Pay Lower Personal Taxes, 6 Strategies

Every tax payer is constantly seeking ways and means to pay lower taxes. According to financial wizards those who actually pay lower taxes for large incomes earned are wise and great decision makers. Statistics show that most people pay higher taxes because:

o They are not up-to-date with tax laws.

o Are sloppy with their accounting methods.

If you are serious about saving on taxes you need to know, what the common tax mistakes people make are and ensure that you avoid them. What you can do is:

o Surf the internet and read through all the articles and tips on taxes published by taxation experts and the IRS. Ensure that you read the 1040 instruction booklet.

o Once in a while hire a professional to check through your tax returns and advice you on your tax planning.

The easiest and most honest way to save on taxes is to plan your taxes and devise a fool proof method of keeping track of receipts, investments, property, business expenses, charitable donations, medical expenses, and so on. By being organized you will not miss any aspect that will allow a tax waiver.

According to tax gurus there are 3 ways in which you can pay lower taxes:

1. Create a solid retirement plan. Since taxes depend on your AGI or adjusted gross income and is a measure of your finances, you must reduce your AGI. The easiest way to do this is to contribute to a 401K or similar retirement plans. Money saved in a retirement plan is deducted from income and so lowers the AGI and taxes. Another way of reducing AGI is to make adjustments by including payments to IRA, student loan interest, alimony payments and so on. Refer to the list provided by the IRS on Form 1040: page 1.

2. Escalate your tax deductions. Taxable income is the money left over after reduction of AGI and exemptions. If you itemize your deductions instead of just taking a standard deduction you will benefit. According to tax advisors you must use which ever is a higher, itemized deduction or standard. Ensure that you take into account mortgage interest, home equity loan interest, state taxes, membership fees, and charitable donations.

3. Use tax credits to reduce taxes. Tax credits are retirement funds, college expenses, adoption of children, and so on. Education related credits are of two main kinds: The Hope Credit for the first two years of college and the Lifetime Learning Credit for anyone taking college classes.

4. Avoid paying additional taxes by resisting early withdrawal of funds from the IRA or 401 K retirement plans. Withdrawal results in an increase of taxable income.

5. Find out if you are eligible for Earned Income Credit.

6. Get a larger refund on taxes by increasing the withholding. Log on to the IRS website and learn about the W-4.

Taxes are not about blindly filling forms it is basically intelligent planning and using strategies that will benefit you in the long run. So think investments, buying property, and so on. The World Wide Web has incredible amounts of information and tips that will help you pay lower taxes.

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Where Should You Invest In Real Estate?

Investing in real estate is one of the few ways for the average person to gain wealth. Can you become rich overnight? Not very likely. Real estate investing should be considered a long term strategy that can gain you tremendous amount of wealth over time but you must do your homework first. The majority of people that are getting into the real estate investing market are simply purchasing a home in an area that they are familiar with and then wonder why they are not rich after a couple of years.

Do a search on the internet for real estate investing and you will find hundreds of ways to get rich quick through real estate investing. And it’s true, if you are selling books, DVDs or real estate seminars you can become wealthy in a short period of time. If you are investing in real estate it is just not going to happen without the proper up front research.

There are three main points you must consider before purchasing your first property and they are location, location, location. This is a rather simplistic view of real estate investing but it has never been more true than today. Thousands of people are getting into the real estate market, and yet over 90 percent of the foreclosures in the market today are from non owner occupied homes. This means that people that have purchased a vacation home or purchased a second home for investment purposes have gotten into financial trouble. This Usually happens because they did not purchase that asset in the correct location at the correct time. So the question is, how do you find the correct location to invest?

Any locations can be the correct location to invest in real estate as long as the timing is right. There are four cycles of real estate investing and the cycles can run from 7 to 40 years depending the the intelligence of the local government. These cycles are Buyers Stage 1,
Buyers Stage 2, Sellers Stage 1 and Sellers Stage 2.

Buyers Stage 1 – strategy buy and hold.

1. Oversupply of properties on the market.

2. Prices and rents are falling.

3. You will see a spike in the properties time on the market.

4. Unemployment is at its highest.

5. New construction is overpriced and sales are stagnant.

6. Construction jobs are at an all time low.

7. Foreclosures are at its highest rate.

8. Investment properties are not being purchased or being purchased at a slow rate.

Buyers stage 1 is a declining market and you will need to shop around for a good investment because you do not know how low the market will go. If the local government is not taking action at this point then the market turnaround will be delayed and more care will be needed taken. Always purchase a new property with a lot of equity and a good cash flow to help minimize your risk.

Buyers Stage 2 – strategy buy and hold – also known as the Millionaire Maker.

