Tax Return

[CarpetJocky]

So who has received their tax return through the mail and decided they should invest it someway?

 

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[Runum]

No return for me. I keep it close and invest year around. I did use my returns to get my start though. Carpetjockey what will you be using your return to invest in?

 

[Bilgefisher]

With the rentals and business I had no idea what my tax situation would look like, so I did not reduce my deductions from taxes.


2/3 will go back into my businesses. 1/3 will go back to me to pay down debts. (My house).

Simple really, but that business investment will help down the road.

 

[CarpetJocky]

Well I need to know more about index funds if anyone can shed some light on them, I hear Apples stock is pretty good too, I need to look deeper in to it though, I figure It can only help me If I get my money to work for me right now since my spending to saving ratio is pretty good pc/out CarpetJocky.

 

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[CarpetJocky]

Well your right I have not been investing my money wisely, I have been living frugally trying to slowly pay off debt, and I Think this year will be better.

 

[hakrjak]

When I was just getting started, I used to use my tax returns each year to pay down debt. It turned out to be a good strategy for me, as I was debt free pretty quickly once I got my head on straight about being disciplined, and not running out to buy a new car or some other doodad with the windfall.

Once I got back to even, I upped my deductions like J mentioned above, to give myself a monthly pay raise so that I didn't get such big returns at the end of the year -- but instead got the money to invest right away.

Think I'm getting back a $5k return this year, which is going towards getting dwindling cash reserves back up to a comfortable level.

Cheers,

- Hakrjak

 

[cfittowin]

Guys,

YOU FILE A TAX RETURN. You don't get back a tax return(unless you paper file and send it to the wrong IRS center). Haha. I think the word you are looking for is tax refund*

I would also not paper file. If you are expecting a refund make sure to e-file, and you can get your state refund back within days and the fed refund a little while after that. Paper filing can take up to two months to get a check mailed to you, and is a SLOWLANE way to get your refund.

Also, what you withhold each paycheck is a matter of preference. You can make the argument either way. I personally like getting a refund this time a year while others will argue that money in their pocket now(more withholdings on each pay check)instead of giving it to the government to hold interest free doesn't make sense, and they would rather pay the taxes later and do more with the money now.

Tax planning is crucial for fastlaners. I have buddies that call me all the time frantically because they don't have money to pay the taxes on their earnings from their internet biz. Some of them balled out* for the year on frivolous expenses(Luxury autos(no lambos yet MJ), exotic vacations, jewelry, you name it), and didn't come to grips with the fact they would have to pay taxes on their baller money they just made throughout the year.

Don't live day to day people. Realize the tax impact of how you are spending your money. Can I deduct this as a business expense on my tax return, or as an itemized deduction? If not, is it worth buying? Ask yourself these types of questions.

The tax man is coming.... Are you prepared?

 

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[tchandy]

When I first started filing taxes, I took it to a tax accountant. I know nothing about how to file taxes and felt better if someone else did mine. They just filed the forms and I'd get a return. Only after really reading and forcing myself to understand taxes I realized I needed to adjust my thinking. After I started investing more I really needed to take it to an accountant as my investment tax forms continued to come in at the start of a new year. Some things I do now:
- I would sell stock rather than keep a loser.
- I adjusted my W4 tax withholdings so the govt could take more from me; this led to a smaller return but I got to use my money rather than the government to use my money at no interest at all.
- Last year my current accountant said to be careful of taxes increasing so I take her comment but continue to look for other advice. Accountants look to save money and are more conservative.
- I make chartible donations that are a hedge for my investments and current earnings so I make sure to keep the receipt.
- I try to take as many business trips as I can with my rentals. Still looking for more rentals.
- Working on placing my rentals into a LLC. Will see if there's a big tax difference when I file next year.
- Lastly I have a folder I just label "Taxes" in big letters. Anytime I make a donation I just file the receipts in the folder or add in any other business memos that I may come across.

On a side note, my job paid for my college loans. However I didn't file the correct forms and no one at my job knew what where the correct forms. So I was running around asking various people and getting different feedback. After two 1/2 years with my loans about to be paid off, Uncle Sam charged me $10K for the late interest that I owed.

Tom

 

[CarpetJocky]

Thanks for the input from everyone I already E-filed and got $653 back I want to know how much I need to invest in Index funds, any feedback would be appreciated.

 

[CarpetJocky]

I appreciate the feedback everyone what I should have asked is how much I need to start a index fund investment 500? 1000? I mean what is the minimum I need to get started I already have a Roth Ira fund. I am thinking I should invest in an Index fund before I spend my money on nonessentials.

