Hey guys! I’ve got some nerdy news … I just set up a Solo 401(k) plan with TD Ameritrade.

And it wasn’t as hard as I thought it would be! In fact, I did most of the 57-page paperwork at 1 a.m while I was half-drunk and watching Beethoven on TV. (BTW – That movie is still just as good today as it was when I first saw it 30 years ago.)

Anyway, I discovered some cool stuff while researching solo 401ks and hunting for the best provider to go with. Figured I’d share some notes and highlights with y’all.

I promise I won’t get too into the weeds.

Recap on My 2021 Income/Savings Situation…

Right now my wife and I don’t have any retirement benefits through our employers. She gets paid W2 income and I receive 1099 income as an independent contractor.

As a contractor, I technically work for myself, which gives me the option to start a small business or solo retirement plan. I chose the Solo 401k account (vs. SEP or Simple IRA) for reasons I’ll explain in a little bit…

As far as annual savings, my wife and I are kind of on the “Coast FI” train. This means we are earning almost the same amount as we are spending each year and don’t have much excess income to invest.

There are pros and cons to this low-income situation. One of the benefits is that we are in a very low tax bracket right now, which lets us play fun games like capital gains harvesting. One of the downsides however is that in order to make contributions to a new retirement account, we have to rob money from an existing asset or account.

Shuffling money around from one account to another might seem silly, but it will help our portfolio grow more efficiently, and we can avoid/defer thousands — or maybe even hundreds of thousands — of dollars in taxes.

Why I Chose Solo 401k vs. SEP vs. Simple IRA

Roth, baby… Roth!!! The biggest reason I love the Solo 401k plan is because it offers both traditional and Roth contribution options! (No Roth for SEP and Simple IRAs). Since we’re in a low tax bracket now (and think we’ll be in a higher bracket later in life), we’d like to move as much money as possible into Roth accounts.

A Roth 401k can roll over directly into a Roth IRA, which basically gives us a path to invest an additional $19,500 per year that we’ll never be taxed on again. We can also withdraw contributions (rollovers) from a Roth IRA any time we want, penalty-free, given that our Roth accounts were established more than 5 years ago. (More details in this post, Ways to Fund a Roth IRA – see Section #4)

Another reason I chose the Solo 401k was because of contribution limits. For SEP plans, the contribution limits are the lesser of 25% of the employee’s income, or up to $58,00 for 2021. Since my contractor income is pretty small (let’s say, like $40k/yr), my SEP contribution max would be 25% of that (so, ~$10k). Whereas the Solo 401k contribution limit is $19,500 for employees — and then additional employer matching on top of this.

Best Solo 401k Providers

I did a bunch of research before choosing TD Ameritrade. By far the most helpful blog post (and reader comments!) I found is at The College Investor. The post goes into detail about the big providers and even has a comparison table of the most popular ones.

Because Roth contributions are important to me, my options were limited to TD Ameritrade, E*Trade or Vanguard. TD seemed to be the most flexible and friendly when I called them, so that’s who I chose in the end.

The total set-up time was about two weeks. TD required printing physical forms and snail-mailing them to open a new account. Kind of old-school, but apparently all of the providers make you do this. The paperwork can seem overwhelming to begin with, but it’s really not as hard as it looks once you get started reading.

My 2021 Contribution Plans

One of the beauties about administering your own 401(k) is you can make contributions at any time you want throughout the year, in any amount you want. Just as long as you don’t exceed the contribution limit.

My original plan was to dump $19,500 right into the Roth 401k to get started asap. But, there are a few potential problems with that…

First, I remembered that I already made some 401k contributions this year. Before my current employer removed my benefits, I siphoned about $10k of income into an employer-sponsored 401k in Q1 of this year. Being that my max personal contribution to ANY 401k in the year 2021 is $19,500, this allows me only ~$9500 more in contributions for the rest of the year.

Next, I realized that the year is still kind of young, and anything can change between now and December 31… What if a killer new job falls in my lap, with awesome employee benefits and a 401k matching program? I’ll be kicking myself for not having any available contributions left. Maybe it’s best to wait until December to contribute funds?

Another consideration is Roth vs. traditional contributions. If I sell 2 more of my rental properties before the end of the year, my overall income might not be so low any more, and I may want to reduce my taxable income instead of funding the Roth 401k. I haven’t run the exact numbers, but that’s a possible scenario.

Anyway, all in all I’ve decided to hold off making any contributions right now. As long as I get them in before the end of the year, all is good. (I have until tax day 2022 to make the solo 401k employer matching contributions too, so no rush there).

Other Benefits and Gotchas of Solo 401ks

Here are some other nerdy notes I made along the way, in case you’re interested…

• As an employee, I can contribute $19,500 to a solo 401k. This has to be earned income from the business. As an employer, I can match contributions, but only up to 25% of total earned income. 
• While employee contributions can be traditional or Roth, employer contributions are always traditional contributions. They can not be Roth also.
• The IRS allows your spouse to be covered under a solo 401k. So potentially, I could double my contributions by setting up an account for my wife too. But, the spouse must earn income “from the business.” And since my wife doesn’t work on my job or duties, unfortunately she can’t use my plan.
• Many brokers (including TD Ameritrade) make you pay your contributions via WIRE transfer, or by mailing them a physical check. Kind of ridiculous, but since I’ll likely be funding all in 1 transaction, I guess that’s OK with me.
• Investment options vary for each broker. Another reason I chose TD Ameritrade was that they let me invest in Vanguard ETFs, commission-free.

Whelp, that’s all I got for now. Any of you have a Solo 401k and are making Roth contributions? Am I the only idiot trying this?

Cheers!
Joel

[This post, My Solo 401(k) Is a $exy, Tax-Advantaged Retirement Account, was first published by 5am Joel on Elite Edge Money]

Roth IRAs are the sexiest tax-advantaged account IMO, and I wish I’d discovered them earlier in life.

Once money goes into a Roth IRA, it grows tax-free, can be withdrawn tax-free (contributions anytime, and growth anytime after 59½), and you are never required to take mandatory distributions. If I could snap my fingers and move all my after-tax dollars into a Roth IRA, I would make the transfer tomorrow…

But sadly, funding a Roth IRA isn’t that easy. There are annual contribution limits and various rules to work around. Roths have to be grown slowly over many years, which is why they are best started when you are as young as possible!

That being said, it’s never too late to open a Roth IRA and start building an account. In this post we’ll go through a quick summary of ways to fund a Roth IRA, and you can see which options are best for your situation.

1. Direct Roth IRA Contributions

The easiest and most common way to fund a Roth IRA is to transfer money into it directly. It is funded with after-tax dollars and there are annual limits to direct contributions. For 2021, the limit is $6,000. This limit applies across both Roth IRAs and Regular IRAs as a *total* each year. (You can contribute to both, as long as the total doesn’t exceed $6k.)

