What’s the Best Use for My Tax Refund?

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Image credit: StockMonkeys.com

As we edge closer and closer to tax Day 2014, many of you have likely already received your tax refund, or are eagerly anticipating it.

Every year, the possibilities for your tax refund seem endless: you vow to pay off some debt, invest it, put it into savings or reward yourself for your hard work by getting a new, expensive toy or gadget.

For some people, all of these are acceptable choices. But for so many others, there is an even better and much wiser place to put your tax refund money.

You know the feeling. You anticipate your refund for months and months, only to have it spent in the blink of an eye. And, it can be a real drag when that seemingly large chunk of dough hasn’t had nearly as much of an impact as you had thought it would.

Here’s what we suggest: instead of burning through your tax refund with little or nothing to show for it – put the money to real use and hire a bankruptcy attorney.

Naturally, this choice isn’t necessary for everyone. If you have all of your affairs in order – major kudos to you! However, if you find yourself frantically looking around the hole you’ve fallen into, wondering how on earth you’re going to get out – what you really need is a fresh start.

If your debt is so intimidating and seems completely insurmountable, there’s no doubt that you need help rebuilding your finances. Are you able to save for retirement? Many Americans are so far in debt that they are unable to put any money aside towards their retirement years. This is a scary thought!

Picture yourself in 20 years, 30 years, whatever the number may be that puts you at retirement age. Now imagine yourself with no income, no savings, and potentially still paying off your debts! That is no way to spend your golden years.

While the thought of filing for bankruptcy may be scary, the image of yourself at retirement age with empty pockets should be terrifying. If you’ve considered filing for bankruptcy in the past, but hesitated due to the cost of a bankruptcy attorney, what better time to make the move then when the money you’d need is right in front of you?

With our help, you can start getting creditors off your back today. Instead of slowly chipping away at your debt while simultaneously being unable to save for retirement, turn that tax refund into a legal retainer and let us pull you out of the debt hole for good.

We make it our business to help you, not to take your money and sit on it. With reasonable fees, free consultations and an extremely compassionate and determined bankruptcy attorney, you have absolutely nothing to lose, and everything to gain.

Call Veitengruber Law today, and get started working on a future you can get excited about. (732) 695-3303

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5 Reasons to Choose Paper Over Plastic

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If you are anything like the thousands of customers who were spooked by the recent Target security breach, you’re probably wondering if cash is back in style. It doesn’t come with the convenience of a credit card, but it does come with the extremely important ability to protect your personal information. Financial experts have noted that the majority of shoppers, although concerned about possible fraud, have not stopped using their credit cards altogether.

It has been shown, however, that at least some Americans have switched back to carrying cash at all times, and this change started even before the infamous Target breach. With the widespread, lightning speed increase of the use of technology in virtually every corner of the world, consumers have very valid fears about the possibility of having their information stolen. With the deluge of stories on the news about identity theft and credit card fraud, plenty of people have chosen paper over plastic.

Keeping your personal information safe is just one of many reasons that cash is back in style.

Money Mindfulness

Spending cash only allows customers to physically see the money leaving their hands with every purchase. For many, this means that spending dollar bills instead of swiping a piece of plastic will actually help them spend less. Sometimes that little piece of plastic can feel like magic, and can cause a denial about how much is actually being spent.

For people who really need to gain control of their spending habits, instilling a cash only policy is a great idea. It is very easy to set yourself a spending budget for the week when you’re only allowed to spend cash. Withdraw a reasonable amount of cash once a week, use only that money for casual spending, and you’ll quickly realize that you’re putting much more thought into each purchase.

Small Business Appreciation and Awareness

More and more Americans have become increasingly loyal to their local mom-and-pop stores, wanting to help small businesses succeed as much as possible. And, while this is a fantastic shift away from throwing more and more money at big-box retailers, handing a credit card over to your local mom-and-pop store owner negates your small business loyalty a bit. Remember that every time you use your credit card, around 3% of your purchase amount goes directly to the bank instead of to the store owners. Paying in cash helps small business owners avoid the outlandish fees they are charged by banks just for accepting credit cards.

Negotiating Power

While it’s true that you won’t be able to negotiate for every purchase you make, it’s much easier to haggle when you have a fistful of cash to wave around. This is especially true if you do a lot of shopping at flea markets, farmers markets, thrift stores and independently owned small businesses. Any place where the actual business owner is present is a great place to negotiate. These types of sellers are not controlled by a corporation, and can raise or lower their prices as they so desire. And, as mentioned above, they’re motivated by cash so that they can avoid those outrageous credit card fees (also known as interchange fees).

Showing Gratitude for Good Service

Whenever possible, try to bring cash with you to establishments where you know you’ll be expected to leave a tip. Some of the most common places to leave a tip include restaurants, salons, hotels, airports, and anywhere with valet parking.

Many people can and do tip using their credit card, however, this does not benefit the tip recipient nearly as much as when they get paid in cash. For example, waiters and wait staff are often required to pool their tips and then redistribute it evenly amongst the entire staff at the end of the night. Although it would require that your server pocket the extra cash you leave, if you have experienced exemplary service, it may be a good idea to give them a little kickback.

As a general rule, wages within the service industry still remain too low. Many of these workers simply depend on tips to boost their income up to a respectable level. Some locations only distribute tips that were left by credit card on a weekly basis. For those workers who are living paycheck to paycheck, leaving their shift with a wad of cash can really make a difference in their day-to-day lives.

Credit cards definitely still have their place in today’s spending world. Of course, there are pros and cons to everything, including paying with credit. We’re not saying that you should go dump all of the cards out of your wallet and cut them up; but do use them wisely and sparingly. We all know the phrase “Money talks,” but remember that you have a say, too.

