Guest Post: Higher Social Security Taxes

Although tax season is over, tax questions arise year round. My husband is an experienced accountant and will be answering questions sent to me at momondeals@yahoo.com

Question: (Thanks Luxury Living Frugal Style)
I read an article on Yahoo saying that Social Security Tax is being raised. The article said that in 2012 the rate will go up to 12.4%, meaning 12.4% of a self employeed person's income goes straight to Social Security Tax. Is this true?

Answer:
Social Security tax has always been 12.4% except this past year because in 2011 the government gave a reprieve making the tax only 10.4%. Starting next year it will go back to 12.4% as its always been. However tax laws change a hundred times in the tax year so it could be less or more by the time tax season rolls around again. On another note, don't forget Medicare will still be applied, so really self employed individuals will pay 15.3% (as its always been).


*Please keep in mind this post is for informational purposes only and answers given are very general. Many things depend on individual circumstances. Please contact your personal accountant or financial advisor for your particular situation.

photo credit: austinpost.org

Thank you Mom on Dealz!

10 Tips about Daily Deal Sites!

It might just be me... but doesn't it seem like there is a new daily deal site ( like Groupon, Living Social, etc.) popping up every day. So, Budget Savvy Diva did some research and came up with: Ten things you should know about Daily Deal sites. Thanks, Mr.Savvy for writing this article!

1. You may not be getting the discount you think you are getting. Some businesses change their prices outright. Others simply charge everyone more and bank on selling the "deals". Try researching a little bit and make sure you read fine print before you buy.

2. You might not be able to cash in. Most people wait until the discount is about to expire and then supplies, or services may be unavailable. It is a good idea to call a restaurant, instructor, guide, etc. and schedule as soon as you can.

3. Since deals cannot be classified as either gift card or coupon, rules regarding expiration and refunds are vague. This has lead to three lawsuits so far, all pending. Some merchants are getting more specific in regards to this, but you may end up with less than you bargained for.

4. If the deal site goes under you could be stuck with the bill. Some merchants may still honor your discount, but it's entirely up to them. There has been an explosion of daily deal sites, over 600 now and they don't all cut mustered in such stiff competition. Make sure you've researched not only vendors but the deal site you buy through.

5. 40% of vouchers don't get redeemed. It's a high possibility you won't even cash in on your own coupon. Some reasons include, forgetfulness, busy schedule, poor gift choice... For the site, however, it is a selling tool to entice venders. If you wind up with a voucher you can't use, there are sites such as couprecoup.com and dealsgoround.com that help you unload it, but better not to spend the money to begin with.

6. There may be even more fine print in the future. Though roughly 66% of groupon merchants enjoyed success, that remaining third made headlines. Groupon leaves it open for merchants to specify the details of the deal, which could result in more upselling than saving.

7. The deals often are extended on the premise that businesses will attract new customers, but data is showing that they often attract stingy penny pinchers who are unlikely to spend more than the voucher amount, become a repeat customer, or tip. This means that the value for merchants is low and more trouble for customer service reps than it is actually worth, so they may pull the plug on daily deal site offers.

8. You are often times getting a half off discount on something you would never do. Even if you cash in on it you are still way overspending. Some people rack up huge expenses on a series of expensive opportunities, simply because the percentage off is good without accounting for the dollar amount.

9. The deals aren't special or exclusive... for long. Limited time offers often show up on other sites as soon as two weeks after one is expired. Merchants are also likely to have the same offer on their own site, facebook, or twitter.

10. Though they try to do effective merchant checks, the need to post deals sometimes outweighs their research or discretion. The bigger the deal site gets it's harder to find useful merchants and they become a target for companies who are building negative reputations.

Do you use Daily Deal Sites? If so which one's and why

Thanks Budget Savvy Diva for sharing this informative post!

Guest Post: Ask an Accountant

This is a guest post written by a professional accountant for Mom On Dealz!

Recently, I have received numerous requests for assistance in "setting up" blogs from a tax perspective, so I figured I would address this to give a basic understanding of the options that are out there & compare them.

Let's start with the need behind organizing the entity.

1. Taxes - a necessary part of our economy...nobody likes to pay them, but without a tax structure, we would not be where we are today as a country.