This is why I wish I knew about Roths earlier in life. If I started funding my Roth every year since I started working at age 14, I’d have about ~$500k in tax-free money in that account right now. Even if I never put another dollar in, that would grow to over $2M in tax-free money by the time I’m 60. (All you youngins out there – start your Roth building asap!)

A couple things to note for direct Roth contributions:

• You can only put earned income into a Roth. You can’t contribute if you don’t earn anything.
• Your income has to be under $140k per year for single tax filers, or under $208k for married filing jointly to be eligible for direct contributions. (The amount you can contribute begins to gradually decrease at $125k/$198k per 2021 IRS rules). If your income is over this, see the Backdoor method below.
• You can withdraw your contributions at anytime, no penalty. However, you can only touch the growth when you’re 59½ without penalty, and your account has to be open for at least 5 tax years!
• If you turn 50 years old before Dec 31 this year, you can make a slightly bigger contribution ($7,000 limit for 2021).
• If you make a large withdrawal of your contributions, you can only “put back” the money under certain IRS conditions, such as doing it within 60 days. You also can not borrow against your Roth IRA.
• Your broker is responsible for filing a Form 5498 to the IRS come tax time. They will send you a copy also, but it’s just for your records and you don’t have to file anything else. Easy!

2. Backdoor Roth IRA Conversions

For people who exceed the income limit for direct Roth contributions, this “backdoor” method lets you move money into a Roth IRA indirectly, via a regular IRA.

It starts by funding a regular IRA, which has no income limit. The maximum contribution is still $6,000, and you will be making non-deductible contributions (using post-tax money).

After the traditional IRA is funded, contact your broker and simply ask to convert the Traditional IRA funds to a Roth IRA. For most brokers, this is a pretty easy and quick process. It’s important that you request this Roth transfer ASAP after funding the regular IRA. (Wait maybe 1 business day). The reason you want an immediate transfer is because if the money accrues any interest or growth, that tiny portion becomes taxable and it will also put you over the strict $6k contribution limit.

Important things to note about Backdoor Roth Conversions:

• If you have an existing traditional IRA in your name with deductible contributions and tax deferred growth, there are different tax consequences because of the IRS pro-rata rule. The easiest way to avoid weird tax rules is to not have any traditional IRAs, SEP IRAs or SIMPLE IRAs in your name. (If you do have one, you could transfer it to your 401k or another employer-sponsored plan.)
• After the conversion has been made to the Roth IRA, you will not be able to withdraw those funds for a five-year period without penalty. Any/all tax-free growth can’t be taken out without penalty until you’re 59½ either.
• Be sure to file the correct tax forms! Form 8606 tells the IRS that you have made a non-deductible contribution to an IRA (how to fill out here). And you’ll also get a 1099-R from your broker which you will file — this tells the IRS you have converted the IRA funds to the Roth. 
• If you’re filing taxes by yourself, here are some awesome step by step guides for how to do backdoor roth filing with Turbotax, H&R Block, or FreeTaxUSA. If you use a tax professional to file, it’s probably best to chat with them about it all before going through the process!

3. MEGA Backdoor Roth IRA Conversions

This is the most complex way to get money into your Roth IRA. But, it’s worth it because of the higher contribution limit. It’s best suited for high income earners who not only max out their regular 401(k) contributions, but also have additional money to save/invest over and above that.

For this process to work, your employer must have the correct type of 401(k) plan. The plan must a) allow after-tax contributions (not *Roth* 401k) and b) allow for in-plan distributions or in-plan Roth conversions (many 401(k) plans only let you withdraw money when you terminate employment).

Here’s a high level overview of the process:

• First, contribute the maximum to your regular 401(k) plan. For 2021, the limit is $19,500, or $26,000 if you turn 50 before Dec 31 this year.
• Next, work out how much your employer will match.
• Then make after-tax contributions up to make up a *total* of $58,000 for all contribution types (or $64,500 for the 50 and older crowd!). For example, if your employer doesn’t do any matching, the after-tax portion max can be $38,500 ($58k minus $19.5k).
• Lastly, withdraw the after-tax portion into your Roth IRA account. This might be a manual request by calling your 401k provider, or working with your benefits administrator at work.

Important things to note about Mega Backdoor Roth Conversions:

• Same as the regular Backdoor Roth process, the IRS pro-rata rule may apply if you have an existing IRA/SEP/SIMPLE in your name. Check on this before doing any withdrawals.
• All money converted to your Roth IRA can’t be withdrawn until 5 years after the transfer without penalty. Growth can’t be touched without penalty until age 59½.
• Keep meticulous records of everything you’re doing! Things become confusing with the multiple tax-exempt and dax-deferred accounts you’re setting up and you’ll want to remember what monies were transferred where.
• Here’s a pretty killer post with more details (and great Q&A comments section) if you’re serious about pursuing this MEGA strategy!
• And here are great posts on how to enter your MEGA Backdoor Roth into TurboTax, H&R Block, and FreeTaxUSA. If you use a professional tax prep team, that’s the easiest way!

4. *Roth 401(k)* Rollover to Roth IRA

Honestly, I had never heard of a Roth 401k until a couple years ago! But, some employers offer this, and it’s becoming increasingly popular for Solo 401k plan providers to offer them too.

A Roth 401k is an employee sponsored plan that allows for post-tax contributions. It’s very similar to a regular 401k plan, except you are paying tax on your contributions now, and none in retirement. The max you can contribute to a 401(k) (aggregate limit across regular 401k and Roth 401k) is $19,500 (or $26,000 if you turn 50 before Dec 31 this year). This is ideal for those who think they will be in a higher tax bracket later in life vs. now.

Roth 401(k)’s can be easily rolled over into Roth IRA’s. Since you’ve already paid taxes on the contributions, there are no tax consequences for this rollover if made directly from account → account. The process is very similar to a regular 401k to IRA rollover.

Important things to know about Roth 401k Rollovers to Roth IRAs:

• There’s no rush to rollover funds from a Roth 401k to a Roth IRA. Both accounts grow tax free over time. 401k accounts do come with some legal protection built in, but IRAs typically have lower fees and better investment options. That being said, Roth 401(k)s are subject to required minimum distributions. You can bypass them by transferring the money to a Roth IRA that ideally has been open for five years (see below).
• When you do make a rollover to a Roth IRA, the rolled over funds are subject to the 5 year withdrawal rule, but with a slight twist. The 5 years begins from the date when the Roth IRA account was first established, not when the funds were rolled over. This is great for people who have opened Roth IRA’s earlier in life and have already had them open for more than 5 years. Rollovers are available immediately. On the other hand, if you didn’t have any Roth IRAs, and then create a Roth IRA in which to roll over a Roth 401(k), you have to follow a new five-year clock — regardless of how long the Roth 401(k) had been in existence.
• There are no income limits for contributing to a Rollover 401k. 
• Here’s a cool IRS comparison chart showing differences between Roth 401k, Roth IRA and regular pre-tax 401k.

