Taxes

Is Your ‘Business’ Just a Hobby?

There’s an old Gershwin song that goes, “You say tomato, I say tamahtoe … let’s call the whole thing off.” Taxpayers and the IRS have their own version: “You say hobby, I say business.” The difference between businesses and hobbies is that you have to prove that your hobby is a business by passing not one …

Categories: Entrepreneurship, Taxes

To Itemize or Not to Itemize? That Is the Question

Misconceptions are common when it comes to taxes in general, but some aspects of income tax preparation seem to have more than their fair share. A breeding ground for misconceptions is the discrepancies over rules: The actual IRS rules versus the rules according to your best friend. The rules that you hear on the street include timeless …

Categories: Taxes

Don’t Forget to Deduct…

The tax-preparation chain H&R Block is running a commercial this year that invites Americans to “get their billions back.” But what exactly does it mean? The overwhelming majority (84%) of Americans who e-filed a tax return last year received a refund, according to the IRS. The average amount of those refunds was $3,211, for a …

Categories: Taxes

Six Common Tax Misunderstandings – and How to Survive Them

During the first few months of the year, I read lots of articles and hear from many readers on the question of income taxes. It’s not surprising since filing income tax paperwork is part of the life of most American adults during these first few months of the year, and it’s always a painful process. …

Categories: Taxes

Five Tax Breaks for Parents

There’s a lot to be said about having children; they’re a joy, they’re a handful — and they’re expensive. How expensive depends upon where you live and how much you earn. The U.S. Department of Agriculture estimates it costs between $180,000 and $540,000 to raise a child from birth to age 18, and those numbers just …

Categories: Family, Taxes

Seven Truths About Self-Employment

It’s three hours until closing time and you’re already counting down. Once the clock strikes 5 p.m., you are ready to race out that door and find comfort with your family – at least until tomorrow. Your morning meeting was beyond frustrating, your co-worker smacked her gum all day (again), and the entire day was …

Your Taxpayer Bill of Rights

The majority of taxpayers have long held the belief that they have no rights before the IRS, according to IRS National Taxpayer Advocate Nina Olson. IRS surveys have confirmed this view, despite the fact that Congress has passed multiple bills over the years titled “Taxpayer Bill of Rights.” The Taxpayer Advocate Service, an independent office …

Tax Prep Checklist

Even the most knowledgeable tax professional can’t complete your income tax return correctly and quickly without all the information they need. Yet every year, countless people sit down opposite their accountant and answer, “I don’t know,” or, “Can’t you just plug a number in?” to questions about income and expenses. Most professionals will smile and …

Categories: Taxes

Going Pro: How to Choose a Tax Preparer

More than 50% of taxpayers hire a professional to prepare their taxes. But you’re legally responsible for what is on your tax return even if you paid someone else to prepare it for you. Mistakes and their consequences are the responsibility of the individual, married couple, or business whose name appears at the top of …

Categories: Taxes

Understanding Income and Tax Brackets

There is a good reason so many people seek professional help with preparing their income taxes. It’s because the tax is complicated, and at the heart of the convoluted system are tax brackets. Federal income tax rates are divided into seven brackets that are based on income and range from 10% to 39.6%. If that was …

Categories: Taxes

Six Big Financial Differences Between a Normal Job and Self-Employment

In 2008, I took the leap from a traditional white collar job into self-employment, mostly on the back of a small side gig I had built for myself that was mostly based around The Simple Dollar. It was a scary change, as I walked away from the stable salary and relative security of my previous …

Top Tax Scams to Watch Out for in 2015

Every year, Americans lose untold billions of dollars to a host of tax scams that range from identity theft to return-preparer fraud. While most of these scams can happen at any time, they tend to be most active during tax season, from January through April 15. IRS Commissioner John Koskinen urges taxpayers to “use caution …

TurboTax Refund for Deluxe Customers

Taxpayers and investors alike have expressed outrage this tax season over recent changes made by TurboTax. The company’s “Deluxe” package, a popular choice in recent years, has reduced critical features forcing some users to upgrade to a higher-priced package. TurboTax Issues $25 Refund to Deluxe Customers Now, TurboTax is responding to the screw-up by issuing a …

Debt Forgiveness and Taxes

In 1726, author Daniel Defoe wrote in “The Political History of the Devil” that, “Things as certain as death and taxes can be more firmly believed.” A modern twist on that time-honored quotation would be, “Few things can affect your taxes more than debt.” Exactly how much debt are we talking about? As of March …

Categories: Debt Management, Taxes

TurboTax Discount Code – Free Offer Promotion

Tax preparers usually need a TurboTax discount code to get a great deal on the software for tax season. However, TurboTax is running a limited-time offer that could get simple filers to complete their federal and state taxes for $0. No Turbotax Discount Code Required UPDATE: 2/13/15 – **This offer ends on Monday 2/16/15** The …

Tax Changes for 2015

It’s nearly impossible to talk about taxes without remembering Benjamin Franklin’s observation: “In this world, nothing can be said to be certain, except death and taxes.” Ben was correct, but his take on taxes does not go far enough. Not only are taxes a certainty, but changes in tax laws and rules are inescapable. Each …

Categories: Taxes

The Facts About E-Filing Your Taxes for Free

If it’s free, it’s for me! With few exceptions, no one really enjoys filing their taxes, so why not reduce the sting by doing it for free? Free is everyone’s favorite price for anything. However, there are restrictions on who, how, and what can be e-filed for free. These filers aren’t invited to the party: Businesses …

Categories: Taxes

Tax Guide for College Students

College is a huge step toward adulthood. Going to class, homework and studying, holding down a job, figuring out a way to pay for college, and trying to make yourself marketable for a job after graduation – that’s exhausting just to type. One more step to adulthood is filing taxes. As a college student, filing taxes can …

Categories: Education, Taxes

Guide to Self-Directed IRAs

The history of retirement plans in the United States is neither as old nor as extensive as most people think. The first private pension fund was introduced by the American Express Co. in 1875 as a means of improving employee retention. By 1900, there were only 13 private pension funds in the entire country, and …

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