4. Your total housing payments should not exceed 28% of your gross income. Total debt payments should come in under 36%.
These guidelines include payment on all loans, such as school and auto loans and credit card debt.
Also remember to take into account other home-related expenses to judge a house's affordability. Property and school taxes, home insurance and energy costs and requirements can vary considerably around the nation. Try to estimate future maintenance costs and work them into your budget. Some homes, especially older ones, may require more regular upkeep than homes built with more modern materials. Roofs, siding and heating, cooling, plumbing, and electric services may have to be replaced within a few years of purchase.
From CNN Money
Rules to Grow Rich By
IRS Warns of Rebate Scams
Even before Congress passes an economic stimulus package, identity thieves are using promises of tax rebates to trick people into revealing financial and personal data, the Internal Revenue Service warned Wednesday.
Under one scheme, the IRS said, people are receiving phone calls telling them they can only receive a rebate if they provide bank account information for a direct deposit.
The tax agency stressed that it does not collect information by telephone and that no legislation has been enacted that would allow it to provide advance payments to taxpayers or that specifies the details of those payments.
The House last week, as part of an economic stimulus package, approved tax rebates of $600 and $1,200 respectively for most individuals and couples, with another $300 per child. The Senate is now considering a slightly different version.
The IRS also repeated past warnings of e-mails, supposedly coming from the agency, where people are asked to enter personal information on a form needed to obtain a tax refund.
A new scam, it said, involves an e-mail notification that a person's tax return will be audited with instructions to click on links to complete forms with personal and account information.
Businesses and accountants are also getting e-mails with instructions to download information on tax law changes. Clicking on these links could download "malware" onto the recipient's computer that gives the scammer remote access to the computer hard drive.
In another telephone scam, a caller claims to be an IRS employee who says the taxpayer has not cashed a refund check and asks the person to verify his or her bank account number.
On Tuesday, at a Senate Finance Committee confirmation hearing for Douglas Shulman, the nominee to be IRS commissioner, Sen. Charles Schumer, D-N.Y., expressed concern that taxpayers would be victimized by tax preparers and lenders who charge high interest rates for short-term advances on their stimulus rebates.
The IRS advised people not to click on any link from an e-mail purporting to come from the tax agency. People receiving questionable e-mails can contact the IRS through phishing@irs.gov.
From IRS
Should You Itemize?
Whether to itemize deductions on your tax return depends on how much you spent on certain expenses last year. Money paid for medical care, mortgage interest, taxes, charitable contributions, casualty losses and miscellaneous deductions can reduce your taxes. If the total amount spent on those categories is more than the standard deduction, you can usually benefit by itemizing.
The standard deduction amounts are based on your filing status and are subject to inflation adjustments each year. For 2007, they are:
Single $5,350
Married Filing Jointly $10,700
Head of Household $7,850
Married Filing Separately $5,350
• Some taxpayers have different standard deductions. The standard deduction is more for taxpayers age 65 or older and for those who are blind. It is generally less for those who can be claimed as a dependent on some other taxpayer’s return.
• Limited itemized deductions. Your itemized deductions may be limited if your adjusted gross income is more than $156,400 or $78,200 for Married Filing Separately. This limit applies to all itemized deductions except medical and dental expenses, casualty and theft losses, gambling losses, and investment interest.
• Married Filing Separately. When a married couple files separate returns and one spouse itemizes deductions, the other spouse must also itemize and cannot claim the standard deduction.
• Some taxpayers are not eligible for the standard deduction. They include nonresident aliens, dual-status aliens, and individuals who file returns for periods of less than 12 months.
• Forms to use. To itemize your deductions, use Form 1040, U.S. Individual Income Tax Return, and Schedule A, Itemized Deductions.
Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.
From IRS
Rules to Grow Rich By
3. Spend no more than 2 1/2 times your income on a home. For a down payment, it's best to come up with at least 20%.
Many buyers in recent years have stretched the limits of affordability, and have bypassed the traditional 20% down model. But make a smaller down payment, and most lenders will require you to have private mortgage insurance (PMI), which adds a minimum 0.5% of the loan amount to your mortgage payments, about $1,000 more a year on a $200,000 principal.