5. Regular 401(k) or IRA Conversion to Roth

So far, all the methods we’ve covered have been moving after-tax dollars between accounts. This last way involves converting pre-tax dollars to your Roth IRA.

Because of this conversion, moving money from a regular IRA or 401(k) to a Roth IRA is a taxable event. You will owe taxes on any amount that you convert. There are no income limits or conversion limits, but keep in mind that if you have a very large IRA or 401k balance and convert the entire amount, your tax burden could be huge.

The process is quite simple. You contact the old 401k or IRA provider and ask them to perform a rollover to your Roth IRA. If both accounts are with the same broker, this is called a trustee → trustee or direct rollover, and the money is transferred internally. If you are changing brokers, they might mail you a check, and then you’ve got 60 days to move the funds to your Roth IRA.

Important things to know about converting 401ks or IRAs to Roth IRA:

• Since you will owe taxes on the converted amount, it’s a good idea to convert in small amounts within low-income years.
• All the money converted is subject to the 5 year rule for withdrawals. In fact, each conversion has its own 5 year clock once the conversion takes place. So make sure you’ve got CASH to pay the taxes owed, because there will be a penalty if you try to deduct it from your converted amount early.
• You don’t have to convert ALL your IRA or 401k to the Roth IRA at one time. In fact, it can be advantageous to set up a smaller and regular annual conversion schedule – some people call this the Roth Conversion Ladder!
• This type of conversion is a way to access your pre-tax 401k or IRA funds, penalty free, well before retirement age. It’s awesome for early retirees, as long as you can wait out the 5 year rule.

Which Method to Fund Your Roth IRA Is Right for You?

I have no clue! Every person has to figure it out for themselves because there’s no one-size-fits-all when it comes to Roth contributions. It depends on your age, income, existing investments, employer, and how much effort you want to put in.

But, it’s worth at least taking a look at your available options, because as each year passes, so do your opportunities to contribute to this wonderful tax free account.

Have a great week!
– Joel

[This post, 5 Ways to Fund Your Sexy Roth IRA, was first published by 5am Joel on Elite Edge Money]

I used to hate filing my taxes. Every year I would complain, procrastinate, make excuses, then finally on deadline day I would take a messy stack of forms to my tax guy and cry for last-minute help. It wasn’t fun at all.

Then something changed. I grew up. I put a system in place. And lucky I did!

Today, even though my tax situation is more complicated than most families’, filing is an absolute breeze! (This year I’ll receive probably 18 x 1099’s and W2s for income/interest, I manage 5 physical rental properties — each of which has 5 or 6 tax forms and large numbers to crunch — some LLC company filings to do and various K1 statements from other partnerships.) 

My tax organizer system really just boils down to a few simple steps — and being organized is 100% FREE. In this post I’m going to share these tips, and hopefully some of them can help you kick your 2020 tax return in the buttocks.

First of All: Check Yo’ Attitude!

If you think filing your taxes will be a sucky process, then it will be! I’m not saying you have to love every second of it, but try not to roll your eyes and think of all the negatives. That only makes it harder for yourself.

The more positive you think, the less painful it will be. The earlier you get your file submitted, the more free time you have to enjoy the year! The better you follow your tax organizer system, the easier it gets every single year going forward.

Let’s get started…

1. Create One Single Place for All Your Tax Docs

Your filing and folder system is the most important step. Personally, I use Google Drive to keep all my stuff, and there are several reasons why I like keeping it in the cloud. But, you can certainly have these files secure on your personal desktop, or do it old school with hard copies. Just make sure it’s all in one place.

Here’s what my drive looks like. All my years are in simple folders:

All tax documents are grouped by category.  Personal income, investment forms, each rental property, partnerships and LLC business, and misc deductions each get a folder of their own:

Inside the folders are the actual tax forms, receipts and scanned files.

Pro Tip: Why I Store My Tax Files in the Cloud

The benefits of having my tax information stored in the cloud are:

1. I keep zero paper in my house. Once I scan something and upload it, I recycle or shred the paper immediately. My online tax organizer is slim, out of sight and out of mind.
2. Using Google Drive, all my forms are searchable (provided I label them correctly).
3. I can work on my tax return anywhere, on any device. This is important for steps #3 and #4 below.
4. I can share these online folders and private links with my tax team (instead of trying to email 100Mb of attachments and scans to them). My accountant LOVES this system.

2: Create a Quick Tax Tracking Worksheet

The purpose of the tracking sheet is to help you compartmentalize all of the docs and forms that make up your return, as well as keep track of what you have received vs. what you are still waiting on.

Here’s a look at my tracking sheet for 2020 (example). Feel free to download this basic sheet here: tax doc tracking template and make your own modifications.

Each year, I find my previous year’s tracking sheet and cut/paste all the data to start a new sheet. It’s a template I use over and over again and most of my forms and tax documents stay the same each year.

Eventually, when I send all the information over to my tax team, I also send this sheet to help them find everything within the folders. I try to label every form specifically, and I put special notes if there’s something different from last year.

3. Scan, Save, and Track All Tax Forms as Soon as You Get Them!

Through the beginning months of the year, you’ll start to receive forms. W2’s and 1099s from employers, bank forms, investment stuff, etc etc. Some of these forms will come via postal mail, some will be sent to your email, and some you’ll have to log into portals to find.

Try and get in the habit of opening, scanning, filing, and noting in your tracking sheet as soon as you receive a document.

It takes me about 3 minutes when I get sent a tax form or statement. I open my mail, grab my iPhone, use a free app called Scannable to take a photo of the form, and immediately upload it to the relative folder in my Google drive. Then I quickly open the tracking sheet in Google Sheets, and note what I received. Done.

Same thing when I get an email saying, “Your 2020 tax forms are ready to download”… I stop whatever I’m doing, log into the bank or whatever portal, download my forms, upload it to my drive and track it. Literally done under 5 mins.

Instead of spending months drowning in documents and trying to remember where I put all the forms, my annual filing process is broken down into simple 5-minute activities. Easy stuff!

Also getting your taxes filed ASAP can help get your refund faster, or in line with the IRS refund schedule.

4. Track Receipts Throughout the Year

Just like the step above, having a quick and easy way to store receipts throughout the year makes it 100 times easier when filing time comes.

For those of you who use Mint.com to track your expenses, there’s actually a label you can assign to different transactions throughout the year. I check this every month when doing our budgeting exercise (although not many of my expenses are deductible).

