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Avoid a Debt Settlement Tax Surprise
Avoid a Debt Settlement Tax Surprise Reaching a settlement on your debt comes with important tax consequences. The number of Americans struggling with high debt is increasing, according to the U.S. Federal Reserve. U.S. household debt reached a new record this spring, the central bank said, with the average indebted household owing more than $16,000 on their credit cards. Seeking debt forgiveness from lenders is one option to try to deal with the burden of high debt. But there is an important tax consequence: Any amount of cancelled debt is generally taxed as ordinary income. This can come as a
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Tax Tips for Those Getting Married – Know someone getting married? Send them this tip now.
If you recently got married, plan to get married, or know someone taking the matrimonial plunge, here are some important tax tips every new bride and groom should know. Notify Social Security. Notify the Social Security Administration (SSA) of any name changes by filling out Form SS-5. The IRS matches names with the SSA and may reject your joint tax return if the names don’t match what the SSA has on file. Address change notification. If either of you are moving, update your address with your employer as well as the Postal Service. This will ensure your W-2s are correctly stated and
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The Tax Impact as Your Children Grow Up – Prepare now for potential income tax hits
The Tax Impact as Your Children Grow Up – Prepare now for potential income tax hits As your children age, you can easily be surprised by a larger tax bill. To help ease the possible burden, here are some possible tax hits to prepare for as your children age A higher tax bill in your future At age 13: loss of your Dependent Care Credit. If your children are in daycare and you offset some of this cost with the Dependent Care Credit you will lose this benefit when they reach age 13. The impact: a credit against up to $6,000
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Sharing Economy Now in IRS Spotlight – 40% are unaware of their tax responsibilities
Sharing Economy Now in IRS Spotlight – 40% are unaware of their tax responsibilities UBER – A vast number of workers taking part in the new Shared Economy are making numerous tax mistakes. So whether you or someone you know is driving for Uber or renting out their home for income, there is now help to navigate this confusing landscape. Sharing Economy Now in IRS Spotlight 40% of the workers in the Sharing Economy are unaware of their tax responsibilities. Over 60% of the service provider companies are not training their new workers on their tax responsibilities. Source: Written statement
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Still Time to Make These Tax-Saving Moves – Action you can take before time runs out
Still Time to Make These Tax-Saving Moves – Action you can take before time runs out Five last-minute tax savings ideas Still Time to Make These Tax-Saving Moves Here are five tax saving ideas that can be used by most taxpayers. But act soon, there are only a few months until our tax year comes to an end. 1 Make a late-year charitable donation. Even better, make the donation with appreciated stock you have owned over one year. You can often receive the higher value donation without paying capital gain taxes. 2 Make final contributions to your qualified retirement plan
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Alert: Review Beneficiary Designations
Alert: Review Beneficiary Designations Checking your beneficiary designation on a regular basis can help loved ones avoid a big mess after you pass away. Here’s why. Alert: Review Beneficiary Designations Sometimes federal tax laws make us lax in reviewing the things that matter. Beneficiary designations is one such example. This is because there is a federal estate tax exemption of $5.45 million for you and an additional $5.45 million for your spouse. This means the likelihood of your death creating an estate tax problem is remote. Correct? Not so fast. Here are reasons an annual beneficiary review is important. Beneficiary
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Reminder. 3rd Quarter Estimated Tax Payment Due
Reminder. 3rd Quarter Estimated Tax Payment Due If you are required to send in quarterly estimated tax payments using Form 1040 ES, your third quarter installment is due now. Reminder. 3rd Quarter Estimated Tax Payment Due If you have not already done so, now is the time to review your tax situation and make an estimated quarterly tax payment using Form 1040-ES. The third quarter due date is now here. Normal due date: Thursday, September 15th 2016 Remember you are required to withhold at least 90% of your current tax obligation or 100% of last year’s federal tax obligation.* A
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When to Ask for Help – OR run the risk of a high tax bill
When to Ask for Help – OR run the risk of a high tax bill All too often taxpayers take action that will cost them dearly when they file their tax return. With a little planning, the IRS will receive their fair share, but not a dollar more, due to ignorance of tax laws. When to Ask for Help “Before taking action talk to your tax adviser.” How many times have you seen this legal disclaimer and have your eyes gloss over? Unfortunately, there are too many times when taxpayers do not follow this advice and then must pay the
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Double Check Your Documentation – Better to be surprised now than during an audit
Double Check Your Documentation – Better to be surprised now than during an audit After filing a tax return, most of us are simply relieved another tax year is done. Before moving on to next year, please spend a moment organizing your records. It will help tremendously should you need to refer to them at a later time. Your tax return is completed and you can exhale a big sigh of relief. Not so fast. Do you have adequate support documentation if the federal or state authorities decide to review your tax return? The checklist Here is a check-list to
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The Lost Art of Tracking Home Improvements – How a tax law makes us sloppy and creates a tax risk
When does a tax benefit not become a tax benefit? When you assume you no longer need to keep track of something. This is the case with the home gain exclusion. One of the more popular provisions in the tax code is the $250,000 capital gain exclusion ($500,000 for a married couple) of any profit made when selling your home. As long as you follow the rules, most home sales transactions are not a taxable event. But what if the tax law is changed? What if you rent out your home? What if you cannot prove the cost of your
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