For long tax payers had wish there was an online user friendly solution for tax preparation, and tax filing for people who submit return on regular basis. And I’m glad to share my finding with the rest of the readers that I have found a good online tax preparation and filing portal, available to the salaried class individuals of Pakistan.
www.befiler.com is an online tax preparation and filing portal assisting individuals in an expedient manner. Anyone who wishes to file his / her income tax return, or register NTN – National Tax Number, can use this website.

One for ALL
Once you sign in, you could choose the level of your expertise for the matter. This sets the tone for the process ahead. If you do not have much knowledge about the process, you could choose expert level as basic. This feature allows any and all individuals, who have till date shied away from the process thinking that it is not their cup of tea to prepare and file their income tax returns themselves. I think this highlights the fact that this product aims to significantly contribute to increasing the outreach to common citizens of Pakistan. The info section of Befiler mentions that this initiative aims to promote the culture of documentation and tax filing in Pakistan.

Easy Format
The format for preparing tax return using befiler.com is simple and self-explanatory. All you are required to do to prepare your tax return is answer simple questions in a YES or NO format and enter relevant details such as figures and amount of various transactions, bank accounts, etc. The step wise process asks you systematic questions, to lead you towards a tax working. Once you have answered all the questions, you will see that a wealth reconciliation has been prepared based on your answers. 
On the side panel, you will be shown a reconciliation of wealth. What is amazing is that the tax working is prepared based on the answers given and the values entered without having an individual to undertake the complex working.
If at this stage, or any other stage, you think you need to speak to a tax consultant, or get better understanding of any of the steps, you can always write in an email at info@befiler.com, or ping for a live chat during the office hours, or even call to speak to befiler’s tax consultants or customer representatives. I found that their response rate, and the dedication to solve your problem is amazing.

SPECULATION BUSINESS [19]

A taxpayer carrying on a “speculation business”, shall treat the same as a distinct and separate business from any other business carried on by the taxpayer. Incomes, gains or losses from a speculation business shall be kept separate from other business incomes. 
Incomes from business are to be presented and separately dealt with under the following sub-heads: 
1. Income from non-speculation business; and 
2. Income from speculation business. 
“Speculation business” means a business in which a contract for the purchase and sale of any commodity (including stocks and shares) is periodically or ultimately settled otherwise than by actual delivery or transfer of the commodity. 
However, the following businesses are not included in “speculation business” [19(2)] : 

1. A business in which a contract is entered into by a person to guard against loss through future price fluctuations in respect of other contracts entered into by him for actual delivery of goods. 
2. A business in which a contract in respect of stocks and shares is made by a dealer or investor to guard against loss in his holdings through price fluctuations. 
3. A business in which a contract is entered into by a member of a forward market or a stock exchange in any transaction of ‘jobbing’ or ‘arbitrage’ to guard against loss which may arise in the ordinary course of his business. 

“Jobbing” 
is the function of buying and selling financial securities on the stock market by dealer who acts as a principal in making a market In these securities. 

“Arbitrage” 
is the buying and selling of products, financial securities or foreign currencies between two or more markets in order to take profitable advantage of any differences in the price quoted in those markets. 

There are many benefits of filing income taxes in Pakistan but most of the salaried persons don’t know them or are too much afraid of Tax Returns and FBR. Most of the salaried persons are engaged in multinational industries or factories that deduct the income tax at source (They get their salary after tax deduction) yet they don’t have NTN and don’t file taxes. These people can enjoy the maximum benefit of filing taxes as they are already paying their taxes.

FBR has made it mandatory for all salaried employees (government and private) having taxable income to file their income tax returns. They have also started sending random letters to people to register for NTN and file income statement as well as wealth statement. Since people are reluctant to get NTN and file taxes in Pakistan, government has made new rules so that filers enjoy the benefits while non-filers have to pay extra charges. This is just the beginning. The charges will keep on increasing for non-filers. So, a wise decision will be to get registered with FBR as soon as possible and enjoy the benefits.

College can be very expensive and many students rely on scholarships and grants to help lower the cost of higher education.

When I attended Carnegie Mellon University, I had the help of need-based grants and a handful of merit-based scholarships. Back then, I was just glad to receive help and never even considered the tax implications. Fortunately, the tax code looks favorably at scholarships and grants.

If you are a student who received college scholarships or grants, here are some tax tips to help you understand how scholarships or grants impact your taxes.

