If you are a wage earner and that is your primary source of income and you received a very large refund—or worse, if you owed money—then your employer is not withholding the correct amount of tax (but it probably isn’t your employer’s fault). Sure, you like a big refund, but you have to remember you […]
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Many taxpayers prefer to care for ill or disabled family members in their homes as opposed to placing them in nursing homes, but doing this can be expensive, time-consuming, and exhausting. The government also recognizes home care as a means of reducing the government’s costs in terms of caring for individuals who otherwise would be
Recently divorced individuals may pay or receive alimony. If this is your situation, here are some tips for how to correctly treat the payments on your tax return. The first consideration is the definition of alimony. There are actually two definitions of alimony—one for payments made under divorce decrees and separation agreements established before 1985 […]
There is a category of income resulting from the sale of capital assets that receives special treatment for tax purposes. A capital asset is defined to include property of any kind, whether held for business or personal use. Capital assets include all kinds of property, tangible and intangible; examples include land, buildings, plants and machinery, […]
Members of the clergy may qualify for two unique tax benefits: a tax-free parsonage allowance and exemption from self-employment tax on their ministerial earnings. Here are the details for both. Parsonage/Rental Allowance Exclusion from Income – A “minister of the gospel” can qualify for the rental allowance exclusion from income if the home or rental […]
With the enactment of the Protecting Americans from Tax Hikes (PATH) Act, Congress made two significant business-friendly changes in the tax law, extending bonus depreciation and making the Section 179 deduction’s higher expensing amount permanent. This article examines these changes so that you can take full advantage of them in your trade or business. Section […]
Many taxpayers are surprised by the size of the penalty being imposed for not having health insurance in 2015. This may be a wake-up call for many who didn’t realize the penalty is being phased in over a three-year period between 2014 and 2016, and the increases are substantial each year. The penalty is determined […]
A taxpayer who needs more time to complete his or her 2015 individual tax return can request an automatic six-month extension. The extension is obtained by filing IRS Form 4868 on or before the April 18, 2016 deadline. The extension gives the taxpayer until October 17, 2016 to file a return and avoid the late […]
This is a question many taxpayers ask during this time of year, and the question is far more complicated than people believe. To fully understand, we need to consider that there are times when individuals are REQUIRED to file a tax return, and then there are times when it is to individuals’ BENEFIT to file […]
If you are like many small business owners, you probably find the year-end period to be a very busy time. You can’t close your books and determine your business’s profit until after the close of the year, and if this has been a good year, you may want to establish a retirement plan and make […]