For Personal Capital users, the same can be done in their system under the transaction tab.

Doesn’t matter if you think you’ll be doing an itemized deduction or taking the standard deduction (apparently 90% of households just take standard deduction), it’s still a great practice to label each expense related to tax!

Reviewing them at the end of each tax year ensures you’re not skipping over any tax deductions and claiming every single cent that you are entitled to.

5. Create a Yearly Summary of Changes

One cool habit I’ve started is creating a simple list of relevant events that happened throughout the year. My CPA dude needs to know what happened in the past year so he can make sure I’ve received all the right forms and file a complete and correct return.

Here’s an example of major events or life changes that can affect your taxes:

• Changed employers
• Gifted to charity
• Contributed to 401k
• Added after-tax funds to HSA
• Got a stimulus check (I’m 99% sure these are not taxable income, but you’ll prob have to note what you received regardless)
• Shut down a business or LLC
• Bought property, sold property, refinanced, etc.
• New dependents to claim
• Got married → individual changing to file jointly?
• Other necessary personal information
• Etc…

My guess is some of you guys already add this stuff in your net worth tracking or annual finance reviews. It’s always handy to keep general information like this recorded with your income tax organizer.

6. Hand Over Your Docs as Neatly as Possible

There are 2 ways you can hand off tax documents to your tax preparer…

The first way is to dump a messy pile of mislabelled and unorganized documents on their desk. Then, somehow expect them to know everything you did throughout the year, prioritize you over their 5,000 other clients, and magically get you the biggest refund possible.

OR …

The other way is to organize all your docs into a neatly wrapped present — with a bow on top. You can provide a tidy, well-explained cover letter with your annual events summary and instructions on where to find everything they need within your filing system. If you do this early in the year, you will be prioritized and they will LOVE YOU.

Remember, your tax preparer is busy this time of year. They probably work 80-100 hours during tax season, and anything you can do to make their job easier will make you stand out over other clients.

I aim to be my tax team’s favorite client each year. It’s not because I pay them more money than their other clients — it’s because I’m the easiest to work with.

**********

This was supposed to be the end of the article! But I emailed a draft copy to my brother, and he pointed out some additional cool stuff. With his permission, I’m sharing his notes…

I was thinking, there are other benefits outside of tax when all this comes in handy, example:

1) This year I applied for a mortgage and I had to upload a buttload of documents. I just counted. I uploaded 67 separate PDF’s to the bank, and that doesn’t include about 5 that I emailed them directly or had them call my insurance people. The process has taken about 2 MONTHS because of all the stuff we have — the wealthier you get, the more complicated it gets. Having a system in place to find past financial documents without much effort really pays off!

2) Similar process when Baby M was born, although I wasn’t 100% on the ball, I was pretty good. I collected all the medical bills that arrived over MONTHS, which are designed to confuse you and deliberately obfuscate the mess that is our medical system. I put each in a spreadsheet and then I could easily spot the duplicate bills, the ones that had no Explanation of Benefits, etc. You can then call them all on their bullshit and plan which bills to protest and which to ask for discounts on. Most importantly it got me a clear picture. 

3) You never know when you’ll need this stuff mid-year for one-off things. For example, 

– Applying for mortgage or other credit without a lot of warning. Asking for previous income amounts or tax info.

– You might apply for a job and be asked to prove your financial stability (eg, when negotiating a salary based on your last salary, or if you hold an office where you need to prove you are financially not a risk for bribery, etc).

– Every now and then I need to look up my kids’ SSN numbers and I know where they are with all the other info.

Anyway, just some thoughts about why this is a handy process outside of taxes!

**********

Ready to join the secret society of ninja tax organizers? Tell us your other efficiency methods in the comments below so we can all learn each other’s tricks. :)

[This post, 6 Tips to Becoming a Ninja Tax Organizer, was first published by 5am Joel on Elite Edge Money]

Last week I got my property tax bill. $5,185. Booooooo.

Many counties across Texas decided that 2020 was a good time to increase everyone’s assessed property value, raising bills by a whopping 10 – 20% for the tax year. It’s a kick in the groin… Because not only are many people under a financial squeeze this year, Texas was already ranked #3 for states with the highest property taxes!

For me, the tax rate is worse than most. While the average county in Texas charges 1.81% of a property’s value, the lovely little county where my rental duplex sits has a tax rate of 2.357%. Ouch! Tax is by far my biggest annual expense. Actually, it’s bigger than ALL other house maintenance, insurance, prop management fees and repairs combined. :(

What can I do? Property taxes are mostly unavoidable, right?

After I got that bummer assessment notice, this year I tried filing my first tax appeal. I was kind of successful, reducing my bill about $200. But I recently learned some other things that might have gotten me a better deal. Stuff I’ll maybe try next year.

Yes, You Can Protest and Appeal Your Property Taxes

Apparently, only 1 property owner out of 10 protests his property tax bills in Texas each year. The other 9 just accept whatever is given to them, or pay without even looking. Most years I’m fine with just paying, but this year the increased property tax assessment was too big to ignore.

Appealing was also free, all done online, and took less than 20 minutes.

My 2020 Appraised Value Notice came by mail in late April. It said my duplex’s current assessed valuation was now $229,040 compared with 209,650 last year. An increase of $19,390, or 9.25%! The value has been increasing every year since I bought the place in 2015. Here’s the tax values and history of increases…

Since I got the first notice in April, mid global pandemic, home sales had stopped, and the stock market was down 30% at the time, I thought there is no way a $229k valuation was fair.

Here’s How I Appealed My Property Taxes (Warning: Amateur Hour)

The notice listed a county website for property tax appeals, so I created a login and filed a formal appeal online. 

There were only 2 fields to fill in for the online appeal form… A number field where I could input what I thought the property value should be, and an explanation box to provide evidence or background information on why I was seeking a revaluation.

Since this was my first time and I didn’t know what I was doing, I just entered $200,000 as an approximate value, and then wrote a long angry rant in the explanation box. In hindsight, this was a poor choice because I’ve since learned a few other tricks that could have possibly made my assessment appeal better (which I’ll get into below).

Anyway, 4 days later I got a response that said a manual re-assessment had been completed, and the appeals board dropped the value to $220,047. Not a huge reduction, but lower by $8,993.

This reduction saved me $212 on my bill. Woohoo! Not bad for 20 minutes of work (which really isn’t much effort for any kind of appeal process)!

Ways I Could Have Make a Better Case to Appeal My Property Taxes

After I accepted the reduction in my duplex’s assessed value, I realized there might have been a better way to petition for a lower property assessment. I started googling and seeing how other taxpayers have protested their property taxes. Here’s some tips I found:

Check property records, tax cards, and house dimensions filed with the city. One of the ways county assessors come up with your valuation is based on a taxpayer’s home size, room dimensions, amount of fixtures, and other “features” listed. Mistakes in county records are more common than you might think, especially for older homes. If I found a discrepancy, a feature issue, or something that made my home less desirable, it could lower my taxable value.

