Married couples have the choice of filing their taxes jointly or separately. What is the best option for you and your spouse? Generally, it is to file jointly – but there are several factors to consider before making your choice. Obviously, the first hurdle is that you have to be married. For tax purposes, you
If you’re a traditional employee, every year you receive a W-2 form from your employer that records your earnings for the year and the amount of taxes withheld from those earnings. IRS 1099 forms are complements to the W-2 form for non-traditional employee relationships. They are generally designed to record sources of income that have
To paraphrase the old adage, there are only three absolutes in life: death, taxes, and the rise of scams during tax season. A major tax scam since 2013 involves phone calls by fictional IRS agents that demand immediate payment for alleged tax debts, threatening lawsuits or even jail time to those who refused to comply.
Tax filing season is upon us. Soon you will be filing your paperwork and perhaps receiving a nice check — unless thieves file a return in your name first and falsely claim your refund. Unfortunately, if a thief has your Social Security number and other relevant information, tax identity theft is very hard to prevent.
The Earned Income Tax Credit (EITC) is a program designed to provide tax relief for American workers with low-paying jobs. Could you qualify for this tax credit? If you have a relatively low income, take some time to find out. Earned Income Tax Credit Qualification Some eligible taxpayers miss out on EITC savings because they
One of the most controversial provisions of the 2017 Tax Cuts and Jobs Act (TCJA) was the limit it placed on state and local tax (SALT) deductions. The TCJA capped the deduction on combined payments for state and local property, sales, and income taxes at $10,000 beginning in the 2018 tax year. According to the
Identity thieves have many ways to steal your money – including fraudulent tax returns. They file a return in your name as early as possible to beat your legitimate return, with fake financial data designed to claim a large refund. You won’t realize this until your tax return is denied because there’s already been a
Did you have a happy New Year? We certainly hope so. Now it’s time to get back to regular routines and take care of January chores, including gathering your tax information. The 2019 Tax Season Begins on January 28 Despite the partial government shutdown, the IRS announced that the 2019 tax season will begin on
Tax preparers such as Certified Public Accountants (CPAs) and Enrolled Agents are incredibly busy during tax season. Their time is precious, even more so this year with many of the changes introduced by the Tax Cuts and Jobs Act taking effect for the first time. That makes it even more important for you to prepare
The holiday season is full of plans and activities that make December incredibly hectic. If you are the average American, tax considerations and financial adjustments are pretty low on your holiday to-do list. However, you are not the average American — you enjoy saving money, are diligent in seeking ways to save, and excellent at
Uh-oh. You didn’t pay your taxes by the deadline. You’re facing late payment penalties – but, believe it or not, you may be able to convince the IRS to waive those penalties. It’s not well publicized, but the IRS does have a First Time Penalty Abatement (FTA) Policy. The FTA only applies for a single
Did you miss the April 17 tax deadline for 2018? If so, you probably filed for and received a six-month extension from the IRS. Don’t relax too much, because October will be here before you know it. The IRS offers a series of tips to help taxpayers avoid common errors when filing their taxes, whether
The term “administrative offset” brings to mind meaningless governmental jargon. It is governmental jargon – but if you are affected, it’s not meaningless at all. In layman’s terms, administrative offset is the government’s way of applying money that would normally be owed to you (such as tax refunds and certain Social Security benefits) to outstanding
Who wants simpler taxes? Most of us do, assuming we also keep more money in the process. Starting in 2018, homeowners are more likely to have simpler tax returns – but they may need to make similar tax calculations to ensure a lower tax bill. Tax simplification was part of the pitch to sell the
Retirement has finally arrived. You’re ready to start drawing on your retirement income sources. Enjoy this new phase of your life. Unfortunately, you haven’t been able to retire from taxes – and your taxes will enter a new phase as well. You don’t have an employer to hold out taxes on your salary anymore. You’re
A summer job is a great way for students to earn some extra money while building a resume for the future and learning new things about the working world. Typically, one of the hardest lessons for students to deal with is income tax. Working students may say, “Why is so much of my paycheck withheld?
You anticipated a large refund on your taxes to pay off some bills and put some money away in a rainy-day fund. Unfortunately, the money never showed up. What happened? Your refund may have gone toward an unpaid bill selected by the government – your unpaid student loan. Your federal student loan is
What goes up must come down – when considering the effects of gravity. That principle doesn’t typically apply to taxes. In the rare cases where taxes do go down, other taxes tend to go up to compensate government coffers. Because state taxes are often linked to the federal tax code in different ways, changes in
The recent Tax Cuts and Jobs Act (TCJA) represents one of the biggest changes to the tax code in many years. Will the Internal Revenue Service be up to the challenge of enforcing these changes? For the last five years, the IRS has been examining fewer and fewer returns. In calendar year 2016, 1.1 million
You are experiencing sweet satisfaction knowing that your taxes were filed on time. That is, until you realize that you took a deduction when you did not qualify for it, or forgot to claim an important tax credit that could save you hundreds of dollars … or until Congress suddenly resurrects some expired tax breaks,
Did your paycheck increase due to the recent tax cuts? Many Americans saw a change in their take-home pay beginning in February once the IRS issued its new tax withholding tables. Businesses adjusted the withholding for their employees according to the new tables. To avoid a tax surprise in 2019, you may need to make
Most individuals in the U.S. know to keep their tax returns for three years in case the IRS decides to audit them, but few know that there are exceptions to that time limit. Some people throw away their oldest return when they file their new one annually, which is normally okay. However, in the following
When your identity is stolen, you have so many potential issues to deal with — changing passwords, closing accounts, dealing with fraudulent charges, and placing fraud alerts with the credit bureaus — that you may forget about potential tax fraud. Armed with your personal information, identity thieves can file a fraudulent tax return in your
It is hard to beat the convenience of a credit card for purchases, but does that same convenience make it worth paying your taxes by credit card? It might, but that depends on several factors involving money and time. “Your credit card is usually a high-interest option, but it is an option,” opines Betterment Head
Waiting until the last minute to pay your taxes can cost you if you are expecting a refund, since the government hangs on to your money and receives more interest on it. However, if you owe money to the government, that same principle applies to you. Why not wait until the last minute? There is
Have you ever cheated on your taxes? If so, you are in the minority – but you aren’t alone, either. A new Credit Karma survey finds that 6% of American taxpayers have knowingly cheated on their taxes. The real total may be higher, since the survey only captures those who are willing to admit it.
A Closer Look at the New Tax Law’s Effects The Tax Cuts and Jobs Act (TCJA) promised an income tax cut for most Americans. Is that promise less likely to be fulfilled if you live in certain states? The Tax Policy Center (TPC) released a recent report addressing the TCJA’s effect on individual states and
Tax season is almost over. Have you filed your return yet, or are you still scrambling to beat the April 17 deadline for 2018? Don’t overlook these common tax deductions that could save you money. When you hurry through your tax return, you may miss valuable deductions that could produce a lower tax bill –
If you are nowhere near ready to file your taxes as the deadline approaches, you may file an extension with the IRS that gives you up to six more months to file your taxes. Filing an extension will spare you from late filing penalties — 5% of the amount of tax you owe for each
Are you a procrastinator who waits until the very last moment to file your taxes? Thanks to Emancipation Day, the filing deadline is April 17, 2018, to file your taxes for the 2017 tax year. That gives you a few more days to consider last-minute ways to lower your taxes. Start by reviewing your possible