California may send IOUs instead of tax refunds this year

Many taxpayers love getting a big tax refund in April. For some, it's a slush fund that they might not have the discipline to build on their own. They look for several hundred or thousands of dollars back from the government to pay off some bills, make a large purchase, or otherwise improve their financial situation.

Tax preparers have been telling taxpayers for years that it makes no sense to let the government get a bunch of your money via withholding, and then refund it to you sometime later... without paying you any interest. Instead, you could decrease the withholding from your paycheck, and put the extra money in an interest-bearing account for yourself. You make a little on your money, and don't have to wait for the government to refund it to you.

And the recent news that California is going to delay tax refunds makes the case for decreasing your tax withholding even more compelling. The state is running out of cash, and has just announced that tax refunds will be delayed 30 days. Allowing the government to take more money out of your paycheck than you really owe in taxes, and then waiting for the refund, used to seem like a sure way to save money. Now with state governments getting a reality check after years of abusive spending, the idea that your tax money is safe and ready to be refunded to you isn't such a sure thing anymore.

Decrease your tax withholding so that the amount taken out of your paycheck adds up to what you'll really owe at the end of the year. Ideally, you should be even... little or no refund, and little to nothing owed. To decrease your tax withholding, you'll need to fill out a new W-4 form. You want to enter a higher number on that form to ensure that less is taken out of your paycheck.

Video: Home Repairs and Tax Deductions

You can claim tax deductions on certain types of repairs you make to your home throughout the year. Learn about home repairs and tax deductions with help from TurboTax in this video clip.

Read More

Brought to you by TurboTax.com

What Are State Sales Taxes?

Many states and local governments impose a direct tax on consumption when you purchase goods and services.

Read More

Brought to you by TurboTax.com

Reality Star Tax Blunders

Tax blunders can be made by anyone, from the average taxpayer to television stars. However, when you're a reality star, your finances often make front-page news. Since many reality stars are newly wealthy, they can be particularly vulnerable to financial missteps, since they may not be well versed with the tax requirements that arise from a cash windfall. Perhaps the most famous reality star with tax issues is Richard Hatch, the winner of the first "Survivor" season. However, the lessons to be learned from the following reality star tax blunders can apply to many taxpayers.

Read More

Brought to you by TurboTax.com

Tax Time Gains and Losses: Calculating Your Investment Portfolio Results

Every investor's goal is the same, to make money. But a dollar earned in one investor's portfolio is not necessarily the same as a dollar earned in another's. That's because each portfolio might include a unique mix of investments and also might spread those investments among different types of accounts. When it comes to minimizing the tax bite, there may be as many different strategies as there are portfolios, but you have several ways to manage your portfolio to reduce your overall obligation.

Read More

Brought to you by TurboTax.com
Read Full Story