General Tax Information

    More in General Tax Information

    Do 401(k) Contributions Avoid AMT?

    Retirement planning with tax benefits is critical to minimizing your tax liability while allowing you to save enough money to stop working at some point. 401(k) plans are just one way for taxpayers to plan their finances to minimize tax liability. While many legal ways exist to ...

    What Is a 501(c) Non Profit?

    The designation 501(c) is an Internal Revenue Service label indicating an organization's exemption from paying income tax. A 501(c) organization provides nonprofit services or support to the public or other charitable groups and is responsible for complying with standards ...

    How to Add a Qualifying Child That You Never Used Before to Your Taxes

    Adding a qualifying child to your return increases the number of exemptions you’re entitled to and lowers your taxable income. In some cases, you may also be eligible to claim additional tax credits or deductions, such as the child tax credit, the child and dependent care ...

    How to Adjust Withholding on Bonus Income

    The tax withheld from bonus income is often more than the tax withheld from your regular pay. Your payroll department either withholds tax on your bonus income at a flat rate or applies your regular rate to your combined salary and bonus income. Although your regular rate is ...

    How to Calculate My Payroll Tax With Pretax 401(k) Contributions

    Whereas a Roth 401(k) retirement plan is structured so you make contributions with after-tax dollars, a traditional 401(k) plan allows you to make contributions with pretax money. If you have the latter, your employer subtracts your contributions from your gross income before ...

    How to Calculate SS Taxes After Pretax Deductions

    Social Security tax is also called Federal Insurance Contributions Act tax because the FICA mandates its collection. Pretax deductions are employer-sponsored benefits that meet the regulations of the respective Internal Revenue Code. As an employee, your employer is required to ...

    Can I Gift Monies From an IRA?

    Investing in an Individual Retirement Arrangement allows you to accumulate funds for retirement. When you are ready to begin withdrawing from your IRA, you may want to help family members or close friends by gifting money from the account. Gifting money will not reduce your ...

    Can You Use Credit Card Statements as Proof for Tax Write-Offs?

    The total earnings in your W-2 or business profit-and-loss statement rarely equal your taxable income. The U.S. tax code has provisions that allow you to reduce your tax liability by claiming certain credits and exemptions. You may also qualify to deduct some out-of-pocket ...

    How to Check Status of a State Tax Refund in Alabama

    Alabama provides two automated methods to receive information about your state income tax refund 24 hours a day. The quickest option is the online system, but if you prefer to check your refund status by phone, a refund hotline is available. Each system requires information from ...

    What Could Cause Under-withholding?

    The Internal Revenue Service expects to receive the money that you owe in taxes at regular intervals throughout the year. This requires your employer to withhold money from your paycheck. If you do not pay enough money to cover your tax liability throughout the year, you will ...

    Do I Declare a Dividend on a Tax Return if It Is a DRIP?

    Dividend reinvestment plans offer the convenience of automatically reinvesting any cash dividends paid by the company in new shares without you having to touch the money. However, just because you don't receive the money in your bank account first doesn't mean you don't have to ...

    Deductible Expenses of Fixing Up a House

    Fixing up your personal home or a rental property can be a time-consuming and expensive process. However, you can deduct the cost of some home improvement and repair projects on your tax return. These deductions reduce your taxable income and decrease how much you owe the ...

    What if I Didn't Keep My Tax Receipts?

    There are any number of reasons why taxpayers might have no receipts to document the deductions taken when filing a tax return with the Internal Revenue Service. Perhaps you had no clue you would need proof of these expenses, or a fire, flood or tornado destroyed the documents ...

    What Is the Difference Between a 1099R and a 1099 Misc?

    In addition to the W-2 form you receive from your employer, you might also receive a 1099 form, or an "information return." Many varieties of the form exist, each to report a specific type of income. For example, a 1099-INT form includes the total amount of interest ...

    The Difference Between Pretax and After-Tax Medical Insurance Payments

    The main difference between pretax and after-tax medical payments is the treatment of the money used to purchase your coverage. Pretax payments yield greater tax savings, but after-tax payments present more opportunities for deductions when you file your tax return. However, ...

    Federal Tax Refund Status Information

    Many people overpay federal taxes throughout the year and get a refund in the springtime. Every January the Internal Revenue Service releases a schedule for anticipated refund dates based on the filing date. Once you file your tax return, the IRS offers three tools for ...

    How to File a Construction Loan on Taxes

    Under normal circumstances, the proceeds you receive in the form of a loan are not taxable to you as income. However, if the creditor forgives all or part of a loan, the IRS considers that to be income to you, or to your company if your corporation took out the loan. Meanwhile, ...

    What If I Forgot to Include My Check With My Taxes?

    Forgetting to send anything to the Internal Revenue Service -- especially money -- can cause just about anyone to panic. However, the IRS does allow you to send your check separate from your tax return. You’ll include a payment voucher with your check so the IRS can ...

    What Happens if You Change Your Withholding to Exempt?

    Unlike Social Security and Medicare taxes, which are withheld at flat percentages of your pay, federal income tax is a multilayer affair. In the case of income tax, your employer determines your withholding conditions from your W-4 form. If you meet the requirements, you can ...

    Does Illinois Require You to Pay State Taxes on an IRA Withdrawal?

    When you withdraw money from your individual retirement account or other qualified tax-deferred retirement account, you will owe federal income taxes on the amount you withdrew. Depending on your state, you may also owe state income taxes on your IRA distributions. States may ...

    IRA Hardship Withdrawals

    The Internal Revenue Service allows investors to withdraw funds early from their Individual Retirement Arrangement accounts without penalty when certain qualified hardships arise. Otherwise, early withdrawals from IRA accounts, including both Roth and traditional IRAs, typically ...

    IRS Hardship Rules for Delinquent Taxes

    Because of penalties and interest, your IRS tax debts can escalate quickly if you don't pay them on time. For taxpayers facing economic hardship because of overdue tax debts, the IRS has established several programs that allow you to pay on more favorable terms. If you are still ...

    What Items Are Deductible When You Own a House?

    Many costs are associated with home ownership, including down payments, closing costs, homeowners insurance, plus the cost of maintaining the property. These expenses can take a chunk of your savings and reduce your nest egg, but you can recoup some of these costs. Owning a home ...

    How to Keep Tax Information Organized

    Tax season can be stressful enough without having to struggle to find receipts and notes about your finances. Whether you prepare your own return or you hire a professional expert, keep tax information organized to streamline the process. Once you create a system, it will be a ...

    How to Look Up Tax Return Information From a Previous Year

    The Internal Revenue Service provides two different reports that list your prior-year return information. You can order an actual copy of your return, but there is a $57 fee for each year you request. In most cases, a free tax return transcript satisfies any reason you might ...

    Do Married Couples Pay More or Less in Payroll or Social Security Taxes?

    If you’re on a company’s payroll, you’re classified as an employee. In this case, you pay your payroll taxes through the withholding process, which requires your employer to deduct the taxes from your paychecks. As a married individual, whether you pay more or ...

    How to Offset Tax Gains by Selling Bad Stocks

    You can’t make every stock trade a winner, but you can reduce the taxes on your winners by selling your losing stocks. The Internal Revenue Service offers guidelines for writing off losses against gains, and you must follow these guidelines in order to receive the full tax ...

    Do I Have to Pay FICA on Retirement Income?

    FICA is a combination of two federal taxes, and it’s required to be withheld from certain types of income. In general, the Internal Revenue Service does not double-tax income you receive, which means if you paid tax on it before, you should not pay tax on it again. For the ...

    How to Pay a Large Tax Bill

    If you owe a large tax obligation as April's tax-filing deadline approaches, you might feel panic setting in. If you anticipate owing money to the IRS, planning ahead and putting money aside each month is the best way to prepare for a tax debt, but this is easier said than done. ...

    Do I Have to Pay Taxes on My Savings Account?

    The Internal Revenue Service considers all of your income from all sources to be taxable income unless it is specifically exempted from taxation by law. That includes income from working, such as wages, salaries, commissions and tips; income from investments, such as capital ...

    Are Paychecks Higher With Pre-Tax or After Tax Deductions?

    Pretax benefits are employer-sponsored benefit plans that are designed to give employees a tax advantage when they are deducted from gross earnings before taxes are withheld. After-tax benefits, in comparison, do not provide a tax break; they are deducted from wages after taxes ...

    What Is a Pre-Tax Item?

    Some employers offer incentives to attract and retain good employees. Those benefits might come in the form of pretax items, which allow employees to obtain a tax advantage on their premiums. The Internal Revenue Service sets the standards that pretax plans must adhere to. For ...

    Real Estate Investment Deductions for Improvements

    Real estate investing is the business of buying commercial and residential properties, and then finding tenants for these properties. As a real estate investor, you can earn income each month from your properties. This can generate substantial passive income, but, as with any ...

    Standard Deduction and Mortgage Interest

    The standard deduction is an amount that you can deduct from your federal taxable income if you don't itemize your deductions. If you do itemize your deductions, you can't take the standard deduction, but you can deduct qualified home mortgage interest. If either the home ...

    Steps to a Window Tax Credit

    If you have to replace the windows in your home, you can offset the cost somewhat by qualifying for an energy tax credit. This is possible if you install energy efficient windows as defined in the American Recovery and Reinvestment Act. You are allowed a maximum tax credit of up ...

    Tax Basis for Selling Inherited Stock

    You realize a capital gain or loss when you sell shares of stock. Tax basis, also called cost basis, is the amount you exclude from the net proceeds of the sale to determine the gain or loss. When you sell stock you have inherited, you must still report any capital gain you are ...

    Taxable Investments vs. Tax-Deferred Investments

    A saying among investment old-timers is, "It's not what you make; it's what you keep." One of the primary factors that affects how much of the return on your investments you get to keep is the amount of taxes you have to pay. The Internal Revenue Service recognizes ...

    Taxation on Bonus Income

    The delight you feel when your employer hands you a bonus check might fade a bit when you realize how much of your bonus is headed for government coffers. In some instances, the Internal Revenue Service takes a larger percentage of bonus pay than it does your regular wages. The ...

    Taxes for Married vs. Unmarried

    Although the IRS does not consider marriage a taxable event, getting married can affect your taxation status in both positive and negative ways. The negatives include the possibility of marriage moving you into a higher tax bracket and the possibility that you could be penalized ...

    Taxes on Reinvesting Stock Dividends

    When a company that you own stock in produces a profit, the board of directors might vote to pay a portion of that profit to the shareholders in the form of a dividend. Some companies offer their shareholders the option of automatically reinvesting their dividends back into ...

    Taxes on My Savings Interest

    Just about any kind of income you can think of is taxable by the Internal Revenue Service. Wages, salaries, tips, gambling winnings, baby-sitting for your neighbor's children and even income from illegal activities are examples of taxable income. It should come as no surprise ...

    How to Treat Income From a Stock Buyback

    Corporations repurchase their shares for a variety of reasons, including to reduce dilution, increase earnings per share for remaining shareholders, and consolidate control back in the hands of directors and a few select stockholders. If shares are substantially undervalued in ...

    How Does My Withholding Affect My Taxes?

    Withholding refers to the taxes your employer is legally required to take out of your paychecks. This includes federal income tax, Medicare tax, Social Security tax and applicable state taxes; the Internal Revenue Service collects the first three taxes, while the respective ...

    What To Do If You Forgot to File Taxes?

    If you forgot to file your tax return, the Internal Revenue Service might file a substitute return for you, perhaps causing you to miss out on qualified tax deductions. It might also assess tax penalties and, in extreme cases, pursue a criminal conviction. If failed to file your ...

    Options on Withholding Taxes on Paychecks

    Employers are required to deduct taxes from your paycheck so you don’t end up with a huge bill at tax filing time. To correctly calculate the amount of payroll taxes, employers rely on the information you provide on your W-4 form. You have some options when you fill out a ...

    What to Do When You Forget to Add Married Name to Taxes?

    When you file your income tax return electronically, the Internal Revenue Service verifies your personal information before accepting the return. The IRS matches your name and Social Security number with the Social Security Administration records and accepts your return only if ...

    Is the SS Retirement Benefit Taxable?

    Millions of people receive Social Security retirement benefits. Some of them may find they owe income taxes on their benefits while others will pay no taxes on their Social Security. The determining factors are whether a retiree has income other than her Social Security benefit ...

    Who Is Exempt From Social Security Tax?

    Americans began to pay Social Security taxes in January of 1937, and the first retirement benefits were distributed at the same time. Today, employees and self-employed individuals in the United States are required to contribute to the Social Security retirement and disability ...

    Which States Don't Have State Income Taxes?

    Most taxpayers must pay a state income tax as well as federal income tax on their earnings. But people who live and work in nine particular states don’t have to worry about paying state income taxes on their earnings because these states don’t tax their pay. While ...

    How to Save Income Taxes on Land Sales

    The sale of land is a taxable event if you sell it for a profit. The lax liability can be pretty steep if your land has greatly appreciated in value since you bought it. However, there are ways to reduce the amount of taxes that you pay. And if you sell your land at a loss, you ...

    Understanding California Tax Withholding on a Paycheck

    California levies a personal income tax on employees who work in the state. California is also one of the few states that mandate state disability insurance withholding. Your employer makes the necessary deductions from your paychecks and pays them to the California Employment ...

    Are Social Security Taxes Withheld on 401(k) Deposits?

