Many of these tax mistakes are easily avoidable if you use Turbo Tax or H&R Block to prepare your taxes. I’ve personally used H&R Block for 13 years … this year will be my 14th. I’m planning to do my taxes this year with both sets of software, just to see if one works better for me. I’ll be sure to report my findings.

It’s easy to make a lot of these tax mistakes. We’re busy and our lives are taxing enough already (pardon the pun). When tax time rolls around, we can get in a big hurry to get it over with and in our rush, make a few mistakes. Here’s a list you can reference to make sure you don’t delay your refund or wind up paying penalties, interest, or fees.

1. Failing to report forgiven debt as income. Companies that cancel debt report it to the IRS on Form 1099-C and you’ll have to pay taxes on it.

2. Failing to report all sources of income. The lucky break that put a little jingle in your pocket or a new iPad in your mailbox is taxable as income too. Forgotten income trips up a lot of people.

3. Falling for a tax break scam. Just because some guy on the radio (or even in a blog article) says you can deduct something doesn’t mean it’s so, check and make sure.

4. Failing to understand IRA rules. They are complicated! Get sound advice from a respected expert when it comes to your IRA.

5. Failing to use the right status. If you’re married and filing separately, make sure you don’t check married filing jointly.

6. Failing to report debt paid by an employer. If your employer paid your student loan, that’s income according to the IRS.

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7. Falling for the unethical tax preparer. You don’t want a tax preparer that is willing to push the envelope.

8. Failing to file altogether. Kind of the most basic mistake, I know, but tens of thousands of people “forget” to file their taxes. The statute of limitations expires after three years if you’re owed a refund, but NEVER expires if you owe.

9. Failing to realize that one spouse can be forced to pay another’s tax bill. If one spouse owes a bill for the past year and the other is due a refund, count on the IRS taking the refund to pay the outstanding bill.

10. Failing to read your entire return to check for accuracy. It is ultimately up to you to make certain everything is accurate. Double and triple check your return. If you use Turbo Tax or H&R Block, you shouldn’t have this problem.

11. Failing to file IRS Form 8822 (change of address) when you move. You’re still liable for any notices sent to your old address.

12. Failing to write your name and SSN on each form and schedule you send the IRS. If one page gets detached, it can be easily put with the correct return if your name and SSN is on it.

13. Failing to have written documentation for your charitable donations. The IRS is keen on this one. Any legitimate charity will willingly give you a receipt. If nothing else, your cancelled check may suffice.

14. Failing to maintain accurate records for your travel and automobile expenses. The IRS wants to see daily entries for your mileage and travel expenses. Don’t just list “500 miles – business” and expect that you’ll survive an audit.

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15. Failing to file IRS Form 8829 if you’re claiming part of your home as a home office deduction. This deduction is highly audit-flagging anyway so make sure you have the proper documentation.

16. Failing to have a written agreement when you and your spouse have legally separated. Until you’re legally divorced, the money you send to your spouse isn’t deductible because it technically isn’t alimony.

16. Failing to deduct job search costs. The cost associated with searching for a job within your industry can be deductible, including copying your resume, travel for interviews, and The Inner View of Your Interview.

17. Falling for the refund anticipation loan. Waiting just a few days to get your refund will save you an unbelievable amount of fees that come with refund anticipation loans.

18. Falling for the ease of paying with a credit card. It’s easy to be sure, but even if you pay it off immediately, you’ll pay the 2.5 percent fee charged by the credit card company … cause the IRS certainly isn’t going to pay it.

19. Failing to correctly handle the “Making Work Pay” tax credit. This credit ($400 for individuals; $800 for couples) is filled with quirks sure to trip up taxpayers and tax preparers alike.

20. Failing to accurately calculate the Earned Income Tax Credit (EITC). The EITC gives low income families and individuals a tax credit for the dependents they support, but many people incorrectly calculate the credit they’re owed.

21. Failing to check your math! Another no-brainer, but the IRS gets thousands of returns each year that transpose numbers or that just don’t add up. If you use Turbo Tax or H&R Block, you shouldn’t have this problem.

22. Failing to use the correct tax table when calculating your taxes. If you’re still preparing your returns by hand, make certain you use the correct table. If you use Turbo Tax or H&R Block, you shouldn’t have this problem.

23. Failing to send in the proper documentation. Many returns will require documentation be sent to the tax authorities. Make sure you sent what’s needed EXACTLY.

24. Failing to sign and date your return. Another rookie mistake.

25. Failing to put the correct bank account routing numbers on a direct deposit request. Your refund could be in limbo for a long time if you don’t use the correct bank account numbers.

