College is one of the most important phases of everyone’s life as it provides experiences that are most valuable at a later stage. It is important to start being careful about money at this stage as there are greater chances to yield to temptation when you are a freshmen. Having finished four years of Engineering, i am reflecting upon the mistakes i had done and wonder how not making them could have enriched my life. But no regrets!!! Sometimes people have to make mistakes to learn the most important lessons in life.

As i was recounting my experiences in college, i thought why not make a post for freshmen on how to save money while on campus. This especially would be useful for students who stay away from home.

Be Vigilant:

From day one be cautious about money. Its a simple math as i have been repeatedly telling, spend less than what you have or if you want to spend more, earn more than what you spend. The choice is yours. Start preparing a budget. Personally i love the concept of writing down what i want to do with the money i have, gives me a sense of power .

Let your excess money earn for you:

Link your checking account to an high yielding online savings account. Let the money that you do not use, help you earn more. Have the habit of monitoring your account regularly. Using an online money management software to track your income and expenditures is a good option.

Be careful about credit cards:

Your campus would be lined up with offers life freebies for credit cards. Do not fall a victim as the interest rates would be higher. If you are a kind of person who knows the difference between conscious spending and impulsive spending then opt for a credit card and pay your bills on time. This could have a positive effect on your credit report and help you while acquiring a mortgage.

Make use of Benefits:

As a student you would get a lot of discounts. Be it on books, gym, music or food make maximum use of it.

Grab any Opportunity for Work:

If you have free hours , take a jab. You could teach for a few students and make money. Once you start earning a regular income, you could start contributing to your IRA. The earlier you start, the better.

While keeping in mind all the above, make the maximum use of your time to acquire knowledge. Do not forget to have fun but make sure you do enough to completely deserve the fun.

]]> http://www.8000credit.org/811/saver-campus/feed/ 0 http://www.8000credit.org/535/tax-benefits-people-seeking-job/ http://www.8000credit.org/535/tax-benefits-people-seeking-job/#comments Sat, 11 Jul 2009 10:04:22 +0000 Teena http://www.8000credit.org/?p=535 Most of the taxpayers spend their summer months in attending various career fairs. You can actually deduct some of your expenses which incurred while searching a job on the tax return. The IRS requires you to know some things on deducting your costs which are related to the job search.
So as to deduct the costs on job search, the expenses should be spent on a job search which is related to your current occupation. You will not be able to deduct the expenses incurred in your tax returns if you are searching for a job related to a new occupation. If you are getting paid by your employer for the employment agency charges incurred by you in a later year, you are required to include the amount which you received in the gross income up to the tax benefit amount which you received in the earlier year.

You will be able to deduct the spending on preparing and sending copies of your resume to the prospective employers if you are searching for a new job in the present occupation. You will also be able to deduct the travel expenses while going to and from an area for searching a new job which is related to your present occupation. The trip must have the primary aim of searching a new job. The primary aims for making such a trip can be determined by looking at the actual time spend on your personal activities compared to that spend on searching the job.

Deduction of these expenses from the tax returns cannot be done if you are taking a considerably longer time break between your old job and the time you actually start searching for a new job. Another thing is that you will not be able to deduct the amount if you are looking for a job for the first time. You can search for a new job and still get the expenses deducted in your tax returns provided you meet the requirements laid down by the IRS. This will enable many employees to search for new jobs.

If you think all the sectors in America are hit by recession then think again, besides installing solar energy panels, the IRS, a vanguard organization for public services has plenty of job opportunities available with it.

President Obama believes that an 8% hike would aid IRS in collecting an additional $17 Bn taxes via rampant tax enforcements. Obama has thereby increased the funding for IRS by $400 million for the 2010 fiscal year.

I see the noose tightening around corporate giants as the IRS Commissioner, Doug Shulman remarked that most of the funding would be used to monitor and enforce taxes on the international operations of such companies. The Obama administration intends to keep a tab on businesses that push filing for taxes by blaming the delay or lack of payment of taxes on the complexness of the capital markets overseas.

Shulman remarked that until now, IRS did not have sufficient resources to keep track of corporate taxpayers who operate in markets overseas. Shulman said that these corporates had enormous amounts of funds to hire tax and legal experts. This meant that the IRS was short of resources and overwhelmed by such returns. He feels that the IRS should recruit and retain experts in economics, examiners, law, finance and special agents who could explore the complex and advanced global tax matters. I feel that this is the major shortcoming of the IRS until now.

To me this feels like a bright future for all the personnel in corporate taxes who would want to jump the bandwagon into government sector. This would be truer for people who are skilled in areas of hybrid structures, financial instruments, tax withholdings and transfer pricing. There is better news for people who possess IT skills as IRS’s report lists that its plan to implement an online portal was a huge flop in the year 2008 post two years of efforts.

