Understanding the Taxability of Savings Account Interest In general, interest earned on savings accounts is considered taxable income by the Internal Revenue Service (IRS). This means that you may be required to pay federal and state taxes on the interest you earn each year. The amount of tax you owe will depend on your tax … Read more
Inheritances, whether received in the form of cash, investments, or property, are generally not considered taxable income for federal tax purposes. However, when it comes to determining eligibility for financial aid, the treatment of inheritances becomes more nuanced. This article delves into the specific regulations governing the reporting of inheritances on the Free Application for … Read more
Understanding IRS Audits for 401(k) Plans The Internal Revenue Service (IRS) has the authority to audit retirement plans, including 401(k) plans, to ensure compliance with tax laws and regulations. An audit involves a review of plan records and financial statements to verify the accuracy of reported information and adherence to plan provisions. Statute of Limitations … Read more
As a homeowner, you’re entitled to a range of tax deductions that can significantly reduce your tax liability. Understanding these deductions and how to claim them can save you a substantial amount of money come tax season. This comprehensive guide will delve into the various tax-deductible expenses for homeowners, providing you with the knowledge to … Read more
401(k) plans are employer-sponsored retirement savings accounts that offer tax advantages. Withdrawals from a 401(k) account are generally subject to income tax and may be subject to a 10% early withdrawal penalty if taken before age 59½. However, there are exceptions to these rules, and the frequency of withdrawals you can make from your 401(k) … Read more
Navigating the complexities of tax debt can be daunting, and considering an Offer in Compromise (OIC) may be a viable option for resolving your tax obligations. While both accountants and attorneys can assist with the OIC process, their fees and services may differ. This comprehensive guide will delve into the costs associated with hiring an … Read more
Navigating the complexities of tax filing can be daunting, especially when concerns about safety and security arise. This guide delves into the world of free tax filing, exploring the available options and addressing the crucial question: is free tax filing safe? By analyzing authoritative sources from the Internal Revenue Service (IRS) and NerdWallet, we aim … Read more
Self-employment tax is a crucial aspect of financial planning for individuals who work for themselves. Understanding the self-employment tax rate and its implications is essential for accurate tax filing and financial management. This article delves into the intricacies of the self-employment tax rate, providing a comprehensive overview for self-employed individuals. What is Self-Employment Tax? Self-employment … Read more
The standard deduction is a specific amount that you can deduct from your taxable income before calculating your taxes. The amount of the standard deduction varies depending on your filing status and is adjusted annually for inflation. Itemizing deductions means that you can deduct certain expenses from your taxable income, such as mortgage interest, state … Read more
Understanding IRS Special Agents The Internal Revenue Service (IRS) employs Special Agents as part of its Criminal Investigation (CI) division. These agents are tasked with investigating suspected criminal violations of tax laws. Circumstances for a Home Visit IRS Special Agents may visit a taxpayer’s home in specific situations, including: Overdue tax bills Unfiled tax returns … Read more