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…

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…

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. Learn more: Arizona residents may be interested…

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…

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…

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…

When you sell a capital asset—property owned and used for personal or investment purposes, let’s say—the sale will result in either a capital gain or a capital loss. You report that gain or loss on Schedule D of Form 1040. The capital assets you’ll most likely report on Schedule D are stocks, bonds, and homes…

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…