Do your Taxes

It is that time of the year again - a time everyone hates - unless you are an accountant or H&R block - they love it because this is the time they make money. But for the rest of us, it is simply a pain..... but, it is always better to get it out way then wait until the last minute.

21. File your taxes

13 basic tax lessons - Tuesday March 7, 6:00 am ET Kay Bell
Nobody ever said "taxes" was an easy subject.
But knowledge is power. And when it comes to taxes, knowledge can also cut your tax bill.
Most of us don't need a master's degree in accounting to be able to better utilize tax breaks or sidestep tax trouble. We just need a firmer grasp of basic tax code principles.
These 13 lessons examine some fundamentals that could prove to be lucky for filers in the know. They'll help you understand what the Internal Revenue Service wants and how it goes about getting it. Then you can use your newfound tax wisdom to shave a few bucks off your IRS bill.

1. Overwithholding is badThe IRS says that most taxpayers get refunds. That's not necessarily bad. But it is bad money management if you repeatedly get a large refund.
"A lot of people are comfortable with large refunds," says Donna LeValley, attorney and contributing editor of "J.K. Lasser's Your Income Tax 2006." "Few are comfortable with paying. But they're giving [the IRS] an interest-free loan."
Most of these refunds occur because individuals have too much in payroll taxes taken out of their checks.
While some people intentionally overwithhold, LeValley says many do it because they don't properly evaluate their personal tax circumstances before filling out their W-4 forms.
"They say, 'I'll do zero so I don't get in trouble.' What most people should know is that each [W-4 allowance] shelters an amount equal to the personal exemption amount," says LeValley. That's $3,200 on 2005 returns; it goes to $3,300 for 2006 taxes.
In addition to claiming an allowance for yourself, you can take one for each dependent. If you're married and you both work, the IRS recommends that the spouse making the most money claim all the allowances and the other partner take none. That, according to the agency, should make your total withholding more accurately reflect the tax bill you'll calculate on your jointly filed return.
Once you've accounted for your personal exemptions, then it's time to consider other things that will affect your tax bill and your W-4.
"If you know you're going to put $3,000 into an IRA, or money into a dependent care account or flexible spending account, add that up," LeValley says. "Every time you reach that exemption amount, add another allowance on your W-4."
By filing a new W-4 that accounts for the proper amount of exemptions, you'll get your cash throughout the year instead of sending it to the IRS's bank account.
Afraid that you'll just fritter away the money if you actually get your hands on it? Direct deposit your check and have the amount that had been going to payroll taxes automatically put into a savings account. It'll be just like before, only now you'll be getting interest on your earnings. Bankrate's search pages can help you find the best rates on money market accounts or certificates of deposit.
You also could use your extra paycheck money to increase your 401(k) contributions (do it while you're in your payroll office changing your W-4) or set up automatic payments to your credit card accounts.

2. Underwithholding is badOK, you're persuaded that having too much withheld in payroll taxes
is bad. Well, going too far in the other direction is not a good move either.
Our tax system is a pay-as-you-earn one, meaning the IRS expects to get its money from you as you earn it regularly throughout the year. When you don't pay up this way, you could face penalties and interest charges for underwithholding.
As you did to correct overwithholding, adjust the amount of taxes taken from your check to ensure that you pay enough.
You also might need to fine-tune your workplace W-4 if you have other income that's not subject to withholding. This could be interest income, property that you sold for a profit or income from a part-time cash-payment job. This extra withholding will help cover taxes on that money so that you don't have to come up with quarterly estimated tax payments.

3. Tips to differentiating your incomeYou might view your income as one figure, but in the eyes of the IRS it has several incarnations, and each plays a part in arriving at your ultimate tax bill.
You start with your gross income, which is, basically, everything of value you got during the year. This includes your salary, as well as investment income, any prizes or awards you won, even the value of bartered goods or services you received.
Once you have that amount, you might be eligible, depending on which tax form you file, to reduce it. You can find the most ways to cut your gross income at the bottom of Page 1 of Form 1040, although the shorter 1040A also has a few.
After you subtract as many of these allowable amounts as you can, you'll have your adjusted gross income, or AGI. Your AGI is significant because it generally determines whether you're eligible for additional tax breaks. If your AGI exceeds the specific limit for a tax break, you can't claim it.
Finally there's your taxable income. You reduce your AGI further by subtracting your personal exemption amount and deductions, either standard or itemized. The result is your taxable income, the actual figure upon which your tax liability is based.