1. No new construction.

2. Demand for housing is increasing sharply.

3. Properties time on market is decreasing.

4. Rents and Prices for property are at its lowest.

5. Foreclosures are starting to decrease.

6. Job growth is increasing.

7. Rehabbers are purchasing an increasing number of properties.

8. Fewer properties are getting on the market.

9. Demand for properties is increasing because buyers are able to qualify at the low prices.

Buyers stage 2 only happens after the local government is starting to attract new business into the area. For every one new job brought into the area three new jobs are created. These newly created jobs are the butchers, bakers and candlestick makers. In other words the support jobs that are needed to service the new people in the area. I believe that the most important thing to watch for in this market is the job growth rate. New people coming into the area will require housing which will drive up the price. Your local economic adviser counsel is a good place to look.

Sellers Stage 1 – strategy buy and sell quickly.

1. Demand for property is increasing.

2. The time on market for properties in decreasing.

3. Property taxes are on the rise.

4. Unemployment in decreasing.

Sellers stage 1 is a very risky time to be investing in property because you do not know how long before the sellers stage 2 will occur. Be sure you know the signs of the next phase so you can get out of the market at the best time.

Sellers Stage 2 – strategy sell, sell, sell.

1. Supply of properties has sharply increased.

2. Time on market is increasing.

3. Construction of new homes is increasing.

4. New job growth is slowing.

5. New real estate investors are jumping in.

6. First time home buyers are increasing.

One of the ways to watch for new construction of new homes is to check with the local building permits department. You will be able to pick up some good deal from the new first time real estate investors that jump in during the sellers stage 2 market. Always do your home work prior to investing in real estate.

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Social Media Marketing Trends You Should Not Ignore

The success of social media marketing lies in the right mix of fruitful strategies. The wrong combination will simply reduce the traffic from targeted customers rather than attract them. If you devise your social media strategies such as social media optimization on the basis of current trends, you can increase profits and use social networking sites effectively for marketing. Here are the recent trends highlighted in an article published by Forbes based on the 2013 Social Media Marketing Industry Report.

Low Usage of Social Bookmarking Sites

According to the research reports, the use of social bookmarking sites has decreased to 10 percent from 26 percent in 2011. This considerable drop of usage clearly indicates the fall of bookmarking sites. Even though the sites including Twitter, StumbleUpon, Reddit and Pinterest are still popular among marketers, majority of sites (e.g. DIGG, Friendfeed) are almost dying. Therefore, it is not a good practice to trust a bookmarking site blindly for marketing purposes in the current scenario. Instead, check for the sites that are most popular and perform the bookmarking very cautiously.

Decline of Daily Deal Sites

Daily deal features or simply daily offerings of deals are regarded as a powerful way to attract a large number of targeted customers at a time. The research report says that around 80 percent of marketers are not interested in using the most popular daily deal sites including Groupon or Living Social for their campaigns in the near future.

Now people concentrate more on the considerable amount of returns that they receive from their purchases over time. Hence, it is advisable to use social networking sites for long term marketing goals rather than daily goals.

Top Sites for Social Media Campaigns

Marketers who use social media for marketing will obviously carry out social media campaigns (using social networking sites for promotion) for their products or services to attract targeted customers. The campaigns will be successful only if the relevant site is popular among the customers.

The research report indicates that marketers who spend more than 40 hours a week for social media marketing carry out their campaigns more intensely through Google+, You Tube, Pinterest and Instagram compared to those who spend six hours or less a week on social media marketing. Also, around 92 percent of marketers who have five or more years of experience prefer LinkedIn than 70 percent of marketers having less than five years of experience. Forum marketing has also decreased to 16 percent this year from 24 percent in 2011.

Around 67 percent of marketers are planning to increase campaigns through Twitter even though it is a slight decrease from 69 percent last year. Young marketers, more than older ones prefer photo sharing sites including Instagram for launching campaigns. 62% chose blogging as most suitable platform to master, which is the highest one followed by Google + (61%) and Facebook (59%).

Trends of B2C and B2B Marketers

Business to Consumer (B2C) Marketers use Facebook at a higher rate of 67% than other platforms. In the case of Business to Business (B2B) marketers, both Facebook and LinkedIn have equal majority of 29% each. Given below is the pie chart showing usage statistics for each platform with regard to B2C and B2B marketers.

B2B marketers use a more diverse array of platforms compared to B2C marketers. Both of them do not completely utilize blogging and have minimal You Tube usage.

If you are a B2B or B2C marketer, try to encourage blogs as they are regarded as the most popular social media platform. YouTube being the second largest search engine, you can enjoy the benefits it offers by posting low-cost videos. Orabrush (B2C Company) and Blentec (B2B Company) have become strong brands by making use of low cost YouTube videos.