26. Failing to send payment. If you owe money, always send it in. If you can’t – call the IRS and set up some payment arrangements. You won’t get out of paying your taxes!

27. Failing to amortize any mortgage points paid over the life of a refinance. Mortgage points are deductible in the year they’re paid, unless you refinance. That’s a whole different story.

28. Failing to get your taxes filed on time. Timing is everything. Correct timing is critical.

29. Failing to make a copy of your return for YOUR records. If the IRS sends you a letter asking about an entry on your return, you better have a copy!

30. Failing to make certain the proper forms are filled out and sent in. No matter what, the onus is on you to send in the correct forms that are correctly filled out.

31. Failing to double check your social security number for accuracy as well as the social security numbers of your dependents. Read them aloud and make certain they’re correct. This trips up thousands of people every year.

32. Failing to include all people who are dependent on your income. If you support someone, you could call them a dependent.

33. Failing to file as “Head of Household” even if you’re single providing you have at least one dependent living with you. Using this filing status could result in a bigger refund.

34. Failing to check if “Married filing separately” is more beneficial than “joint.” Everyone’s tax situation is unique and you should make certain you use the correct status.

35. Failing to send in your W-2’s and 1099’s. The taxing authorities will want these so be sure to send them in with your return.

36. Failing to claim additional standard deductions if you’re blind or over 65. The government gives you an additional benefit if you’re in these categories.

37. Failing to sign the check you send to the IRS. Another seeming rookie mistake but many people get in a hurry or think they’ll delay having to make payment by not signing the check. The IRS won’t fall for it.

38. Failing to write your social security number on your check sent to the IRS. If that check falls out of the envelope, having your SSN on it will insure it’s properly credited to you.

39. Failing to check all 1099’s for accuracy. Just because you received a 1099 doesn’t mean it’s accurate. Check it against your own records.

40. Failing to claim a credit for any overpaid social security taxes if you worked for more than one employer. You can actually double pay your social security taxes so make sure that if you did, you get a credit for it.

41. Failing to accurately account for your state tax refund. State income taxes are deductible on your federal return. If you received a refund, that amount becomes taxable again since it artificially lowered your federal taxes.

42. Failing to accurately account for a refund of interest paid on a mortgage in an earlier year. Chances are very good you deducted that mortgage interest, so just like with your state income tax refund, it artificially lowered your taxes and you’ll have to make it up.

43. Failing to subtract assessments from your real property tax deduction. Assessments used to improve community property (if included in your property tax bill) are not allowable deductions.

44. Failing to get a spouses signature on a tax return. Both spouses must sign!

45. Failing to subtract your non-taxable social security benefits when your income falls below a certain level. If you’re below a certain income level, a portion of any social security benefits you receive isn’t taxable.

46. Failing to fill out IRS Form 8606 Nondeductible IRA Contributions for your contribution to an IRA even if you don’t claim any deduction for the contribution. The IRS wants to know what happened.

47. Failing to recheck your basis in securities you sold during the year (especially mutual funds). Automatically reinvested dividends and capital gains from your investments increase your basis in the fund and reduce its gain or increase its loss.

48. Failing to deduct front end loads or purchase fees for your mutual fund investments. These fees reduce your investment returns and are deductible.

49. Falling for the “forced savings” plan by overpaying your taxes all year just to get a bigger refund. Why give the government an interest free loan all year? Accurately pay your taxes all year and use the money yourself.

50. Failure to use Certified Mail when you mail your return to the IRS. That’s the best way to make sure your return was received. For additional peace of mind, send it “Return Receipt Requested.”

51. Failure to write legibly. Have someone else look at your handwritten return to make sure your handwriting is legible. Why tick off an IRS employee?

52. Failure to use enough postage to get the return to the IRS on time. Don’t think one stamp will do it. Have the Post Office weigh it to be sure. If your return is late for lack of postage, you’ll incur a penalty.

53. Failure to report and pay domestic payroll taxes for a nanny, in-home caregiver, or housekeeper. If you employ someone in this capacity, better make sure the proper taxes are paid. It isn’t just politicians that get caught.

54. Failure to figure if you’re liable for the Alternative Minimum Tax (AMT). Not everyone is liable, but if you are, you’ll be in deep water if you don’t pay it.

55. Failure to mail your return to the correct address. Again, it’s up to you to insure you put the correct mailing address to the IRS. Your return will probably make it anyway … eventually … but it could be late if the address isn’t correct.

