Taxes & the Single Man

When it comes to some of the activities you most enjoy, tax filing probably doesn’t rank very high on the list. And in a draft pick, it would likely be selected dead last. Taxpayers often think married couples benefit the most from the system; however, there are many incentives out there for single filers as well - including bachelors with no dependents.  


By reducing your taxable income, and increasing deductions, tax preparers will help you find the maximum savings for your filing status. Those that take the standard deduction assume that itemizers get the better deal. In reality you can deduct a lot of things, even if you don’t itemize. Student loan interest, job-related moving expenses, contributions to health savings accounts and IRAs are all considered acceptable deductions.  


In a recent survey conducted by DDB Communications, 15% of Americans admitted to fibbing on their taxes. Of that number, 64% are single men. While white lies serve a function—heck they can even be justified as being harmless—Uncle Sam has a zero tolerance policy on the matter. Many conclusions could be drawn from this, but only one thing’s for certain - some friendly tax preparation advice couldn’t hurt.  


According to recent studies, better"> color="#0000ff">money management could help flip those numbers. Through DDB’s Life Style Study, a direct correlation links those who spend frivolously and cheat on taxes. If you generally receive a taxrefund or tax refund anticipation loan each season, use those returns to start up a savings account - and know for what you’re saving. According to the poll, only 32% of men have a tendency to tuck away that excess cash. For single men, especially those under 45, the motivation for preparing for those golden years is often blurred by the need to take care of the here and now. If you have trouble wrapping your head around saving for retirement, shift the focus. Rather, visualize on what you’d like to accomplish during those retirement years. Have you always wanted to invest in a startup business? Perhaps a yearlong travel adventure is on your bucket list? If an oceanfront beach villa in The Caribbean is all you’ve ever wanted, then that’s what you’re saving for. Whatever it may be, become a saver - not a spender. 


While we’re on the subject of retirement, come up with a realistic number for what you can afford to contribute each pay period into an IRA or 401(k). Say you"> color="#0000ff">invest $250 a month starting at age 25, earning a hypothetical 6% interest. By age 60 you'll have accumulated almost $360,000. Now say you wait until age 35 but put away 20% more ($300 a month) and earn 50% more - or 9% - on your investment. Roughly $340,000 will be waiting in the wings. Whatever amount works for your budget, the sooner your money is in the account, the sooner it begins to earn tax-deferred. If you use a Roth IRA, all of the earnings will be tax-free if the money is distributed after you reach age 59.5.