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Taxes are Illegal? The man sitting across my desk had been a client for years. He had come in to tell me that he would not be using my services ever again. "Why?", I asked. He had found...


What To Do When You Can't Pay Your Taxes April 15th has arrived, and you don't have enough money to pay your taxes.  What are you going to do? First of all, don't panic. You are not alone. Every year thousands...


How To Get Out of Debt and Become Debt Free Forever This is the first post in a series that will explore how you can become debt free, and stay debt free forever. Future posts will talk about when you should and should not...


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5 Tax Tips for The Self-Employed

Posted on : 31-01-2012 | By : Kathleen | In : Starting a Business, Taxes


learn about taxes

Tax time can be extra taxing for the self-employed. What really do you count as income? What can you deduct as expenses? And why do you have to pay self-employment tax? Here are a few tax tips to help you prepare your self-employed tax return.

1. What is Self-Employment Income?

Self employment income can be any income that you earn as an independent contractor, a freelancer, or even money that comes in from a hobby. You don’t need to make much to be considered self-employed by the IRS.

2. What Business Expenses Can You Deduct?

The good news is that you can deduct any expenses that you incur to create income. Many people have expenses for items that are used for both business and personal, such as computers and internet costs. In those cases the IRS allows you to take a prorated amount as a deduction. Keep a log showing how much is business use, and how much is personal use to come up with your prorated deduction amount.

3. What is Self-Employment Tax?

When you work for someone else as an employee you have social security taxes deducted from your paycheck. Your employer pays an additional amount. When you are self-employed you pay both parts yourself as self-employment tax.

4. How Do You Report Self-Employment Income?

If you are not a corporation or a partnership you will report your self employment income and expenses on Schedule C. It is filed at the end of the year with your Form 1040. However, taxes are due through out the year. Estimated taxes are paid with form 1040-ES.

5. Where Can I Find More Information on Taxes and Self-Employment?

The IRS has many great resources to help self-employed people with their taxes. Start with these links from the IRS.

Tips For Dealing With Credit Card Debt

Posted on : 05-08-2011 | By : Kathleen | In : Debt


photo courtesy freedigitalphotos.net

Struggling with credit card debt can cast a black cloud over every aspect of your life. The longer you stay in debt, the more damage you’ll end up doing to your credit rating. That in turn will make it harder to get a loan in the future for important borrowing like a home mortgage. Not to mention that fact that debts limit your spending power in the present, restrict your options, and generally have a negative effect on your emotions and outlook.

So it pays to get on top of your debts as soon as possible – but how? Here are a few tips you can start applying today to turn your debt situation around.

Negotiate with Your Lender

In many cases you can actually negotiate with your credit card company in order to make paying your debt easier. There are several options available here – for example, you may be able to have your interest rate lowered. You may be able to extend the period you have to pay before you start incurring more penalties, or you may be able to have some fees waived altogether. In any case, the first step is to contact your lender and see if there’s a way you can reduce the burden of the debt.

Pay the Most Expensive Debt First

If you have multiple credit card bills, you need to work out which one is costing your the most in interest and focus solely on paying that bill first. That’s the fastest strategy for paying off the debt. You know to work out which bill is costing you the most in interest – the sooner you pay that bill, the less interest you’ll incur and the lower the overall amount you have to pay back will be.

Make Debts the Priority

Often people end up in credit card debt to begin with because they can’t manage their money and try to live beyond their means. If you have bad financial habits, they’re the reason you’re in debt – and they’ll keep you in debt if you don’t change them. You’ll need to develop the self-discipline to say no to non-essentials until you have your debts handled. If you’re in debt, don’t go spending money on concert tickets and most definitely don’t take on any more debts.

Debt should only be used for things that will help you get to a better financial position in the future – things like buying a house, starting a business or getting an education. If you take out a new debt every time you want to buy a consumer item on impulse – new shoes, a car, a holiday – you’ll just keep digging yourself into a deeper hole.

