Prom Night

Spring will be here shortly, and with the spring months comes a big event in a teenager’s life, and that would be the Prom. Prom also means coming up with money for this traditional formal event. This can put a strain on a family budget and cause tension between kids and parents. The following is few ways parents and kids can save money and still make it a memorable and fun evening.

Start by planning ahead. Discuss with your parents and your date how much you want to spend and who will pay for what things. This will help split some of the costs so one person is not stuck paying for everything.

Here are some fun alternatives that will save you money. Instead of going to a salon, have a bunch of your friends do your hair and makeup or do it yourself. You can also save money by going to a cosmotology academy to have a student get you ready.

You can save on a dress by borrowing one from a friend or renting one. Renting can also be expensive, if you look around you may find a dress that is cheaper than a rental. Maybe you or a family member can make a dress or alter an existing one. Many consignment shops and online stores feature new dresses at a quarter of the price.

For guys, unless you know someone you can borrow a tuxedo from, you are probably going to have to rent one. Ask around for the best price and negotiate. Go with a few other friends and ask for a group discount. If your date isn’t concerned about a tuxedo you can save by wearing a nice suit and tie.

Dinner is not only expensive it is often overcrowded. You are not only competing with other couples and prom groups, but with the regular weekend crowd. So instead of waiting all night for a table, why not have a sit-down dinner or barbeque at home. Invite friends and parents over for a potluck. You can set up a backyard deck or patio into a nice scene for a prom dinner. Even ask some parents to serve as the cooks and waiters as you enjoy a fun meal with friends.

Transportation to the prom is important as well. Limousines are a popular choice, but are expensive and overdone. Perhaps you know somebody with a classic car or new luxury vehicle. Though they may not let you borrow that car, they may not mind escorting you to the front doors in style. If you do choose a limo, get as many people as the limo will fit, that way the cost is split between more than one person.

If you bring your own camera, more than likely you will capture more memorable photos than the boring ones that cost extra money.

Parents that are helping with costs may want to set limits and guidelines to how much they want to spend. If the child is working and is willing to pay for extra expenses then they should feel free to do so.





While the snow begins to melt and most of us begin to thaw out, others will make a plan to do a little spring-cleaning. Your finances are also a great place that can use a little sprucing up in order to avoid a stockpile of paid bills and junk mail.

First thing that you will want to have is a storage unit that can hold the stuff that you need to hang on to. A filing box can help you organize and is pretty cheap to come by. Buy a package or two of hanging filing folders and your in business.

Take your folders and label them in a way that you know will help you stay organized. You could organize by the month or have a folder for each bill that you make payments on. You can label folders as paid and unpaid if you like. You may find that it is easier to be more detailed in your folders while others can get by with more general categories. The point is to keep what you need, get rid of what you don't, and reduce the paper mess.

You will want to have a place where all of your current bills can go. This way they don't get lost and can be paid on time each month.

Go through any piled up bills, statements, and any other mail. File them accordingly based on how you choose to set up your files. Only keep the minimal things that you need. Make sure you throw away any junk mail and shred any items that contain any personal information.

Only keep cancelled checks, paid utility bills, credit card statements, etc., for one year. The exception to this is if any of the receipts, checks, or statements is needed to support past filing for state and federal taxes.

Income tax records and federal tax records will need to be kept for seven years as this is the time the IRS has to audit past returns. This is the same with all receipts and statements that support these records. After the seven years have passed, it is okay to dispose the old records.

Try and keep up with it daily and get rid of any junk mail as it comes in or at least place it in a folder that you can go through weekly. The more you stay on top of things the more you will stay organized and can avoid spending too much time cleaning up next time.
Remember, these items should be kept in a accessible, safe, and secure place:

* Birth Certificates
* Social Security Cards
* Marriage License
* Deeds/Titles
* Contracts - Mortgage Papers
* Home Improvement Receipts
* Wills or Power of Attorney
* Veteran's Papers
* Transcripts, etc
* Family Health Records
* Warranties and Manuals
* Large Purchase Receipts
* Insurance Policies
* Credit Card Information





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A Chilling Way to Protect Your Identity

People are continuously trying to find ways to protect themselves from identity theft. As of November of last year there is another option consumers can use to guard themselves. It is called a credit or security freeze and it is now available through the three major credit bureaus.

Before November of last year there were only a handful of states that had laws that would allow consumers to put a freeze on their credit. Now the option is available to all consumer’s credit reports from TransUnion, Experian, and Equifax. Each state has different fees and regulations in regards to a security freeze and you will need to search for your states details. You can go online to any of the credit bureaus websites to find your states specific details.

Generally you will need to contact the credit bureau in which you want to activate the freeze. They will then put a freeze on your report and give you a PIN in which you can remove the freeze with. Once your report is frozen all third parties who are not exempt under law will not be allowed access to your credit reports without your approval.

This is obviously a good way to prevent anyone from gaining access to your report, but it will also hinder the times when your credit report needs to be legitimately reviewed. So if you are trying to apply for a loan or credit it will be delayed until you can lift the freeze.

