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Tag Archive | "taxes"

Secrets smart investors use year-round to save on their taxes


(BPT) – Come tax time, many people work to locate tax breaks. While this is always a smart financial move, a little-known way to help build your net worth is to keep taxes top of mind throughout the entire year.

Reducing taxes means you keep more of what you earn, according to Nick Holeman, a financial planning expert at Betterment.com.

“You can’t control the stock market, but you can control some of your taxes,” Holeman said. “Knowing how your investments affect your tax bill can help you save money not just on April 15th, but for years to come.”

Check to see whether your long-term investment strategy is running efficiently with these tips from Holeman.

Invest your tax refund: One smart place to invest your tax refund is in an IRA. Normally, investors might divert a portion of the refund into this account as part of a well-rounded investment strategy and claim the deductions for next year’s tax time. Invest your refund, and you may get a portion of that back in tax savings. Stay in the habit of investing that refund if you can and watch those small returns add up over time.

Think several moves ahead: Investing is complex and from time to time you will have to sell some of your investments; everybody does. It might be to rebalance your portfolio or maybe your goals have changed and your investments no longer match their intended purpose.

Still, smart investors need to think ahead before blindly selling parts of their portfolio. This is because selling could potentially lead to taxes. By carefully choosing which investments to sell, you can help minimize that hefty tax consequence.

One way to do this is to partner with an investment company that has the tools to make this information easy to access and understand. Betterment.com, for example, offers Tax Impact Preview, which lets investors see estimated potential tax on a sale before making the trade. If you don’t think the pros outweigh the cons, don’t do it.

Reorganize your investments: Another way to potentially leverage even small tax advantages into long-term growth is to build your portfolio like an energy-efficient engine, built to run for more miles with less need to refuel. You can help accomplish this by reorganizing your portfolio. Move inefficient investments like international stocks and other assets that are taxed more often into a tax-deferred account, such as an IRA or a Roth IRA. That way, you can enjoy the high growth for less tax. Then, move less-taxed assets, such as municipal bonds, into taxable accounts.

Benefit from losses: Help keep your portfolio in balance by selling off the laggards and replacing them with a similar investment. You can receive a tax deduction from your losses that can help cancel out the taxes you owe on assets that have gains. This is done automatically for investors at many automated services through a strategy called tax loss harvesting. Smart investors should always remember that investments involve risk and may result in loss.

Give to a worthy cause: While it’s important to secure your future, many investors see community support as an important goal. Consider donating a to a nonprofit organization in your community. Not only are you helping to improve the quality of life in your locale, you can potentially claim a deduction from your income tax. It can pay to do the right thing.

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Sand Lake residents will vote on street improvements

This drawing shows a more upscale version of the Village of Sand Lake streetscape project, which would not include as much red brick and the curbs would not jut out as far. This drawing is looking east from 5th Street (at the Park) toward Northland Drive. Drawing by Fleis & VandenBrink

This drawing shows a more upscale version of the Village of Sand Lake streetscape project, which would not include as much red brick and the curbs would not jut out as far. This drawing is looking east from 5th Street (at the Park) toward Northland Drive.
Drawing by Fleis & VandenBrink

By Judy Reed

When the residents in the Village of Sand Lake head to the polls November 8, they will vote on a street improvement bond that would take effect in June, 2018.

They are asking voters to approve a bond that would allow them to borrow up to $775,000 to pay the costs of designing, constructing, reconstructing, and paving streets, streetscape improvements, and costs of related improvements.

According to Village President Roger Towsley, the bond would be used to pave Lake Street from Northland Drive to 5th Street. It would include new sidewalks, curb and gutter, and more decorative street lights.

He said it’s been at least 25 years since they’ve done a project like this. “We want a nice 6-inch curb,” explained Towsley. “We’ve just been putting bandaids on, and there is no curb left in spots.”

