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If you are concerned about your financial IQ — how you deal with money — you might consider doing a little more reading on the subject. One place you can start is with The Complete Idiot’s Guide to Boosting Your Financial IQ by Ken Clark. Clark is a Certified Financial Planner, and he takes you through the basics of making solid financial decisions in language that is easy to understand. When you are done, you’ll feel financially smarter.

The book is laid out intuitively, starting with financial basics and explaining why they are important, and devoting a whole section to the dangers of credit cards. Then it moves on to investing and then to real estate, helping you understand the importance of prudent investing, as well as sharing some of the things you need to know about mortgages (and even renting). Financial IQ also addresses how to handle big expenses like health care, college and buying a car. Finally, Clark addresses smart tax moves, and how you can keep growing your financial IQ — and your wealth — over time.

Throughout the book, there are helpful tips and definitions designed give you bite-sized bits of financial wisdom. There is also a handy resource section at the back of the book, providing additional study material, a glossary of terms and web sites you can visit to learn more about keeping your finances on track.

I really enjoyed reading this book. It’s practical and understandable. It is truly a basic primer to getting your finances in order and learning a little bit more about finances. For those just starting out, it provides a helpful road map. For those who might already be in a little bit of trouble, Financial IQ provides sound principles that you use going forward. And, if you need a little refresher, this book lays it out with foundational money principles.

Disclosure: I received a free copy of this book for review, and received no other compensation.

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This is a guest post from Manny Davis.

You’ve probably heard about settling taxes owed for a fraction of what is owed or for pennies on the dollar. This may sound almost too good to be true, but there actually are instances where the IRS will allow individuals to pay less on their taxes than they actually owe (not always a fraction of what is owed, but still less) and then consider them back into good standing with their taxes. Many tax relief companies try to portray it as a norm, but it isn’t, in fact extremely rare.

There are four main reasons the IRS will allow individuals settle their taxes for less than the total amount they owe. If your situation fits one of these reasons then you must prepare the appropriate filing with the IRS in order to apply. Below are the four different reasons:

1. If you can prove to the IRS that it is highly unlikely that they will ever be able to collect the full amount of taxes that you owe them, even if they were to use forced collection mechanisms.
2. There is doubt that the amount of tax that was assessed is actually correct. This means that there must be legitimate doubt from both the IRS and the taxpayer that the amount that is owed is indeed correct.
3. The collection of the tax would be unfair or inequitable because it would cause undue financial hardship. This is typically the reason for the IRS letting elderly or disabled people off the hook for the total amount that is assessed.
4. If you have penalties added onto the taxes you owe and you feel (and the IRS agrees) that you should not be responsible

Believe it or not, the IRS does have a heart, but they require detailed proof to back up your claim before they will give you any sympathy. In order to provide proof for your claim, you must provide the IRS with the correct IRS filing and all the details filled out exactly as they want in order for them to consider you. Below are the 3 different types of filings that can be done in order to settle taxes for less.

1. Offer in compromise: This is the filing that many tax relief firms like to advertise, even though most people do not qualify for it. Out of all the ways to settle taxes for less, this way allows you to settle for the least, which is also why this is the most difficult type of filing to get accepted. When this type of filing is accepted, it is mainly because the IRS doubts they will ever be able to collect the total amount of taxes the person owes, even through forced collections. This sort of filing is also accepted if there is doubt that the tax amount owed is incorrect or it would be unfair or inequitable to hold the person liable for the taxes owed.
2. Partial Payment Installment Agreement: Typically if you cannot pay your taxes in full, the IRS will want you to enter into an installment agreement. An installment agreement will allow you to make monthly payments towards the taxes owed. If you cannot make the required monthly minimum payment with an installment agreement then the IRS may consider you for a partial payment installment agreement. You may be thinking that since you still have to make monthly payments towards the taxes owed you will still end up paying the entire amount of taxes owed, there is a catch. The statute of limitations for taxes owed is 10 years. If you are making payments with a partial payment installment agreement it is likely the 10 years will be up before you pay off the entire balance and then the remaining balance will no longer be due to the IRS.
3. Penalty Abatement: With penalty abatement you can have penalties removed if you have a good enough (determined case by case by IRS) reason for not paying or filing your taxes on time. Many times penalties can add up and become very large amount of total taxes owed and sometimes these penalties can be eliminated. The IRS uses penalties as a way to scare taxpayers into paying or filing their taxes on time. The IRS does realize that there are times when circumstances arise that don’t allow people to stay in full compliance and if the IRS thinks your reason is good enough they may remove penalties you have been charged, which in essence settles your taxes for less than the total amount owed.

Settling taxes for less can really be a financial life saver to many individuals that actually meet the qualifications. Many people believe that is unfair to let some individuals settle taxes for less, however is actually a good thing. Say someone that is elderly can’t pay their taxes and the IRS forces them to pay, they are then left with little or no money to pay for support they need and then it just becomes a cost that is paid for by the taxpayers once again when they get government funding to pay for the help they need. The IRS also believes that if they let individuals off the hook it may give them more opportunity to regain financial freedom and make more money in the future and in turn they end up paying more taxes to the IRS in the long run, which ends up being an advantage to the country and other taxpayers. If you feel you meet the qualifications for any of the above filings you should take advantage of what the IRS offers. The filings above are pretty complex and it is normally a good idea to consider having a tax professional help you with making the appropriate filing.

Manny Davis is an accountant and tax writer who helps individuals get back tax relief. Find more details on various IRS tax settlement filings on his site.

It’s February. Do you know where your tax information is?

Even though it is still a couple months until April 15, it really is a good idea to get your tax stuff done as soon as possible. Indeed, February is a great time to get out the financial checklist and make sure that filing your tax return is on it. After all, if you have a tax refund coming, you will get your money that much sooner. And if you owe money, it’s a good idea to get your return prepared early so that you know whether or not you are going to need to save up so you can pay on April 15.

You don’t have to do everything for your taxes all at once, but you should probably get started, doing a little bit at as time as you can. Here are some of the things you will need when it comes to taxes, whether you are preparing them yourself, or having someone else do it for you. For the most part, documents that don’t involve your personal information are provided to you. They should be mailed by January 31. Double check to make sure that you have the necessary, and if you don’t, contact the organizations that are missing them.

• Social Security Numbers: These are for you, your spouse and your children.
• Your residential address.
• Child care provider tax ID: If you plan to deduct child care, you need this tax ID number.
• W-2 forms: These should be provided to you by an employer. One copy each goes to the federal government, the state government and you. There is usually a fourth copy as well.
• 1099 forms: If you performed non-employee contract work, those you did it for should send you a form if you made more than $600 from them in the year.
• K-1 forms: For businesses.
• Farm income.
• Income from partnerships and trusts.
• Annuity and pension information. If you are receiving retirement plan distributions, you need this information as well.
• Alimony received.
• Winnings from gambling or lottery: This will be on form W-2G.
• Award and prizes: This should be on a 1099-MISC. Be aware that non-monetary prizes can be counted as income as well.
• Jury duty pay.
• Interest income received.
• Unemployment benefits.
• Stock transactions and statements.
  
• Fellowships and scholarships.
• Income tax refunds from state and local governments.
• Mortgage interest paid: First and second mortgages.
• Sale of real estate: 1099-S
• Real estate taxes paid.
• Documentation for expenses: If you plan to claims deductions or credits for business expenses, sales tax on a new car, first time home buyer, charity donations, moving expenses, or anything else, you will need the proper documentation for this. Otherwise, if a tax audit comes your way, there could be trouble.