Who enjoys doing taxes? For the one guy out there who raised your hand, put it down… no one believes you anyway. The rest of us hate doing taxes and more importantly, we hate paying The Man. One thing we hate more than paying The Man, is overpaying The Man. So, the annual searching and researching for deductions begins right around now and goes on until April 15th. Let me make a quick suggestion, skip the caveman tax return by-hand thing and enter the 21st century. Let software do the heavy lifting.

By using tax software, you essentially guarantee that you’ll get as accurate a return as you can possibly get as long as you answer all the questions accurately (as they say, “garbage in, garbage out”). If you miss a potential deduction, tax preparation software will likely ask the right questions and get the deduction if you qualify. The software updates itself so you’re sure to get any changes to tax law that are passed after the IRS printed out the paper forms (such as the AMT patch). While software isn’t infallible, it’s certainly better at it than you are.

One additional thing to consider is that many Americans qualify for free tax preparation (and even filing!) through special programs. If it’s free, it makes no sense to do it yourself.

Lastly, here are some common income tax deduction and some often overlooked income tax deductions if you still want to do the caveman by-hand thing.

One of my friends had a car that she loved but had to bring into the shop every three or four months, like clockwork, for one problem or another. This wasn’t some car she bought used on Ebay or some shady car dealership, this was a brand spanking new vehicle. I won’t slander the manufacturer by saying who made it but suffice it to say, the brothers on CarTalk have complained frequently about it’s expensive ball joints. So, knowing she’d been to the dealership so many times I wondered what the lemon law actually covers and what it means (in Maryland, the laws may differ for you wherever you are).

In order to qualify for protection, your car must be less than fifteen months old with less than 15,000 miles on it and either owned or leased by you and registered in Maryland. (If it’s registered elsewhere, check that state’s lemon laws) Now, this usually puts you within the manufacturer’s warranty so they should fix pretty much every problem you bring them. If they can’t, that’s when the lemon law protections come in.

First, write your dealer or car manufacturer a letter requesting the repair and send it via certified mail. If the manufacturer refuses to repair the problem with thirty days or if they do complete repairs and it “impairs the use” or “substantially reduces the market value” of the car, then you may qualify for a refund or replacement vehicle as long as the problem is from the following list:

The problem list is:

• A brake or steering failure that was not corrected after the first repair attempt, and that causes the vehicle to fail Maryland’s safety inspection; or
• Any one problem that substantially impairs the use and market value of the vehicle that was not corrected in four repair attempts; or
• Any number of problems that substantially impair the use and market value of the vehicle that have caused it to be out of service for a cumulative total of 30 or more days.

If you qualify, you’ll want to write a complaint to the manufacturer with the following information (sending it via certified mail!):

• List the make, model, year and VIN of your vehicle.
• Include the name of the dealership from which your automobile was purchased and the date of purchase.
• Describe the problem you are having.
• Describe what you have done to address the problem and include copies of repair orders and dates of repair attempts.

If the manufacturer can’t correct the problem you outline within 30 days, they are required to repurchase or replace your car. If they repurchase it, they must cover the full purchase price plus license fees, registration, and any other government charges and they have the option of reducing it by 15% because you got to use the vehicle and a “reasonable allowance” for damage outside normal wear and tear. if you

If your car is a lemon and the manufacturer is unable to correct the problem within 30 days of receiving your letter, the manufacturer must repurchase or replace your vehicle. If you previously contacted the manufacturer, you will want to send a follow-up letter by certified mail, return receipt requested, outlining your problem, the steps you have taken to resolve it and what action you want taken. (See sample letter C.)

The manufacturer can replace your vehicle with a comparable one that is acceptable to you, or buy it back, whichever you prefer. The repurchase price you are offered should cover the full purchase price including license fees, registration fees and other similar governmental charges. The manufacturer can subtract up to 15 percent of the purchase price for your use of the vehicle, and a reasonable allowance for damage not attributed to normal wear and tear. At this point, I’d contact the Consumer Protection Division to get their help. If you need more information, the Maryland AG office has more information.

Good luck!

