Gambling winnings are considered taxable income, though you can write off losses up to the amount you won.
This post is by Kay Bell at Bankrate.com.
Here's a look at the federal tax forms you'll need to share your good fortune with the Internal Revenue Service. And if you lost a few rounds before your numbers came up, there's a way you can turn those losses to your tax advantage.
For recreational gamblers, requirements for reporting and withholding from a winning bet depend on the type of gambling, the amount won and the ratio of the winnings to the wager.
If you got married or divorced, took in an elderly parent, lost your job or adopted a child, you may need to adjust your tax planning.
This post is by Laura Saunders of The Wall Street Journal.
What was new in your life last year? Did you get married or divorced, or adopt a child? Did your parents move in — or your adult child? Did you lose a house to a storm?
These and other major events often have tax consequences people are unaware of — precisely because they are unusual, unlike, say, deducting donations. And with big tax increases taking effect this year, it is all the more important for taxpayers to seize any break they can.
Make sure you take all the deductions and credits to which you're entitled. That requires keeping up with changes in the laws.
This post is by Richard Satran of U.S. News & World Report.
Accountants say their clients often have a higher standard than the IRS requires. Some people will not itemize an expense when they cannot find a receipt, for example, even though not every tax deduction requires one. Estimates that conform to a "reasonable" standard are often adequate although some, like charitable deductions, must conform to a higher one.
Of course people are afraid of an IRS audit. But according to the 2012 Survey of Taxpayer Attitudes from the IRS Oversight Board, 86% say it's "personal integrity" that motivates them to be honest, and just 40% say they file faithfully out of fear of being caught doing something wrong.
Before you buy a tax software package, make sure it suits your needs -- and that you're not eligible to use free online filing programs.
This post is by Kay Bell of Bankrate.com.
Are you prepared to spend almost a full day filling out your tax return? And we're talking a 24-hour period, not a standard eight-hour work day. That's the Internal Revenue Service's estimate of how long it will take the average taxpayer to complete Form 1040.
Sure, that includes the time it takes to pull together and sort through all your tax receipts and records, learn about the Form1040, decipher its instructions, copy the completed form and send it in. But even discounting these ancillary duties, the IRS figures it still will take more than five hours just to fill out this most popular income tax return.
If you have additional schedules or tax credits to file, you might be measuring your tax time by the calendar instead of the clock.
If your taxes are complicated, you may need an accountant, lawyer or enrolled agent to make sure you comply with laws that get more complex every year. Here's how to find a good one.
This post is by Tom Herman of The Wall Street Journal.
If so, you are in the minority. As our tax laws have grown increasingly complex, more taxpayers have hired someone to figure out the mysteries of Form 1040 and all those other Internal Revenue Serviceforms and instructions that appear to be written in a foreign language.
"I did my own taxes for a long time," says Joseph Thorndike, director of the Tax History Project at Tax Analysts and an adjunct professor at the Northwestern University School of Law. "Then I wised up for a few years and hired [an] accountant, before reverting to my foolish ways and doing it myself again. Last year, the IRS alerted me to a mistake. Initially, it seemed to be in their favor, but later it turned out to be in mine.
If your family is struggling financially, you may be able to save on your tax bills with deductions for education, job searches and more.
This post is by Bill Bischoff of MarketWatch.com.
While the economy has improved, it’s still underperforming, and it may not have gotten any better for you personally. So let’s cover some tax-saving opportunities that are likely to be helpful between now and whenever the sunshine really breaks out.
Going back to school
Improving your resume by going back to school will put you in a better position when the job market turns in your favor.
Meanwhile, you can probably collect some tax breaks to help offset your expenses. The two most valuable breaks are the American Opportunity tax credit (worth up to $2,500 per year for the first four years in an undergraduate degree program) and the Lifetime Learning tax credit (worth up to $2,000 per year for graduate school and nondegree classes).
March 15 is the deadline for some taxpayers to take action. It's also a good time to make a plan for how you'll pay taxes due April 15.
This post is by Eva Rosenberg at MarketWatch.com.
Here are tax deadlines and issues to keep in mind this month.
We start with gentleness from the Internal Revenue Service. Farmers' and fishermen's tax returns are normally due on March 1 if they have not made any estimated tax payments during the year.
Employers are required to withhold taxes and pay Social Security and Medicare taxes for all workers to whom they pay more than $1,800. The IRS is making it easier to come clean.
This post is by Arden Dale of The Wall Street Journal.
Employing a nanny or other household worker can open a can of worms with the Internal Revenue Service, but the agency wants to make it easier for people who mishandle taxes for their hired help to put things right.
The tax-preparation season is a time when questions often surface about how employers of household help have handled -- or not -- the withholding requirements and other tax issues, financial advisers say. This year, the IRS is allowing more people to enter a special program that eases penalties for those who haven't been following the rules.
A lot of people either aren't familiar with the rules or don't want to be bothered to jump through all the hoops. They may pay a nanny under the table or treat the worker as an independent contractor. That can prompt an audit and penalties.
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