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Taxes

Pay Taxes on Court-Awarded Damages?

by Luke Landes

If you are involved in a lawsuit and awarded damages, the IRS may require you to pay taxes on the funds you receive. It depends on whether the money can be considered income. If the damages are awarded to compensate you for financial losses, the money theoretically makes you whole. Therefore, no taxes are due. ... Continue reading this article…

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I Owe New Jersey $26

by Luke Landes

I received a notice and bill today from the New Jersey Division of Taxation for $26.11. Since my income in 2006 was higher than I expected and I didn’t adjust my state withholding from my day job (only federal), I owe for back interest that would have been collected on my neglected estimated payments throughout ... Continue reading this article…

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Seven Home Equity Tips, Part 5: Get the Tax Deduction

by Luke Landes

The interest on a home equity loan or line of credit can be tax deductible, which many people find to be a strong positive point to taking advantage of these products. Tax deduction on interest doesn’t beat paying no interest at all, but if that’s not a possibility, this is a good alternative. There are ... Continue reading this article…

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Souvenir Tax Bill: Lucky Fan May Owe $210,000

by Luke Landes

If you haven’t been living in a hole and have any interest in sports, you may have heard that Barry Bonds surpassed Hank Aaron’s record and hit his 756th home run the other day. With all the footage from a plethora of angles of Bonds breaking the record, the news also showed a man in ... Continue reading this article…

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Keogh Plan Account Holders May Be In Trouble

by Luke Landes

It pays to pay attention to letters from your banks and brokerages. If you don’t you could end up owing money to the government. The Keogh Plan is a popular alternative to a traditional pension for individuals who are self-employed. It’s a tax-deferred retirement plan in which contributions are tax-deductible and mandatory distributions begin at ... Continue reading this article…

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Tax Warning

by Luke Landes

Here’s a tax warning. If you are able to negotiate forgiveness of a portion or complete debt, the amount forgiven can be considered income, and you’ll owe income taxes. [MSN]

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Congress: Tax Preparers Must Police Their Clients

by Luke Landes

Thanks to a new law signed in May, tax preparers, whether certified public accountants, lawyers, or your local H&R Block, can be assessed strong penalties for filing returns with “questionable or aggressive tax items” on behalf of their clients. This new regulation will go into effect for 2007 tax returns. The Wall Street Journal says ... Continue reading this article…

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Sold My ESPP Shares, Nice Profit, More Tax Owed

by Luke Landes

At the beginning of the year, I started participating in my company’s newly-offered employee stock purchase plan, which gives us the opportunity to automatically deduct up to 10 percent of our paychecks and defer that money for use at the end of the quarter. At that time, we are able to purchase stock at a 15 percent ... Continue reading this article…

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IRS Gives Storm Victims Additional 48 Hours

by Luke Landes

If you’re scrambling to submit your tax return and you’ve been affected by the recent bad weather, the IRS has granted you two extra days to file. I’ll just repost the full press release. It gets the point across, is straightforward, and has all the information needed. WASHINGTON. Victims of the major storm affecting several ... Continue reading this article…

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When The IRS Sends the Wrong Refund

by Luke Landes

Several years ago, I was expecting a tax refund from the IRS of about $900. When I received the check — this was before direct deposit was available — it was for significantly less money, about $600. They included a note indicating I miscalculated one of the lines on my 1040 and provided the correct ... Continue reading this article…

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TurboTax Fixed a Security Leak

by Luke Landes

This year, rather than going to a tax professional as I originally planned, I rolled my own return by using TurboTax Online. Apparently, there was a security leak last week. One woman was able to view tax returns from two other people with the same last night, presumably by tweaking a URL and guessing the ... Continue reading this article…

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10 Ways to Spend Your Tax Refund for Fun

by Luke Landes

Most people will be receiving a tax refund this year, and many people I know have received theirs already. There are two reasons people would receive a tax refund: either they’re not minimizing their withholding throughout the year and missing out on interest or investment returns they could earn, or they deliberately overpay for the ... Continue reading this article…

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Tax Freedom Day

by Luke Landes

If you were to designate all of your income to your taxes (federal, state, and local) starting with January 1, New Jersey residents would have to keep doing so until May 10, a good ten days after the national average. MSN Money has an article including a table with the Tax Freedom Days for each ... Continue reading this article…

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Income Taxes: Done and Over With

by Luke Landes

I decided to bite the bullet and do my income tax return without any professional assistance. I was originally considering working with a tax accountant due to the increased income from my side business. As it turns out, it wasn’t as complicated as I thought it would be. I’m pretty sure I was able to ... Continue reading this article…

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H&R Block Opens Virtual Tax Office

by Luke Landes

First, Reuters opened a news bureau in Second Life, a virtual reality game that people connect to through the internet to live out fantasy lives in the comfort of their own desk chairs. Now, while Congress is still trying to determine how to tax income in virtual worlds, H&R Block is joining the Land of ... Continue reading this article…

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Millions in Taxes Overpaid, Millions in Taxes Uncollected

by Luke Landes

It’s always interesting to see stories in the media that seem to conflict with each other. Here is a case of conflicting messages, although both viewpoints may be true to an extent. First of all, CBS reports that Americans pay too much to the IRS in the form of taxes. This happens mainly because people ... Continue reading this article…

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New Jersey Property Tax Rebate Increasing for Renters

by Luke Landes

As a renter, over the last few years I’ve been receiving $75 tax rebates, usually by surprise, months after filing taxes. On the governor’s budget plan, the rebate for renters will increase up to $350. Low income renters will see this biggest increase, while those earning between $50,001 and $100,000 like myself will get an ... Continue reading this article…

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How Much Do You Pay in Taxes?

by Luke Landes

We talk about tax brackets for income taxes ranging from 10 percent to 35 percent, but when all payments to the government are taken into account, we pay significantly more. Research by Laurence J. Kotlikoff and David Rapson in a paper called Does it Pay, at the Margin, to Work and Save [PDF] shows that most people ... Continue reading this article…

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National Tax Advice Day 2007

by Luke Landes

Tomorrow, January 11, 2007, is H&R Block’s National Tax Advice Day. This “holiday” occurs right before the IRS begins accepting completed tax forms, to build awareness of of H&R Block’s products and services. The company has established a website for taxpayers to access free tools and generalized advice. There have been improvements since last year. ... Continue reading this article…

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Repealing the Alternative Minimum Tax (AMT)

by Luke Landes

The Alternative Minimum Tax (AMT) is a rule that was established in the United States tax code to make sure rich people don’t take advantage of loopholes to the point where they owe no tax to the government. The minimum income required to qualify for the AMT was never adjusted for inflation, so over time, ... Continue reading this article…

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