This is not legal advice in anyway, I was just trying to understand the laws to help out a friend.

Ryan is a guest author from Millionaire Money Habits, a personal finance site that discusses how to build wealth by developing the habits of self-made millionaires. Subscribe to his RSS feed.

In the Millionaire Next Door, author Thomas Stanley talks about the importance of playing good financial defense in order to build wealth. In other words, controlling your spending and expenses in order to keep more of your money.

Financial defense is one way to increase your net worth, but many people either focus on or want to achieve the flip side of that concept. That would be to play good financial offense by increasing your income in order to produce and build wealth.

What is the Best Way to Increase Income?

Playing financial offense is a proactive, thoughtful approach to increasing income. It’s about planning and executing, as opposed to reacting to a situation. Too often people hope to increase their income by getting a promotion or a raise by working hard. That’s great, but you can take more control and create an offensive strategy to achieve your income goals rather than hope for them.

By taking initiative and having a clear plan on how to bring in more money, it would be virtually impossible not to achieve some level of success. Here is how I would recommend going about this:

Identify Your Goals

Take 15 minutes and give yourself some quiet time with no TV, no kids and no email. Shut it all down. Grab a sheet of paper and a pen and draw a line down the middle. Label the columns “short-term” and “long-term.” Now write down how much money you want to increase your income within the next 6 – 12 months and in the next 5 years. Winning the lotto does not count.

Create a Plan

Now, think about how you are going to reach these goals. Under the dollar amount you just listed, write 3-5 ways to reach these goals. Let me give you an example:

short-term goal = $5,000/year increase in income

• Negotiate a raise
• Interview for a higher paying position
• Start a part-time handyman business
• Get a weekend job
• Find valuable things at auctions to sell on eBay

long-term goal = Make $100,000/year

• Become director of x at my company
• Obtain 25 cash-flowing rental properties over the next 5 years
• Grow my part-time business to bring $X revenue

The examples above are to get you started. For each item, take each point a step further and have an action plan on how you could feasibly make them a reality. To negotiate a raise, for example, do some research on how to negotiate a raise and prepare a case to present to your boss.

Execute

Now that you have identified your goals and drawn out a plan, take action and execute your plan. You may fail at one or two of these, but that is why you should have a number of paths to achieve your goal. You will learn from your mistakes, and will be better prepared to brush yourself off and try again.

While Thomas Stanley stresses the importance of playing good financial defense in order to accumulate wealth, you can accelerate your goals by being offensively alert as well. Set some goals that you will hold yourself accountable to, take a proactive approach to increasing your cash flow, and start making more money for yourself.

(FYI, the Carnival of Personal Finance was posted this week at Four Pillars, go check it out!)

When I first started working several years ago, I was amazed at the idea of a Flexible Spending Account (FSA). I could make tax-deductible contributions and they could be withdrawn tax free for qualified medical expenses and over the counter products. Since then, I’ve become aware of two other types of accounts: Health Savings Accounts (HSA) and Health Reimbursement Accounts (HRA). Each have their benefits and drawbacks and not every employer offers those program so it mostly depends on your luck. In the two employers I’ve had, I’ve only ever had access to the FSA. So, let’s talk about the differences between each of the programs.

Flexible Spending Accounts

Both the employer and employee can make tax-deductible contributions through paycheck deductions and there is no limit to how much one can contribute to the FSA. You are either issued a debit card linked to that account or you submit receipts of service or products for reimbursement after the fact. The primary downside to an FSA is that the funds are forfeited each year so it’s a “spend it, or lose it” account. If you leave your job mid-year, you lose the funds too (but you pay monthly so the loss is only what you actually paid in).

One loophole with an FSA is that you can spend the full year’s value before you’ve made the contributions. So if you put $1200 into your FSA, or $100 per month, you can spend all $1200 in the first month. What this means is that you can leave in month two and not repay the FSA value. This is usually mitigated by the fact that the funds are forfeited if they are not spent.

