Tax Planning

A taxpayer's tax liability is the amount of federal tax he or she is responsible for. The liability amount is based on filing status, income, credits and deductions. If a taxpayer is liable for...

The alternative minimum tax, or AMT, was designed to ensure that all taxpayers pay at least some income tax. One of the unintended consequences of AMT legislation is that some supposedly...

The Internal Revenue Service requires all employers to have each of their employees fill out a W-4 form to help the company determine how much money from each paycheck should be withheld in...

The federal government introduced tax withholding in 1943, which requires that you pay estimated taxes on your income as you earn it rather than making on large payment when you file your taxes at...

There are a number of government-sponsored investment accounts that allow you to appreciate capital gains without paying taxes on them. Some government securities like treasury bonds and municipal...

The tax penalty for early withdrawals of funds from a pension plan is 10 percent. Early distributions occur when you are younger than 59 1/2. This penalty is in addition to ordinary income tax...

The most common method of tax deferral is to contribute income to a retirement plan such as a 401(k) or traditional IRA. The IRS and some state and local governments also allow individuals to...

If you own rental property, a home of your own, invest in the stock market, or own a business, you may benefit from itemizing your deductions on your federal income tax return. The Internal...

Even if there is a change of Government after the election, some of the announcements in the pre budget report may be revised or even dropped. However, given the Conservative's views on reducing...

Are you one of the millions who need tax help? Do you loathe even thinking about tax season, yet it seems to come every year? Just follow these few steps to simply your life and your taxes.

In general, the IRS differentiates independent contractors from employees in that contractors are responsible for the means and methods of the work performed, and the person for whom the work is...

All tax returns are due to the IRS on (or postmarked by) April 15. Taxpayers who file late returns are considered non-compliant by the IRS and may be assessed a failure to file penalty and a...

You must fill out a W-4 form when you are hired to claim withholding allowances. Your employer uses the information when calculating how much income tax to deduct from your wages. Employers only...

Estate tax rules and taxable amounts---which currently change annually---include assets in retirement accounts. Even if your estate falls short of the amount needed to invoke estate taxes, there...

When someone dies, the fallout brings lots of key decisions. After funeral arrangements, you face a multitude of issues related to finances. One key concern involves how to handle life insurance...

Individual quarterly tax returns generally are filed by self-employed people who must make tax payments in lieu of an employer withholding taxes. The Internal Revenue Service refers to it as...

The IRS taxes estates valued at more than $1 million that pass on to beneficiaries, with the exception of a surviving spouse. A straightforward set of guidelines governs the protocols for figuring...

An individual retirement account (or arrangement) (IRA) can be a great way to save for retirement and reduce your taxable income. But what happens if you get divorced or if you're unhappy with...

If you travel on business, you may already know about some of your tax deduction entitlements. But for outside sales professionals, you should draw from a large pool of legal tax deductions to...

The Internal Revenue Code establishes IRAs as tax-deferred investment vehicles. Annuities are tax-deferred investment vehicles sold by insurance companies. IRAs may be tax deductible; annuities...

Many taxpayers rush to prepare their tax returns only to discover that they owe tax. Fortunately, there are alternatives for taxpayers who cannot afford to pay the tax debt in full.

The married filing separate filing status is one of five income tax filing (married filing separate, married filing joint, single, head of household, widow). Married filing separately is a useful...

The amount of federal income tax withheld from your pay is based on your tax bracket and the information you provide on your W-4. This information includes your filing status, withholding...

The primary reason to identify individual stock lots for sale is to minimize taxes. If you have already taken capital gains during the year, you could choose tax lots that are trading at a loss to...

No one ever said that tax planning and tax filing would be easy, but the sooner you start the planning process, the better off you will be. By understanding your finances and how they relate to...

Estimated taxes are the government's way of making sure you pay your taxes throughout the year so that you don't have to face an extremely large tax bill when April 15 rolls around. It is used for...

Tax season is when many taxpayers look for ways to help reduce their tax burden including seeking tax strategies which can reduce what they owe. A certified accountant, financial planner or other...

Estimating taxes on retirement pension income requires some patience and calculation, but the Internal Revenue Service (IRS) provides guidance in Form 1040-ES, Estimated Tax for Individuals. The...

Each April worrying about filing taxes and taxes due becomes the great American pastime. Everyone wants to know whether they will get a refund or pay, and if so, how much? By filling out a 1040...

Converting an IRA or 401(k) to cash is relatively simple and will be governed by the process your financial institution or employer (for your 401(k)) has in place, and by their timeframes for...

An audit involves a review of financial statements by the Internal Revenue Service (IRS) after which an opinion is given as to whether the evidence gathered in the audit is factual, complete, and...

Your life undergoes many changes when you retire, but one thing remains the same: taxes. You may no longer have a paycheck from which taxes are withheld, but you still probably receive income from...

Estimated taxes are due four times a year and should be claimed on your income tax return at the end of the year. For some taxpayers, a problem arises when they lose track of how many estimated...

Advance taxes are simply taxes that are paid before they are due. For individuals who receive a regular paycheck, advance taxes are withheld from each paycheck, usually at a rate designated by the...

A federal tax identification number, also known as an employer identification number, or EIN, is a number the IRS assigns your business, non-profit organization or the estate of a deceased person....

Whether you are leaving the employment of a company or simply want to move your retirement funds into a different type of investment, you need to know some basic information before making a...

The term "totally disabled" is mentioned repeatedly in IRS publications to describe a taxpayer who meets the criteria for various credits and deductions. The actual definition of "totally...

Someone who owes back taxes often doesn't fully understand the implication it has on a spouse. When a couple files a joint return, they are individually and jointly responsible for the full amount...

You've carefully filled out the Form W4 for your employer so that the proper amount of tax can be withheld from your payroll checks, but every year when you file your return, you owe the Internal...

Everyone who files Federal Taxes must have a Taxpayer ID Number known to the IRS as the Taxpayer Identification Number or TIN. The Taxpayer ID Number can be a Social Security Number or it can be...

For the income tax year 2003, Americans donated $5.9 billion in real estate to charities, according to a 2006 IRS publication. Why donate your home to a charity? Tax advantages may be one owner's...

Using Profile Tax software allows the individual or business to get a snapshot of their current tax liability. This is not only valuable information for the company or individual, but helps...

To effectively manage your taxes, keep track of the liabilities that you incur and think about them all year, not just on April 15. This approach goes against the grain for many of us, but it...

You just lost your job. You're thinking about starting a business or moving. You're worried about your tax bill. Fortunately, the Internal Revenue Service (IRS) has many resources to help the...

Federal income tax withholding is the amount of money your employer deducts from your paycheck and pays to the federal government to cover your income taxes. You determine federal withholding by...

No one wants to pay more taxes than they have to. With careful examination of different avenues for saving taxes, one can significantly reduce the taxes owed ever year. The following steps walk...

People have many reasons for requesting an extension for filing their income tax return. The Internal Revenue Service recognizes that personal circumstances can make filing by the April 15 due...

Subcontractors are considered independent contractors by the IRS. This means they are responsible for paying self-employment taxes and making estimated tax payments, because they do not have an...

In order to ensure that taxpayers comply with IRS rules, the Internal Revenue Service assesses penalties on tax returns that are not filed and taxes that are not paid by April 15. Since the U.S....

Working as a consultant has a number of important advantages, including the ability to set your own hours and work at your own pace. Even so, consultants and other self-employed individuals need...