Money Hacks

Yesterday I mentioned a paycheck calculator from a random web site. But did you know that the IRS actually has a couple of great web-based tools? For example, you can use their withholding calculator to figure out exactly how much to have held back from your paycheck.

Why would you need such a calculator? Well, say for example you run a group of web sites that has begun to produce a not insignificant amount of income, and you’re worried of the tax implications. The withholding calculator can help you get things figure out. Or maybe you always end up owing tax at the end of the year. Or maybe you always get a refund. The withholding calculator can help you adjust things so this no longer occurs.

In order to use the tool, you’ll need to have some information handy, including a recent pay stub and last year’s tax return.

[Internal Revenue Service: IRS withholding calculator]

Ever wished you could find some way to play with the numbers that go into your paycheck? I have. Sometimes I want to know what would happen if I changed my withholding rate, or how my taxes would be affected if I got a raise.

Paycheckcity (a site for which I cannot vouch) has a handy paycheck calculator that lets you play with the numbers. You can select your state, the tax year for which you want to experiment, and then enter a variety of parameters to see what happens to your net pay.

[Paycheckcity.com: Paycheck calculator]

JLP at All Financial Matters has compiled a list of fifty easily overlooked tax deductions.

Last night I was looking through The Ernst & Young Tax Guide 2007. For those of you who may not be familiar with the Ernst & Young Tax Guide, it is a HUGE (over 700 pages) book that covers the federal income tax in detail. Basically, the book is IRS Publication 590 in an expanded version with lots of tips, tricks, and other cool stuff. That said, here’s a list of the fifty most easily overlooked deductions in alphabetical order (you’ll have to consult the Guide for more information on each deduction).

Among the more common things that people might be able to deduct are:

• Accounting fees for tax preparation services and IRS audits
• Casualty or theft losses
• Commissions and closing costs on sale of property
• Contraceptives, if purchased with a prescription
• Dues to labor unions
• Home improvements
• Subscriptions to professional journals

The complete list is fifty items long, though there’s no additional information on each item other than the fact that it may be tax deductible.

[All Financial Matters: 50 of the most easily overlooked tax deductions]