Tax Tips
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Eight IRA mistakes to avoid at tax timeThe good news is that many people can increase their saving potential simply by learning more about IRA dos and don'ts. Saving as much as possible, handling rollovers correctly and avoiding costly penalties are the keys to success. "There's no question that saving through an IRA is a strategic move, but it's not quite as simple as 'set it and forget it,'" says J.J. Montanaro, a Certified Financial Planner with USAA. "Staying aware of what to do and what not to do can really pay off, especially now, when you have the opportunity to invest and potentially save on your tax bill." Montanaro outlines eight of the most common mistakes IRA investors make when it comes to making the most of this retirement-saving tool: * Thinking you've missed the deadline: Though 2009 is over, it's not too late to make your IRA contribution count toward this year's tax bill. This year, you have until April 15 to make "2009" IRA contributions and claim eligible deductions on your tax return. * Not contributing enough: Contributions to a Traditional IRA are tax deductible, within limits, so you can help secure your future and cut this year's tax bill at the same time. If you're younger than 50 years old, you can contribute up to $5,000 annually. Maxing it out makes for maximum tax savings. * Not playing catch-up: Age does have its rewards. If you're 50 or older, you may be eligible to contribute an extra $1,000 (up to $6,000 per year) to an IRA account. This "catch-up" contribution offers a chance to kick your savings into overdrive. * Assuming you can't contribute: If you're a stay-at-home spouse, you can still open an IRA as long as contributions from both spouses don't exceed your combined taxable compensation. A "spousal IRA" is especially handy when the working spouse is already covered by an employer retirement plan and can't deduct IRA contributions. What you can deduct will depend on your Modified Adjusted Gross Income (MAGI), but every bit counts. * Rolling the wrong way: If you've recently switched jobs or lost your job, you can roll the funds from your old employer's retirement plan into an IRA. Just be sure the transfer is made directly from one custodian to the next - a direct rollover. If the payout goes to you first, it will be subject to a mandatory 20 percent withholding tax. Then, you'll have only 60 days to move the funds you received, plus the 20 percent that was withheld, to a new account or you'll have to pay income taxes on the distribution, plus an early withdrawal penalty if you're not at least age 59 1/2. * Not considering a Roth: You might be able to save more on taxes in the long run by contributing to a Roth IRA instead of a Traditional IRA depending upon your tax situation. Roth IRA contributions aren't tax deductible, but the Roth can provide tax-free withdrawals come retirement time. And starting this year, the income restrictions to convert a Traditional IRA to a Roth IRA have been eliminated, opening the door to millions more investors. Ask a trusted financial adviser if opening or converting to a Roth IRA would be the right move for you. It's important to keep in mind that conversions from a Traditional IRA to a Roth IRA are subject to ordinary income taxes, so it's recommended that you consult with a tax advisor regarding your particular situation. * Withdrawing too early: Your IRA is designed to remain untouched until you reach age 59 1/2. If you make a withdrawal from your Traditional IRA before then, you'll have to pay taxes on the income and investment earnings, and fork over a 10 percent penalty, with some exceptions. While a Roth IRA allows you to withdraw your contributions, not including earnings, at any time without taxes or penalties, you'll thank yourself later for not raiding the piggy bank. * Procrastinating: More than any technicality, it's plain old procrastination that hurts investors the most. Whether its uncertainty in the markets, cash flow concerns or the rising costs of college, there will always be excuses to put off this year's IRA contribution. But time-honored investing principles show that consistent contributions - through good times and bad - provide the clearest path to long-term investing success. So make the commitment and take action to help secure your financial future now. For complete IRA details, visit www.irs.gov and search for Publication 590. When in doubt, you can contact professional financial advisors at USAA through www.usaa.com or at (800) 531-USAA (8722) to help you determine how investing in an IRA can help you meet your financial goals. Courtesy of ARAcontent
(ARA) - When you clean your house in the spring, you really want it to be clean. Dirt, dust and germs are banned, and all appliances, floors and walls are scrubbed clean. But is your house really clean, or have you traded dirt and germs for caustic and toxic chemicals found in most conventional cleaning products? |
Snow and ice removal a matter of safety and liabilityA few years ago, the Salt Institute conducted an informal survey of county and municipal agencies regarding their practices of sidewalk snow clearing. Eighty-three percent of the agencies have written policies directing property owners to remove accumulated snow and ice "within 24 hours of the end of the snowstorm." Penalties for property owners not complying can range from nominal tickets, to misdemeanors punishable by up to 90 days in jail, to fines of up to $500. There is also the possibility of a lawsuit alleging negligence if sidewalks and parking lots are not properly maintained and a pedestrian slips and is injured. Often the homeowner, business owner and municipality are all named in such lawsuits. Over half of the agencies which responded to the survey reported being sued for a sidewalk accident. Some property owners cite confusion over the liability involved with the decision "to shovel or not to shovel." The common misconception is that by not shoveling, plowing or spreading salt, one cannot be sued for clearing surfaces poorly in case of a pedestrian slip and fall. While laws vary by state and municipality, most mandate clearing and offer some level of protection for reasonable efforts. For instance, the Illinois Snow and Ice Removal Act states that any owner who "removes or attempts to remove snow or ice from sidewalks abutting the property shall not be liable for any personal injuries allegedly caused by the snowy or icy condition of the sidewalk resulting from his or her acts or omissions unless the alleged misconduct was willful or wanton." Property owners should check their state laws and local ordinances and then take the required actions, which may include hiring a private contractor to clear areas of snow and ice if they are unable to do it themselves. Courtesy of ARAcontent |