Expose known property faults. If I could prove that my property is run down, needed major repairs, or had structural issues, I could include this in the appeal for a lower valuation. Since the ground in Texas moves very slowly over time, almost every house older than 10 years has “evidence of foundation movement” or “irregular soil levels.” Although these aren’t dangerous, I could take a bunch of bad photos and try to sell these property issues as worse than they really are.

This is a photo of “irregular soil level” that the inspector spotted when I bought the property in 2015. Sounds silly, but any evidence I can produce that the property is worse than the neighbors’ will get me a lower valuation.

Another common (but not critical) issue that could be pointed out is roof wear and tear. Proving that the property roof is getting old and showing unappealing photos could lower the assessment value.

Research the neighbors, and be more exact with numbers: Instead of me submitting my request for a $200k round number with no real justification, I should have researched the area and provided my own property comparisons. Using Zillow, Realtor.com, or other home value sites I could have found nearby houses that gave me a lower average fair market value.  The county assessor uses this same “comp” method to do their evaluations, but I have to assume they use the higher available comps. I would try to use the lowest.

Be nicer with my request: Instead of ranting and complaining in my property tax appeal, I think it’s a better strategy to leave emotion out of negotiations and just stick to facts. And I’m sure the assessment appeals board appreciates this strategy!

There’s no perfect way to submit an appeal or guarantee that any of this will work. But it’s worth a try I think!? Before any of you property owners out there submit an appeal I urge you to check out your local laws and rights for appealing taxes!

We’ll See What Happens With My Property Value and Taxes Next Year…

While I love owning a property that rises in value, if I can’t increase the rents to match the rising tax bills, the investment slowly gets less and less profitable for me.

Not sure what the rest of 2020 or 2021 will mean for property values, we’ll just have to wait and see!

TLDR; & Summary About Appealing Your Property Taxes

• Appealing my property taxes online took about 20 mins, and saved me $212. It was my first time.
• In hindsight, I could have submitted a stronger appeal by projecting my house as less desirable or more run down.
• Apparently only 1 in 10 people protest their property taxes, at least in Texas. Since it’s free and easy in most counties, why don’t more people do it?
• I just realized I am an idiot… I live in a state with the highest income tax (CA), and own properties in a state with the highest property tax (TX). I should be doing the opposite!

[This post, How I Appealed My Ridiculous Property Taxes, was first published by 5am Joel on Elite Edge Money]

Happy Monday, everyone! :)

Thought it’d be fun to share some tax trivia — some true facts , and some false facts — since we’re nearing the end of a super-long filing tax season here in the U.S. (Public service announcement: Taxes for 2019 are due THIS WEDNESDAY! That’s July 15, 2020.)

I’ve dug up (and made up) these weird tax facts for a little game of True or False.

But first, a quick story…

I was born and raised as a city boy. So when I visited Montana for the first time in 2011, it was my first taste of the “country.” It was remote and beautiful.

But something really surprised me about Montana … Every little town I visited had about 20 businesses in it, and of those 20 businesses, about five of them had signs hanging out the front that said “taxidermy.” 

I’d never heard that word before. Taxidermy … Sounds a lot like “tax attorney,” so I just assumed it was local slang for the tax office.

I thought to myself, “Why do they have so many tax offices in Montana? People out here don’t know how to file their own tax returns? What idiots!”

As it turns out, I am the idiot. Many years passed before I found out that taxidermy has nothing to do with taxes. My in-laws who live in Montana had a good laugh when they schooled me about what taxidermy is. 

True story. And now whenever I see a stuffed animal, I think about taxes. I’m a weirdo!

OK, onto the game …

These are all True or False questions/statements. The answers are posted at the bottom. No peeking! Some of them are no brainers — I’m sure all of you will pass with flying colors.

Taxes: True or False?

1. The United States has the highest national income tax rate in the world. Second-highest is the Netherlands, and Finland is third-highest.
2. In Kansas, untethered hot air balloon rides are exempt from sales tax because they are considered a legitimate form of air transportation.
3. There are 7 U.S. states that levy no personal income tax. They are: Texas, Nevada, Florida, Washington, Alaska, South Dakota, and Wyoming.
4. If you’re over the age of 100 and live in New Mexico, you don’t have to pay state income tax. In fact, you don’t even have to file with the state if you’re that old.
5. It’s smart to have your employer withhold as much tax as possible during the year, so that when you file your return, you get a bigger refund check!
6. Professional strippers in Las Vegas are allowed to deduct the cost of breast implants or enhancements in their annual tax filings.
7. Billionaire Mark Cuban once filed his tax return using paper forms instead of electronically. It took a small team of accountants 23 days to fill out and double-check all the paper forms. They eventually shipped four large filing boxes full of papers to the IRS. Cuban did this as a protest against paying such high taxes.
8. If you file your taxes early in the year, you have a higher chance of getting audited. If your one of the late tax filers, the IRS is so overwhelmed that it doesn’t have the bandwidth to check everyone’s return in detail, so you have less of a chance of getting audited.
9. Every U.S. president starting from Richard Nixon (1969) onward has provided his tax returns to the public for review.
10. In the UK, residents must pay a “television tax.” This is an annual fee to watch TV, and it covers watching shows on your TV, laptops, and cellphones.
11. The IRS is trying to be more progressive to keep up with various technology platforms. If it decides to audit someone in the millennial or Gen Z age bracket, it will begin by notifying the taxpayer person through his or her TikTok or Instagram account.
12. The word “TAX” is an acronym for the original Latin phrase “Taeter Amor Xenium,” which roughly translates to “love donation for the king.”
13. If you have a side hustle, you don’t need to pay tax if you didn’t earn more than $3,000 (or $6,000 for those married filing jointly) in income from that specific side hustle.
14. In Texas, if you hire someone to paint holiday images on your windows at home, you do not owe tax on the painter’s fee.
15. In New York, there is a “sliced bagel tax” that costs you an additional 8 cents if your bagel is sliced or schmeared with cream cheese. 
16. The average tax refund check for 2018 was about $1,200. This is how the government came up with a “fair amount” to give people as a covid-19 stimulus payment in 2020.
17. If you get audited or screw up on your tax return, your credit score will drop a few points. The people most at risk are ones with credit scores below 720.
18. Chuck Norris didn’t even file his taxes in 2019 …  but the IRS sent him a refund check anyway.   

