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The BlueCollarDollar was designed as a personal finance center where you will find the complicated world of investing and financial planning explained. We take a common sense approach to the money you earn, your investments (mutual funds, bonds, mortgages), retirement planning (IRAs, 401(k)s, etc.), insurance, mortgages, and debt. We want you to have a financially stable retirement, that is both comfortable and healthy.

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Tax Mama

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Order your copy of Building Wealth in a Paycheck-to-Paycheck World by Paul Petillo. It is packed with safe, proven wealth-building strategies that cover all the major components of a balanced financial plan, including:

• Straight talk on mutual funds, bonds, real estate, and annuities
• Techniques for avoiding financial disasters
• Tools to help readers track their debt and create a plan for staying out of it
• Road maps to buying a home and saving for college and retirement

Determining Capital Gains
The current tax policy has changed the way you calculate capital gains and, surprise, it is more confusing, breaking down the differences into the following deductible percentages: 0%, 5%, 10%, 15%, 18%, 20%, 25%, 31%, 33%, or 35%. The highest rate applies to those in the top 1% of the tax payers and has a great deal to do with the type of asset owned and how long it was held.

Tax payers make a number of serious mistakes when it comes to calculating this figure. A large number of people who sold their homes after having occupied them for two years or less are usually not aware that they may qualify for a break. Granted, the sale of the home must be "unforeseeable reasons", which are listed in the IRS Publication 523. Among the reasons which include the change of jobs, poor health, and divorce, terrorism is now among the qualifiers for this tax break.

If you own a home that housed your office, you may also be eligible for a credit against the gains you received. You can file an amended return for this dating back three years but be aware. Many of these amended returns may have a negative effect. The IRS, will allowing you to do so, may also be scrutinizing that year's tax return and others for subsequent errors.

Those errors may be worth the risk. Since 1997, filers could recognize gains of up to $250,000 for single filers and $500,000 for married ones provided they lived in the residence for two of the last five years. This is one you should get with a professional to discuss in detail.