Do you really have to pay taxes on a scholarship? The answer is… maybe.

Scholarships and Grants That Aren’t Taxed

The good news is that you won’t pay any taxes on scholarships or grants for what the IRS calls “qualified education expenses.” What qualifies as a non-taxable education expense? Any funds you receive to pay for tuition, school fees, books or any supplies required for courses at your school.

The IRS also notes that to qualify, you must be a “candidate for a degree at an educational institution that maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities.”

There are no taxes to pay if you received a scholarship or fellowship as part of the National Health Services Corps Scholarship Program or the Armed Forces Health Professions Scholarship and Financial Assistance Program. This also applies to anyone who is part of a qualifying work-learning-service program.

So what scholarships and grants ARE taxable?

Taxable Scholarships and Grants

If you paid for your qualified education expenses and have scholarship funds left over, that money counts as taxable income.

Any scholarship funds that go towards your room, board, or utilities are taxable. Any funds used for college expenses outside of the required supplies for your education are taxable too and applies to any school-related travel that is paid for by the scholarship or grant funds.

If your grants, fellowships or assistance programs require you to provide some type of service while enrolled in school, this could make them closer to a stipend or payment rather than a scholarship. For example, if you received a $10,000 scholarship and $4,000 was designated as compensation for teaching or research while at school, that piece would be taxable income. The remaining $6,000 may not taxable if used towards qualifying education expenses.

We all slip up when it comes to handling money. But sometimes small infractions we think are no big deal, end up becoming mistakes that sabotage our long-term wealth. Be careful not to make these five mistakes.1. Carrying debt

Debt, especially consumer debt, is the mortal enemy of wealth! One of your first goals in protecting your long-term wealth is to make a debt pay off plan and stick to it.

The debt snowball and debt avalanche techniques are two effective ways to dig your way out of debt. One thing you can start doing immediately is paying as much as you can above the minimum due on your debts so more money goes toward paying off the principal balance.2. Committing common investing mistakes

One of the surest ways to build wealth is to start investing early and stay consistent with those investments. You also need to have a plan in place that ensures your investments are diversified and aligned with your time horizon (when you need to use the money), asset allocation (into which type of investments – e.g. equities or bonds – you put your money) and risk tolerance.

It’s also easy to forget to rebalance your portfolio from time to time to ensure that your investments still sync up to your asset allocation. If one investment performed particularly well, it could’ve thrown your allocation out of whack. For example, you could have had an 80 percent stock, 20 percent bond split – but after some stocks did well, you’re now at a 90 percent stock and 10 percent bond allocation, which no longer aligns with your risk tolerance.

You also need to understand how investments impact your tax strategy.3. Failing to put a tax strategy in place

Of course, you have to pay your taxes, but it’s a time-honored American tradition to figure out how to work within the rules to pay the least amount possible. You should aim to take advantage of every opportunity to lower your tax liability. Ultimately, that gives you more opportunity to save and invest more into building your wealth.

Do some research, and determine which tax strategies you can use, like: maxing out retirement savings, creating a charitable trust, or even going so far as to move to a state with no state income tax.4. Not being properly insured

It’s an unfortunate reality that one major medical emergency could do some serious damage to your net worth. For this reason, it’s important to maintain adequate, effective health care coverage. You should also aim to save up you’re the amount of your deductible as part of your emergency fund. That way the money is there if you ever need it.

If you’re eligible, Health Savings Accounts are a great way to save for future medical expenses. You also get a nice tax benefit out of the deal because your contributions are tax free when spent on qualifying medical expenses.

It’s important to also not don’t insurance needs for areas of your life outside of healthcare. You also need to proper insurance on your home or apartment, car, and both life and disability insurance – especially if a family depends on your income.5. Poor retirement planning

Saving up to be financially independent and not reliant on a paycheck is a huge money goal for everyone.

One of the easiest ways to start is to save for retirement through a 401(k), IRA, 403(b) or similar retirement plan. If you’re eligible for a company match on your retirement plan, save at least enough to take the match. Retirement contributions are also another great way to lower your taxable income.

If you’re too overwhelmed at the thought of actually picking investments, you can start by using a target-date fund. That automates your investments to move from aggressive to moderate to conservative as you reach retirement. Once you become a more confident investor, you can start reallocating your investments to align with your own risk tolerance and time horizon. 

The post 5 Mistakes that Sabotage Your Long-Term Wealth appeared first on TaxAct Blog.