Strange and Bizarre Tax Deductions

It was Albert Einstein who said physics was easy compared to trying to prepare his taxes. You probably feel the same way. The tax code is full of oddities, and here are a few that will make you roll your eyes.

The internal revenue code is thousands of pages long. Throw in the regulations interpreting the code, and you have a wall full of confusing books. To make things even scarier, you are assumed to both know the code and understand it. That should send chills down your back.

Over the years, the code has been modified so many times that nobody really knows it all. Various sections seem to completely contradict others. Some seem to say the exact opposite of others. While this is all frustrating, it is the bizarre little sections that make you wonder what is going on in Congress. Here are some examples of strange things you will find.

1. If you have a child, you usually get to claim more deductions. In our fractured society, however, the tax code is a mess when it comes to dealing with divorces. The question is basically which parent gets to claim what? There are all kinds of rules, but one of the stranger ones has to do with...kidnapping.

If your child is kidnapped, you may get to claim the child tax credit and so on. Being a tax issue, there are some strange rules. For instance, the kidnapping cannot be by a family member! If your brother drags your child off to Canada, you get no deduction. You can read IRS publication 501 to figure it all out if you are insanely bored.

2. Jury Duty - Nothing beat jury duty, eh? Sit for eight hours and get paid five or ten bucks. Well, some business owners are good members of society. They will pay you normal wages while you do your civic duty. If they do, you can claim a deduction if you pay them back your earnings from jury duty. Boy, I bet your boss is going to be happy as pie when you give him or her that $5! On the other hand, a deduction is a deduction.

3. Tax Benefits of Being Blind - This one is an old favorite. The government is going to give you a break if you are blind. Just check the box on line 39A. Huh? You are BLIND! Obviously, the idea is you are having someone else do the tax return, but it is still pretty funny at first glance.

The above represents only a small sampling of the oddities found in the tax code. There are plenty other such as rules regarding issuing 1099s to fishing boat crews, but we have to stop somewhere. At least now you know that you are not alone wondering if the tax system makes any sense whatsoever. If you get frustrated, take comfort in the fact former President Jimmy Carter said the U.S. tax code was a crime against humanity!

About the Author

Richard A. Chapo is with BusinessTaxRecovery.com - providing information on
http://www.businesstaxrecovery.com/tax_deductions

Insider Secrets For Getting Credit Cards For Bad Credit Situations

I can't even begin to tell you how many horror stories I've been told about innocent people falling into traps when looking for credit cards for bad credit. While there are many legitimate bad credit credit cards on the market, there are also some very unscrupulous sharks out there just waiting to make you their next victim.

Fortunately, I have some insider secrets that will keep you safe and sound and will help you find honest-to-goodness credit cards for bad credit.

Show Me The Plastic, I'll Show You The Money

It's a very common scam for a company to promise a bad credit credit card, as long as you send payment in first. Unless you're sending in the money as a security deposit for a secured credit card, there is never a reason to send in up-front funds for a credit card for bad credit.

If you refuse to pay an up-front fee and the person you are talking too gets rude, hostile or insists your credit is so bad that you have to pay a fee up front or you'll never get credit, don't take the bait.

Let that be a huge red flag that you are dealing with a scam operation and they want to rob you of your hard-earned money. Nine times out of ten, the consumer sends in the money and never sees the credit card they paid for.

Some Fees Are Legitimate

Now that we've gotten that out of the way, it's important to note that you may indeed have to pay an annual fee for a bad credit credit card. However, when paying an annual fee for credit cards for bad credit, the fee should be charged to the card and you should not have to pay for it up front.

Look Out For Misleading Credit Limits

Before accepting any bad credit credit card, make sure you know how much your credit limit is and what fees are involved. If the credit card company is going to charge you a $125 fee to get a credit card for bad credit and you only have a $200 credit limit, it's really not worth it. You would be better off getting a secured credit card for bad credit, earning interest on your deposit and paying a lower annual fee.

Watch The Rates

If you're applying for credit cards for bad credit, don't expect to get a great interest rate. You will likely be paying interest in the double digits. That being said, don't let yourself get taken for a ride. If a bad credit credit card company tries charging you more than 19 or 20 percent interest, run in the other direction and find a better deal.

Do Your Homework

Most importantly of all, when shopping for credit cards for bad credit, don't rush into anything. Shop around, find the best deal and manage your bad credit credit card carefully once you get it. Eventually, you'll be able to work your way out of the credit cards for bad credit and into a low-interest credit card that will better serve your needs.

About the Author

For more tips on getting the best bad credit credit cards, saving money and avoiding getting taken, check out CreditCardTipsEtc.com, a website that specializes in providing credit card tips, advice and resources. http://www.creditcardtipsetc.com/bad_credit_credit_cards

Mortgage Term Life Insurance

Why should one buy mortgage term life insurance? The answer to that question is pretty obvious to most people but just in case there is anyone who doesn't know let us look at the what this policy provides. The intent of the designers of mortgage term life insurance was to create a policy that would be very inexpensive and at the same time would provide sufficient death benefit to pay off the mortgage in the event of the death of a breadwinner.

Life insurance was designed with the protection of the family first and foremost in the minds of it's creators. I believe it was fraternities who first explored the idea because they saw the difficulties that families experienced when a wage earning parent died. They figured that if a group of people got together and contributed to a fund over a period of time that money could be used, at minimum, to cover burial cost of the deceased and much pressure would be taken off the shoulders of the surviving family. At some point later someone came up with the idea to have mortgages paid off in the event of the death of a breadwinner. Let us look at how mortgage life insurance works and in particular mortgage term life insurance.

• The Premium
  
  

  As the name mortgage term life insurance implies this is very inexpensive life insurance. Term is the cheapest type of life insurance. This is close to the purest type of term insurance that exists. The premium of this policy remains level throughout. The mechanics are best illustrated by detailing an example...

  Let us suppose you bought a house for $200,000. You have good credit and a good job so you decide to make a down payment of $40,000...20%. You owe $160,000 which you intend to pay off over a 20 year period. The amount you pay each month will depend on the rate of interest the bank charges but for the sake of this illustration that is beside the point.

  In the initial years the majority of your payment is going to interest. As the years go by, and the principal decreases, a larger portion of your payment actually goes to reduce the amount owed to the bank or mortgage company.

  In the initial years the life insurance company is bearing greater risk. The natural thought is that you should be paying a higher premium for your policy at the beginning. Not so. What the actuaries have done is to calculate the cost for the risk the insurance company is bearing, each year, for the 20 year period. They charge you an average, thereby allowing for a level premium over the 20 year period. Calculating the premium is a little more complex than that but, in a nutshell, that is how it works.

• The Death Benefit

  Bear in mind that your mortgage term life insurance policy was intended to pay off your mortgage in the event of your death. That is exactly what it will do. The death benefit of the policy decreases each year; thus the popular name for this policy...decreasing term insurance. The amount paid by the insurance company upon the death of the insured is equal to, or close to, the amount owed to the bank or mortgage company...

  Let us use the same $160,000 mortgage as an example. If the insured died within the first year the amount paid would be equal to the amount owed at that time...$160,000. If the homeowner died in the tenth year the amount paid by the insurance company would also be equal to the amount owed but that amount at that time would be much less. I guess something close to $100,000. You would need to look at mortgage tables, and consider the interest rate, to arrive at an accurate figure...

  The beauty of the whole thing is that the survivors will have a house free and clear.

For additional information on mortgage term life insurance go to: http://www.lifeinsurancehub.net/mortgage-insurance.html