A backdoor Roth IRA is a strategy that allows high-income earners to contribute to a Roth IRA even if they exceed the income limits for direct contributions. The strategy involves making non-deductible contributions to a traditional IRA and then converting those funds to a Roth IRA. Benefits of a Backdoor Roth IRA Tax-free growth: Earnings … Read more
The Internal Revenue Service (IRS) has stated that the majority of tax refunds are issued within 21 days of filing. However, some returns may require additional review and take longer to process. Factors that may delay your tax refund: Errors on your tax return: If there are any errors or inconsistencies on your tax return, … Read more
Tax fraud, a serious offense that undermines the integrity of the tax system, can take various forms, including false exemptions, unreported income, and organized crime. Individuals who suspect tax fraud can play a vital role in combating this illicit activity by reporting their concerns to the Internal Revenue Service (IRS). Consequences of Reporting Tax Fraud … Read more
Tax Topic 151, a communication from the Internal Revenue Service (IRS), often raises concerns among taxpayers. This comprehensive guide will delve into the significance of Tax Topic 151, its implications, and the appropriate actions to take upon receiving it. What is Tax Topic 151? Contrary to popular belief, Tax Topic 151 is not an audit … Read more
Understanding Federal Income Tax Withholding Federal income tax withholding is the process by which employers deduct a portion of an employee’s paycheck to pay towards their federal income tax liability. This amount is determined based on the employee’s Form W-4, which they complete when they start working for a new employer. The W-4 includes information … Read more
Understanding IRS Audits The Internal Revenue Service (IRS) conducts audits to verify the accuracy of tax returns and ensure compliance with tax laws. While the IRS aims to audit a representative sample of taxpayers, certain factors can increase the likelihood of an audit. Factors Influencing Audit Selection Income Level: Higher-income earners are more likely to … Read more
Understanding Homeownership Deductions Homeownership offers various financial benefits, including potential tax deductions. However, it’s crucial to understand which expenses are deductible and which are not. Deductible Expenses Mortgage Interest: Homeowners can deduct interest paid on their mortgage loans, subject to certain limits. Property Taxes: State and local real estate taxes are deductible, up to a … Read more
As a self-employed individual, navigating the complexities of tax deductions can be a daunting task. However, understanding the intricacies of eligible expenses can significantly reduce your tax liability and boost your bottom line. This comprehensive guide will delve into the various deductions available to self-employed taxpayers, empowering you to optimize your tax strategy and maximize … Read more
1099 forms, commonly referred to as “information returns,” are crucial documents issued by entities or individuals who have made payments to you during the tax year. These forms provide a detailed breakdown of the income you have earned from sources other than your primary employer. While receiving a 1099 form does not automatically imply that … Read more
What is TurboTax Refund Advance? TurboTax Refund Advance is a loan provided by First Century Bank, N.A., Member FDIC, that allows you to access up to $4,000 of your expected tax refund before the IRS issues it. This can be a great way to get cash quickly if you need it for unexpected expenses or … Read more