If opening your credit card bills, your checkbook or your wallet are traumatic events, you may have a problem with overspending. It’s nothing to be ashamed of, and you’re certainly not alone, but there’s a good chance that it is keeping you from achieving some of your goals. If you have a dream of buying a car or a house, paying off debts, or any similar financial goal, then putting an end to overspending will help you get where you want to go — and it’s not as hard as you think it is.
Financial experts have come up with plenty of strategies to help you break your overspending habit and divert your money into where it serves you better. Some are better and easier than others, but the four that follow are among our favorites:
If you hire a domestic worker to provide services in or around your home, you probably have a tax liability that you don’t know about – or one that you do know about but are ignoring. Either situation can come back to bite you. When the worker is your employee, your liability includes both withholding and paying payroll taxes as well as issuing a W-2 after the close of the year.
Sure, it is a lot easier simply to pay your worker in cash so as to avoid federal and state payroll taxes – and all the paperwork that goes with them. Your domestic worker will likely be fully cooperative with a cash deal because he or she can also avoid paying taxes. However, if the IRS or your state employment department finds out about these payments, the result could be very unpleasant for you.
Not everyone who performs services in or around your home is classified as an employee. For instance, a plumber or electrician who makes repairs in your home will generally be a licensed contractor; the government does not classify contractors as employees.
Just a reminder that the last day you may make a tax-deductible purchase, pay a tax-deductible expense, take advantage of tax credits, or make tax-deductible charitable contributions for 2018 is Dec. 31. Every taxpayer’s situation is unique, and the suggestions offered here may not apply to you. The best way to ensure that you are putting yourself into the most tax-advantaged position is to seek tax-planning advice, usually earlier in the year. However, the following are some tax strategies that can be utilized at the last minute.
If you have received an IRS envelope from the Internal Revenue Service (IRS) in your mailbox that does not contain a refund check, it will probably cause an increase your heart rate likely increased. But Don’t panic, though; most of the issues in these letters can be dealt with simply and painlessly.
Every year, the IRS sends millions of letters and notices to taxpayers, notifying them of changes to their account, requesting additional information, and alerting them to payments that are due. Many of these letters are issued in error or are sent only because of a misinterpretation of facts.
If you get such a letter, it may be for one of several reasons; perhaps you overlooked an item of income or the amounts you reported on your return don’t match other information that the IRS received. It is also possible that someone else is using your SSN or is claiming your child as a dependent. The list goes on.