No, there will not be an unemployment tax break for 2022. The American Rescue Plan Act of 2021 provided a temporary exclusion of up to $10,200 of unemployment compensation from taxable income for individuals with modified adjusted gross incomes (MAGIs) below $150,000. This exclusion applied to unemployment compensation received in 2020. However, this exclusion expired … Read more
In today’s economic climate, determining how much money is needed to live comfortably in major U.S. cities has become increasingly challenging. This comprehensive guide will delve into the latest research and data to provide a detailed analysis of the financial requirements for living comfortably in different parts of the country. Income Thresholds for Comfortable Living … Read more
Retirement marks a significant transition in life, often accompanied by a desire for a more relaxed lifestyle and financial security. One crucial factor that can greatly impact your retirement experience is the tax burden you’ll face. Strategic relocation to a tax-friendly state can significantly reduce your tax liability, allowing you to maximize your retirement savings … Read more
The Internal Revenue Service (IRS) offers installment agreements as a flexible payment option for taxpayers who are unable to pay their tax debts in full. However, the IRS may reject an installment agreement request for various reasons. This comprehensive guide will delve into the reasons for IRS installment agreement rejection and provide a detailed overview … Read more
Understanding 1099 Forms and Their Significance A 1099 form is an informational document issued by businesses or financial institutions to report payments made to individuals or entities during a specific tax year. These forms serve as crucial documentation for tax purposes, as they provide details of income earned from non-employment sources. The IRS utilizes this … Read more
As a business owner, understanding the nuances of owner’s draws is crucial for effective financial management and tax planning. This comprehensive guide will delve into the concept of owner’s draws, their tax implications, and the key differences between owner’s draws and salaries. By gaining a thorough understanding of these aspects, business owners can make informed … Read more
Understanding the Taxpayer Bill of Rights and IRS Communication The Internal Revenue Service (IRS) is responsible for enforcing tax laws and collecting taxes in the United States. As part of this responsibility, the IRS may need to contact taxpayers to gather information or collect unpaid taxes. However, the IRS is also bound by certain rules … Read more
The Canada Revenue Agency (CRA) conducts audits to ensure that taxpayers are fulfilling their tax obligations accurately and receiving the benefits and refunds they are entitled to. While most taxpayers comply with tax laws, audits play a crucial role in maintaining the fairness and integrity of Canada’s tax system. How does the CRA choose a … Read more
Roth IRAs are popular retirement savings accounts that offer tax-free withdrawals in retirement. However, the Internal Revenue Service (IRS) imposes income limits on contributions to Roth IRAs. Exceeding these limits can result in penalties and affect your retirement savings strategy. Roth IRA Income Limits The Roth IRA income limits vary depending on your filing status … Read more
Understanding the US Exit Tax The United States imposes an exit tax, also known as the expatriation tax, on individuals who renounce their US citizenship or terminate their green card status. This tax is governed by Internal Revenue Code (IRC) Section 877A and targets high-net-worth individuals to ensure that their global income and assets are … Read more