    Deposits to a 401(k) are the contributions you make toward your employer-sponsored retirement plan. Your employer sends your contributions to the plan provider, which funds your account. Your employer withholds taxes from your contributions before sending them to the provider. ...

    Is the Interest on a Savings Account Taxable?

    Savings accounts at banks and other financial institutions offer a way to earn a return on income without buying assets that might fall in value. Unlike investments that need to be sold to realize gains, savings accounts pay interest periodically over time. In general, interest ...

    Tax Deductions for Clothing

    Donated used clothing is a common tax deduction, and the Internal Revenue Service has guidelines for what constitutes a tax-deductible donation and the proper way to register those donations on a tax return. In some cases, taxpayers can also claim deductions on certain clothes ...

    The Difference Between Pretax and Post-Tax Benefits

    If your employer chooses to offer voluntary benefits it can do so on a pretax or post-tax basis. The Internal Revenue Service and applicable state and local governments have different taxation rules for pretax benefits, which reduce taxable wages. Post-tax benefits do not lower ...

    Are Reinvested Stock Dividends Taxable?

    When you invest in stock, you may receive periodic payments called dividends that the corporation that issued the stock elects to pay to its shareholders. Companies with steady profits sometimes choose to pay dividends as a means of attracting and retaining investment. Cash ...

    Does Using a Good Accountant Lower the Odds of a Tax Audit?

    Having an experienced tax accountant advise you and prepare your annual returns usually reduces your chances of facing an Internal Revenue Service audit. Be aware that there are many "good" accountants who have little tax experience. To lower your odds of an IRS audit, ...

    If My Job Did Not Take Out Federal Income Taxes, Does That Mean I Pay?

    The first time you look at your pay stub and realize that your employer isn’t withholding federal and state income taxes from your paycheck, it might seem like a tiny windfall. While it may mean more pocket cash in the short term, the mistake in withholding may come around ...

    529 Plans Versus IRAs

    Individual retirement arrangements and 529 plans are both tax-sheltered accounts, which means your investments grow tax-free. However, the two types of plans serve different purposes: IRAs are intended to help you save for retirement, whereas 529 plans are intended to help you ...

    Federal Tax on Royalties

    The federal government imposes taxes on a wide variety of income sources besides the wages and salaries earned by workers. If you own intellectual property, such as copyrights or patents, or if you own property containing natural resources, such as oil, gas or minerals, you may ...

    What Percentage of Income Tax Is Deducted From Bonus Checks?

    Businesses typically pay fixed wages and salaries to employees, but they can also choose to give out additional compensation in the form of commissions, awards, prizes and bonuses. The Internal Revenue Service considers bonuses to be a form of "supplemental wages." ...

    Do I Have to Pay Taxes on Money My Parent Gave Me?

    Parents are legally required to provide for financial support for dependent children, but large gifts can have negative tax consequences -- for your parents. In general, you don't have to pay taxes on money you receive from a parent unless you are your parent's employee.

    Effective Tax Rate Calculation

    You might think you pay a high income tax rate when you consider only your federal income tax bracket. However, your overall, or effective, tax rate is typically lower. This rate measures your total tax as a percentage of your total income. Your tax bracket represents your ...

    Is My Tax ID the Same as My Social?

    For individual taxpayers, their Social Security number is their tax identification number unless they applied for a separate number for their business. The Internal Revenue Service does not require all businesses to register for a tax ID, but Bloomberg Businessweek says that ...

    Tax Benefits of 1099 Vs. W2

    In a traditional employee-employer relationship, the employer issues a paycheck on a regular basis to cover the employee’s earnings after deductions, including taxes. At year-end, each employee receives a W-2 to use when filing income tax returns. However, if you have ...

    Taxes on SS Retirement Money

    If you collect Social Security retirement benefits, your payments may be subject to federal and state income taxes. Your total benefits for the tax year are reported to you and the Internal Revenue Service each January on Form SSA-1099. The part that is federally taxed depends ...

    Tax Benefits of Taking Children as Dependents

    The Internal Revenue Service has an assortment of tax breaks for people who take children as dependents. The benefits are available when you claim as dependents your own qualifying children or children who are related to you. You can often take a dependent exemption for any ...

    Tax Rate vs. Marginal Tax Rate

    If you ask people about their tax rates, many people respond with their marginal tax rate, which is the highest tax bracket that they fall in for the year. However, because you don't pay that tax rate on all of your income, your overall or "average" tax rate is usually ...

    Do I Have to Pay Federal Taxes on U.S. Bonds That I Use to Pay College for My Kids?

    Using U.S. savings bonds to save for your children's college education offers several tax advantages. In addition to offering tax-deferred interest, if you qualify, you can also exclude the interest income from your taxes when you spend it on your children's eligible educational ...

    Does Hours Worked Affect Withholding Tax?

    Withholding taxes include federal income tax, Social Security tax, Medicare tax and, in most cases, state income tax. Some local governments require local income tax withholding. Your tax amounts depend on your wages; the more you earn the more tax you pay, and the less you earn ...

    Social Security Tax Withholding Rules

    In 1939, the taxing provisions of the Social Security Act were amended and put under the Internal Revenue Code. The taxing guidelines were also renamed the Federal Insurance Contributions Act, which is why Social Security tax is often called FICA tax. Most income earners in the ...

    How to Calculate Compound Daily Interest of Tax Underpayment

    If you do not pay the full amount of taxes you owe by April 15, the Internal Revenue Service will assess interest on the underpayment balance, even if you filed for an extension to file your return. The IRS calculates underpayment interest by adding 3 percentage points to the ...

    Taxation of Reinvested Dividends

    When you buy stocks, you may receive periodic cash payments called dividends that corporations elect to distribute to shareholders as a means of attracting retaining investment. Cash dividends are taxable, but they are subject to special tax rules, so tax rates may differ from ...

    How to Pay Taxes on a Previous Refund

    People who itemize deductions can claim the amount of state and local taxes they pay and reduce their federally taxable income. As with overpayments of federal taxes, people receive refunds of any state tax they paid that exceeds their actual liability. Although paying taxes on ...

    What the Numbers Mean in a Federal Tax ID EIN

    The Employer Identification Number -- EIN -- is a tax identification number the IRS issues to private and public businesses, whether they operate for profit or not. EINs start with a two-digit prefix followed by a hyphen and seven more digits. In its literature, the IRS ...

    How Much State Income Tax Does North Carolina Withhold From Paychecks?

    As an employee in North Carolina, your employer is supposed to take state income tax out of all your paychecks, unless you’re exempt from the tax. The withholding amount varies, as it depends on your wages, pay period and the data you put on your state tax form.

    Does the IRS Pay Interest?

    Any time a taxpayer makes a late payment to the Internal Revenue Service, the agency charges interest in addition to any late-filing fees. The situation does not reverse itself if you file early -- you don't get interest on refunds owed just because you sent your return well ...

    Is FICA Tax a Payroll Tax That Is Paid Only by Employers?

    The federal government levies income taxes on a wide variety of income sources, but it also imposes payroll taxes that only affect earned income. Earned income describes money gained through active work, such as wages, salaries and self-employment income. The Federal Insurance ...

    I Live in Illinois & Work in Wisconsin: How Do I Pay Income Tax?

    Illinois and Wisconsin are among the states that have entered into reciprocal tax agreements that make life much simpler for a taxpayer who lives in one state and works in the other. As of 2012, 15 states had tax reciprocity agreements with at least one other state. These ...

    What Factors Determine Who Pays Sales Tax?

    When you go shopping, the amount you pay for an item at the register is often higher than the amount on the price tag: depending on where you live and what you buy, the vendor adds sales tax to the final cost. Sales taxes are not imposed at the national level: state and local ...

    Taxable Wage Definition for Social Security Taxes

    The federally administered Social Security program is funded by contributions from workers and their employers. Employers deduct the employee’s share from his wages and remit, along with the employer’s portion, on a periodic basis. Deductions are based on employee ...

    Are Prizes Tax Free?

    Receiving a prize or award can provide a welcome windfall, whether it's cash or an asset of significant value, such as a car or home -- but it can also increase your income tax bill. The Internal Revenue Service usually considers prizes of cash or property to be a form of ...

    Taxation on Unemployment Insurance

    If you receive unemployment insurance compensation, you are probably living on a reduced income. Even so, the Internal Revenue Service requires you to include unemployment insurance benefits in your taxable income. Depending on your state's tax law, you may also need to pay ...

    What Could Cause You Not to Get an Income Tax Refund?

    Filing an income tax return can grant you a tax refund, but not all taxpayers get refund checks. According to The Huffington Post, about 75 percent of taxpayers get refund checks every year, which means a quarter of taxpayers don't get tax refunds. Several factors related to ...

    What Do You Do if You Put the Wrong Routing Number & Account Number on Your Tax Refund?

    For years, the IRS has offered taxpayers the option of receiving their refund by electronic funds transfer, a faster method of getting paid. By including your bank’s routing number as well as your account number in the appropriate field in Form 1040, you allow the revenue ...

    Applying Pretax Deductions to Federal & State Vs. FICA

    Your employer takes pretax deductions out of your gross wages before applying taxes, which generally include federal and state income tax and Federal Insurance Contributions Act taxes (which fund Social Security and Medicare). This process can get confusing, as not all pretax ...

    What Is Unearned Income When It Comes to Taxes?

    The Internal Revenue Service draws a distinction between two basic types of income for tax purposes: earned income and unearned income. Earned income is money you make through employment or running a business, such as wages, salaries, tips and business profits. Unearned income ...

    What Can Give You a Higher Tax Refund?

    Filing a tax return can be a laborious process, but it also gives you the chance to claim tax breaks that could grant you a tax refund. A variety of tax breaks, including tax exemptions, deductions and credits can potentially reduce your total tax bill and give you a bigger tax ...

    Taxpayers' Bill of Rights in North Carolina

    Citizens have both rights and responsibilities in the United States. One responsibility that many people abhor is the duty to pay taxes. In North Carolina, you still need to pay taxes, but with this responsibility comes rights enshrined in the state's Taxpayers' Bill of Rights. ...

    IRS Penalties if a Tax Return Is Incorrect

    If you file an incorrect tax return, the IRS will not assess a penalty if it owes you a refund. You can even claim your refund late by filing an amended tax return within three years. If you owe the IRS money and you fail to pay because of inaccuracies on your tax return, ...

    Is a 403(b) a Pretax or Post-Tax Deduction?

    If you work for a public school, state college, university or other tax-exempt organization, your employer may offer a 403(b) retirement plan -- also called a tax-sheltered annuity, or TSA for short. As a participant in the plan, you typically make contributions with pretax ...

    What Are Special Assessment Taxes?

    The cost of owning a home goes far beyond the actual amount you agree to pay when you make a purchase. Expenses such as mortgage interest, real estate taxes and maintenance can increase the cost of home ownership by thousands of dollars a year. Special assessment taxes are an ...

    What Items Are Deducted From Gross Income on a W-2?

    Your W-2 is the end-of-year earnings statement your employer gives to you for tax purposes. It details your gross income and all the tax withheld for the year. These taxes include income tax and Social Security and Medicare taxes. Your W-2 typically also includes other voluntary ...

    What Types of Payments Do IRS Refunds Come in?

    Taxpayers who have overpaid in income taxes through routine withholding from their paychecks, or who claimed suitable and substantial deductions on their tax returns, might receive a tax refund. The benefit of receiving a tax refund extends beyond simply being paid back for the ...

    Tax Rules on Freelance Work in America

    Performing services for clients outside of a regular job can provide extra income to supplement wages or an avenue of full-time self-employment, but freelance work has several important tax implications. Freelancers or independent contractors are considered self-employed ...

    How to Track an Income Tax Return

    Seventy-two hours after you file your federal tax return electronically or one month after you submit it by mail, the IRS has a record of its receipt. At that point, you can contact the federal agency’s representatives or access its online system to track the status of ...

    The Most Widely Forgotten Tax Credits

    Tax credits differ from tax deductions. Tax deductions reduce your taxable income, saving you only a percentage on your taxes. For example, if you have a 21 percent effective tax rate, every $100 you deduct off your taxable income saves you $21 in taxes. A tax credit comes off ...

    Who Pays Back Taxes in a Divorce?

    Untangling yourself from a former spouse in a divorce is never an easy matter. There is property to split, debts to divide and possibly custody issues to resolve. If you previously filed a joint return, you also need to extract yourself from one another’s tax obligations; ...

    What States Have the Lowest Tax Rates?

    While the federal government primarily collects income tax, the states generate tax revenues from several different types of tax. Income taxes, sales tax and property tax are the big three for state and local governments. Some states collect all three, whereas others do not -- ...

    Pretax Payroll Deductions

    Pretax deductions lower your taxable wages, because the deduction is taken out of your wages before taxes are withheld. These deductions are offered through an employer, at its discretion. Pretax plans must meet the Internal Revenue Service’s requirements to qualify as ...

    How to Gross Up Severance Pay

    Severance pay, also called supplemental wages, is subject to taxation. If you were fortunate enough to negotiate a gross-up with your employer, you get the entire severance amount because your employer pays the taxes. To gross-up your severance, you need the agreed-upon ...

    The Annual Tax-Free Gift Limit

    Gift giving is a common way to recognize friends and family on special occasions, but giving away large sums of money can complicate tax returns. The Internal Revenue Service imposes a gift tax on donors who give gifts that exceed an annual exclusion and a lifetime unified ...

    What Is Taxable on My Paycheck?