4. Different dollars have different ratesYou've figured out your taxable income. The next, and biggest, question is: How much in taxes will this amount cost you?
You already know that there are different tax rates, currently six ranging from 10 percent to 35 percent. And you probably say you're in, for example, the 25-percent tax bracket because your $50,000 salary falls into the earnings rate covered by that rate.
But not every one of your 50,000 dollar bills is taxed at 25 percent. The progressivity of the tax system means you pay more than one tax rate on your income.
"Progressivity means the more you earn, the more you pay," says LeValley. "You can have a progressive flat rate and just start taxing at higher income levels. We have brackets, so when you earn more income, the higher amount will be taxed at higher rates."
The first portion of every individual's earnings is taxed at the lowest, 10-percent, rate. The subsequent rates start applying when your income hits a set level for your filing status. The tax rate you pay on your last dollar, that 50,000th one in our example, is your marginal tax rate, 25 percent in this case.
That's why you can't simply say, "I made $50,000 and am in the 25-percent bracket, so I owe $12,500." A look at the current tax table will show your bill actually is much less: $9,171.

5. Itemizing isn't always necessaryThere are several ways to get your final tax bill as small as possible. The most common way is through deductions, either the standard amount or itemized expenses.
But there are some tax breaks you can claim without having to itemize.
They are found at the bottom of the first page of both the 1040A and 1040 forms. Technically, they are adjustments to your income and are items you can claim to arrive at your adjusted gross income discussed in lesson No. 3.
Their popular name is above-the-line deductions, because they are located on the forms just above the line (No. 37 on the 1040 and No. 21 on the 1040A) where you enter your adjusted gross income.
Four adjustments are found on the 1040A. More than 13 can be claimed on the 1040. Unlike some of the deductions found on Schedule A, you don't face thresholds, such as the limits on itemized medical or miscellaneous expenses. You will, however, have to complete some work sheets and additional forms to claim these breaks in most cases.
You can take any above-the-line deductions you qualify for, regardless of whether you plan to claim the standard deduction or itemize to get even more breaks. So take a few minutes to look over the 1040A and 1040 forms to see if any of these breaks can help you.

6. Credits are better than deductionsDeductions get lots of attention, but the tax code has something even better: credits.
A deduction helps reduce your amount of taxable income. A credit directly reduces your tax bill.
Say you and your spouse use itemized deductions to get your taxable income to $40,000. When you file your joint return, you'll owe $5,274 to the IRS. You had a combined $3,900 withheld during the year, so you still owe $1,374.
But because you have a qualifying child, you can claim the $1,000 child tax credit. This will take your bill down to $374. And the amount you paid for care of your child while you both worked entitles you to a $200 credit. Thanks to these two credits, you only have to write a $174 check to the IRS.
People who don't understand the difference between a credit and deduction sometimes choose the tax break that offers the larger dollar amount. That could be a costly mistake.
"Don't assume that the raw dollar amount of a deduction is better than a smaller credit," says LeValley.
She suggests you use this shorthand method to get an idea of how much a deduction will reduce your tax bill: Multiply the deduction dollar amount by your marginal tax rate (the rate your last dollar is taxed at, as discussed in lesson No. 4). This calculation shows that a $400 deduction equals a $100 credit for a filer in the 25-percent bracket.
You can do the math in reverse, too. To get the deduction equivalent of a $400 tax credit, this filer would divide the credit amount by 25 percent and discover that he would need $1,600 in deductions to get the same tax savings.

7. Exclusions add up to tax savingsOur tax system offers yet another way to reduce your taxable income. In some situations, you can exclude some of your income from taxation.
Many taxpayers get to do this at work through their cafeteria plan benefits. In these cases, you spend your money on a benefit, such as making contributions to a flexible spending account or paying your portion of health-care coverage. Your money, however, goes toward these benefits before your employer computes your payroll taxes. Your salary amounts used for these benefits are, in effect, excluded from your taxable income.
Tax savings in this case aren't limited to federal income taxes. You also escape the employee's 7.65-percent portion of Social Security taxes on the excluded money, says LeValley, and "a lot of states follow the federal rules and also don't tax that money, so you get an additional bump."
In most cases, says LeValley, when given the choice between a deduction and exclusion, "go for the exclusion over the deduction." This means, for example, you generally will come out ahead on taxes if you opt to put money in a medical flexible spending account (an exclusion) rather than trying to amass enough medical expenses to itemize on your tax return.
You'll also find that some federal tax credits contain exclusion provisions. They are used as a way to reduce overall holdings for estate purposes (the annual gift-tax exclusion, for example, allows you in 2006 to give away $12,000 each to as many individuals as you would like with no tax liability for either giver or recipient) and, on the state and local levels, as a means to lower your annual property tax bill by eliminating part of your home's assessed value from the computation (homestead exemptions).
And speaking of homes, the federal tax law governing the sale of a personal residence provides the biggest exclusion most taxpayers will encounter. Tax law says you don't have to count $250,000 (twice that if you're married filing jointly) of your sale profit as taxable income.

