Yes, taxes can be taken out of Social Security checks. If you are receiving Social Security benefits, you can request that the Social Security Administration (SSA) withhold federal income taxes from your monthly benefit payment. This can help you avoid owing a large tax bill when you file your annual tax return. Who should have … Read more
Understanding Tax Withholding Federal income tax is a “pay-as-you-go” tax, meaning that taxpayers pay the tax as they earn or receive income throughout the year. Employers generally withhold income tax from their employees’ paychecks and remit it to the IRS on their behalf. At the end of the year, the employer sends the employee a … Read more
The Internal Revenue Service (IRS) plays a crucial role in the U.S. tax system, ensuring compliance and collecting revenue. When taxpayers encounter difficulties fulfilling their tax obligations, the IRS initiates a series of communication processes, including the issuance of notices. These notices serve as official reminders and provide essential information regarding outstanding balances, payment options, … Read more
Understanding Trust Beneficiary Tax Implications Inheriting assets through a trust can be a complex financial matter, particularly regarding tax implications. Whether or not you have to pay taxes on money inherited from a trust depends on several factors, including the type of trust, the nature of the distribution, and your own tax situation. Types of … Read more
Navigating Complex Tax Laws: Innocent Spouse Relief The complexities of tax laws can sometimes lead to situations where one spouse is held liable for taxes they may not have been aware of or responsible for. In such cases, the innocent spouse rule provides a mechanism for relief, allowing the affected spouse to seek exemption from … Read more
Understanding IRA Conversion Eligibility Contrary to popular belief, there is no age limit or income requirement for converting a traditional IRA to a Roth IRA. Individuals of any age, including those over 70, are eligible to make this conversion. However, it’s important to note that the conversion process involves paying taxes on the amount converted. … Read more
Understanding Your Rights as a Taxpayer The Taxpayer Bill of Rights (TBOR) outlines ten fundamental rights that taxpayers possess when interacting with the Internal Revenue Service (IRS). One of these rights is the ability to appeal an IRS decision in an independent forum. This means that taxpayers have the option to challenge IRS decisions through … Read more
Navigating the Complex Landscape of Homebuyer Tax Credits The prospect of purchasing a home can be both exciting and daunting, especially when it comes to navigating the complexities of tax credits. In 2020, the tax landscape for homebuyers underwent significant changes, leaving many wondering if there are any tax credits available to ease the financial … Read more
The Internal Revenue Service (IRS) has issued a stern warning to taxpayers about a recent surge in IRS-themed text message scams designed to pilfer personal and financial information. These scams, known as “smishing,” have proliferated in recent months, prompting the IRS to urge vigilance and caution. Modus Operandi of Smishing Scams Smishing scams typically involve … Read more
The Canada Revenue Agency (CRA) is responsible for administering tax laws and ensuring compliance among Canadian taxpayers. A common question that arises is: “Does the CRA know how much money I make?” This guide will delve into the various methods the CRA employs to obtain information about your income and how this knowledge impacts your … Read more