The Backdoor Roth IRA Strategy

The term “Backdoor Roth IRA” refers to a strategy employed by individuals with higher incomes who are ineligible to directly contribute to a Roth IRA due to specific income limits. Instead of making a direct Roth contribution, these individuals contribute to a non-deductible traditional IRA and subsequently convert it into a Roth IRA. A Roth […]

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retirement savings

The Retirement Savings Contributions Credit, commonly known as the Saver’s Credit, is designed to offset a portion of the first $2,000 that individuals voluntarily contribute to retirement accounts like Individual Retirement Arrangements (IRAs), 401(k) plans, and similar workplace retirement programs. This credit extends to eligible individuals with disabilities who are designated beneficiaries of an Achieving […]

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In a significant development that spells trouble for gig economy workers and consultants, the Internal Revenue Service (IRS) has sharply increased the penalty for tax underpayments. The penalty, which has nearly tripled since 2021, has now reached 8% as of October 1, a considerable jump from the 3% rate observed just two years ago. This […]

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Receiving a tax refund is often a welcome financial boost, but what happens when the expected windfall falls short? Many taxpayers have found themselves in the perplexing situation of not receiving their full tax refund from the Internal Revenue Service (IRS). Before delving into the reasons for an incomplete tax refund, it’s crucial to grasp […]

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IRS Expands Use of Chatbots

The Internal Revenue Service (IRS) has introduced an enhanced chatbot technology to promptly address basic queries for individuals who have received notifications regarding potential tax underreporting. This new chatbot feature is designed to support taxpayers who have received notices like CP2000, CP2501, and CP3219A. These communications inform taxpayers when the IRS’s tax information from third […]

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The utilization of tax withholding can be employed to avoid penalties for underpayment of taxes. Income taxes withheld from wages are considered to be paid evenly throughout the tax year, unless the taxpayer can provide evidence of the specific dates when the amounts were actually withheld. This rule provides taxpayers with three strategies to reduce […]

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education credits

As a student or parent of a student, you may be eligible for tax credits that can help offset the cost of education. The American Opportunity Credit and the Lifetime Learning Credit are two of the most commonly used tax credits for education expenses. In this blog post, we will explore the similarities and differences […]

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Married Filing Separately (MFS)) does not regard two spouses as unmarried single taxpayers. Married couples filing separately are prohibited from claiming some tax benefits by law. They include the education credits for American Opportunity and Lifetime Learning, the childcare credit for children and dependents, and the student loan interest deduction. The amount of Social Security […]

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Taxation of a Side Hustle

Your side business could result in a tax headache whether you rent out your home on Airbnb, provide guitar lessons and accept payment via Venmo, or sell shoes on eBay. A new law mandating users who earn more than $600 in revenue to receive tax forms from sites like eBay, Etsy, and Airbnb as well […]

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Regardless of whether it came from a business or a pastime, every income earned is taxable. Losses sustained while engaging in a hobby are not generally deductible, whereas commercial losses are. Where you disclose money on your tax return depends on how the gig is categorized. Schedule C, “Profit or Loss from Business (Sole Proprietorship),” […]

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