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…
Z is for Zero. If you work a regular job – meaning that you’re not an independent contractor – you pay federal income tax as you go by having it withheld from your pay during the year. This is called “withholding” and is based on the number of allowances you claim when you file a…
Y is for Year End. Tax returns are filed based on your tax year end. Individual filers have a calendar year which means that federal income tax returns are due on April 15 of each year – unless that day falls on a Saturday, Sunday or holiday as it does in 2012. This year, we…
X is for X-Mark (Signature). No matter how thorough and accurate your tax return is, it’s not considered a valid return unless you sign it. If you are filing a joint tax return, your spouse must also sign. If you can’t sign your tax return for some reason, a representative can sign it on your…
W is for Wash Sale. “Just call it a wash.” How many times have you said that? If you’ve ever uttered those words, then you have a pretty good understanding of a wash sale. It is, at its most basic, when you sell or trade stock or securities at a loss while simultaneously (or nearly…
V is for Vacation Home. Spring Break is coming up in a few weeks and we’re lucky enough to be able to spend time with my parents in coastal North Carolina where I grew up. Every year that we go down there, I convince myself that I want a vacation home. And I know exactly…
U is for Unreasonable Compensation. I don’t love S corporations. I know that my CPA friends love, love them but I don’t. While I agree that they have advantages in terms of flexibility, many shareholders struggle with compliance putting the S status at risk. And even more concerning? The IRS isn’t a fan. And by…
T is for Tuition and Fees Deduction. College can be expensive. Crazy expensive. I say this as a former student now repaying tons of student loans – and eying my three kids and thinking about how in the world I’m going to pay for them, too. Fortunately, there are some tax breaks available for paying…
S is for Standard Deduction. Most taxpayers have the option of claiming the standard deduction or the itemized deduction. I say “most” because, as with almost everything tax-related, there are some exceptions. You cannot use the standard deduction if you file as married filing a separate return and your spouse itemizes deductions; you are a…
R is for Refund. With tax season down to the wire, more and more taxpayers are wondering about the status of their refunds. Your refund information is generally available about 72 hours after your tax return is processed. You can track your refund online with the “Where’s My Refund?” service offered by IRS or use…