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Taxes

As the old saying goes, “death and taxes” are inevitable. The taxes bucket will always be in your financial picture, but planning carefully for them allows the bucket to fade to the background. Once you plan for withholdings and know how to efficiently and accurately complete your taxes each year, you can move on to the work of accepting the reality of taxes and being grateful for the gift of the income that created the taxes for you. God asks us to acknowledge authority in our lives in Romans 13:7, which says, “Give everyone what you owe him: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honor, then honor.”

Are taxes scriptural?

Jesus paid taxes.
Matt 17:24 – 27

“After Jesus and His disciples arrived in Capernaum, the collectors of the two-drachma tax came to Peter and asked ‘Doesn’t your teacher pay the temple tax?’ ‘Yes He does,’ he replied. When Peter came into the house, Jesus was the first to speak. ‘What do you think, Simon?’ He asked. ‘From whom do the kings of the earth collect duty and taxes – from their own sons or from others?’ ‘From others,’ Peter answered. ‘Then the sons are exempt,’ Jesus said to him. ‘But so that we may not offend them, go to the lake and throw out your line. Take the first fish you catch; open its mouth and you will find a four-drachma coin. Take it and give it to them for my tax and yours.’”

Jesus told His followers to pay taxes.
Matt. 22:15 – 21

“Then the Pharisees went out and made plans to trap Him in His words. They sent their disciples to Him along with the Herodians. ‘Teacher,’ they said, ‘we know you are a man of integrity and that you teach the way of God in accordance with the truth. You aren’t swayed by men, because you pay no attention to who they are. Tell us then, what is your opinion? Is it right to pay taxes to Caesar or not?’ But Jesus, knowing their evil intent, said, ‘You hypocrites, why are you trying to trap me? Show me the coin used for paying the tax.’ They brought Him a denarius, and He asked them, ‘Whose portrait is this? And whose inscription?’ ‘Caesar’s,’ they replied. Then He said to them, ‘Give to Caesar what is Caesar’s, and to God what is God’s.’”

The Bible also tells us to submit to the authorities.
Romans 13:1 – 7

Everyone must submit himself to the governing authorities, for there is no authority except that which God has established. The authorities that exist have been established by God. 2. Consequently, he who rebels against the authority is rebelling against what God has instituted, and those who do so will bring judgment on themselves. 3. For rulers hold no terror for those who do right, but for those who do wrong. Do you want to be free from fear of the one in authority? Then do what is right and he will commend you. 4. For he is God’s servant to do you good. But if you do wrong, be afraid, for he does not bear the sword for nothing. He is God’s servant, an agent of wrath to bring punishment on the wrongdoer. 5. Therefore, it is necessary to submit to the authorities, not only because of possible punishment but also because of conscience. 6. This is also why you pay taxes, for the authorities are God’s servants, who give their full time to governing. 7. Give everyone what you owe him: if you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honor, then honor.”

How long should I keep my financial records?

For tax purposes, you should keep all of your routine records for at least three years.

There are some records that you should keep indefinitely:

  • Copies of old tax returns

  • Records of major transactions such as the purchase or sale of a home

  • Investment records

There are two rules to follow:

  • Keep tax records (supporting documents) for at least three years.

  • It is better to be safe than sorry.

How should I prepare for my taxes?

One of the greatest signs of poor planning is for you to get a tax refund. If you plan to get a refund, you have given the government an interest free loan of your money. The government does not require you to over withhold or to pay more taxes than what you will owe.

Three ways to plan for your taxes:

  • There are many software packages available that can help you plan.

  • Take a copy of last year’s tax return and pencil in the numbers you expect for this year. Then figure the taxes you will owe.

  • Ask your CPA or accountant to help you.

However you decide to plan for your taxes in the coming year, do not plan to receive a tax refund.

What tax planning steps do I need to be taking for 2008?

The best time to think about how to reduce your taxes is as early as possible, but certainly before the end of the year.

When you are meeting with your tax accountant to do last year’s taxes, it is really too late to do any more tax planning, with the exception of certain contributions to retirement plans. Ask your accountant about this.

There are really only two things you can do to reduce your taxes:

  1. Defer income – if you have income coming in, and you can take it in January instead of December, do that and you will not owe taxes on it until the next year.

  2. Accelerate expenses – best example of this is to give charitable contributions in December instead of waiting until January.

The simplest way to do your tax planning is as follows:

  • Make a copy of last year’s tax return.

  • White out last year’s numbers.

  • Fill in what you think this year’s numbers will be.

  • Estimate your tax liability.

This method is only an estimate, but it is easy enough to do on your own.
Finally, a very important thing to keep in mind is this: every tax deduction costs you something. It is better not to have the expense and not to get a deduction, than to have to pay the expense just for at 20-40% deduction.

Psalm 24:1-2
“The earth is the Lord’s, and everything in it, the world and all who live in it; for He founded it upon the seas and established it upon the floods.” (NIV)

Link: William Perez at About.com, “Tax Planning Basics: 3 Ways to Reduce Your Taxes”

Click Here to View the Full MasterYourMoney.com Blog


Taxes

As the old saying goes, “death and taxes” are inevitable. The taxes bucket will always be in your financial picture, but planning carefully for them allows the bucket to fade to the background. Once you plan for withholdings and know how to efficiently and accurately complete your taxes each year, you can move on to the work of accepting the reality of taxes and being grateful for the gift of the income that created the taxes for you. God asks us to acknowledge authority in our lives in Romans 13:7, which says, “Give everyone what you owe him: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honor, then honor.”

 

Savings Nut shares income tax savings tips.

Crosswalk offers biblical wisdom about paying taxes.

BankRate has tax calculators.

Christian PF gives tax tips.

Taxes

As the old saying goes, “death and taxes” are inevitable. The taxes bucket will always be in your financial picture, but planning carefully for them allows the bucket to fade to the background. Once you plan for withholdings and know how to efficiently and accurately complete your taxes each year, you can move on to the work of accepting the reality of taxes and being grateful for the gift of the income that created the taxes for you. God asks us to acknowledge authority in our lives in Romans 13:7, which says, “Give everyone what you owe him: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honor, then honor.”

Matthew 22:17-21
“Tell us therefore, what do you think? Is it lawful to give a poll tax to Caesar, or not?” But Jesus perceived their malice, and said, “Why are you testing me, you hypocrites? Show me the coin used for the poll tax.” And they brought Him a denarius. And He said to them, “Whose likeness and inscription is this?” They said to Him, “Caesar’s.” Then He said to them, “Then render to Caesar the things that are Caesar’s; and to God the things that are God’s.” (NASB)

Luke 20:22-25
“Is it lawful for us to pay taxes to Caesar, or not?” But He detected their trickery and said to them, “Show me a denarius. Whose likeness and inscription does it have?” And they said, “Caesar’s.” And He said to them, “Then render to Caesar the things that are Caesar’s, and to God the things that are God’s.” (NASB)
Romans 13:7-8

Romans 13:7-8
Render to all what is due them: tax to whom tax is due; custom to whom custom; fear to whom fear; honor to whom honor. Owe nothing to anyone except to love one another; for he who loves his neighbor has fulfilled the law. (NASB)



 

 
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