Tax Season is fast approaching here are our office hours from February 9^th through April 15^th:

Monday          7:30 am – 5:00 pm

Tuesday          7:30 am – 7:00 pm
Wednesday     7:30 am – 7:00 pm
Thursday        7:30 am – 7:30 pm
Friday             7:30 am – 11:30 am
Saturday          9:00 am – 3:00 pm
Sunday                    Closed

Call soon for your tax appointment!

To See, or Not to See, a Tax Professional

 

According to the National Taxpayer Advocate, nearly 60 percent of taxpayers hire paid preparers to do their taxes. With all the tax software programs out there, why do so many people turn to a professional?

 

“Some fans of over-the-counter tax programs would never dream of hiring a professional, but it really depends on the situation,” says Holly Gunnette, EA, an enrolled agent in California. “Young, single adults with one or two W-2s can probably do fine with tax software, but what if you’re married, own a home, have kids, are going to college or have kids going to college? There are plenty of confusing tax traps just waiting for you.”

 

A knowledgeable tax pro should actually save you money because he or she will interview you in-person and ask a lot of questions to determine what deductions you may qualify for. Tax laws change every year, and if it’s not your full-time job, it’s hard to keep up. Here are just a few areas where you could be missing out on saving money on taxes.

Education and child care. The IRS publication explaining the variety of education credits alone is 94 pages long. How about child care expenses? That publication is a quick read at only 19 pages! Those publications cover only two line items on most 1040 forms.

Volunteer expenses. Gunnette points out that if you are a Scout leader, volunteer in your church or local food bank, deliver books to a hospital or meals to seniors, many of your volunteer expenses, including mileage, may be deductible.

 

Job related expenses. Perhaps you’re a traveling nurse. Do you wear a uniform? Do you carry protective gloves and a stethoscope that you are not reimbursed for? Do you have to renew a license or take continuing education courses to maintain a license? Job-related expenses may also be deductible on your tax return.

Filing status. Married people don’t always file jointly. There are as many reasons filing separately might be a good idea as a bad one. 

Are you paying off student loans?  Wondering if you should contribute to a Traditional IRA? Paying alimony? You don’t even have to itemize deductions, these items can reduce your income and that reduces your tax bill. All of these are questions that impact the amount of taxes you will pay and a wrong answer can cost you money. Tax professionals such as enrolled agents are licensed and required to take continuing education courses every year to stay up-to-date on all the latest tax changes.

 

About Enrolled Agents

 

Enrolled agents (EAs) are America’s tax experts®. They are the only federally-licensed tax practitioners who specialize in taxation and also have unlimited rights to represent taxpayers before the IRS. While attorneys and certified public accountants are also licensed, only enrolled agents specialize exclusively in taxes.

go to http://hgifinancial.com/ for additional information.

 

 New Tax Bracket

The tax year 2013 brought us a new top tax bracket, so the tax returns you file on or before April 15, 2015 will feature some people sending Uncle Sam a bigger portion of their income. 39.6 percent for incomes of more than $406,750 (for single filers) or $457,600 (married, filing jointly).

The more you know about taxes and 2014's new taxes in particular, the better you can plan and the less you'll likely pay. Got a situation or a question? We are ready and waiting for your call. Remember: Enrolled Agents are America’s Tax Experts!

What’s that New Tax?

New taxes you may first notice in 2014 include a Medicare surtax. The Net Investment Income Tax (NIIT) is "a 3.8 percent surtax” that will be due on the lesser of your net investment income for the year, or the amount by which your “modified adjusted gross income” – or MAGI – exceeds those income thresholds. And yes, if you're a high earner, you might get hit with both the 0.9 percent Additional Medicare Tax and the 3.8 percent NIIT surtax. Note that the Additional Medicare Tax applies to your earned income and the NIIT applies to investment income. What investment income is subject to this? Generally interest, dividends, capital gains, rental and royalty income, nonqualified annuities, businesses that are taxed on your return as “passive activities” and income from businesses involved in the trading of financial instruments or commodities are affected. Please call or email for more information on this.

With all the ghouls and goblins out there

trying to rob you of your hard earned money,

let HGi Financial Services help you

get all the treats you have coming to you.

Don’t be tricked this upcoming tax season.

 

Happy Halloween!