As B2B marketers increasingly use LinkedIn, they have an opportunity to utilize SlideShare (owned by LinkedIn). This social media entity can be used for generating leads for B2B organizations.

Fewer Check-ins Online

As per the research reports, there is a decrease in the usage of geo-location services including Foursquare from 17% in 2011 to 11% this year. These services allow check-in to your locations automatically online. The decline in these kinds of services indicates that people are now concerned more about privacy and safety. Marketers can tackle this situation by introducing contests and rewards. This will encourage people to check-in more.

If you are still following the old strategy for social media marketing, then it is the time to develop new strategies based on all these current trends. It is better to entrust this tedious task to a reputable social media marketing company that offers reliable social media marketing services rather than try implementing the strategies on your own.

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The Responsibilities of Cosigning For a Student Loan

The responsibilities of a cosigner don’t end when the bank approves the student loan application and doles out the money. In truth, the responsibility has only just gotten started.

As a cosigner, your first responsibility will be to counsel the person asking you cosign on their loan and advising them as to the best course of action. Make a gut decision if this amount is the right amount. Too much borrowed could allow for excess spending, and a tough financial burden if the student drops out of school. Too little borrowed, and the student may not be able to complete studies due to a lack of funding. Either way, the student loses. And the cosigner could get stuck with the bill.

Moreover, ask all the “what if” questions: What if you quit school? How will you pay off this loan? What if you move out of state? How will I reach you? What if you worked part-time and only took out a smaller, more affordable student loan to get your through school? What if you sought out loan forgiveness programs available in certain professions like nursing, teaching, and the military?”

In non-legal terms, a cosigner agrees, with the simple stroke of pen adding their name to the college student loan contract, to assume equal responsibility for loan repayment. The cosigner then has assumed a loan obligation which could negatively impact their credit history and lower their credit score.

As a student loan cosigner, you must be responsible to retain copies of all important papers related to the loan, and develop leverage of the borrower to ensure that this loan gets repaid on time.

Entering into a loan agreement means that the cosigner is pledging to pay off the loan if the student
borrower fails to live up to the terms of the loan. If the loan goes into default, the cosigner will be equally liable. And, since a cosigner will probably have more tangible assets, a lender will be able to file a lien on the cosigner’s property to recover on the loan.

So, say if the borrower stops making payments, the cosigner will have to take over the payments. You may even be responsible for the full payment of the loan in the event that the borrower dies or is disabled, though oftentimes a student loan can be forgiven if the right type of loan has been taken out.

Some banks will relieve the cosigner of his or her obligation after the first two years of loan repayments. After the student has made his or her first 24 consecutive monthly payments on time and meets certain credit requirements, he or she often has the opportunity to request to remove the cosigner from the loan.

A cosigner should have a good credit history and steady income, plus full trust in the person he is helping get a loan that he or she will honestly do eveything they can do to repay the loan when the note comes due.

What does a cosigner need to sign on the dotted line and make the loan go through? All lenders require different documentation to approve a student loan. During the application process, cosigners will generally be asked to supply some or all of the following information:

  • Current address, phone numbers, and alternate contact information
  • Personal reference information, including full names and phone numbers
  • Employment information: employers, address, phone numbers, supervisors, time worked at each job, and gross income
  • Your monthly rent or mortgage payment
  • Social Security number (some will require you produce the actual Social Security card so they can photocopy it and keep it with the loan application).

When you cosign, your credit history will be examined by the lender. A higher credit score, stable work history and a long-term successful use and repayment of previous credit should help you and the borrower get approved for the loan.

There are two rights that most co-signers should request from the lender. One, demand that the lender give them proper notification of any and all late payments. And, two, writing into the loan agreement a clause limiting the cosigner’s financial responsibility only to the loan’s principle, and excluding late fees and attorney costs. Such rights, properly exercised, could limit the financial liability to the cosigner in the end, should the student loan go into default.

If you are a Sallie Mae cosigner, then there are new protections available. Under the Sallie Mae’s ‘Smart Option Student Loan’, if the primary borrower dies, becomes permanently and totally disabled, whatever balance remains of the loan is forgiven. Thus, the cosigner is not expected to continue making those monthly loan payments. (or permanent and total disability), the remaining balance would be forgiven. However, for other loans such as a Perkins student loan or a Stafford student loan you need to read over the promissory note carefully to see if similar protections apply.

As was stated earlier, the responsibilities of a cosigner don’t end when the application is approved and the loan is funded. The responsibility bestowed on a cosigner after all the money has been spent, the classes taken, and the loan payments begin could last for many years. Thoughtful analysis of all the factors surrounding such a loan request should be carefully considered before one agrees to cosign a college loan.

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