From CNN Money
Stay Home System
The "Stay Home System", created by Rachel Ryan, is another one of my highest paying and easiest "make money and work at home" recommendations. Rachel is fast becoming a house hold name in the “How To Make Money Online” industry. It was such great encouragement for a seasoned veteran like me and even more so for anyone new to the internet's work at home industry yet needs to start making money quickly. The "Stay Home System" is a groundbreaking achievement. In only 72 hours I implemented her methods and began to make money like clockwork... given time, about 2 months, as much as $1,175 a day and growing!
The Pros: What surprised me the most about Rachel's program was how quickly you can start to make money with it. Here's what happened...I was able to take a little over an hour to set up her system as she describes it and within 30 days I was bringing home an extra $950 a week! By applying Rachel's "Stay Home System" I predict that in just 90 days time, I'll be making $1,500 a day. Yes, it's that good! A giant plus about this system is that Rachel literally spoon feeds you as much information as you can handle, without making it tough to comprehend. You get not one or two make money methods, but instead you get a DOZEN zero risk automated "work at home to make money" systems! Don't forget though, Rachel Ryan personally walks you step-by-step through each process along the way. Plus you can choose to set up as many work from home money making systems as you want. Think about it, the more money making systems you set up, the more money you can make. And if you're anything like me, then you're going to love this and find yourself progressing very fast!
$49.95 From Stay-Home-System
Self-employment
If you're in business for yourself, or carry on a trade or business as a sole proprietor or an independent contractor, you're considered self-employed.
Self-employed individuals are required to pay self-employment tax by filing Schedule SE along with Form 1040.
If you have employees, you must pay employment taxes, including federal income, Social Security and Medicare taxes.
You may need to pay excise taxes if you manufacture or sell certain products; operate certain kinds of businesses; use various kinds of equipment, facilities, or products; or receive payment for certain services.
Estimated Tax
Estimated tax is the method used to pay tax on income that isn't subject to withholding. You generally have to make estimated tax payments if you expect to owe taxes, including self-employment tax of $1,000 or more, when you file your return. Use Form 1040-ES to figure and pay the tax.
For estimated tax purposes, the year is divided into 4 payment periods. Each period has a specific payment due date. If you don't pay enough tax by the due date of each of the payment periods, you may be charged a penalty even if you're due a refund when you file your income tax return.
Business Expenses
To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that's common and accepted in your trade or business. A necessary expense is one that's helpful and appropriate for your trade or business.
It's important to separate business operating expenses from expenses used to figure the cost of goods sold, capital expenses and personal expenses.
Business Use of Your Home or Car
If you use part of your home exclusively and regularly for business, you may be able to deduct expenses for the business use of your home. These expenses may include mortgage interest, real estate tax, rent, insurance, utilities, repairs and depreciation. You can even deduct the cost of your office furniture and equipment.
You may be able to deduct car expenses using either the actual expense method or the standard mileage rate (48.5 cents per mile of business use for 2007). If you use your car for both business and personal purposes and claim actual expenses, you can deduct only the business-use percentage of your expenses.
Income Deferral
If you're self-employed and use the cash basis of accounting (meaning all income is included in the year it's actually received), it may be advantageous for you to defer some of your income until the next year. For example:
A farmer grows and sells his crops in late fall of 2007. He receives payment for the crops in January 2008 and reports his crop sale income in 2008. But because he incurred and paid his expenses for seed, labor, water and fertilizer in 2007, those costs are deductible in that year.
But you can't defer income for which you had "constructive receipt" during the year. For example, you can't defer income if you receive a check during 2007 and don't cash the check until 2008. See IRS Publication 538 for more information about constructive receipt.
Hiring the Family
If you have your own business, an income-splitting opportunity is to put your children on your payroll. What you pay them is a business deduction for you and earned income for them. You can do this only if they actually work for you, and you can't pay them more than their services are actually worth. In addition, the wages can be used as a basis for funding your children's IRA contributions, giving them a start on retirement.
From H&R Block
Successful on eBay
"Thanks to eBay I quit my corporate job and now work a lot less and earn A LOT more money..."
"What sells best on eBay and what can I sell?"
"Could I be successful on eBay?"
"Are people really earning tens of thousands monthly?"
"How can I make REAL money in my spare time?"
From Silentsalesmachine
