You think planning a wedding ceremony is complicated? Wait till you see the possible tax issues involved. If you are getting married this year, there is a long list of things you need to be aware of and plan for before tying the knot that can have a significant impact on your taxes. And there are a number of tax-related actions you should take as soon as possible after marriage.
While it’s true that every business is different from the next – and every entrepreneur will go on his or her own unique journey – there are still a few constants that we know to be true.
The start-up phase, for example, is when you write a formal business plan. You secure financing, you select your business structure, and you do all the other work required to get your enterprise off the ground. On the other end of the spectrum, we have the maturity phase, which is when you do what it takes to remain both competitive and sustainable for as long as possible.
In between that, however, we have what is known as the growth phase – one that often catches a lot of new entrepreneurs in particular off-guard. Still, this is an exceptional opportunity to grow from the business you’re running into the one you hoped you’d be in charge of when you started, provided that you’re able to keep a few key things in mind.
Raising money through Internet crowdfunding sites prompts questions about the taxability of the money raised. Several sites host money-raising projects for fees generally ranging from 5 to 9%, including GoFundMe, Kickstarter, and Indiegogo. Each site specifies its own charges, limitations, and withdrawal processes. The money raised may or may not be taxable depending on what the purpose of the fundraising campaign was.
On the one hand, it’s almost a prerequisite for entrepreneurs of all types to have that “can-do spirit.” That sense that nobody else sees things quite like they do so, whatever it is they want to accomplish, it becomes something they know they’ll have to do themselves. In a lot of ways, this is an asset as it’s a big part of what has contributed to your success thus far.
On the other hand, this type of mentality can certainly get people into trouble when it comes to the day-to-day necessities of actually running a business – with bookkeeping, accounting, and other financial matters being chief among them. While there may be a time when you can handle your books yourself, that time will likely pass. There are a few key warning signs in particular that you should watch out for to help clue you in as to when that becomes the case.
It doesn’t matter what age you are or how long it will be until you retire – most people spend at least a little time wondering how much money they’ll need to save to continue to live the lifestyle they want after they’ve left the workforce. Having said that, understanding what you’ll need and actually achieving that goal are two entirely different things.
Given the fact that the stock market is currently down overall, not to mention that there is uncertainty in the economy, major inflation, and other financial stress to deal with, it’s natural for people of all ages to worry if they have enough money put away to successfully retire on. Thankfully, simply removing that uncertainty and coming up with a concrete (and most importantly realistic) number can help a lot of those worries go away.
Therefore, if you truly want to make sure that you’re saving enough money for retirement, there are a number of important things to keep in mind.
The tax code provides two tax advantageous plans for taxpayers to pay medical expenses. One is a Flexible Spending Account (FSA) and the other is a Health Savings Account (HSA). The two are often misunderstood and their provisions are frequently mixed up by taxpayers who then fail to take advantage of the tax benefits available from these accounts.
This article explains the workings, qualifications, and tax benefits of each with a side-by-side comparison chart of the two programs. Both have a common theme: contribution to both is made with pre-tax dollars (they reduce taxable income) and distributions to pay qualified medical expenses are tax free. After that the two plans are quite different.
Taxpayers often question how long records must be kept and the amount of time IRS has to audit a return after it is filed.
It all depends on the circumstances! In many cases, the federal statute of limitations can be used to help you determine how long to keep records. With certain exceptions, the statute for assessing additional tax is 3 years from the return due date or the date the return was filed, whichever is later. However, the statute of limitations for many states is one year longer than the federal limitation. The reason for this is that the IRS provides state taxing authorities with federal audit results. The extra time on the state statute gives states adequate time to assess tax based on any federal tax adjustments that also apply to the state return.
In addition to lengthened state statutes clouding the recordkeeping issue, the federal 3-year rule has several exceptions:
Generally, individuals are required to file a tax return for a year if their income exceeds the standard deduction for their filing status for that year. But even if they are not required to file it may be beneficial to do so. They could be missing out on huge refunds.
Just because someone is not required to file a return does not mean they shouldn’t. Failing to file a return could end up leaving large sums of money on the table. Here are some examples.
Under federal law, taxpayers must pay taxes during the year as they earn or receive income, or they can find themselves falling victim to substantial underpayment penalties. Even worse, they may have spent the money, and when tax time comes are unable to pay their past taxes and spiral into financial distress.
To facilitate the pay-as-you-earn concept, the government has provided several means of assisting taxpayers in meeting that requirement. These include:
Those dealing with income taxes only once a year when involved with their own personal tax return often have questions related to tax terminology. The following is a compilation of questions frequently asked by individuals: