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I am proud to be paying taxes in the  United States.    The only thing is

  I could be just as proud - -  for half the money.

 ~Arthur Godfrey

The Gross National Debt

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Click here to Print Free Federal and State Tax Forms

Where can I find -- a great home -- in a great town --  for less than $50,000?

1. Taxes can make or break retirement. Taxes on a home in a metropolitan area can be $3,000 to $10,000, while a similar home in a more rural or small-town setting might be $700 to $1,500.There is not an easy way to determine tax rates for the thousands of communities in the US. They vary widely. And if the real estate taxes are low, chances are you may pay dearly in some other way. And if ALL taxes seem low, check on the services available. These things must be paid by some source of revenue.  Find communities that have what you want, then call Realtors and ask about the property taxes on an average house like the one you will be buying.
2. Some states tax certain retirement income, while others like Pennsylvania do not. Sales taxes can range from nothing to over 8%. Some states tax food and clothing, and others do not.
3.  Compare various taxes in every state. SeniorArk internal pages.
4. Find out the details on any homestead exemptions in your state. This is a tax reduction based on the property being your primary residence.  I lived in my last house for 12 years not knowing I could have paid less if I had applied for this. In some states the homestead exemption for Seniors is quite sizable.
5. In many states you will not have to pay sales tax on items that are purchased from, and installed permanently in your home by the same company. For example, in Pennsylvania if you purchase a hot water tank from Sears, and Sears installs it for you, you will pay no sales tax on the tank or installation. If you purchase the tank and you and a friend install it, you must pay sales tax on the tank. At some businesses, you must educate them on this savings. It is easier for them to just collect the tax  than deal with the exemption. The revenue office of your state will be able to tell you if this applies where you live.

6. Beware of emails that claim to be from the IRS, wanting to refund you some piddly (under $100) amount by crediting your bank/credit card account and requesting the account number. The IRS DOES NOT refund money this way!! They always send a check. These emails are scams. Don't fall for them! In fact, if you get one, forward it to phishing@irs.gov, so they can nail the scammers. Remember.. if it sounds too good to be true, it probably is!   Rivahcat,  Virginia

7. The IRS has arranged for FREE online tax filing for those with incomes below $50,000.   This is the place to begin.

8. Get free online IRS Federal Tax Forms and instructions

9.Don't automatically accept that you are paying the correct amount of real estate taxes. A little time and        research can save you big bubks for years to come.  10 ways to get your real estate taxes reduced

10. A mismatch between a name and a Social Security number on a tax return could mean costly problems. At best, it could slow down a refund. At worst, it could unexpectedly increase a tax bill. A couple of years ago, the Internal Revenue Service stopped putting taxpayer Social Security numbers on the tax package labels. Privacy advocates were concerned that this information could be too easily used by others. Unfortunately, the IRS found that removing it also meant that taxpayers forgot to write in their identification numbers on their tax returns. So it's now up to you to fill in your Social Security number, as well as any others required on your return and associated schedules.

11. Having trouble paying your tax bill?  The IRS offers several different ways to remit what you owe.

12. You've been saving diligently for your retirement, but now you need some of that cash to cover today's expenses. Can you get to it without incurring Uncle Sam's tax wrath? In some instances, the answer is yes. IRS rules for early IRA withdrawals

13. If you turned 70 last year and haven't yet started spending what Uncle Sam thinks you should, on April 1 you have to take an IRS-specified amount out of your retirement account, even if you're still working. This withdrawal, known as a required minimum distribution, must come out of retirement savings where taxes have been deferred. This includes several popular IRAs -- traditional, simplified employee pension, or SEP, and SIMPLE accounts -- as well as certain employer-sponsored plans. It's no secret why the IRS wants you to start drawing down these accounts. Your money sat there for years, tantalizingly out of reach of the tax collector as it accrued tax-deferred earnings. full story

14. State-Local Tax Burdens,  Year 2005    Senior Ark internal page

15. Check the property taxes on similar homes in your neighborhood. If yours seem unjustified consider an appeal. In some communities an appeal usually results in a reduction. Make sure you are not already below nearby prevailing rates. Your jurisdiction will have instructions on how to file for an appeal.  

16. You will be hearing a lot about a great American tax break in 2006. Don't be fooled. It is called the "death tax" for effect. ONLY 2% OF AMERICANS COULD POSSIBLY BE AFFECTED BY THE REPEAL OF THIS TAX.  And there are ways to minimize the impact of this tax if you ARE in the 2% group.   I believe we have been witnessing the greatest redistribution of wealth from the  lower   and middle classes , to the upper classes, that we have ever seen in our history. This is another "break" we do not need.

17. Does Charity Car Donation Still Make Sense Under Tougher IRS Rules?

18. On tax matters, I checked with the Centers for Medicare and Medicaid Services and the IRS to find out whether Part D premiums and other Part D expenses, most of which were incurred for the first time in 2006, are tax deductible. They are. But too often we forget to include out-of-pocket Medicare Part A, B, C and D expenses among our medical deductions.That would include the 2006 Part B monthly premiums ($88.50 for most people).
You also may include the Part A and B deductibles, ($952 and $124, respectively) and Medicare and Part C Medicare Advantage (HMO) co-pays and any other out-of-pocket medical expenses.
In order for any of that money to be returned to you in the form of a tax deduction, however, your expenses must exceed 7.5 percent of adjusted gross income. Premiums paid for Medigap policies, COBRA or your costs for supplementary coverage from a current or former employer, as well as expenses for travel to and from doctors, also count toward your total in determining deductibility. Saul Friedman, Newsday.com  January 6, 2007

19. Social Security and You: Benefit statements are easy to replace
I understand that I should have already received my SSA-1099 so I can complete my income tax return. I must have misplaced it. How can I go about getting another one?

20. Finding the cheapest place to retire means more than cutting expenses, you need to beware of the tax climate. Not every state will be an affordable place to retire. Forty of the 50 states give a variety of tax breaks to retirees. Seven have no state income taxes for all residents, and eight gave property tax relief to homeowners over 65. Fourteen give homestead exemptions to all homeowners. Most states will allow you to deduct some portion of your government, military or private pension when calculating your income tax. See Taxes by State. Also see the expanded section on tax rates favorable to seniors in Pennsylvania.

21. See how your state ranks in taxes in the 2007 assessment done by the Bureau of Economic Analysis, Census Bureau and Tax Foundation.
22. The Federal US Government may tax some of your Social Security benefits. Here is a link to the official IRS publication #915, explaining that possibility.
23. IRS: Beware 12 Worst Tax Schemes : March 13, 2008
24. Have just a little fun. Watch: YOU ARE ALWAYS ON MY MIND (requires Microsoft PowerPoint)
25. November, 2009 Read about the upcoming Extension-Expansion of the Home Buyer Tax Credit

26. During the tax years 2009 and 2010 there is a huge tax credit available to Americans who make their homes more energy efficient. A tax credit lowers your tax bill dollar for dollar. A deduction shaves money off your taxable income, so the value depends on your tax bracket. If you're in the 25% bracket, a $1,000 deduction lowers your tax bill by $250. But a $1,000 credit lowers the bill by the full $1,000, no matter in which bracket you are.

27. October, 2010 - According to the Tax Foundation, the top states for states for median real estate taxes in 2009 besides New Jersey were; Connecticut ($4,738); New Hampshire ($4,636); New York ($3,755); Rhode Island ($3,618); Massachusetts ($3,511); Illinois ($3,507); Vermont ($3,444); Wisconsin ($3,007); and California ($2,893). The bottom five were South Carolina ($689), Arkansas ($532), Mississippi ($508), West Virginia ($464), Alabama ($398) and Louisiana ($243). The data comes from the Census Bureau. Read More

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