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This guide is generally oriented towards the time-honored approach of deferring income and accelerating deductions to minimize 2015 taxes. For individuals, deferring income also may help minimize or avoid AGI-based phaseouts of various tax breaks. Year-end tax planning for 2015 must take account of the many important “temporary” tax provisions that have expired and may not be retroactively reinstated and…
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The breadth of our life experiences and changes that occur as we mature always have wider tax implications. The major milestones of our lives bring both tax benefits and liabilities. Almost every milestone we reach, whether it includes the excitement of change or the sadness of loss, directly or indirectly affects our status as a taxpayer. For example: Getting married…
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If you can afford health insurance but you don’t wish to buy it expect a higher federal income tax bill for 2015. Under the Affordable Care Act, unless you have a health coverage exemption, the IRS will assess an additional penalty, using the higher result of the following two criteria: 2% of your yearly earnings: The amount of income above…
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“Identity theft is one of the fastest growing crimes nationwide, and refund fraud caused by identity theft is one of the biggest challenges facing the IRS.”…IRS Tips for Taxpayers, FS-2014-2, January 2014 According to an IRS report, Mauricio Warner, a Georgia resident, had a $10 million tax fraud and identity theft operation underway before he was caught and convicted. Warner…
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The majority of taxpayers pay their taxes due annually when filing their tax return for the year. In some circumstances, however, taxes must be paid to the IRS on a quarterly basis. These tax payments are called estimated taxes because they are based on the amount of income that an individual or business expects to make for the year.
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April 15th may be more than six months away but it is never too soon to start thinking about how and when you will file your tax return. If all taxes due are not paid on time, you run the risk of penalties and interest. This is not a situation most people want to be in. You avoid penalties by…
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Tax deductions and credits help taxpayers reduce their tax liability. The differences between the two are in their definitions: A tax deduction reduces your gross income and arises from a deductible expense. Taxpayers can take a standard deduction up front or itemize expenses. A tax credit is an amount of money applied directly to the tax liability. Tax credits are…
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Should you try to file that complicated tax return with using commercial tax software or get the help of a qualified tax preparer? Unless you’re a qualified tax accountant, you should consider the pros and cons of DIY versus DPB. The former is fraught with pitfalls; the latter is more conducive to peace of mind. A note on the aforementioned…
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Experience can be a good teacher, but we shouldn’t learn everything through our mistakes. For example, if the IRS penalized you last April because you underpaid your taxes, you can fix that for this tax year. Consider having your employer deduct more from your wages, or at least going the estimated tax payment route. We may be halfway through 2015…
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As the tax year matures, it is not too late to find ways to reduce your personal or small business income tax bill. Below are three areas to pay attention to throughout the year: 1. Take more charitable deductions. You are probably aware that you can deduct the cash or value of property you give to charitable organizations. However, you…
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