Health Savings Accounts

These are actually investment accounts and both the employer and employee can make tax-deductible contributions subject to federal limits. The earnings of the account are tax free and the withdrawals are tax free if used to pay for qualified medical expenses. The funds are linked to the employee and not the employer-employee relationship so it follows the employee even if they leave a company. Another added benefit is that the funds accumulate over the years, as opposed to an FSA where they are forfeited.

Health Reimbursement Accounts

I’ve seen the least of these and they are usually set up by your employer as part of your benefits package. Employees cannot make contributions and an employer’s contributions are not considered income for you and are also not subject to limitations. I know the least about these types of programs as they are not as popular as FSAs and HSAs.

If you’d like to learn more about these plans (and a few others), the IRS has a detailed Publication 969 governing them. I think I’ve captured the important details but they do a much more detailed and dryer job.

This is a guest post by Lynnae of Being Frugal.net, a blog about frugal living and paying off debt. If you like this post (and I trust you will), subscribe to Lynnae’s blog via RSS or email, you will not be disappointed.

Since Jim is newly married and off on his honeymoon, I thought I’d take the time to focus on marriage and money. I’ve been married almost 13 years, and though my husband and I don’t argue about money much these days, there are a few things I wish I would have realized at the beginning of my marriage. It would have made the first few years a lot easier.

Your Priorities Will Be Different

This one seems obvious, but it’s often not to newly married couples. Too often couples get married and expect to agree on most things. Sometimes the difference is dramatic. The wife wants to buy a whole new wardrobe every season, while the husband wants to sock away lots of money for retirement. Or it might be more subtle. The husband might have a Star Wars collection that the wife just doesn’t understand.

Whatever the difference, it’s important to discuss things calmly and compromise. Putting away money for retirement is obviously very important, but if your wife is feeling strangled, because you complain every time she buys a new skirt, you’re headed for trouble. Realize your spouse’s priorities and compromise on those things.

A good example of this is Gibble, who recently bought his wife a new engagement ring after the original ring was lost. Yes, the money could have been used for debt repayment, but this was very important to his wife, and I think he made a wise choice.

Good Communication is Key

Talk and talk often. As the years go on, individuals change and grow. Priorities change. It’s important to keep the lines of communication open, so you are always on the same page with the finances. By talking about little issues as they come up, you can avoid the big all out fights that seem to happen when an issue festers and isn’t dealt with right away.

My husband loves sports. If it were up to him, we’d have every seasonal sports package on our satellite subscription, he’d subscribe to all the big sports magazines, and we’d have satellite radio, so he could listen to every game he wanted to in the car. That’s not going to happen.

Still, there are plenty of times when my husband comes home with a Fantasy Football magazine, or a NASCAR publication. I don’t understand the need to buy the magazines, because you can get all the information online. However, since I’m constantly in communication with my husband, I realize that this is how he relaxes. Knowing that, it’s much easier to just let the spending slide as long as it’s not out of control.

Be Honest

There will be a time when one of you does something financially stupid that you don’t want to ‘fess up to. Here’s my advice. Come clean. Right away. Trust and honesty are much more important in a marriage than saving face. It might be a difficult conversation, but in the long run, your willingness to be honest with your spouse will pay big dividends.

For the Men: Allow Your Wife to Buy Pretty Things

I know a lot of men think pretty clothes and soft throw pillows for the couch are a waste of money. But for a woman, these things make her feel feminine. You will have a much happier wife if you allow her these little indulgences. And if you allow her to indulge herself, she’s a lot less likely to complain when you buy the sports magazines.

For the Women: Respect Your Man

There may be times when your husband’s career doesn’t go as planned. He may even lose his job at some point. Nobody plans for these things when they get married, but little hiccups in the career are a part of life.

If your husband is discouraged on his job, you need to be extra encouraging at home. According to my husband, there’s nothing worse than feeling like a failure on the job, only to come home and feel like a failure with your wife. When your husband’s job isn’t going well, if you continue to support him, it will boost his morale and help him stay motivated to find a better job. He will also never forget that you stood by his side in the trenches of life.

Keep communicating, be understanding, and remember you are on the same team. That’s what it all comes down to.
Congratulations Jim and Mrs. Jim! I hope you have a wonderful time on your honeymoon!