    It seems your wages form the foundation for figuring your taxes, but additional non-cash fringe benefits may qualify as taxable. If you divide your annual earnings by the number of paychecks you receive, you will arrive at your basic wages per pay period. Examine an entry on ...

    How to Find Out When You Will Receive Your State Tax Refund

    The process of filing income tax returns is done each year for the federal tax system as well as for most states and some municipalities. Taxpayers who are slated to receive a tax refund often are unsure when to expect the refund to arrive. Whether you are awaiting a check in ...

    Taxation When You Receive Social Security Benefits & Interest Income

    Generally your Social Security benefits are not taxed by the Internal Revenue Service. However, when combined with interest income, there’s a possibility that your benefits become taxable compensation. Interest income is passive incomes and can be earned from a variety of ...

    Is Settlement Money Taxable?

    Settlement money escapes the taxman if it results from a personal injury. Any other settlement, like an award stemming from an employment discrimination allegation, will be taxed. That’s the simple answer. However, there are rules in the tax code that could cause a ...

    The Penalty for Non-Payment of Taxes

    The federal government imposes income taxes on a wide variety of income sources, from wages earned at a job, to savings account interest, investment gains and gambling winnings. Income earners are responsible for reporting taxable income to the Internal Revenue Service and ...

    Do Past Due Federal Taxes Ever Expire?

    The IRS is subject to limitations on its ability to asses back taxes against you, to place a lien on your property or to collect these taxes by, for example, auctioning your property. In addition, you may be eligible to discharge certain types of tax debt in chapter 7 bankruptcy ...

    Types of Income Taxes

    Income taxes have a long history in the United States. Enacted in 1862 by Abraham Lincoln, the tax was first created to pay for expenses resulting from the Civil War. With various laws, constitutional amendments and federal changes since its early years, the income tax system is ...

    What Types of Income Do You Not Have to Pay Social Security Tax On?

    The government imposes federal taxes to pay for the Social Security program, but unlike federal income taxes, which apply to a wide variety of income sources, Social Security tax applies only to the first $110,100 of your earned income as of 2012. Earned income generally ...

    Tax Consequences of Dividend Stocks

    Stock shareholders can make money on investments in two ways: through capital gains and through dividends. Dividends are payments that corporations make to shareholders; such payments can help companies attract investment. Similar to capital gains, cash dividends are subject to ...

    List of Non-Taxable Fringe Benefits

    The Internal Revenue Service imposes taxes on many sources of income besides what workers earn in the form of wages and salaries. Some employers offer fringe benefits that provide extra compensation in the form of property, services, cash or cash equivalents. Fringe benefits are ...

    Taxation of Supplemental Pay

    Workers occasionally receive compensation in the form of bonuses, commissions or other supplemental pay that is not a part of regular wages. Supplemental wages are subject to income tax, Social Security tax and Medicare tax just like normal wages. Employers that pay supplemental ...

    The Tax Benefits of Gifts Vs. Donations

    Spiritually, your generous nature is a virtue and a reward unto itself. Once that generosity crosses paths with the Internal Revenue Service, things aren’t nearly as straightforward. Although giving gifts to friends and loved ones and donating money or items to charities ...

    How to Recover a Lost Tax Return

    Tax returns continue to be useful documents even after you file your taxes. You need a copy of your tax return for a variety of situations in which you must verify your income, including applying for a mortgage or a student loan. If you misplace a tax return or it is damaged, ...

    How to Change Local Income Tax Withheld

    Local withholding can mean city, school or state taxes, depending on where you live. All but nine states in the U.S. require that its citizens pay income tax. If you have a job that pays wages, these taxes are usually withheld from your paycheck. Similar to the IRS’ W-4 ...

    How Tax Credits Directly Offset Tax Liability Dollar for Dollar

    When you do your taxes, you use tax deductions that save you money. You might also qualify for one or more tax credits, which also save you money. Deductions and credits work in different ways, however, so take the time to learn how tax credits offset tax liability dollar for ...

    How to Look Up a Federal Tax Lien

    If you do not pay your taxes, the IRS has the right to file a tax lien against your property. There are several ways to find out if you have an outstanding federal tax lien. Even though federal tax liens are initiated by the IRS, they are recorded at the county level. Liens on ...

    Who Pays Quarterly Taxes?

    Federal income tax is a pay-as-you go tax that employees pay automatically through tax withholding. Tax withholding occurs when an employer holds back a portion of a worker's pay and sends it to the government to cover the worker's tax liability. Certain taxpayers -- such as ...

    Is Inheritance Taxable?

    The passing of a loved one can raise a variety of complex financial issues including the distributions of assets to heirs and other beneficiaries. Assets a family member leaves behind may be subject a federal estate tax. The recipients of assets are not subject to taxation at ...

    Do Pre-Tax Deductions Count as Medicare Wages?

    Pretax deductions provide a savings on your annual returns. Deductions from your wages used to pay for your employer-sponsored benefits reduce your income and are excluded from taxes. In many cases, pretax deductions are exempt from Medicare tax; however, this isn’t always ...

    Value of Inherited Stocks

    Figuring out the value of inherited stock is necessary for tax purposes. The value is called your cost basis. Normally cost basis is the amount of money you invest, which is the amount you subtract from sale proceeds to calculate your gain or loss. When you inherit stock, you ...

    Gifting Shares of Stock

    Gift giving is a customary way to recognize friends and family on special occasions, but gifts of significant value can affect your personal tax situation. Gifts that exceed an annual exclusion of $13,000 can increase estate taxes and may be subject to gift tax. Gifts of ...

    How to Check Status on Amended Individual Income Tax Refund

    Tax refunds from amended returns take a lot longer to process than you may be accustomed to. When you file a regular return, the Internal Revenue Service usually only takes one to three weeks to process it, depending on whether you file by mail or electronically. Amended returns ...

    What Can I Claim on My Taxes to Get a Bigger Refund?

    Filing an income tax return can result in owing additional taxes to the government, but it is possible to get a tax refund if you pay too much income tax during the year. The Internal Revenue Service offers a variety of tax breaks that filers can claim to reduce tax liability ...

    Can My Husband Legally File Taxes as Married Without Me Knowing?

    If you're married, you have two choices of filing status when filing your taxes: married filing jointly or married filing separately. Your husband cannot legally file a joint return unless he has legal control of your affairs -- such as through a power of attorney -- because you ...

    How to: Box 7 on a W-2 on a Tax Return

    The U.S. tax code obligates employers to track their staff’s wages and payroll deductions. At the start of tax season, they must also compile the same information on Form W-2, which they then mail to each employee and the Social Security Administration. As an employee, you ...

    Tax Information for Newlyweds

    Marriage affects many aspects of personal finance, including taxation. The Internal Revenue Service recognizes four tax filing statuses, two of which apply only to married individuals. Getting married can also increase the income range in which you can claim various tax ...

    What Is a Gas Guzzler Tax?

    You’ve heard the term, but perhaps you’re not sure of the extent to which the government has gone to fight the nation’s dependence upon fossil fuels. The "Gas Guzzler Tax" came about when the Energy Tax Act of 1978 was passed by Congress. While the ...

    Do I Pay State Taxes on Social Security Benefits?

    Social Security benefits, including disability, supplemental security income and retirement, are taxable at the federal level. Recipients of Social Security benefits might also owe income tax to their state government, depending on the state of residence, the amount of benefits ...

    Alabama Tax Laws for Retirement & Social Security

    Alabama is among the more tax-friendly states for retirees. According to the Alabama Department of Revenue, the state ranks 48th among the states in per-capita taxation and its real estate tax is among the lowest in the nation. It provides tax breaks to people over age 65 that ...

    Ohio Sales Tax Exemption Explanation

    Ohio applies its 5.5 percent state sales tax to sales of most tangible goods and certain selected services. Ohio’s 88 counties also levy local sales taxes of 0.5 percent to 1.5 percent on the sales taxed by the state. In fiscal 2010, the latest figure available, the state ...

    Do I Have to Pay Georgia Ad Valorem Tax on a Car From Another State?

    Georgia residents who purchase vehicles outside the state are not likely to find much of a break on taxes. Cars purchased outside the state may avoid a specific sales tax when initially acquired. However, once brought into Georgia, the vehicle must be titled under state law ...

    Can You Write off a Doctor's Copay on Your Taxes?

    Copayments to doctors can be expensive, but you may be able to write off a doctor’s copay on your taxes. The Internal Revenue Service allows you to deduct out-of-pocket medical expenses under some circumstances. If not, you might be able to use pre-tax dollars for ...

    Tax Filing Tips for Married Filing Separate Parents

    You and your spouse might decide to file your federal income tax returns as married filing separately for a number of reasons. You might be separated but are still legally married, for example. Choosing to file separately even if you are happily married lets you claim some ...

    Decedent Tax Return 1041 Filing Requirement

    When someone dies and leaves property behind, the property forms an "estate." Until probate court passes the property in the estate to the deceased person's heirs, the estate remains a separate legal entity. Because estates may earn income, the Internal Revenue Service ...

    Can the State Levy Your Personal Taxes Because of a Business Debt?

    In most cases, the Internal Revenue Service intercepts tax refunds only for other government agencies or for government debts assigned to other agencies. In this instance, the state would typically only be able to collect business tax debts or business government debt from your ...

    Income Tax on Company-Provided Cars

    With the significant expense that a vehicle presents, both in the initial purchase and its upkeep, a company-provided vehicle provides a significant benefit to those who receive it from their employers. The IRS also recognizes this value, and expects to collect its share of this ...

    Does Your Credit Score Affect Your Tax Refund?

    Americans received an average federal income tax refund in 2012 of just over $3,000. In fact, most taxpayers receive a refund, rather than having to pay extra when they file their tax return. No mystery exists as to why a taxpayer receives a refund. It really boils down to ...

    If You Gave Money to Someone Can It Be Deducted Off Taxes?

    You may choose to give a gift for many reasons. Perhaps a friend or family member has fallen on hard times. Or, your son may be starting out on his own, and you may want to help him get established with his own home. If you have the resources, why not help out these people? Of ...

    What Countries Give Tax Breaks to Films?

    Italy was once a mecca for American filmmakers looking for scenic vistas, cheap extras and low production costs. Thus the movie industry once referred to action films produced overseas as “spaghetti Westerns.” These days, the entire world has opened its arms to ...

    How to Protect Yourself in a Tax Audit

    Every year, around 1 percent of all income tax returns are audited by the IRS. While many of these are chosen at random, higher-income taxpayers are more likely to face this process. This is because a higher-income taxpayer is more likely to owe money after an audit. While most ...

    What if Money in a Flexible Spending Account Is Not Spent?

    Flexible spending accounts are a benefit that your employer sets up to help offset medical or childcare expenses. You contribute a set amount each pay period to these accounts, and can access these funds to pay allowable expenses with a special credit card or be reimbursed upon ...

    Do I Pay Tax on Inherited Assets?

    The Internal Revenue Service doesn't impose a tax on most inherited property. However, if the property earned income while the decedent was alive, you may owe tax on the amount you receive after his death. You must also pay income tax on any amount you earn after the assets are ...

    What Could Delay a Federal Tax Return Refund?

    According to the IRS document "2012 Tax Season Refund Frequently Asked Questions," the IRS has improved its technologies and will process more refunds this year in as little as 10 days, with more than 90 percent of its refunds issued within 21 days. Given the volume of ...

    Is Inherited Money Tax Free?

    The death of a loved one raises legal and financial questions, such as who receives money and other assets the deceased person leaves behind and whether taxes are due on those assets. The federal government imposes an estate tax that applies to the assets a decedent leaves ...

    Tax on a Nondeductible IRA

    While you must meet certain income requirements to make a tax-advantaged contribution to an individual retirement account, almost any taxpayer can make a nondeductible contribution to a traditional IRA. While a nondeductible contribution does not offer the same benefits, it does ...

    Do I to Have Pay Income Tax on CD Investments?

    Certificates of deposit are special types of savings accounts typically issued by banks that promise to pay a higher rate of interest than what is usually available on a regular savings account in exchange for a promise that you will leave the money on deposit for a certain ...

    How to Switch From an SSN to a Tax Identification Number

    An Employer Identification Number (EIN), also known as a Business Tax Identification Number, is a nine-digit number issued by the Internal Revenue Service for business entities and all non-personal business activities. This number cannot be used in place of a Social Security ...

    Ways Around the Gift Tax

    While sharing your wealth with others may be appropriate, the Internal Revenue Service is always on the lookout for ways that people try to transfer their money without paying the appropriate taxes. The IRS sees giving money away while you are alive as a potential way to avoid ...

    IRS Regulations on Taxes on Social Security Benefits

    For some retirees, a portion of their Social Security benefits counts as taxable income. For others, benefits are not subject to taxes and aren’t reported as income. Internal Revenue Service regulations determine whether your benefits are taxable based on how much other ...

    The Advantages of a Hardship Withdrawal

    The tax rules allow you to save money for retirement by contributing tax-deductible or tax-deferred money to a 401(k). Normally, you can't withdraw money from the account until you reach the age of 59 1/2; however, under certain circumstances you can make a "hardship ...

    Do You Have to Pay Federal & State Tax on SS Retirement Benefits?

    People entering their retirement years count on Social Security retirement benefits as part of their retirement income stream. But your Social Security retirement benefits may be taxed by both the federal government and your state government. Federal taxation of Social Security ...

    Can I Take a Health Savings Account Deduction Even If I Take the Standard Deduction on My 1040?

