Author: Mike Holman

Categories
Personal Finance

Smarty Pig Gift Card Winners And Some Links

First off – last week we had a competition for two $25 Smarty Pig gift cards and the winners were Debbie and Kate.  They have been contacted and will receive their cards shortly.   SmartyPig is only available to Americans but for any Canadians looking for a $25 bonus for opening up an account check out my ING $25 bonus page.

Some links

Thicken My Wallet had a great post on the riskiness of starting your own business.  He argues that starting a new business is not as risky as the general public assumes it is.

BBC News – Why do people often vote against their own interests? I really liked this article since it addresses something I’ve wondered about – the opposition to health care reform in the US by people who would benefit from it.  I don’t know how many times I’ve heard the sentiment “I don’t want the government deciding my health care”.  Meanwhile, right now it’s the insurance companies that decide their healthcare (if they can afford the premiums).

Fantastic roundup at Len Penzo’s blog.

Million Dollar Journey gives his views on the Talking About Finances With Your Aging Parents … or Grown Kids

Preet is Severing The Link Between Price and Weight Part I

Financial Blogger talks about fixing up your house for a better sale.

Canadian Capitalist recommends watching The card game on PBS.

The Intelligent Speculator has the best oil stock picks for 2010.

ABCs of Investing wrote about money market mutual funds.

Carnivals

Carnival of Personal Finance
Carnival of Mutual Funds 4 :Beat Mutual Funds

Categories
Investing

2010 RRSP Contribution Deadlines For 2009 Tax Year And RRSP Contribution Limits

This is a quick post to tell you that once again the RRSP contribution deadline for this year is March 1, 2010.

I’ve created separate pages for RRSP contribution deadlines and contribution limits which you can see here:

In the RRSP deadline post you can look up the contribution limits for the next five years, find out how to make contributions after the deadline (and still get a receipt) and learn how the deadline is calculated.

In the RRSP contribution limits post I list the the limits for different tax years.

Why a separate page?

I did a separate page for these topics because I want to be able to keep the same page current each year by just updating the information.  My regular posts have the date in the url which “dates” them a bit.

So check out the pages, bookmark them, link to them (if you have a website) and I promise to keep them up to date.

I’m planning on doing a few more “back to basics” posts/pages so let me know if you have any ideas for that type of post.

Categories
FrontPageOnly

Obama State of the Union 2010 – Stimulus Check No – Tax Credits Yes

Several new tax credits aimed mainly at the middle class will be announced tonight in the 2010 Obama State of the Union speech.  Unfortunately, it looks like there will be no stimulus checks issued in 2010 but the year is still young.

The health care reform issue should be addressed but no specifics have been released as yet.

Here are some proposals with the more significant ones appearing first:

Student loan payment cap

Federal student loan monthly payments will be capped to 10% of gross income minus a basic living amount which appears to be $6200.  For example, if you are earning $35,000 and have student loans of $30,000 then the annual payments will be ($35,000 – $6,200)/10 = $2,880 which means $240 per month.  This will benefit a large number of people who have big student loans – especially if they are not making a lot of money.

The Child and Dependent Care Tax Credit

The Child and Dependent Care Tax Credit will be increased to 35% from the existing 20% credit now in place.  This applies to families making less than $85,000 (AGI) per year.  If you make between $85,000 and $115,000 then this credit will be prorated back down to 20% which is the amount applied if the family makes $115,000 or more.  If you make more than $115,000 then there will be no impact.

A maximum of $3,000 of child care expenses can be claimed for each of 1 or 2 kids.  The maximum tax credit for a family with 2 kids will increase from $1200 to $2100.

Child care funding will also increase by $1.6 billion.

Saver’s Tax Credit

The Saver’s Credit will be increased to match 50% of the first $1,000 of retirement account contributions for families earning under $65,000 (up from $55k).  A partial credit will be available for families earning between $65,000 and $85,000.

Mandatory Workplace IRAs

This proposal calls for all employers to provide automatic direct deposit IRAs (Individual Retirement Accounts).  It won’t be mandatory for employees to take advantage of these accounts but they will always have the option.  Small firms will be exempt.  This proposal is interesting since IRAs are already available from other institutions (unlike 401(k) plans).

More support for caregiving families

Families caring for relatives will benefit from increased funding to the Department of Health and Human Services caregiver support programs.  This extra funding should make it easier to get more free help if a family or individual is caring for an aging relative.