2. Liability protection - we want to protect and seperate our personal assets (homes, vehicles, bank accounts) from any business activities in the event there is a problem, error, or mistake another person or entity can hold you liable for. You do not want the legal system to use these personal assets for retribution.

Here are the different types of entities:

Let's start with the sole proprietor. From an administrative standpoint, this is the most simplistic. There are no additional tax forms, as the income is reported on your 1040, however, this essentially is an extension of you personally, and any income from these operations are considered Self Employment income and come with an additional Self Employment Tax in addition to your regular income tax rate. Self Employent Tax can be estimated at approx. 15% of the self-employment income. The drawback here is there is no liablitity protection in the event of litigation.

The next option, is an LLC. They have become a very popular business form for new entities, and many existing entities have converted to this form. They exist in some form in every state. They combine limited liability features of corporations and pass through characteristics of partnerships and S corps, but are more flexible than S corps. For federal tax purposes, LLC's are treated as partnerships (unless they elect otherwise). There is one exception, a Single-Member LLC, which retains the liability protection, but is taxed as a sole-proprietor. The profit from these entities also trigger Self-Employment tax.

Finally, Corporations: The S Corp (so named from a chapter of the tax code) is a regular corporation with regular limited liability, whose owners elect "pass through" status meaning the corporation itself pays no tax. The profit is passed through to the owner and the tax is paid on the owner's 1040. Corporations whose owners don't choose to make the federal S corp. election-that choose to be taxed as corporations-are called C corps and pay tax a higher corporate tax rates. The benefit here is there is no self-employment tax on the profits.

*Please keep in mind this post is for informational purposes only and answers given are very general. Many things depend on individual circumstances. Please contact your personal accountant or financial advisor for your particular situation.

photo credit: austinpost.org

Thanks Mom on Dealz for sharing!

Guest Post: Paper Lunch Bag Photo Album

This post was written by a fellow blogging friend at This Mama Loves Her Bargains! She shared this awesome post with us: Paper Lunch Bag Photo Album Tutorial.

I love making crafts with and without my kids. Pre-kids, I had so much time to scrapbook and make photo projects, and to be honest, I've missed doing it. Recently a friend of mine, Jen, introduced me to the world of making paper lunch bags into photo albums, and I love them so much I felt like I had to share with you all! You can do these without photos if you want- what a cute idea for kids to make and showcase their own story for mom or grandma, or for a friend, and tuck momentos into the bag openings!
One thing I love about this project is that most of it can be done with things most of us have at home already, and little kids can make one too- we've made several and as long as I can get the holes punched and tie things together, my 3 and 5 year olds can do the rest solo!

Supplies:

• paper lunch bags (I used the larger size in brown but you can use any you want- usually something everyone has at home already!)
• adhesive (we're big on Elmer's for adhesives in this house and used their glue sticks, glue-all and glue dots for this project)
• scissors
• hole punch
• ribbon- curling ribbon, grosgrain, really anything works! twine or raffia can be used as well
• scrapbooking paper (again, you can just use any paper you have, although with photos acid/lignin free is definitely best)

Assembly:
Step 1: Gather your supplies!

Step 2: Stack your bags (3-4 works best, 4 will be a little tougher to get your hole punch through) alternating the stack with open end, closed end

Step 3: Fold stacked bags in half (you want a good crease if possible just so it helps stay in position when punching the holes)

Step 4: Punch holes so you can get your ribbon to tie

Step 5: Tie ribbon through holes

Step 6: Decorate (we used $1 scrapbook packs from Target- 6 pages all coordinating but you can really use just about anything)

Step 7: You can also do some cardstock or double up paper to cut to the size of the bag opening and tuck in for extra photos. We like to put a tab of some sort onto this to make pulling it out easier.

Step 8: Add photos, stickers, writing if you like- or let the kids write a story or poem and illustrate it and mount those onto the pages, and VOILA!

This is SUCH an easy craft and so much fun to do, and a really nice way to make a gift from the heart that will be enjoyed for a long time. You can really dress these up with fancier supplies and tools or keep it fairly simple as we do. There's plenty of time to make one for Mother's Day if you'd like!