“The sidewalks will also be wider than they are now,” explained Towsley. “We want the sidewalk to be a connector between the White Pine Trail and Salisbury Park.” He said it would one to one-and-half feet wider, which would make parking a bit narrower, but not much. They may also install a bike path.

The goal, he said, is to make it a more walkable community, which is something that the State of Michigan looks for when awarding grants for this type of project.

The streetscape project would not have as much red brick as seen in the photo, nor would the curbs be bumped out as far. “We scaled it back a bit,” he said.

The proposed millage of 3.8035 mills ($3.8035 for each $1,000 of taxable value) would generate the funds to pay for the project, along with a $352,950 grant from Grand Valley Metro Council.

The engineer on the project is Fleis and VandenBrink.

If it passes, the millage would not begin until the current 5 mills they are paying for a road pavement project in 2003 is completed. That will be paid off in June 2018.

In addition, the road project plans for spring 2017 include the crush and reshaping of Lake Street from 5th to Ritchie Avenue. That project will be paid for with a $250,000 grant from the State of Michigan, and a $130,000 loan from the State Infrastructure Bank. That loan will be paid back over a period of 10 years using Act 51 revenue from the State of Michigan.

For more information, call the Village Office at (616) 636-8854 Monday through Thursday 9:30 a.m. to 2:30 p.m.

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GRCC millage fails; Pierson president survives recall

Kent County voters sent Grand Rapids Community College the same message Tuesday that they’ve sent three times since 2007: NO NEW TAXES.

The college had asked for a $98 million bond proposal to upgrade facilities, and it was soundly defeated by a vote of 26,417 (no) to 19,856 (yes). While Grandville, Northview and Lowell also had millages on the ballot, most communities had nothing else on the ballot, which led to low voter turn out.

Voters in Grandville nixed a $22.85 million bond proposal by a narrow margin—only 38 votes. There were 2,508 no votes, to 2,470 yes votes.

Lowell renewed their operating millage, and Northview passed an $11.9 million bond proposal.

In Montcalm County, Pierson Village President Karl VanHaren survived a recall election by three votes—24 to 21. He has filed a recall petition against three of the trustees involved in the recall against him: Rebecca Starr, Duane Grifes, and Verna Smigiel. That vote will take place in August.

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Tax resolutions for the new year

(ARA) – It might be coincidental that the new year and the beginning of tax season arrive so close together. Many people resolve to be wiser with their money in the new year, and it just so happens that being smart about your taxes is a good way to get started.
Whether it’s your only resolution or just one of a few, sticking to your new year’s tax resolutions throughout the whole year is the trick to being successful. And just like taking losing weight during the year will have you in better shape for the future, following your financial resolutions can make tax time far easier next year.
Use these tips to help build a successful approach to your tax resolution.
* Get started now. Procrastination can be your downfall – it often happens that the longer you put something off, the more daunting a task it seems. And the last thing anyone needs is an excuse to be more overwhelmed by the thought of working on taxes. If you know that you struggle with preparing your return, make the call to a professional who can help you. But again, don’t wait – tax preparers’ appointment books fill up fast during tax season.
* Set up a filing system and stick to it. The flurry of paperwork is stressful enough when you’re doing your taxes—not being able to find a necessary slip of paper only makes it worse. Create files for receipts and other documents and be sure to keep them updated. If you want to go digital, use a scanner to file everything neatly away in specialized folders on your computer.
* Take advantage of tax-saving benefits offered by your employer. If they’re available to you, consider how much smarter it is to use pre-tax dollars for things like medical expenses and childcare. If you need more guidance about how to best take advantage of the offered programs, check with your human resources department, or your own tax preparer or financial planner.
* Promise to give yourself a tax check-up twice a year. Don’t let yourself be shocked when tax time rolls around. the psychological and financial stress of being unprepared for a big tax bill can take a major toll. Do yourself a favor by checking on your tax liability a couple of times through the year. If you need to make adjustments to your withholding, do so as quickly as you can. Even if you find that nothing needs to be changed, you’ll have something to smile about and one less worry to occupy your mind.
* Make it a habit to save. Putting extra money away is always a good habit, whether the intent for it is to help pay off tax bills or to purchase a new vehicle. Giving yourself a little extra cushion to fall back on doesn’t have to make you feel fiscally stressed, though. Put away $20 here and there, or have a percentage of your paycheck sent directly to a savings account, and you’ll be excited by how much you have at the turning of the next new year.
Bothersome as taxes can seem, if you prepare for them throughout the year, you might find the experience far easier the next time you have to file. For more ideas about a financially sound new year, visit blog.equifax.com.