There are many other times when your credit may need to be checked and can be delayed. This can include renting an apartment or house, applying for insurance, applying for a mortgage, buying a cell phone, setting up utility services, making purchases on the internet, or even applying for a job.

So if you are considering a security freeze on your credit report make sure you plan accordingly so you or anyone else doesn't need access to your report. It's not that you can't remove the freeze from your account it just takes time and costs you money every time you want to “thaw” your account. In the event that you want to permanently remove the security freeze you will have to do it in writing and that can take you quite awhile to take effect.

In order to freeze your TransUnion credit report you need to send a freeze request via mail. You will then receive your PIN, which you use to regulate the freeze. You can lift the freeze temporarily by writing them or calling them. A permanent remove requires you to write them.

An Experian security freeze also requires a written request to activate but you can instantly lift it online, over the phone, or through the mail by using your PIN. You will need to request a permanent removal in writing.

As with the previous two, Equifax requires written notice to freeze your file. Equifax has a toll-free number you can call to remove or lift the freeze.

The main concern for the credit freeze is the cost of temporarily lifting or reactivating the security freezes. The amount is generally around $10 for each time you want to lift the freeze and $10 to request or remove a freeze. Victims of previous identity theft may receive the security freeze service for free. Some states may also offer this service for free or cheaper rates for those over the age of 65. It's important to check with your state's specific details in regards to fees.

Protecting your credit and identity is important in preventing major setbacks to your finances. A credit freeze may be a good way to assist you if you feel that you can properly plan for legitimate credit checks. If you know that you will need to have your credit reviewed you may want to look at other ways to protect your identity as the fees and lost time of lifting freezes can cause you other problems.




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Tax Rebates for Most

In an effort to help boost the slowing economy the U.S. Government passed the Economic Stimulus Act of 2008. This means that about 130 million Americans will receive a check from Uncle Sam. Who will get a check and how much can they expect? Hopefully this article will help answer those questions for you.

The good news is that most people will receive a rebate check. That is anyone who had any net income tax liability or had an income of at least $3,000 but who did not owe any taxes. This will include those who rely on Social Security as their income, as well as, some disabled veterans.

As far as how much you can expect depends on your filing status.

Individual taxpayers can expect to see rebate checks of at least $300 and up to $600.

Married couples can receive up to $1,200.

Most individuals who claim an income over $3,000 but don't have to file a return will get $300.

Some taxpayers who have children may receive an extra $300 per child.

Here are some people who will not qualify for the rebate:

Parents cannot expect to get a child credit for any child they claim over the age of 17.

Along those lines, those who are over 17 years old, but are claimed as a dependent will not receive a refund. Even if they are in college or have a job where they earned over $3,000.

Nonresident aliens will also not be included in the refund.

Wealthier taxpayers will receive little to no refunds. A single filer whose Adjusted Gross Income (AGI) is more than $75,000 will see their refund decrease by $50 for every $1,000 over, which means those who have an AGI over $87,000 will not receive any refund. Married joint filers will see their refund begin to phase out at $150,000 and will not exist for those who make more than $174,000 combined.

It may take some time to receive your refund. You will want to first file your 2007 tax return as usual, if you haven't already. You won't get a rebate until you file your 2007 return. If you file an extension then you will have to wait longer for your rebate.

It is expected that checks will begin to be sent out towards the end of May. The earlier you file your return the better the chances are that you may get your refund check earlier. Checks will be mailed out to recipients but may also be available for direct deposit if that is the method you chose for your 2007 tax return.

As far as your 2008 tax return goes, most of us will not have to pay taxes on this year's rebate. It will simply appear as a gift from the government that is tax-free. The 2008 tax forms should have a space where you will put how much you received from the tax rebate.

There are some warnings out there that will be associated with the government rebate. There will be plenty of people who will use this opportunity to try and scam people by obtaining vital personal information.

Beware of any e-mails or phone calls you receive from people claiming to be from the IRS needing more information from you before they can process your rebate. They may ask you for your Social Security number, credit card numbers, or banking information so they can get your rebate check to you. The IRS will not contact you by phone or email in regards to the rebate check.

There are other details and specifications that you may want to look into if you still have questions about the government rebate checks. The purpose of these tax rebates is to help boost a sluggish economy. Use the refund wisely to help with some bills or even just to pad your savings. Whatever you decide make sure it is helping you financially.



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Hello everyone and happy March.

You know how I usually admit to not following the advice that I give to you all with the best of intentions? Well, SURPRISE! I did it again. This time I have to admit that when it comes to organization my wife and I are not the best at it. Each month we pay bills and after a couple of months we have a basketful of paid statements and junk mail. The bad part is when a new bill gets shuffled into the old pile too much time is spent trying to find it.

We have a very nice filing box filled with folders just waiting to be used. Problem is they are crammed with a few years full of old bills that we have yet to go through and get rid of. A lot of it is my fault as I worry that something will comeback to haunt us and I will need to show proof somehow. Even if that were to happen it would take me a few days sorting through the piles to find the proof needed.