Categories
Personal Finance

External Hard Drive – SimpleTech Signature Mini Espresso Review

Don’t forget to enter the SmartyPig $25 giveaway contest which ends on Thursday, January 28.
external hard driveDigital cameras and computers are wonderful things. They allow us to take lots of pictures of our kids growing up and easily send them to various grandparents/aunts/uncles who don’t get to see them often.  The problem is that sometimes computers fail (especially the hard drive) and pictures can be lost. Over the last few years I’ve been taking steps to make sure that if one of the computer fails we won’t lose any files.

One of the actions that I’ve been doing for a few years to back up the files on our computers to an external hard drive. I don’t copy the entire computer hard drive – just the files that that we want to back up which are mainly pictures.

The problem is that last year we ran out of room. My hard drive was only 50 GB which seemed pretty huge when I bought it but now it was too small. The main problem is our new cameras – the file size is much bigger than on our old camera plus we take more videos which suck up a lot of space. The Sony DLSR A350 takes photos very quickly which adds to the number of files and the Canon 200sx has a great video feature.

So I went shopping for a new external hard drive. These devices are faily simple so I wasn’t looking for anything fancy. I mainly just wanted a lot more storage space.

Over the last 2 or 3 years there have been quite a few advancements in external hard drives. You can buy drives that are much smaller than the old ones with way more space. The other big advantage is that while our old hard drive had to be plugged in separately, the new one plugs into the USB port in the laptop which is very convenient. The last advancement is looks – some of these hard drives look very, very good! The one we ended up buying was designed by the same company that has styled most Ferraris. 🙂

What external hard drive did I end up buying?

SimpleTech Signature Mini Espresso external hard drive 500gb.  The price was $150 but I notice that Best Buy has it for $130.  Amazon.com has it for $99.

The storage is 500 gigabyte which is 10 times the old one. I’m under no illusion that this will be enough space forever but it should hold us for a few years. It had comparable data transfer rates to other drives and I found the small size was definitely a plus.

It also has a 1 click backup feature which I have yet to utilize but I am planning on doing this.

It plugs into your standard USB 2.0 port and has the following dimensions:  4.4″ x 5″ x 1.5″ and weighs in at 0.5 pounds. Very small.

This wasn’t the cheapest option for a hard drive but the small size was enough for me. The cheaper drives generally were larger (and not all that much cheaper).

Do you use an external hard drive for backup?  If you don’t do any kind of backup then I urge you to buy an external hard drive and start backing up.  I’ll be posting more on this topic.

Categories
FrontPageOnly

2010 Income Tax Deadline for 2009 Taxes

Every year millions of Americans have to file their tax return in order to make sure that they have paid the proper amount of tax to the government.  The last date you can file your 2009 taxes without risk of any late penalties is Thursday April 15, 2010.

If you are filing electronically then the return has to be filed by April 15, 2010.  If you are sending your tax return by mail then the postmark date cannot be later than April 15, 2010.

If you thinking about buying tax preparation software then consider software programs such as TurboTax or TurboTax Canada (for Canadians).

For some people this might be a happy time, especially if they are expecting a large tax refund.  For others, it might be a bad time if they owe money at tax time.  Regardless of your situation, preparing and organizing your tax paperwork and then completing your tax return can be a lot of work.

In order to avoid late tax payment penalties it is important to start your tax preparation early. Right now would be a great time to start preparing.

Here are a few suggestions to help with the tax filing process

1)  Assemble all your tax paperwork into one place.

This can sometimes be the hardest step.  The best way to handle this is to organize some sort of system for your tax paperwork ahead of time and then file each document when you receive it.  You also have to know which paperwork you will be receiving so that you don’t get any surprises after you have filed your taxes.

2)  Organize your paperwork into envelopes.

Arrange your paperwork so that different types of paper work are in the same envelopes ie all the income statements should be together, all the business expenses (if applicable) should be in another envelope etc.  Some suggestions on organizing your tax paperwork.

3) Complete the tax return yourself or hire an accountant else to do it.

Completing the return yourself can be time consuming and frustrating and increases the possibility of errors but on the other hand it is cheaper, a good learning experience and it can really help you understand your finances better.  You have to realize that hiring someone to do your return doesn’t mean they will find and organize all your paperwork.  You will still have to do some work.

4)  Tax software or by hand?

If you are doing the return yourself will you be using tax software or doing it by hand?  Using tax software can be a godsend if you aren’t all that familiar with tax rules.  It can be much quicker to use a good tax return software rather than doing it by paper.  Of course not everyone is comfortable with using software so it might not be the best option for everyone.  Cost is a factor as well.
I strongly recommend looking into tax software.  Many of them have free trials or money back guarantees so you can test them out and make sure they are right for you.

