Filing taxes can be a daunting task, and receiving a zero tax refund can be particularly frustrating. Understanding the reasons behind this outcome can help you optimize your withholding and avoid overpaying taxes in the future. Reasons for Getting Nothing Back in Taxes 1. Accurate Withholding Your employer withholds taxes from your paycheck based on … Read more
Understanding IRS Notices and Letters When you receive a notice or letter from the IRS, it’s important to understand why you’re being contacted. The IRS sends correspondence for various reasons, including: You have an outstanding balance due. You’re due a larger or smaller refund. The IRS has questions about your tax return. The IRS needs … Read more
Understanding Chapter 13 Bankruptcy and Tax Refunds When filing for Chapter 13 bankruptcy, it’s important to understand how your tax refunds will be treated. In general, you will be required to turn over your tax refund to the Chapter 13 trustee, who will distribute it to your creditors. However, there are some exceptions to this … Read more
Understanding IRA Conversions An IRA conversion involves transferring funds from a traditional IRA or other pre-tax retirement account to a Roth IRA. Roth IRAs are funded with after-tax dollars, meaning that the contributions are not tax-deductible. However, qualified withdrawals from a Roth IRA are tax-free. Benefits of Converting to a Roth IRA After Retirement Tax-free … Read more
Understanding Tax Evasion and Whistleblower Reporting Tax evasion, the deliberate underpayment or nonpayment of taxes, is a serious offense that can trigger IRS investigations and penalties. If you suspect someone is evading taxes, you can report them to the IRS through their whistleblower program. IRS Whistleblower Program The IRS Whistleblower Office encourages individuals to report … Read more
Understanding IRS Offsets The Internal Revenue Service (IRS) has the authority to offset tax refunds to settle outstanding debts, including federal taxes, child support, federal agency nontax debts, state income tax obligations, and unemployment compensation debts. This process, known as a refund offset, involves applying an overpayment in taxes towards these debts. Reversal of IRS … Read more
Yes, you can check the status of your IRS audit online. To do so, you will need to create an account on the IRS website. Once you have created an account, you can log in and click on the “My Account” tab. Under the “Tax Records” section, you will see a link to “View Your … Read more
When applying for a mortgage, submitting tax returns is a common requirement. These documents provide valuable insights into your financial situation, enabling underwriters to assess your eligibility for a loan. Understanding what underwriters scrutinize on tax returns can enhance your chances of loan approval. Why Do Lenders Request Tax Returns? Mortgage lenders analyze tax returns … Read more
Capital gains tax (CGT) is a levy on profits made from the sale of certain assets, such as stocks, bonds, and real estate. In the UK, CGT rates range from 10% to 28%, depending on the type of asset sold and the taxpayer’s income tax bracket. One potential way to avoid or reduce CGT liability … Read more
Key Considerations: Tax implications: Selling a stock at a loss can generate a capital loss, which can be used to offset capital gains and reduce your tax liability. However, if you sell a stock within 30 days of purchasing it, the loss will be considered a “wash sale” and will not be tax-deductible. Investment strategy: … Read more