Christian Finance Blog

By now, most of us have heard about the news of the $700 billion bailout signed into law by President Bush on October 3rd, 2008. The bill is designed to bailout the numerous banks throughout the country that were making bad mortgage loans. The government (read: we, the taxpayers) are now going to own $700 billion worth of homes and hopefully sell them later for a profit. How much later is in question.

Do I support the bailout? It doesn’t matter. It has already passed. What I can do is try to analyze the effects of the bailout to you and I. Joe Doughnut. The average American. I definitely don’t like the idea of using taxpayer money to bailout any huge corporation that made bad decisions. They should be allowed to fail. This is a free market capitalist country. I’m afraid America is moving more and more toward socialism and that’s scaring me. But enough of that.

The real question is why does it matter to me personally? After all, this is a personal finance blog. Along with the huge amount of “bad” in the bailout, there some “good” thrown in there as well. For example, the bill increases the FDIC insured limit from $100,000 to $250,000 deposits at all banks and credit unions (that are FDIC insured). That means more protection for you! Hopefully it will get you to save more and spend less, too! This expires December 31, 2009.

Also included in the bill is about the alternative minimum tax. It was expected to hit 20 million taxpayers with an unexpected tax increase this year but it was originally supposed to affect 155 high-income households who owed little or no taxes at the time when it was introduced.

So what does the bailout mean for me? What does it mean for you? It means that I’m doing everything I can to get out of debt and avoid my own “credit crisis”. If I don’t have any debt and a have whole bunch of cash, I won’t have a credit crisis! If I don’t need to borrow, I don’t need credit! What a concept!

Great news! The Treasury Department said Thursday that the special economic stimulus rebates would be distributed five days earlier than first said. The first round of rebates are expected to be sent starting Monday, April 28 rather than May 2 as previously thought.

About 800,000 tax filers will receive rebates on Monday, Tuesday, and Wednesday. An additional 5 million will be distributed on Friday. The economic stimulus plan signed in February by President Bush will distribute more than $110 billion to 130 million taxpayers.

So what are you going to do with the money? Most people I’ve talked to and read about seem like they aren’t spending it but rather paying down debt and/or boosting their emergency funds and not necessarily the economy. I’m doing the same.

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I just received my federal income tax refund yesterday! I filed on April 5th and my refund came exactly 13 days later. That was pretty quick! I’m glad I e-filed for the first time this year. I think I’m never going to mail in my tax return ever again. The benefits simply outweigh any of the negatives.

Here’s how to check the status of your refund. Just go to the official IRS “Where’s My Refund” page (can also be accessed from the main IRS website) and enter your social security number, filing status, and exact refund amount shown on your tax return. It showed that mine would be direct deposited on April 18th and it showed up exactly on April 18th in both accounts (I split my refund into two accounts). Most states also have a way to check the status of refunds. Check your particular state tax websites for more information.

Now I’m just waiting for the economic stimulus rebate to arrive. It will be direct deposited to the same account that I filed with (only the first one). Check out this post to find out when you can expect yours.

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The tax deadline is fast approaching! If you’re like many Americans and have procrastinated so far, here are several ways to prepare and file your taxes for free! Nothing beats free!

All you have to do is go through the IRS Free File page. Generally, your adjusted gross income (AGI) needs to less than $54,000 for 2007 unless otherwise noted.

Here are some of the companies that provide this service and are recommended:

1. TurboTax Freedom Edition
The limitation here is that your adjusted gross income (AGI) needs to less than $30,000. If you qualify, this is a great way to do your federal as well as state taxes (AL, AR, AZ, GA, ID, IA, KY, MA, MI, MN, MO, MS, NY, ND, NC, OK, OR, RI, SC, VT, WV) for free!

2. H&R Block’s TaxCut
This is available as a free access to the TaxCut software. Adding a state return costs $24.95.

3. TaxAct
Available with a free federal return. A state return will cost $12.95.

4. CompleteTax
A state return will cost an additional $9.95.

5. Tax Engine
A state return will cost an extra $10.

6. TaxSlayer
This comes with a free state return if you prepare a federal return with it. Otherwise, a state return will cost an additional $9.95.

