5 Tips For Minimizing Your Capital Gains Tax

As we’ve previously discussed, the capital gains tax is a tax on the profits a person makes when they sell an asset. So if you bought stock that grew in value, you pay a capital gains tax on the difference when you sell the stock. If you bought a piece of land at a certain price and later sold it at a higher price, the money you made from that sale is taxed. The capital gains tax is one of the most infamous taxes Read More

Understanding Forensic Accounting

If you’ve enjoyed an episode of CSI or Bones lately, then you’ve probably heard the term “forensics” before. The word “forensic” has a couple of different definitions. It can mean utilizing the scientific method to help solve crimes as well as anything that is suitable to be used in a court of law. The methods and techniques put forth in forensic science can be applied to numerous situations, including accounting. Read More

Can’t Pay Your Tax Bill? Here’s What to Do

What should you do if you can’t pay the IRS? First, don’t let this stop you from filing your return, as there are penalties for failure to do so. As for the payment dilemma, you do have options if you can’t come up with the entire amount by the due date. Put the bill on your credit card While it’s rarely a good idea to cancel one debt by incurring another, using a credit card is a viable option if your Read More

Four Tax Tips for the Self-Employed

Self-employment gives you a rare opportunity to be your own boss. You work when you want to, take vacation when you want to, and in general enjoy a greater degree of independence. But with that freedom comes more responsibility, especially where taxes are concerned. Self-employed individuals typically have to pay their own FICA taxes, self-manage their retirement plans, and in general manage their tax situation Read More

What to Do if You’re Audited by the IRS

It’s hard not to panic when you see a letter from the IRS in your mailbox. Are they out to get you? Planning to seize all your assets or, even worse, jail you for perceived tax evasion? Relax: being audited doesn’t necessarily mean that you’ve done anything wrong. Perhaps the computer randomly selected you or, if you own a business, it was chosen as part of a program to “test” overall tax compliance in your Read More

Why Investment Income Is Preferable to Ordinary Income from a Tax Standpoint

Corporations and individuals alike are required to pay federal income tax on all of their capital gains earnings, with the rate of taxation depending on their tax bracket and how long they held the investment before selling it. Capital gains come into effect when you sell a stock or other capital asset for more than its original purchase price, or basis. Conversely, if it is sold for less than its basis, the Read More

Setting the Record Straight: Four IRS Audit Myths Exposed

Audits are easily the most feared outcome of the tax filing process, and this dread has given rise to myths and half-truths. This article examines four of the most common misconceptions about a procedure that happens to around 1 percent of filers. Myth No. 1: Audits are a terrifying process The truth is that satisfying an audit can be as simple as answering a few IRS questions. Most IRS queries are sent by Read More

“How Will My Investment Income be Taxed?” An Overview of the Capital Gains Tax

Whenever we make money, the IRS is waiting to take its share. We’ve long since come to terms with the reality of income taxes, but the capital gains tax, which applies whenever we sell capital assets such as stocks and real estate, can still be confusing. A capital gain results when an asset sells for more than its costs. For example: if you buy a gold watch that costs $4,000 and sell it later for $5,000, the Read More

High Income Earners: Four Tips to Save on Your Taxes

Many people dream of earning six figures annually - or more! - but when that goal is accomplished, many are surprised to see just how high their tax burden becomes. This is because of the progressive tax system that is followed in the United States. To put it simply, the more you earn, the higher your tax rate becomes. Fortunately, there are many tax breaks and other options available to help lower the total tax bill Read More

Don’t Raise Red Flags: Mistakes to Avoid on Your IRS Tax Return

Nobody wants to have to deal with an IRS audit, yet many people continuously make the same mistakes on their tax returns year after year, which raise the risk of an audit. Since many people think that audits are only for the rich, or else that they are 100% randomly generated, too many taxpayers don’t take steps to avoid getting audited, which is often a costly mistake. The reality is, there are many things you Read More