To claim your Individual Retirement Account (IRA) contributions on your taxes, you need to know the type of IRA you have. Traditional IRA contributions are tax-deductible, but withdrawals are taxed as income. Roth IRA contributions are made with after-tax dollars but withdrawals are tax-free. To deduct traditional IRA contributions, you must meet certain income limits … Read more
Minimizing tax on dividends requires understanding the different types of dividends and the tax laws that apply to them. Qualified dividends, which come from investments held for a specific period, are typically taxed at a lower rate than ordinary dividends. To avoid paying tax on dividends altogether, consider investing in tax-advantaged accounts such as 401(k)s … Read more
When the government issues stimulus checks, many taxpayers wonder if they can have their payments directly deposited onto their TurboTax card. The answer is yes, if you used the TurboTax card to file your taxes and receive your tax refund in previous years. The IRS will automatically send your stimulus check to the TurboTax card … Read more
Residents of Washington D.C. have a unique tax situation compared to other states. Despite being a federal district, D.C. operates as a municipality and thus has its own local tax laws. However, as a federal district, D.C. is not subject to state income taxes. This means that individuals who live and work in Washington D.C. … Read more
A tax refund is not considered income. The Internal Revenue Service (IRS) views a tax refund as a return of overpaid taxes, not as additional income. The refund represents the amount of money that was withheld from your paycheck or estimated tax payments during the year that exceeded your actual tax liability. When you receive … Read more
Long-Term Care policies, designed to cover expenses associated with chronic illnesses or disabilities, offer tax-free benefits. These benefits are not subject to federal income tax, and in some cases, state income tax as well. In contrast, Accelerated Death Benefits, which provide a lump sum payment when a policyholder is terminally ill, are generally considered taxable … Read more
Property taxes are typically assessed on the value of your home and land. In some areas, Mello-Roos taxes are also included in property taxes. Mello-Roos taxes are special assessments that are levied to pay for certain public improvements, such as roads, parks, or schools. These taxes are typically used to finance new development and are … Read more
An ad valorem tax levy is a type of property tax assessed as a percentage of the assessed value of the property. This tax is commonly used by local governments to fund public services such as schools, fire departments, and road maintenance. The assessed value of a property is typically determined by a local assessor … Read more
The person or organization responsible for withholding tax varies depending on the specific circumstances and location. In general, employers are responsible for withholding income tax, social security tax, and Medicare tax from employees’ wages. Self-employed individuals are responsible for calculating and paying their own withholding taxes. Entities such as banks or brokerage firms may also … Read more
Whether or not stockholders have to pay taxes on their stock holdings depends on several factors, such as the type of stock, the timing of the sale, and the tax laws in the relevant jurisdiction. In general, stockholders must pay taxes on any profits they make from the sale of their stock. However, there are … Read more