    Health savings accounts that you fund yourself are eligible for a deduction from your income as an adjustment to your gross income, and this adjustment is available to you whether or not you claim the standard deduction and choose not to itemize. HSAs are only available, ...

    How Do I Dissolve a Tax Exempt Number?

    Tax exempt status is provided by the Internal Revenue Service for certain non-profit organizations that meet the requirements of Internal Revenue Code section 501(c) and for political organizations that meet the requirements of IRC section 527. Throughout the organization's life ...

    Tax on Withdrawals From a Medical Savings Account

    Archer medical savings accounts were established as a way for people to save money in a tax-advantaged way to help pay for health-related expenses. Withdrawals from these accounts to pay for these expenses are tax free and penalty free, including health insurance in certain ...

    The Difference Between a State Tax ID and an EIN

    State tax ID numbers and federal Employer Identification Numbers are assigned to businesses that employ workers, but EINs can also be assigned even if the company has no workers. Unless your work involves processing business documents, such as business loan or license ...

    Tax Withholding Options for Those Who Are Married

    The Internal Revenue Service operates a pay-as-you-go tax system; you must have money withheld from your paycheck each pay period to pay your tax obligation or pay quarterly taxes if self-employed. Married people have several options to make certain that the correct amount of ...

    Are Municipal Bonds Taxable?

    Despite their name, municipal bonds are not limited to those issued by municipalities. They also include bonds from other public entities such as county or state governments. Municipal bonds typically are issued for public projects such as roads, schools and real estate. These ...

    Tax Basis of Assets

    The tax basis of an asset is the cost of acquiring it. This includes the purchase price and other associated costs. The tax basis is important in business for depreciation of the asset, and it is needed in personal finance to calculate capital gains taxes when you sell, give ...

    Do You Pay Sales Tax on Game Show Prizes?

    Game show prizes are subject to several different types of taxes, depending on where you live and where you participated in the game show. Sales and use taxes are generally collected by your home state, however, and since the prizes were not sold and may not be subject to sales ...

    Do I Get a Refund on Social Security Taxes That Are Withheld?

    Social Security taxes are withheld from the paychecks of all employees working in the United States up to the allowable maximums. Social Security tax is based on a flat percentage of salary and does not allow for deductions from your income like the income tax system, so refunds ...

    The Advantages of Tax Exempt Bonds

    When it comes to investing, you can be an owner or a loaner. Owners invest in equities, such as stocks, while loaners invest in debt instruments, such as bonds. When you buy a bond, you are loaning money to a company or government entity in exchange for regular interest payments ...

    Are Ordinary Dividends Taxable?

    Investing in the stock market can generate income in two forms: capital gains and dividends. Capital gains are profits realized from selling a stock, while dividends are periodic payments that corporations pay to shareholders out of company earnings. Corporations don't have to ...

    Legal Help for Income Taxes

    You might find that it's necessary to hire a tax attorney if the Internal Revenue Service discovers a problem with your return during an audit. If you are summoned by the IRS but don't have the financial resources necessary to pay for that legal help and can prove personal ...

    What Is the Meaning of a Tax Exempt Entity?

    While the goal of most businesses is to maximize profit, some organizations are set up to provide services and benefits for reasons other than profit. These nonprofit agencies often receive special benefits from the government that may help them remain viable and fulfill their ...

    Do You Have to Pay State & Federal Taxes on a Civil Lawsuit Settlement?

    If you settle a lawsuit in your favor, you will probably have to deduct attorney's fees from any amount you receive. In addition, you may have to pay state and federal taxes. Whether you have to pay taxes on all or part of your settlement depends on what the money compensates ...

    What Happens When You Miss a Tax Year?

    Failing to file your federal income tax return on time triggers IRS penalties and interest. Both are calculated as a percentage of the overdue amount. Although they increase the longer you owe money, they're capped at a legal maximum. Eventually, the IRS could investigate your ...

    Is Supplemental Security Income Payment Considered Taxable Income?

    Certain individuals with disabilities qualify to receive Supplemental Security Income -- SSI -- under the eligibility criteria established by the Social Security Administration. Unlike Social Security benefits, which are banked by payroll taxes, SSI’s funds are generated ...

    Traditional IRA Taxation

    A traditional IRA allows you to set aside funds in an investment account designed to build wealth over years of contributions and investment earnings. The traditional IRA format provides tax advantages that serve as incentives to encourage investors to routinely save money ...

    Tax Lien Judgments

    The Internal Revenue Service, state, county and local taxation authorities have the power to place a lien on your property and assets if you have not fully paid your taxes in a timely manner. Liens are a matter of public record and notify your creditors that a taxation authority ...

    Alternative Minimum Tax & Mortgage Interest

    The alternative minimum tax is a separate tax system that was set up in the 1960s to ensure that the wealthiest Americans pay a fair share of taxes and do not over-use deductions to reduce their income. Over time, the level of income that will subject you to the AMT has not been ...

    Can Back Taxes Be Taken Out of a Refund?

    Not paying your taxes is usually more trouble than it is worth. Back taxes is a slang term for federal, state or local taxes you owe from prior years. The IRS has much more power to collect a debt from you than a normal debt collector does. Even if you file for bankruptcy, only ...

    Do You Not Pay Taxes on IRA Contributions?

    Because of the importance of saving for retirement, the tax laws allow for some significant tax benefits for contributing to your retirement plans. If you contribute to an individual retirement account, you may not have to pay taxes on some of your contributions, depending on ...

    Do You Pay Income Tax on NY Lotto Number Games?

    Playing the New York Lotto game can be alluring and fun -- especially if you end up winning money. Whether you visit or live in New York and take a chance on the Lotto, don’t allocate winnings if your numbers are drawn quite yet. The state will deduct income tax from your ...

    Taxes on Stocks After a Death

    Shares of stock are a valuable asset and may be subject to estate taxes after the death of the owner. The estate is responsible for any estate taxes, not the heirs. Inherited shares of stock are not subject to capital gains taxes until the beneficiary chooses to sell them. Some ...

    Tax Consequences of a Self-Directed IRA

    Of the $5.7 trillion invested in individual retirement accounts, less than 2 percent is invested in self-directed IRAs, where you can invest in more nontraditional types of investments. The most compelling reason to use a self-directed IRA is because it promises potentially ...

    NY State Estate Tax Law

    Some states are more expensive to die in than others, and New York is one of them. Like the federal government, the state taxes your right to transfer your property to others when you die. Your estate pays the levy, not your heirs or beneficiaries, although their bequests may ...

    Parent-to-Child Gift Tax

    Parents who want to help their children financially, or who just want to transfer some of their estate while they're alive, might chose to give their child a gift. While bestowing such a gift is a noble thing to do, gift taxes may apply. The donor pays the gift taxes on any ...

    Tax Credits vs. Tax Cuts

    Taxation is often viewed as an impediment to economic growth, because taxes take money out of the hands of consumers, which can discourage economic activity. The government can reduce the burden that taxes place on individuals and businesses using a variety of methods, including ...

    Definitions of Tax ID and Parcel Number

    Taxing authorities at all levels of government use a numbering system to identify taxpayers and track tax payments. You will need to use the number assigned to you for personal taxes and, if required, a separate number assigned to your business when you file tax returns and ...

    Do I Have to Pay North Carolina Income Taxes if I Work in South Carolina?

    You might need to cross state lines to make a living, but if you do your tax situation is going to be a little confusing. North Carolina and South Carolina each have state income tax systems designed to claim a portion of your income; exactly where you live is going to be the ...

    Can I Be a Resident of Utah but Work in Texas and Not Pay State Income Taxes?

    As in most other states, residents of Utah must file annual income tax returns and pay taxes on the money they earn. If you live in Utah but work somewhere else, you may still have to pay tax on that income. It all depends on your status as a Utah resident.

    Taxation of Stock After Date of Death

    When a stockholder dies, there are two tax issues that may affect shares of stock owned by the deceased. One issue is the capital gains tax, if any, the heir is responsible for. In addition, estates valued at over a certain amount are subject to federal and state estate taxes, ...

    Does Life Insurance Count Towards the Two Million for Federal Estate Tax?

    Estate taxes only apply to estates with values above a set limit. Though Congress raises the exemption for some tax years, Internal Revenue Service regulations set the minimum limit at $2 million. A large life insurance policy can sometimes trigger a federal tax for an estate ...

    Do I Pay Taxes on a Roth IRA Withdrawal of My Original Funds?

    With so many retirement fund options available, it can be hard to choose the best one for your situation. A prime consideration for most people is not only how much they can save, but also how they’ll be taxed when they begin to take out their money. The Internal Revenue ...

    Income Tax on Life Insurance Benefits and Annuities

    Life insurance provides a way for you to secure the financial future of your heirs after your death. Annuities allow you to establish an income that lasts throughout your retirement. Investors should not only understand the benefits of life insurance and annuities, but also how ...

    Objectives and Purposes of Tax Audits

    The Internal Revenue Service periodically produces estimates of the difference between the income taxes actually paid and what should have been paid by all taxpayers. This is called the tax gap and for tax year 2006, the IRS estimated the tax gap at $450 billion. In addition, ...

    What to Expect in a Tax Audit

    Every year, the IRS audits the tax returns of approximately 1 percent of all taxpayers, with the risk of audit increasing for higher-income taxpayers or those with multiple deductions. Self-employed taxpayers also face a higher risk of audit. While the process strikes fear in ...

    What Is the IRS Marriage Penalty?

    While you will have many invited guests at your wedding, the Internal Revenue Service may not be a party that you were expecting. Nonetheless, the federal agency is very interested in the fact that you are tying the knot. The so-called marriage penalty has been widely ...

    Can Your Spouse's Tax Liability Affect You if You're No Longer Married?

    The Internal Revenue Service holds the institution of marriage in high esteem – enough that it may not recognize the terms of your divorce decree when it comes to tax liabilities. Your responsibility for your spouse's taxes depends a great deal on when she incurred the ...

    Can I Pay My Back State Taxes if I Still Owe Them the Following Year?

    Your state tax collector will definitely not refuse your offer to pay your back taxes a year late. Not paying them late is much better than never paying them, as the penalties on your unpaid tax debt mount up when you wait. The sooner you pay your back tax, the happier your bank ...

    Are Roth IRA Contributions Taxable After 59 1/2?

    A Roth Individual retirement account can provide a nice source of income once you retire, especially if you’ve added to it over the course of many years. Since a Roth IRA has rules that are different from traditional IRAs, it helps to become familiar with and pay attention ...

    Can Dividends From a REIT Be Reinvested & Tax Deferred?

    Many real estate investment trust (REIT) stocks have histories of excellent dividend payments. The tax rules governing REITs promote the payout of profits to investors in the form of dividends. Those same rules mean that investors must pay taxes on those dividends, even if they ...

    What Is Tax Auditing?

    After taking all your eligible deductions and credits, you’ve filed your taxes and received a nice refund. All seems well when months later you receive a letter or a phone call saying you are being audited. Simply put, tax auditing is the process in which a tax auditor ...

    Who Pays the Tax on Savings Bonds Held Jointly?

    For most U.S. savings bond owners, the interest accumulates tax deferred until a bond is redeemed. The bank or U.S. Treasury will send you and the Internal Revenue Service a Form 1099-INT reporting the interest earned on a cashed-in bond. With co-ownership of a savings bonds, ...

    The Tax Consequences of Mutual Funds Not in an IRA

    An individual retirement account provides a tax shield for any investments you put into it. You don't have to pay any tax on your investment earnings until you take the money out of your IRA. If you own mutual funds outside the protective wrapper of an IRA, you'll have to pay ...

    Social Security Retirement Benefits & Taxation by State

    When choosing where to retire, seniors must consider a wide variety of factors, from weather and access to favorite pastimes to proximity to family and friends. To ensure your retirement savings will last well into your golden years, you will need to understand how the tax ...

    Taxation of Death Benefits Paid on a Life Insurance Policy

    When it comes to taxes, there are few simple rules. Taxation of death benefits depends on many factors, as well as the nature of the taxes. In some cases, your life insurance proceeds can pass to the policy's beneficiary tax-free when you die. If you take care to handle the ...

    Are Annuities Taxable?

    An annuity is financial product sold by insurance companies that can supplement other sources of retirement income. When you buy an annuity, your funds are invested to provide you with a series of periodic income payments during retirement or an account that you can tap into ...

    Can I Claim the Taxes on My New Car on My Tax Filing?

    With the large cash outlay that you make in buying a new vehicle, do not overlook the potential for the purchase to save you money on your federal income taxes. While the deductibility of sales taxes for vehicle purchases is in doubt as of December 2012, you can deduct some ...

    How Much Can I Make and Gross for a 15% Income Tax Bracket?

    As of 2012, the Internal Revenue Service offered taxpayers six income tax brackets. Your tax rate depends on your net income -- the money that remains after you've taken any and all deductions, exemptions and tax credits. In this important calculation, gross income becomes just ...

    Payroll Deductions for Health Insurance

    Pretax health insurance plans provide both employees and employers with a tax break, so it’s practical for an employer to establish one. If you participate in your employer’s pretax health plan, you pay your premiums with pretax money via payroll deduction. You can ...

    Does Estate Tax Exemption Apply to a Life Insurance Payout?

    If your life insurance is part of your estate when you pass away, the payout to your beneficiary might be decreased by estate taxes. As of 2012, the Internal Revenue Service could levy taxes as high as 35 percent against your estate; the rate was to rise to 55 percent in 2013. ...

    Tax Refund Check Delay Information

    Waiting for a refund check can be frustrating. Several factors can cause this delay, ranging from avoidable issues, like taxpayer filing errors, to unavoidable circumstances. There are resources available for checking the status of your refund.

    Tax Consequences of Ineligible Rollovers to an IRA

    A rollover allows you to transfer retirement assets from one tax-deferred retirement arrangement to another, such as rolling over assets from an employer’s 401(k) to a traditional IRA or transferring IRA assets from one IRA custodian to another. If done correctly, ...

    What Is the Maximum Earnings Before Issuing a 1099?

    The Internal Revenue Service tracks money that people earn outside of normal wages and salaries to make sure that they are properly reporting this income, and paying any taxes due on the money. Form 1099 is the document the IRS wants the payer of these other types of income to ...

    The Tax Consequences for an Unused College Account

    College tuition is usually one of the steepest costs a parent can face. The easiest way to manage it is to start saving early, and the Internal Revenue Service helps you along toward this goal with a variety of tax-deferred accounts. You'll have a dilemma on your hands, however, ...

    How to Estimate an Income Tax Return

    You can reduce some of the stress associated with tax season by learning to estimate the amount of your refund or the amount of tax you will owe before you sit down with your tax preparer. As soon as you receive all your income-related tax documents, such as W-2s and Form 1099s, ...

    Can I File as Married Filing Jointly if a Spouse Owes Child Support?

    You might be used to a nice income-tax refund check every year. But if you marry and your new hubby owes back child support, you may be in for a surprise. Filing a joint tax return with a spouse who owes child support can cause you to lose your refund. Fortunately there are ...

    IRA SEP Deadline Rules

    If you work for yourself and you've had a good year, you may be thinking about putting some of your profits into a retirement plan. One option, a simplified employee pension, allows you to contribute as much as $50,000 extra to your own IRA in addition to your regular IRA ...

    Can the IRS Hold Your Tax Refund if You Didn't File in Previous Years?

    Although you may not be required to file tax returns each year because you didn’t have enough taxable income, the IRS may question if you have an erratic tax-filing history. Large income fluctuations also raise a red flag with the IRS. As a precautionary measure against ...

    Is Interest on a Promissory Note Reported to the IRS?

    If you have lent money that the borrower has agreed through a promissory note to repay, and you are charging interest on that loan, you will earn interest income that, by law, you must report to the Internal Revenue Service. There are exceptions and conditions attached to this ...

    Do Smaller Tax Refunds Come Back Quicker?

    The experience of preparing and filing a tax return ends with the anticipation of a refund for lucky taxpayers. Waiting for it can be stressful, even if it is a small amount. Fortunately, you can relieve this stress with some information about processing schedules from the ...

    Can Someone Who Hasn't Worked Get a Tax Refund?

    Typically, you get a tax refund because your income tax withholding from your paycheck exceeds your taxes due. But, even if you haven't worked, it's possible that you can get a tax refund, depending on your circumstances. For example, you might have paid estimated taxes on your ...

    What Minimum Amount of Interest Does a Savings Account Have to Have to Issue a 1099-INT?

    It may only amount to pocket change, but any interest you earn in your savings or checking account has to be reported as income on your tax return. In most cases your bank will send you a Form 1099-INT listing the total amount of interest payments you should report. The bank ...

    Is Probate Inheritance Taxable?

    The Internal Revenue Service taxes a decedent's right to pass his property to his beneficiaries when he dies, subject to certain thresholds based on the value of his estate. His estate pays these taxes, however, not his beneficiaries. Federal law doesn't provide for inheritance ...

    How to Fill Out a W-9 Form for an Irrevocable Trust

    If you are appointed the trustee of a revocable trust, you are responsible for administering the trust when the grantor dies. First you must review the trust provisions to determine the identity of the trust beneficiaries and the assets left to them. Depending on the size of the ...

    Is Jury Duty Pay Tax Exempt?

    Registered voters, licensed drivers and most property tax payers in the United States all have a good chance of receiving a summons for jury duty at a local or federal court. In return for your service during the jury selection process and during a trial, the court commonly pays ...

    Do I Pay Taxes on All of an Inherited Annuity or Just the Gain?

    A nonqualified annuity, which is an annuity not associated with an employer-provided plan or an Individual Retirement Account, is generally purchased with an after-tax, lump-sum investment by the owner, or "annuitant." Then, similar to other retirement plans, that ...

    How Much in Taxes Do I Pay on the Alaska Permanent Fund Dividend (PFD)?

    The state of Alaska since 1982 has distributed a share of the state’s oil revenues to the state’s residents in the form of an annual dividend check from the Alaska Permanent Fund. In 2012 the state distributed $567.3 million to 646,800 Alaskan adults and children, ...

    At What Age Can I Draw Funds From an IRA Without Paying Taxes or Penalties?

    Individual Retirement Accounts, commonly called IRAs, provide favorable tax treatments that allow you to build your savings for retirement faster than with other forms of saving accounts. You may owe taxes and/or penalties when you take money out of an IRA. But any taxes and ...

    Reasons Why Unemployment Insurance Is Considered Taxable Income

    It might seem that having to pay taxes on unemployment insurance benefits is adding insult to injury. The loss of your job is usually a financial setback. Receiving unemployment insurance benefits because you were laid off or for a reason that was not your fault can be a ...

    Are Employee Reimbursements Tax Exempt?

    It’s not uncommon for employees to take the initiative, pay for work-related supplies or training out of their own pocket and then receive a reimbursement from their employer. While this sort of short-term loan seems as if it should be a simple matter, if the exchange of ...

    Household Employee Deductions

    Household employees can hurt you more than help you at tax time. You can't deduct the wages you pay from your income, although if you hire someone to care for a child younger than 13 or a disabled adult, you might qualify for the child and dependent care tax credit. Even if you ...

    What Is the Difference Between Single & Married Withholding?

    Income tax withholding is the process in which your employer withholds income taxes from your paycheck. Social Security and Medicare taxes, also known as the Federal Insurance Contributions Act, or FICA, are based on a flat percentage. Your federal taxes are based on several ...

    What Decreases Taxable Income?

    Decreasing taxable income is often done by claiming allowable adjustments to income, like a deductible traditional IRA contribution, or by taking advantage of before-tax employee benefits, such as 401(k) contributions or flexible spending account plans. Reducing your taxable ...

    Are Taxi Tips Taxable?

    A taxicab driver can enhance his income considerably by going out of his way to provide great service and an unusually good experience, encouraging his patrons to reward his initiative by giving a tip. For some drivers, tips are a significant portion of their earnings. While it ...

    Tax on US Treasury STRIPS

    Treasury bond STRIPS are a widely available form of zero coupon bonds. These bonds do not pay regular interest; instead, a STRIP is purchased at a discount from the face value and the earnings are the difference between the cost and the maturity value. Unfortunately, the tax ...

    What Is Taxable in Texas?

    If losing too much of your earnings to taxes doesn't sit well with you, you could do a lot worse than settling in Texas. According to a report in USA Today, residents paid only 7.9 percent of their incomes toward various taxes in the state in 2010, and that number has remained ...

    Can You Write Off an Executor's Out-of-Pocket Expenses?

    The role of executor is vital to settling an estate after a decedent dies. The executor gathers assets, notifies creditors, and pays the decedent's debts and taxes, sometimes liquidating tangible assets to raise the funds. The executor then oversees transfer of the remaining ...

    Taxation of Municipal Bond ETFs

    States and local governmental entities issue municipal bonds to raise cash for projects. If the projects serve the public good, the bonds are ruled tax-exempt and you do not have to pay federal income tax on them. Other municipal bonds serve private needs, like building a sports ...

    What Is Taxable When Someone Dies?

    The Internal Revenue Service doesn't allow much to escape taxation, and this is true both before and after a taxpayer's death. Post-death taxes are more complicated, however. A decedent's property is subject to myriad tax laws for the decedent, his estate, and his beneficiaries.

    Taxation of Bond Funds

    Bond funds provide investors with instant diversification through a portfolio of bonds. Bond funds may be actively managed by professionals who buy and sell in the hopes of outperforming a relevant index. Index bond funds don’t compete with indexes, they try to replicate ...

    Are Pensions Taxable in Illinois?

    The federal government taxes most sources of retirement income, including pension benefits, but the states take a variety of approaches to taxing retirement income. Some states tax any retirement income that the federal government taxes. Others exempt certain types of retirement ...

    Does the Parent or Student Claim the Hope Credit?

    The American Opportunity Education Tax Credit expanded the Hope Credit and applies to tax returns filed from 2009 through 2012. At the time of publication, this credit provides up to $2,500 per qualifying student, 40 percent of which is refundable. This means that a family with ...

    Can the IRS Hold Your Refund if You Didn't Pay Your Local Taxes Last Year?

    Each spring, the taxman comes knocking on your door looking for your share. Taxpayers who paid extra receive a refund of the overage -- in most circumstances. Taxpayers who owe a debt to a government entity may not receive the refund. The Internal Revenue Service can hold your ...

    Sources of Taxable Income

    According to the Internal Revenue Service, all income is taxable under law and must be reported on your tax return. Failure to appropriately report income can result in penalties, fines and interest accrued on unpaid back taxes. Understanding your tax liability can help you ...

    Exercising Call Options on Qualified Dividends in a Holding Period

    Qualified dividends paid on stock shares are taxed at a lower rate than distributions that do not meet the criteria to be qualified. One criteria to have dividends you earn be qualified is to own the stock for a certain period of time -- the holding period. The use of call ...

    GNMA Taxation

    Government National Mortgage Association guaranteed bonds have a lot of positive features for investors. The interest and principal payments are guaranteed by Ginnie Mae, you earn an attractive rate of interest and GNMA mortgage bonds make payments every month. However, GNMA ...

    Do I Have to Pay Pennsylvania Inheritance Tax if My Relative Lives in Another State?

    Inheritance taxes are payable to the state where a decedent lived and died. Only seven states have inheritances taxes, but Pennsylvania is one of them. You won't pay it just because you live there, and you won't pay it if your relative didn't reside in the state. You might ...

    Tax Questions for a Second Home

    Whether you have a second home so you can vacation in comfort, have a second place to live or for investment purposes, it can make your tax situation more complicated. Some of the benefits that the Internal Revenue Service extends to your primary residence do not apply to your ...

    How Does Marriage Affect Taxes When One Itemizes?

    During the first decade of the 21st century, Congress made significant progress on eliminating the "marriage penalty," which led to some married couples paying higher taxes than two single people with the same combined income. However, some marriage penalties remain in ...

    Are Credit Card Rewards Taxable?

    It's no secret that underreporting income on your tax return can lead to big problems with the Internal Revenue Service. Unfortunately, when it comes to credit card rewards programs, it can be difficult to determine what must be included in your income and what can be excluded. ...

    Do I Have to Pay Taxes on the Sale of a Home in a Trust?

    When it comes to trusts, it's not so much a question of whether taxes will come due on the assets they hold, but who is responsible for paying them. This depends a great deal on whether the trust is revocable or irrevocable, and if the grantor – the creator of the trust ...

    Taxation of Simple Trusts

    Irrevocable trusts are estate planning tools for those who don't mind giving up control of their assets during their lifetimes. If you create one and fund it, you can't later have a change of heart and take those assets back into your ownership. You can set the terms of your ...

    The Best Way to Avoid Death Taxes

    Unfortunately, there's no effortless or one-size-fits-all way to avoid estate taxes, also known as death taxes. The best method for you comes down to your personal concerns and the extent of the wealth you're passing to your beneficiaries. With the passage of the American ...

    The Responsibilities of the Taxpayers to Ensure They Are Withholding Enough Taxes

    To ensure your employer withholds enough taxes from your paychecks, you must do your part. The process for accomplishing this depends on the tax in question. If you're self-employed, you do not pay taxes via withholding, but you must still pay your share. If you expect to owe ...

    What Are the Allowed Deductions by an Executor in New Jersey?

    New Jersey executors face a daunting task when it comes to taxes. In addition to federal estate taxes, the state also has two taxes: an inheritance tax and an estate tax of its own. Deductions typically apply to estate taxes. They subtract from the overall value of the estate, ...

    Do Married Couples Have to File Joint on State Taxes if They Filed Joint on Federal Taxes?

    States typically use information from a federal income tax return to determine tax owed on a state return. In most cases, states require taxpayers to submit a copy of their federal income tax return along with their state return. Unless you have a nontraditional marriage, you ...

    The 529 Massachusetts Tax Break

    Those seeking state tax advantages when investing in a Massachusetts-sponsored 529 education investment plan will be disappointed. While some states offer tax breaks for invested funds and earnings, Massachusetts does not. If you invest in a Massachusetts 529 plan, you'll still ...

    Is There Any Penalty for Distribution After 59 1/2 on an IRA?

    Traditional IRAs defer taxes on the contributions until they are withdrawn at retirement. Roth individual retirement accounts give you no tax breaks on contributions during your working years, but they provide tax-free income at retirement. IRS rules include penalties if you ...

    The Federal Dividend Tax Credit in Canada

    One of the fundamental realities of financial planning is that the tax man treats income differently, depending on its source. Income from capital gains or dividends faces a lower tax burden than income from employment or interest-bearing investments, an advantage referred to as ...

    How Is a Disbursement From an Estate Taxed?

