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The Standard Deduction May Be Costing You – This technique could save you plenty
The Standard Deduction May Be Costing You – This technique could save you plenty Many taxpayers default to the standard deduction when filing their tax return because of its simplicity. Unfortunately, this often creates a higher tax bill. Here is a tip to ensure it does not happen to you. Only about a third of Americans file income tax returns using itemized deductions. Unfortunately many of those who don’t itemize are overpaying their taxes. Don’t wait until tax time to figure out if itemizing your deductions yields a lower tax bill. Start now to review your situation and plan for
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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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Avoid the 10% Early Withdrawal Penalty – What every Traditional IRA owner should know
Avoid the 10% Early Withdrawal Penalty – What every Traditional IRA owner should know While it is not a good idea to tap retirement accounts prior to retirement age, sometimes it cannot be avoided. What can often be avoided, however, is the punitive 10% penalty for early fund distributions. Outlined here are exceptions to the 10% penalty rule for Traditional IRAs. It is one thing to be taxed on retirement contributions and their related earnings when you withdraw funds from your Traditional IRA, it is quite another when you pay the tax PLUS a 10% penalty for early withdrawal. Need
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After filing your tax return, do not close the book on your taxes until you have set up next year’s files, purged unneeded old records, and prepared your records in case of an audit. Here are some tips. With a sigh you are relieved that yet another tax return has been sent off to the government. Another 12 months before you need to do this again. But before you close that tax file, there is still some work to do. If the IRS or state revenue department selects your return for review, you will need to be prepared. Here is
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Most of us only see the media portrayal of the lottery. Lucky winner, lots of cash. Outside of the bright lights is the true winner: the taxman. Here is what you need to know. bästa casino bonus Most everyone enjoys dreaming of winning it big in the lottery. News media outlets publicize the large unclaimed pots of money on the evening news and they put a spotlight on the lucky multi-million dollar winners. Ever wonder what the tax math looks like? The bottom line when seen from a wage stand point is that 75% or more of the income used
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If you are participating in an HSA, recently announce limits for 2014 will help you get a jump on planning for next year. The savings limits for the ever-popular Health Savings Accounts (HSA) are now set for 2014. The new limits are outlined here with current year amounts noted for comparison purposes. What is an HSA? An HSA is a tax advantaged savings account where part of your wages can be contributed on a pre-tax basis. There is no tax on the funds contributed or the interest or investment earnings as long as the funds are used to pay for
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Unlike fishing, phishing has no limits and can hurt anyone it touches. As one of the top 12 IRS tax scams, you do not want to take this bait. Here is what you need to know. Each year the IRS publishes the top dozen tax scams it encounters over the prior year. One of them that makes an all too common appearance on their list is the phishing scam. Here is what you need to know. Phishing requires bait Phishing is the act of creating a fake e-mail or website that looks like the real thing. This “bait” is then
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Government Shutdown Impacts Return Processing – …but only a little
Think the 16 day closure of the Federal Government is going to delay the tax season? Yes, but only a little. The Government announced it will open the 2013 tax filing season on January 31st. Only one week later than anticipated. “Our teams have been working hard throughout the fall to prepare for the upcoming tax season. The late January opening gives us enough time to get things right with our programming, testing and systems validation…” -IRS Acting Commissioner Danny Werfel Many anticipated that the Federal Government closure in October would dramatically impact the start of processing tax returns. It
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New Mileage Rates for 2013
The IRS announces mileage rates for 2013. These rates may be used in place of tracking actual auto expenses for qualified travel. The IRS recently announced mileage rates to be used for travel in 2013. The Business, Medical, and Moving mileage rates increase one cent versus 2012. Unfortunately, the rate to be used for Charitable travel is unchanged because updates in this area require Congressional action. Remember to create and keep a detailed log of your applicable mileage for your qualified business, medical, moving and charitable driving. Without this documentation, your qualified deduction could be disallowed. 2013 New Mileage Rates