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Want to cut the deficit? End offshore tax abuses

By Sen. Carl Levin

The vast majority of Americans fulfill their legal and civic obligations to pay the taxes they owe, and rightly expect others to do the same. But too often, corporations and wealthy individuals use overseas tax havens to dodge their duty, passing their tax burden off onto others and increasing the federal budget deficit.
That’s why I have introduced the Stop Tax Haven Abuse Act, legislation geared to stop offshore tax abuses that constitute a huge drain on U.S. taxpayers. This bill offers powerful tools to combat offshore tax abuses and eliminate tax incentives that encourage corporations to move jobs and profits overseas. And at a time when budget deficits are everyone’s concern, this bill offers a reasonable way to reduce the deficit by billions of dollars. I have recommended to the Joint Select Committee on Deficit Reduction – the so called “super-committee” – that they consider the Stop Tax Haven Abuse Act as they work on a bipartisan agreement to reduce the deficit.
The bill is a product of the investigative work of the Permanent Subcommittee on Investigations, which I chair. For more than ten years, the subcommittee has exposed billions of dollars in offshore abuses, including the use of offshore corporations and trusts to hide assets; the use of tax haven banks to set up secret accounts; and the use of U.S. bankers, lawyers, accountants and other professionals to devise abusive tax shelters.  A small office building in the Cayman Islands, called the Ugland House, is listed as the headquarters for more than 19,000 shell corporations that in too many cases are being used to dodge their taxes.  In addition, over the past two years, 30,000 Americans have come clean to the IRS about hiding funds in offshore bank accounts.
Why is this so important? Because the stakes for taxpayers and our budget problem are enormous.
Our subcommittee has estimated that offshore tax abuses cost taxpayers about $100 billion a year. The loss of that money means two things happen: the tax burden on law-abiding, middle-class taxpayers goes up to cover the obligations of those who fail to pay what they owe; and our budget deficit deepens.
The Stop Tax Haven Abuse Act would help put a halt to offshore tax dodging in several ways. It would authorize the Treasury secretary to take special measures against foreign jurisdictions or financial institutions that impede U.S. tax enforcement. It would give law enforcement new tools to establish who owns and controls offshore entities. And it would stop corporations that are run from the United States from avoiding taxes by claiming status as foreign corporations.
I have introduced similar legislation in the past, and some important provisions from those bills have become law. But much more can and should be done. Cracking down on offshore tax abuse would not only combat rising budget deficits, but also make our tax system fairer to middle-class families.
No one enjoys paying taxes. But almost all of us do.  Some pay their taxes simply to avoid trouble, but for most of us, there is something else going on: a sense of civic duty. We understand that, as Supreme Court Justice Oliver Wendell Holmes put it, when we pay taxes, we buy civilization.

We know that for our country to remain safe, secure and prosperous, paying our fair share is necessary.  It’s wrong that so many use offshore shelters to avoid their obligations, and we can and should do more to put an end to the tax cheating that robs our Treasury, honest taxpayers, and our children’s future.
 Carl Levin is the senior U.S. senator from Michigan.

