- How to Fill Out Form 8949 for the Sale of Capital Assets
Form 8949 is used to report the sale or exchange of capital assets, such as stocks, real estate, or cryptocurrencies to the IRS. It details the purchase and sale dates for each transaction, as well as the proceeds, cost basis and any adjustments. This information is then transferred to Schedule D, where gains or losses… read more…
- Nanny Tax: What It Is and How to Calculate It
Hiring a nanny can provide much-needed support for families, but it also comes with specific financial responsibilities. One of those responsibilities is the “nanny tax,” a federal requirement that applies to families who employ household workers, including nannies, caregivers and housekeepers. As of 2024, if you pay your household worker $2,700 or more in a… read more…
- What to Know About Form 8889 for HSAs
If you’ve made contributions to or taken distributions from a health savings account (HSA), the IRS requires you to report it on your yearly taxes. That’s where Form 8889 comes in. It details contributions, distributions and potential tax deductions so you can report all HSA-related activities to remain compliant as well as optimize your tax… read more…
- How to Report Foreign Gifts With Form 3520
The IRS has clear guidelines and specific thresholds that dictate when and how U.S. persons (citizens, resident aliens or domestic trusts) must report gifts from foreign entities. With penalties for non-compliance potentially reaching staggering amounts, understanding these rules is not just a matter of financial literacy but of fiscal responsibility. If you receive a gift… read more…
- How to Set Up a Payment Plan for Taxes You Owe
When an individual or business owes taxes to the Internal Revenue Service (IRS), settling the entire amount in a single payment may not be financially feasible. In such cases, a tax payment plan can offer a viable solution. This arrangement with the IRS allows taxpayers to pay their due taxes over an agreed period, easing… read more…
- How to Report a Backdoor Roth IRA With Form 8606
A backdoor Roth IRA typically offers high-income earners a workaround to contribute directly to a Roth IRA when their earnings are above IRS income limits. This strategy could allow you to take advantage of tax-free growth and withdrawals in retirement. Reporting a backdoor Roth IRA contribution on your taxes is relatively straightforward. But doing it… read more…
- Understanding Form 8606 for IRA Taxes
If you use an IRA to save for retirement, IRS Form 8606 might be an important part of tax season. Specifically, this is the form on which you report nondeductible contributions to an IRA. It is also used to track distributions for households that have made nondeductible contributions, early distributions from Roth IRAs, and conversions… read more…
- When and How to Report a 1031 Exchange on Your Tax Return
A 1031 exchange lets real estate investors defer capital gains taxes by selling one investment property and reinvesting the proceeds into another like-kind property. While this strategy can delay a significant tax bill, it doesn’t eliminate the tax obligation entirely. Investors must still follow IRS rules and deadlines carefully. Knowing how to report a 1031… read more…
- My Tax Preparer Made a Mistake: What Can I Do?
By law, you are responsible for your own tax return, even if you hire someone else to complete it. Therein lies one of the major contradictions at the heart of the personal filing system. While lawyers and accountants dedicate their careers to understanding the tax code, even they sometimes get it wrong. However, Congress and… read more…
- 2025 IRS Tax Changes: What You Need to Know
The new year brings new tax brackets, deductions and limits that will impact your 2025 federal income tax return. Changes to the IRS tax code affect taxpayers across income levels and will change how much you owe or your refund amount. For 2025, the agency has announced annual inflation adjustments, which could impact income tax… read more…
- Common Tax Breaks for Retirees
Imagine evenings spent on a sandy beach, weekends filled with family gatherings and afternoons engaged in hobbies. This or a number of other scenarios could be your retirement life. However, if you’re not properly prepared for taxes then it might end up taking more than you planned for from your fixed income. Luckily, the federal… read more…
- How a Solo 401(k) Is Taxed and What Is Deductible?
Investing in a solo 401(k) is a common retirement savings plan for self-employed individuals or small business owners. Let’s break down how it works, gets taxed and what potential deductions you can take. As with all retirement plans, how much you can save will depend on your specific circumstances. Therefore, getting personalized advice from a… read more…
- MAGI vs. AGI: What’s the Difference?
Adjusted gross income (AGI) and modified adjusted gross income (MAGI) are two ways to calculate what your income might be for tax purposes. Both these figures directly influence your tax obligations, qualifying for certain tax benefits and deductions. Therefore, knowing when each applies can support your tax-saving strategies and inform financial decisions. Consulting with a… read more…
- Do You Pay Taxes on Dividends Reinvested?
Investing in dividend stocks can create a nice stream of passive income. Instead of receiving payouts as cash, you can also use dividends to increase your holdings by reinvesting them to purchase additional shares of stock. Among other benefits, reinvesting dividends can help you avoid brokerage fees. However, even when you don’t receive dividends as… read more…
- What Is Imputed Income?
Imputed income refers to the value of non-cash benefits or perks that an employee receives from their employer, which are considered a form of compensation. These benefits, while not directly paid as wages, still have monetary value and are subject to taxation. Understanding imputed income is crucial because it can significantly affect your taxable income… read more…
- Who’s Responsible for Paying Property Taxes When the Owner Dies?
When someone passes away, there can be plenty of questions over who gets what, especially if there’s a home in the mix. An often-overlooked question centers on who is responsible for paying property taxes when the owner dies. A delinquent… read more…
- TurboTax Deluxe vs. TurboTax Premier
Doing taxes by hand is often tedious and confusing, and it can open you up to making costly mistakes. Using commercially available tax software will ease tax preparation for many Americans. If you’re an individual looking to file your taxes… read more…
- FreeTaxUSA vs. TurboTax
TurboTax and FreeTaxUSA are online tax preparation services that can be used by individuals and businesses. TurboTax is more full-featured and has lots of built-in guidance, as well as helpful support delivered by phone or chat. However, it’s significantly more… read more…
- How Much Do You Have to Make to File Taxes?
While taxes are inevitable for most Americans, the government doesn’t require those with sufficiently low incomes to file. However, choosing not to file usually means forfeiting profitable tax breaks and other financial advantages. Plus, you’ll be penalized if it turns… read more…
- TaxAct vs. TurboTax
As you prepare for Tax Day, you might be overwhelmed by the options available for filing your taxes online. You’ve probably heard of TaxAct and TurboTax, two of the most popular tax-filing services on the market. But which is right… read more…
- Jackson Hewitt vs. H&R Block
When tax time rolls around, one thing you’ll have to decide is whether you’ll do your taxes yourself or hire a pro. If you’re leaning toward letting someone else do your taxes, some of the top options include Jackson Hewitt… read more…
- What Is a 1099-R Form?
When tax season rolls around, your mailbox might fill up with W-2s and other forms that you’ll need to file your return. An Internal Revenue Service (IRS) Form 1099-R might be in the mix if you received certain types of… read more…
- Tax Refund Schedule 2025
If you’re like most people, you dread tax season. But if you’re expecting a tax refund, you may have something to look forward to. Most people will get their tax refund within three weeks of filing, but it varies based… read more…
- All About IRS Form 8962 and Calculating Your Premium Tax Credit
With Form 8962, you are reconciling the tax credit you are entitled to with any advance credit payments (or subsidies) for the tax year. The size of your tax credit depends on the cost of available health insurance, your family… read more…
- All About IRS Form 2441
Hiring someone to care for your loved one so you can continue working is a common practice in the U.S. If a child, spouse or other household member requires care and you can’t provide the care without quitting your job,… read more…