brass Blog

Now that I have my tax refund, I have enough money to buy generic-brand shampoo and Top Ramen again. While eating my Picante Shrimp Ramen last week, I dreamed of what I would have done had I gotten a bigger return. These actually are worthwhile uses of that refund money:

Dream #1: Start a Roth Individual Retirement Account (Roth IRA). With the opening deposit out of the way, you can drop in some coin whenever you find a little extra in your budget. You can keep depositing money until you retire (or reach 59 ½ years old, which is when you can first access the money), and then live comfortably with all that interest you’ll have earned.

Dream #2: Open a Certificate of Deposit (CD). If you are planning on buying a house within, say, three years, try setting it up for two years or so. That way, even if you don’t buy a house, you’ll have a little cash put away so you can keep the CD going. You could also take out the money and drop it in a Roth IRA, or have a down payment ready if you go car shopping.

Dream #3: Cut a check to your credit card company. With that extra few hundred bucks sitting around, you can slice your credit card balance down to a more manageable size.

Dream #4: Invest! Mutual funds, bonds, stocks, money markets–there are so many options!

Remember, though, that getting a refund is not like winning the lottery; you have paid out this money to the government over the past year. If you think you’re paying too much, you should consider adjusting how much the IRS takes out every month. An adjustment could get more of your hard-earned cash into your hands during the year so you can put it to better use, like earning interest in an investment or paying down high-interest debt.

I found this withholding calculator on the IRS website. You’ll need some documents with you while you fill the calculator out, but this could help determine how much in taxes you want taken out every year. Then, talk to your employer about changing your exemption number on your W-4 (that’s the form that you filled out when you were hired).

Explore these options and consider adjusting your withholdings if you need to. Otherwise, I suggest the Cajun Chicken Ramen.

I bought a $10 antenna the other day just so I could watch Lost and The Office, my two favorite TV shows. I didn’t expect to watch anything else. I didn’t expect to be impacted in any significant way by the tube that evening. And I definitely didn’t expect to be writing a blog about it for brass.

However, I ended up watching The CW after The Office was over, and there I saw the BR!CK Awards. This show featured a handful of young adults who are making an impact in the world we live in.

Ranging from a dog-bite victim to a Tourette Syndrome Association Youth Ambassador to a survivor of the Liberian civil war, the 12 young award winners are really making a difference in their respective fields. Here’s a video of some red-carpet interviews with a few of them:

The show was hosted by celebs like LeAnn Rimes, Wyclef Jean, and Mandy Moore. Dashboard Confessional was one of the night’s performers (lead singer Chris Carrabba is an active social worker). I was also impressed to find that the awards show was ethically “green” in its production efforts. Check out this backstage tour of the award show.

The BR!CK Awards has the application for the 2008 awards already up on their website. I’d recommend checking it out if you think of yourself or someone you know as making a positive difference. Oh, and by the way, there is a prize of $10,000 in grant money (for the winners’ projects or programs). If you are under eighteen, half of that is scholarship money. Not too bad for doing something you love.

I don’t know about you, but I think that’s a great thing they’ve got going on there; changing the world can seem like such a daunting task, so it’s inspiring to see everyday young people out there picking up a part of the world with their own two hands. Check out these people and get inspired to do something to help others.

Here it comes friends, the tax train. Next stop: your checking account. You’ve got T-minus-five days (until Tuesday, April 17^th) to do your taxes and send them in (either by snail mail or electronically). Are you a recent college graduate who had to borrow money for school? Have you procrastinated on getting your taxes filed? Maybe you were out job hunting, working late at your first job, or watching Sanjaya’s latest performance on American Idol. It doesn’t matter why you’re running late, because you don’t have to panic. Here’s a last-minute tip on how to get a little more scrilla back from Uncle Sam as you scramble to get your taxes done:

• If you are not claimed as a dependent by anyone, you may be able to claim interest you’ve paid on qualified student loans. This only works if you are obligated to make payments legally.

• If you have student loans, your lender should have sent you an IRS form called the 1098-E that reports the amount of interest which may be deductible. It will probably look something like this. If you lost this document or never received one, contact your lender immediately. You may be able to access this online with your account information at your lender’s website.

• Unlike a lot of seemingly helpful deductions, you do not have to itemize to receive this deduction! This year if you’ve paid $600 or more in student loan interest, you can get in on this kickback.

• Look forward to a deduction that can reduce the amount of your taxable income by up to $2,500 for 2006.

Taxes can get pretty hairy, so be sure to check with a local tax agency or use a reliable tax program that can answer any more questions you’ve got. Just remember: brass pointed you in the right direction.

Oh, and by the way, since you’re running a little short on time, you might want to check out Free File. If you have an Adjusted Gross Income under $52,000, you can electronically file your taxes with this service for free. So get to it. By Tuesday night you’ll be able to watch American Idol guilt-free with your tax refund on it’s way.

Recently, I just finished editing an article for the upcoming May issue of brass|MAGAZINE about saving. I’ve been doing a lot of research on different ways to save money and everyone seems to agree that when it comes to saving, “the earlier, the better.” A lot of experts say that for young adults like me (I’m 23, just graduated from college, and my job as the Editorial Assistant here at brass is my first job in the “real world”), a Roth IRA (Individual Retirement Account) is one of the easiest ways to multiply my money for the future. So I looked into it and here’s what I found:

• You can contribute to a Roth IRA if you make less than $110,000 if you’re single or $160,000 if you’re married filing jointly (I fall into the first category).
• If you make less than $95,000 (me again), you can contribute up to $4,000 a year.
• The contributions come out of your paycheck after taxes, which means that you’re paying taxes on that money now. But it also means that if you follow the rules, you don’t pay taxes on the money when you take it out in a few decades.

(Those numbers are all applicable for the 2006 tax return and may change in the coming years.)

Another perk? While you generally only get to take distributions (that’s when you take money out of your IRA) without penalties after you turn 59½, there are some really cool exceptions. Qualified first-time home buyers can take some money out to cover a few expenses, penalty free. Plus, your Roth IRA savings may be able to help if medical bills start piling up and you are unemployed, if you are disabled, or even if you need help paying tuition. So, even though a Roth IRA is primarily used to save for retirement, it could also help you out if you need it before your hair starts graying.

Personally, I’m excited to see my money grow. I like the idea of having a million-plus to my name when I retire. I would really like to retire somewhere sunny…like the Bahamas.