Then there are things that really don't fit in a category but I swear that I will take a look at it at a later time and don't throw it away. The truth is if I would just throw it away in the first place I would forget about it and it wouldn't bother me. Instead I look at it each month and put it into a pile until I can re-pile it the month after that.

Needless to say that we need to do a little spring cleaning and get rid of a bunch of papers that we don't need anymore and make room for the things we legitimately need to save for the year.

It's the middle of February and my wife and I have yet found the time to sit down and file our taxes. I long for the days where I could take 10-15 minutes to file my return over the phone. But know I can expect it to be at least an hour to sit down and figure out all the new things that we have to include.

With both my wife and I paying on student loans and her continuing to take Masters classes it can become a bit confusing. I'm sure we will make it through it all right as we have in the past. We just need a little more time and to concentrate on not making mistakes and as some of you may know that can be hard with a toddler running around.

Like we have done in the past we will likely file our return online through one of the major tax preparing programs. Even though it takes us a little longer these days I still stand by this software as the easiest way to file our return. The other great part about it is that we can receive our return in less than 10 days with direct deposit. We have contemplated using a professional tax preparer but our return is still basic enough that we don't have that many questions that can't be answered through the software we use. We are confident enough to do our own and save some money from not having to pay a professional.

As far as what we are planning on using our return on is still in question. We will probably pad our summer savings a little as my wife doesn't have any summer employment arrangements and we will need to use the savings to help us pay bills. We are also trying to figure out how we should use the extra tax rebate that the government will start handing out in May.

There are some minor home improvements that need to be made and we could always add some to our savings. We were a little skeptical when it came to the tax rebate and I guess we still are a little. Until we receive the rebate we probably won't plan on it or add it to our budget until we know how much we receive.

I guess I shouldn't make plans for our tax refund either. Sure, I can assume we will receive a refund but I shouldn't rely on it until I know for sure that it's coming. Many of us probably plan on receiving a refund and make arrangements to use the money to pay off something or even just help catch up on bills. That can be dangerous though, as you may not receive as much as you planned or any refund at all. This can be devastating if you were expecting it. So, don't spend the money before you have it in hand.

I hope that everyone has either finished their return or will be done soon. Until next month, good luck and have fun.



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Truth & Misconceptions

(This information is not to be taken as tax advice. If you have any questions or concerns you should contact a certified tax advisor.)

Owning a home has always been a part of the American Dream while paying taxes can often be a nightmare. There are a number of misconceptions when it comes to how your home can provide you with a number of tax breaks. Hopefully this will help clear up some of the confusion.

The biggest misconception that homeowners have is that any improvements that they make on their home can be written off on their taxes. This is simply not true. Whether you put on a new roof or remodeled your bathroom, you will not receive any tax breaks from the government.

However, you may want to explore the opportunities to install environment-friendly devices, such as solar panels or certain appliances. You may also be able to deduct improvements that needed to be made due to a health reason. This could include installing handicap accessible ramps and lifts, or special air circulating systems. There have been tax breaks for certain items but what is and isn't allowed changes every year so you will want to research it before you try and claim it.

Some homeowners may be required to carry private mortgage insurance (PMI) if they had a down payment under 20%. PMI has not previously been deductible but there have been some changes in recent years. If your mortgage was originated or refinanced between January 1, 2007 and December 31, 2009 you may be able to deduct your insurance premium payments. The PMI deduction is phased out for those who have an adjusted gross income exceeding $100,000 and is eliminated if your AGI is $110,000 or higher. You will need to ask a professional on the details and process to achieve this.

Other things such as Neighborhood Association fees and property insurance are also not deductible and are your responsibility.

You can usually deduct the interest you pay on your home mortgage. You mortgage interest is considered any interest you pay on a loan secured by your main home or second home. The loans that are included are your mortgage, second mortgage, home equity line of credit, or a home equity loan.

You may receive a reduced or no deduction if your mortgage is more than the fair market value of your home or your mortgage is more than $1 million ($500,000 if you're married and filing separately from your spouse). Also, if you have a home equity loan that is more than $100,000 ($50,000 if you're married and filing separately) than you may see a reduced deduction. The details for housing interest deductions can be found in IRS Publication 936: Home Mortgage Interest Deduction.

You may have a secondary residence or vacation home. Mortgage interest on a second home is fully deductible. Even if the vacation home isn't technically a home you may still be in luck.

The IRS will consider all of these homes: a house, condominium, mobile home, boat, recreational vehicle (RV), or property that has sleeping, cooking, and toilet facilities. If you claim any of these as a secondary residence you may have to prove that you lived there at least 14 days in order to receive the interest deduction.

As you can imagine there are a lot more details to each of these tax situations, and we cannot feature all the specifics, as we do not have the amount of space needed to include them. So we encourage you to use this information to help you ask your tax professional more specific questions that may help you receive a higher return.

There may not be as many tax benefits for owning a home as you may have thought, but the breaks you can get are good and there are plenty of other benefits that comes with being a homeowner.

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