Summing Up

Credit card debt may seem like it’s impossible to beat, but with a few phone calls to your credit card company and a change in your financial habits and mindset, you can start turning your life around from today.

How To Pay Estimated Taxes When You Run Your Own Business

Posted on : 28-07-2011 | By : Kathleen | In : Starting a Business, Taxes


Congratulations! You have your own business! Now the bad news. Uncle Sam wants a big portion of your income.
When you start your own business, one of the first things you must plan for is paying your taxes.

How Often Do You Pay Estimated Taxes?

As an employee, your employer takes taxes out of each and every paycheck. When you are your own boss, you need to pay the IRS, not just on April 15, but three other times during the year.
Estimated tax payments are due on:

  1. April 15 for income earned from January through March
  2. June 15 for income earned April through May
  3. September 15 for income earned June through August
  4. January 15 for income earned September through December of the previous year

Income Taxes, Self-Employment Taxes, Quarterly Taxes? Which is it?

The taxes you pay as a self-employed business owner go by many different names, one of which is quarterly estimated tax payments. I find this kind of funny, because as you can see from the list above, the taxes are not paid every three months, rather they are paid four times a year on a rather random schedule. I have yet to find out why this is.
When you are self employed, your estimated tax payments are actually for two different taxes, income taxes and social security taxes. Social security taxes are often called self-employment taxes when talking about self-employed individuals. This is because as an employee, you pay 1/2 your social security and medicare taxes and your employer pays the other 1/2. When you are your own boss, you get to pay the full amount! Lucky you.

So, to answer the question, the answer is all of the above. Your quarterly estimated taxes are made up of income taxes and social security taxes. They are paid four times a year, but are not equally space out.

How Much Should You Pay

Ideally, four times a year you would calculate your income for the previous time period, estimate your income and social security taxes, and pay that amount. A quick estimate of the amount you should pay would be your federal income tax rate, plus 15% for self-employment taxes, times your net income. For example, if you are in the 15% federal income tax bracket, your estimated tax payment will be about 30% of your net income. Net income is all the money that came in, minus the expenses that you paid to earn that money. As a very rough guide, I find that most of my clients do OK when they pay 15 to 20% of their gross income. Gross income, simply stated, is all the money that your earned. If you want to be more exact, you can use this IRS Estimated Tax Worksheet to calculate how much you should pay each year.

This video has some good information on easy ways to track and save for your estimated tax payments.

How Do I Pay My Estimated Taxes

There are two ways to pay your estimated tax payments. One way is to use paper coupons provided by the IRS, and mail your payments to the IRS. Be sure to write your social security number on your check. The IRS Estimated Tax Worksheet has payment coupons and the addresses for where to mail your payment.

The IRS would prefer it if you would use their Electronic Federal Tax Payment System. At this website, once you register, you can easily make your tax payments from your computer. You can even schedule your tax payments to happen automatically.

Can I Pay My Taxes More Often?

It might seem like a silly question, but you would be surprised by how many people would like to pay their taxes more often. By paying your estimated taxes monthly, or even weekly, the payment amount is smaller, and many people find it easier on their budgets if they pay their taxes more often than quarterly.
Yes it is OK to pay your taxe more often, just print additional tax payment coupons, or use EFPTS, the Electronic Federal Tax Payment System to make a payment whenever you want.

What If I Miss A Payment, or Can’t Make A Payment?

Don’t worry about it too much. If you miss a payment the IRS is not going to come looking for you. Just make the payment as soon as you can. You may be penalized for paying late, or for not paying enough, but if you pay as much as you can as soon as you can, the penalty will be minimized.
If the reason you can’t make a payment is that you don’t have any income, then you really don’t need to worry about it. (At least not the taxes. ) No income means that no taxes are due.

I’ve Paid My Estimated Taxes, Now What?

