Tag: tips and tricks

Need Help Managing Your Money? Try These Top 10 Budgeting Apps

It’s said that no one likes making a budget, they only like having a budget. If that’s true, then there are at least 10 apps to help make it much easier for you to not only have a budget but also to follow it. Although each of these 10 budgeting apps features slightly different characteristics, all of them have two important goals:  1) To help you understand where your money goes and 2) To keep you from spending more than you have. With these goals in mind, let’s take a closer look at each of these top 10 budgeting apps that just may help you stretch your dollars.

 

  1. Mint – Nearly all reviews of budgeting apps include Mint on their lists for one primary reason: It tracks everything when it comes to your money. Bill alerts, account balances, investments, loans, bank fees, credit cards, even cash transactions are all accounted for in Mint. Based on these and other factors, Mint configures your budget and instantly calculates your net worth.

 

Need Help Managing Your Money? Try These Top 10 Budgeting Apps
Nearly all reviews of budgeting apps include Mint on their lists for one primary reason: It tracks everything when it comes to your money.

 

  1. YNAB – “You Need a Budget,” thus the acronym. Rule #1 in YNAB is to “give every dollar a job.” Assigning your income dollars to expenses shows how much you have left for discretionary spending, saving, or getting out of debt.

 

  1. Wally – Wally is more than a budgeting tool. It’s a personal finance app. Wally performs all the budgeting functions while also helping you keep track of – and stay abreast of – your progress toward your financial goals.

 

Need Help Managing Your Money? Try These Top 10 Budgeting Apps
Wally is more than a budgeting tool. It’s a personal finance app.

 

  1. Simple – Just as its name implies, easy-to-use Simple tracks expenses through your bank accounts. You can set and track savings goals as well as instantly check your “safe-to-spend” amount, which keeps you from overspending. Note: Just so you don’t confuse other apps for this one, Simple is called “Simple – Better Banking” in your favorite app store.

 

  1. Pocketguard – Instantly providing you with the “big picture” of your finances, Pocketguard also uses a pie chart to help you keep aware of spending against your budget while reminding you of your “in my pocket” balance – the amount you have to spend minus your bills. Pocketguard helps you set and track savings goals, as well.

 

Need Help Managing Your Money? Try These Top 10 Budgeting Apps
Pocketguard helps you set and track savings goals, as well.

 

  1. GoodBudget – Remember when budgeting meant labeling envelopes and filling them with cash to pay your bills? GoodBudget uses the same idea but in a virtual budget program. You can track your “envelope” balances on your way to reaching your most important financial goals.

 

  1. Mvelopes – Using the same concept as GoodBudget regarding virtual envelopes, Mvelopes adds additional levels of service (for a fee) up to and including having the help of a personal finance trainer. Choose from three levels of subscription budgeting service: Basic, Plus, or Complete.

 

  1. Albert – The Albert personal finance app – and Albert Genius, an additional service – carry out similar savings, spending, and tracking functions as other budgeting apps but with the added twist of offering a team of financial experts whom you can text with specific questions about your personal finances and spending.

 

  1. Trim – If your focus is mostly looking for ways to save money, then Trim is the app for you. Connect your accounts, and Trim will analyze your spending to find money-saving opportunities for you. Additionally, Trim offers automated tips to lower your monthly expenses based on your transactions.

 

Need Help Managing Your Money? Try These Top 10 Budgeting Apps
Trim offers automated tips to lower your monthly expenses based on your transactions.

 

  1. Everydollar – By simplifying the budgeting process, Everydollar can develop your personalized budget in 10 minutes or less, based on your account and expense input. Charitable giving and emergency fund savings are included as part of your overall plan.

 

Because handling money – and money matters – go beyond having a budget, Donohoo Accounting can help you. We are a professional accounting services provider, dedicated to helping our clients overcome the challenges and burdens that individuals and small businesses face. Call us today at 513-528-3982 for a free consultation.

 

The 5 Smartest Options for Using Your Tax Refund

Many people treat their tax refund like a bonus they weren’t expecting. Others act as if they randomly hit a small lottery jackpot. These attitudes result in people spending their refunds almost as quickly as they get them. Although it may not seem like that big of a deal, a tax refund of any size can be a great opportunity to make real progress with different financial goals.

 

If you want to use your tax refund in a way that will continue benefiting you instead of quickly fading away, here are the five best options:

 

  1. Knock Out High-Interest Debt

 

Debt like credit cards, payday loans or other high interest loans makes it nearly impossible to get ahead financially. Using your refund to reduce or eliminate these types of debts can take a major strain off your finances. If you’re free of those forms of debt, you can also look at putting some of your refund towards paying down student, car or home improvement loans, as well as a second mortgage if you have one.

 

  1. Start or Build Up an Emergency Fund

 

Although personal finance experts may differ on some topics, one issue that’s pretty universal is the importance of having an emergency fund. This fund can keep you on track even if something comes up out of the blue. One thing to keep in mind is you want your emergency funds to be accessible, so don’t worry if the interest you earn on this specific amount is minimal.

