FINANCIAL ACADEMY SCHOOL AN ABSOLUTE GUIDE TO INVESTMENT SUCCESS - A SUPPORT LIBRARY FOR ENTREPRENEURS, INVESTORS, AND TRADERS. Financial Knowledge And Financial Education Tools And Resources
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Things to Do Now to Lower Your Tax Bill And Maximize Your Return.. The More You Know About Taxes The Less You Will Pay And The More Money You Will Have Coming To You..
FINANCIAL ACADEMY SCHOOL AN ABSOLUTE GUIDE TO INVESTMENT SUCCESS - A SUPPORT LIBRARY FOR ENTREPRENEURS, INVESTORS, AND TRADERS. Financial Knowledge And Financial Education Tools And Resources
==
Things to Do Now to Lower Your Tax Bill And Maximize Your Return..
Dealing
with tax problems is stressful enough. But it can be downright
maddening to discover that your credit has been damaged over a tax bill
you had nothing to do with. A Credit.com blog reader asked:
My spouse's credit report shows a tax lien from my taxes from before we were married. Is that legal?
Probably
not, In most cases, if the tax lien was filed against the husband, not
the wife, then his wife's "credit report should not show the lien," . If
they live in a community property state, though, the answer may be
different. More on that in a moment. LEARN MORE HERE ABOUT TAXES...
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Tax debt isn't usually reported on credit reports unless the Internal Revenue Service files a Notice of Federal Tax Lien. The IRS files tax liens to protect its interest in the property
of someone who can't or won't pay the taxes they owe. Liens may be
automatically filed for unpaid tax debts totaling $10,000 or more, and
may sometimes be filed for smaller debts. (That limit used to be $5,000,
so some consumers' credit reports may show older liens for smaller
amounts as well.)
Tax liens may be reported for seven years from the date they were
assessed if they have been paid, or indefinitely if they are unpaid.
They severely damage consumers' credit scores.
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It's
also worth noting that spouses have separate credit reports and the
only time one partner's credit or tax problems should affect the other
person's reports is when they share accounts (for example, joint loans
or credit cards, or when one is an authorized user on the other's
accounts).
Community Property States
However,
it does get tricky in the case of community property states — Arizona,
California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and
Wisconsin — which establish joint property rights.
"It
gets complicated because each spouse has a vested half interest in the
other's property regardless of how it is titled," says Pilla. He gives
this example:
===Parties get married on Day 1. On Day 2, she buys a house in her name. Even if it is titled in her name only,it's a community property asset which gives her husband half interest. The IRS can file a tax lien and it will attach only to the husband's interest. So far there are about nine community property states...
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Things to Do Now to Lower Your Tax Bill And Maximize Your Return..
Could Your Spouse's Tax Problems Affect You?
Dealing
with tax problems is stressful enough. But it can be downright
maddening to discover that your credit has been damaged over a tax bill
you had nothing to do with. A Credit.com blog reader asked:
My spouse's credit report shows a tax lien from my taxes from before we were married. Is that legal?
Probably
not, In most cases, if the tax lien was filed against the husband, not
the wife, then his wife's "credit report should not show the lien," . If
they live in a community property state, though, the answer may be
different. More on that in a moment.
=====
Tax debt isn't usually reported on credit reports unless the Internal Revenue Service files a Notice of Federal Tax
Lien. The IRS files tax liens to protect its interest in the property
of someone who can't or won't pay the taxes they owe. Liens may be
automatically filed for unpaid tax debts totaling $10,000 or more, and
may sometimes be filed for smaller debts. (That limit used to be $5,000,
so some consumers' credit reports may show older liens for smaller
amounts as well.)
Tax liens may be reported for seven years from the date they were
assessed if they have been paid, or indefinitely if they are unpaid.
They severely damage consumers' credit scores.
====
It's
also worth noting that spouses have separate credit reports and the
only time one partner's credit or tax problems should affect the other
person's reports is when they share accounts (for example, joint loans
or credit cards, or when one is an authorized user on the other's
accounts).
Community Property States
However,
it does get tricky in the case of community property states — Arizona,
California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and
Wisconsin — which establish joint property rights.
"It
gets complicated because each spouse has a vested half interest in the
other's property regardless of how it is titled," says Pilla. He gives
this example:
Parties get married on Day 1. On Day 2, she buys a house in her name. Even if it is titled in her name only,it's a community property asset which gives her husband half interest. The IRS can file a tax lien and it will attach only to the husband's interest. So far there are about nine community property states...
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Things to Do Now to Lower Your Tax Bill
As
you fine tune your New Year's resolutions for year, there's a good
chance that something related to personal finance is on the list.
Taxes may not be on the agenda until the April crush, but it makes
sense to start preparing now for the current tax year and perform maintenance check-ins periodically.
The following 10 tips that can help individuals and small business owners lower their tax burden and maximize their income tax return,
avoid audits, and feel a little better about the whole tax thing. A
courtesy of knowledgefinancial.com
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Optimize Withholdings
Although
it's nice to get a big refund after sending in your return, it's even
better to optimize tax withholdings and receive a little more money in
every paycheck.
"The IRS has a withholding calculator you can use," says Bill
Hendricks, former TurboTax leader and co-founder of Common-form.com.
"Once you figure out the right amount to be withheld, request your employer to change the number of withholding allowances."
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Save Receipts
If
you're looking for a new job this year be sure to save all the relevant
receipts. You can take deductions for everything from buying resume
paper to traveling for job interviews. This may not amount to a lot, and
only applies if you itemize deductions, but it takes some of the sting
out of the search process.
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'Continue Your Education'
Is
this the year you pursue the learning you've long wanted to acquire? If
you (or a spouse or dependent) are enrolled in a post-secondary school,
such as a two-year or four-year college or vocational school, you may
be eligible for a Lifetime Learning Credit worth up to $2,000 a year.
(Note: income restrictions apply.)
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Purchase Health Insurance
This
year, the penalty for not having health insurance increases to the
greater of 2 percent of household income or $325. Although enrolling in a
plan may be more expensive, the penalty is worth avoiding if you can.
Individuals receive a subsidy towards their premium if their annual
income is less than $46,680 and pay lower premiums and out-of-pocket
costs if their income is below $29,175.
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Report Life-Changing Events
Taxpayers
that a major "life event," such as the birth of a child or a marriage,
should prompt submission of a new Form W-4 to employers. Your new
circumstances may affect the number of withholdings you're entitled to
claim
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Pay Estimated Taxes on Time
If
you're earning money on the side through a freelance job, your own
business, or even from interest or rent income, remember to pay
estimated federal and state (when applicable) taxes four times a year.
Failure to do so can result in costly penalties.
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If
you're starting a business, open separate business credit card,
checking, and savings accounts. Using a single account for personal and
business expenses can get you in trouble during an IRS audit. Moreover,
keeping the finances separate will help you stay organized all year
while providing accurate real-time information
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Track Your Travels
Small
business owners should track how far and when they drive for any work,
medical, volunteer, or non-profit activity. Even short trips to the
local drugstore to pick up a prescription or to a local charity to drop
off a donation add up to a decent tax deduction.
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Record Other Expenses
In
addition to keeping an accurate mileage log, business owners should
keep expense reports for all business-related travel as well as receipts
for business-related meals (note with whom you dined and the purpose of
the meeting).
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Document Everything
If
you're not sure if you need to keep a copy of something, or you expect
to claim an exemption, deduction, or expense that might not be clear to
the IRS, make notes and keep documentation. This is particularly
important for events that occur early in the year, which may be long
forgotten when it comes time to file your taxes next year...
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