    Estates are stuck in a morass of complicated rules when it comes to taxation, and the taxes often overlap. The Internal Revenue Service levies an estate tax on the overall value of a decedent's assets and property, and then both the IRS and some states will take a bite of estate ...

    What Is Taxable in California?

    In February 2013, Forbes.com made the observation that Californians might soon begin fleeing the state in droves due to the state's merciless tax rates. With one notable exception, California doesn't miss many opportunities to tax its residents.

    Can the IRS Prevent You From Getting Social Security Retirement?

    If you've worked enough to earn Social Security retirement, you can begin drawing benefits as early as age 62. The IRS may impose income taxes on part of your benefits, depending on how much you earn from other sources. The tax folks have no authority to deny a Social Security ...

    Does Loan Money Have to Be Claimed as Taxable Income?

    When you take out a mortgage or buy dinner with a credit card, you're borrowing money, but not earning income. Loans aren't taxable income because they're temporary. You pay them back, often with interest, so you're not any richer for borrowing the money. Loans only become ...

    How Tax Auditing Works

    Internal Revenue Service statistics place the overall national income tax audit rate at 1.11 percent. However, if your income exceeds $200,000 per year, the rate increases significantly to 3.93 percent. Even though audits are designed to keep taxpayers compliant with the law and ...

    Do You Have to Pay Income Taxes on Defaulted Mortgages?

    When you default on a mortgage, the lender will typically foreclose on your home, sell it and attempt to collect any remaining balance from you. Even though you may not own the home anymore, the Internal Revenue Service may still require you to pay income tax on any gains you ...

    Are Retroactive Social Security Disability Benefits Taxable?

    Most Social Security disability claimants wait several months -- and sometimes several years -- before they are approved for benefits. When you are approved for benefits, you will generally be awarded a retroactive payment -- called back pay -- of all the benefits you should ...

    Do Youth Ministers Pay Federal & State Income Taxes?

    Youth ministers are generally considered employees of the church or organization for which they work. In some cases -- such as when a youth minister's ministry is itinerant and involves ministering in several churches -- the youth minister may be considered an independent ...

    Tax Rules on Annulments

    Calculating your tax liability when you're married can be hard enough, and doing it after a divorce can be even more complicated. Annulment throws a whole new monkey wrench into the proceedings. If a court annulled your marriage, it means that, in the eyes of the law, you were ...

    How Long to Save a Deceased Parent's Tax Returns

    The Internal Revenue Service statute of limitations for an audit is three years. In some specific instances it can be longer. Financial experts suggest that records be held for an additional two to three years in case there are questions about the deceased’s final return.

    Is the IRA Distribution Subject to EIT?

    The earned income tax, or EIT, is a Pennsylvania wage tax imposed by cities and other local governments around the state. It's based on what you earn working for your employer or on your self-employment income. If you live in a city such as Pittsburgh that levies the tax, one ...

    Is the Money From a Revocable Trust Inheritance Taxable?

    Whenever someone writes you a check, there's a question as to who is going pay taxes on the money. If you earned the money, the answer is relatively simple – you do. If the money is an inheritance, however, and particularly if it's an inheritance from a trust, the issue ...

    Can I Not Pay Federal Taxes for a Few Months?

    Taxes take a big chunk of your income each month. It’s tempting to try to eliminate your tax payments for a few months with the intent of making it up later. It’s tempting but generally not recommended. Taxes are pay-as-you-go -- either forcibly withheld from your ...

    Will They Garnish My Tax Return if I Owe Social Security?

    Paying into the Social Security system during your working years entitles you to a check each month from the Social Security Administration once you hit retirement age -- a minimum of age 62 for a reduced benefit. The SSA calculates your benefit based on your primary insurance ...

    What Is the Percentage Tax Rate for Roth IRA?

    The percentage tax rate on Roth individual retirement account withdrawals is zero, as long as you follow the rules. Roth IRAs are alternatives to traditional IRAs, in which withdrawals create taxable income. Tax rates, or the income they imply, figure into Roth IRAs in a few ...

    Are Distributions From Trusts Taxable?

    As with any source of income or earnings, if you receive a distribution from a trust, you're most likely going to pay taxes on it. Trusts are complicated legal entities, however, so there are exceptions. The deciding factor is usually whether your distribution comes from trust ...

    Does Debt Settlement Have to Be Reported to the IRS?

    While debt settlement can be a benefit to you, because you will end up paying less on a bill than you owe, the amount of the debt that is forgiven generally must be reported to the Internal Revenue Service. Form 1099-C is the usual form a creditor uses to report canceled debt to ...

    Federal Tax Instructions for Form 1040A

    Form 1040A is a tax form used by individuals who do not qualify to use Form 1040EZ. Using this form, you can claim dependents, several types of unearned income and adjustments to your income. If you earn income from a small business or itemize your deductions, you do not qualify ...

    Do You Have to Put Your Retirement Plans on Your Taxes?

    As long as the assets in your IRA or other tax-exempt retirement plan sit in the account, the IRS doesn't care what they're worth. You don't have to report the contents of your account on your 1040. Money going into or coming out of your accounts is of great interest to the IRS, ...

    Is Military Retirement Income Taxable in North Carolina?

    Budget-conscious seniors know that taxes can take a big bite out of your retirement budget. As you consider different retirement spots, compare tax codes in each locale to determine how much of your nest egg you'll have to pay the government each year. Some states, such as North ...

    Is California Pension Income Taxable Outside California?

    Failing to file a tax return or pay taxes when they're due can trigger stiff penalties. Unfortunately, variations in tax laws between the states can make it difficult to figure out where you have to file, especially if you receive income from a state you no longer live in. While ...

    Is Disability Income Taxable in New Jersey?

    New Jersey residents pay state as well as federal income taxes. The state exempts various benefits from income tax, including disability payments. Disabled residents of the Garden State still may owe federal tax, however, on a portion of their Social Security disability benefits.

    AGI Compared to Income Tax

    The term "income" can mean many things, particularly when the Internal Revenue Service uses the term in connection with income tax. While gross income and taxable income are important, the calculated adjusted gross income is often used by Congress in determining tax ...

    What Taxes Are on an Inherited House?

    The government doesn’t allow too many opportunities for taxation to slip by. If you inherit a house, it's a safe guess that the municipality, the state, and the Internal Revenue Service will all be interested in the transaction. Who you'll end up paying depends on several ...

    Do Ohio Residents Have to Pay Local Tax on Lotto Winnings?

    If you strike it rich at MegaMillions or another lottery available to residents of Ohio, you will have some income to declare to the Internal Revenue Service -- as well as the state and municipalities that tax lottery winnings. Tax time may prove a bit less painful with the ...

    Does Kansas Charge an Inheritance Tax?

    Losing a loved one is hard enough without the added worry of how you'll pay the taxes on your inheritance. When you receive money or property after someone close to you dies, this income could be subject to taxes at both the state and federal level. While each state sets its own ...

    Does Taxable Income Include Pretax Health Insurance?

    Health insurance isn't cheap, even if you're paying for coverage under an employer plan. However, using pretax dollars to pay for the plan helps you when it comes time to pay your taxes, because the money taken out of your paycheck to cover your premiums isn't counted as taxable ...

    Collection Statute Expiration Date of the IRS

    If you let those income tax debts to the Internal Revenue Service remain unpaid for too long, the agency has a number of collection methods at its disposal to ensure it gets what you owe. Federal statutes do, however, limit the amount of time the IRS has to collect back taxes ...

    How to Get Free Copies of Your State & Federal Taxes for Past Years

    According to the Internal Revenue Service, to assist in future returns, you should keep a copy of your income taxes for at least three years. Your tax forms are not only required for filing future tax returns, you also need the forms to prove prior-year income when applying for ...

    Taxation of Pensions in Florida

    When you retire, the last thing you want to do is send Uncle Sam anymore of your hard-earned money. Moving to a state that offers tax breaks on pensions can help you keep more of your money free for fun, family and living out your retirement dreams. With its warm and sunny ...

    Building Improvements Vs. Leasehold Improvements

    When you improve your commercial real estate property, the work you do fits into one of two broad camps. A building improvement is something that you do for your building, and a leasehold improvement is something that you do to your building for a specific tenant's benefit. The ...

    Is My Minor Child's Social Security Benefit Treated As My Income?

    When the parent of a minor child pays into the Social Security system and then retires or dies, the child is often entitled to Social Security benefits under the parent's work record. If your child receives these benefits, a portion of them may be taxable. However, your child's ...

    Will Your Tax Return Be Delayed if You Itemize?

    Itemized deductions allow you to deduct a potentially higher amount from your income, thereby lowering your tax liability, than what the IRS allows you for a standard deduction. Because you are claiming a higher amount, you might believe that your income tax return is subject ...

    The Purposes of Unified Transfer Tax Credits

    The purpose of the unified transfer tax credit is to offer a tax credit for gifts made to others either before or after your death. The unified tax credit offers exclusions on gift and estate taxes, typically up to $1 million. You are eligible for this tax credit, and it can be ...

    How to Prepare for an IRS Audit

    A tax audit isn’t a quick overview of your tax returns – it is a line-by-line examination of everything you have placed on your tax returns conducted by the Internal Revenue Service. Even though the chances of being audited are low, when you receive an IRS audit ...

    Who Pays Taxes on a Trust?

    A trust is a separate legal entity set up to hold assets and managed by a trustee for the benefit of the beneficiaries of the trust. How the money earned by a trust is taxed depends on how the trust is organized and what happens with the earnings generated by the asset held in ...

    Is the Principal Amount for a Mutual Fund Investment Taxed?

    Mutual funds are pooled investments that give you the opportunity to own a piece of a diversified portfolio through a single transaction. The principal amount of your mutual fund investment is your cost basis -- the amount you paid to buy the shares, including fees and ...

    Taxes on Inherited Money From Nonqualified Investments

    Inheriting investments can be a nice, unexpected windfall, giving you an immediate boost to your net worth. With nonqualified investments you also receive the stocks, bonds or fund shares on a tax-advantaged basis. If you inherited qualified money like an individual retirement ...

    How to Depreciate an Investment

    Depreciation is an income tax deduction the Internal Revenue Service allows taxpayers to claim on certain types of property. The deduction is based on the gradual drop in value of some types of property throughout their useful life. Certain investments, such as buildings, ...

    Taxes Withheld From a Paycheck and the W2 Do Not Show the Same Amount

    Like many Americans, you probably anxiously await the arrival of your Form W-2. This is, for some taxpayers, the only document they need to file their taxes and get their refund as soon as possible. You still should double-check your Form W-2 for accuracy, particularly to make ...

    Define Tax Withheld

    Prior to 1943, employees received their entire paycheck without having any money withheld for income taxes. Nowadays, a seeming litany of deductions are taken before you get whatever's left over on payday, because of withholding -- money that the payer takes out and ships ...

    Who Pays Taxes for Sitters?

    Spending a little time away from the kids might be priceless, but you still probably have to pay the babysitter, and believe it or not, the Internal Revenue Service considers that payment to be taxable income for the sitter. This brings up the whole issue of who is responsible ...

    Can You Take & Use Your 401(k) to Build a House Without Paying High Capital Gains at Age 65?

    After saving for their retirement using a 401(k) plan, some people want to cash in on their hard work. At age 65, you can withdraw from your 401(k) plan to build a house. While you won't pay capital gains taxes on money withdrawn this way, you will still be taxed on your 401(k) ...

    Can Lottery Winners Split Winnings on Their Tax Returns?

    The Internal Revenue Service considers all lottery winnings to be taxable income, even if you do not receive an income document at the end of the year that reports the amount you’ve won. If you’ve split your prize with another person or group of people, you need to ...

    Do I Owe Taxes if I Got Money From My Mother When She Died?

    There's a saying that nothing's certain but death and taxes: sometimes, in fact, they show up together. If your mother dies and leaves you money, you may not owe a cent on it. However, depending on the amount, where she lived and what she left you, the tax bite may be quite ...

    What Happens if Your Employer Does Not Put Your HSA Savings on Your W2?

    Just because your employer is required by law to provide you with a correct W-2 showing all of your wage and tax information pertaining to your job doesn't mean that this will always be done. If your employer doesn't give you a form that shows your HSA contributions correctly, ...

    What Is Taxable Offset?

    When it comes to tax debts, the Internal Revenue Service has a long memory, rivaled only by those of state governments. Neither will release your tax refund if you owe certain entities. Tax offsets or set-offs, sometimes erroneously called "taxable offsets," are the ...

    How Are the Proceeds From Mutual Funds Treated in a Tax Return?

    Mutual funds are a low maintenance, affordable and relatively liquid investment option. While their risk factor varies depending on type -- stock, bond or money market fund -- the sheer number and range of companies in a mutual fund significantly reduces the overall risk ...

    Taxes on Lottery Annuities

    Judging by ticket sales, millions of people are willing to risk a few dollars to win a big lottery. But before you claim your prize, you should consult with tax and estate expert on whether to take your winnings in annual installments from an annuity or in a lump sum. Federal ...

    How to Get Rid of a Fixed Annuity Inheritance

    Getting rid of a fixed annuity inheritance is neither difficult nor painful, but the tax bill it leaves behind just might be. Although you do have options, few come without a corresponding tax liability for the year in which you dispose of part or the entire annuity. However, if ...

    Can I Have My Tax Return Deposited if Both Names Are Not on the Checking Account?

    According to a Bankrate.com poll, 88 percent of all Americans who will receive an income tax refund choose to have that refund direct-deposited into their checking account. Before you make that decision, you need to know how the IRS, as well as your financial institution, will ...