The reports state that the portal did not have a feasible, stipulator agreed, and an enterprise wide strategy. It lists furthermore that the organization in charge for formulating this project had had experienced financial challenges and therefore the CIO decided against funding the project as further advancement would have meant expenses on equipments. I feel this is unjustified as this project would have cost a mere $19.5 Mn, had it seen the light of the day.

Are the corporate tax pros listening to IRS? I feel this is an excellent opportunity for all you people out there.

In reaction to President Obama’s proposed plan on changing the income tax deferment rules for corporates, Steve Ballmer the Microsoft CEO warned that Microsoft would move a chunk of it’s operations overseas.

Bloomberg News reported that Ballmer remarked that he would move the jobs overseas if the purported international tax reforms are passed stressing on the fact that the current US taxes make hiring workforce in U.S. expensive.

President Obama believes that under the existing tax law, MNC’s “ship jobs overseas” as companies can instantly deduct costs on foreign investment from their taxes in the U.S. and putt off paying their taxes on profits earned overseas until it gets repatriated back to the country.

The latest tax plan released by the Treasury department aims to alter the deferral rules such that a company would not be able to receive deductions on the tax returns which support its investments overseas till the time it pays out taxes on its overseas profits, the only exception being spends on experiments and research activities. The plan would be effective in 2011. The Treasury department anticipates that this would raise tax revenues by an additional $60.1 billion during 2011-2019.

Obama’s move intending to increase domestic investments may actually backfire as Ballmer’s remarks indicate that such reforms might achieve opposite results as companies might be forced to operate their businesses overseas as a result of double taxation.

President of the Business Roundtable, John J. Castellani reacted to this by saying that the timing for this announcement couldn’t have been worse as it would cripple the companies in U.S. from competing with the foreign markets. He further added that this might result in more pink slips and dampen the economic growth as well.

Chief Economist Dr. Marty Regalia of the US Chamber of Commerce said that U.S. companies would find it difficult to compete in the global marketplace as it is the only industrialized country to pay double the taxes. He opined that deferral for U.S. companies is therefore necessary as countries overseas do not subject companies to double taxes.

Obama administration is facing opposition from business groups as they feel he is not addressing the global competitiveness of domestic companies and provide a thrust for investment activity by reducing corporate taxes. Currently corporate tax rate in U.S. is a whopping 35%, 2nd highest after Japan.

MNC’s in the U.S. pay out vast sums as other taxes along with corporate tax. The “Total Tax Survey”, which was released this year by PWC states that the 40 participant companies paid $94 billion in taxes in the financial year 2008 out of which state and federal corporate taxes constituted $28.5 billion. The participant companies paid out $122 billion as salaries and wages to 1.6 million workers in the U.S.

Corporations also facilitated the government in tax collections unofficially by collecting/remitting $169 as withholding/sales/excise/customer/employee taxes for every $100 of corporate tax.

In a meeting that was held at White House to review the path to recovery after the congress passed the extensive stimulus package early this year along with Vice President Joe Biden and other cabinet officials, president Obama said that although there is progress, there is still a lot that needs to be done in order to aid recovery.

President Obama feels concerned about the toll that lay offs have on family units and communities at large could be fortifying. He further added that spending has decreased due to lay offs which in turn affects sales for some businesses leading to further more layoffs.

The meeting was scheduled 3 days post the Labor Department’s release of report stating that unemployment figures increased to 9.4 % last month, though job cuts were less severe with 345,000 reported cuts.

Obama said that this was very encouraging and promised that the stimulus package would be spent with complete transparency such that taxpayers money is not spent wastefully.

The $787 bn Recovery and Reinvestment Act which was passed in the congress with enormous opposition from Republicans is estimated to create/save 3 – 4 million jobs by 2011. It is reported that the act created/saved close to 150,000 jobs in its 1st 100 days. Republicans pointed out that Mr. Biden has previously quoted on 13Th May that as many as 150,000 jobs were saved/created in 1st 77 days.

Since the onset of recession in December 07, U.S. economy lost close to 6 million jobs and another 2.9 million in the current year.

In an effort to loosen the Democrats’ power in the election-2010, Republicans debated that the recovery act is thoughtless bill for enormous spending which would make the country to accumulate huge debts.

Mitch McConnell, the Senate Minority Leader remarked last week that he doubted that the big stimulus package is actually going to produce any positive result, at least in the near future. He felt that the economy had the dynamics to recover all by itself even before the stimulus package starts producing any positive results.

200 waste & water systems in the rural regions, creation of 125,000 summer jobs; construction & maintenance of 98 airports at 1,500 different highway areas and a 107  national parks is what the accelerated stimulus spending is purported to achieve.

