ReAnn Rothwell’s Money Saving Ideas, Tax & Organizing Tips

Have a piece of glass cut to fit the top of your desk and each month change the theme by switching out the fabric, wallpaper, or wrapping paper that you place between the desktop and the glass. It is an inexpensive way to spruce up your space (once the initial glass top is purchased).

I had a very interesting conversation about my post on paying no taxes the other day. I want to clarify some numbers for all of my readers.

40% of U.S citizens right now pay no federal income taxes leaving 60% of us to share the burden of our federal government and its infrastructure and programs. 10% of taxpayers provide 70% of total income tax revenue.

Does this seem fair?

Most of the non-payers are not wealthy people using tax loopholes. The majority are lower income taxpayers who are single and use the Single or Head of Household (i.e. single with dependent children) filing statuses. Some of the non-payers actually get a refund that is in fact greater than the amount of their federal withholding, due to an Earned Income Tax Credit (EITC), which is considered an anti-poverty tool. It is worth noting that these people still pay some taxes, even if they do not pay federal income tax. Non-payers of federal income tax still contribute to social security and Medicare taxes, sales tax, and excise taxes.

I am going to be very interested in how federal income tax code issues are addressed in the next year or two!

Some days are just hopeless and you should have stayed in bed. One of the best cures for office stress and bad days is humor. Wacky workplace humorous items will help you make your day a little better.

For example, take a few minutes and pretend ‘Dead Fred’ ($9.99) from ThinkGeek is the grumpy client you just spent 20 minutes trying to make happy to no avail.  Made of silicon rubber, you can stab him repeatedly with your pen, release some stress and go on to the next client in a little better frame of mind.

If you work alone most of the time and find yourself talking to the inanimate objects in your office, buy a set of Character Stickers ($4.99) to give the stapler evil eyes and your favorite coffee mug a goofy face. Then at least the objects in your office will be looking at you when you are talking to them - if not answering you back!

Even if you ARE mad at your boss or a co-worker, I would not recommend the Shocking Pen ($5.99). Besides, you have too much work to do! Unless the boss is gone and then a game of office Laser Shocking Tanks ($49.99) might be in order.

Really want to annoy someone?  “The Annoy-a-tron ($9.99) generates a short (but very annoying, hence the name) beep every few minutes. Your unsuspecting target will have a hard time ‘timing’ the location of the sound because the beeps will vary in intervals ranging from 2 to 8 minutes. The 2kHz sound is generically annoying enough, but if you really really want to aggravate somebody, select the 12 kHz sound. Trust us. The higher frequency and slight ‘electronic noise’ built into that sound byte will make a full-grown Admin wonder where his packets are.”

 See all of these wacky office supplies plus many more at ThinkGeek.com or Prankplace.com. Just looking at them and thinking of the devious things you COULD do (if only you were THAT bad) will make you smile. (You might find a Christmas gift idea for a co-worker while you are browsing too - only 30+ days left before it is here!!)

Before & After Space Station

The Blue Lounge Space Station ($79.95) is an extended desk organizer for laptop users with internal coiling pins that conceal all the cords that usually sprawl over your desk. Hovering just ½ inch above the desk, your cords are free to enter or exit the hub at any point – on the side to connect a scanner, the front for an iPod, the back for a laptop or camera.

An internal 4-port USB 2.0 hub will keep all of your peripherals connected with one plug. Just one USB plug exits the station right where needed to connect your laptop.

Easily tip the front of the Space Station up to access the hub and cords.

Underneath the Space Station

With the end of the year nearly around the corner, my thoughts turn to tax season. (Yes, I hear the loud groan out there!)  I know that many if not most of my clients would like to find a way to have a zero tax bill at the end of each year so thought I would share some numbers and thoughts on that subject.

Remember, the current federal tax system was designed to be progressive: the more you make the more you pay. According to the IRS, in 2005 the top 10% of taxpayers provided 70% of total income tax revenue at an average 25% of their income.  Fewer than 2% of those top 20% do not pay any income taxes. That is only about 400,000 individual people in the U.S. – approximately .1%.  Most of those folks still pay social security tax, Medicare taxes, state and local taxes, property taxes and sales taxes.

If you want to legally pay no taxes, one strategy is to earn little to nothing. Most of the 40% of the folks out there that pay no federal income taxes earn less than $30,000 per year including the 15 million who do not earn enough to even file tax returns in the first place. Many of those are single ‘head of household’ parents who qualify for an earned income credit and $1000 per child tax credits. (A single person with no kids or deductions can earn up to $10,300.) Earning less is a great tax saving plan – unless you want to have a social life or go anywhere. {smiles}

Before 1986, when Congress started aggressively closing loopholes in the tax laws, you could deposit money in off shore trusts and corporations that were not liable for taxes. However, Congress has passed a bunch of laws that make sure earnings in tax havens like Panama, the Bahamas and the Cayman Islands are taxed. Bank secrecy laws have even been pierced.