(Some samples of product were received, but all opinions expressed within are my own)

Kids Frugal Fun: Mother's Day Crafts!

Each week Mom On Dealz brings you a craft you can create with your child that is both frugal and educational. This week she focuses on Mother's Day crafts. You may be thinking, "I don't want to create my own gift!". If this is how you feel, pass the directions onto your husband or another adult. I personally think it makes the gift even more special if you help your child create it because now you not only have a gift, but every time you look at you will remember the experience of helping them make the gift.
There are so many gifts for Mother's Day on the internet and in books; I have tried to pick a couple of the most frugal ones that allow you to use materials around the house.

Recipe Card Holder

Materials:
Small envelope box
Wrapping paper, brown paper bag, or construction paper
Markers, crayon, glitter, any other decorative items
Glue or tape
Index cards
Recipes from internet or magazines

Directions:
1. "Wrap" the empty envelope box with your choice of paper.
2. Decorate the outside of the box and labe the top "Mom's Recipes".
3. Cut the recipes out and glue or tape them onto the index cards.
4. Fill the box with recipes!

Photo or Memory Box

Materials:
Empty shoe box or diaper wipe container
Wrapping Paper of your choice
Tape or glue
Markers, glitter glue, other decorative items

Directions:
1. Wrap or decorate the outside of your box or container.
2. Label the box "Mom's Favorite Photos" or "Mommy/Name of Child" Memories
3. Fill with loose photos or scraps of paper with favorite mommy/child memories. You can also present it to Mom for her to fill. We filled ours with a flower Will made at Easter and a framed photo of the boys.

Kid's Easter Project: "Empty Tomb"

Here's a great idea to do with the kids to help them understand the reason for Easter. Saving Toward a Better Life did this with her preschool class this week and the Bargains family made them the other day, too!!

Would You Pay to Try on Clothes?

Stores in Australia are demanding shoppers pay as much as $50 to try on garments – a fee which is refundable if they decide to purchase the item.


Guess why they are doing this:

The move is said to prevent people from trying designer items in-store, then buying them online at a discounted price. Also, noting that the stores employees time is valuable – and should be paid for the “annoyance” of opening up the changing room door…

Many owners are stating that they want to ensure that if he doesn’t get the sale, at least he pays for their time.

Stores that have this fee have seen a raise in income.

Can you believe this?

Wonder how long till the United States stores start doing this?

Thanks! Daily Mail UK for the information and Budget Savvy Diva for the post!

TLC: "Extreme Couponing" Coupon Fraud.

My fellow blogging friend at Budget Savvy Diva has written a post about the new TV show "Extreme Couponing." I'm not sure if any of you have been watching, but it's very popular right now. If you saw the first episode they aired last week, couponer Jaime was filmed using a quite unusual shopping method. If you've been couponing for anytime at all, you know your list usually has food items listed on it. Well her's was a list of codes by manufactures. Real Couponers do not shop this way!  Well Budget Savvy Diva wrote TLC to question why they were filming someone that was teaching unethical methods of couponing and here's what they had to say:

I have AWESOME news about the whole Coupon Fraud saw on TLC's Extreme Couponing a few weeks ago. Here at Budget Savvy Diva we feel strongly about exposing this as much as possible - because what she did effects all of us - making it harder to use coupons in the future.

To find about the whole controversity read some of these articles.

Extreme Couponers: J’Aime’s coupon fraud ON TV

MUST READ: TLC’s Extreme Couponing PROMOTING COUPON FRAUD!!!

In the most simple terms this couponer Jamie as shown below on National T.V committed coupon fraud which she was caught for a year before. She also teaches couponers in a coupon class all about it --- for a pretty penny -- $35.00 !!!!!!

What she does wrong:

- There is a way to figure out coupon codes.

You see the bar code ?

There are numbers under the bar code - well you take the first set of numbers and you look for UPC on products from the same company and if they match up the coupon CAN be used on that other product. So people will take a high value coupon for one product and use it on a low cost product - sometimes being from completely different products. Like using a toothpaste coupon on detergent.

This is what she does - and she is proud of it.

"The Couponer Under Fire Jamie"

The repercussions of such couponing are large... such as lower value coupons and more extreme restrictions at store like Krogers

Well Budget Savvy Diva along with other upset couponers let TLC know how they felt - and TLC has FINALLY responded.