8. Stealth taxes sneak inEven when you do all you can to reduce your adjusted gross income, sometimes it's not enough.
Many deductions and credits aren't available to taxpayers who make more than a specific AGI. Exceed the limit set for a particular tax break, and you won't be able to claim it.
And personal exemptions and total itemized deduction amounts are reduced or even eliminated for high-income taxpayers. "When you reach the top of the progressive system, you start to lose things," says LeValley.
Opponents of these restrictions refer to them as "stealth" or "backdoor" taxes that effectively raise taxes without increasing tax rates.
Tax-law changes over the past few years have eased these limits somewhat by allowing filers to make more money before losing various tax benefits. But be aware that they still exist, and your tax-cutting efforts could run straight into them.

9. Deductibility has its boundaries. Don't be duped by deductibility claims. While deductions are a valuable tax-reduction method, many have limits.
Some taxpayers encounter this issue when they make charitable donations. Say, for example, last year you wrote your favorite nonprofit a $500 check. To claim it as a deduction, you must itemize. But when you fill out your 2005 return, you note that as a single filer, you're allowed a standard deduction of $5,000. If your only itemized deduction is that $500 charitable gift, it will still help the charity but not your tax bill, since you'll take the larger standard amount.
Even if you do itemize, some deductions must meet a threshold before they help you. Only medical expenses that exceed 7.5 percent of your adjusted gross income can be deducted. Similarly, miscellaneous expenses must total more than 2 percent of your income or they are of no tax value.
Being aware of deductibility limits can help you establish a tax strategy to get around them. One approach is bunching, where you concentrate your deductible expenses in one year so you can itemize. Then the next year, you might take the standard amount. It might make sense to alternate your deduction method between standard and itemized from one year to another.

10. Earned and unearned are taxed differentlyIn addition to the regular tax brackets, your income is taxed differently depending on how you acquire it. The IRS generally characterizes income as earned or unearned.
The rule of thumb for earned income is that it comes from a business activity. This includes money you get from your job, either by hourly wages or salary, along with tips, bonuses and some fringe benefits. It also covers any self-employment money you make, either as your main work or a part-time job.
Unearned income typically comes from investment sources, inheritances or what the IRS calls passive activities, such as rents from property you own. Much of unearned income is taxed at different rates than ordinary income. You face lower rates, for example, on capital gains and dividends you receive.
But a lot of unearned income, even with its lower rates, isn't necessarily good. You could be closing other tax avenues, says LeValley.
"You have to have earned income to make an IRA contribution," says LeValley. "Eligibility for a lot of credits also depends on earned income.
"You might think, 'Oh, I'm getting away with something.' Yes, you are, but you could be missing out, too. If you're playing with getting earned income down, you're cheating yourself in other ways, like Social Security.
"Like it or not, you're paying into it, so you should get what you deserve."

11. Extension to file means just thatThe IRS allows you more time to get your return in and even simplified the process for this filing season. Now, you only have to file Form 4868 to get six more months to complete your taxes. Previously it was a two-step, two-form process.
Keep in mind, however, that it's still an extension to file your return, not an extension to pay any taxes you owe.
If you don't have the money to pay your tax bill in full, LeValley says it's still a good idea to get your paperwork in on time. "It eliminates the failure-to-file penalty and cuts the failure-to-pay penalty in half, so at least that reduces the extra in penalties you'll owe," she says.
It also lowers the amount of unpaid taxes that is subject to interest charges.
"They know you owe, and they will find you," says LeValley. "Not doing anything is always worse.
"The IRS is moving to private collections. It's not the same slow process and not as genteel, so this is a good reason to be proactive. Your tax bill will ultimately be resolved and you want to be in the driver's seat here."

12. Audit pain can be reducedOne of the best ways to avoid an unwanted call from the IRS is to file your return on time. Other ways to keep auditors at bay, or at least get rid of them quickly if they do show up, is to keep good records.
LeValley says the IRS tends to look more closely at things that require substantiation. If you're self-employed or use your car or cell phone for business, the IRS will want proof.
And know the rules. In the case of mobile phones, for example, LeValley says that for the device to qualify as a business deduction, you must use it more than 50 percent of the time for business purposes. If not, it's a personal, nondeductible expense.
"The tax devil is in the details, so keep the detailed records," she says. "If you don't like writing those things down, get a minirecorder.
"These are the type of deductions they will pursue, not necessarily thinking that they're false, but because they have the best chance to be knocked out because they can't be substantiated."
And while high-income filers are a target because the IRS expects to get a bigger return on investigations in the top tax range, less wealthy taxpayers also face scrutiny.
In fact, a tax break designed especially for lower-income filers, the Earned Income Tax Credit, gets closely examined each year. The EITC is complicated and requires a lot of authentication. If you file for this credit, be sure to have all the required Social Security numbers and proof that you're eligible in case the IRS questions your claim.

