Most families think they can’t possibly save for retirement when it is so hard to make ends meet. You know retirement will eventually come and you would like to be able to retire comfortably, but how do you keep up with inflation? Maybe it’s time to adopt some income management skills.

One major key that we must abide by is to “Pay Yourself First.” You may have heard this before but have you taken action? Think about it, are you working for everybody else? Why should they be a priority? It would help if you divide you living expenses in to percentages and evaluate just where you are spending your money. This is income management at work. If you look hard you will see you blow a lot of money on needless things. Do you need to spend $3.50 cents on a specialty coffee? You can still get the buzz on a $1.00 cup can’t you? Do you need 30 pairs of black shoes? The fact is about two thirds of the world lives on $2.00 a day. When you get that in prospective it should make you feel more powerful.

Think of your finances like you would your health. If you are so busy taking care of everyone else you may be neglecting yourself. What’s going to happen to them if you fall apart? It is time to find the discipline. If you really believe there is no money left to save than you are living above your means. There is professional help to be had. Learn to shelter your money from taxes, check on your insurance payments, and shop for lower premiums; this will help create cash flow so you can have better income management. Stop nonsensical spending and put that into savings. You may have to move. If you are in an expensive state you may need to leave it. The alternative may be living in a cardboard box when you’re 65.

Are you one of the lucky Americans who received a tax refund this year? As reported by the Internal Revenue Service 77 percent of the people who filed tax returns in 2004 received a refund. The average amount refunded was $2,100. How will we choose to spend those tax refunds?

Some families decide to use the “extra” money they receive from their tax refund to increase their nest egg. Families are not always able to save on a monthly basis. Instead, they use their tax refund to increase their savings.

Often there are home improvements and needed repairs that do not get done because the finances are simply not available. The added income from tax refunds gives the family an opportunity to make those necessary improvements. It also adds to the value of the home.

Unfortunately, many people live from pay check to pay check. They rely on credit cards to help them make ends meet. Tax refunds can help pay off those high interest credit cards as well as other outstanding debts.

The most common use of the tax refund is self indulgence. We treat ourselves and our families to some of the things we have sacrificed all year long. Families splurge on everything from a new automobile to renovations on their house. They may purchase that 60 inch platinum television or even a trip to Disney World. If you are not sure how you would like to spend or not spend your tax refund, there are thousands of retailers and financial institutions that are willing to accept your business.

Taxes have been a part of our society for many years. State income taxes are individually imposed by each state. The following states have chosen not to have income taxes: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. Taxes in Tennessee and New Hampshire are limited to dividends and interest. The State of California has the highest income tax rate at 10.3 percent. The state with the lowest percentage is the state of Illinois. It has a flat tax rate of 3 percent.

States without taxes have interesting arrangements. Alaska and Florida have state corporate taxes. These taxes are placed on corporations or associations. Florida has a specific clause in their state constitution that prevents a personal income tax being levied against its residents. South Dakota's corporate tax is placed on financial institutions. Since 2006, Texas has had a franchise tax on businesses. Like Florida, Texas is against a personal tax against it citizens. Washington's tax is called the "Business and Occupation Tax." This tax is based on gross receipts tax.

Several states have flat rate taxes. As earlier mentioned, Illinois has a rate of three percent. The rate in Pennsylvania is 3.07 percent. Indiana's rate is 3.4 percent. The rate for Michigan is 4.35 percent. Colorado has tax rate of 4.63 percent. Utah's rate is five percent even. Lastly, the Commonwealth of Massachusetts has a rate of 5.3 percent. It is safe to say that with the massive rate of inflation, there will never be complete elimination of state income taxes.

The United States Tax Court was started by congress in 1924 being under Article 1 of the U.S. Constitution. The Tax Court helps to decide problems between the Internal Revenue Service and tax payers. The President calls 19 people to be the tax court judges, they are given terms of 15 years. One of the judges is elected to a duty of two years as chief judge. He oversees the administration of the court and also has a caseload. Judges who have been retired can be called back to serve under the chief judge. He has 17 trial judges who work under the regulations and rules of the court.

The reason problems arise between the IRS and the taxpayer are because sometimes the IRS spots a tax deficiency and the person doesn't agree so the problem is taken to the Tax Court. You can't just go to Tax Court, you have to file a petition to have your case heard. In this situation, the person is called the petitioner and the IRS is called the respondent. If you are not sure of yourself you may hire an attorney who practices this type of law to represent you. If you cannot afford an attorney they have a place where you might qualify for assistance in representing you in Tax Court.

There are many states which have Tax Courts and they are all linked together. The U.S. Tax Court is also a Federal Court. Although they are linked together they each cover their own jurisdiction. There are seven states which have this Specialized Court; Arizona, Indiana, Maryland, Minnesota, New Jersey, Oklahoma, and Oregon. The Tax Court in these states hear cases involving state tax, property tax, sales tax also taxes on inheritance from the probate courts.

Tax planning makes a lot of sense-- and it can make you a lot of money. Most people have a large amount taken out of their pay so that they get a large refund in May and feel like they're getting something for free. The fact is they are only getting their own money back.

It makes sense to have your employer take out a little more than expected so you don't end up owing any taxes. No one wants to pay more tax than they must, so withholding a little more is not necessarily a bad thing.

However, putting that extra money in a savings account or an IRA would earn interest-- at the expense of a smaller refund. However, the interest on savings or an IRA will outweigh the refund. Within a few years, you could have a nice little stash and a security blanket as well.

Some people will always go crazy at tax time. If they get a big refund this year, they try to figure out how to get a bigger one for next year. But those who have twice the necessary amount withheld just to get that big refund at tax time should stop to think of all the money that's lost by not putting that extra money away. It's important to realize that the refund consists of your money. The government is just holding it (and sometimes using it) until they have to return it-- hence the name Income Tax Return!