- NJ Mansion Tax: Who Pays It, How to Avoid It
New Jersey imposes a mansion tax on real estate transactions that exceed $1 million. This 1% levy applies to residential and certain commercial properties, adding a significant cost for high-value buyers. The tax is typically paid by the purchaser at closing, though exemptions and legal strategies may help reduce or eliminate the obligation. Buyers looking… read more…
- What Are Back Taxes? Meaning and Consequences
Back taxes refer to unpaid taxes that remain outstanding from previous years, either due to missed payments, underreporting of income or adjustments in tax filings after an audit. These unpaid balances can accrue penalties and interest over time, which may significantly increase the amount owed. Individuals or businesses with back taxes may face consequences from… read more…
- Tax Forms W-8 vs. W-9: Differences and When to Use
IRS forms W-8 and W-9 serve distinct purposes in the tax system and are used by different groups to fulfill their tax obligations. A W-8 form is typically required from non-U.S. individuals or businesses to certify their foreign status and can enable filers to claim full or partial exemption from certain U.S. withholding taxes. In… read more…
- What Is Form W-8BEN for Individuals?
The W-8BEN form is an IRS document required for non-U.S. individuals who receive interest, dividends or other income from U.S. sources. The form, also known as the Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting, enables nonresident aliens to confirm their foreign status to the tax collecting agency. It… read more…
- Itemized Deductions vs. Standard Deduction
Itemized deductions and the standard deduction are two options that taxpayers can choose when filing their tax returns. The choice affects how much taxable income is reduced, potentially influencing the amount of taxes owed. The standard deduction is a fixed dollar amount that varies based on factors like filing status, while itemized deductions allow for… read more…
- The Kiddie Tax: Rates, Limits and Rules for 2026
The kiddie tax is a set of tax rules designed to prevent parents from reducing their tax burden by shifting investment income to their children. It applies to children under the age of 18, or dependent full-time students under 24, who have unearned income from investments. The kiddie tax rate follows the parents’ marginal tax… read more…
- How to Fill Out Form W-8 BEN for Individuals
Foreign individuals use IRS Form W-8BEN to certify their non-U.S. status and claim benefits such as reduced withholding rates that may be available because of an income tax treaty. The form helps determine how much tax will be withheld on income from U.S. sources. To fill out a W-8BEN form, you’ll need basic information like… read more…
- How to Fill Out Form 8949 for the Sale of Capital Assets
Form 8949 is used to report the sale or exchange of capital assets, such as stocks, real estate, or cryptocurrencies to the IRS. It details the purchase and sale dates for each transaction, as well as the proceeds, cost basis and any adjustments. This information is then transferred to Schedule D, where gains or losses… read more…
- Nanny Tax: What It Is and How to Calculate It
Hiring a nanny can provide much-needed support for families, but it also comes with specific financial responsibilities. One of those responsibilities is the “nanny tax,” a federal requirement that applies to families who employ household workers, including nannies, caregivers and housekeepers. As of 2024, if you pay your household worker $2,700 or more in a… read more…
- What to Know About Form 8889 for HSAs
If you’ve made contributions to or taken distributions from a health savings account (HSA), the IRS requires you to report it on your yearly taxes. That’s where Form 8889 comes in. It details contributions, distributions and potential tax deductions so you can report all HSA-related activities to remain compliant as well as optimize your tax… read more…
- How to Report Foreign Gifts With Form 3520
The IRS has clear guidelines and specific thresholds that dictate when and how U.S. persons (citizens, resident aliens or domestic trusts) must report gifts from foreign entities. With penalties for non-compliance potentially reaching staggering amounts, understanding these rules is not just a matter of financial literacy but of fiscal responsibility. If you receive a gift… read more…
- How to Set Up a Payment Plan for Taxes You Owe
When an individual or business owes taxes to the Internal Revenue Service (IRS), settling the entire amount in a single payment may not be financially feasible. In such cases, a tax payment plan can offer a viable solution. This arrangement with the IRS allows taxpayers to pay their due taxes over an agreed period, easing… read more…
- How to Report a Backdoor Roth IRA With Form 8606
A backdoor Roth IRA typically offers high-income earners a workaround to contribute directly to a Roth IRA when their earnings are above IRS income limits. This strategy could allow you to take advantage of tax-free growth and withdrawals in retirement. Reporting a backdoor Roth IRA contribution on your taxes is relatively straightforward. But doing it… read more…
- Understanding Form 8606 for IRA Taxes
If you use an IRA to save for retirement, IRS Form 8606 might be an important part of tax season. Specifically, this is the form on which you report nondeductible contributions to an IRA. It is also used to track distributions for households that have made nondeductible contributions, early distributions from Roth IRAs, and conversions… read more…
- When and How to Report a 1031 Exchange on Your Tax Return
A 1031 exchange lets real estate investors defer capital gains taxes by selling one investment property and reinvesting the proceeds into another like-kind property. While this strategy can delay a significant tax bill, it doesn’t eliminate the tax obligation entirely. Investors must still follow IRS rules and deadlines carefully. Knowing how to report a 1031… read more…
- My Tax Preparer Made a Mistake: What Can I Do?
