Payday loans is a some-what new multi-billion dollar industry in which people borrow money to tithe them over until their next payday. These loans also go by names cash advance loans and paycheck loans. They prey on lower class that find themselves short of money before a payday.

The one thing to consider when looking into a payday loan is APR or Annual Percentage Rate that these loans carry. At first glance, you may think paying $240.00 for a loan of $200.00 for two weeks is ok. The A.P.R of this loan comes to a whopping 520%. That is amount this loan would cost if played over a years time. Compare this with a high interest credit card of 29%. When you see it compared to these numbers, you can see they are not bargain you first thought it was.

A representative from a payday loan company has agreed to be interviewed for this article on condition his identity and that of his company be anonymous.

I asked him, how can they can justify such enormous interest charges. His reply was "Because we can. There are loopholes out there that allow us to do this. This is a high risk loan for most cases so we need to charge enough to cover bad loans and to make a profit."

When asked about if payday loans are ever a good idea, his response was "Sure. For example if you will be late on a credit card payment of $70.00 and will be charged a late fee of $30.00 then APR of payday loan justifies getting one. You will save points if you get a payday loan and not pay higher interest rate of late fee."

When you should get a payday loan:

There are times when payday loans are justified as discussed above. The primary example when your late fees are more expensive than late fees paid to your creditors.

There have been a lot of tax legislation changes recently that may have an impact on your year-end tax planning for 2004. There are two major tax acts that have provisions that affect 2004 and beyond.

The American Jobs Creation Act of 2004 allows taxpayers to elect to take state and local general sales and use taxes as an itemized deduction in 2004 and 2005 instead of deducting state and local income taxes. This option can benefit taxpayers living in states with no income tax or others depending on their particular situations. This tax act also creates tougher deduction and substantiation rules for charitable contributions of autos after 2004, giving taxpayers an incentive to donate autos this year instead of next year.

The Working Families Tax Relief Act of 2004 extends some credits and deductions through 2005. The Act keeps child tax credit at $1,000 through 2009 and extends marriage penalty relief. One deduction that has been extended through 2005 is deduction for teaching-related expenses incurred by educators. A not-so-welcome change is that “bonus” first-year depreciation was not extended, so it generally will not be available for assets bought and placed in service after 2004.

The following is a checklist of actions that may help you to save taxes if you act before year-end. Not all actions will apply to everyone, but many taxpayers can benefit from numerous items. A consultation with your tax professional before year-end would allow that trusted advisor to work with you to narrow down tax savings actions specific to your situation – a customized tax savings plan.

Checklist of Tax Savings Actions:

• Increase amount you set aside for next year in your employer's health flexible spending account so that you can get tax-free reimbursements for over-the-counter drugs.

• Consider arranging with your employer to defer a year-end bonus until 2005 (to defer taxes to 2005).

• If you own an interest in a partnership or S-corporation, you may need to increase your basis in entity so you can deduct a loss from it for this year.

• Consider prepaying expenses that can generate deductions for this year. If you are short on cash to do so, you can do so via credit card.