Have you ever been tempted to cheat on your taxes, even if by just a small amount? Here's why that's not such a good idea.
Imagine living in a nation with no taxes. That sounds like a utopia or a dream. But what we do know is that the Internal Revenue Service, or what I like to call Uncle Sam's headquarters, does not always collect what it's owed for a number of reasons.
Somewhere in the mix are those who cheat the system. Who are those people?
The IRS can file a tax lien if you miss a due date, which can severely damage scores.
It's a good thing to be punctual, especially when it comes to financial matters. Credit scores rely heavily on your payment history, so developing a habit of making on-time payments will help you improve and maintain high credit scores.
While tax information isn't generally reported to credit bureaus, missing the deadline for paying the IRS could result in a tax lien, which could seriously damage your credit. But in general, that's the only way tax-related information goes on your credit report.
What's a tax lien?
It's pretty simple: If you don't pay your taxes, the IRS can file a notice of federal tax lien with the credit bureaus, and that's a huge negative on your credit reports.
Increase isn't necessarily driven by wealthy citizens trying to escape taxes, experts say.
While Washington is focused on immigration, tax experts are focused on the opposite issue: a surge in Americans moving out.
Last year, a record 2,999 Americans gave up their citizenship or terminated their long-term U.S. residency, according to new data from the U.S. Treasury Department. That was more than three times the number in 2012, and greater than the combined totals for 2011 and 2012.
Many will look at these numbers and say they are proof that America's high taxes are chasing Americans overseas. After all, many of the expatriates who have been named are wealthy or high earners -- like Facebook billionaire Eduardo Saverin or pop star Tina Turner.
If you're eligible, a home office deduction can save you big bucks at tax time. If you're not, claiming it can get you in big trouble.
It's mid-February. By now you should have received paperwork documenting your 2013 income, as well as paperwork from those who paid you interest and from those you paid. You've also hopefully corralled your receipts to document your deductions.
But before you sit down to take care of business, there's a potential deduction that can slash your tax bill: the home office deduction. According to the IRS, "In tax year 2010, the most recent year for which figures are available, nearly 3.4 million taxpayers claimed deductions for business use of a home."
Wish taxes were so simple you could file them on a postcard? Some say a flat tax could make that possible.
With tax season upon us, you may be wondering why the government has to make things so complex.
According to the CCH Standard Federal Tax Reporter (.pdf file), the tax code clocks in at an astounding 73,954 pages as of 2013. It includes seven tax rates, four standard deductions and at least a dozen tax credits for individuals. Then there are the exemptions, the itemized deductions and the special tax rules.
And when you think you're starting to understand how the system works, the government likes to throw in a few curveballs, like the alternative minimum tax.
The renewal of 55 federal extenders that expired last year is on Congress' to-do list for 2014.
As the next Senate Finance Committee Chairman Sen. Ron Wyden (D-Ore.) takes the gavel, his first priority will likely be to renew the more than 55 tax breaks or extenders that expired at the end of the year.
These provisions are essentially a grab bag of goodies for business and industry, as well as some for individuals. Last year, they cost taxpayers a whopping $74 billion --$63 billion of which solely benefited businesses, according to the Joint Committee on Taxation.
One of the most popular -- and most expensive -- extenders is the research and development tax credit, which subsidized business expenses at a cost of more than $6 billion in 2013, according to the Tax Foundation. Some other popular provisions include bonus depreciation, the mortgage deduction and incentives for the renewable energy industry, as well as an $11 billion break for U.S. multinational corporations that allows them to defer U.S. taxes on overseas income. These measures are separate from popular tax breaks like the mortgage deduction, the earned income tax credit and exclusions for employer health insurance.
If you've sketched out your tax situation and it makes you want to try and forget it until April, we have some better options.
This post comes from Christine DiGangi at partner site Credit.com.
As much as we'd all like a refund this tax season, not everyone gets money back from the IRS. If you're not prepared for it, owing money on your taxes can seriously stress your budgets and, potentially, your credit.
If you're not sure whether you'll owe or be owed, there's no better time than now to get started on your taxes. There are advantages to filing early, but if you get started and realize you're going to have to spend a little extra come April, at least you have some time to come up with a game plan.
Figure out what you owe
Perhaps you've been getting a little bit more mail lately — start sorting through any tax forms you may have received from employers, financial institutions or healthcare providers in the past few weeks, follow up with anyone who should be sending you one and look into any deductions you need to prepare to claim.
Every year millions of Americans get money back, then blow it. Here are four ways to put it to better use.
This post comes from Stacy Johnson at partner site Money Talks News.
According to the IRS, the average American tax refund for tax year 2013 is about $2,600. But whatever you're expecting this year, there are smart things you can do with it, as well as things that aren't so smart.
Here are some of each, along with some advice on how to check on the progress of your refund if you've yet to receive it.
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