Friday, May 4, 2007
By: Chuck Chuckuemeka
It makes good financial sense to periodically examine your life insurance coverage, in order to make sure the coverage is still sufficient. After all, life insurance is often a family’s most important financial and estate planning tool.
With today’s frequent changes in financial circumstances and goals, it’s a good idea to re-examine your life insurance coverage on the occurrence of any of the following:
Tip: In addition to the amount of coverage, you may need to make a change relating to beneficiaries, policy ownership, or type of coverage. You may need to consult with a professional.
A Slip of the Lip May Bring On a Tax Audit
Many taxpayers have learned, to their dismay that it generally isn’t wise to talk carelessly about their taxes—especially about sensitive areas. Why? Because the wrong person had overheard their careless talk and had "turned informer," either for revenge or in the hope of an "informer’s reward."
An informer’s "tip" to the IRS will often trigger a tax audit. Even though the taxpayer has done nothing improper, he or she may have to suffer through the audit. Not only is this time-consuming, but it can also result in additional taxes due to the discovery of an innocent error on the return or the disallowance of a marginal deduction.
Tip: Most informers are disgruntled employees and former spouses or lovers.
Check Your Credit Report
Order a copy of your credit report from one of the major credit reporting agencies. Read the report carefully and report any discrepancies to the appropriate agencies. This not only ensures that the records are accurate, but helps prevent others from obtaining credit in your name.
Review Budget vs. Actuals
Compare April income and expenditures with your budget. Make adjustments as appropriate to your May expenditures. Make sure you have invested your planned savings amount for April.
Make Withholding Adjustments
Based upon the results of your prior year’s tax return, make any necessary adjustments to your tax withholding by completing Form W-4 and providing it to your Employer.