Dec 28

The end (of 2015) is near. Still, you can do a lot to help your finances before the ball drops on Thursday and we ring in the new year. Let’s look at some of my top year end tips –

  • The Charitable RMD is now an option that will be available every year. This part of the tax code allows those who are 70-1/2 and taking RMDs from their IRA to donate directly to a charity. In effect making a donation deductible even though the donor doesn’t itemize. This code needed to be renewed each year, but recently, congress made this rule permanent.
  • If you are retired already, and are not too close to the next tax bracket consider a Roth conversion to “top off” your current bracket. Say you are at a taxable $65K. You have an additional $9,900 you can withdraw or convert to Roth, and pay just 15%. By converting to Roth, you help to keep from breaking through the 25% rate as your withdrawals increase in the future.
  • Do you have an FSA (flexible spending account) at work? If there’s a bit of money left, you should consider a quick purchase, typically, eyeglasses come to mind as they are an easy expense, and have a wide range of cost from simple reading glasses at $100 to a fancy pair of glasses well over $500. Don’t let that money get forfeited.
  • Year end is good time to look at how much you are depositing to your 401(k) account. Can you bump the deduction up by a percent or two? You won’t regret it .
  • Did 2015 bring you any change in family members? Marriage, new child, divorce,  family member pass away? It’s time for an annual review of the beneficiaries on all of your accounts. It’s never to soon to see if your new spouse has a former spouse of their own as a beneficiary. Pretty important to get that updated asap.
  • Last, see if the Tax Loss Harvesting I wrote about can help you. You can read the full article, but the important thing to know now is that you can take stock losses against up to $3000 of ordinary income each year. Hopefully, your are making a profit, but this is an easy way to get a bit of money back on a stock you are holding at a loss and are wanting to sell.

That’s all for this year, Happy 2016


written by Joe \\ tags: ,

Nov 05

The 2015 tax rates have just been announced by my friends at the IRS. If you’ve been reading this blog for a while, you know how taxes work, more or less.

The tables aren’t the actual tax you pay on gross income, but on taxable income which is gross less a number of items, including the personal exemption which rises to $4,000 in ’15 and the standard deduction for single $6,300 or joint $12,600.

I’ll be referring back to this article over the next year whenever the tax table is part of the conversation. Check out the new rate table and start planning for 2015.


Taxable income is over But not over The tax is Plus Of the amount over
$0 9,225 $0.00 10% $0
9,225 37,450 922.50 15% 9,225
37,450 90,750 5,156.26 25% 37,450
90,750 189,300 18,481.25 28% 90,750
189,300 411,500 46,075.25 33% 189,300
411,500 413,200 119,401.25 35% 411,500
413,200 119,996.25 39.6% 413,200


Married Filing Jointly
Qualifying Widow(er)

Taxable income is over But not over The tax is Plus Of the amount over
$0 18,450 $0.00 10% $0
18,450 74,900 1,845.00 15% 18,450
74,900 151,200 10,312.50 25% 74,900
151,200 230,450 29,387.50 28% 151,200
230,450 411,500 51,577.50 33% 230,450
411,500 464,850 111,324.00 35% 411,500
464,850 129,996.50 39.6% 464,850


written by Joe \\ tags: ,

Oct 26

This year has flown by and as we approach year end, the IRS shares the numbers that will impact your 2015 retirement savings limits. 2013 inflation was low enough that we saw no increase in ’14. 2015, however, sees a bit of a bump, so let me share these numbers.

Employee contributions to 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $17,500 to $18,000. The cath-up provision, for those 55 and older in 2015 is also increased a bit, to $6,000.

The IRA limit is unchanged at $5,500 with a $1,000 catch-up for 50 and older. The phaseout for IRA deductibility for a single filer covered by a workplace retirement plan is between $61,000 and $71,000, and for married filing joint, between $183,000 and $193,000. The AGI phase-out range for taxpayers making contributions to a Roth IRA is $181,000 to $191,000 for married couples filing jointly.

The AGI phase-out range for taxpayers making contributions to a Roth IRA is $183,000 to $193,000 for married couples filing jointly.  For singles and heads of household, the income phase-out range is $116,000 to $131,000.

There are still quite a few numbers we need to see. Marginal rates, HSA limits, FSA limits, etc. As soon as I see the IRS press release, I’ll share the numbers.

written by Joe \\ tags: ,

May 11


This week congress passed legislation requiring on-line stores to collect sales tax  based on the buyer’s state of residence. This really isn’t a new tax, when you buy an item from an out of state vendor, you are required to pay your state sales tax when you file your tax return. It seems no one ever does, so this was simply a matter of enforcement.

written by Joe \\ tags: ,

Apr 08

A pre-taxday guest post from Home Daddys’ Mike Freidberg –

Save yourself time and money

April is upon us, and as usual, a majority of Americans are scrambling to get their taxes figured out so they can file on time. As we near the big day, here are 10 of the most common mistakes made by Americans that you shouldn’t be making.

Filing late

One of the biggest mistakes Americans seem to make every year is that they file their taxes late. It’s one of the most talked about dates during the year, rivaling Christmas and New Years in media attention every season. While exact numbers of how many Americans forget to file on time is hard to pin down, the IRS apparently thinks it’s a big enough issue that last year they decided to increase the penalty for filing late, and hire scores of new employees to help enforce it.

Avoiding filing because you can’t pay

You should know that the IRS sets the penalty for not paying and the penalty for not filing separately—meaning even if you can’t pay, you can avoid significant penalties by applying for an “offer in compromise”, or making monthly installments on your tax bill. None of these options are particularly attractive, so you’re better off saving up for tax day, but there’s never a good reason to put off filing.

Under-reporting your income

Whether you use a W-2 or a 1099, there’s absolutely no point in reporting less earnings than you actually received. Your employers and clients have to report what they’ve paid you, and they’ll be sure to declare every penny to keep their own taxes low—so if your numbers don’t match theirs, the government won’t have any trouble finding out about it. Snag every possible deduction you can, but never lie to the IRS.

Incorrect business deductions

The IRS spells it out pretty clearly on their website what can be used as a deduction for your business. Take some time to review it and figure out what deductions apply to you. If you do operate your own business, be prepared by ensure that whoever you use for your merchant card services provides you with annual or quarterly statements for your records.

Claiming phony dependents

It’s hard to see your children leave the home and head off to college, but it’s even harder a couple years later when you realize you can’t claim them anymore. It’s not difficult for the government to cross check your tax returns with those of your dependents, so do yourself a favor and stop claiming them they start paying their own income taxes.

Missing charitable contributions

Turns out America is a pretty generous country when it comes to charitable giving, but many filers forget or neglect to fill out this portion of their taxes. It’s an easy write off and a great way to ensure your money is going to the exact causes you want. Be sure to include any donations you make to Goodwill, as well as any religious organizations or non-profits you support.

Getting your math wrong

Use a calculator. Better yet, e-file. Bad math can not only cost you on getting back all your refund, but it can even spur an audit if you mess up badly enough. Have someone else double check your figures before you file.

Mike Freiberg is a staff writer for HomeDaddys, a resource for stay-at-home dads, work-at-home dads, and everything in between. He’s a handyman, an amateur astronomer, and a tech junkie, who loves being home with his two kids. He lives in Austin.

written by Joe \\ tags: ,