Taxes

by **Chacal** » Wed Mar 05, 2003 1:12 pm

I must go with Cpl. Bingham on this one. I believe we have achieved a balance between capitalism and rampant socialism that seems to mostly work.

I mean, if there's no care program and it's everyone to himself (?what's the English idiom for this one?) then what's the point of living in society?

In Quebec we have things like free health care for everyone, (it's a mandatory health insurance in fact), employment insurance, welfare. The only thing I envy the US is food stamps. Here we give money to those on welfare, they can spend it on booze if they want.

I can't say there's rampant abuse, the gov't is much more strict than it was a few years ago. If I quit my job, I get no EI.

What's very important is we don't just give money, we have lots of programs to help people get out of the streets, out of addicitions, learn a skill, get a job, and so on.

by **BulletToothTony** » Wed Mar 05, 2003 1:20 pm

Well you are on the right track to see about putting money into IRA's. Whatever you can put in before April 15th will come back to you since you can deduct it off of your taxes.

Not everyone has this luxury, but always try NOT to carry a credit card balance. Credit cards should be used as a convenience or for an emergency expenditure that you might not have the cash for. If possible, pay the full balance at the end of each month. Paying those high interest rates is like letting someone rob you.

I don't know what line of work you are in, but if you have receipts for buisness related travel expenses or meals and have not been reimbursed by your company, those items are usually tax deductable, but you must have the receipts.

I'm not an accountant btw, the above are either my opinion or things my accountants have done for me in the past.

-BT

by **RCinator** » Wed Mar 05, 2003 2:13 pm

Originally posted by Chacal
I mean, if there's no care program and it's everyone to himself (?what's the English idiom for this one?) then what's the point of living in society?

We say "Every man for himself"

Originally posted by Chacal
The only thing I envy the US is food stamps. Here we give money to those on welfare, they can spend it on booze if they want.

People still find easy ways to abuse the food stamps too. They're often sold on a kind of food stamp black market. On top of this, our welfare system aditionally provides cash to people, and it is often abused in the same manners as in your country.

by **Camel toe joe** » Wed Mar 05, 2003 2:22 pm

Originally posted by BulletToothTony
Well you are on the right track to see about putting money into IRA's. Whatever you can put in before April 15th will come back to you since you can deduct it off of your taxes.

Not everyone has this luxury, but always try NOT to carry a credit card balance. Credit cards should be used as a convenience or for an emergency expenditure that you might not have the cash for. If possible, pay the full balance at the end of each month. Paying those high interest rates is like letting someone rob you.

I don't know what line of work you are in, but if you have receipts for buisness related travel expenses or meals and have not been reimbursed by your company, those items are usually tax deductable, but you must have the receipts.

I'm going to see about thr IRA's but I will need to beable to take that money out shortly to buy a house...as for credit cards...it seems thats why I work to pay those fuckers back...once i finish paying them back I will never use a credit card again unless an extreme emergency...I really have anything as far as work related expenses... thanks for the info

by **mecujo** » Wed Mar 05, 2003 2:47 pm

My advice FWIW...

With the exception of a house mortgage (and possibly car loans depending on your income and car loan interest rates) you should not invest in ANYTHING not tax deferred unless debt free (all CC's paid off).

Just think of a CC at 15% interest rate (that's generous). Instead of putting your money into paying that off you buy some stocks or mutual funds or put cash in a money market account. Unless you're getting over 15% return on your money you are getting hosed. With today's market 99% of us aren't getting 15% on our investments.

So do yourself a favor ... make 15% on your money by paying off those CC's. Yes, I said MAKE 15% ... think about it. Ole Ben franklin said a penny saved is a penny earned.

I had my bout with CC's when I was young ... never again.

Take care,

mecujo

'If you want to be liked, get a dog. The people you work with are not your friends.'

:beer:

by **SHWoff** » Wed Mar 05, 2003 3:10 pm

Problem with tax deferred investments lies in its name. The taxes are deferred. One thing you can guarantee is that sooner or later Uncle Sam will get his money. Also, most tax deferred investments have strict rules and caps that contain heavy penalties if not met. For example, if you put your dough in an IRA and take it out early, penalties will arise. Same goes for 401k, 403b, most college funds, etc. Not that some tax deferred investing isn't a good idea - just know that there are many assumptions about them that are plain wrong. IMO (I'm a network engineer not an accountant, attorney, etc - *see below) a diverse portfolio of tax deferred and taxable investments is best.

* I'm currently going over all this with my financial advisor ad nauseum so it's all fresh in my head. I recommend paying the $500-$1000 for an advisor if you're not sure how/where/how much/what to invest.

by **BulletToothTony** » Wed Mar 05, 2003 3:45 pm

Yeah, I hear what you're saying about needing the money to buy a house. I figure though that if you are going to have to pay the taxes anyway, it would be better to put like $2,000 of it into an IRA to reduce your tax liability. Downside is your money will then be tied up in the retirement fund and you won't be able to use it for the house.

Mecujo is dead on about paying the CC's off over investing. I've been lucky, I got through my late teen's/early twenties without racking up the credit card debt, however, I started investing in mutual funds in April 2000 which was the WRONG time to buy them. The market started taking it's dive not long after that. It's such a crapshoot anymore, that you're better off eliminating any types of debt or loans.

-BT

by **mecujo** » Wed Mar 05, 2003 3:47 pm

I'm a land surveyor, so no expert in this matter other than personal experience and the advice I pay for...

Yes tax deferral means as the name implies.

Don't invest in tax defered plans with early withdrawal penalties if you plan on withdrawing early. This is a long term investment obviously.

Yes, you will get taxed at some point. However, if you're making some damn good money now our (US) system rewards your success with a higher percentage of your wages being garnished. By sheltering this money from this high tax rate (30-40%+) you can withdraw it at a later date (during retirement) when your tax rate is probably lower due to a lower income level.

If you can shelter some money from the unwashed masses who need their entitlement programs (at 30-40%) up the limits, then you can be better off doing that with the money than paying a 15% CC debt (more Return-On_Investment). After that sehelter is capped you're being taxed so plod on and pay off those high interest CC's before EVER investing.

Buy a car with cash, it can be like a solid 7% investment. No worry on what the market does, you made your 7% interest rate.

Yes I know that compound interest works best with eary (now) investment but those CC's will eat you alive and you'll be paying 14 years or more on average at the minimum rates.

Take care,

mecujo

'In dog years I'm dead.'

PS: SHWoff, you're a damn crack shot. I don't think I've won a 1 on 1 with you yet!

by **ECGNDan** » Wed Mar 05, 2003 7:56 pm

Originally posted by mecujo
Dan the answer to the National Debt is less spending, not more taxes. You can tax the shit out of the people who create all the jobs and prosperity only so long.

Exactly, we are Spending more & taxing less, that doesn't help a Nat'l Debt.. :violin:

by **Ralph Wiggum** » Wed Mar 05, 2003 9:38 pm

I think that the current deficits we are running are more of a situational short term problem. Also, despite the huge dollar values, both the deficit and the debt are probably as low as they have been in a long time as a percent of GDP.

Joe, I'm sure your accountant knows this, but I believe I read somewhere that for tax purposes IRAs in P.R. are different than U.S. IRAs.

Taxes

Debt / Investing

Re: Rob from the rich, give to the poor?

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