You can move to another country and in 2008 have earned less than $87,600 federal tax-free – however, you will probably have to pay local taxes in the country that you moved to.

You can take the drastic step of renouncing your U.S. citizenship to avoid U.S. taxes. However, if the government feels that you have done this only to escape U.S. taxes, they will still tax your income for 10 years.

How to lower your taxes

There are a handful of government-approved ways to collect certain kinds income that is federal income tax free.

Invest in municipal bonds that are used to finance toads, schools and other public works. Do it right and when you retire you can live off your savings income tax free.

Own a small business. Although congress has tightened many of the extravagant deductions that were once common, there are still many things that can be subtracted from your income. Keep in mind that the business expense deductions must be necessary and reasonable. Writing off a trip taking the entire family on a business conference to Hawaii would be frowned upon. However, certain meals out, a home office, a lot of mileage and contributions to an expanded retirement plan are all benefits that you can take advantage of to lower your tax bills.

Invest in Rental Real Estate. Although I personally do not recommend this tough business for everyone, many folks enjoy the tax benefits of owning rental real estate. As long as your rental income is paying for your rental expenses and the value of the property is going up, then when you sell the property you can spread the lower taxed long-term capital gain over several years with an installment sale.

Think you may want to go back to school or take some classes? Another good strategy is to open a 529-college savings plan. Your earnings grow tax-free and the withdrawals are tax-free when the money is used for college expenses for either a child or an adult.

Whether or not you itemize your deductions, you may deduct qualified higher education expenses. You may take the deduction on up to $4,000 in tuition and fees if your adjusted gross income is $65,000 or less ($130,000 for joint filers).

Put your money in a Roth Retirement account. All withdrawals are tax-free after age 59 ½.

Clean out your garage or basement and keep track of your charitable deductions. The new IRS rules require you to have a detailed list of all the items that you donated to places like Goodwill or Salvation Army. You might be surprised what all of those boxes of ‘stuff’ are worth as a deduction on your tax return! (If you do not itemize, check to see if any one else in your family does and if they could use the itemized deduction if you cannot.)

There are some companies and books out there that purport to explain to you how to not pay taxes via methods such as setting yourself up as a non-profit entity or as a church. Most of them charge a fee or require you to buy their book.  My personal opinion is to run from these as hard and fast as you can. Most are illegal if not immoral. (Don’t believe these outlandish claims: wages are not income; filing a return and paying taxes are merely voluntary; and being required to file Form 1040 violates the Fifth Amendment right against self-incrimination or the Fourth Amendment right to privacy. Taxpayers who file a return or make a submission based on one of these positions are subject to a $5,000 penalty.)

Do you still have an Adjustable Rate Mortgage (ARM) or high interest rate Mortgage?

Do you need to consolidate some loans? Consolidate credit cards?

My recommendation: Get those mortgages refinanced ASAP!!!

According to Jim Koontz and Karen Olson at Diversified Mortgage in Great Falls, MT “Don’t be scared!! You can still easily refinance if your credit score is at least 620 or above.”

Interest rates currently are around 6 to 6 ¾ percent if you have decent credit and at least 80% equity in your home.  If your numbers are not that good, it is still a good idea to do some calling around to see what is available for your individual situation. As always, I recommend that you comparison shop for who will offer you the best fixed rate mortgage.

You can get your credit score at Fair Isaac: FICO score (www.myfico.com).

See also

Your Credit Record – Creating and Keeping a Good One

Having returned from a long trip recently, with airlines charging for everything including your first piece of checked luggage and any sort of overage in weight: I urge you to consider a digital luggage scale like the Balanzza Ergo . This is truly a handy, money saving gadget. The Ergo is an ergonomically designed device that easily weighs your baggage before you get to the airline counter so you can anticipate or avoid extra charges. The digital readout makes it much easier to read than a standard scale.

The Ergo weighs only 8 oz. itself and is compact in size. It is easy to pack to take with you on your trip just in case you buy a bunch of gifts for the return trip. Simple to use, just secure the scale to the bag’s handle by using the provided strap and lift the luggage until you hear a beep indicating the weight has been registered.

A bright easy to read LCD display indicates weight. During these days of stressful and difficult travel, being informed is vital and can save you money. Be a bit more prepared the next time you travel!

Smart Tech daily System

I do not get to do a lot of shopping at Pottery Barn, unless it is online or I travel to places like Calgary, Spokane or Denver.  However, I would like to recommend their line of Smart Technology furniture.

It is worth noting for not only the way it integrates gadget clutter into homes but also for adding decorative and other functional/organization features.

