It is amazing as to how people are unprepared when they go to have their taxes prepared and filed. Most taxpayers are excited and some are nervous and just want to get it over and done. But, will find out as their emotions are taking control that they forgot something very important to make the process run smoothly! Forming a habit of organizing during the year for all possible tax items will help alleviate the stress of trying to find those documents at filing season. The IRS advises taxpayers to gather ALL of their income statements and receipts to file…
Author: Lavestia Gaston Harper
Paying taxes can be quite taxing for entertainers as well as other entertainment professions. Most working musicians are considered “self-employed” in regard to filing their taxes. In a legal and taxpaying sense this means that your “business” as a musician and you as an individual taxpayer are one and the same. You may be earning money from several different sources (solo gigs, session work, teaching, recording, songwriting, merchandise, etc.), so it’s important to know how to keep track of everything and which tax forms you’re required to file The IRS gives an extra warning to taxpayers who work in the…
Tax planning is important for every existing tax bracket. Taxpayers in any bracket and complexity level are subject to the changes in their taxation brought about by life events, such as marriage, new children, selling a house, or changes in employment and income level. While few people would be likely to make a decision on one of these life changes based on the tax implications, they can greatly benefit from knowing how these events will affect credits, deductions, phase-outs and other factors.The under served market is in the middle and upper middle classes, where individuals are still likely to…
One of the most confusing decisions taxpayers have during tax season is determining whether to wait on their W2 or file with their last pay check stub of the year. Some tax preparation companies contribute to this confusion by advertising and telling consumers to come in and file with the last pay check stub. An incomplete form or a form that has information that doesn’t match IRS records will delay processing of your return, and hold up your refund. Although it is possible to prepare a preliminary tax return based on your final pay stub for the year, your pay…
A taxpayer can claim one exemption for each qualified dependent, thereby reducing the taxable income. a qualifying relative can be any age To meet this test, the person must either: • Live as a member of the taxpayer’s household all year, or • Be related to the taxpayer in one of the following ways: • Child, stepchild, foster child or a descendant of any of them • Brother, sister, half brother, half sister, stepbrother or stepsister • Father, mother, grandparent or other direct ancestor, but not foster parent • Stepfather or stepmother • Son or daughter of the taxpayer’s brother…
According to Bloomberg, the IRS is turning up the heat on taxpayers. Some of them, anyway. The number of audits conducted by the Internal Revenue Service has dropped as it continues to reel from years of budget cuts. But even as its workforce shrinks, the agency must keep the money flowing into the U.S. Treasury. The solution in 2017? Focus on target-rich environments, and squeeze more dollars out of each audit. That means more scrutiny of people and companies who are likeliest to hide money or under-report their tax burden. Tax specialists are warning their clients, especially if they’re wealthy…
Although tax season has come and gone the growing problem of identity theft has now become an on-going part of the tax season culture. With the allowance of our unregulated “free for all” electronic filing system it will get worse each year. Because of this enormous problem the IRS has been defrauded out of billions of dollars. Something effective and efficient needs to take place as soon as possible to help stop this increasing dilemma. According to a recently released report by the Treasury Inspector General for Tax Administration (TIGTA), the IRS has made some progress in assisting the innocent…
During times of interest rate uncertainty, investors are often left to wonder what will happen to the price of their bond holdings if interest rates rise or fall. The answer may lie in a measurement called duration. What is duration? Duration is the time it takes for an investor to be repaid the price for a bond by the bond’s total cash flows. This is considered to be the bond’s true cost. The longer the repayment period, or duration, the greater the chances that the bond will be exposed to interest rate risk. Knowing your bonds’ exposure to interest rate…
Small businesses are being established every day. With all the hard work involved they want their fair share of having time to grow and flourish their business. A business emphasis should be on keeping good accurate records and keeping business accounts separate from personal accounts. These are the main documents that the IRS will review when trying to distinguish between a hobby or business designation. If a taxpayer has a loss on Schedule C the hobby rules may become an issue. The IRS may rule the business a hobby if the taxpayer cannot prove his intent is to become…
Tax changes under the new administration could be the “largest tax change since the Reagan Administration.” Key features of Trump’s plan could lead to changes with state and local government tax collection. It all comes down to standardized deductions — the amount of write-offs you can claim without having to provide lots of documentation (or even spending money on any of the things you can write off). Here are some of Trump’s major objectives: The number of tax brackets will be reduced from seven to three. The highest tax rate would be 33%, but but that tax cut would…