Taxgirl’s own Taxes From A to Z® series — breaking down tax concepts and terms one letter at a time, in plain English.
J is for Junk Fees. If you’ve ever bought or sold a home, you’ve probably seen a laundry list of fees on your sale or mortgage papers. These fees, usually found at the bottom, are in addition to notary fees and appraisal fees, and are sometimes called “junk fees.” While a specific fee may be…
I is for IRA Rollover. An individual retirement account (IRA) is type of retirement plan that allows you to set aside money for later use. Depending on the kind of IRA you establish (traditional versus Roth), you can rely on tax-free withdrawals or tax-deferred growth in the future. (Quick caveat: since this topic can be…
H is for Hardship Withdrawal. When resources are limited – especially in a tough economy – taxpayers look all over the place to pay bills, from the equity in their homes to under the sofa cushions. One of the options that taxpayers often consider is a hardship withdrawal from a retirement plan. Retirement plans, such…
Practically every year, I get a query or two about how to make a donation to the federal government to pay down the debt. Apparently, it’s keeping some of you up at night. It’s a complicated issue because most of us can’t explain, at any given time, what the debt is and how it’s calculated….
F is for Fellowships and Scholarships. More and more students are relying on fellowships and scholarships to help defray the cost of a college education these days. For tax purposes, a fellowship is an amount paid to or on behalf of a student for research purposes. A scholarship is an amount paid to or on…
E is for Educational Assistance. In this job market, every advantage helps. And arguably, that advantage could be a college or other degree (though it’s worth noting that I don’t believe in going to school just because you don’t know what else to do). To help defray the cost of education – and perhaps make…
D is for Disaster Relief. The forecast for the past several days has been terrible with warnings and advisories for gusting winds, heavy rain and ice, and several inches of snow slated to blow into the Philadelphia area. Did the storm live up to the hype? The storm really did pack a punch in other…
C is for Carpooling. You cannot deduct the costs of getting to and from work, no matter if you take a bus, trolley, subway, taxi, or drive your own car. Commuting expenses to and from your regular place of work (as opposed to traveling for work) is never deductible. Taxpayers are always trying to come…
B is for Bad Debt Expense. Most tax discussions about debt focus on debts that you owe. But what happens when the debt is owed to you? And worse, what if it’s pretty obvious that the debt isn’t going to be paid back? When that happens, you have a bad debt. For tax purposes, you…
Today, I’m kicking off my annual “Taxes from A to Z” series. As part of the series, I plan to focus on tax terms that might not get much play on a day to day basis… If you’re wondering what the heck MAGI is or how to figure out the difference between an injured spouse…