All of these can be accessed through the IRS Free File website. I filed my taxes last weekend and I’ve already received my state return direct deposited. My federal refund should arrive within a week or so. I’m glad that I e-filed this year and used direct deposit. I used the paid version of the TurboTax software. Just be aware that if you purchase the retail version, you’ll have to pay $17.95 each return to e-file. So if you file a federal and state return it will cost $35.90 in addition to the software cost. Just so you know. If you haven’t filed yet, get to it! This is the last weekend to file your taxes. Hope this helped.

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The IRS will begin to send approximately 130 million tax rebate payments to boost the economy starting on May 2. Most people will receive their rebates by July 11 if tax returns are filed by the April 15th deadline. The IRS takes about two weeks to process a return. Here’s a full schedule for the special rebate payments:

You can use the IRS’s own online calculator to figure out exactly how much of a rebate you’ll get and whether or not you’re eligible.

I’ve written about this special stimulus rebate here and here.

Source: IRS

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7 Render therefore to all their due: taxes to whom taxes are due, customs to whom customs, fear to whom fear, honor to whom honor.

Romans 13:7 (NKJV)

Yes, the Bible talks about paying taxes! Benjamin Franklin said, “In this world nothing can be certain, except death and taxes.” Even in Biblical times they had to pay taxes. It’s nothing to get all upset about. We have to pay taxes in the United States and most anywhere else in the world. The best thing we can do is to try and minimize our taxes as much as possible instead of complaining about them.

I haven’t filed my taxes yet although I am pretty much finished with most of it (I use computer tax software). I just need to finish up some last details and find some paperwork and I’ll be done. I’m thinking about e-filing this year just because it’s more convenient. Last year I mailed mine out after printing the forms out from my tax software and I just think e-filing is less of a hassle plus I can get my refund faster. The IRS has reported that 46.9 million taxpayers have already filed their 2007 tax returns for a total of $106.7 billion in refunds through February 22. Out of those, 38 million e-filed. The average refund is $2,708.

I’m getting about $700 back this year not including the secondary stimulus package refund that I’ll be getting later that President Bush signed. That’s still too much for me. I like to get as close to zero as possible so I may have to adjust my withholding. Remember that if you receive a large refund you’re loaning the government an interest-free loan. That’s money you could use every paycheck to help pay off debt, bolster your emergency fund, or something else. But if you don’t have the discipline to use the money wisely, it may be a good idea to keep your withholding the same so it forces you to save. The math doesn’t work out but if it works for you, it works for you.

It’s tax season so start now! The sooner you start, the better off you’ll be and the faster you’ll get your tax refund. Plus you may be eligible for the stimulus refund. God bless!

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Today President Bush is expected to sign the now $170 billion economic stimulus passed by Congress recently. He hopes that this will prevent a recession or lessen the impact. I’m not sure if it will work or not, but it sure will help a whole ton of low to middle income people. I’m not complaining about the free money!

Some changes to this bill from the $150 billion one was that tax breaks for equipment purchases by businesses, payments to disabled veterans and senior citizens were added. That’s where the extra $20 billion came from.

The rebate checks still range from $600 (for individual taxpayers) to $1,200 (for couples) plus $300 tax credit per dependent child under 17. The income cap (AGI - adjusted gross income) is also still at $75,000 for individuals and $150,000 for joint filers. If you don’t owe any income tax but had at least $3,000 in earned income or Social Security benefits you can qualify for $300 per person or $600 per couple. Also, you might be able to receive partial money if you go over the income limits. You will lose 5% over the income limit up to a certain amount.

You must file a federal tax return for the year 2007 to be eligible for the tax rebate even if you are not required to. You can expect the checks to start showing up between May and early July if you meet the April 15th tax deadline!

So what are you going to do with your tax rebate? Just leave a nice comment! I’m going to pay down debt and save some of it!

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The proposed $150 billion “economic stimulus package” by President Bush is promising rebates of between $300 and $1200 or more to the low and middle class people of the United States to help kickstart the economy by giving money to those who are most likely to spend it. Why don’t you go against the current and actually save it instead of spending it?