56. Failure to itemize when it’s beneficial. Too many people use the 1040-EZ form and miss out on perfectly legal deductions as well as a larger refund. If you use Turbo Tax or H&R Block, you shouldn’t have this problem since both use an interview method to determine which form you should use.

57. Claiming ineligible dependents. I’ve actually seen people pass around SS numbers to friends in order to help them claim dependents that weren’t actually theirs. This is fraud and won’t be tolerated by the IRS.

You still here? Wow!

There are many, many ways to miscalculate your taxes and whether you over-pay or under-pay, they’re still inaccurate and guess what? You either lose up front or lose eventually either way, so insure that your taxes are accurate, your i’s dotted and your t’s crossed.

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Are you angry that banks are now charging you to use your own money?

When Bank of America announced their (bad/dumb/stupid/greedy) decision to start charging me and millions of other people for using our debit cards to access our own cash that they make a fortune using and lending out, I was pretty well ticked off. As an MBA and a business owner, I understand the regulatory environment changed because of a short-sighted Congress who wouldn’t know their belly-button from a hole in the ground (this is a family blog) and I do understand the revenue shortfalls this too-big-to-fail bank will experience. But dang it, that’s MY money and we’ve been conditioned for the last 20 years to use our debit cards instead of credit cards and now the game changes in mid-stream.

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When you or I use a credit card to make a purchase of say, $100, the merchant only receives about $97. The remaining $3 is used for processing the card — a portion goes to American Express, MasterCard, Visa, or Discover, a portion goes to the card processor, and a portion goes to the bank who handled the money. When you or I use our debit card, typically there isn’t as much going on — essentially this becomes a simple online transfer of funds from your checking account to the merchant’s, handled by a card processor. What recently happened was that Congress placed a limit on the amount that processors and banks could zing merchants … now just 21 cents per transaction. Swipe your debit card to buy a $4 latte and the processor gets 21 cents … swipe it to buy a $1,000 LED television and the processor also gets 21 cents. Processors aren’t happy and neither are the banks, so the banks are responding by charging an additional fee for debit card use to make up for their lost fees. Guess who pays?

I’m not going to stand for it.

How YOU can avoid the new debit card fees

1. Best Advice – Switch Banks In 6 Easy Steps to a bank that understands that IT’S YOUR MONEY.
2. Good Advice — Use cash as much as possible. You shouldn’t be charged for taking cash from your own bank’s ATM, but I wouldn’t be surprised if that changed at some point as well.
3. Good Advice — Go back to using checks. Sure they’re a pain to have to write out, but it beats paying extortion money for using your own funds that are sitting in that big old bank building on the corner.
4. Be Careful Advice — Use a charge card like American Express where you have to pay it off each month or a credit card like Discover. Make certain you pay these off each month and don’t carry a balance! One quick way is to set up online access between your bank account and the credit card and transfer the cash each evening to pay that card THAT DAY.

In the event you don’t want to change banks, stop using their debit card and go back to old fashioned checks or credit cards (diligently paying them off each month), but be certain to open an account at Ally Bank or at PerkStreet. Neither of these banks will charge you to use your own money and after speaking with representatives from both of them this past weekend, I can tell you they were astonished that Bank of America (and several other banks including Regions, Citi, Chase, and Wells Fargo) made such a move.

Banks are predicted to lose up to $6 billion in revenues because of this change in fees. Perhaps they shouldn’t have built all those fancy offices and should focus more on providing great customer service like Ally Bank and PerkStreet.

Technorati Tags: banking, bank of america, card processor

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An earlier retirement could be within your reach with proper planning and a willingness to make a few lifestyle changes. If you’re interested in retiring while still young enough to actually enjoy it, read on, there may be hope for you yet. First, let’s take a look at the realities of retiring in the USA.

The Magic of Age 65

Sixty-five used to be the standard age associated with retirement. Though probably no one really remembers why that number was pulled out of the air, once you hit that age, you were eligible to begin receiving back the funds that you and your employer deposited into the mysterious Social Security lock box with your name on it. In essence, you could trade your paycheck for a government check. For those of us born after 1937, retiring at 65 with full benefits is no longer the case. A graduated scale of eligibility now increases the age workers are eligible to receive full retirement benefits from age 65 for those born in or before 1937 to age 67 for workers born in 1960 or later.

Collecting Early Social Security Benefits

If you wish, Social Security is offered at an earlier age, 62 … for a price. No only will you NOT receive full benefits, the benefits you DO receive by drawing your Social Security earlier are reduced along a similar scale.

