Planning Ahead for Tax Credits and Deductions

Most people use software or hire an accountant to help them find all the deductions they can subtract from their taxable income and all the credits they can subtract from their final tax bill. But most tax breaks require you, the taxpayer, to plan ahead. Even the most skilled accountant can’t deduct a charity donation…

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Nonresident Individuals and Tax Returns

Form 1040-NR is a version of the IRS income tax return for nonresident individuals to file if they earned income from US sources throughout the year. As with regular Form 1040, those who fill out Form 1040-NR may either owe more money or be entitled to a refund. Before considering whether you need to fill out…

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Tax Treatment for Kids Working in the Family Business

What kind of business is a mom-and-pop operation? It’s probably not a question you pondered when you dreamed of going into business. Suppose you employ your child. How is this handled so that you are in compliance with IRS rules and regulations? Payments for a child under age 18 aren’t subject to Social Security or Medicare taxes if the…

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Relief Bill Offers Provisions for Families with Children

Beginning in July, those with children may get deposits into their bank account or paper checks for advance payment of the 2021 Child Tax Credit (CTC). The second stimulus package (Consolidated Appropriations Act, 2021) includes updates to the child tax credit, making it more accessible to people whose incomes fell during the pandemic. The expanded…

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2021 Economic Impact Payment Status Available

The IRS has a new tool for checking when and how they have sent your 2021 Economic Impact Payment if you are eligible to receive one. Information about the tool, ‘Get My Payment,’ can be found at https://www.irs.gov/coronavirus/get-my-payment. Or, click this link https://sa.www4.irs.gov/irfof-wmsp/login to directly access the tool. Information provided through the tool updates once…

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Pros and Cons of Tax Extensions

In general, individual and trust income tax returns are due on April 15th of each year, while partnerships and corporations must file by March 15th. If your accountant thinks there is a reasonable chance that you will not be able to file your tax return on time, they will file an automatic request for extension with…

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Filing Taxes for the Deceased

Death doesn’t cancel a final responsibility: paying income taxes. A decedent’s executor must file one last income tax return for the deceased if the deceased’s income surpassed a certain threshold. And even if a return isn’t required, a return may be necessary anyway to obtain a refund. The executor must take into account all the…

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Medical and Dental Expenses: What Can You Deduct?

Can you deduct medical and dental expenses? That’s a complicated question. To start with, your deductions must exceed 7.5 percent of your adjusted gross income. And they must fall into an IRS-approved category. Deductible medical expenses may include, but aren’t limited to, the following: Payments of fees to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and…

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IRS Clarifies Deductible Expenses

The IRS has updated some rules for deductible expenses, as guidance in areas that may have been murky as a result of the Tax Cuts and Jobs Act (TCJA). The rules being updated involve using optional standard mileage rates when figuring the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes, among…

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