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Continuing our effort to provide you with valuable, practical tax information, we will periodically update this page with useful income tax tips and income tax advice from the best sources — information on issues that you commonly deal with. Be sure to check our newsletter from time to time to stay on top of the latest and most effective tax strategies.
CompleteTax will provide income tax tips that will help you save money when it's time to file your tax returns. It's a good idea to use a well planned strategy so that you aren't surprised in April. Using CompleteTax Income Tax Preparation Software and keeping good records could mean the difference between paying a large chunk of money in April and receiving a big refund check. Use our income tax tips as part of your ongoing preparation.
Make Sure Your Federal Income Tax Withholding Is Accurate
As we all know, the United States income tax is a "pay as you go" system. This means that we are supposed to be turning over a portion of our income to Uncle Sam as we receive it. For self-employed individuals or those with substantial amounts of unearned income, this "pay as you go" is accomplished via estimated tax payments. However, wage earners generally count on withholding from their wages to keep them current on their tax payments.
When we start a new job, the employer presents us with a Form W-4, Employee's Withholding Allowance Certificate. We dutifully complete this form so that it accurately reflects our earning situation at that moment. However, many changes can occur that affect your tax picture after you fill out your initial Form W-4. Some of these are marriage, divorce, birth of a child, loss of a dependency exemption, taking a second job, receiving capital gain income.
It makes sense to periodically review your withholding statement and make any necessary adjustments. If you have too little withheld, you will have an unpleasant surprise when you calculate your final tax liability in April. In fact, you might end up with a penalty for underpayment of estimated tax! If you have too much withheld, you will get a large refund, but you have lost the use of your money for all the months you gave it to Uncle Sam as an interest-free loan.
For more information on how to check our story, Take a Moment to Fine-tune Your Withholding.
Disposing of Capital Assets
When you sell, exchange, or otherwise dispose of a piece of property that has a useful life of more than one year, you need to determine the capital gain or loss from that disposition. To acquaint yourself with these rules, please read Disposing of Capital Assets.
Claiming Federal Tax Credits
Tax credits reduce your tax liability dollar-for-dollar. Therefore, it is important to claim every credit that you can. In addition, credits can have an impact on your withholding. Some of them (the refundable credits) can even increase the size of your refund check. However, credits must be claimed in a certain order. Learn more about the correct way to claim your credits by reading Claiming Federal Tax Credits.
Business Travel Expenses
Summer time is often convention time. Many organizations hold annual or semi-annual conventions during the summer months. When can you deduct the expenses of attending a convention? Find the answer in our article Business Travel Expenses.
Stock, Bond, and Other Capital Asset Sales
Special rules apply when you dispose of stocks, bonds and other investments. Become familiar with the rules so that you can manage your dispositions to lower the taxes due as a result. Stock, Bond, and Other Capital Asset Sales.
Are You Missing Your Refund?
Millions of unclaimed dollars are languishing in IRS bank accounts, waiting to be claimed by their rightful owners. If you were entitled to a refund but didn't file a return or if you moved without notifying the IRS, you may have money waiting for you. The IRS has provided information on how to claim your missing money. Are You Missing Your Refund?
Amended Returns Enable You to Correct Errors
There are times when you need to correct information that appeared on your tax return. Perhaps you forgot an item of income or failed to claim a tax credit. Regardless of the reason, you can amend your return by filing Form 1040X. Amended Returns Enable You to Correct Errors .
Airlines, Not Flyers, Reap Windfall from Expired Ticket Taxes
As of July 23, numerous taxes imposed on airline travel expired when Congress failed to act to reauthorize the Federal Aviation Administration. Rather than reducing the amount that travelers pay, the airlines kept prices the same—pocketing the money as part of the fare, rather than paying it over to the IRS. The IRS has provided information regarding how travelers can obtain a refund of taxes paid and what the future may hold if the taxes are re-instated. Airlines, Not Flyers, Reap Windfall from Expired Ticket Taxes.
IRS Broadens Access to Equitable Relief for Innocent Spouse
In order to allow more spouses who find themselves wrongly holding the bag for their spouses' tax misbehavior, the IRS has eliminated the requirement and a claim for equitable relief be filed within two years of the first collection action. IRS Broadens Access to Equitable Relief for
Past Tax Tips Newsletters
Each month, CompleteTax sends out the informational Tax Tips Newsletter.
Read past Tax Tips Newsletters.