Tips and Warnings  

How to Budget and Save Money    

By: wikiHow 

 

Tips

• Always over-estimate your expenses and under-estimate your income.
• Make purchases with paper money, not exact change, and always save the change. Use a piggy bank or jar for your coins. Coins and change may look insignificant but when accumulated over time they can help you save. Some banks now offer free coin counting machines. When you redeem your coins, ask to be paid by check so you won't be tempted to spend your new found cash.
• Take care of your possessions. In this way, you'll need to replace items less. Also, don't replace items until it's absolutely necessary. For instance, just because a motor in an electric toothbrush breaks doesn't mean it stops functioning as a toothbrush. Continue to use it, and when ready go buy a new one or check the warranty.
• Every time you go to buy something think of the thing you are saving for and the rough percentage of your savings so far that the thing costs and quite often you won't buy it.
• If you get paid about the same amount on a regular basis, it'll get easier to budget your money over time. If you have a variable income, it'll be harder to anticipate your expenses because you won't know the next time you'll get paid. List your budget categories in order of importance and fulfill the most important items first. Play it safe; assume it'll be a while before you get money again.
• Use affirmations. For example, repeat this affirmation to yourself until it sinks in: Debt is not an option.
• If you receive unexpected cash, put all or most of it into your savings, but continue to set aside your regularly scheduled amount as well. You’ll reach your savings goals sooner.
• Even if you REALLY want something, ask yourself, do you REALLY need this? More than half of the time it will be a big no.
• Most people can save something regardless of their income. Starting to save a little will help build the habit of saving. Even saving as little as $5 a month will teach you that you don't need as much money as you think.
• If you can't bring yourself to destroy all your credit cards, at least freeze them. Put them in a container, fill it with water, and stick it in a freezer. That way, if you feel the urge to use credit, you have to wait until the ice melts, and during that time you may come to your senses and realize you don't really need to buy what you wanted to buy.

  

Warnings

•  If you do mess up don't beat yourself up about it. Just try to do better the next time you get paid.
• After a long week of working, you may want to indulge in some luxury, telling yourself, "I deserve this". Remember that the things you buy are not gifts to yourself; they are trades, products for money. Say, "Of course I deserve this, but can I afford it? If I can't afford it, I'm still a worthy person, and I still deserve to meet my savings goals!"
• Unless you're in truly desperate financial straits (like 10 seconds from eviction and your three children are starving) don't try to cut corners connected to health. Basic preventative care for yourself, your family, and your pets might cost you a $60 office visit or a $30 heart-worm pill today, but the skipping it will contribute to expensive problems and heartache down the road.
• Do not go out "window shopping" with any money on you. You will only be tempted to spend money you cannot afford to lose. Only shop with a predetermined shopping list.
• If you have spendthrifts in your circle of friends, you may need to formulate a list of ready excuses to explain why you can’t go out with them all the time.

How to Budget and Save Money

By: wikiHow

 

Cutting Expenses       Part 2 of 3

1) Remove luxuries from your budget. If you're having trouble saving money, it's wise to start here. Many of the expenses that we take for granted are far from essential. Eliminating luxury expenses is a great first step to improve your financial situation because this won't impact your quality of life or your ability to perform your work significantly. While it can be difficult to imagine life without a gas-guzzling car and a cable TV subscription, you may be surprised how easy it is to live without these things once you remove them from your life. Below are a just a few easy ways to reduce your luxury expenses:

• Unsubscribe from optional television or internet packages.
• Switch to a thriftier service plan for your phone.
• Trade in an expensive car for one that is fuel-efficient and cheap to maintain.
• Sell any electronic gadgets going unused.
• Buy clothing and home furnishings from thrift stores.

 

2) Find cheaper housing. For most people, costs related to housing make up the single biggest expense in their budget. Because of this, saving money housing can free up a substantial amount of your income for other important activities, like saving for retirement. While it's not always easy to change your living situation, you'll want to seriously re-examine your housing situation if you're having a hard time balancing your budget.

• If you're renting, you may want to try negotiating with your landlord for a cheaper rent. Since most landlords want to avoid the risk that comes with looking for new tenants, you may be able to get a better deal if you have a good history with your landlord. If need to, you may be able to exchange work (like gardening or maintaining the house) for cheaper rent.
• If you are paying a mortgage, talk to your lender about refinancing your loan. You may be able to negotiate for a better deal if you're in good standing. When refinancing, try to keep the repayment schedule as short as possible.
• You may also want to consider moving to a cheaper housing market altogether. According to a recent study, the cheapest housing markets in the U.S. are in Detroit, Michigan; Lake County, Michigan; Cleveland, Ohio; Palm Bay, Florida; and Toledo, Ohio.

 

3) Eat for cheap. Many people spend much more on food than is necessary. While it's easy to forget to be thrifty when you're biting into a gourmet meal at your favorite restaurant, food-related expenses can become quite large if allowed to get out of control. In general, buying in bulk is cheaper in the long run than buying small quantities of food — consider getting a membership at a warehouse retailer like Costco if your food expenses are high. Buying individual meals at restaurants is the most expensive option of all, so making an effort to eat in rather than eat out can also save you lots of cash.