13. Simple can be costlyFilling out tax forms is tedious and often frustrating, so many people look to file the easiest possible return they can.
This isn't necessarily a bad idea, as long as you make sure that a simpler return fits your tax situation.
The 1040EZ is the shortest and easiest to complete. The 1040A is a bit more complex, but offers a few more tax-saving opportunities. And the long 1040 is the most detailed and potentially difficult, but it provides the most chances to cut your tax bill.
By taking the EZ-filing route, you might save time but you won't be able to write off, for example, moving expenses or claim any education credits. By forgoing those breaks simply to get through tax paperwork more quickly, you probably will end up paying more taxes than you should.
And that's definitely a tax lesson that none of us wants to sit through.

THE TOP 5

Here is the top 5 list of things to do if you are bored at work, and you need to find some way to entertain yourself.

5. Chat online
4. Go on friendster and search for long lost friends
3. read gossip on the internet
2. Plan how your dog will spend his day
1. Learn how to marry rich (so you'll no longer have to work, and will no longer need to entertain yourself, instead, you'll be going to spas and take wild vacations)

For more details, please link to the old posts to find details.

WHAT NOT TO DO!!!

Fine for driver's make-up offence

Maddock was caught by a mobile speed camera van and the images were shown to the court.
A motorist has been fined after being caught by a speed camera taking both hands off the wheel to apply make-up while driving near a north Wales town.
Pwllheli Magistrates Court heard on Wednesday how Donna Marie Maddock, 22, from Mold, was travelling at 32mph in a 40mph zone earlier this year.
She was using an eyeliner with one hand and a compact in the other.
Maddock was fined £200 after admitting careless driving. The court heard she was banned last week for drink-driving.
Magistrates hear that it was an Arrive Alive mobile anti-speeding van, equipped with a camera, that caught Maddock driving her Vauxhall Astra in Ala Road - the road out of Pwllheli towards Abersoch.
Ian Evans, prosecuting, said she had what appeared to be an eyebrow or eyelash pencil in one hand and something like a compact or mirror in the other.
The video was shown in court and Maddock, who did not appear for sentencing, could be seen with both hands off the steering wheel.
'Beggars belief'
Mr Evans said: "This is an unusual case. The police speed check caught the defendant doing 32 mph in a 40 mph area. There was no speeding but she had no hands on the steering wheel."
Magistrates imposed six points on Maddock's licence and heard that she was already serving a 20-month driving ban, imposed last week.
A letter from her solicitor asked that because she had been disqualified since the offence, no further ban be added.
A spokeswoman for North Wales Police said: "A car is a dangerous lump of metal in the wrong hands.
"You need to be in control at all times and Miss Maddock's actions beggars belief."

Big Deal with 'Bitches"

Oscars Viewers to Hear Word 'Bitches' in Song
By Sue Zeidler
Reuters
LOS ANGELES (Mar. 2) - There will be no F-word or N-word, but the word "bitches" will be heard by television viewers during the first-ever rap performance at the Academy Awards Sunday.
At the request of the Academy and ABC, which is broadcasting the Oscars show, the composers of best-song nominee "It's Hard Out Here for a Pimp" from the film "Hustle & Flow" have substituted less offensive words for the song's profanity-laced lyrics.
"As long as the Academy approves it, it's cool," said rapper Jordan "Juicy J" Houston, a member of Three 6 Mafia, which wrote the song for the film and will be performing it.
But he said he was told by actress Taraji P. Henson, who performed the song in the film, and will sing onstage with Three 6 Mafia, that the show's producers were letting her keep the word "bitches", in the chorus. "Taraji said the Academy told her she can say 'bitches,"' said Houston.
A spokesman for Gil Cates, the producer of the Oscars telecast, confirmed that the word "bitches" was not one of the words changed by the nominated artists.
In another flap over lyrics a few years ago, actor-comedian Robin Williams performed a cleaned-up version of "Blame Canada" the off-color, Oscar-nominated song from the animated "South Park" movie during the Oscars telecast, replacing the f-word with a lesser f-word that means an expulsion of intestinal gas.
After being asked to perform the pimp song at the 78th Academy Awards, Houston, along with fellow songwriters, Paul "DJ Paul" Beauregard and Cedric "Frayser Boy" Coleman, combed through the tune, line by line, substituting various words to make the lyrics meet ABC's broadcast standards.
The song portrays the life of a hustler in the inner city of Three 6 Mafia's home town, Memphis, Tennessee,
"We know there will be children watching and we want it to be family-friendly," Houston told Reuters.
While rapper Eminem won the best song Oscar in 2003 for "Lose Yourself" from the film "8 Mile," he skipped the ceremony and the song was not performed.
Some industry analysts have suggested the Academy is hoping to reach a younger demographic by putting rap on the show.
Aaron Rosenberg, lawyer for Three 6 Mafia, said it was a milestone for the Academy to recognize hip-hop's influence on American culture and the group is extremely sensitive to decency concerns after the baring of Janet Jackson's breast during the 2004 Super Bowl halftime show.
"They worked hard to clean it up as much as possible without compromising their artistic integrity," he said.
Just in case, ABC is also expected to use a five-second delay to aid network censors.

