Tax Tip 1 Reduce taxes withheld by adjusting number of exemptions on your w-4 form. Avoid getting a large refund each year; you are simply making an interest-free loan of your money to government. If you need help saving, set up an automatic withdraw from your paycheck into a money market account and earn some interest.

Tax Tip 2 Writing off family medical expenses This strategy is a little more complicated but well worth extra effort. Our family saved by deducting over $5,000 in out-of-pocket medical expenses from our home business income last year. With two kids in braces and an unplanned surgery, medical expenses can add up quickly. ·To use this strategy, first, you must hire a spouse or other trusted family member to work for your home or small business, full or part time will work. ·Next you need to set up and sign a medical reimbursement plan. You may need advice of an accountant to help you with this. This plan allows any sole proprietor too convert all family out-of-pocket medical expenses into legitimate business deductions ·Finally, your spouse or family member pays all out-of-pocket medical expenses for family keeping receipts and documenting miles driven for medical purposes. At a specified time, your business reimburses your spouse or family member for these expenses and deducts them as a business expense.

Tax Tip 3 Writing off your Child's College Education Expenses If you put your child on payroll of your business for performing office chores etc., you can pay each child up to $4,400 a year (2001) and that amount will be canceled out by child's own standard deduction. Your child can pay for or save for their college education with deductible wages you pay them, and there will be no payroll taxes for your child under age 18.

Hopefully, after keeping a daily or monthly log of expenditures, you’ve begun to notice your pattern of spending habits. You should be able to see where all your money is going and not just wondering. You should now be able to look at what you can cut out or cut back on.

Why do you need to do this * OverHall *?

Several good reasons could be if you’re having troubles making ends meet, living from paycheck to paycheck, or don’t have any money in reserve for unexpected emergencies. Other reasons could be that you want to buy a home, take a vacation, buy new equipment for your business, go to college or send your children to college. Still other reasons could be that you're self-employed and you need to save or invest for your retirement.

Let’s get started by making two lists, one for your NEEDS and one for your WANTS.

What’s difference?

Let me give you an example of how I see NEEDS vs. WANTS.

A NEED is something that you NEED to survive such as food, shelter, and clothing.

A WANT is something you desire. Something that you might already own, but you WANT another or a new one such as shoes, or a jacket, or a car. A WANT can also be something that you don’t currently have. As humans, we all have unlimited wants, therefore we must make choices. In economics this is referred to as * opportunity cost *, highest-valued, next-best alternative that must be sacrificed to attain something or to satisfy a want. Some refer to this as a trade off.

Now you need to ask yourself how much you are willing to spend or need to spend on your needs to survive and are you spending too much? Do your clothes have to be new, with big name labels? Does your home have to be near water with a hot tub and a swimming pool? Does your food have to be best cut of meat or dining at fancy restaurants every night? You get idea?

What about your WANTS? What are you willing to trade off to make your WANTS a reality?

Let’s look for a minute of a WANT of a vacation to Alaska.

You will need to take some actions and ask yourself, possibly, some hard questions, and make some hard decisions.

~~ Do you have to save for this and how will you save?

~~ What steps must you take to estimate cost of such a vacation AND what steps will or can you take to save for trip?

~~ How long do you want to vacation?

~~ How will you travel and what are those costs? Planes, Trains, Automobiles? Hike, Bike, Cruise ship?

~~ Where will you stay and what are those costs? Hotel, Motel, Inn? B&B, Igloo, Tent? Friend, Relative, Friend of a Friend?

~~ How will you eat and what are those costs? Bring or buy food there? Eat out? Skip some meals?

~~ Do you need to purchase * special * clothes? Where can you purchase? How much will that cost?

~~ When do you want to vacation in Alaska? Now, next year, five years, or ten years?

Once you find estimated answers to those questions you’ll need to look at how much you need to save and where in your daily expenses can you cut back.

TIP: Use this type of exercise for any wants you have for your life and business. You’ll discover if you can really turn your wants into reality, if they are realistic and feasible.