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Be aware that not only are your benefits reduced if you take this option, but so are your spouse’s benefits (if your spouse has earned little or no benefit on his or her own). Your spouse is eligible to receive 50% of your benefit amount, based on the amount you would receive at full retirement age. That 50% is then reduced by the amount listed in below.

If your spouse earned enough income to receive a benefit of his or her own that is larger than the amount provided under your benefits, the larger benefit applies.

What if I have a 401(k) or 403(b)?

These are treated a little differently than you may think. With employer sponsored plans like these, age 62 is when you can access your money without a penalty for early withdrawal. The extra cash from Social Security could be enough to help you check out before you reach the traditional full retirement age of 65, 66, or 67 (depending on your age).

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How about 59.5 or sooner as a retirement age?

I don’t know who came up with the 59.5 rule (seems quite arbitrary), but if you have a significant nest egg in your 401(k) or 403(b), instead of waiting for Social Security eligibility, you can check out a few years sooner by accepting “substantially equal distributions” from your employer’s plan for at least five years or until you turn 59.5 (whichever is longer). The downside? You could lower your eventual Social Security benefit by having too many years where you don’t earn an income. If you have a high-paying job, the last few years of your career are likely to represent your highest lifetime earnings and that’s an important factor in determining your eventual Social Security benefit.

Another option is to take on a part-time job, even in your semi-retirement. A little part-time job will put some cash in your pocket and may provide medical benefits (you will probably need them). One caveat: you cannot hold this job for more than ten years prior to becoming eligible for Social Security.

Want to check out even sooner?

You’ll need to be wealthy or very frugal with what funds you have at your disposal. If you’re rich, well, that’s easy. Why keep reading?

If you’re NOT wealthy, you’ll have to set some strong priorities on dining out, travel, gifts for grandchildren, and recreation. But, if relaxing on a picnic blanket with the wind whistling through the trees at your local park, spending time with family playing ball in the yard, or volunteering for charities you care about is more important to you than the trappings of a spending-like-crazy retirement, you may be in better shape than you thought.

You may need to change the question you’re asking yourself from “how much do I need to retire?” to “how little do I need to retire?” Retiring early CAN be an option, but it will take careful planning and a willingness to alter your lifestyle.

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Charles Ponzi is credited as the inventor of what has become known as the Ponzi Scheme, though the mechanics of this type of scam had been used for decades before Chuck started his based on selling the arbitrage of international reply coupons for postage stamps to investors in 1920. A Ponzi scheme is a fraudulent investment operation that rewards early investors by paying returns, not from any actual profit earned by the organization, but from money paid by later investors. These returns are often very high, or very consistent, both of which are desirous traits to investors for various reasons.

Ponzi schemes work primarily by utilizing a “confidence trick”: playing on the unsuspecting investor’s lack of knowledge and winning his or her confidence. Such was the case with former NASDAQ Chairman Bernie Madoff, who created an elaborate Ponzi scheme of his own by offering shares in an investment vehicle that purchased blue-chip stocks and then placed options contracts on them, sometimes called a split-strike conversion. Typically, a position in Madoff’s investment was made up of 30–35 S&P 100 stocks, most correlated to that index, combined with the sale of out-of-the-money calls on the index and the purchase of out-of-the-money puts on the S&P 100. The sale of the calls was designed to increase the rate of return, while allowing upward movement of the stock portfolio to the strike price of the calls. The puts, funded in large part by the sales of the calls, supposed limited the portfolio’s downside. Confused yet? You aren’t alone. Both Ponzi and Madoff played thousands of people for fools by winning their confidence and selling them a bill of goods.

Presidential candidate Rick Perry and the Social Security Ponzi Scheme

Mr Perry has alleged that Social Security, as it now exists, is a Ponzi scheme. His rationale is that since the earliest investors will be paid by later investors, it qualifies as a Ponzi scheme. On the face of it, he’s right. When Social Security was first concocted, the average life expectance was only 65 — meaning half of the population wouldn’t live long enough to collect and the politicians knew it. Also, Social Security had 41.9 workers per beneficiary in 1945 — today there are only 1.75 workers per Social Security beneficiary … and that number is steadily declining.

Mr. Perry, and millions of young Americans, are rightfully worried. Social Security is heading down a path that will eventually have one worker paying the benefits of one recipient. THEN what happens? One worker paying the benefits of two, three, or more beneficiaries? That isn’t sustainable and every single Presidential candidate knows it.

