Tax Basics
Latest Tax Basics Stories
What to Do If You Realize You Made a Mistake After Filing Your Taxes
Filed under: Tax, Tax - Basics, Tax - Advice
First, take a deep breath. Mistakes happen. And this one is a pretty easy fix. When you make a mistake on your tax return either because you left off some information or failed to file a particular schedule, you simply correct your mistake by filing a federal form 1040X, Amended U.S. Individual Income Tax Return.
Taxpayer Rights: What You Need to Know If You Get Audited
Filed under: Tax, Tax - Audit, Tax - Basics, Tax - Advice, 101 taxes
The three most intimidating letters of the alphabet for most Americans are I-R-S. Very few things strike more fear in a taxpayer's heart than the thought of being audited by the Internal Revenue Service.
For years, reports of abuse of power and poor treatment from the IRS ran rampant. That led Congress to pass two Taxpayer Bill of Rights in the 1990's.
These rights cover the basics, such as placing the burden of proof in tax disputes on the IRS (not the taxpayer). But they don't tell the whole story. So today we'll reveal the real rules of engagement so you understand the rights that will help you deal with the IRS should you receive that dreaded letter or phone call.
Help! My Tax Documents Are Late!
Filed under: Tax, Tax - Basics
10 Often Overlooked Tax Deductions
Filed under: Tax, Tax - Basics, Tax - Advice, Tax - Deduction
In life, you can't win the game if you don't know all the rules, and paying your taxes is no different. Every tax deduction or tax credit that you miss means more money out of your pocket and into Uncle Sam's.
But our tax code is so complex -- it is 70,000 pages, after all -- that even IRS Commissioner Doug Shulman admits he hires someone to help do his taxes. So personal finance experts Ken and Daria Dolan of Dolans.com are here to make sure you don't miss out on these 10 commonly overlooked tax deductions.
We all should pay our fair share...but let's make sure you don't pay one penny more!
Tax Changes You Need to Know for 2011
Filed under: Tax, Tax - Basics, Tax - Advice
- Payroll Tax Holiday. As we reported earlier, there's a one-year payroll tax holiday in effect for 2011. This means that taxpayers subject to FICA (Social Security and Medicare) taxes will see a tax break of 2% in their paychecks during the year. The break is tied to Social Security payroll taxes, which means the benefit ends when you hit the Social Security cap during the year, which is $106,800 for 2011. Taxpayers who don't pay into the Social Security system during the year will not receive a benefit.
Seven Early Tax-Filing Tips That Will Save You Time and Money
Filed under: Tax, Tax - Basics, Tax - Advice, Tax - Deduction
The National Taxpayer Advocate recently announced that Americans spend 6.1 billion hours a year on tax prep. That's almost as many hours that 3 million full-time employees work in a year.
You can easily cut down the number of hours you spend preparing your 2011 taxes by taking a few simple steps now. Trust us, tackling tax season in bite-size chunks will make the whole process less daunting.
Here are seven simple, painless tips to save time, money, a headache and hassle down the road:
How to Avoid Tax Penalties After an Audit
Filed under: Tax, Tax - Audit, Tax - Basics
If you're audited and the result is that there are no adjustments to your return (or if you get a refund), it decreases your odds of being audited in subsequent years. If you're audited on the same items two years in a row with no additional taxes due, the IRS manual actually recommends that you not be audited for the same items for another year.
But what if you're audited and the IRS finds that you owe additional tax? You'll want to resolve those outstanding tax liabilities as soon as possible in order to avoid further interest and penalties.
If you can afford to pay the tax due in full, you'll prevent any future penalties and interest from piling up. If you can't afford to pay the tax due in full from your regular operating account, consider dipping into savings accounts or money markets. The IRS goes so far as to suggest that you consider a home equity loan, personal loan or credit card, since penalties and interest for your taxes may cost you more over the long run.
Energy Tax Credit Explained
Filed under: Tax, Tax - Basics, Tax - Credit
Under current law, taxpayers may be eligible for a federal income tax credit for the purchase of a new energy-efficient water heater, air conditioner or furnace. But it doesn't stop there. The credit also applies to such improvements as windows and doors, roofs and insulation. You can find a detailed list of qualifying purchases on the Energy Star website.
How to Prepare for a Tax Audit
Filed under: Tax, Tax - Audit, Tax - Basics
While the chances of being chosen for an audit are still generally low, your chances of being selected are on the rise. Don't get caught by surprise. Here's what you need to know in order to be prepared.
The most basic question is what kind of audit the IRS is seeking. Audits can be divided into two general categories: paper audits and people audits.
Tax Audit Frequently Asked Questions
Filed under: Tax, Tax - Audit, Tax - Basics
Here, we tackle some of the most frequently asked tax audit questions: