Understanding the Identity Verification Process The Internal Revenue Service (IRS) has implemented an identity verification process to prevent identity theft and ensure that refunds are issued to the rightful taxpayers. If you have received a notice or letter from the IRS requesting you to verify your identity, it is crucial to respond promptly to avoid … Read more
Understanding Owner Compensation and PPP Loan Forgiveness The Paycheck Protection Program (PPP) was established to provide financial assistance to businesses and self-employed individuals impacted by the COVID-19 pandemic. While the program initially allowed for flexibility in using loan funds, the rules regarding owner compensation and loan forgiveness have since been clarified. Eligibility for Owner Compensation … Read more
Investing in the stock market can be a lucrative endeavor, but it also comes with the risk of losses. When you sell a stock for a loss, you may be wondering if you can deduct that loss from your taxes. The answer is yes, you can deduct stock losses from your taxes, but there are … Read more
Understanding TDS on Cash Withdrawals Section 194N of the Income Tax Act, introduced in 2019, mandates banks and other financial institutions to deduct Tax Deducted at Source (TDS) on cash withdrawals exceeding certain limits. The threshold limit is Rs. 1 crore in a financial year, and the TDS rate is 2%. However, for individuals who … Read more
Yes, you can claim 3 allowances if you are single and meet certain criteria. Who is eligible to claim 3 allowances? Single taxpayers with one or more dependents Married taxpayers filing separately with one or more dependents Head of household filers with one or more dependents How many allowances should I claim? The number of … Read more
Understanding Tax Refund Offsets A tax refund offset occurs when the federal government intercepts a portion or the entirety of an individual’s tax refund to settle an outstanding debt owed to a federal or state agency. This debt can stem from various sources, such as unpaid child support, student loans, or other financial obligations. Reasons … Read more
An IRS audit can be a daunting experience, especially if you discover that you owe additional taxes. Understanding the consequences and your options for resolving the debt is crucial. Consequences of Owing Money After an Audit Additional Tax Liability: The primary consequence of failing an audit is the additional tax you owe. The IRS will … Read more
Understanding how to calculate take-home pay is crucial for both employees and employers. Take-home pay represents the actual amount of money an employee receives after all taxes, deductions, and other withholdings have been subtracted from their gross pay. This guide will delve into the intricacies of take-home pay calculation, providing a step-by-step approach to determine … Read more
Mutual funds offer investors a convenient and diversified way to grow their wealth. However, investors need to be aware of the potential capital gains tax implications when selling mutual fund shares. This guide will explore the different ways to avoid or minimize capital gains taxes on mutual fund investments. Understanding Capital Gains Taxes on Mutual … Read more
Understanding the IRS Verification of Non-Filing Letter An IRS Verification of Non-Filing Letter serves as official documentation issued by the Internal Revenue Service (IRS) to verify that an individual has not filed a tax return for a specific tax year. This letter is often required when applying for financial aid, such as student loans or … Read more