 

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[MJ DeMarco]

Thanks for the input from everyone I already E-filed and got $653 back I want to know how much I need to invest in Index funds, any feedback would be appreciated.

I'd stick it under the mattress, or in a conservative, ultra-short bond fund. Then when the time comes, deploy it when you need it. (Like in a Fastlane venture). I don't see the "stock market" being a good investment now or in the near future.

 

[TaxGuy]

Mattress might not be the best bet, try a fire-proof safe

On the plus side, you're looking at your refund differently than probably 90% of Americans(myself included ) who see it as a gift/paycheck instead of what it really is, giving your money to someone else to invest for you and hoping for a return.

And oh yea:

Tax planning is crucial for fastlaners. I have buddies that call me all the time frantically because they don't have money to pay the taxes on their earnings from their internet biz. Some of them balled out* for the year on frivolous expenses(Luxury autos(no lambos yet MJ), exotic vacations, jewelry, you name it), and didn't come to grips with the fact they would have to pay taxes on their baller money they just made throughout the year.

Don't live day to day people. Realize the tax impact of how you are spending your money. Can I deduct this as a business expense on my tax return, or as an itemized deduction? If not, is it worth buying? Ask yourself these types of questions.

The tax man is coming.... Are you prepared?

This basically describes the idiocy I went through when I had my business(before joining TFTM), although I would make purchases such as office equipment/supplies that I could write off, I was still pretty frivolous with my money and made a lot of dumb purchases(namely my house and motorcycle) that have put me in a big mess. Thankfully, the last few months have really brought me to asking those 2 questions, although it doesn't hurt that my dad is a CPA whose primary business is tax preparations and I hope to follow in his footsteps soon(while working on bringing a fastlane twist to his slowlane service "S" business ).

 

[randallg99]

I hate it when I have 500 bucks burning a hole in my pocket... but take some good advice here: keep it under the mattress like MJ says until you have a good idea/need/proposal/venture/etc

 

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[MJ DeMarco]

Tax planning is crucial for fastlaners. I have buddies that call me all the time frantically because they don't have money to pay the taxes on their earnings from their internet biz. Some of them balled out* for the year on frivolous expenses(Luxury autos(no lambos yet MJ), exotic vacations, jewelry, you name it), and didn't come to grips with the fact they would have to pay taxes on their baller money they just made throughout the year.

You know, I really should stress this more. This is so true, thanks + speed for mentioning. If you net $100K/mo in your business and you elect to spend $75K/month on "doodads" -- you will end up broke when the tax bill comes ... the trap is *thinking* you are being prudent by saving 25% when that is not enough!!

Since Fastlaners are paid FIRST and the government LAST, it is so important that u SAVE MORE THAN 25% OF YOUR NET INCOME (when your net income starts to explode) because those high tax brackets are 35%, and soon, 40% cannot be avoided. If you aren't paying Estimated Taxes timely, drop in interest and penalties.

 

[CarpetJocky]

You all are so smart! I hope I can give advice to others when Im 50 and driving my skyline. I guess I will just save it for now, I am curious though what would happen to 500 if invested wisely today 20 years from now look like?

 

[randallg99]

1999.
I partied hard with girl I called mine

I made alotta money
And saw very cool parts of Europe with girls I called honies.

The times were comfortably behind me of strife
Now, boy they were fun, we lived the life

Wind blew but I smelled all of the roses
I tipped everyone like I was Moses

Everywhere I went, I walked on air
It felt like people pointed to me: "hey there!"

Behind me were those times of despair,
And now love and money was everywhere

but little I did I know
that the bubble would ever blow

This becomes the sad part of my poem
Because the IRS said let's go get 'em

After I spent my nuggets
I get a funky letter from the gov'met

Uncle Sam was nice:
I'll letchya off the hook when you pay the price

Pay me and I'll let'ye pass go
And only when you come up with all of the dough

well, I ran out of rhymes
but I paid the price and it cost me plenty
lesson learned is to know the price of making money
preparing for taxes are very important to keeping and investing your cash.

 

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[CarpetJocky]

Yes Thank you I was expecting a higher figure but I suppose I would have to put down a higher figure to expect a higher return in the long run. Yes you answered my question pretty well thank you.

 

[Cat Man Du]

Well, let's say that you consider investing in an Index Fund to be a "wise" investment.

You invest $500 today given those parameters.

In 20 years...wait for it...wait for it...you have about $2600.

Which will buy a nice hamburger! :smx4: