Back in a December 2010 blog post, we discussed budgeting and mentioned that one option was to open an IRA. However, there are two different types of IRAs, and deciding which one is best for you is extremely important. While both Roth and Traditional IRAs currently have the exact same contribution limit ($5,000 in tax year 2010), contributions to Traditional IRAs are sometimes tax deductible, while Roth IRA contributions are never deductible. If neither you nor your spouse participates in an … [Read more...]

If you are a business owner, it is extremely important that you know the difference between employees and independent contractors, especially when it comes to taxes.  For employees, you must withhold income taxes and Social Security/Medicare taxes, as well as pay unemployment tax on their wages.  Conversely, you do not have to withhold or pay any of these taxes for contractors.  Misclassification could result in fines and penalties from the IRS, as well as having to pay the required taxes plus … [Read more...]

If you like to gamble, whether periodically just for fun or regularly as a way to supplement your income, you’ll want to know that there are different guidelines for amateurs and professionals.  In addition, the IRS has issued updated guidelines pertaining to gambling winnings. If you are an amateur gambler who only gambles periodically and you end up losing more money than you win, you do not get that extra amount back on your taxes.  You are only allowed to deduct your gambling losses up to … [Read more...]