Of the committed $135 bn stimulus package by the White House only $44 bn has been utilized.

In a statement Mr. Biden expressed his intentions to speed up growth in the construction sector, spend more on recovery and create jobs for people.

More than a third of the humongous Recovery Act was to provide tax relief, with another major part committed to relief for local/state governments so that inflation in healthcare and education programs is kept in check without further raising the taxes.

The accelerated project consists of:

Extended health care assistance given to 300,000 patients at hospitals across U.S.

Financial support for 135,000 jobs in the education sector

Betterment of 90 medical centers for veterans

Hiring/maintenance of 5,000 law enforcement jobs

Cleanup of 20 Superfund locates

359 military facilities to undergo Construction and rehabilitation of 2,300 undertakings

The Labor Department reports that companies cut jobs by 345,000 in May as compared to 504,000 in April, which is a steady decline since Q4 last year putting to rest the predicted 520,000 by the market.

Nigel Gault, chief U.S. economist (IHS Global Insight- Lexington, Massachusetts) said that the decline in job cuts indicates that the market is recovering. Unemployment rates recorded beat the1983 benchmark, a shocking 9.4% in May vs. 8.9% in April attributed to job seekers who were not active but are approaching employers now.

John Canally, investment strategist and economist (LPL Financial, Boston) said one could hope for recovery of U.S. markets by 2009 end.

Government issued bonds rates declined steeply with 3.90% return on Treasury note, higher than the benchmark recorded in 10 years and highest since the past few months.

Dollar saw huge gains in a day and stocks closed with mixed results. The Central and Federal Reserve would have to retreat from the monetary aid as recovery begins.

Market players felt that the Labor Department figures are misleading as it considered fresh ventures and excluded obsolete jobs leading to an optimistic figure, however economists tend to disagree.

The 18 month long recession has been the most retentive after the great depression with 6 million job cuts till now, however Q1 09 figures show job cuts fell by 82,000 vs. the recorded 643,000/month.

Recent increase in house sales and customer confidence indicate economic recovery and growth by Q3 09. Job cuts and decline in home prices is coercing Americans to alter their buying and spending wont. Consumer borrowing as per Federal Reserve exhibited a decline of $15.68 bn in April as compared to $16.57 bn in March.

Job cuts slowed down throughout all sectors vs. previous months. Jobs in Construction fell by 59,000 in May vs. 108, 000 in April due to the $787 bn government bailout. Service industry eliminated 120,000 jobs in comparison to 230,000 jobs in April. Manufacturing industry cut 156,000 jobs in May as against 154,000 in April, mainly due to closure of plants after Chrysler’s bankruptcy.

Industry experts say that due to decline in demand firms had cut jobs by huge numbers and as a result were cutting fewer jobs now.

Healthcare and education sectors added 44,000 jobs vs. 13,000 the month before. Hospitality and leisure sectors added 3,000 jobs.

Government sector which added 92,000 jobs in April in line with census 2010 cut 7,000 jobs in May.

Economists believe unemployment rate will decline by December 2009 and would be 10% by 2010. In May a spate of new entrants in the job market accompanied by job cuts caused a sharp rise in the rate of joblessness.

Average hours of work/week declined to 33.1 vs. 33.2 in April. Average earnings/hour increased by 3.1% vs. last year from $18.54 vs. $18.52, smallest gain in the12 month period since 2005 end.

The job market falloff that measures unemployed people, workers partially involved with jobs and part time workers working due to economic conditions increased to 16.4% in May vs. 5.8 % in April.

Biden, formerly a regular rail commuter, said more than $100 million will be spent on replacing a bridge on the railway’s Northeast Corridor, while $82 million will go towards repairing rail cars. In addition to the Amtrak funds, the stimulus package also includes $8 billion to fund a high-speed rail network.

The stimulus package is aimed at saving jobs, putting people back to work and helping to restore the nation’s long-struggling passenger railroad. Carper said, “In the short term, this money will put a lot of Delawareans to work. In the long run, these upgrades would reduce traffic, oil consumption, greenhouse-gas emissions, and household transportation costs.”

Stimulus funds, $82 million will be used to repair 68 rail cars and return them into service, helping to boost capacity on heavily traveled routes. Speaking at Union Station, Biden said $105 million will be spent to replace a 102-year-old Connecticut bridge on Amtrak’s heavily traveled Northeast Corridor.

Amtrak Yard

Amtrak supporters, including Biden and Republican Transportation Secretary Ray LaHood, note that every national rail system worldwide survives on public subsidy, and feel that Amtrak should be no exception. Obama  administration officials added that ridership has been increasing over the last few years, and that stimulus money will create or retain more than 6,000 Amtrak jobs. Amtrak plans to hire workers who have been laid off from jobs at nearby manufacturing facilities that were recently closed.

