Taxes

No one likes learning about taxes, but understanding taxes can save you thousands of dollars each year. It really pays to know how to get the tax breaks you already qualify for.

Know your tax bracket, this helps you understand how much you should be putting into your retirement accounts each year. There is an awesome calculator found at MoneyChimp that will tell you how much you will be paying.

Paying taxes while in college. Because our income is so low we pay very little in taxes--you're probably in a similar position. So far, every year we have been in school we have recouped the full amount of our tax paying and even been refunded a few thousand dollars each year (this is largely due to a tuition tax credit that is quite generous). This has increased as we have had children and been eligible for earned income and other tax credits. I have calculated that if I used the tax returns from each of the years I was in college and put the full amount into a ROTH IRA that collected 10% a year and kept that money until I retired at age 65, I would have $1.26 million dollars at retirement. That's just from the 10 years of tax returns I got while in college. Not too shabby.