Taxes are what you pay to the federal, state and local governments where you live. Different types of taxes include income taxes, capital gains tax, sales tax, estate tax and real estate taxes such as property tax. Learn how to bequest property and do transactions in a way that will help you pay less taxes and follow the law.
Filing Taxes: DIY or Hire a Tax Pro?
I started my tax career in a national CPA firm a long time ago. What shocked me about filing taxes with this particular firm was that it was charging $250 to prepare a simple tax return. What’s the big deal? Back then, $250 got you a nice two-bedroom apartment. Today, that same apartment would run [...]
Filing Taxes: Oops! I Made a Mistake!
You think you made a mistake? Let me tell you about the time I made a $90,000 error. It was very embarrassing. This $90,000 was the very first entry I had made into the tax software for the client. When the return was finalized after two months of work, the $90,000 had disappeared. It turned [...]
When, Why, and How Should I File for an Extension?
Right around this time of year, the tax dance heats up and the pace gets frantic. It’s the time when tax professionals have to try to keep up with the frenetic twists and turns of emerging tax laws, deadlines, IRS announcements, and warnings. But don’t finalize your tax return just because the April 15 tax-filing [...]
Tax Aspects of Inheritances
People keep asking TaxMama® how much tax they’ll have to pay on something they inherited. The good news is, generally the answer is “none.” The heirs don’t pay. The estate of the decedent pays any taxes due when the estate is large enough to be subject to estate taxes. This leads to more good news: In [...]
Tax Tips for Your Honey-Do List
In spring, we turn to thoughts of gardening, home repairs, refurbishments, and maybe even remodeling. Let’s look at common tasks and see what the tax ramifications are. Is anything deductible? Probably not—but don’t despair. I have some tax tips for how to find a tax credit (or two) available to you. Before going forward, set up two [...]
Where Do You Want to Retire?
As people grow closer to retirement, they often start to rethink their living situations. The perfect city to raise a family isn’t always the perfect place to retire. Before you settle down for your golden years, consider some of these factors to help you decide where you should live in retirement. How will the weather affect [...]
Keeping Track of Your Employer’s Retirement Account Contributions
The first quarter of the year is often when employers share information about your retirement account contributions. However, it’s a good idea to keep track of your contributions throughout the year. If your employee compensation package guarantees matching funds, then you’ll want to keep an eye on the numbers to make sure mistakes don’t slip through [...]
Four Tax Tips for Same-sex Couples
2013 is shaping up to be an exciting tax year for same-sex couples. This month, the Supreme Court has agreed to hear two cases that can change both federal tax laws and marriage laws. Who will be affected? These federal tax changes will affect same-sex couples who are legally married, as well as registered domestic partners (RDPs). It [...]
Unemployment Taxes and Other Surprises
Each year, the IRS sends out charming letters telling you that you didn’t report some income on your tax return. Sometimes those CP-2000 letters come as good news, like one did for a client of mine with Alzheimer’s disease whose family found $100,000 worth of bank accounts when the IRS notice showed unreported interest income. But often [...]
Offsetting the Payroll Tax Increase with Retirement Contributions
In 2013, the payroll tax holiday that lowered workers’ taxes by 2 percent came to an end. This effectively raised each individual’s payroll tax from 4.2 percent to 6.2 percent. That might not sound like a lot, but employees have already found that the change takes a big chunk out of their paychecks. How much [...]