******

Answers

1. FALSE! The U.S. is far from the highest taxed nation … the Netherlands has the highest national tax rate, at 52%!!! Then about 20 other countries are higher than the USA.
2. TRUE! Under Kansas tax law, as long as the hot air balloon is “untethered,” there is no sales tax. Woohoo! Plus, hot air balloons are way more fun when they’re not tied to anything :)
3. TRUE. I wish California were on the tax-free state list, but unfortunately I live in the state with the highest personal income tax. Booooo.
4. TRUE! This rule came into place in tax year 2002. People 100 years of age or more who are not dependents of other taxpayers are exempt from filing and paying New Mexico personal income tax. They still have to pay federal income tax, of course.
5. FALSE. I hope you got this one right!  Overpaying through the year just to get a bigger return is like giving the government an interest-free loan! The most ideal tax planning is to have $0 owed or refunded at the end of the year. :)
6. TRUE! Well, kind of. A famous court case in 1994 was won by “Chesty Love,” who enlarged her “assets” to a size 56FF, then even bigger to 56N! She claimed the surgeries were necessary to increase her professional income and therefore should be tax-deductible.
7. FALSE. The Mark Cuban story is made up. I always wonder how multi-millionaires file their massive multi-state and federal tax returns. And how many accountants does it take for their tax preparation!
8. FALSE. No matter when you file your return, your chances of being audited are the same. Accuracy is the most important thing when filing, not tax day timing!
9. FALSE. Donald Trump and Gerald Ford never provided their returns to the public. But the first two pages of Trump’s 2005 tax return were leaked to MSNBC a few years back. $152.7M in income… wowzer!  (All other presidents and some presidential candidate filings can be seen here.) 
10. TRUE. Television tax is how the BBC is mostly funded. The UK government brings in about £4 billion annually from this TV tax, charging each home and business £157.50 a year (or just £53 for black-and-white TV sets … as if anyone still has one of those!).
11. FALSE. Beware of scams! The Internal Revenue Service will never initiate contact with taxpayers by email, text message or social media to request personal or financial information. They will send you a letter in the mail if you are lucky enough to be audited :(
12. FALSE. The word “tax” first appeared in the English language in the 14th century. It derives from the Latin taxare which means “to assess.” I just made up “taeter amor xenium”… It really means “foul love gift.”
13. FALSE! Side hustle income is taxable! Don’t hide any income from the IRS, even if you earned only a tiny amount from your sexy side hustle. Tax evasion has serious consequences! 
14. TRUE. Texas window painters (for Christmas cheer) will not charge tax, so long as you provide the paint! If the painter provides the paint, you’ll be taxed. What a weird set of rules, right!?
15. TRUE. New York has different taxes for standard foods (a bagel) and a “prepared meal” (a sliced bagel). There’s even a whole section in the NY tax code that explains what classifies as a sandwich.
16. FALSE. The average tax refund in 2018 was about $2,869. And average taxation has nothing to do with the 2020 stimulus check amount!
17. FALSE. The IRS does *not* report anything to credit agencies about your filing, extension dates, taxes owed, etc. But if you take out a loan to pay your taxes and then default on that loan, your credit will definitely be affected!
18. TRUE! But most years Chuck Norris just sends the IRS blank forms and includes a picture of himself, crouching in the attack position… No tax collector or IRS employee has ever dared to audit him.

Sooooo. How’d you do!?

Have you filed already, or are you getting an extension? Any unexpected or mammoth bills/returns you want to share with the group? :)

FYI – here is updated info on the IRS refund schedule!

*Pic up top by Rachaelvoorhees on Flickr!

[This post, Tax Fun Facts! (But Are They True or False?), was first published by 5am Joel on Elite Edge Money]

Morning!

Saw this comment come through and it reminded me to get my a$$ in gear and finally wrap up my own taxes ;) How are you doing with yours? Getting any refunds back?

Here’s an idea of what you could do with it if you are:

Thanks to earned income I get a tax refund of anywhere from $4k to $7k per year.

I use that tax return to pay all my bills for a year.  I multiply my cell, internet, Netflix, and car insurance by 13 months (I like an extra months padding), then take that amount and add the cost of my contacts and vision exam, dental costs, and life insurance.  I then deposit that amount into a Capital One 360 account.

Every month I sit down and pay my bills directly from that account.

– MB

BOOM! How’s that for a refund strategy?! Using it to pay your NEXT YEAR’S EXPENSES in full! Minus your mortgages or loans or important stuff like food, of course, but still – pretty clever :)

I tend to go the more boring route and just funnel any extra refunds into maxing out my IRA for the year so it feels like I’m getting it for free (hah!), but whenever I break even that’s perfectly fine too.

Just so long as I never OWE MONEY at the end of the year!!

I’ll do anything to avoid that pain, even if it’s just psychological, haha… And I bet that’s why others prefer getting money back at the end of the year vs having to pony up some as well… Getting money that feels *free* is always much more exciting to spend or save when you get it in a chunk like that! So if it helps you propel your goals by “giving the gov’t a loan”, so be it! There are worse ways to get that scratch!

That’s how I look at refunds, anyways… How about you? Have any mantras or strategies of your own with tax management? Do you use refunds to take nice vacations or pick up fancy toys you wait all year to finally get? :)

I’ll be honest and say I’m always a bit envious of those who can spend their refunds freely like that without any guilt… I like to think that everyone doing this has already rocked their finances all year so this is their one reward for doing so, but I’m not naive enough to think that’s actually the reality ;)

But if this IS you, I salute you with both hands and feet!! That’s a great balance to achieve and I need to be better about it myself!

[This post, A cool way to use your tax refunds, was first published by J. Money on Elite Edge Money]

It’s true…

Winnings are considered “income” and you can get in some serious doo-doo if you try to hide it. Though reputable places will at least remind you of it when they send you a nice tax doc at the end of the year informing you they’re reporting it to the IRS :)

And it’s not only applicable to things like winning the lottery or hitting it big on slots either. Free *stuff* and giveaways also count! And can put a damper on your party like my boy Joshua is now finding out:

Hey Jay!

My wife recently had the incredible opportunity to go on a [POPULAR GAME SHOW] and she ended up winning a ton of gifts and a killer trip! We feel sooooo lucky, but…. Of course we found a way to stress about it.

The “fair market value” of what she won is ~$1,500, so we’re going to have to foot a $700 tax bill now. Thing is… it’s hard to enjoy the gifts when you realize you actually had to pay $700 for the stuff, especially when we were not planning on buying a bunch of things for $700. It’s basically like getting to buy everything at your marginal tax rate.

Being conservative you think, “would I have bought all this stuff for 60% off?” (Assuming you have to pay 40% of fair market value in tax)… Sure it’s a great deal, but I don’t think we would have still gone out and bought it all.