    Does a Person Have to Pay Income Tax on Money Received From a Medical Malpractice Settlement?

    You pay income tax on more than just your paycheck. IRS Publication 525 lists all the different types of income, such as fringe benefits, bribes and cash rebates, and lists which ones are taxable. If your doctor screws up and you sue, some or all of your settlement may be ...

    Do Foreigners That Just Became Citizens Have to Pay Income Taxes in the US?

    All American citizens are liable for income tax. It doesn't matter whether you were born here or took your citizenship oath last week: once you start earning money as an American, you pay American taxes. In some cases, you may have to pay the IRS even if you're not a citizen yet.

    Are Withdrawals Taxed in a Custodial Account?

    Custodial accounts are financial accounts opened for the benefit of a minor. They are a convenient way to get your children involved in investing or to invest gifts or earnings they receive. Until they reach legal adulthood -- age 18 to 21, depending on the state where the ...

    How to Not Pay a Lot of Taxes on Large Sums of Money

    Winning the lottery, selling a stock that quadrupled in value, and getting a big advance on your novel can all make you richer. They can also push up your tax bill when you add them to your regular income for the year. There are strategies and tactics you can use to push your ...

    Are Wages Paid to Step-Children Exempt From Social Security Tax?

    Employing your step-children in your trade or business doesn't always mean that their wages are exempt from the Social Security tax. You might have an obligation to withhold Social Security taxes from their wages and to make the additional matching payments required of ...

    AGI for Passive Loss Limitations for Married & Filing Jointly

    You may feel you work for every dollar, but the IRS doesn't always see it that way. Money you earn through investment, such as dividends, interest and rental property, is usually classed as passive income. If your passive activities run in the red, there are limits on how big a ...

    What Does SDI Stand for on W2 Tax Forms?

    SDI stands for state disability insurance, which pays a portion of your salary if you experience a non-work-related illness, injury, pregnancy or childbirth. Only a few states require that employers carry the insurance, and either you, your employer or both parties may pay the ...

    What Is the Tax on Lotto Winnings in California?

    Winning the California lotto can quickly change your financial situation. While a small prize might not make a big difference, winning hundreds of thousands or millions of dollars puts a potentially life-changing amount of money in your pocket. You're not the only winner, ...

    Tax Benefits for Military Reservists

    If you're a military reservist, you have a number of federal tax benefits. These include larger deductions for your travel expenses, and exclusions for certain types of military pay. However, simply enlisting in the military reserves doesn't automatically make you eligible for ...

    The Taxes on the Inheritance of a Tax Deferred Annuity

    Tax deferred annuities are investment contracts offered by insurance companies that grow free from tax until owners go to withdraw funds. Annuity contracts typically guaranteed returns that are backed by the credit of the issuing company, and tend to be popular among more ...

    Are Unpaid Wage Settlements Taxable?

    If you file a lawsuit against your employer and the damages you claim relate to lost or unpaid wages, settling out of court instead of going to trial doesn't change the tax treatment of your employment earnings. Settlements for unpaid wages are taxable, just like the wages you ...

    Do I Have to Pay Taxes on My Retained Earnings Distribution?

    When you're a member of a partnership, you pay tax like a sole proprietor. The partnership itself doesn't pay income tax. Instead, the company divides income and expenses among you and your partners, all of whom can choose to distribute everything the partnership earned this ...

    Tax Bracket Definition and Example Formula

    The federal tax code isn't what most people consider light reading, but understanding the basics of how your tax bill is figured helps you predict and plan for your taxes. Different tax brackets are composed of different tax rates, with your highest bracket being called your ...

    Will Moving to a Higher Income Tax Bracket Cost You Money?

    Getting a raise sounds great until you get scared the extra income will bump you into a higher income tax bracket. Take a deep breath and relax, because your fear is mostly unfounded. Moving into a higher tax bracket will cost you more, but only on the portion of your income ...

    Meaning of "Stimulus Check"

    To revive a struggling economy, Congress passed the Economic Stimulus Act in 2008. The law allowed taxpayers to claim a rebate on their 2007 taxes in the form of a direct payment from the U.S. Treasury -- a "stimulus check." The IRS set some conditions on the stimulus ...

    Where Do I Write to Ask for Past State Income Tax Records?

    In most states, if you earned income as a resident or nonresident, you must pay income tax on those earnings. In addition to filing a federal tax return with the Internal Revenue Service, you must file a return with the state revenue agency. You may obtain your state income tax ...

    Tax Examination Vs. Tax Audit

    The Internal Revenue Service publishes an extensive "IRS Manual" available at IRS.gov. Within the manual, the IRS uses the term "tax examination" in several different contexts within its operating procedures, and also in reference to contacting taxpayers. The ...

    Tax Consequences of Variable Annuity Withdrawal

    An annuity contract guarantees a stream of monthly payments for a fixed term or for life. In a variable annuity, the earnings in the account will vary according to the success of the investments the account holds. When you take distributions, the IRS requires you to report those ...

    What Is "OID Interest"?

    In the period between the time that businesses approve bonds and when those bonds go to market, interest rates often change. Should interest rates increase above the stated rate on the bond, the business typically sell bonds below face value so purchasers get an equivalent ...

    How to Amend, Change or Correct a Return You Already Filed

    Nobody's perfect, and the Internal Revenue Service understands that applies even when it comes to filing your taxes. Even after you have filed your return, the tax code allows you to amend your return for the current tax year as well as the three prior tax years, whether you ...

    What Regressive Tax Means

    A regressive tax is a tax that consumes a greater proportion of the income of someone who earns less than of someone who earns more. It's the opposite our progressive income tax system where the more you make, the higher your rate goes. While taxes that are designed to be ...

    De Minimis Tax Rule

    Over the course of normal business, your company may give you a gift of cash or something else that is not part of your normal salary. While most compensation from your employer is considered taxable income, a coffee cup received from your employer seems to be too insignificant ...

    Form 1040 as a Do-It-Yourself Forensic Tool in Divorce

    Divorce can cost a bundle. If you're willing to do some of the more tedious tasks yourself, you can keep some of that money rather than spend it on professionals. This can be the case when it comes to poring over your spouse's financial records for clues regarding hidden income ...

    Tax Implications for Refinancing an Investment Property

    Refinancing a mortgage allows you to cash-in on your equity, save money each month by reducing your interest rate or change the terms of your mortgage. Regardless of the reason you choose to refinance, you can usually save some money on your taxes by deducting some of the ...

    What Is 'Cafe 125' on a W2 Tax Form?

    Under a cafeteria, or Section 125, plan, you pay for your employer-sponsored benefits with pretax money. Your employer deducts your payments from your wages before withholding certain taxes. Your employer doesn't include your pretax payments in your taxable wages on your annual ...

    Frequently Asked Questions About Taxation for Mutual Fund Investors

    Mutual funds are companies that are set up to do one thing -- own investments. When you buy a share in a mutual fund, you're buying a piece of that fund's portfolio. Like any investment, the IRS usually takes a share of any profits that you earn from your mutual funds. How much ...

    Is There a Gift Tax When Putting a Relative as a Co-Owner of a Mutual Fund?

    When you put a relative's name on a mutual fund with yours, you're giving him a gift. To the Internal Revenue Service, you just gave that person half of your mutual fund account. This doesn't necessarily mean you have to pay gift tax, though. The laws concerning gift taxes are ...

    Can the IRS Force Me to Have an Audit?

    The Internal Revenue Service has the authority to audit or examine tax returns that the agency feels warrant additional scrutiny. The IRS doesn't ask taxpayers if they want an audit or tell them they have to have an audit; instead, it informs them an audit is taking place. ...

    Do We Have to Pay a Gift Tax for the Automobile We Won?

    When you receive a gift, you never have to pay the gift tax. It's paid by the donor. Unfortunately, if you won an automobile from a company or organization, it isn't a gift that is covered by the gift tax. Instead, it's treated as a form of noncash compensation, and you'll have ...

    Does the IRS Always Do an Audit if You Don't Turn in Your 1099-R Form?

    When a 1099-R you receive is not reported on your original tax return, the IRS may conduct an audit, but this is not always a standard procedure performed in every such instance. There are several methods the IRS may use when selecting a return for audit, but in many cases, the ...

    Tax Write-Offs for Insulating Your House

    When you're taking care of your finances, you want to get the most you can out of every dollar. This includes taking a close look at any renovations you make to your home and seeing if they may be eligible for tax write-offs. Insulating your home is one renovation that can save ...

    Social Security Benefits & Flex Account Reimbursements

    Your flexible reimbursement account allows you to set aside a certain amount of your salary to pay for qualified expenses such as medical and dependent care. You pay for these benefits with pretax money, which gives you income tax savings. Flexible reimbursement accounts are ...

    Are Maryland State Pension Benefits Taxable?

    If you're employed by the state of Maryland, you may be eligible to receive benefits from the State Retirement and Pension System. Benefits are paid out monthly and retirees typically have to pay both state and federal taxes on the money. Maryland state pension benefits are also ...

    When Do I Need a 1099-MISC?

    When a business pays you money, other than for employment wages, it may report the annual total to you, and the Internal Revenue Service, on a Form 1099-MISC. The businesses that make the payments to you are solely responsible for determining whether you'll need a 1099-MISC or ...

    What Are the Disadvantages of Withholding Taxes?

    The current tax withholding system is relatively modern. While withholding started with the imposition of the income tax in 1913, it was repealed three years later. The federal government's need for large sums of income due to the combination of New Deal expenses and World War ...

    Tax Rules for an Inherited Nonqualified Annuity

    Annuities are designed to help investors protect against the risks of outliving their money. But not every annuity gets beyond the accumulation phase, when contract holders make deposits into their account. When the person who took out the annuity dies before the annuity begins ...

    The Tax Consequences of the Short Sale of Gold ETFs

    Exchange-traded funds are typically funds with lower management costs than other managed funds but seek simply to earn the same return as a particular market index. Gold ETFs attempt to offer investors the same return as physical gold without the logistical difficulties of ...

    Pros & Cons of Tax Credit Fund Investing

    Tax credit funds are investments that grant the ability to reduce the amount of taxes that you pay on a dollar-for-dollar basis. They are typically tied to socially desirable investments like low-income housing or projects using renewable energy, giving you the opportunity to ...

    Can I Deduct a Contribution to My Thrift Savings Plan on My Tax Return?

    Members of the uniformed services and federal employees often get the benefit of participating in a thrift savings plan. This defined contribution plan, established in 1986, operates similar to a 401(k) and 403(b) and provides many of the same tax benefits -- including the ...

    Am I Exempt From North Carolina Taxes if I Did Not Reside but Only Worked There?

    State income tax laws pose complications for workers who earn income in one state but live in another. In North Carolina, the law requires you to file a tax return if you are making money from a job or property in North Carolina, no matter where you happen to live. However, the ...

    Tax Credit for Deployed Soldiers

    The Internal Revenue Service gives you special treatment in recognition of your service to the country when you're deployed. Deployed soldiers enjoy the opportunity for tax-free income and for special treatment in the calculation of the earned income tax credit. You'll also get ...

    Are Early Income Tax Filers Audited More Often?

    Each year, the Internal Revenue Service chooses certain tax returns for audit. If the IRS selects your return for audit, one of the IRS's representatives will scrutinize your return to ensure that all of your entries are accurate. Since the IRS chooses returns for audit ...

    Why Is There a 20 Percent Federal Withholding on My 403(b)?

    A 403(b) plan or tax-sheltered annuity is a retirement plan designed for public school employees and individuals who work for certain tax-exempt organizations. It functions as a defined contribution plan, which means you build your nest egg through elective deferrals. If you ...

    What Are Property Taxes on Condominiums?

    While the ownership of a condominium is different than ownership of a stand-alone home, property taxes are the same with both types of properties. Your local taxing authority will send a tax bill at its prescribed interval. In addition, your mortgage company may collect a ...

    How to Estimate Taxes on Retirement Pension Income

    Planning a budget for life on a fixed income can be strenuous enough before accounting for taxes. When you receive pension income, you might owe federal taxes on part or all of it as well as state income tax. Generally, if you contributed any after-tax funds to the pension, you ...

    Tax Considerations for Royalty Trusts

    Royalty trusts are similar to real estate investment trusts, but instead of holding portfolios of investment real estate properties, they hold portfolios of mineral royalty interests, which are frequently oil and gas. Like REITs, they are designed as pass-through entities. Since ...

    Taxes on a Retirement Account: Monthly Withdrawal Vs. Annual

    Before you tap your retirement account, it's helpful to understand your withdrawal options. Traditional defined-benefit pension plans, for example, are required to offer participants monthly annuity payments. If you're enrolled in a 401(k) or similar defined contribution plan, ...

    Tax Implications of a Promissory Note

    People frequently use promissory notes when providing loans either for investment purposes or just to help out friends and family members who cannot obtain traditional financing. It is important to realize that there are income tax consequences for both lenders and borrowers any ...

    Taxes on an Early Pension Buyout

    Defined-benefit pension plans are designed to pay out a set amount of money once you retire. These plans can be expensive for employers to maintain, and in some cases, companies may opt to offer employees early retirement to cut costs. If you accept an early pension buyout, your ...

    I Owe a City Government Money: Could They Withhold My Income Taxes?

    Your local government collects money for many purposes. Whether it’s parking tickets, licensing fees or property taxes, you must pay the bill or face debt collection. While it makes sense that a city government could ask the Internal Revenue Service to offset your taxes, ...