When it is time to file your tax return, your estimated taxes will work much like withholding taxes on your tax return. On the tax payments section of the tax return, there will be a place for you to record exactly how much you have paid in estimated taxes. If you paid too much, you will get a refund, if you didn’t pay enough, you will owe additional taxes, and maybe some penalties.

Get into the habit of paying your estimated taxes, and tax time should not be too much of a problem.
Do you have any questions about paying estimated taxes, or any other tax questions? Ask in the comment section and I will be happy to answer!

Start Your Business With A Strong Financial Foundation

Posted on : 27-05-2011 | By : Kathleen | In : Make Money, Starting a Business


I came across an article today that I really wish I had written. In just a few paragraphs Siu Ling Hui sums up the first steps every new business owner must do to provide a strong financial foundations for their business.
She says in her article, Building a Sound Financial Foundation for Your Internet Business ,

I have seen many young fast growing businesses falling over because they didn’t have sound financial management practices in place. Ironically, it is when rapid business growth happens that the financial cracks emerge.

read the rest of the article

In her article she recommends three must dos:

1. Hire a good accountant or bookkeeper before you earn your first dollar.

I cannot stress this enough. Too many new business owners make costly mistakes because they just didn’t know. A good accountant will help you through the maze of government regulation and provide advice that will help your business be more profitable. Almost without exception a good accountant will save you money.

2. Separate your business and personal finances.

You must have a separate checking account and separate credit card for business. Doing so is more professional and will give you clarity in your finances. Also, if your business is ever audited, your personal finances will not be included in the audit.

3. Manage cash flow.

Cash is king. Cash is the lifeblood of your business. Without cash or available credit your business cannot function. Good cash flow planning will allow you to plan for the ups and downs in your business and insure that you will be able to sail through the inevitable downturns in your business.

These three simple steps will insure that your business has a strong financial foundation and go a long ways towards insuring the success of your business.

Learn more about Enforcement Policy Statement issued by FTC on New Debt Relief Rule

Posted on : 17-03-2011 | By : Kathleen | In : Uncategorized


Today’s guest post is compliments of Anya.

The Federal Trade Commission consistently put forth a sincere effort to secure the consumers’ interests and thwart the deceptive and unethical business practices. It offers consumers the assistance to detect, cease and evade fraudulent debt relief agencies and which help to avoid debt settlement scam. Recently, the FTC has issued an enforcement policy statement on a new FTC rule in order to protect consumer’s interests by dissuading debt relief firms from collecting up-front fees. In its statement, the FTC proclaims that while most companies that sell debt relief services over telephone are strictly forbidden from charging fees before settling or reducing a consumer’s credit card or other unsecured debt. On the flip side, this will certainly adjourn the enforcement of the new rule for tax debt relief services for a while.

The ban on advance fees introduces few changes in the existing FTC Telemarketing sales rule. Few tax debt relief companies have accused that they are baffled by this new rule and expressed uncertainty whether the rule applied to them or not. Question arises whether all tax debts will be regarded “unsecured,” and will come under this new rule. The FTC currently is taking this matter into account and the FTC representative states “services that represent, directly or by implication, to renegotiate settle, or alter the terms of obligation between a person and a taxing entity (tax debt relief services).”

The enforcement policy however makes it crystal clear that tax debt relief services must comply with the FTC’s Telemarketing Sales Rule and exception may take place during the enforcement deferral period, only for the debt relief amendments. It also intends to remind providers that they must act in accordance with with the FTC Act, which has been working constantly for banning unfair and deceptive practices.

All valuable and explanatory information regarding this new rule are now available in FAQ section of the agency’s website http://www.ftc.gov/ . In order to assist businesses to determine whether they are covered by this new rule and discuss how fees may now be collected or to guide a consumer regarding the intricacies of the new act, browse through the enforcement policy statement on FTC new debt relief rule. If you are a consumer restore your peace of mind and attain financial freedom with this new act.