By law, you are responsible for your own tax return, even if you hire someone else to complete it. Therein lies one of the major contradictions at the heart of the personal filing system. While lawyers and accountants dedicate their careers to understanding the tax code, even they sometimes get it wrong. However, Congress and… read more…
- Important Tax Changes to Know Before You File in 2026
Tax rules rarely stay the same, with exemptions, deductions and thresholds often changing from year to year. This year is no exception, as several updates apply to 2025 taxes filed by April 2026. Before gathering documents and preparing your return, it’s important to review the current tax rules to ensure you remain compliant and take… read more…
- 2026 IRS Tax Changes: What You Need to Know
The new year brings new tax brackets, deductions and limits that will impact your 2026 federal income tax return. Changes to the IRS tax code affect taxpayers across income levels and will change how much you owe or your refund amount. For 2026, the agency has announced annual inflation adjustments, which could impact income tax… read more…
- Common Tax Breaks for Retirees
Imagine evenings spent on a sandy beach, weekends filled with family gatherings and afternoons engaged in hobbies. This could be your retirement life. However, if you’re not properly prepared for taxes, they may end up taking more than you planned for your fixed income. Luckily, the federal tax code comes to your aid with an… read more…
- How a Solo 401(k) Is Taxed and What Is Deductible?
Investing in a solo 401(k) is a common retirement savings plan for self-employed individuals or small business owners. Let’s break down how it works, gets taxed and what potential deductions you can take. As with all retirement plans, how much you can save will depend on your specific circumstances. Therefore, getting personalized advice from a… read more…
- MAGI vs. AGI: What’s the Difference?
Adjusted gross income (AGI) and modified adjusted gross income (MAGI) are two ways to calculate what your income might be for tax purposes. Both these figures directly influence your tax obligations, qualifying for certain tax benefits and deductions. Therefore, knowing when each applies can support your tax-saving strategies and inform financial decisions. Consulting with a… read more…
- Do You Pay Taxes on Dividends Reinvested?
Investing in dividend stocks can create a nice stream of passive income. Instead of receiving payouts as cash, you can also use dividends to increase your holdings by reinvesting them to purchase additional shares of stock. Among other benefits, reinvesting dividends can help you avoid brokerage fees. However, even when you don’t receive dividends as… read more…
- What Is Imputed Income?
Imputed income refers to the value of non-cash benefits or perks that an employee receives from their employer. These benefits, while not directly paid as wages, are considered a form of compensation and are subject to taxation. Understanding imputed income is crucial because it can significantly affect your taxable income for the year. For example,… read more…
- Can the IRS Take Money Out of Your Bank Account?
When someone owes back taxes, the Internal Revenue Service has a few tools at its disposal to compel the person to pay. Wage garnishments are one option; bank account levies are another. Can the IRS take money out of your bank account? Yes, and it’s perfectly legal for them to do so. Bank account levies… read more…
- Who’s Responsible for Paying Property Taxes When the Owner Dies?
When someone passes away, there can be plenty of questions over who gets what, especially if there’s a home in the mix. An often-overlooked question centers on who is responsible for paying property taxes when the owner dies. A delinquent… read more…