Understanding IRAs

Understanding IRAs

An individual retirement arrangement (IRA) is a personal savings plan that offers specific tax benefits. IRAs are one of the most powerful retirement savings tools available to you. Even if you're contributing to a 401(k) or other plan at work, you might also consider investing in an IRA. What types of IRAs are available? The two major types of IRAs are traditional IRAs and Roth IRAs. Both allow you to contribute as much as $6,000 in 2021 (unchanged from 2020). You must have at least as much taxable compensation as the amount of your IRA contribution. But if you are…
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Tax Tips: Homeowners Insurance

Tax Tips: Homeowners Insurance

The purpose of home insurance is obvious. The tax rules surrounding home insurance, though, aren't always so clear. For example, if your insurance won't cover you for a given loss, are you simply left holding the bag, or can you expect some tax relief? And what about premiums--can you deduct them or not? Here are some tax tips to help you make sense of it all.   If your home or possessions are damaged, destroyed, or stolen, you may get a tax deduction If you suffer a home-related loss, begin by reading your homeowners policy carefully to find out what…
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Qualifying for the Home Office Deduction

Qualifying for the Home Office Deduction

Working from home can certainly provide you with personal benefits, such as a flexible schedule and more family time. But increasing numbers of people are discovering the tax advantages as well. It's no secret that you generally can't deduct certain personal expenses (e.g., homeowners insurance, utilities, and home repairs) on your federal income tax return. But if you're using part of your home as a home office, you may be able to write off part of these expenses. To qualify for the home office deduction, you must first understand the IRS requirements. The home office deduction is really a group…
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Caring for Your Aging Parents

Caring for Your Aging Parents

Caring for your aging parents is something you hope you can handle when the time comes, but it's the last thing you want to think about. Whether the time is now or somewhere down the road, there are steps that you can take to make your life (and theirs) a little easier. Some people live their entire lives with little or no assistance from family and friends, but today Americans are living longer than ever before. It's always better to be prepared.   Mom? Dad? We need to talk The first step you need to take is talking to your…
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Repaying Your Student Loans

Repaying Your Student Loans

You vaguely remember signing a form every year at college registration time. Now that you've graduated, it's all become painfully clear — those forms were promissory notes detailing your student loan obligations. Your loans aren't going away, and you'll want to repay them as quickly as possible. So whether you have a small sum or a small fortune to pay off, it's helpful to brush up on some student loan basics.   First, remember the grace period After you graduate, you'll probably have a lot to think about — deciding where to live, finding a job, renting an apartment. Fortunately,…
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