How To Qualify for a Home Equity Line of Credit (HELOC)

Posted on : 11-10-2010 | By : Kathleen | In : Debt


A home equity line of credit can be a smart choice for many borrowers. As opposed to other types of borrowing, a HELOC generally carries a lower interest rate than a credit card or an unsecured loan, and for most people, the interest on a home equity line of credit is tax deductible. The biggest downside, is that if you default on your loan, you could lose your house.

To qualify for a home equity line of credit you need to have equity in your home and the income to pay the loan back. It helps to have a decent credit rating to keep your interest rates down.

Especially in today’s market, the hardest qualification for most people will be finding the equity in their home. As a rule of thumb, most lenders will want your total debt against your home to be no more than 80% of your home’s value. That is including the home equity line of credit.

If you don’t have enough equity in your home there are just two ways to change that. One is to pay down your mortgage and reduce the debt against your home, the other is to increase the value of your home.

If you are looking at taking out a home equity line of credit, you probably don’t want to spend the money to pay down your debt. That leaves increasing the value of your home as the only option to increasing the amount of equity in your home. While you can’t do anything to improve the housing market, you can make improvements and repairs to your home that would increase its value.

You need to show the banks that you have the income to repay your home equity line of credit. If your income is too low, consider paying off credit cards and other debts to make room for the HELOC.

A home equity line of credit is a good option for many people. With it’s low interest rates and favorable tax status it may be worth the time and effort to increase your equity and your ability to pay.

Make Money with Adsense and Get BackLinks for Free!

Posted on : 20-09-2010 | By : Kathleen | In : Make Money


There are two things most bloggers I know are looking for. They want to know how they can make money with Adsense, and they want to know how they can get more backlinks to their blogs. The following sites allow you to do both. They are all revenue sharing sites where you can earn money by posting content. They also encourage you to link back to your own blogs, so by posting you also get some lovely do-follow links!

But don’t think these are places where you can just spam away. They all require good content that provides value to the reader.

Bukisa is a revenue sharing site where you are paid for page views. The amount you are paid per 1000 page views varies depending on your “Bukisa index”. They do not directly link to your Adsense account, rather, when you reach a minimum payout of $10 you are paid via PayPal. You are encouraged to post original content, however, you can re-post your own content.
Bukisa is a good place to start blogging for money because you don’t need an adsense account and you don’t even need your own blog. You can literally get started for free.

Xomba is a revenue sharing site where you can post original articles, or you can “bookmark” links to sites that you like. You do need your own Adsense account. With Xomba 50% of the time your articles and bookmarks are showing your Adsense ID and you get paid for the clicks, the other 50% of the time the Xomba gets paid for the clicks.

Hubpages is one of my favorites and one of my “hubs” (articles) has earned over $100. They are also a site where part of the time you get credit for the Adsense clicks, and part of the time Hubpages gets the credit. They have a nice 60/40 split so most of the time the clicks are yours! In addition to Adsense you can also earn commissions from Amazon and Ebay.

SheToldMe is another revenue sharing site where you need your own Adsense account. You can post original articles and “scoops”. A scoop is like a bookmark on Bukisa. It is a link to a site that you find interesting. You can scoop your own site or anyone elses. You do need to write a short, original paragraph about the scoop. What I really like about SheToldMe is that they place one adblock in your article or scoop that shows your Adsense ID 100% of the time. Your posts are always working for you! The other ads on the page go to SheToldMe.

YouSayToo is a revenue sharing site with both Adsense and Amazon. What I really like about this site is you can add your rss feeds and your new blogs posts will automatically be shown on the site. They have a 50/50 revenue share where 1/2 of the time the ads are yours and 1/2 of the time the add income goes to YouSayToo.

Blog Engage is a little different from the others in that you need to have your own blog where you create your posts and articles. You can then submit them to the site where other users can vote your posts up or down. Blog Engage is a 50/50 Adsense revenue site, but with a little effort there is a way where your posts can show your Adsense ID 100% of the time.

These are just 6 sites that I am using. I know there are more! Feel free to comment if you know of other revenue sharing sites.