I had the fantastic opportunity to email interview Liz Pulliam Weston, a personal finance columnist for MSN Money as well as the author of several books including Easy Money: How to Simplify Your Finances and Get What You Want out of Life and Your Credit Score: How to Fix, Improve, and Protect the 3-Digit Number that Shapes Your Financial Future. I’m going to be getting a review copy from her publicist after we get back from our honeymoon but I wanted to ask Liz a few questions about simplifying our finances and she was happy to oblige!

1. I recently got married and discussed how we were going to try to simplify our finances, consolidating accounts and reducing the number of mailers we received each month, did you have any tips or advice for us on how to best do this?

First of all, congratulations!! Not only are you embarking on a wonderful journey, but it’s bound to provide lots of great fodder for your blog.

My best advice with trying to combine married finances is to ease into it and figure out what works for you. I’ve noticed people have VERY strong opinions about what you SHOULD do, but the only thing that matters is what works for you and your spouse.

Also, what works for you now might not work in a few years, and that’s okay, since people’s needs evolve.

What’s worked for my husband and I is to have one joint account where our paychecks/income streams are deposited and from which the bills are paid. But we also have “no questions asked” money—an “allowance” that we’re allowed to spend whatever way we please. Will keeps his in a separate bank account—the money is transferred there automatically each week. I take mine out of the joint account.

As I mentioned in the book, technology makes it pretty easy to move money around in accounts, so you don’t necessarily have to combine everything at one bank.

I’m NOT a fan, however, of hidden accounts—credit cards or bank accounts that are kept secret from the other person. I think the accounts themselves should be transparent and available for both parties to see.

If both of you have good credit, then getting a joint credit card or two for household expenses is a good idea (or you can add each other as authorized users to existing cards). Just don’t close old accounts since that can hurt your credit scores.

To reduce credit card offers, sign up for the credit bureaus’ opt out service, www.optoutprescreen.com or 888 5 OPT OUT.

2. There isn’t a single person out there who isn’t happy to simplify their lives, personal finance or otherwise, but there is always the fear that in “simplifying,” you accidentally cut something out that you never intended. Is there a proper way to approach this so that you make sure you don’t cut out something that was actually quite important?

The biggest fear is probably that you’ll toss something that you’ll need later. But remember that in the rare instance that you’re likely to need financial paperwork, it’s probably “living” somewhere that’s relatively easy to access. Your bank is required to keep your statements for at least six years; ditto your credit card company.

Just take a moment to ask yourself: “What’s the worst that could happen if I consolidate or eliminate this?” If you don’t know the answer, call a pro (like your tax preparer) or post it online in a forum where there are some financially savvy folks.

I’ll reiterate that your simplification generally shouldn’t extend to shutting down credit cards, unless your FICO scores are over 750 and you’re only closing recently-opened, low-limit accounts. Always keep your oldest and highest-limit accounts, regardless of your scores, and don’t close anything if you’re in score-improvement mode.

3. I’m hardly a Luddite but what would you recommend for people who are less trusting of the internet or less able to navigate it when it comes to simplifying finances? Bill pay works great if you trust the system and yourself to set it up properly, but people make errors.

People who monitor their accounts online tend to catch fraud faster and limit the damage compared to folks who wait for their statements to arrive in the mail. And remember that the U.S. mail is not encrypted and there’s no electronic trail showing when a payment left your account and landed in your biller’s account—in contrast to when you’re using online bill pay or other electronic payments.

As with everything else, if you’re new to this, start slowly. Pay a few bills electronically to get the hang of it. Monitor your bank account so you see what’s getting paid. Don’t put everything on automatic all at once.

4. If I only had the time to do three things to simplify my finances, what would you recommend and why?

Use online bill pay. Safer, faster and more efficient than using checks.

Aggregate your accounts. It’s easier to track your money if you can see all your accounts in one place. If you use one bank for everything, you can use its Web site; some bank sites, including Bank of America, have an account aggregation feature that lets you add accounts from other institutions. Yodlee is another account aggregation option that’s been around for awhile and that has lots of features. If you’re wary of having a Web site store your financial info, then use Money or Quicken.

