Issue #2614
Thursday, March 12, 2009

• WEALTHY: Is it too late to save on your taxes? (Tim Clay)
• HEALTHY: Why you need to avoid processed foods (Jon Benson)
• WISE: Arthur Godfrey on paying taxes

ALSO IN THIS ISSUE:

• Grow your business – without investing in new marketing (Derek Gehl)
• Another way to de-clutter your inbox (Jason Holland)
• It’s Fun to Know… about the health benefits of cow urine
• Add "palindrome" to your vocabulary

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"I’m proud to pay taxes in the United States; the only thing is, I could be just as proud for half the money."

Arthur Godfrey

Get Your Biggest Tax Refund Ever: 3 Strategies for Always Paying Less to the IRS

By Tim Clay

Tax planning effectively and immediately reduces your tax burden. It lifts a load from your shoulders and lets you enjoy more of the money you’re earning.

And there’s nothing wrong with doing everything you can to legitimately lower your taxes. Consider this famous quote from Judge Learned Hand:

"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the Treasury. There is not even a patriotic duty to increase one’s taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands."

It’s pretty much too late to do anything about reducing your tax bill for 2008. Trying to save on your taxes at tax time is like closing the barn door after the cows have run away.

But you CAN reduce your tax bill every year from now on. Today, I’m going to show you how.

Take the following tax-saving strategies with you when you visit your tax professional. Ask him to show you the difference these strategies will make in your financial health. You’re going to be meeting with him anyway, right? So go in prepared with this advice.

1. Invest in a Retirement Plan

Investing in a 401(k), SIMPLE IRA, individual IRA, or similar retirement plan gives you three benefits with one effort.

First, the money put into these plans grows tax-free. (It is taxed only when taken out.) That means a 20-year-old who puts $50 a month into a 401(k) can look forward to having $263,703 at age 65 (assuming a growth rate of just 8 percent).

Second, the contributions made to these retirement plans are tax deductible. Fifty dollars socked away every month gives you a $600 annual contribution. So, at tax time, you’ll end up with (approximately) $150 in tax savings (based on a 25 percent tax rate).

Finally, this money helps you plan for retirement. Younger people may feel it’s not necessary – but I have two words of warning: Social Security. Don’t depend on it. Take advantage of the tax law to plan your future.

2. Invest in Your Education

You’ve heard it from Michael Masterson: You can increase your income by expanding your expertise.

Take courses that maintain or improve your employment qualifications. It’s not only a good self-investment, it can help lock in job security – which is more important than ever these days. And the cost of this education and training is tax deductible.

The deduction can be taken as an optional deduction or as an Education Tax Credit. Choose the one that gives you the greatest tax benefit.

3. Invest in a Home-Based Business

Home-based business owners are able to take deductions that employees cannot – for a business phone, Internet service, office supplies, a vehicle, etc.

When you start a business, any initial losses translate into bigger tax refunds. As the business grows and makes money, legitimate deductions continue to lessen your tax burden. In his book Lower Your Taxes Big Time, tax accountant Sandy Botkin says that having a home-based business can generate $3,000 – $9,000 in tax savings.

Not sure what kind of home-based business to get into? Consider an Internet business or affiliate marketing. Both have a low cost of entry.

The idea, with a home-based business, is to build it around something you’re passionate about. That transforms it into a source of relaxation as well as financial reward.

Let’s say you love to knit. You’ve been doing it for years, and you’ve become really good at it. In that case, it shouldn’t be hard to figure out some way that you could turn some aspect of knitting into a home-based business – maybe by giving lessons, selling knitting supplies online, or marketing a video demonstrating complicated stitches. That would give you additional income, as well as tax deductions and benefits.

One Last-Minute Tax-Saving Strategy for 2008…

As I said earlier, it’s pretty much too late to reduce your 2008 tax bill. But there is one last-minute tax-lowering strategy you might be able to take advantage of.

If you work for someone and you’re not covered by a retirement plan, you have until April 15, 2009 to fund an individual IRA for 2008. You could save $1,250 ($1,500 if you’re over 50) in taxes (assuming a 25 percent tax bracket) just by taking this one action.

If you are already covered by a retirement plan, make sure you’ve contributed the maximum amount allowed. Then keep "maxing it out" every year.

[Ed. Note: Internet Money Club member Tim Clay, E.A., is an Enrolled Agent - a federally authorized tax practitioner - and a certified QuickBooks Advisor with 25 years of experience. Visit www.AskTaxGuys.com to learn more and sign up for Tim's free tax-tips newsletter.

One of the best ways to reduce your tax bill for 2009 - while building a business that could throw off income for years to come - is to further your education. Learn how you could make between $50,000 and $5 million by starting your own Internet business - and get ETR's 10-pound "playbook to Internet riches" right here.]

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Leverage Your Existing Customers to Keep Your Business Healthy in Tough Economic Times

By Derek Gehl

The best way to keep your sales and profits up in a slow economy is to build solid relationships with your existing customers.

Take your e-mail marketing, for instance.