Part of what they call the ‘Daily System’, The Smart iPod Speaker Station with Whiteboard  ($149) for example, combines a white eraser board and built-in stereo speakers with a plug for an iPod or other MP3 player. With its lovely simple style, it is ideal for posting important reminders or inspiration while listening to your favorite songs. Take a look at the entire wonderful Daily System here.

If you always find yourself looking for your cell phone/iPod/miscellaneous rechargeable device, the Recharge Station is the perfect answer. Available in wood grain, red and white, it is a discreet docking station to organize and recharge portable accessories. (Normal cost = $79 – Right now Antique Honey and red are on sale for $49.99!)

Although this station may have a lot in common with other docking stations I have seen, it does have a very decorator look.  One must always appreciate an extra drawer for helping to introduce order in the chaos that seems to be our daily lives.

Check out the rest of the collection, including a cabinet, shelf and desktop hutch here.

With the holidays fast approaching and no quick end in site for the current economic woes, saving money is on every one’s mind. I have rounded up a few sites that may help you in your quest. (If you have any other good sites, please share in the comments!)

Price Protectr

Many stores out there offer price protection policies.  When the price drops on an item you have purchased; they will refund you the difference. However, there is a catch… it is up to you to catch the price drop.

Price Protectr makes it simple to keep track of your purchases, watch prices, and get your money back. It is free and it is easy. You just need your product’s URL number.

Gasbuddy and Gaspricewatch

Although I have mentioned these before, they bear mentioning again. Both of these sites track the cheapest gas stations by name and area. Plug in your area or destination to find the best places for filling up.

Retailmenot

RetailMeNot is an easy way to find online coupon codes for over 20,000 stores. Enter these codes at the checkout page of participating merchants for instant discounts.

Honesty

Honesty.com lets you know how much things usually go for on eBay and what is currently for sale there. This way you do not overpay when you buy. Just type in an item name for price comparisons on both current and recent EBay listings.

Booking Buddy, Tripmama and BookingWiz

These sites consolidate many travel sites such as Expedia, Orbitz and Travelocity to get you low rates with a targeted search. You enter the details of your trip once, and then click on the sites you want to search. Time and money saved!

Pricespider and WishRadar

These sites will hunt for an item that you want, at the maximum price that you are willing to pay. Create a wish list with the most you would spend on each purchase. Then the sites will email you when the items turn up at your desired price or less.

Please let me know if any of these worked out well for you or if you have some other sites to share!

I just received an email that really hit home for me today so I am sharing it with all of my readers. (I have no idea where this came from originally or who the original author is.)  I have never done this before however it just seemed a good thing to share with the world in such an uproar lately. You can only control the things that you can control & the rest you have to leave to whatever God or higher being that you belive in. Else you will drive yourself & probably a few other people in your life crazy!! {smile}

HAVE A GREAT WEEKEND!! 

1. Pray

2. Go to bed on time.

3. Get up on time so you can start the day unrushed.

4. Say ‘No’ to projects that will not fit into your time schedule or that will compromise your mental health.

5. Delegate tasks to capable others.

6. Simplify and unclutter your life.

7. Less is more. (Although one is often not enough, two are often too many.)

8. Allow extra time to do things and to get to places.

9. Pace yourself.  Spread out big changes and difficult projects over time; do not lump the hard things all together.

10. Take one day at a time.

11. Separate worries from concerns.  If a situation is a concern, find out what God would have you do and let go of the anxiety.  If you cannot do anything about a situation, forget it.

12. Live within your budget; do not use credit cards for ordinary purchases.

13. Have backups; an extra car key in your wallet, an extra house key buried in the garden, extra stamps, etc.

14. K.M.S. (Keep Mouth Shut).  This single piece of advice can prevent an enormous amount of trouble.    

15. Do something for the kid in you everyday.

16. Carry a Bible with you to read while waiting in line.

17. Get enough rest.

18. Eat right.

19. Get organized so everything has its place.

20. Listen to a tape while driving that can help improve your quality of life.

21. Write down thoughts and inspirations.

22. Every day, find time to be alone.

23. Having problems?  Talk to God on the spot.  Try to nip small problems in the bud.  Do not wait until it is time to go to bed to try to pray.

24. Make friends with Godly people.

25. Keep a folder of favorite scriptures on hand.

26. Remember that the shortest bridge between despair and hope is often a good ‘Thank you, Jesus .’

27. Laugh.

28. Laugh some more!

29. Take your work seriously, but not yourself at all.

30. Develop a forgiving attitude (most people are doing the best they can).

31. Be kind to unkind people (they probably need it the most).

32. Sit on your ego.

33. Talk less; listen more.

34. Slow down.

35. Remind yourself that you are not the general manager of the universe.

36. Every night before bed, think of one thing you are grateful for that you have never been grateful for before.  GOD HAS A WAY OF TURNING THINGS AROUND FOR YOU.