Now that the latest tax season is over, many payers are reeling from the tax bill -- especially those who weren't expecting the surtaxes that come with Obamacare.
When you are surprised by your tax bill, it's tempting to argue that you don't owe what Uncle Sam says you do. While you can make your case, the reality is that there are many tax arguments that the IRS considers frivolous.
When we think of taxes, we often focus on federal income tax. However, it's important to remember that your state wants it's cut, too. If your state collects income tax, you need to file a state return as well as a federal return. If you've moved in the last year, you might need to file more than one state tax return.
As tax season draws to a close, many consumers feel a sense of relief. They are done with taxes, and not anxious to start on another tax season.
If you don't owe taxes, you aren't required to file a tax return. However, just because you don't have to file a tax return doesn't mean that you shouldn't file one. In fact, you might be missing out on money that the government owes you if you don't file a tax return.
So far this tax season, refunds are on the rise. According to IRS data, the average refund is more than $3,000. That's not a bad amount of change, and it's money that many consumers consider a "windfall."|With the Great Recession a very recent memory, and with the economy and labor market still struggling, many consumers are saying that they plan to use their tax refund money prudently.
Recently, TD Ameritrade conducted a survey to find out what Americans will do with their tax refunds, and found that a majority of them plan to save or invest their refunds.
When it comes to paying taxes, where you live matters. While many of us focus on the amount we pay in federal taxes, the reality is that there are a number of taxes that we pay. In fact, your local taxes might be taking a bigger bite out of your income that you expect.
Every year, I bring my documents to my accountant and he prepares my taxes. This year, he told me that there has been increase in the number of people that bring their returns to professional tax preparers. The IRS reports that around 60 percent of taxpayers turn to professionals when preparing and filing their returns.
The 2014 tax season is underway, and the IRS has released some statistics that show how things are progressing this season.
One of the realities of our tax system is that reporting is largely voluntary. You are required by law to pay taxes, but, for the most part, the system relies on the fact that you are honest in your reporting. You voluntary report your income, and then pay on that amount.
Starting in 2014, the individual mandate for health insurance coverage is in effect. Unless you meet the exemptions put forth by the government, you are expected to have minimal insurance coverage. For those who already have coverage through work, or through a government program like Medicaid or Medicare, the individual mandate doesn't change much.
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