- Refundable Tax Credit: Explanation, Eligibility, Benefits
Tax credits reduce the amount you owe to the IRS, but not all tax credits work the same way. A refundable tax credit can reduce your tax liability below zero. This means you could receive a refund even if you owe nothing in taxes. For eligible taxpayers, this can result in extra money back at… read more…
- What Is Earned Income? Examples and How to Calculate
When it comes to taxes and financial planning, you need to know the IRS has different rules for different types of income. Earned income, the money you make from working, affects everything from how much taxes you pay to whether you qualify for certain deductions or credits. Whether you’re earning a paycheck from an employer,… read more…
- Nonrefundable Tax Credit: Definition, Types, Examples
A nonrefundable tax credit can lower what you owe to the IRS, sometimes substantially but only to a point. Unlike refundable credits, nonrefundable credits cannot generate a refund if the credit amount exceeds your tax liability. That means if your total tax due is zero, the credit cannot push you into a negative balance and… read more…
- 2025 Corporate Tax Rates and Brackets By State
Corporate income taxes vary widely across the U.S. Some states impose flat rates, while others apply graduated brackets based on taxable income, and a few have no corporate tax at all. The variation in corporate tax rate per state is significant enough that it can influence where businesses choose to operate, expand or incorporate. As… read more…
- Inc. vs. LLC: Key Differences, Pros and Cons for Taxes
Choosing between a corporation (Inc.) and a limited liability company (LLC) affects how your business is taxed, how profits are shared and how much paperwork you need. While both LLCs and corporations can elect corporate tax treatment, corporations are structured by default as separate tax entities, which can make it easier to retain earnings (reinvest… read more…
- What Is Withholding Tax and How Is It Calculated?
You’ve likely noticed the IRS withholds a portion of your paycheck before it ever reaches your bank account. This is due to withholding tax, a system the IRS uses to collect income tax throughout the year. Whether you’re an employee trying to fine-tune your paycheck or a business owner handling payroll, you should know how… read more…
- The IRS Isn’t Answering. Now What?
What should you do if you need help with your taxes? After a busy filing season, many households are trying to manage a difficult question. What happens if April 15 comes and goes, and you still have unanswered questions about your taxes? It’s a relevant question. About one-third of all taxpayers wait until the last… read more…
- How to Minimize or Avoid Taxes on Your Venmo Transactions
Whether you are splitting a bill or selling handmade goods, the IRS may expect you to report certain payments. This is especially the case for business-related transactions. If you are using Venmo regularly, it is important to know when taxes apply, as well as how to minimize or avoid Venmo taxes. With recent updates to… read more…
- ISOs vs. NSOs: How Are They Taxed Differently?
When comparing ISOs vs. NSOs, the biggest differences come down to how each is taxed and who can receive them. Employees often receive incentive stock options (ISOs), which can receive preferential tax treatment when specific holding periods are satisfied. Non-statutory stock options (NSOs), on the other hand, trigger ordinary income tax at exercise. Understanding these… read more…
- 5 Ways Billionaires Avoid Taxes: Strategies and Examples
Billionaires often avoid taxes using legal frameworks, advanced planning, and strategic investments. While their strategies can be complex, some of the same tactics are available—and legal—for everyday taxpayers, just on a smaller scale. From investing in real estate to borrowing against their assets, these methods may offer insight into effective tax management. Here’s a closer… read more…
- Self-Employed vs. Business Owner: Tax Differences
While the terms “self-employed” and “business owner” are often used interchangeably, the IRS views them differently. Self-employed individuals typically work alone and report earnings on their personal tax returns. Business owners may operate a more structured entity, possibly with employees, and may file separate business tax returns. Each structure comes with unique tax implications, including… read more…
- 6 Tax Benefits of Having a Child: Credits and More
The IRS offers a number of tax benefits that support families. These opportunities can help you keep more of your income and plan more effectively for your family’s future. But the rules can be nuanced. Eligibility may depend on your income level, filing status and the age of your child. A financial advisor can help… read more…
- What Are Pre-Tax Benefits and Deductions?
When evaluating a job offer, salary isn’t the only factor to consider. Pre-tax benefits can have a big impact on your take-home pay and overall financial health. You can save money for specific expenses before taxes, lowering your taxable income and the amount of income tax you owe to increase your spendable earnings. If you’re… read more…
- Tax-Exempt Interest Income Examples
Certain investments, such as municipal bonds, can generate interest that is exempt from federal, and sometimes even state and local, income taxes. This makes them especially appealing to high-income earners, retirees and those looking to build a more tax-efficient portfolio. However, not all interest income qualifies. Knowing which sources are truly tax-exempt can help you… read more…
- LLC vs. Corporation: How to Decide for Your Business
Choosing between an LLC and a corporation can affect how you pay taxes, raise money, handle paperwork and manage your liability. Both offer limited liability, but they differ in flexibility, tax rules and how they operate. Your choice should match both your current business needs and your long-term plans. A financial advisor can help you… read more…
- New Jersey vs. New York: Which Is Better for Taxes?
Comparing New Jersey vs. New York taxes highlights differences in how income, property and sales taxes affect residents on both sides of the Hudson River. New York typically imposes higher income tax rates, especially on high earners, while New Jersey’s property taxes rank among the highest in the country. Sales tax rates are also different,… read more…
- California vs. Florida: Which Is Better for Taxes?
When comparing California vs. Florida for taxes, the absence of a state income tax in Florida often draws attention. However, this doesn’t mean Florida offers a lighter tax burden across the board. Many low- and middle-income families pay similar or even higher overall tax rates in Florida than in California. This is in large part… read more…
- Standard Mileage Deduction: Requirements, Rate and Examples
If you use your personal vehicle for business or other specific needs, you may be eligible to claim the standard mileage deduction on your federal tax return. This deduction allows taxpayers to write off vehicle-related expenses based on the number of miles driven, using IRS-approved rates. The standard mileage deduction can significantly reduce your taxable… read more…
- Section 83(b) Election for Stock Options: Deadline, Examples
An 83(b) election lets individuals who receive restricted stock or stock options pay taxes on the value at the time of grant, rather than when the shares vest. This election is only available within 30 days of receiving the stock and can affect the amount and timing of taxes owed. Understanding how the 83(b) election… read more…
- Form 8396: How to Claim Mortgage Interest Credit
Form 8396 is used to claim the mortgage interest credit. This is a nonrefundable federal tax credit available to certain homeowners who receive a mortgage credit certificate (MCC) through a state or local housing agency. The credit is designed to make homeownership more affordable for low- and moderate-income individuals by allowing a portion of the… read more…
- Form 8283: How to File for Noncash Charitable Contributions
When you donate noncash items—such as artwork, vehicles, clothing or other property to a qualified charitable organization, you must report those contributions using Form 8283: Noncash Charitable Contributions if the total value exceeds $500. This form helps document the nature of the donation, how the value was determined and whether an appraisal was conducted. While… read more…
- Puerto Rico Tax Benefits for Americans: What to Know
As a U.S. territory, Puerto Rico can offer tax incentives not available on the mainland. This status allows it to offer tax incentives for individuals and businesses that aren’t available on the mainland. The island’s tax advantages are primarily governed by Acts 20 and 22. These regulations aim to stimulate economic growth by attracting new… read more…
- What to Buy Before and After Trump Tariffs Go Into Effect
President Donald Trump is forging ahead in his second term with an ambitious and controversial plan to remake global trade through tariffs. This raises an important question for consumers: what to buy before the full effects of these tariffs take effect? Consumers may consider purchasing imported cars, electronics or household items now before the full… read more…
- What Is the Federal Corporate Income Tax Rate?
The federal corporate income tax rate in the U.S. is a flat 21% as of 2025. This rate applies to corporate profits and affects how much income a company keeps after taxes. In addition to the federal rate, businesses may also face state corporate taxes, which vary by state and increase the total tax cost.… read more…
- Tax-Exempt Interest on Form 1040: How to Report and Examples
Reporting tax-exempt interest on Form 1040 is required even though the interest is not taxed. This type of income often comes from municipal bonds and must be listed on your tax return to follow IRS rules. A financial advisor can help you track and report this income correctly as part of your overall tax strategy.… read more…