Mistakes happen, and when they do, it’s important to know how to correct them. If you’ve made a mistake on your tax return, you can amend it by filing Form 1040X. But how far back can you amend your taxes? The IRS allows you to amend your tax return for up to three years from … Read more
Understanding the Reasons for IRS Deposits Receiving an unexpected deposit from the IRS can be confusing and raise questions about its source and purpose. Here are some potential reasons why the IRS may have deposited money into your account: 1. Tax Refund: The most common reason for an IRS deposit is a tax refund. This … Read more
Section 115BAC of the Income Tax Act introduces a new tax regime for individuals and HUF taxpayers, providing an option to pay income tax at lower rates with fewer exemptions and deductions. This new regime became effective from FY 2020-21 (AY 2021-22) and is the default option for taxpayers starting from FY 2023-24 (AY 2024-25). … Read more
The Paycheck Protection Program (PPP) was established as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide financial assistance to small businesses and non-profit organizations struggling amidst the economic fallout of the COVID-19 pandemic. The program offered forgivable loans to eligible entities, with the forgiven amount generally excluded from taxable income. … Read more
Understanding the Reasons for Paper Stimulus Checks The third round of stimulus checks, amounting to $1,400 per eligible individual, is currently being distributed. While many recipients have received their payments via direct deposit, others have been issued paper checks or EIP (Economic Impact Payment) debit cards. If you’re wondering why you’re receiving a paper stimulus … Read more
Closing costs are unavoidable expenses associated with purchasing a home. While these costs can be substantial, there are limited opportunities to deduct them on your tax return. This guide will provide a detailed overview of which closing costs are tax deductible and how to claim these deductions. Tax Deductible Closing Costs The only closing costs … Read more
Understanding how taxes impact your income is crucial for effective financial planning. This guide will delve into the intricacies of post-tax calculations, using $2,000 as an illustrative example. We’ll explore the various deductions and withholdings that affect your take-home pay, empowering you to make informed decisions about your finances. Calculating Your Take-Home Pay Calculating your … Read more
Wage garnishment is a serious matter that can have a significant impact on your financial stability. If you are facing wage garnishment, it is important to take action to stop it as soon as possible. There are several ways to stop wage garnishment, including: Paying off the debt in full. This is the most straightforward … Read more
Owner’s draws are a common way for business owners to access funds from their company for personal use. However, the tax implications of owner’s draws can be complex, and it’s important to understand how they are treated by the Internal Revenue Service (IRS). In this article, we will explore the tax deductibility of owner’s draws, … Read more
Filing false tax returns is a serious offense that can lead to severe penalties, including fines and imprisonment. The Internal Revenue Service (IRS) actively pursues individuals and businesses that engage in tax fraud, and the consequences can be significant. Penalties for Filing Fake Taxes The penalties for filing fake taxes vary depending on the severity … Read more