Thanks to the advance payments of the Child Tax Credit, approximately 60 million children received $15 billion in July, according to the Department of Treasury and the IRS. While many of these families will benefit from the extra money deposited into their bank accounts, some families may want to opt-out and instead take the credit when they file their tax return next spring.
Key tax provisions in the American Rescue Plan Act (ARPA) could affect your tax situation. Here’s what you need to know:
The new tax law affected taxpayers in several ways. First, it increased the dollar amount of the credit and the amount of eligible expenses for child and dependent care.
An offer in compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service that settles a taxpayer’s tax liabilities for less than the full amount owed. That’s the good news. The bad news is that not everyone can use this option to settle tax debt; the IRS rejected nearly 60 percent of taxpayer-requested offers in compromise. If you owe money to the IRS and wonder if an IRS offer in compromise is the answer, here’s what you need to know. Continue reading
Employees and small business owners often have questions about what to do with an employee’s home–and what the tax consequences might be–when they move to a new job location. Here are some answers: Continue reading
Federal law requires most employers to withhold federal taxes from their employees’ wages. Whether you’re a small business owner who is just starting or one who has been in business for a while–and ready to hire an employee or two–here is what you should know about withholding, reporting, and paying employment taxes. Continue reading
The Internal Revenue Service has started sending letters to more than 36 million American families who, based on tax returns filed with the agency, may be eligible to receive monthly Child Tax Credit payments starting July 15, 2021. Here’s what families need to know: Continue reading
Estimated tax is the method used to pay tax on income that is not subject to withholding. This includes income from self-employment, interest, dividends, alimony, and rent and gains from the sale of assets, prizes, and awards. You also may have to pay an estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough. Here’s what you should know about estimated tax payments: Continue reading
Taxpayers who relinquish citizenship without complying with their U.S. tax obligations are subject to the significant tax consequences of the U.S. expatriation tax regime. If you’re an expat who has relinquished–or intends to relinquish–your U.S. citizenship but still has U.S. tax filing obligations (including owing back taxes), you’ll be relieved to know there are IRS procedures in place that allow you to come into compliance and receive relief for any back taxes owed. Let’s take a look: Continue reading
If you’ve given money or property to someone as a gift, you may owe federal gift tax, but in many cases, you will not. For example, there is usually no tax if you make a gift to your spouse or a charity. If you make a gift to someone else, the gift tax usually does not apply until the value of the gifts you give that person exceeds the annual exclusion for the year. Continue reading
One of the most important questions you face when changing job is what to do with the money in your 401(k) because making the wrong move could cost you thousands of dollars or more in taxes and lower returns. Continue reading