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Main Street

Roger on Main StreetDown with government?
No taxes, no government. This notion has taken hold in some circles. In my opinion, the idea has a few flaws.
If nobody in town had to pay taxes we’d have to do without water, sewer and roads. Not paying taxes would leave your budget with more money for steak and designer jeans, but, whoa – the street is off-limits for you, buddy, unless you pay a hefty toll fee to the private owner. If your house catches fire, better have your credit card handy because there would be a service call charge, an hourly charge for each fireman, mileage fees, water charges, and hose usage. That’s plan A. Your fire is out. But if you want the firemen to save people or pets from the building, you have to buy plan B from the owner of the fire department. (No taxes, though.)
Check the city budget. Try online for a summary of where the money goes. It’s clear to me that we need government. It’s the most cost-efficient way to get the things we need. Why government and not private providers? Because government doesn’t have to make a profit.
Taxes save us money. You read it here.
Be prepared
Two elderly women met for the first time since graduating from high school.  One said, “You were always so organized in school. Did you manage to live that way all your life?”
“Yes,” said her friend. “My first marriage was to a millionaire; my second marriage was to an actor; my third was to a preacher; and now I’m married to an undertaker.”
“I don’t get it,” said the other. “What do those marriages have to do with a well-planned life?”
“One for the money, two for the show, three to get ready, and four to go!”
Mom joke, No. 1
My mother and I were walking down the street when a man with a clipboard stopped us. “I’m taking a survey,” he said. “Do you think there is too much sex in movies?”
“I’m not sure,” replied my mother. “I’m usually too wrapped up in the film to notice what the rest of the audience is doing.”
Mom joke, No. 2
A young man finds his dream girl and asks her to marry him. He tells his mother he wants her to meet his fiancée. Wanting to make a bit of a game out of it, he says he’ll bring the girl over with two others and see if his mother can guess which is his choice. His mother agrees to the game.
That night, he shows up with three beautiful young ladies. They all sit down on the couch, and everyone has a wonderful evening talking and getting to know each other.
After the three have departed, the young man says, “Okay, Mom, which one was the girl I want to marry?”
Without any hesitation, his mother replies, “The one in the middle.”
The young man is astounded. “How in the world did you figure it out?”
“Easy,” she says. “I don’t like her.”

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Need more time to pay your taxes?

Taxpayers who owe taxes may be relieved to know that there are some options for those who owe and can’t afford to pay the full amount right away.

Here are the top 10 things the IRS wants you to know if you need more time to pay your taxes.

Taxpayers who are unable to pay all taxes due are encouraged to pay as much as possible. By paying as much as possible now, the amount of interest and penalties owed will be less.

Based on the circumstances, a taxpayer could qualify for an extension of time to pay, an installment agreement, temporary delay or an Offer in Compromise.

If you cannot pay the full amount, taxpayers should immediately call the number or write to the address on the bill they receive.

You may want to consider financing the full payment of your tax liability through a loan. The interest rate and fees charged by a bank or credit card company are usually lower than interest and penalties imposed by the Internal Revenue Code.

If you cannot pay in full immediately, you may qualify for a short amount of additional time, up to 120 days, to pay in full. No fee is charged for this type of payment arrangement and this option may minimize the amount of penalties and interest you incur.

You may also want to consider an installment agreement. This arrangement allows you to make monthly payments after a one-time fee of $105 is paid. If you choose to pay through a Direct Debit from your bank account, the fee is reduced to $52. Lower-income taxpayers may qualify for a reduced fee of $43.

To apply for an installment agreement you can use the Online Payment Agreement application available on the IRS website; file a Form 9465, Installment Agreement Request; or call the IRS at the telephone number shown on your bill.

In some cases, a taxpayer may qualify for an offer in compromise, an agreement between the taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. Generally, an offer will not be accepted if the IRS believes that the liability can be paid in full as a lump sum or through a payment agreement.

Even if you set up an installment agreement, the IRS may still file a Notice of Federal Tax Lien to secure the government’s interest until you make the final payment.

It is important to respond to an IRS notice. If you do not pay your tax liability in full or make an alternative payment arrangement, the IRS is entitled to take collection action.

More information on the collection process is available at http://www.irs.gov.

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