TLC said in an statement to EW: “We have received a strong response to the premiere and are listening to and reading the various comments around the show — as with all programs, we appreciate the feedback. While the series documents extreme couponing strategies, we take any concerns about specific tactics seriously and are looking into the situation.”

Do you think anything will happen??

Did you know????

What are the penalties for coupon fraud?

Longest prison sentence: 17 years
Highest financial penalty: $5 million
Prison sentences of three to five years are not uncommon. Financial penalties generally vary, but have often been in excess of $200,000.

Check out MORE Fake Coupon Alerts HERE

This post is from Budget Savvy Diva!

I have been able to hook up my readers with some Winnie the Pooh coloring pages - enjoy!

Finally, because Easter wouldn't be complete without Painting and Decorating Eggs, below you will find some fun ways to design your eggs in the spirit of Winnie the Pooh and Friends!

WINNIE THE POOH is our beloved `hunny'-loving bear, so why not choose one of his favorite things - a honey jar – to create as an Easter egg? You want it to look like a real honey jar so use tape to cover the top of the egg where the lid will be and also a wide strip of tape around the middle for the `HUNNY' label. Boil half a cup of water, mix in 30-40 drops of blue food dye, and one tablespoon of white vinegar. When it cools, gently lower the egg into the pot. The longer the egg remains in the pot, the darker the color gets! Once you are happy with the color, take it out with a spoon, dry it and remove the tape. Then stick the word `HUNNY' in tape to the egg, and pop it back in the pot, just for a few seconds to make the `label' pale blue. Finally, you can use acrylic paint for a blob of honey and leave the word `HUNNY' in the egg's natural color. If Pooh could see your Easter egg, he might think it looked so much like a honey jar that he would keep it in his personal collection!

TIGGER would be ecstatically happy about painting Easter eggs. You could have a go at painting an egg that looks like Tigger! First, use an orange watercolor crayon to paint the entire egg orange. While it dries, bounce around a bit – Tigger – style! Then draw in the tiger stripes with a steady hand and a black marker and fill them in with a black watercolor crayon. You can use a pink button for the nose and draw on eyebrows, eyes, mouth and whiskers with the black marker. Tigger-tastic!

EEYORE we all know would probably be less excited about painting Easter Eggs, so why not create one of his favorite food -- thistles, of course! All you need are some crayons, a little spinach and also purple and green acrylic paints. Draw the thistle with a crayon, to prevent the area from being dyed. Boil the spinach, letting it simmer for 45 minutes. Put the egg into the water to color it green. The crayon colored thistle won't dye (due to the wax in the crayon), so you can use acrylic paints to finish your egg. Even Eeyore would have to admit it looks pretty sweet.

PIGLET loves his friends, and his motto is "Even if you are rather small you can still have a very big heart." Why not paint a Piglet style Easter egg, with huge hearts on it? First, draw seven hearts with a marker, and then use small pieces of sponge with different colors to paint the egg. You can paint the whole egg pale blue like the sky and then paint each of the hearts with one of the colors of the rainbow: red, orange, yellow, green, blue, indigo and violet. Piglet would love this Easter egg because it's small and cute, just like him!

To have more adventures with Pooh and friends go and see WINNIE THE POOH, the brand new film by Disney, in theatres July 15th!

Thank You Walt Disney Company for giving me this information.

Thanks Budget Savvy Diva!

Frugal Friday: Growing Your Own Grass for Your Easter Basket!

A friend of mine wrote me this email and I thought I would share it with you all for this weeks Frugal Friday Post!

Here's a fun little Easter project. Growing up, we always grew our own live grass in our baskets. It was so much fun to be able to plant the seeds and wait and watch the grass grow. I loved this tradition growing up, so I decided to pass it down to my own boys. This year we just did one basket. I lined the basket with a plastic grocery bag, and sent my son out to fill it with dirt. Then, together we sprinkled it with seeds and watered the seeds. Since this is his first planting experience, I don't think he's quite sure what we are doing, but he will soon find out! Today was the first day we started seeing a little green sprout up!!  It also makes a nice decorative centerpiece on your table or counter...fill it with some eggs, and you have a live Ester decoration!  Don't waste time getting started though, as the grass will take 7-14 days to begin growing and Easter is right around the corner.