Consolidate to one or two credit cards. The fewer due dates, rates and terms you have to keep track of, the better. Pay off your credit card balances as soon as possible and get in the habit of paying your cards in full every month. Then consolidate to using one or at most two cards for your spending. Try not to use more than 30% of your credit limits at any point during the month to keep your credit scores healthy.

What do you get when sixteen personal finance bloggers get together and produce an e-book titled Money Matters for All Ages? You get a forty-two page compendium of posts applicable to anyone and everyone, regardless of your age, income level, or personal finance “maturity.” It’s really a great little package starting as young as “infant” (it’s really suggestions for parents to do on behalf of their children, such as open up high yield savings accounts) and as old (or good, if you prefer) as “retirees.” It has all sorts of active links, just as the original posts did, as well as the original pictures.

So, head on over to My Two Dollars and download your copy of Money Matters for All Ages today. Kudos to everyone for all their hard work.

Lesley Scorgie appeared on Oprah Winfrey when she was 17, a show entitled “Ordinary People, Extraordinary Wealth,” and ever since she’s had a string of television and media appearances because she seems to have a knack to grow her own personal finances and well on her way to being rich by thirty. Now, author of a book titled “Rich by Thirty: A Young Adult’s Guide to Financial Success,” I’ve had the opportunity to read it and hopefully be able to set up an interview with her in the near future.

Rich by Thirty is perfect for the early twenty crowd. If you recently graduated college, just got your first paycheck, or are about to sign the lease on a new apartment; you’re the target audience for this book. If you’re a little older but at this stage financially (maybe you went to graduate school? maybe you made some poor financial decisions?), this is a great book for you because it puts down on paper everything people are forced to learn (and pay for) in the real world on their own.

This isn’t a book about a kid who struck it rich by coming up with a series of great internet ideas (that’s Cameron Johnson) or a guy who exemplified frugality until he was able to strike it rich in the real estate boom (that’s Alan Corey), this is a story about fiscal responsibility, investing acumen, and just being smart with your money from someone who came from a middle-class family in Canada.

I enjoyed the book because it was very direct, understandable, and didn’t use these huge long rambling allegories to get her point across. The book is broken up into logical sections like Get Started (it’s about budgeting), Get Out from Under (how to handle credit and debt), Get Saving (umm… it’s about saving), and two sections on investing. In each, she uses a quick example (”Meet Joey, a Pisces from Georgia who likes long walks on the beach…”) and then jumps right into an explanation that is both clear and appropriate.

I think this book makes a great graduation gift if you’re trying to think of a gift for someone this summer and at a mere $12.95 it’s a pretty good deal. I don’t often recommend that someone buy the book (borrowing it from the library is usually good enough) but since I think this is good information for a college graduate, it makes an ideal gift. Now, getting them to read it is another thing (though the sections are in nice bite-sized pieces so the short-attention-span crowd will be able to digest it).

What happens when you make a product that promises to “boost your immune system” and ward off colds? You make a ton of money, if it actually boosts your immune system and wards off colds. When you make that promise and don’t actually do that, at least anymore than a sugar pill placebo, then you are called Airborne and you settle for $23.3 million for false advertising. I’ve never taken the stuff, mostly because it looks like a nasty orange mixture and because I didn’t believe it, but a lot of people did and if you are one of those people, you are entitled to a piece of the settlement.

If you did drink the stuff, you probably didn’t do your body any harm; the mixture was just a super-shot of Vitamin C along with some other goodness that was mostly likely expelled out of your body the next time you used the bathroom. In fact, Vitamin C is water soluble and you urinate out anything more than 100% the daily recommended value (so the extra 230948203483209% is pretty much useless). If you do feel a cold coming on, taking Vitamin C is not a bad idea but taking 2309428304923% will not help anymore than 100%. (Some other vitamins such as A, are fat soluble and thus not expelled in urine, and you can certainly overdose on those so be very careful!)