 
• Pick cheap, nutritious foods. Rather than buying prepared, processed foods, try checking out the fresh food and produce aisles of your local grocery store. You may be surprised how cheap it is to eat healthy! For instance, brown rice, a filling, nutritious food, can come in large, twenty-pound sacks for less than a dollar per pound.
• Take advantage of discounts. Many grocery stores (especially large chains) give out coupons and discounts at the check-out counter. Don't let these go to waste!
• If you frequently go out to eat, stop. It's generally much cheaper to cook a meal at home than it is to order an equivalent dish in a restaurant. Regularly cooking your own food also teaches you a valuable skill you can use to entertain friends, satisfy your family, and even attract romantic interests.
• Don't be afraid to take advantage of local free food resources if your situation is serious. Food banks, soup kitchens, and shelters can all provide meals for free to those in need. If you need help, contact your local Department of Social Services for more information.

 

 

4) Reduce your energy usage. Most people accept the price on their utility bill each month without question. In fact, it's possible to greatly reduce your energy usage (and thus your monthly bill) with just a few simple steps. These tricks are so easy that there's practically no reason to avoid them if you're looking to save money. Best of all, reducing the amount of energy you use also reduces the amount of pollution you indirectly produce, minimizing your impact on the global environment.

• Turn off the lights when you're not around. There's no reason to leave the lights on if you're not in the room (or in the house), so flip them off when you leave. Try leaving a sticky note by the door if you're having a hard time remembering.
• Avoid using heating and A/C when it's not essential. To stay cool, open your windows or use a small personal fan. To stay warm, wear several layers of clothing, wear a blanket, or use a space heater.
• Invest in good insulation. If you can afford to pay for a substantial home improvement project, replacing old, leaky insulation in your walls with high-efficiency modern insulation can save you money in the long run by keeping your house's warm or cool internal air from escaping.
• If you can, invest in solar panels. As a serious investment in your own future (as well as the planet's), solar panels are the way to go. Though the up-front cost can be quite high, solar technology becomes cheaper with each passing year.

 

5) Use cheaper forms of transportation. Owning, maintaining, and running a car can eat up a large portion of your income. Depending on how much you drive, fuel can cost you hundreds of dollars per month. On top of this, your car will also cost you in licensing fees and maintenance expenses. Instead of driving, use a cheap (or free) alternative option instead. Not only will this save you money, but also potentially allow you to spend extra time exercising and cut down on the stress from your daily commute.

• Investigate public transit options near you. Depending on where you live, you may have a variety of cheap options for public transit at your disposal. Most big cities will have metro, subway, or streetcar lines running in and out of the city, while mid-sized towns can have bus or train systems for you to use.
• Consider walking or biking to work. If you live close enough to your job for this to be feasible, both are excellent ways to get to work for free while simultaneously getting fresh air and exercise.
• If taking a car is unavoidable, consider carpooling. Doing this allows you to share fuel and maintenance expenses with the other members of the carpool. Plus, you'll have someone to talk to during your commute.

 

6) Have fun for cheap (or free). While reducing your personal expenses can mean cutting frivolous luxuries out of your life, you don't necessarily have to stop having fun if you're trying to save money. Changing your leisure habits and recreational activities to more affordable ones allows you to strike the perfect balance between fun and responsibility. You may be amazed at the amount of fun you can have for just a few dollars if you're resourceful!

• Keep up-to-speed on community events. Today, most towns and cities will have an online events calendar listing upcoming events in the local area. Often, events put on by the local government or community associations will be cheap or even free. For instance, in a medium-sized town, it's often possible to explore free art exhibitions, see movies in a local park, and attend donation-based community rallies.
• Read. Compared to movies and video games, books are cheap (especially if you buy them at a used bookstore). Good books can be absolutely captivating, allowing you to experience life through the eyes of exciting characters or learn new things you might otherwise never have encountered.
• Enjoy cheap activities with friends. There are almost no end to the amount of things you can do with your friends that require little or no money. For instance, try going on a hike, playing a board game, catching an old movie at a cheap second-run theater, exploring part of town you've never been to, or playing sports.

 

7) Avoid expensive addictions. Certain bad habits can put a serious damper on your efforts to save money. In worst-case scenarios, these habits can become serious addictions which are almost impossible to defeat without help. Worse yet, many of these addictions can be extremely hazardous to your health in the long term. Save your wallet (and your body) the trouble of going through these addictions by avoiding them in the first place.

• Don't smoke. Today, the harmful effects of smoking are well-known. Lung cancer, heart disease, stroke, and a variety of other serious illnesses are known to be caused by smoking. On top this, cigarettes are expensive — depending on where you live, up to about $14 per pack.
• Don't drink excessively. While a drink or two with friends won't hurt you, regular heavy drinking can cause serious problems in the long run, like liver disease, impaired mental function, weight gain, delirium, and even death. In addition, nursing an alcohol addiction can be a massive financial burden.
• Don't do addictive drugs. Drugs like heroin, cocaine, and methamphetamine are extremely addictive and can have a variety of seriously harmful (even lethal) effects on your health and can be much more expensive than alcohol and tobacco. For instance, country musician Waylon Jennings is purported to at one point have spent over $1,500 per day on his cocaine habit.
• If you need help overcoming an addiction, don't hesitate to contact an addiction hotline. Several relevant hotlines are listed here.