 

  1. Pay Down Your Mortgage

 

When you look at average families across the US, what they pay in mortgage interest is often their second biggest lifelong expense. It’s not uncommon for interest to add up to 3/4 of the principal amount of a mortgage. Given that huge expense, paying down your mortgage sooner is very smart. Using a lump sum like your tax refund will definitely make a big difference over the long-term.

 

  1. Get a Jump on Reducing the Taxes You’ll Owe

 

Give yourself a pat on the back if you’ve taken care of the first three options prior to receiving your refund. Since you’re in a position to be a little more strategic, really good options include taking steps like increasing IRA or 401k contributions to minimize your tax burden next year.

 

  1. Improve the Value of Your Home

 

Just like what we discussed above, being financially healthy provides a lot of freedom in regards to making good use of your tax refund. A great area to consider is using what you get to make improvements that will add value to your home.

 

If you want professional help doing your taxes this year, call us today at 513-528-3982

How are “bonuses” taxed? Different than regular wages?

As an employee, getting a raise is exciting for a few important reasons. Not only does it validate what you’re contributing to the company, but it also means getting a bigger paycheck every two weeks. Getting a bonus is also a great validation of what you’re doing at work every day. While a bonus comes with plenty of excitement, it can also create a little confusion. The reason that type of confusion is so common is people aren’t sure what effect a bonus will have on their tax filing.

 

What Does the IRS Think of Bonuses?

Supplemental income is the label that the IRS uses to classify bonuses. This label is used for other benefits like payouts for accumulated sick leave, severance packages, moving pay and vacation pay. So you have your regular salary, and then anything else you receive goes in the supplemental income category. While that information is helpful, it doesn’t fully answer the question of how bonuses are taxed at the federal level.

 

Flat Rate vs. Aggregate Taxes

The most common method employers choose for taxing bonuses is flat rate. As long as a bonus is separated from regular income and under one million dollars, it will be taxed at a rate of twenty-five percent. In the event that a bonus does exceed one million dollars, the tax rate goes up to 39.6 percent.

While most employers go with the flat rate method to handle the taxation of bonuses, there is another option available. Known as aggregate taxing, this approach involves adding bonuses to the latest paycheck and taxing the entire amount together. Not only can this method be a little more complex to process, but another reason it’s not as popular is it often results in a higher withholding, which means an employee will be left with a larger tax burden. It’s important to note that regardless of which method is used, bonuses are also subject to Social Security and Medicare taxes.

 

How Bonuses Are Taxed in the State of Ohio

On top of making sure your bonus is properly accounted for when you file at the federal level, it’s also important to understand your state obligations. According to the Ohio Department of Taxation’s website, “the rate is at least 3.5% percent. Ohio Administrative Code 5703-7-10 provides that withholding agents must withhold at least 3.5% on supplemental compensation such as bonuses, commissions, and other non-recurring types of payments other than salaries and wages.”

If you have any additional questions about bonuses or other tax issues, you can reach Donohoo Accounting Services by calling 513-528-3982.

What You Need to Know About Tax Extensions

Although it’s always best if you can get your return filed on time, there are plenty of situations that come up which prevent people from being able to file their tax return by the date it’s due. These types of delays are actually quite common with professions like securities traders. One of the reasons that traders tend to struggle with hitting the tax filing deadline is they face more complexity than employees with easy-to-report W-2 income, portfolio income, and itemized deductions. Traders have involved trade accounting issues, trader tax status analysis and reporting strategies, business vs. investment expenses and other unique considerations.

 

Whether you’re a trader, business owner or just someone who needs time to get everything together required for filing your tax return, here are some helpful tips on getting an extension to file:

 

The Automatic Six-Month Extension

 

The simplest way to get the extra time you need to complete and file your tax return is by using Form 4868. Known as the Application for Automatic Extension of Time To File US Individual Income Tax Return, this form doesn’t require a reason to request an extension. However, it’s very important to understand that what the form gives you is an extension of time to file a complete tax return, not an extension of time to pay taxes owed. Even if you use this form, you will still want to estimate and report what you think you owe based on your tax information received.

 

Understanding State and Federal Penalties for Being Late

 

On the same form mentioned above, you can see a detailed explanation of federal late-payment penalties and late-filing penalties, including how to request penalty abatement. While it’s best if you can pay the full amount of what you think you owe, paying something is better than not paying anything. A general rule of thumb is the late-filing penalty is ten times more than the late-payment penalty. That’s why even if you can’t pay in full, you should file your tax return or extension and pay as much as you can.

 

Do You Need to File Quarterly Taxes?

 

After going through the process of filing for an extension and then getting your tax return filed within the six-month window, you may decide that you want to avoid going through this additional stress again. One option for individuals like traders, business owners and freelancers is to make quarterly estimated tax payments during the year to avoid underestimated tax penalties

 

If you need help with an extension or any other aspect of your taxes, you can have a free consultation with a member of the Donohoo Accounting team by calling 513-528-3982.