Navigating the complexities of income taxes can be a daunting task, especially when it comes to understanding the interplay between gross income and taxable income. This comprehensive guide will delve into the nuances of tax brackets, clarifying the distinction between gross and taxable income, and providing valuable insights into how these concepts impact your tax … Read more
The Internal Revenue Service (IRS) uses various methods to determine the marital status of taxpayers for tax purposes. This information is crucial because it affects tax filing requirements, tax rates, and eligibility for certain tax benefits. Methods Used by the IRS 1. Tax Return Information The primary method the IRS uses to determine marital status … Read more
Tax Collected at Source (TCS) is a mechanism implemented by the Indian government to ensure timely collection of taxes from specific transactions involving the sale of goods or services. Sellers are obligated to collect TCS from buyers at the point of sale, and failure to comply can result in significant penalties. Penalty for Non-Collection of … Read more
Understanding Interest Income Interest income is the compensation you receive for lending money to a bank or other financial institution. When you deposit money into a savings account, the bank uses that money to make loans to other borrowers. In return for the use of your money, the bank pays you interest. Taxability of Interest … Read more
Receiving correspondence from the Internal Revenue Service (IRS) can be a daunting experience, especially if it’s a Notice 1450. This notice signifies that the IRS has placed a federal tax lien on your property or assets to secure payment for unpaid tax debts. However, understanding what a Notice 1450 entails and the steps you can … Read more
The third round of Economic Impact Payments, authorized by the American Rescue Plan Act of 2021, is being distributed to eligible individuals and families. The IRS is using data already in its systems to send the payments, and the method of payment will depend on the taxpayer’s preferred method on file. Direct Deposit Taxpayers who … Read more
The Thrift Savings Plan (TSP) is a retirement savings and investment plan for U.S. service members and federal employees. It offers two main types of accounts: Traditional and Roth. Traditional TSP With a Traditional TSP account, you contribute pre-tax dollars, which reduces your current taxable income. This means you’ll pay taxes on your contributions and … Read more
TurboTax, the leading tax preparation software, offers a convenient solution for filing your prior year taxes. Whether you missed the tax deadline or need to amend a previous return, TurboTax has got you covered. In this comprehensive guide, we’ll explore how to file your 2021 tax return using TurboTax, ensuring accuracy and maximizing your refund. … Read more
Day trading, the practice of buying and selling financial assets within a single trading day, has gained significant popularity in recent years. However, understanding the tax implications of day trading is crucial to avoid potential financial pitfalls. This guide delves into the tax obligations of day traders, including the intricacies of Social Security tax, estimated … Read more
Receiving a letter from the IRS indicating a delay in your tax refund can be concerning. This guide explains the IRS’s 60-day review process, common reasons for delays, and steps you can take to expedite your refund. 60-Day Review Process When the IRS reviews your tax return, it may take up to 60 days to … Read more