If you were to ask taxpayers about their most common fear, many would say that they worry about being audited by the Internal Revenue Service. While the actual number of tax audits done each year is quite low, those who are affected by them can suffer serious financial trouble, leading to large judgments and years of back tax payments. It's far more important to do what you can to avoid a tax audit in the first place. With the proper information and preparation, your chances of being audited by Uncle Sam can become very small.
If you've been paying the traditional income tax for the past several years, you may not have even heard of the Alternative Minimum Tax. In reality, though, this separate tax system affects many Americans each year, including some who didn't know they were even subject to it. What is the Alternative Minimum Tax? Should you be concerned about having to pay it? Is there anything you can do to find out if it applies to your tax return?
Financial advisers and experts advertise their services every day. How can you tell which professional to hire for your IRS tax needs? Much of it depends on the specific kind of assistance you're looking for. Ideally, you should choose a professional who is best qualified to handle your money matters. Often, that means hiring a Certified Public Accountant (CPA) or an IRS Enrolled Agent (EA). But, how can you tell which one to choose for your financial needs?
Taxpayers who deduct gifts on their tax returns often wind up getting audited, but that doesn't mean that the IRS disallows all deductions for gifts. In some instances, taxpayers can receive gifts without paying taxes or give gifts and claim a deduction. The key, however, is knowing the IRS rules for tax-free gifts.
Taxpayers who get married, get divorced, or adopt kids often deal with name changes. While these individuals may remember to use their new last names in their everyday dealings, they may forget to update the records of their names for tax purposes. Whenever a taxpayer changes a legal name, though, he or she needs to do so in a way that will not interfere with their ability to file a tax return on time.
Are you a freelancer who is dreading the income tax deadline this year? If so, your concern is understandable since freelancers are among the most frequently audited taxpayers. The good news is that you can successfully navigate your way through the income tax code and avoid the traps that catch so many of your colleagues.
There are three basic types of traditional 401(k) plans available that can save you money on your tax return this year. Here's an overview of how your 401(k) plan can benefit your tax return.
The "fiscal cliff" was huge news across the country during the latter part of 2012. In an effort to avoid it, both Democrats and Republicans worked to hammer out a budget deal that would include budget cuts and tax increases. As a result, several income tax rates have increased this year. Some of these tax increases for 2013 will affect taxpayers in 2014 and beyond, but others have already started to have an impact on the financial welfare of American citizens.
Estimated taxes can be one of the trickier sections of the IRS tax code. If you're not subject to income tax withholding or if you own your own business, you may be subject to these taxes. It's best to learn about the requirements for estimated taxes in advance so you can make sure that you're following the law correctly.
Many of the current income tax credits and deductions were scheduled to expire at the end of 2012, but the federal government has decided to extend some of these credits into 2013 or longer. The credit extension is good news for several taxpayers, including those with children, those who are employed as educators, and those who take retirement distributions. Here's a look at a few of the tax credits that been extended into 2013.