Anyway, if you bought an Airborne product between 01 May 2001 and 29 November 2007, then you qualify to file a claim against the settlement. If you have proofs of purchase (unlikely unless you are a serious receipt filer) then you can get a refund for everything you bought and stuff have a proof of purchase for. Otherwise, you can claim as many as six products in addition to the ones you have proof for. So, if you have a receipt for three boxes then you can make a claim for as many as nine (3 proofs plus 6 undocumented items). The only downside is that everyone and their mother is likely to make a claim since you can claim up to 6 items without proof, whether you bought it or not, so you will only get your piece after the $23.3MM has been divvied up.

The deadline to submit is 15 September 2008. If you opt to mail it in, it must be postmarked by September 15th.

Resources:

• Settlement Website
• Settlement Agreement
• Online Claim Form
• Paper Form

This is the third installment of a chapter originally removed from Alan Corey’s A Million Bucks By 30 (review). In this part, Alan shares the rest of the lessons learned.

Oh No, Girlfriend (Part 4), Lessons Learned:

Similarly, if you’re about to buy something stop for a moment and ask yourself, “Do I already own something like this?” Ridiculous, right? How many black skirts do you own? Red sweaters? Pairs of brown boots? I thought so. I see this time and time again in all my friend’s closets, girls and guys. If you really want something that you already have do the following: Go to your closet and find everything you haven’t worn for year, and bring it your local recycled clothing store. You probably have at least 50 items. If the store doesn’t want to buy it from you (be prepared, they’ll offer you like $2 for a leather jacket that they resell for $25), try to sell it online. Take the money you make (50 items X $2 = $200) and go buy whatever it is you are jonesing for. You open up closet space and now only have items you actually wear.

My friend Eric spent 3 years buying clothes at discount prices at our local recycled clothing store (like your $25 leather jacket) and reselling them on eBay for a decent profit (selling it for $40). He find this so lucrative, this was his only income for three years. He wasn’t getting rich off of it, but he was able to live entirely off the earnings, create his own hours, and plus, he thoroughly enjoyed doing it.

If it’s an obvious trend, go for the cheap knockoff. So Prada’s spring shoe line is all about pink patent leather mary janes with glitter accents. That’s totally awesome — Payless and Target have them too, for about $400 less. (I never said there wouldn’t be sacrifices.) Girls, take notice. Guys don’t notice your shoes. You think I’m going to know the difference between Manolos and your Payless high-heels? All I’m going to notice is that you’re freakishly taller. Enough said.

Do yourself a huge favor and don’t shop with your credit card; it’ll keep you from spending money you don’t have.

Consider being model at a school for hair stylists to get cuts for free. Obviously, you don’t want to do anything crazy or complicated, but a.) these people aren’t total morons and b.) they want to do a great job. It’s their “class work” and they don’t want to get a D+. And you don’t need a haircut every month. It’s okay to wait a while.

Invest in some nice manicure and pedicure supplies and do these yourself. Or just do them yourself most of the time.

Figure out when you absolutely must have a certain brand, and when a generic version will do. Have a favorite shampoo or cleanser? OK. But do you need top of the line cotton balls? Hand lotion? Mud mask? Similarly, when comparing your fancy brand with a store or generic brand, check out the ingredients: are they, in fact, the same? How much are you paying for a name brand, a company’s marketing campaign, and nicer packaging?

Bitch and Swap. There are a bunch of names for these, but the basic concept is that you get a group of women together who have all gone through their closets and pulled out the stuff they never, ever wear, or are sick of, or that doesn’t fit anymore. Each person presents their items, and if anyone wants something, they take it. If more than one person wants it, negotiations ensue. (This is where the “bitch” part comes in, but it usually all works out for the best.) Make this the last step before you donate your clothes. Anything that doesn’t get claimed goes to charity. The end result is that everyone gets something new and cool for free. Maybe this goes without saying, but it’s wise to plan this with friends your size. My sister went to one and no one wanted her clothes and she couldn’t wear anyone else’s clothes because she’s a foot taller than most humans. But she got some items and reused the fabric to make her own stuff. And even got a shirt she thought she could sell.

That’s it for this missing chapter! I hope you enjoyed it!