One of the ways that you can get a tax break for your health care costs is with the help of a Flexible Savings Account (FSA). The FSA allows you to make tax deductible contributions to an account, and later in the year, you can use the money to pay for qualified health care costs.
There will always be those intent on earning money by tricking the hard-working out of their cash. Right now, the IRS is warning about two new scams that might impact you:
1. Typhoon Haiyan Relief
Recently, a massive typhoon devastated parts of the Philippines. As is the case when such disasters strike, efforts to collect money for charitable efforts immediately got underway. Unfortunately, these types of disasters also bring out the scammers.
Starting in tax year 2013, a new tax is being levied on those considered high earners. This is a 0.9% Medicare surtax. While it seems fairly straightforward at first, many married couples might find an unpleasant surprise when they go to file their tax returns in the new year.
One of the first things many of us learns about the tax code is that it is always changing. New tax breaks appear, and tax breaks you have grown used to expire. Indeed, there are a number of tax breaks that you might be enjoying now that have expiration dates on them.
Remember when the payroll tax cut expired? Even though things were just going back to normal, to many taxpayers used to the lower payroll taxes it felt like a tax hike. You might feel the same way, too, when the following 4 tax breaks come to an end along with 2013.
Now that the year is drawing to a close, it's time to start organizing your taxes. It's not too early to start thinking about filing your taxes -- especially if you want to avoid a frenzied attempt to get your tax return filed by April 15.
Now that 2014 is approaching, many consumers are starting to become concerned about the requirements put on them by the Patient Protection and Affordability Act (PPACA -- also called Obamacare). For those who already have health insurance, things are likely to remain mostly the same.
The biggest changes as a result of the law impact those that currently do not have any health care coverage. For those who do not purchase health insurance coverage, a fine will be imposed. The penalties will be collected by the IRS, and the Supreme Court ruled that the mandatory coverage requirement basically amounts to a tax.
Earlier this month marked the day that tax code as we know it, complete with income tax, became law. The 16th Amendment was properly approved in February of 1913, and Woodrow Wilson signed the requisite legislation for our tax code on October 3, 1913. So the tax code -- and the income tax as codified in the Constitution -- has reached its 100th birthday.
Right now, there is a debate raging over whether or not severance pay should be subject to FICA taxes. It's a tough call because it all depends on whether or not severance pay is considered wages, and whether or not the pay is for services that you provide to the company.
The government is in shutdown mode right now, with many services being cut, and government offices closed. The IRS is one of the agencies seeing limited operations as a result of the impasse over funding the government.
One of the debates that rages around taxes is whether it's right for some people to do their best to avoid paying taxes if they can. Just because it's legal to avoid paying taxes in some cases doesn't mean that it is right.
The Wealthy and Paying Taxes
We talk a lot about the wealthy paying their "fair share" of taxes. However, what is fair? It's hard to pinpoint that answer when those who make a lot of money are legally reducing their tax bills. There have been complaints lately about how the wealthy get too many tax breaks, but if they take advantage of the ability to legally lower their tax bills, is there anything wrong with that?
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