    Taxes on Partial Lump Sum Retirement Payments

    Employer-sponsored retirement plans are designed to help you grow your nest egg while enjoying some tax advantages. The plan's structure determines whether you can make monthly withdrawals or a lump sum payment once you're ready to retire. Plans that allow lump sum distributions ...

    What Taxes Are Paid When a Mutual Fund Investor Dies?

    When a mutual fund investor dies, the Internal Revenue Service will probably have the opportunity to collect taxes. Mutual funds don't stop throwing off taxable income just because a shareholder dies, and their transfer can also create tax liability. When they're held in ...

    Are Restricted Stock Awards Included on the W-2?

    According to a 2012 article published by Reuters, more employers are paying their employees with restricted stock awards instead of heavily criticized stock options. Based on accounting rules at that time, restricted stock has a lower financial impact on corporate revenue than ...

    If I Die Will the Past Due State Income Tax Be Null & Void?

    None of your debts disappear just because you're dead. When your executor sets to work on wrapping up your affairs, one of her jobs is identifying your creditors and paying what you owe. Funeral expenses get paid first, then come the tax bills. If your estate can't pay the ...

    Do You Have to Pay Income Tax to a Nonresidential State?

    Americans who live in one state and earn money in another must generally pay non-resident income tax to the state where they earn their money, but there are several variations on this theme. For example, some states don’t tax income. In other cases, some neighboring states ...

    Are Workers' Comp Indemnity Earnings Taxable?

    If you live in any state but Texas, state law requires that your employer carry workers' comp insurance. When you get injured or ill because of your work, you may receive temporary or disability benefits because of the injury. Medical-only or first aid injuries do not involve ...

    Gift Tax When Transferring Stock to a Joint Account

    If you transfer stock into a joint account without receiving compensation for its value, you may create a taxable gift. It is the payer's responsibility to cover any applicable taxes. This does not apply to accounts you hold jointly with your spouse. Gifts between spouses are ...

    Veteran Tax Benefits

    Service in the military brings tax benefits to veterans and to active-duty members. Although the Internal Revenue Service considers military retirement as taxable income, veterans who have a service-rated disability may qualify for tax exemptions on their disability benefits ...

    Can Backup Withholding Be Taken From an IRA?

    Reporting accurate income information to the IRS is the basis for determining your tax burden. When you fail to report all of your investment income, the IRS subjects you to backup withholding. All payers who issue you a 1099 either annually or for distributions are required to ...

    Taxes on Special-Needs Trusts

    A special-needs trust is an entity created to benefit a disabled individual. Like all trusts, the special-needs trust has a trustee who manages the assets, a grantor who creates the trust and a beneficiary who receives the trust funds according to the trust document. Internal ...

    Do Teachers on a Pension Pay State Income Tax?

    As of 2010, nine of the 50 U.S. states didn't impose state income tax on ordinary income. Five of the remaining 41 states didn't tax teacher's pensions. Of the other 36 states, five states didn't tax their own teachers' pension income, but might tax a teacher's pension income ...

    What Does "Horizontal Equity" Mean?

    When tax discussions arise, one of the most frequent topics involves fairness and equitable taxes. Horizontal equity is a principle that economists use to assess the fairness and equitability of taxes. The principle holds that similarly situated taxpayers pay the same amount in ...

    Are Civil Penalty Settlements Taxable Income?

    Civil penalties are the money you're asking for when you sue someone. You may be seeking money the defendant cheated you out of or fighting to get your medical bills reimbursed. Whether you win $10 or a million-dollar settlement, the Internal Revenue Service usually gets a cut.

    Tax Effects of K1s Issued by ETFs in IRAs

    A K-1 form is a tax report that comes from an exchange-traded fund. The tax effects of ETF gains vary, but in individual retirement accounts, the gains are not taxable until withdrawal. Therefore, K-1 forms will generally not have tax implications for investors whose ETFs are ...

    Can An Insurance Settlement Be Used to Buy Annuity Tax Free?

    Insurance settlements arising from accidental injury cases can take the form of tax-free annuities. The annuity payments may be set for a specific period or for the lifetime of the victim. An annuity resulting from an injury settlement must be structured correctly to qualify for ...

    Who Pays for a Tax Audit: You or Your Accountant?

    Receiving notice that your income tax return has been selected for audit is never a comfortable scenario – for you or your accountant. However, in most cases, an accountant should be willing to work with you to ensure records used to prepare your return are in order and to ...

    How Does a Quitclaim Deed Affect Your Personal Taxes?

    When you transfer property using a quitclaim deed, you legally walk away from any rights that you have in the property, whether or not you actually have any. With this in mind, you could quitclaim a property for any of a number of different reasons. The type of deed you use to ...

    Is Temporary Housing Taxable?

    Your employer may occasionally require you to work at a different location temporarily but longer than the amount of time usually associated with a business trip. For example, you may be working on a project or assisting in opening a new location. These temporary assignments ...

    Are Easement Payments Taxable Income?

    When you give another person or business -- for example, a utility company -- access to or through your property, you grant that person an easement. When you grant an easement, you receive payment or consideration for that easement. Whether you provide a right of way easement or ...

    Are Military Unpaid Pay and Allowances Taxable?

    In general, the payments you receive as a member of the Armed Forces are taxed as wages. However, if you are now retired from the military and receive retirement pay, the Internal Revenue Service taxes the payments you receive as a pension. Typically, any allowances you receive ...

    Is Giving Your Wife Money for Bills Taxable?

    The Internal Revenue Service sets guidelines on how much you can give away each year and avoid paying gift taxes. The reason for this is to keep people from giving assets away while alive to avoid the estate tax. While the laws surrounding gift taxes are some of the most ...

    How to Avoid Paying Taxes on an Inherited Property

    Inheriting a house or a Picasso is fantastic, unless a tax bill comes with it. If you decide you want to sell your inheritance, profits on the sale are taxable. If you keep the property, you may have other taxes, such as property tax on a house. Some states even charge an ...

    Is Paying an Ex-Husband for Half of a House Taxable?

    Dividing assets in a divorce is emotionally painful and also financially tricky. A lot of times it comes down to a trade-off: you get the family house, for instance, and your spouse gets cash. Dividing up assets in a property settlement is usually tax-free, though -- so that's ...

    Is Annuity Inheritance Taxable?

    An annuity contract provides a stream of payments in return for one or more premiums that pay for the contract. The contract owner can pay for the annuity with a single lump-sum premium or can build up the annuity’s cash value over a defined period. The tax arising from an ...

    Do Liens From State Income Tax Ever Expire?

    If you fail to pay state income tax you owe, the state can file a tax lien against property you own currently or in the future. States handle tax liens in different ways and vary in how long a lien remains in effect. Liens are often attached for a period of five years, although ...

    Tax Implications on the Inheritance of Government Bonds

    An inheritance can trigger a number of taxes. If you are the beneficiary of government bonds, you’ll potentially have to contend with estate, inheritance and income taxes. Your tax bill depends on the size of the inheritance, the size of the deceased’s estate, the ...

    Tax Tips on POD Savings Bonds

    Some buy United States savings bonds for children as gifts to invest in their future. Others buy savings bonds for themselves out of patriotism, to help the U.S. finance its borrowing needs and as a conservative foundation for their investment portfolio. Still others buy savings ...

    Taxable Inheritance Benefits

    In the eyes of the Internal Revenue Service, most inherited money isn't income. If your parents leave you, say, $50,000 and a Ferrari, you don't owe Uncle Sam a penny. Some types of inheritance are taxable, though. On top of that, states and the federal government don't play by ...

    Unemployment & Employee Withholding in Washington State

    The state of Washington provides assistance to qualified unemployed workers through its unemployed benefits program, which helps workers deal with some of their expenses while looking for a new job. In Washington state, employers pay a tax to cover the cost of unemployment ...

    Disbursement of Nontaxable Money to Family Members

    The Internal Revenue Service provides you with lots of ways to receive nontaxable money. Health savings accounts, Roth individual retirement arrangements and other tax-saving vehicles let you invest and withdraw money tax free as long as you follow the rules. The rules sometimes ...

    Taxes on Retroactive Benefits

    Defined benefit plans offer a set payout, such as $100 per month for year worked, guaranteed to be there regardless of the recipient’s contribution. Social security is a commonly recognized defined benefit plan, but employers might also offer pension programs with defined ...

    Deductibility of Interest on Tax Deficiency

    Whether it's the Internal Revenue Service you have a tax deficiency with or a state or local government's tax agency, you will be charged interest on your unpaid taxes. The only way to avoid, or at least minimize, the amount of interest you pay is to get your deficiency paid off ...

    Wages Taxable for Michigan Unemployment Taxes

    Each state, including Michigan, has an unemployment insurance fund established for displaced workers. Employees who become unemployed through no fault of their own may be eligible to receive benefits from the plan. Most Michigan employers are required to contribute to the plan. ...

    Do Employees Need to Pay Taxes on Health Insurance Premium Reimbursements?

    In most cases, employees do not pay taxes on reimbursements received from employers for health insurance premiums. However, in some cases, a reimbursement may be considered taxable, depending on the nature of the reimbursement or for certain S corporation employees. When premium ...

    Can Homestead Exemptions Lower My Tax Bracket?

    A homestead exemption can lower your tax bill, but not your tax bracket. The exemption gives you a cut in your property taxes, and it can keep you from losing your house in bankruptcy. It doesn't reduce your income taxes. In fact it's unlikely to have any effect on your federal ...

    Can HRA Funds Be Used to Pay Health Insurance Premiums?

    If your employer offers a health reimbursement account, you can benefit by using the money in the account for health expenses. The IRS sets the rules for HRAs, which your company can fund with tax-deductible money. An HRA account allows you to reimburse medical providers and ...

    Tax on Stock in Lieu of Pay

    Employers may compensate their workers with stock rather than regular pay both to motivate employees -- giving them a direct stake in the company's success -- and to conserve cash. For tax purposes, stock given to workers in lieu of pay is treated like regular income. It may not ...

    Tax Rules When an American Marries a Canadian

    Filing your taxes may be the last thing on your mind before the wedding, but you may need to do some research to avoid penalties. The American and Canadian systems of taxation are quite complex. Basically, U.S. tax laws are based on citizenship, while Canadian tax rules are ...

    Balanced Index Fund Tax Advantages

    A balanced index fund is an investment fund that tracks a pre-determined set of investments, called an index. In addition to being an index fund, it also combines different types of investments so that it gives a way to balance money into different parts of the market. One ...

    Tax Law on Family Trust Funds

    A family trust holds assets for the benefit of the members of a family and under the management of a trustee appointed by the grantor. A parent wishing to pass property to his children and allow his estate to avoid the legal tangles and expenses of probate court would set up a ...

    Is an Annuity From the Coast Guard Considered Taxable Income?

    The United States Coast Guard provides retirement benefits through annuities, which make monthly payments for the remainder of the retiree’s life. Like many retirement benefits, pre-tax contributions fund the retirement annuities provided by the Coast Guard. Monthly ...

    Taxation of Rental Properties in a Family Trust

    A family trust is a living trust you set up to pass your property to your family outside probate. If you appoint yourself as trustee, you can manage your assets -- rental houses, bank accounts, personal home -- just as if you were still the legal owner. At your death, your ...

    Taxation and Honorarium

    Honoraria and speaker fees are compensation that organizations pay to reimburse speakers for giving an address. They can vary from nothing to more than $100,000 for in-demand speakers such as former President Bill Clinton or former New York City Mayor Rudy Giuliani. Regardless ...

    Tax Audit: Physical Vs. Digital Receipts

    Because business expenses lower taxable income, the Internal Revenue Service pays special attention to significant expenses and associated documentation. If the IRS decides to audit your records, it will ask you to produce documentation of your expenses. You can maintain tax ...

    Definition of HSH Income

    The Internal Revenue Service defines HSH income as income earned by some household employees. According to IRS rules, the HSH designation applies if the employee didn't earn enough to require you to issue a W-2; that amount was less than $1,800 in 2013. The agency also has ...

    How to Turn the Deduction Cap Into a Middle-Income Tax Cut

    As configured in the early 21st century, the American tax code serves two primary purposes. First, it generates revenue to help pay the expenses of the government. Second, it is also used as a tool to promote certain types of behavior. For instance, the ability to deduct ...

    Tax on Stocks Exchanged Through a Merger & Acquisition

    If a company you've invested in goes through a merger or an acquisition, you may find some unfamiliar shares residing in your brokerage account. Payment in the form of stock -- so many shares of the acquiring company for shares of the purchased company -- is a common feature of ...

    Do You Need an EIN to Avoid an Inheritance Tax?

    Instead of assigning Social Security numbers to companies, the IRS assigns Employer Identification Numbers. An individual doesn't need an EIN, and it won't help you avoid paying tax on your inheritance. However, only a handful of states charge an inheritance tax, fewer than half ...

    Are There New York State Income Taxes on State Retirement Benefits?

    When you prepare your New York state taxes and you're either retired or age 59 1/2 or older, you can subtract some income from your federal adjusted gross income before you calculate your New York state taxable income. Pension income you receive from the federal, state or local ...

    The Unauthorized Inspection of a Tax Return by a Private Party

    If you're accustomed to thinking of the contents of your tax returns as confidential information, your view reflects a modern outlook that dates back less than 50 years and owes its existence to the aftermath of Watergate. At various times in United States history, your tax data ...

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