Why Social Security IS NOT a Ponzi Scheme

One simple reason: Social Security isn’t optional. Investing in a Ponzi scheme IS. You don’t HAVE to invest your hard earned money with Chuck or Bernie, but not so with Social Security. You and I have no choice but to sink our hard earned dollars … to the tune of 15.6% of our income before taxes, including the employer “contribution” … into the Social Security debacle, only to see those funds wasted on everything from $600 hammers to $600,000 vacations to $600 million pet projects for legislators.

Had the Social Security “trust fund” remain untouched, there might be hope. But for you and me and millions of younger workers, there’s simply no way it can be maintained in its present form.

Hopefully, the Rick Perry/Social Security dust-up will bring the program’s problems to the forefront and something positive will come of it.

What do you think? Do you believe Social Security in its current form will be there for you when you get ready to retire?

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Just like individual credit scores are calculated by three bureaus (Equifax, Transunion, and Experian) the credit scores of countries are also rated by three agencies (Standard & Poor’s, Moody’s, and Fitch). While both individuals and sovereign states both borrow money, the way scores are recorded are very different.

Individual credit scores range from 350 to 850, with anything higher than 780 considered very good. Credit ratings for countries are usually recorded using letters, pluses and minuses, and numbers.

If you don’t know your credit score, you can easily find out ALL THREE scores for FREE at GoFreeCredit.com.

With the US credit rating (or credit score) being downgraded by Standard and Poors from AAA to AA+, it’s much like having an individual credit score decline from 850 to 820, maybe 800. What really makes things worse is that the “outlook” is considered negative, meaning the rating could easily worsen.

What does this mean for the average person? Not a whole lot. Your personal financial situation is still more dependent on your ability to:

1. Make extra money.
2. Control your personal expenses so that you spend less than you earn.
3. Stay out of high interest debt (move your credit card debt to a long duration zero percent balance transfer card like the Discover® More Card).
4. Save money and invest it properly.
5. If you buy a home, make certain your mortgage is specifically designed for your personal situation (check with Quicken Loans).

What are other countries credit ratings? These are the latest ratings I could find on 33 countries and obviously are subject to change.

Country	Moodys Rating	Moodys Outlook	Fitch Rating	Fitch Outlook	S & P Rating	S & P Outlook
USA	Aaa	Review	AAA	Stable	AA+	Negative
Argentina	B3	Stable	B	Stable	B	Stable
Australia	Aaa	Stable	AA+	Stable	AAA	Stable
Austria	Aaa	Stable	AAA	Stable	AAA	Stable
Belgium	Aa1	Stable	AA+	Negative	AA+	Negative
Brazil	Baa2	Positive	BBB	Stable	BBB-	Positive
Canada	Aaa	Stable	AAA	Stable	AAA	Stable
China	Aa3	Positive	A+	Stable	AA-	Stable
Denmark	Aaa	Stable	AAA	Stable	AAA	Stable
Estonia	A1	Stable	A+	Stable	A	Positive
Finland	Aaa	Stable	AAA	Stable	AAA	Stable
France	Aaa	Stable	AAA	Stable	AAA	Stable
Germany	Aaa	Stable	AAA	Stable	AAA	Stable
Greece	Ca	Developing	CCC		CC	Negative
Iceland	Baa3	Negative	BB+	Stable	BBB-	Negative
India	Baa3	Stable	BBB-	Stable	BBB-	Stable
Ireland	Ba1	Negative	BBB+	Negative	BBB+	Stable
Israel	A1	Stable	A	Stable	A	Stable
Italy	Aa2	Review	AA-	Stable	A+	Negative
Japan	Aa2	Review	AA	Negative	AA-	Negative
Korea	A1	Stable	A+	Stable	A	Stable
Kuwait	Aa2	Stable	AA	Stable	AA	Stable
Netherlands	Aaa	Stable	AAA	Stable	AAA	Stable
Norway	Aaa	Stable	AAA	Stable	AAA	Stable
Poland	A2	Stable	A-	Stable	A-	Stable
Saudi Arabia	Aa3	Stable	AA-	Stable	AA-	Stable
Singapore	Aaa	Stable	AAA	Stable	AAA	Stable
Spain	Aa2	Review	AA+	Negative	AA	Negative
Sweden	Aaa	Stable	AAA	Stable	AAA	Stable
Ukraine	B2	Stable	B	Positive	B+	Stable
UAE	Aa2	Stable	AA	Stable	AA	Stable
United Kingdom	Aaa	Stable	AAA	Stable	AAA	Stable
Venezuela	B2	Stable	B+	Stable	BB-	Stable

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