When you stay in touch with your regular customers – and regularly e-mail them valuable information – they’ll quickly come to view you as a credible resource, an expert in your field, and, most important, someone who’s watching out for their best interests.

And they’ll reward you with their loyalty (and continued purchases).

Having a smooth-running and reliable e-mail marketing program is one of the surest ways to keep your business humming, without having to invest a lot of money!

Fortunately,it’s easy to enjoy a high rate of deliverability with your e-mail, if you understand a few basic rules that ensure your messages don’t get tagged as spam:

Rule #1: Keep accurate records of each person who subscribes.

Rule #8: Use an authentic, non-misleading subject line.

[Ed. Note: Get hundreds of proven strategies for your Internet business by signing up for Internet marketing expert Derek Gehl's Marketing Tips newsletter.

Interested in starting an Internet business but unsure where to start? With the Early to Rise Internet Money Club Independent Learner Edition, you'll get ETR's very own "playbook" for getting an online business up and running - including easy-to-use website-building software, guides to writing sales copy for the Web, recommendations for product creation, and much more. Get all the details for making money online right here.]

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The "No Response Necessary" E-Mail Productivity Trick

By Jason Holland

Some days it seems like half your e-mail time is spent sending short replies to people to let them know you got their e-mail.

"Thanks!" "Got it!" "Working on it!"

Of course, there are times when an important e-mail requires confirmation. But for the most part, it’s just a courtesy.

So let’s all agree to stop. It cuts down on productivity. And the time would be better spent writing and following up on e-mails that do require a response.

So here’s what you do. Before hitting "Send," type "No Response Necessary" in the message or even on the subject line. (In Outlook, you can simply click the little red flag on your toolbar and choose that option from the dropdown menu.)

Ask your colleagues to do the same. Before you know it, that flurry of unnecessary replies will stop and you will have added hours to your workweek.

[Ed. Note: You'll find dozens of productivity "tricks" just like this in Unscrew Your Life, Early to Rise's monthly newsletter devoted to helping you overcome life's obstacles - big and small, at home, at work, and everywhere in between.]  

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The Double-Whammy

By Jon Benson

If you believe "a calorie is a calorie"… I have news for you. All calories are not created equal.

For example, it requires more body energy to process calories from protein. You burn about 25 percent of the protein calories you consume just on digestion and biochemical processing. That’s one of the many reasons a high-protein diet burns more body fat.

The other side of the coin is processed foods – white flour, cheap breads, sugar, and so on. It’s not just their calories, which tend to be very high, it’s the fact that these foods rob the body of nutrients that are vital to health.

Many of the natural substances that trigger the brain to recognize that the body has eaten enough are removed from processed foods. That’s the main reason you tend to eat a lot more of these high-calorie foods without feeling full. Some manufacturers even add chemicals to trick the body into believing it is not full so you will eat more!

Talk about a double-whammy!

The best way, by far, to become leaner and healthier is to get 75-80 percent of your food from whole, unprocessed sources. Grass-fed beef, free-range chicken and eggs, lots of fresh organically grown veggies, low-sugar fruits, and a few whole grains.

There’s no reason to deny yourself your favorite foods and try to be "perfect." I’ve proven you do not have to do that in order to be lean and healthy.

But just remember that when you eat processed foods, you’re getting a double-whammy: more calories, and the food itself makes you want to eat more than you should.

Think about it.

[Ed. Note: Start eating better today with help from ETR's natural health newsletter. You'll find dozens of healthy eating strategies plus delicious recipes for meals that can help you feel better and live longer. And that's not all... (read on here).

If you want to lose weight while enjoying your favorite foods, get your copy of nutrition and fitness counselor Jon Benson's Every Other Day Diet System. Try it for 60 days and prove to yourself that it works.]

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It’s Fun to Know: The Health Benefits of Cow Urine

In Ayurvedic medicine, cow urine (mixed with herbs and other things) has been used for centuries to treat a variety of ailments, including obesity, ulcers, and jaundice. And in India, where Ayurveda originated, this practice is going commercial.

A Hindu nationalist group, seeking to take sales away from foreign invaders Coke and Pepsi, is set to market a cow urine-based soft drink. Its unique selling proposition (yes, yes, it does have a USP!), as noted by one of its creators: It won’t smell of urine, and it will be healthy and devoid of toxins.

(Source: The Times)

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• Rebuild your financial portfolio?
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• Grow or start a business?
• Lose weight?
• Prepare for early retirement?

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Word to the Wise: Palindrome

A "palindrome" (PAL-in-drome) – from the Greek for "running back again" – is a word, phrase, sentence, or verse that reads the same backward or forward.

Some well-known examples:

• Madam, I’m Adam.
• A man, a plan, a canal – Panama!
• Able was I ere I saw Elba.

[Ed. Note: Become a more persuasive writer and speaker ... build your self-confidence and intellect ... increase your attractiveness to others ... just by spending 10 VERY enjoyable minutes a day with ETR's new Words to the Wise CD Library.]

Copyright ETR, LLC, 2009

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This entry was posted on Thursday, March 12th, 2009 at 5:10 am and is filed under Daily Issues .