The Road to Psycho Path

20. Learn how to impress everyone you meet with the latest news! This really is a good way for all ya gents to impress the ladies. the ladies would think you are so smart. Just look at all the information you can learn (see below for 2 samples)


Psycho Path 'craziest' road in US

Other entries included Clinton and Fidelity streets and Zzyzx RoadA street in the US state of Michigan has won the dubious honour of being chosen as the most bizarrely named of more than 2,500 entries.
Psycho Path won first prize in a competition run by an American website.
Divorce Court (off Easy Lane) in Pennsylvania and Farfrompoopen Road in Tennessee were runners-up in the Wild, Weird and Wacky Street Names contest.
In the US, owners of private roads can register whatever name they choose with the local authorities.
Marty Padgett, editor of thecarconnection.com, said "Psycho Paths" were apparently popular in the US, after receiving several similar entries.
"I don't think they're mad on Psycho Path. If it is your property you can name private roads whatever you want.
"Psycho Path was that person's personal expression," he said.
Heading for Divorce Court
Some of the top entries occurred where two streets intersected - for example Stroke and Acoma streets in a retirement area of Wisconsin, or Lonesome and Hardup roads in Georgia.
TOP FIVE STREET NAMES
1. Psycho Path
2. Divorce Court
3. Farfrompoopen Road
4. Clinton and Fidelity streets
5. Unexpected Road
Source: thecarconnection.com
Mr Padgett said his favourite was the intersection of Clinton and Fidelity streets in Houston, Texas.
"As far as bodily functions are concerned, you would probably not want to pass by Farfrompoopen Road.
"We are told it is the only way to get to Arkansas' Constipation Ridge."
All the street names were checked to ensure they were registered and not made up, including the macabre Shades of Death Road and the unpronounceable Zzyzx Road.
Mr Padgett said one reason for the bizarre listings could be that in some communities, developers simply ran out of names.
Jeff Zellar has lived in Pennsylvania's Divorce Court with his second wife for a few years.
"People laugh when they hear it. They ask: 'Are you planning on staying married?'
"In Divorce Court, there are seven homes - and probably six of us have been divorced already once. When we first moved in, my wife said: 'This sounds like trouble.'"
Mr Zellar is still married.

DETROIT, Michigan (AP) -- Apparently, one 12-year-old visitor to the Detroit Institute of Arts doesn't think much of abstract art.
The boy stuck a wad of gum to a $1.5 million painting called "The Bay" by Helen Frankenthaler, leaving a stain the size of a quarter, officials said.
The boy, who was not identified because of his age, was part of a school group that was visiting the museum last week when officials said he took a piece of gum out of his mouth and stuck it on the 1963 painting. (Watch why the boy put the goo on the canvas, see the stain -- 1:32)
The gum stuck to the painting's lower left corner and did not adhere to the fiber of the canvas, officials told the Detroit Free Press. But it left a chemical residue about the size of a quarter, said Becky Hart, assistant curator of contemporary art.
The museum's conservation department is researching the chemicals in the gum to decide which solvent to use to clean it. The museum hopes to make the repair in two weeks and will keep "The Bay" on display in the meantime, she said.
"Our expectation is that the painting is going to be fine," Hart said.
Holly Academy director Julie Kildee said the boy had been suspended from the charter school and says his parents also have disciplined him.
"He is only 12, and I don't think he understood the ramifications of what he did before it happened, but he certainly understands the severity of it now," said Kildee.
Copyright 2006 The