The Internal Revenue Service (IRS) uses various methods to determine the marital status of taxpayers for tax purposes. This information is crucial because it affects tax filing requirements, tax rates, and eligibility for certain tax benefits. Methods Used by the IRS 1. Tax Return Information The primary method the IRS uses to determine marital status … Read more
Engaging in hobbies can be a fulfilling and enjoyable way to spend time. However, if these hobbies generate income, it’s crucial to understand the tax implications. The Internal Revenue Service (IRS) classifies income from hobbies as “hobby income,” which is subject to taxation. This article will delve into the definition of hobby income, its tax … Read more
The Internal Revenue Service (IRS) may notify you of a mistake on your tax return through an audit or an examination. An audit is a review of your tax return to ensure that the information you provided is accurate and that you have paid the correct amount of taxes. An examination is a more in-depth … Read more
Tax season is a time of anticipation for many Americans, as they eagerly await their tax refunds. However, recent data from the Internal Revenue Service (IRS) indicates that the average tax refund for 2022 may be lower than in previous years. This has raised concerns among taxpayers, who are wondering if they will receive less … Read more
An IRS audit is a review or examination of an organization’s or individual’s accounts and financial information to ensure that the information reported on tax returns is accurate and that the reported amount of tax is correct. The IRS conducts audits to verify the accuracy of tax returns and to ensure compliance with tax laws. … Read more
Overview The government has various methods at its disposal to locate your bank accounts, including: Tax Returns: When you file your tax returns, you are required to provide information about your bank accounts, including account numbers and routing numbers. This information is used by the IRS to process your tax refund and to track your … Read more
Understanding the Taxability of Savings Account Interest In general, interest earned on savings accounts is considered taxable income by the Internal Revenue Service (IRS). This means that you may be required to pay federal and state taxes on the interest you earn each year. The amount of tax you owe will depend on your tax … Read more
Understanding your tax bracket is crucial for making informed financial decisions. This guide will delve into the intricacies of the US tax system, specifically focusing on the tax implications for individuals earning an annual income of $100,000. Tax Brackets: A Tiered System Contrary to common misconceptions, income is not taxed at a flat rate. Instead, … Read more
Capital gains are profits from the sale of assets like stocks, bonds, and real estate. The IRS tracks capital gains to ensure accurate tax reporting and collection. This article explains how the IRS detects capital gains and the consequences of underreporting. Reporting Capital Gains Individuals are responsible for reporting capital gains on their tax returns … Read more
Retirement is a significant milestone that marks the end of your working years and the beginning of a new chapter in life. It’s a time to relax, pursue your passions, and enjoy the fruits of your labor. However, taxes can put a damper on your retirement savings, especially if you live in a state with … Read more