Paying Taxes When You’re Self-Employed

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It can definitely be confusing when tax season rolls around if you are currently working as a 1099 contractor, or in other words, if you are self-employed. If you have been working from home – either on your own business or as an independent contractor, you do still have to pay income tax, as long as you’re actually generating an income. The tricky part is, now you are considered to be the employer and the employee.

Most 1099 contractors love the flexible work schedule and increased amount of independence that comes with being self-employed. However, one of the negatives that unfortunately also comes with the package deal, is figuring out and managing to pay your own income taxes properly and on time.

After all, no one wants to get in trouble with the IRS.

Just like a W-2 employee, your income taxes as a 1099 contractor will be determined by how much you earn per year. You can pay your taxes electronically or the good old-fashioned way: by mail.

The first thing you’ll need to do when determining how much of your wages to fork over to the government, is to add up all of your yearly income. Be sure to include all payments you have received from any and all clients throughout the entire preceding calendar year. The nice thing about working independently, is that you can then deduct business expenses and tax credits from your gross earnings. You can deduct virtually anything that you use to help run your business, ranging from the supplies you use on a daily basis and office furniture in your home to any expenses related to traveling for your business. Another nice bonus of working for yourself, is that you can actually deduct part of your mortgage payment if you have a home-based office.

Next, you should also know that as an independent contractor, you will be required to pay something called a Self-Employment tax, or SE tax. This is because you no longer have an employer taking money out of your paycheck to go toward Social Security and Medicare.

By using form 1040-ES, you will be able to determine whether or not you are required to pay your SE taxes, as well as your income taxes, quarterly, or if you can simply pay them once per year.

After filling out the worksheet attached to form 1040-ES, you will know your estimated quarterly tax payments. Included with form 1040-ES are blank vouchers that independent contractors can use when sending in quarterly tax payments to the IRS. Remember, you can also pay quarterly using the IRS’s electronic payment system.

Even if you pay your SE and income taxes on a quarterly basis, you will still be required to file an annual return every year. This is because most sole proprietors estimate their quarterly income. Your annual report will show the IRS your actual earnings for the entire year so that any corrections may be made to the quarterly payments that you have submitted.. To file your annual return, you can use the Schedule C form, found on the IRS website.

Filing your taxes as a sole proprietor or 1099 contractor can be confusing, especially if this is your first year in business for yourself. By using the tips in this article, you should be able to successfully handle filing the appropriate forms and making the correct payments.

Should you need further assistance, we can easily direct you to a trusted tax preparer within our vast professional network. It’s as simple as leaving a comment after this post, sending us a quick note using our Contact Us form, or calling/dropping by our office. As always, we’re happy to help!

Should I Buy a Short Sale Property?

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In years gone by, many potential home buyers had the impression that homes labeled “foreclosures” or “short sales” were dumps or money pits. Think: Major Fixer Upper.  Most buyers steered clear of those listings, and they could easily do so because homes listed for sale were aplenty.

These days more people who are in the market for a home have a much better understanding of what a short sale home actually means, and more people are willing to, and sometimes specifically aiming to purchase a short sale home.

Even with the increased interest in purchasing short sale properties in the new millennium, there are still an overabundance of misunderstandings and misconceptions when it comes to shopping for a home that, by name, is a bit of a misnomer.  Reason being: short sales are anything but short.

The big question, then, is: if they take so astonishingly long to settle, WHY ARE THEY CALLED SHORT?

Therein lies the misnomer and the misunderstanding. These transactions were named due to a money short, not a quick sale. They occur when the previous (or current, depending on how you look at it) homeowner has faced a financial difficulty of some kind. This may be due to a divorce, job loss, job transfer, illness or some other unforeseen obstacle. The hardship forces the homeowner to sell their home for less than it’s worth, and less than they actually still owe to their bank or lender.

In order to increase their odds of selling the home due to necessity, the homeowner asks their lender to accept less money than they owe on the loan. If the lender agrees to accept, say $150,000 instead of the $200,000 they are owed, they are being “shorted” $50,000. Hence the name: SHORT SALE.

Why and how does this affect you, the buyer? Sure, you very well may get a decent property at a substantial discount. Additionally, since the lender has already taken a financial loss on the home, they may even offer you a very attractive interest rate. After all, they are eager to make up some of the money that they’ll lose on the transaction. It may seem counterintuitive for lenders to willingly take less than what they are owed, but as foreclosure as the alternative, a short sale looks desirable in comparison.

Another plus of seeking out a short sale property is that you will have the cooperation of the sellers. Unlike a property in foreclosure, short sale sellers are eager to make it a done deal. That’s why their home is in a short sale in the first place.

Conversely, if you are considering purchasing a short sale property, you will not be able to go it on your own. It is extremely important that you work with a real estate agent or attorney who has significant short sale experience under his belt. Many realtors just cannot handle short sale situations well. They require a great deal of  steadfast perseverance and the ability to remain calm yet determined when dealing with difficult or uncooperative lenders. So, you may be looking at attorney’s fees, but keep in mind the steep deduction in the price of the home and you will quickly realize that the savings greatly outweigh the cost of a good attorney.

Several other things to consider include:

  • The property may be in various degrees of disrepair.
  • The process can be unpredictable, stressful, and sudden changes can occur quickly.
  • A sizable down payment is usually required to show the lender that you are a better risk than the last homeowner.
  • Some lenders are more resistant to short sales than others.
  • Short sales become exponentially more complex if there is more than one lender involved. Often the second or third lenders are the ones taking the largest financial hit, causing them to dig their heels in and resist, which can cause extreme delays in the process.

As long as you enter into the process with your eyes wide open to the potential pitfalls and have a qualified real estate attorney working for you, a short sale purchase may very well be one of the best decisions you’ve ever made.