The Tax Man Cometh: Ever Wonder How He Spends Your Money?

Every year you repeat the same tired task. You collect all your receipts forms, and related tax information and either settle in for a marathon self-preparation session, or you hand it all over (along with a few hundred bucks, give or take) to your tax preparer. When all's said and done, you'll see exactly how much money the federal government took from your paychecks, but you certainly don't see an itemized list of where that money will go.

However, in his 2011 State of the Union Address, President Obama pledged to develop a new online tool that would allow every American to see precisely how the government spends his or her annual tax payments. The resulting and first-of-its-kind public website, “My Federal Tax Receipt,” launched last year and was just recently updated to reflect current spending. The tool is an online calculator, located at www.whitehouse.gov/2011-taxreceipt. Once there, you simply enter your income tax, Medicare tax Social Security tax, and a detailed calculation of how your tax dollars are allocated pops up on the screen.

Having a better understanding of what we pay for and how makes us stronger citizens, and let’s face it, its information we deserve to know.

But you don't actually have to do anything at all to satisfy your general curiosity — after all you could just simply scan the numbers and learn how much of the collective federal income tax is allocated where, as its all broken into categories and subcategories and measured by percentage. While the information on the site is incredibly informative, intriguing, and perhaps even a bit surprising, I'd be less than honest if I neglected the site's democratic political bent, but the information is still interesting, despite the occasional overt partisan prose.

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Five Steps to Cutting the Financial Umbilical Cord

One of the biggest impediments standing in the way of retirement for today’s baby boomers is their children.  Everyone knows that cost of raising a kid is high, but what’s holding many parents back is the cost of their kid even after they are raised.  Ameriprise Financial surveyed a group of these baby boomers and found that over 90% admit to providing financial support to their grown children.  Over half of them have allowed their kids to move home and live rent free while 71% have helped their kids pay for college.  This doesn’t include all of the parents still dishing out for car insurance, cell phone bills, health insurance, and so on.  It’s a parent’s basic nature to want to support their kids, but there comes a time when it’s best for both sides to cut the umbilical cord and create some financial independence.

50% of the paycheck goes to needs, 30% funds your wants, and 20% should head to savings.

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