Monday, April 23, 2007

Money and Taxes

Money Management was the intended focus for March in preparation for the April taxes. In any case, I hoped that taxes were filed on time and Uncle Sam won't go after you. The question now, what do I do after the tax season. The simple answer, do a financial checkup again just like before the new year started. For a longer to do list, check out the rest of the article. Things to do After Filing for Taxes

  1. Review your tax return. Most individuals focus on how much tax refund they are getting and not the more important details such as tax bracket, filing status etc. Check this information on your tax returns so you can plan for this year's tax payment. If you are single and have multiple jobs and owed taxes, you might want to withhold a little bit more of taxes on your weekly paycheck. This is where your tax bracket information is crucial for this year.

  2. Archive your tax documents. This includes receipts and journals that would back up your tax return. You'll never know when you need it. Aside from tax review purposes, these documents are useful for claiming insurance and warranty.

  3. Plan for new tax year. Are you working under a 1099? Got married? Bought a house? All these things and more can affect your tax contributions. Talk with your tax advisor / accountant.

  4. I got a refund, what do I do with it? Before splurging it on a trip to Cancun or that new Rolex watch here's my list of other options according to priority: A. online savings account (ING Direct or HSBC Direct); B. Pay-off credit card debts; C. House renovation or that new boiler; D. Education / College Fund; E. Vacation (we all need one).

  5. Setup your financial calendar. I was able to download a payment reminder from and tweaked it a little bit with my own version (check it out excel / pdf versions). If you need help with this spreadsheet, send me a comment / email.

There are a thousand of ways to save money, the first step is to understand your spending habits and second is to start putting away a dollar or two now. As always, check with an accountant and a financial advisor with whatever you plan to do.