When you are in the military and under the age of 30, retirement looks like a long way off, but saving for it now is crucial if you plan to retire early. The sooner you save, the sooner you can retire. By following these simple guidelines, you can enjoy life now and still have enough saved for later, when the time comes to retire.

1) Invest: Make your military pay work for you right away. Begin investing early so you can plan your retirement sooner. You will gain interest on your investment which will help your investment to grow quicker.

Interest earns money on your investment, so, basically, you are making money from the money you put in, without having to do anything. Because of this military personnel will have more savings available to them. If you only invest $100 a month at 18 years old, you could potentially be a millionaire by the time you reach retirement. It will also allow you to what you want to do as you keep track of the money you are investing.

2) Consistent investment plan: If you invest something every month, regularly, you can receive long-term gains. Military personnel have the potential to invest more over a longer period time because it is steady income. Plan to retire now by saving now and as your savings grow, so does your knowledge of investing, which will enable you to invest in something with bigger returns.

The perfect investment for a young soldier would be a low-cost broad market index investment. It is an easy investment and virtually no maintenance. It take very little knowledge and about an hour to make your investment work for you.

3) Diversification: When you diversify, you have less risk. If all of your money is invested in the stock market, you stand to lose all of your money if the market crashes. By placing your money in several different investments, you have a greater potential of making a substantial profit.

4) Tax benefit vehicles: Investment vehicles will give you benefits to help you towards retiring at a young age. Roth IRAs are great investments that help lower your taxes. 40% of your income goes to pay taxes, so if you invest in a Roth IRA, you can keep more of the money you earn.

Planning an early retirement now is the perfect reason to invest. Diversifying your investments will give you more security and more gains, plus affords tax benefits. If you begin now, you will be able to have the things you want in retirement without worry.  

 Daniel Stoica Accounting Professional

Instead of having a yard sale this summer, consider donating to a worthy charity. There are, at least, four reasons to donate instead of having a garage or yard sale. Being charitable is a lot more fulfilling that making a profit.

1. Donating is a time saver. If you add up all of the hours you spend preparing for and having your garage or yard sale, and then cleaning up afterwards, you will end up spending 20-30 hours on it. By donating, you may only spend an hour gathering your stuff, loading it into your car and driving to the Good Will or Arc Thrift Stores. 

2. You will get rid of you unwanted items. When you finish with a yard sale, you generally end up with some stuff left over. What do you do with it? Do you store it away for the next yard sale? Why not just save yourself the time and take it to the thrift store. It’s still in good shape, otherwise you wouldn’t be trying to sell it. If you give it to charity to start with, you won’t have to go through all of that.

 3. You will get a tax deduction for donating to a qualified charity, which can save you hundreds of dollars on your taxes. A lot of people do make some money holding garage or yard sales. If you make $300 for 30 hours of work, you are making $10 per hour. But you can make the same amount, if not more, by donating and taking a tax deduction. The IRS will give you about $150 on your federal tax return if you are in the 15% tax bracket and $1000 if you are in the 25% tax bracket.  So, a $1000 worth of donations will save you approximately $250 in taxes.

 4. You are helping people by donating. There are a lot of people who need your unwanted items and when you donate to places like Good Will or Arc, the items are sold, mainly to lower-income people, and part of the proceeds goes to developmentally challenged individuals. By donating, everyone wins and you feel good because you have done something to help others.

So, if you are thinking about having a garage or yard sale, please consider the alternative and donate to a charitable cause. You will save time while still getting rid of items you don’t need, you’ll lower your taxes, and you will be doing a good thing for others.

 Daniel Stoica Accounting Professional

It’s difficult for a sole proprietor to find legitimate tax reductions. Tax codes are confusing, so it’s hard to decipher all of the rules and regulations.

In 1913, when income taxes were first instilled, the tax code book was only a half an inch thick. The very first tax return was only two pages with a four page instruction book. Things have certainly changed.

The tax code book is now two to four inch volumes and over a million regulations which explain what the code means. When you consider all of the tax-related court rulings that are attached to the code, you have 25 feel of library shelves.

The first thing a small business owner needs to realize is that with the same amount of profit, you won’t necessarily pay the same amount of taxes as another small business.

If you have ever wondered if others who make the same amount of money as you, but pay less in taxes, the answer is yes.

It’s legal for one business owner to pay less than another, even with the same income. Most small businesses pay more in taxes just because they own the wrong type of business. It doesn’t seem fair, but the truth of the matter is, it is legal.

The term “type of business” means whether you are a sole proprietorship, a partnership, a C corporation, an S corporation, or a limited liability company (LLC).

There are many types of business ownership. If you are not the “right” type, you will end up paying several thousand more in taxes than you need to. There are a lot of differences in the amount of taxes that these different kinds of businesses pay.

Sole proprietors generally end up overpaying their taxes because they are sole proprietors. Have you considered the tax benefits of a partnership, corporation or LLC? It’s what’s called a choice of entity analysis. By looking at the benefits of operating your business as anything other than a sole proprietorship, you could save thousands in taxes each year.

Talk to a tax professional to find out if changing your “type” of business will help you pay less in taxes.

Daniel Stoica Accounting Professional