Posts Tagged ‘Mileage’

Tax Credits and Deductions

May 27th, 2011

Your goal when preparing your taxes is to try to reduce your gross as much as possible. Tax credits and deductions are the tools you use to cut your gross down.

Most people focus on tax deductions when preparing their taxes. It is the most common of terms and understood by just about everyone. If you are new to the process, a tax deduction is simply an amount that you can subtract from your gross earnings. For instance, you might own a small business and drive a lot. The business mileage is deductible, so you should be able to claim a deduction for the mileage times the appropriate rate per mile allowed by the IRS. Once you claim all your deductions, your gross will be reduced to a number called a net profit for businesses or adjusted gross income for personal taxes.

Tax deductions are held up as the great tool for the masses. I scoff at tax deductions. They are helpful, but pale in comparison to the mighty tax credit. Let me make it clear. My tax credit will crush your tax deduction just about any day. Most people fail to look for tax credits when preparing their returns. Heck, many people don’t even know what they are. Let’s take a look.

A tax credit is a beautiful thing. Why? Well, it is not helpful like a tax deduction when it comes to reducing your gross. It is far more powerful. A tax credit is deducted from the tax you owe. Let that sink in for a minute. It is a dollar for dollar reduction of the amount you determine you have to pay the IRS after figuring out your net profit or adjusted gross income. Let’s look at an example.

Assume I suddenly decide to adopt a child. The federal government thinks this is a noble goal and it is going to reward me. I am going to get a tax credit of roughly $10,000 or so. I go ahead and prepare my taxes for the year. After deducting everything legitimate, I end up with my adjusted gross income. I flip over to the tax tables and discover I owe $11,000 to the IRS. Yikes! Wait a minute. I get to deduct my $10,000 tax credit. Now I only $1,000! This is the value of the tax credit.

Tax credits are incredibly powerful ways to knock down your tax liability. Claim as many deductions as you can, but make absolutely sure to claim every tax credit possible.

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Motorhome Insurance Top Tips

September 3rd, 2010



One of the most common mistakes people make when taking out insurance for their motorhome is insuring the motorhome under a standard car insurance policy. It may seem that the policy is very similar, but it could leave you without the correct cover.

For example – a specialist motorhome insurance policy will cover your camping equipment as well as your vehicle. Options such as new for old cover are often limited under a car policy.

Another consideration when comparing insurance policies for your motorhome is whether breakdown cover is included. As with any breakdown service, the one provided with your motorhome insurance policy could prove invaluable should your motorhome breakdown whilst on holiday. Good questions to ask your breakdown provider is whether there are length or weight restrictions for the service they provide and whether they have coverage in Europe. You may think you have been sold specialist motorhome breakdown cover, only to find that your vehicle is too long or too heavy to be recovered, leaving you stranded.

If you secure your motorhome with an alarm or tracking device, look for insurance companies that will recognise this and reward you with insurance discounts. You should also be able to earn a no claims discount on your policy and even get a discount for being a member of a motorhome club or online forum, so check what discounts you are entitled to.

Extra cover benefits such as European cover and European breakdown may be available at extra cost, therefore, if you don’t plan to travel outside the UK, you could ask for these benefits to be removed, saving you money on your premium. Another way to reduce your premium is to limit the mileage in your motorhome each year or increase your voluntary excess if this is possible.

When ringing around for insurance quotes, remember to ask the right questions and only pay for the cover you need.

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Is Your Plumber Price Gouging?

April 11th, 2010

Most plumbers are dedicated to working hard for what they earn. There will always be scam artists, however, and the last thing you want to deal with is a dishonest plumber. But how do you know if your plumber is price gouging?

Hidden Costs

You’ve probably had to look for hidden costs in other industries. Don’t assume they can’t exist in the plumbing industry. One method of price gouging is to fail to tell customers about hidden costs that will eventually be added to the bill, often at inflated prices.

Hidden costs your plumber might charge can include mileage for the drive to your home, time to shop at stores for parts and consultation fees. Avoid price gouging by asking for a written contract that plainly describes all the fees you will owe.

It is also a good idea to know what the average plumber charges when it comes to fees. Never hire a plumber without first researching average plumber prices. Call several and ask for ballpark estimates you can compare. The actual prices might vary once the plumber surveys the problem at your home, but at least you’ll have a general idea.

Product Inflation

If your plumber has to replace pipes or parts in your home, he will need to get those parts at a hardware or plumbing store. Another form of price gouging occurs when a plumber inflates the cost of the parts he purchases. For example, he might say that your toilet costs $180 when it actually only cost $150.

You have to be careful with this type of price gouging, because it can be small and therefore difficult to detect.

To avoid price gouging through product inflation, ask for receipts of all items purchased. If the plumber already has the products in stock, research the specific item on the Internet or at the hardware store to get an idea of what your plumber paid.

In some cases, a plumber might use a substandard product and charge you for better materials. When a plumber is working in your home, avoid price gouging by actually looking at the products he uses to fix your plumbing. If they don’t look similar to the grade of materials he says he is using, call him on it.

Don’t Get Scammed

Even the most savvy consumer can make mistakes when it comes to whether or not a plumber is price gouging. You can reduce your risk, however, by exercising due diligence with every professional you hire.

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