Thanks Sarah!

Guest Post: Contact Us Weekly

Contacting companies is a great way to get coupons! Why? Because 99% of the time, they will reward the time you took to provide them with feedback with coupons!!  Read more.

Here is a recap of who we contacted this week:

Scrubbing Bubbles

Chiquita

Chicken of the Sea

Birds Eye

Campbell's

Bush's Beans

This contact list was provided by Saving Toward a Better Life!

Image from mainemma.org

Guest Post: Frugal Eats!

Each week Budget Savvy Diva brings us a different recipe each week!


For More Budget Savvy
Diva's Frugal Eats - Head on Over HERE

This week I did something a little different - plus a video for you as well.

I was at Rite Aid and saw that chocolate chip cookie mix for .99 cents - so I
snagged it anything below $1.00 for cookie mix is a good buy to me. When I went
to make the cookies I thought I should experiment a bit. I love to experiment in
the kitchen - do you?? I decided to take an apple and make

Apple Pie Chocolate Chip Cookies

I make the cookies like it told me on
the package BUT I took the apple cut it up into small chucks on sauteed in a
grill pan with 1 tbs of butter - 1/4 cup of brown sugar and a dash of cinnamon
for about 10 minutes - until it was nice and soft.


Looks Good I think -
here is a little video I shot enjoy







Final Cost: Less the $2.00 for 18 Cookies

Guest Post: Ask an Accountant

As we all know, it’s that dreaded time of the year-Tax time! In honor of tax season, Mom on Dealz has a new series called “Ask An Accountant”. Send in your tax questions each week to momondeals@yahoo.com and she will post the question and give an answer from an experienced accountant

Question:
How do I determine the amount of office space to use for a write off?

Answer:
A home office is defined by IRS guidelines as "any area of your home used exclusively for business". This means, it cannot serve any other purpose other than business use. If an area of you home qualifies, the easiest way to determine the area is to estimate the suare footage of the business area of the home as a percentage of the entire square footage of the home.
This is reported on Form 8829, then you are able to apply that percentage to mortgage interest, real estate taxes, hazard insurance, repairs, and utilities and get a better deduction than you would normally get from those items on schedule A. The remaining percentage of the mortgage interest & real estate tax then goes on the appropriate line on Schedule A.

Here is an example: Your home is 1,000 sqaure feet and your home office is 100 square feet. Therefore your business percentage is 10%. You would then apply the 10% to your mortgage interest, real estate taxes, hazard insurance, repairs, and utilities. Your remaining percentage of mortgage interest and real estate tax would be 90% and would go on your scedule A.

*Please keep in mind this post is for informational purposes only and answers given are very general. Many things depend on individual circumstances. Please contact your personal accountant or financial advisor for your particular situation.

photo credit: austinpost.org

Thanks Mom on Dealz for this informational post!

Guest Post: Ask an Accountant

As we all know, it’s that dreaded time of the year-Tax time! In honor of tax season, I have a new series called “Ask An Accountant”. Send in your tax questions each week to momondeals@yahoo.com and I will post the question and give an answer from an experienced accountant.

Question:How I want to handle my rollover..In 2010 I rolled over all the money from my IRA (which started out as a 401K) to a Roth IRA. Do I want to split the taxable amount between 2011 & 2012 or do I want put in the whole taxable amount this year & take the tax hit all this year?

Answer:
If you think you will be in a higher tax bracket next year, then take it all now. If it will not make that much of a difference, split it to get refunds in both years. In the end you will most likely pay the same amount of tax on those dollars, you just have the option of paying the tax over 1 year or 2. Personally, I would opt for 2 years...(why pay the IRS now if they are allowing you to pay later with no penalty) You control the use of the money, not the IRS. This can be a gamble if tax rates increase, but I don't think that wil happen for a few years.

*Please keep in mind this post is for informational purposes only and answers given are very general. Many things depend on individual circumstances. Please contact your personal accountant or financial advisor for your particular situation.

photo credit: austinpost.org

Thanks Mom on Deals!