So even though we got all these great gifts we found a way to stress about it. Then I realized… Is this $700 going to significantly matter when we’re financially independent? No!!! So we might as well just enjoy the gifts we were sooooooo lucky to receive!

Going to just enjoy it all now :)

[This note was in response to our post on life when you’re financially free, and he’s absolutely right! While it sucks to “lose” money, it’s not going to matter a whole helluva lot once they FIRE. And plus you can still go and sell it all if you really wanted to or even re-gift them to others ;) Which ironically does not trigger any tax implications, at least up to a certain point…]

Remember that time Oprah gave out all those “free” cars to people 15 years ago??! Tax ding, Tax ding, Tax ding!! Haha…

“While General Motors handled the state sales tax on each of the new cars (around $1,800 per car), plus licensing fees, audience members were tasked with paying federal and state income taxes on the value of their new vehicle. To keep things simple, for reporting purposes, General Motors issued forms 1099-MISC to the recipients. While actual taxes payable varied based on individual tax brackets, estimates settled around $7,000 per car.” – Forbes, A Look Back At Oprah’s Ultimate Car Giveaway

Now you can always decline gifts, of course, if you’re not willing or in a position to pay the taxes, but most people never think about that in the heat of the moment (or know about it) and just see FREE FREE FREE!! OMG GIMME GIMME GIMME!!! Haha…

So 1) here’s your notice so you now know!

And 2) never go on game shows or ever get anything free in life ;)

Okay I’m just kidding, but do your best to set aside some $$$ so you avoid any nasty surprises later that can wipe away all that experiential joy…

And for the love of all things holy, do not win stuff on national TV and then IGNORE THE IRS!! They have literally seen you win millions of dollars as well as half of the rest of the world! If you’re gonna hide it, do it on the low or change your identity, jeesh! ;)

So that’s my negative nugget for you today, haha… In more positive news, there’s still time to max out that Roth IRA for the year if you’re looking to up your game! That’s a gift that’ll end up paying you the more times you participate in it – no luck required!

[This post, Did you know you have to pay taxes on all winnings?!, was first published by J. Money on Elite Edge Money]

Saw this list come out on the best ways to use your refund money, and thought I’d use it as an opportunity to live vicariously through you guys since I’m getting squat this year ;)

Though by no design of my own as I LOVE getting a nice chunk back every year and thinking about all the ways to power your goals! Even if it’s your own money we’re talking about! (And let me tell you – after just maxing out our Roth IRAs yesterday, it’s a LOT more fun using your “free” tax money than it is your “normal” money, haha… I felt the sting hard this time!)

So if you’re not one of those “I don’t give the government a free loan” type people, which is fine if you’re actually APPLYING THAT MONEY towards your goals every paycheck!, here’s an excellent list of ways you can use your newfound money for good. [Also here is an updated IRS tax refund schedule, so you can check when you might anticipate your refund!]

Per MyBankTracker.com, with comments from yours truly:

The 10 Best Ways to Use a Tax Refund

1. Build an Emergency Fund – Excellent route for anyone just starting out in their journey!
2. Pay Down Your Debt – An excellent route for anyone no matter *where* they are in their journey! Especially if we’re talking about debts with 10%+ interest rates!
3. Fund Your IRA – My go-to answer every year – with or without a tax refund :) Even if this was all you ever did every year you’d have hundreds of thousands to your name by retirement!
4. Invest – Another great option, which I’m assuming refers to non-retirement accounts since of course most of what you do in retirement accounts is invest ;)  But maybe this could be a fun side pot to poke around and experiment with? Especially since again it feels like “free” money and wouldn’t affect you as much if you were more risky with your everyday money?
5. Pay for Home Improvements – Or perhaps home improvement “wants” vs needs? ;) Especially those that’ll increase the value of your home over the years?? I remember once someone telling me you should do all of them while you’re *living in the house* vs before you go to sell it so you can actually ENJOY all the upgrades you do! Something we failed big time when we sold our first house, and now every time it pops back on the market and we see all those beautiful hardwood floors and kitchen cabinets I get sad that we never got to appreciate them :(
6. Replace an Old, Inefficient Appliance – Sure, why not?! And pick up one that’s energy star compliant to help save the earth – and your electric bills – at the same time!
7. Invest in Yourself – I always find this one the hardest to do regardless of how you come into cash, but I agree we need to be better about taking care of ourselves, both in terms of our minds/brains/bodies, but also just in our general well-being too. And a tax refund can be the perfect opportunity to treat yourself here that you might otherwise never do.
8. Save for an Upcoming Expense – My Bank Tracker lists stuff like irregular expenses or real estate taxes (yaaaawwwn), but maybe you can stash some for more exciting expenses that are on the horizon if there is such a thing ;) (Road trip? International vacay!?)
9. Make a Charitable Donation – And then get a tax write-off too! Hah! (Get it? A tax write-off on your tax return??!) But yes – an excellent idea as this world needs as much help as it can get these days… And might I recommend a few places I’m proud to support:
   • SundaraFund.org – An organization that recycles old hotel soap into new soap for those who don’t have access to any around the world, or even know what soap IS?!
   • Breadcoin.org – A new currency of tokens you can hand out to those in need, redeemable for food at local merchants here in the DC area.
   • TheGoodCemeterian.org – A two-person preservation team that restores old tombstones and then shares the stories of the people they honor to help their memories live on.
   • The J. Money Fund — a charity I’ll one day finally create again!!! ;) It’s been almost 10 years since our first one: Love Drop! (Anyone still around from those days?)
10. Treat Yo’Self – Buy Something Fun – The only place where I’ll keep this on the list since I know most of us actually have the *opposite problem* here of wanting to hoard all our money! Haha…  So if you haven’t done something nice for yourself lately, go ahead and splurge a little and then get right back to the Goodness again to keep your sanity ;)

And btw – this doesn’t have to be a “one thing” only type deal either. Mix and match it up depending on your personal preference! For some that’s going “all in” on one main goal and killing it, while others like to spread out the love and hit upon a few different areas that excite them…

What matters most is that you’re using this money MINDFULLY, which I find is a lot easier to do when you get big chunks of it vs smaller ones throughout the year that tend to get lost in the shuffle.

So if you’re one to be getting a nice refund back this year, embrace it! There’s nothing wrong with it no matter what people say… It’s mostly us $$$ nerds that raise a big stink about it, haha….

Now make me jealous and tell me everything you’re gonna do with your money!! And bonus points for sharing *how much” you’re getting back to really rub it in! ;)

[This post, What are you doing with your tax refunds?, was first published by J. Money on Elite Edge Money]

Morning, hustlers!

Anyone already file their taxes and feeling good about it?

Yeah, me neither ;)

But I have started putting all the paperwork in one neat pile, if that counts for anything?! Haha…

The good news though is that there are a handful of *free* places you can file your taxes this year, so before you get into it be sure to check ’em out and see if any match up well for you.