The largest project to receive help is the aging drawbridge spanning the Niantic River near East Lyme, Conn. Repairs have been planned for 20 years, but were postponed due to lack of funds. Biden said further delays would lead to significant speed restrictions, slowing trains on the Northeast Corridor that run from Washington to Boston.

Upgrades also include $63 million to fix Amtrak’s aging power supply system on the Northeast Corridor. Problems with converters in Chester, Pa., installed in the 1920s, led to three power outages in 2006 that inconvenienced passengers for hours, officials said.

Riley said, “We are going to put on 50 workers at Bear, so it’s going to help employment. As far as the trains are considered the upgrading of the track has to be done. We’ve got trains that will go 170 to 200 miles an hour, but the highest they can go is 160 because of the track”.

About $105 million will be spent on long-deferred repairs at Amtrak stations, maintenance shops and buildings nationwide, including the Wilmington heavy locomotive shops and Bear shops.

Sen. Tom Carper, D-Del., said the funding includes money to refurbish 59 train cars at the Amtrak shop in Bear and $3 million for security upgrades in the state. About 450 work in the Bear car shops, and about 500 work at Amtrak’s Wilmington locomotive repair center. The railroad carried a record 28.7 million people last year.

Amtrak Promotion Code

If you know any Amtrak Promotion Code, write it below. I will also periodically keep updating it.

The Federal Stimulus Bill mostly emphasizes on spending increases and tax cuts to revive a badly ailing economy. The package includes aid to states and local governments to help them avoid cuts in medical coverage and school funding. The bill also would extend unemployment benefits and give unemployed workers subsidies for health care coverage.

About 3.6 million jobs have been lost since the United States entered a recession in December 2007. The world’s largest economy contracted by 3.8% in the last quarter of 2008 and most economists predict even worse in the current quarter. So the major portion of the tax relief in the bill would go to individuals which include a $500 refundable tax. There is also emphasis for traditional job creating programs such as highway construction and mass transit projects.

Apart from that tens of billions of additional dollars would be distributed to the states, which face the prospect of deep budget cuts of their own. This money marks an attempt to ease the recession’s impact on schools and law enforcement agencies. With funding for housing and other provisions, the bill also makes a down payment on Osama’s campaign promise of creating jobs that can reduce the nation’s dependence on foreign oil.

Obama’s Stimulus Package Details and Breakdown 2009

Now let’s have a close look at the whole $ 819 billion stimulus check and see how the money is going to be distributed among various sectors. We can do by breaking it up in to the broad areas in which it is panning to help.

Direct Payments

First of all the stimulus bill’s spending are divided in to direct payments to individuals (includes unemployment compensation or tax credits) and purchases of goods and services, either directly by the government or indirectly in the form of grants to states and local governments.

Now let’s have look how the entire boll amount will be distributed among various sectors

Tax Breaks

The House would pull over around 64% of the entire package or $525 billion in to the country’s economy within 19 months through spending and tax breaks

Health, Human Resources, Education and Labor

In the Stimulus package $91.3 billion has been reserved for these sectors. But most of the funds in this portion would not be spent before September 2010. Only about half of the cash proposed to renovate elementary and secondary schools would be used in the next 19 months.

Medical Provisions

An estimated $ 89.7 billion dollar has been devoted for the medical sector in the stimulus package. Most of this money will be made available between 2009 and 2010.

Tax Credits

An estimated $ 82.1 billion has been reserved for tax credits and the major half of which will be distribute within the next two years

Transportation and HUD

$ 62.3 billion dollar has been allotted to this sector of which just one third will be allocated for highway construction by the end of fiscal 2010.The rest will not be touched now.

State Fiscal Stabilization Fund

A total of $ 79 billion in this stimulus package is reserved for  this fund which will be administered by the Education Department .The programmed will help the  state and local governments  to fund education and other services in order to ease the pressure on them.

Miscellany

Some other areas covered by the economic stimulus package are as follow:

$ 48.9 billion is allotted to the Water and Energy sector

$ 47.7 billion for unemployed workers and struggling families

Health insurance assistance for the unemployed will cost $40.8 billion

$ 26.9 billion for Agriculture, Nutrition and Rural Development

Health Information receives $ 20.2 billion

Now I am sure you will have a lot of questions for the government tax man so I am publishing the IRS help line below.

Contacting the IRS By Phone

I’ve listed the phone numbers for the IRS below.

Expect to wait on hold:

I tried calling up IRS stimulus number but not suprisingly like most other support numbers I was greeted by a nice message that told me the IRS was experiencing heavy calls volumes regarding the economic stimulus/rebate. I didn’t wait to see how long it was going to take. However from other accounts I have heard that you might as well put it on speaker and go about your regular job untill your hear somebody from the other side.