March Money Management

MARCH 3, 2008
TAX SEASON QUESTIONS
How can you lower your tax bill? The Georgia Society of CPAs advises that there are many tax-savvy steps you can take to limit the amount you pay in taxes. For example, participating in your company 401(k) plan or contributing to an individual retirement account can allow you to lower your taxable income now and make the most of your long-term nest egg.

Of course, you should also be sure you are taking all the proper deductions. If you have questions, your CPA can help. When a CPA prepares your tax return, he or she will point out ways to lower your tax outlay and discuss opportunities to improve your overall financial situation. Be sure to contact your local CPA for help with all your tax and financial planning needs. 

MARCH 10, 2008
SMART WAYS TO USE YOUR TAX REFUND
Are you expecting to receive a tax refund this year? Refunds are always a nice surprise, but they also present a great opportunity to make some sound financial decisions that will reap benefits now and in the future, according to the Georgia Society of CPAs. For example, if you have high-interest credit cards, hefty student loans or any other debts looming over your financial landscape, CPAs recommend that you use some if not all of your refund to pay them down as much as possible. If you pay off a credit card with a 16% interest rate, you’ve just gotten yourself a 16% return on your money—-a nice bonus that’s higher than the regular return on most investments. Once you’ve wiped the slate clean of outstanding debt, you can use your hard-earned money to save up for dream purchases. But if you don’t lower your debts, that money instead will be wasted on interest charges. If you have questions about smart ways to use your tax refund, your local CPA can advise you on any of the financial questions facing you and your family.

MARCH 17, 2008
TAX BREAKS FOR THOSE IN THE MILITARY
If you or a loved one is in the military, the Georgia Society of CPAs suggests that you be aware of some of the special tax breaks available to soldiers.

For example, thanks to the Heroes Earned Retirement Opportunities Act, members of the military serving in combat zones are allowed to make contributions to a traditional individual retirement account or Roth IRA based on their tax-free combat pay. Before this law took effect in 2006, soldiers who received tax-free combat pay generally did not qualify to set aside any of their earnings in tax-advantaged IRAs.

To find out more information about how the tax laws apply to those in the armed forces, turn to IRS Publication 3, “Armed Forces’ Tax Guide,” which is available online. You can access it by going to http://www.irs.gov/, then clicking on “Individuals” and finding the section entitled “Tax Information for Members of the U.S. Armed Forces.” You can also call the IRS toll free at 1-800-829-1040.

Have more questions about how the tax laws apply to those serving in the armed forces? Turn to your local CPA for all the information you need.

MARCH 24, 2008
TIPS FOR FIRST-TIME HOME BUYERS
Purchasing a home can be an excellent investment, according to the Georgia Society of CPAs, but there are some important issues to consider when you do. The first step is to decide how much house you can afford. As a general rule, your monthly housing cost should not exceed 25% to 30% of your gross monthly income if you want to qualify for a conventional mortgage. Monthly housing costs include your mortgage principal payment, interest payment, property taxes and home insurance.

To determine your possible mortgage costs, you can use a mortgage calculator like the one found on the Web site of the CPA profession’s 360 Degrees of Financial Literacy program at http://www.360financialliteracy.org/. To use the calculator, fill in your total expected mortgage amount, the interest rate and the mortgage term. You can change the amount or other factors until you find the right price for you. And if you need advice on buying a home or any other important financial question, consult your local CPA. He or she has the expertise to help you make the best financial decision for your situation.
  
MARCH 31, 2008
MORTGAGE SHOPPING TIPS
When you buy or refinance a home, it’s a good idea to shop around for the best mortgage deal you can find, recommends the Georgia Society of CPAs. When you’re looking for information, remember that the mortgage interest rate will affect your monthly payment amount, so as a general rule you will want to find the lowest interest rate possible. Be sure to ask, however, whether the lender is offering a fixed-rate loan or an adjustable-rate mortgage.
      
With a fixed rate loan, the interest rate will remain the same as long as you hold the mortgage. With an adjustable-rate loan, the rate can change based on the direction of interest rates in the credit markets. Adjustable-rate mortgages often offer low initial interest rates, but those rates can creep higher in the future. That means your monthly payment will also rise. Find out what kind of loan you’re being offered and, if it’s an ARM, how often the rate can change and by how much. If you select an ARM, CPAs advise that you ensure that you can afford the mortgage not only right now, but also in the future. And remember to consult your local CPA about how your decisions will affect your overall financial picture.

For more information contact Calvin Wong at 404-231-8676, Opt. 5.