Here are the quick facts on the proposed plan:

1. Most single taxpayers will receive a $600 check
2. Dual-income households will receive $1200.
3. For each child (dependent) you will receive $300 each.
4. Workers who made at least $3,000 but didn’t pay taxes will receive $300 ($600 for those married and filing jointly).
5. Income limitations are $75,000 for single taxpayers and $150,000 for couples.
6. Apparently all of this is based on your 2006 tax return.

The legislation has not passed yet, although it most likely will and is being pushed strongly by President Bush. But if and when it does pass, you can expect your rebate checks to come in May or June of this year (2008). Just file your 2007 taxes just like normal.

All I can say is to not act like you’ve already got the money and spend an extra $600 on something you don’t need! I’ll probably get $600 as a single taxpayer and I’ll most likely just boost my emergency savings or pay down debt or both. All I know is that I’m not going to act like I have it and spend it before I get it. It will be a welcome surprise in my budget come May or June!

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(Not mine, btw)

Now that you’ve probably received your refund check in the mail or even direct deposited, here’s how you can spend your tax return from a Bankrate article. Hopefully you haven’t spent it already!

1. Pay down credit card debt.

2. Open an IRA (I recommend a Roth IRA unless you don’t qualify).

3. Take stock (I’m not too sure about this one. I recommend that you don’t invest in the stock market unless you have at least basic knowledge of how it works).

4. Set up a rainy day fund.(In other words, an emergency fund. I would probably put this higher than number 4, though).

5. Refinance your house (They’re saying use part of the refund to pay the closing costs of refinancing. I don’t think you should refinance unless you’re going to save at least

6. Add to your mortgage payment (A great idea!).

7. Spruce up the homestead (They’re talking about some do-it-yourself landscaping or remodeling).

8. Auto details, details, details (They’re talking about detailing your car, if you’re planning on selling it soon. I think it’s a good idea only if you’re planning on selling, though).

9. Service your car (They’re saying most people don’t maintain their cars. That’s true, but why wait to maintain them? It will cost you less to keep a well-maintained car).

10. Get the star treatment (In other words, splurge a little. Don’t go crazy now, but you deserve a little splurging once in a while).

17 Tell us, therefore, what do You think? Is it lawful to pay taxes to Caesar, or not?”

18 But Jesus perceived their wickedness, and said, “Why do you test Me, you hypocrites? 19 Show Me the tax money.”

So they brought Him a denarius.

20 And He said to them, “Whose image and inscription is this?”

21 They said to Him, “Caesar’s.”

And He said to them, “Render therefore to Caesar the things that are Caesar’s, and to God the things that are God’s.” 22 When they had heard these words, they marveled, and left Him and went their way.

Matthew 22:17-22 (NKJV)

I love this story about Jesus and the Pharisees. The Pharisees were always trying to trap Jesus to get Him in trouble. Every time they never succeeded. They tried to outsmart Jesus and it just didn’t work! Isn’t it kind of funny how Jesus basically told the Pharisees off?

With Tax Day (April 17th) less than a week away, now is the time to start and finish your taxes if you haven’t already started! Jesus said pay your taxes so get on it! What more motivation do you need?

Get free tax software here.

You can download a free copy of TaxCut Premium software here. (Edit: this no longer works. It was for the 2006 edition but here are six ways to file for free.)

So if you haven’t started your taxes yet or don’t want to buy some tax software, just download this free version! When you add it to your cart, make sure you remove “Extended Download Protection” which is $3.99.

I just tried it out and it worked! I was able to download it for free but this may be for a limited time so YMMV (your mileage may vary).

God Bless!

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I just got my federal income tax refund direct deposited today! I got a “whopping” $202, which is pretty small compared to the average tax refund this year of $2,423, according to the IRS! I’m still waiting for my state refund, which is supposed to be $179.

If you haven’t already started on your 2006 taxes, get started now! The more you wait, the more you’ll keep putting it off. Get all your paperwork together and get the tax return done. If you have a refund due (which is two-thirds of you) then that should be enough incentive to finish your return and send it off. If you owe taxes, still get the return done, but wait until you file. I wouldn’t wait until the April 17, 2007 deadline, though, because of the mad rush close to the deadline. Instead file a week or two early to avoid the rush. That way, you’ll avoid the hassle and you’ll still maximize your money.

Don’t forget, tax day is April 17th this year! Only a month away! So get started now, or you’ll regret it!