What is a taxable year?

A taxable year is the 12-month time period that the IRS defines for each person’s tax season. In most cases, the taxable year is the regular calendar year, starting in January and ending in December. However, a taxable year under IRS rules does not necessarily have to be a regular calendar year.

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What can I do to reduce what I owe on my IRS income tax return?

The trick is to withhold the exact amount necessary without withholding extra. While a refund is better than additional taxes due, it is still not an ideal scenario, as you are basically loaning the government your money without any interest attached. In order to remedy this problem, you can either increase the amount of federal income tax withheld from your pay or make estimated tax payments for your tax year. You may change the amount of federal income tax withheld from your pay by filing a new Form W-4, Employee’s Withholding Allowance Certificate.

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What is excluded from gross income tax?

Exclusions from gross income tax are only those provided by statute including most proceeds from life insurance contracts, most damages received for personal injuries, and gifts or inheritances. In order to understand all the available exclusions from gross income tax in your state, contact local income tax attorney.

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Tax Law Changes for Your 2010 Tax Filing: Understanding What’s New and How It Might Affect You

Because of a quirk in the calendar, tax day this year falls on Monday, April 18. Even with the three day bonus from the normal deadline, the dreaded day is fast approaching. If you’re considering saving a little cash by doing your taxes yourself this year, there are some important tax law changes you should be aware of before sitting down to the kitchen table with your calculator and digging in to those tax documents and forms.

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My financial silent partner has had sole control over the corporate bank account and has misused the corporate monies, creating tax liability mess. Am I responsible?

If your silent partner in your corporation has mismanaged corporate funds, the funds you invest in the corporation may be used to pay unpaid taxes from periods in which you held stock in the corporation. If you are aware of errors in accounting or tax payments in a corporation in which you hold stock, contact an experienced business attorney immediately.

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What is taxable income and how is it determined?

Taxable income is calculated by starting with gross income, subtracting excluded income and exemptions (removed in 2018), and subtracting allowable deductions. In determining what items of income and deductions should be taken into account for any taxable year, the taxpayer’s method of accounting must be taken into account. For almost all individuals, that method is the cash receipts and disbursement method. In other words, income has to be received and deductions have to be spent. Some business activities can use other methods of accounting, and if you think that might apply to you, consult with a tax adviser or accountant.

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Teens and Summer Employment: Tax Breaks Can Save Precious Money

Summer is here and the economy continues to be on nearly everyone’s mind. Unemployment numbers are not pretty, especially for teens and students who used to rely on summer jobs to pick up some cash for school and savings. But for teens lucky enough to find a summer job, or for parents trying to think creatively about how they can translate their needs into summer work for their children, paying attention to some of the tax breaks for young people offered by the IRS can make a big difference next April, and even possibly inspire some new ideas about summer jobs that might be advantageous to both employee and employer.

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