Got them from a press release H&R Block just sent me so they’re a little biased, but a lot of these options are really really good – particularly if you earned less than $66k this year or are in the military!

Hope this helps!

#1. Free way to file if you have a simple set up –> H&R Block’s free online tax filing

This includes a free federal and state return, along with twice as many forms than you’d get with TurboTax’s free product. Also includes the ability to claim the Child and Dependent Care Credit, deduct student loan interest for new graduates, and 40+ other forms to help take advantage of credits & deductions. But again, this is mainly for people with simpler situations like those with only W-2s and who rent vs. own, etc.

#2. Free way to file if you earned under $66,000! –> MyFreeTaxes.com

This one we showcased here last year and it’s awesome. (And def. not spammy, even though it sounds like it would be!) It’s a partnership with United Way, and so long as your total household income doesn’t exceed $66,000 (AGI) for 2018, you can file federal and state taxes in all 50 states and the District of Columbia for FREE. It’s the only free, national, online tax filing product offered by a nonprofit, and is powered by H&R Block’s premium software. You can find my original write up on them here: MyFreeTaxes – A Free Way to File Your Taxes This Year!

(They also have an option for filing taxes in person too through “Volunteer Income Tax Assistance” sites (VITAs), and the locations of these can be found on their site)

#3. Free way to file your federal taxes –> FreeFileAlliance.org

The Free File Alliance is a nonprofit coalition of industry-leading tax software companies partnered with the IRS to help people prepare and e-file their federal tax returns for free. Pretty much a database of all the free software and forms you can use all in one main spot, and includes a dozen+ name brand tax companies (TurboTax, H&R Block, TaxAct, etc).

#4. Free tax prep and filing software for those in the military –> MilitaryOneSource.mil

This is another partnership backed by H&R Block and aimed at the servicemen and women in our country. Here’s a clip directly off their website: “MilTax is a suite of free tax services for the military, including easy-to-use tax preparation and e-filing software, personalized support from tax consultants, and current information about filing taxes in the military. It’s designed to address the realities of military life – including deployments, combat and training pay, housing and rentals and multistate filings”

Oorah!

Let me know if you end up using any of these, or what you think if you’ve tried them before!

I still pay $300+ a year for my accountant to do ours, so that’s always another option as well ;) No shame in hiring out if it makes more sense for you! I also find it helpful having a direct line for advice when a billion and one questions pop up throughout the year too, haha… That alone can be worth the money.

*****

UPDATE: Here’s another option recommended by a reader –> AARP: “FYI, AARP also offers free tax filing for low and moderate income folks. They use trained volunteers, and meet in person at libraries, etc. You have to make an appointment through whichever location you’re using. I have been using them for years. You don’t have to be a senior… they serve all ages with this service.”

UPDATE #2: “For those that can’t file for free, Costco sells discounted turbo tax packages!”

UPDATE #3: There’s more recommendations in the comments now too… Not gonna post them all up here or else we’ll be on update #87 by the end of the day :) Love seeing them all though – thanks guys!!

[This post, 4 Ways to File Your Taxes for Free, was first published by J. Money on Elite Edge Money]

I know I know, taxes – ugh.

But I might have something for you that could save you hundreds of dollars this tax season, both in filing fees, as well as getting back the maximum refunds owed to you.

It’s a tool called MyFreeTaxes.com, and despite its somewhat spammy name I guarantee it’s legit ;)

Not only do I have a good friend who recently switched careers to work for its parent organization, but its parent organization is none other than mega charity United Way! I.e. the largest privately-funded charity in the entire world! (#TrueFact). MyFreeTaxes is one of their initiatives in fighting for “the financial stability of every person in our community,” and they’ve already helped close to 1 million people since launching in 2009, saving them $180+ million in fees in the process.

They also happen to be the only free, national, online tax filing product offered by a nonprofit, and is powered by H&R Block’s premium software making it even more robust and easy to file.

See – legit!

But of course, there is a catch, however it’s a good one whichever way you look at it ;)

In order to qualify to use MyFreeTaxes, your total household income must not exceed $66,000 for the 2017 year, whether that’s W-2 income, freelance income, investment income, or a combination of all three. So if that’s you, great! Keep reading to learn more! And if not, great too! Congrats on making more than 70% of your fellow citizens!

But whether you qualify or not, I hope you’ll help me spread around the word so everyone else in our communities can learn about this great option too. Even a tweet or Facebook share can help, as we ALL know someone who makes less than $66k a year! And it covers *individuals* too, not just families, so it really does affect a ton of people.

Please help me share this around today!

Here are more details, and benefits, of the MyFreeTaxes program:

• The average filing savings is about $200 using MyFreeTaxes
• Most filers complete their taxes in under an hour
• It’s powered by industry leader, H&R Block, which guarantees that tax returns are 100% accurate and uses the highest standards to safeguard taxpayer information
• The software screens for refund and credit eligibility such as the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC), to ensure filers receive their maximum tax refund
• It’s easy to use; just upload a picture of your W-2 and MyFreeTaxes will automatically fill in your info
• Filers can call, email or use the chat box to get assistance from IRS-certified professionals in real time (available from January 29th through April 30th, 2018 from 10:00 a.m. to 10:00 p.m. EST Monday through Friday, and between Noon and 9 p.m. EST on Saturdays)
• Users can file federal taxes, and up to three state returns for free
• There are specialized forms for self-employed filers
• And they offer support in both English and Spanish

They also have an option for filing taxes in person, for those who prefer that instead. They’re called “Volunteer Income Tax Assistance” sites (VITAs), and the locations and other info can be found at MyFreeTaxes.com or by calling 1-855-My-TX-Help.

So yeah! A killer option for those who qualify! Please helps us get the word out as it can literally help millions of people in our country! 

Here’s the link again for anyone who wants to take advantage of this –> MyFreeTaxes.com

They’ve already saved people over $1 billion in refunds over the past 8 years, and they need our help in continuing it until we finally reach financial stability for all those around us. Which let’s be honest – is going to take a very long time :( So be thankful if you’re in the top 30% here who don’t qualify! What a luxury to be able to shoot for an early retirement!

UPDATE: I just got confirmation that the $66k is actually AGI (Adjusted Gross Income), so in actuality you can be earning much more than $66k and still qualify if you’ve got lots of deductions!! Making this even better!

*******
This post was in partnership with United Way and MyFreeTaxes.com, which as you know by now I’m a huge fan of ;) Programs like these are exactly what we need to be doing more of in our space, and I’m proud to be a part of supporting the mission.

[This post, A Free Way to File Your Taxes This Year! (Federal + State), was first published by J. Money on Elite Edge Money]