Individual Tax

When filing your individual income tax returns, you are allowed to deduct certain expenses from your taxable income, thus reducing the amount of income tax you must pay. There are two ways you can take deductions on your federal tax return:  you can deduct a defined amount, the standard deduction, or you can list specific…

If you’re taking care of adult children, relatives or parents, you know that this can create an additional financial strain. To ease it, the IRS offers a credit for dependents who are too old to qualify for the child tax credit. You may qualify for a $500 credit for each dependent who meets these criteria:…

Tax deductions and tax credits can both help you, but that doesn’t mean they’re the same thing. Knowing how they work can help you understand your tax situation. Tax credits are subtracted from your final tax liability, dollar for dollar, after it is calculated. A tax credit valued at $1,000, for example, lowers your tax…

The IRS is offering some help to taxpayers in getting organized so the filing season can be as easy as possible for everyone. “Having all needed documents on hand before taxpayers prepare their return helps them file it completely and accurately,” says the IRS. This includes: Forms W-2. Each employer you worked for must send…

IRAs—individual retirement arrangements—are among the most popular retirement savings vehicles. They can be used to reduce taxes on retirement savings, but how do they work? If you create a traditional IRA, you may be able to deduct some or all of your contributions to the account from your income taxes. You also may be eligible…

The IRS has announced the new retirement plan numbers for 2022. Retirement limits for 401(k) and similar plans are up. The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased to $20,500, up from $19,500. IRA limits have changed for certain savers. If…

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…

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…

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…