Form W-4, Employee’s Withholding Certificate, plays a crucial role in determining the amount of federal income tax withheld from your paycheck. The number of allowances you claim on this form directly affects the amount of withholding, which in turn impacts your take-home pay and potential tax refund or liability. This article delves into the implications … Read more
The Internal Revenue Service (IRS) may impose interest charges on unpaid taxes resulting from an audit. The interest rate is determined by the federal short-term rate plus 3 percentage points, compounded daily. The current interest rate is 6%. Additional Penalties for Late Payment or Underpayment In addition to interest charges, the IRS may also impose … Read more
Understanding the Child Tax Credit (CTC) The Child Tax Credit (CTC) is a tax credit that helps reduce the amount of taxes owed by eligible taxpayers. It is available to both single and married parents who meet certain income requirements. For the 2023 tax year, the CTC amount is $2,000 per qualifying child. Eligibility Requirements … Read more
Financial setbacks can arise unexpectedly, leaving individuals struggling to meet their financial obligations. In such situations, writing a hardship letter to creditors can be a crucial step towards seeking relief and regaining financial stability. This guide will provide a comprehensive understanding of what constitutes a financial hardship, how to write an effective hardship letter, and … Read more
Understanding the interplay between unemployment benefits and Adjusted Gross Income (AGI) is crucial for individuals seeking to claim the Earned Income Credit (EIC). This comprehensive guide analyzes the impact of unemployment compensation on AGI and EIC eligibility, providing valuable insights for taxpayers. Unemployment Compensation and AGI The Internal Revenue Service (IRS) defines AGI as the … Read more
Understanding Gift Taxes and Audits Gift taxes are imposed by the IRS on individuals who give gifts exceeding a certain threshold. Failure to file a gift tax return or filing an incorrect return can trigger an audit. Common Triggers for Gift Tax Audits Failing to File a Gift Tax Return: If you make a gift … Read more
The Internal Revenue Service (IRS) is actively reaching out to millions of individuals and families who may be eligible for valuable tax benefits but have yet to file a 2021 federal income tax return. This outreach effort is intended to ensure that eligible individuals receive the financial assistance they are entitled to. Unclaimed Benefits The … Read more
TurboTax 2022 is now available and ready to help you file your taxes. You can start your taxes at any time, but the IRS will not begin accepting returns until January 24, 2023. Here are some key dates to keep in mind: January 24, 2023: The IRS begins accepting tax returns. April 18, 2023: The … Read more
Receiving a notice from the IRS that your tax return is under review can be a daunting experience. Understanding the reasons behind an IRS review and the potential outcomes can help alleviate anxiety and guide you through the process effectively. This comprehensive guide will delve into the various factors that may trigger an IRS review, … Read more
Understanding IRS Billing and Collection Process The Internal Revenue Service (IRS) is responsible for collecting taxes from individuals and businesses in I Owe the IRS $55,000 in Back Taxes FAQ How much do you have to owe the IRS before they come after you? If you owe more than $10,000, the IRS will add penalties … Read more