As a self-employed individual, you are responsible for paying both self-employment (SE) tax and income tax. Self-employment tax covers Social Security (12.4%) and Medicare (2.9%) taxes, while income tax is the tax you pay on your business profits. If you fail to pay your self-employment taxes on time, you may face penalties and interest charges. … Read more
Navigating the complexities of tax returns can be a daunting task, especially when you receive an IRS notice regarding an adjusted refund amount. This guide delves into the intricacies of adjusted refund amounts, empowering you with the knowledge to decipher these notices and take appropriate action. What is an Adjusted Refund Amount? An adjusted refund … Read more
Purchasing a home is a significant financial milestone, and many individuals consider utilizing funds from their Individual Retirement Arrangement (IRA) to facilitate this endeavor. While this strategy can provide access to substantial capital, it’s crucial to understand the tax implications and reporting requirements associated with IRA withdrawals. This guide will delve into the intricacies of … Read more
Leaving the country with unpaid debt may seem like an appealing way to escape financial obligations, but it’s important to understand the potential consequences before making such a decision. This article will explore what happens to your debt when you leave Australia, the impact on your credit score, and the legal implications of defaulting on … Read more
An IRS audit can be a daunting experience, especially if you’re missing receipts to support your tax deductions. However, it’s crucial to remember that an audit is not a trial, and honest mistakes won’t land you in jail. This guide will provide a comprehensive overview of what to expect during an audit without receipts, including … Read more
Receiving a notice from the IRS that your tax return is under review can be a daunting experience. Understanding the reasons behind an IRS review and the potential outcomes can help alleviate anxiety and guide you through the process effectively. This comprehensive guide will delve into the various factors that may trigger an IRS review, … Read more
The Internal Revenue Service (IRS) is responsible for enforcing the nation’s tax laws. As part of this responsibility, the IRS conducts audits to ensure that taxpayers are complying with these laws. What is an IRS Audit? An IRS audit is a review of an individual’s or organization’s tax return and supporting documents to verify the … Read more
Sole proprietorships are a common business structure for individuals who want to start their own businesses. However, there may be times when a sole proprietorship does not generate any income. In these cases, it is important to understand whether or not the business owner is still required to file taxes. This article will explore the … Read more
Life insurance proceeds, typically paid directly to a beneficiary, are generally not subject to income tax as they’re seen as reimbursement for a loss. However, exceptions do exist. For instance, if the beneficiary owes back taxes, the IRS may place a lien on their assets, including the insurance proceeds. Understanding the Exceptions 1. Beneficiary’s Outstanding … Read more
Living trusts have gained popularity as estate planning tools, offering benefits such as probate avoidance and asset protection. However, it’s crucial to be aware of the potential drawbacks associated with living trusts, particularly revocable living trusts, before making a decision. This guide delves into the disadvantages of revocable living trusts, providing a comprehensive analysis to … Read more