5)  If you prepare your return using tax software will you then file electronically or print it out and mail the return?  This is a no brainer to me.  I can’t understand why anyone would mail a return that was created by tax software unless maybe they are worried about security.  Efiling is easy and cheap.  Just do it!

More resources

Popular tax software TurboTax review

Categories
Announcements

$25 SmartyPig Gift Card Giveaway For Two Lucky Winners

I recently posted a comprehensive review of the online savings (piggy) bank called SmartyPig.  Please check out my SmartyPig review for more information.  The good folks at SmartyPig were kind enough to donate 2 $25 gift cards which are redeemable at SmartyPig.

Let’s have a contest!

Please note the contest is closed!

Rules for the gift card giveaway are as follows:

  1. Must be an American resident (only American residents can set up accounts at SmartyPig – sorry Canucks).
  2. You have to either already have an account at SmartyPig or be able to sign up for one if you win (sign up anyway).
  3. Leave a comment explaining how you use SmartyPig or if you aren’t a client yet then indicate how you will use it.  For example someone might use the account to save for a vacation.
  4. Contest ends Thursday, January 28 at 9 pm EST.  Winners will be contacted and will be asked for a US address as well as permission to provide that address to my SmartyPig representative so he can get the gift card to you.

Have fun!!  If you are interested in setting up an account at SmartyPig then please click on one of the links/banners in this post (so I can some cash from the deal) or click on the big pink button below!  You know you want to….

Categories
Announcements

New iPhone LinkStuff Edition

I got an iPhone this week – finally joining the mobile wireless internet crowd.  I have to say that it wasn’t as expensive as I thought it would be and the surfing is pretty good.  Full review coming up soon!

On with the links

Michael James had a great post on fine print in advertising – particularly car ads.   Some of the crap they say is so stupid it’s no wonder they all went bankrupt.
Mike Piper wrote a great piece on Insufficient Sample Size and how it could affect your investment decisions.
Book Review: Rob Carrick’s Guide to What’s Good, Bad and Downright Awful in Canadian Investments Today | Canadian Capitalist
Mega List of 2009 Tax Deductions and Credits
Review: Unconventional Success by David Swenson
What are Money Market Mutual Funds?
10 Ways to Cut Your Fitness Membership Costs | Squawkfox
Introducing Bundle – The Number One Source for How People Spend and Save Money : Generation X Finance
Lost and Found: Is the 2000’s the lost decade of investing?
How To Get Your Credit Card Interest Rate Reduced – Amateur Asset Allocator
The Financial Blogger » Blog Archive » A look into options strategies: Covered call
Tax Attorney Or CPA?
Roth IRA Contribution Limits For 2010
Real Rate Of Investment Return

Carnivals

Carnival of Personal Finance – Support Haiti Edition | Million Dollar Journey

Categories
FrontPageOnly

Why You Might Need A Tax Attorney Rather Than A CPA


Tax accountants are used by many businesses big and small, as well as individuals.  Another option which is quite a bit more expensive, is to use a tax attorney instead of an accountant.

This option won’t be available to most small businesses and individuals because of the higher cost but if a tax attorney fits into your budget then it might be worth consideration.

If you thinking about buying tax preparation software then consider software programs such as TurboTax or TurboTax Canada (formerly QuickTax).

Some advantages of using a tax attorney over an accountant

A tax attorney has attorney-client privilege which accountants do not have if you are facing a criminal tax case from the IRS.  Accountants also don’t have client privilege for state tax audits or an investigation by another federal agency even if they are not criminal cases.

If you owe back taxes you can’t pay or are seeking some sort of tax relief from the IRS then a tax attorney should be better qualified to deal with this sort of scenario rather than an accountant.

If you are facing a criminal action from the IRS or are planning to bring a suit against the IRS then a tax attorney is necessary.

Some disadvantages of using a tax attorney over an accountant

The main disadvantage is the cost.  The rates for tax attorneys and CPAs vary quite a bit so the best way to determine potential costs is to interview some attorneys and accountants and compare the costs directly.
If you are honest with your accounting then you shouldn’t have to worry about major problems with the IRS but sometimes paying more money for a tax attorney could be a form of insurance for your business.

Summary

Hiring a tax attorney vs a CPA is not a clear cut decision for a lot of firms and individuals.  If your taxes are very complicated, involve overseas law, have problems with the IRS then an attorney might be the best choice.  For most small businesses and individuals a good accountant will probably suffice.
Keep in mind of course that within any group of professionals there will be a large range of competancy so it is important to interview possible hires and check all references.