I finished doing our 2007 taxes today. Papers are printed out, two checks need to be written, and on Monday we’ll mail the taxes and checks out to the federal government and the state of Colorado. I was hoping that our checks would be smaller together, but I am proud to say that our federal check is only $100.00. Given that I have had to send thousands in past years, this means that we’ve managed to calculate, pay and balance our tax cycle. Our state check was higher, but next year I think we’ll have it nailed pat. Furthermore, since we are sending in less in taxes we’ll have more money to put down on our debt reduction snowball!

I don’t love taxes, but I sure do love having gotten the numbers closer this year. As weird as it sounds I can’t wait to find out about next year’s taxes because I’m ready to be even closer (or possibly get a very, very small refund check because we maximized deductions and credits). I believe there are a few more things that are certain besides death & taxes, but I’m glad to have 2007 behind me.

Bonus: The number one thing that ended up saving me more than I expected (for some ignorant reason) was donations.  We donated stuff to Goodwill as well as supporting various missionaries, our church, and World Vision.  If you’re looking for ways to make your 2008 count, this may be a good way to do so.

From an email I got earlier today:

Free File is an electronic tax preparation and filing program. For the sixth straight year, eligible taxpayers will be able to use the IRS Free File web site to prepare and electronically file their federal income tax returns at no charge. There are no hidden fees. Free File will be available to anyone who earned $54,000 or less in 2007. The site will be accessible 24 hours a day, seven days a week, beginning mid-January 2008.

http://www.irs.gov/efile/article/0,,id=118986,00.html

Handy to have this sort of thing available, I’ll be passing this along to others for sure.

The PaidTwice.com blog asks an important question: what else could one save money on for seeking businesses to change their billing, interest making and the like.  She’s after Saturn to help pay for expensive vehicle repairs.  Go read the article and offer up a word of encouragement.

I’ve got quarterly taxes due soon.  Turns out that I need to have saved a bit more than I did, but we’ll have our stuff taken care of by April 15th and our future withholding (I’m self employed, so the withholding is self-inflicted).  Since getting my finances in order earlier this year I’ve learned a lot about where my taxes should be.  However, we’re recovering from earlier mistakes in the year and so more taxes are due.

What things do you do to help manage your taxes?

Do you have an accountant who helps you maximize tax savings?

What strategy do you take for yearly or quarterly tax payment?

Do you take deductions if you’re not self-employed?

I just heard a gal who had called in on the Dave Ramsey Show talking about the concept of borrowing money from a home loan/home equity loan as being a bad idea.  She had been chastised by her family member for being so brash as to not maximize her dollars to make money on the stock market.  She told Dave, “If it was that easy, I figure everybody would be doing it.”  This common sense thinking is so rare in the financial world.  Dave’s mathematical discussion of the issue also was an interesting discussion.

If you take out a loan at six percent, make twelve percent on the stock market do you ‘make’ six percent on your investment?  The answer is no for several reasons.  The first reason is that you’ll pay some sort of brokerage fee somewhere, or a trading fee of some sort.  Then you pay taxes on that money, the percentage may vary depending on what you have going on in your life, but then another chunk just simply vanishes with inflation.  The money that you make could be no money at all or you could lose money.  Yes, some people may make money, but will it be enough?  Not really.  Figure that if you paid off your home mortgage and all debts and then invested heavily in some sort of safe investment with continual amounts of money, with less risk than debt, then you’d come out ahead with greater certainty.  If you get into debt, pour your resources into investing but get injured, get fired or get demoted your house payments are wrapped up in an investment that you’ll be penalized for taking out and living off of.

In short: get rid of debt.

I used to clean a cell phone store when I was in High School many years ago.  This was before every mall had three or four - hundred - kiosks celling sell phone services [it's SIC, I know].  My boss from then happened to be in town last week and I met him for lunch.  He and I chatted about different things that had been going on and our discussions turned to being independent contractors or business owners.  Because we could potentially pay a lot in taxes due to our work arrangements he threw around some ideas that would be good for me to discuss with an accountant.  The problem for me is finding one.

I called one before and the guy was nice, but he played it conservative.  He wasn’t willing to really investigate with me some ways to cut down on my taxes and help me maximize my honest tax savings.  I’m not interested in not paying taxes, I don’t want to be involved with fraud, I just want to save as much as possible so that future me isn’t sad that he gave away so much money to the government.  What do you do to save money on taxes?

I’ve got the book ‘Lower Your Taxes Big Time‘ and it has some good ideas, I just need to find a local accountant with ethics and a spirit of saving on taxes at the same time