Issue Number: Tax Tip 2018-40 Many taxpayers may need to take out money early from their Individual Retirement Account or retirement plan. Doing so, however, can trigger an additional tax on early withdrawals. They would owe this tax on top of other income tax they may have to pay. Here are a few key points to …
Most taxpayers can claim one personal exemption for themselves and, if married, one for their spouse. This helps reduce their taxable income on their 2017 tax return. They may also be able to claim an exemption for each of their dependents. Each exemption normally allows them to deduct $4,050 on their 2017 tax return. While …
Many Americans enjoy hobbies that are also a source of income. A taxpayer must report income on their tax return even if it is made from a hobby. However, the rules on how to report the income and expenses depend on whether the activity is a business or a hobby. There are rules and limits …
Individual: Net Income Tax Rates: 10%, 12%, 22%, 24%, 32%, 35%, 37% Capital Gains & Qualified Dividends Tax Rates Remain: 0%, 15%, 20%; however, the 15% breakpoint is $77,200 MFJ and the 20% breakpoint is $479,000 MFJ. Standard Deduction: increased to $24,000 MFJ and adjusted for inflation for years after 2018 Personal Exemption: suspended for …
From scrapbooking to glass blowing, many Americans enjoy hobbies that are also a source of income. A taxpayer must report income on their tax return even if it is made from a hobby. However, the rules for how to report the income and expenses depend on whether the activity is a hobby or a business. …
New business owners have tax-related things to do before launching their companies. IRS.gov has resources to help. Here are some items to consider before scheduling a ribbon-cutting event. Choose a business structure When starting a business, an owner must decide what type of entity it will be. This type determines which tax forms a business …
Items to Consider: Withholding and Estimated Taxes: If you expect to owe at least $1000 in tax, the required tax payment to avoid underpayment of tax penalties and interest is the lessor of 90% of the current year returns tax or 100% of the tax shown on the prior year’s return (unless your AGI on …
IRS Tax Tip 2017-54, October 4, 2017 Taxpayers who are victims of a disaster might need to reconstruct records to prove their loss. Doing this may be essential for tax purposes, getting federal assistance, or insurance reimbursement. Here are 12 things taxpayers can do to help reconstruct their records after a disaster: Taxpayers can get …
If you have not already done so, go to www.ssa.gov and create a mySocialSecurity online account. Here you can learn more about your benefits based on your facts and circumstances. Social Security Retirement Benefits: Who is eligible? Worked and paid Social Security Taxes to earn 40 credits Reached a minimum age of 62 for early …
For some taxpayers, filing an extension is just a given. Others find the concept unthinkable. For some, the decision to extend comes down to the wire. Some taxpayers incorrectly believe that filing an extension will be a red flag on their return and draw attention to the IRS that will generate an audit. Regardless of …