Losing your job is a stressful time, but don’t bury your head in the sand. You need to get moving, not only to find another job, but to make sure your family is provided for and your obligations are paid. You may be tempted to draw on your retirement savings, but that can have severe tax consequences as well as reducing the stability of your future. Here are some common retirement-related tax questions that people ask after losing a job.

Are there penalties for withdrawing from IRAs or qualified retirement plans?

The tax benefits of IRAs and qualified retirement plans rely on the fact that you will not use the money until you reach retirement age, defined as 59½ by the IRS. Read more »

If you work overseas but have US citizenship, you may have questioned whether or not you need to pay US federal taxes and file an income tax return.

The answer: Yes.

If you are a US citizen who is working overseas, you will still need to file a federal tax return and pay taxes just as any US citizen living and working in the United States does.

Here is a look at some of the basics that you will need to know when preparing and filing your tax return while living and working outside of the US:
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The risks for IRS audits have been increasing steadily across all income levels, although the wealthiest Americans face the greatest risk increase for an income tax audit according to data released by the IRS.  Another interesting trend seen in the data is that non-profits and small corporations are being audited more and more frequently over the last 10 years.

Some people believe politics plays a role in the reason wealthier taxpayers are audited more frequently. Others believe that the wealthy are being targeted more simply because if a wealthy individual is audited and made mistakes on their tax return, the IRS stands to gain more per man hour worked.   Read more »

When tax time is looming, Benjamin Franklin’s famous quote about death and taxes is often mentioned. His “Nothing is certain except death and taxes” quote is one of the most enduring quotations from the inventor, politician, writer and founding father.

However, few people really understand why the words were uttered and under what circumstances.

The French Letter

The quote, as it happens, was not uttered in English. It was written by Franklin in French in November of 1789, in a letter to Jean-Baptiste Leroy, a French scientist. Franklin, fluent in French, had once been the U.S. Ambassador to France.
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There are many ways through which the elderly can reduce their income taxes. Approximately 13% of the U.S. population is over the age of 65, and a large percentage of seniors are on fixed incomes. Reducing tax liability is necessary for many individuals, as senior income doesn’t usually increase when living expenses increase.

Here are a number of tax credits and deductions that an elderly person is likely to qualify for:

Tax Deductions and Tax Credits Specific to Senior Citizens

The following credits and deductions are available for senior citizens to help reduce their tax liability:

Increased Standard Deductions

If you are a senior over the age of 65 and do not itemize tax deductions, you can increase your standard deduction by an additional $1,150 or $1,450 (for 2011 and 2012) depending on your filing status.
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Everyone is concerned about identity theft, and tax time can be of particular concern. Identity theft begins when someone gains access to your personal information – most often a Social Security number – and uses it for his or her own gain. The information may be used to get a job or to file for a tax refund, which can result in a destroyed credit rating, a mountain of undeserved debt and even legal troubles.

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Making decisions concerning your retirement account is not always an easy task because what works for one person may not be the best choice for the next.

When it comes to choosing between a Roth IRA and a 401(k) account for your retirement savings, the primary concerns involved in the decision are when you expect to pay out the taxes on any contributions, and which accounts you are eligible to contribute to.
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That’s right, we’re giving away copies of TurboTax Deluxe Edition 2011 (valued at $69.95) to two lucky Facebook fans!

How to Enter

Entering is simple. All you have to do is go to the BTH Tax Blog Facebook page and click the “Like” button by February 29th.

Contest Rules

• Anyone can enter between the dates of 2/1 – 2/29
• 2 grand prize winners will receive copies of TurboTax Deluxe Edition 2011 (includes free e-filing for both Federal and State tax returns)
• You must “Like” us from your personal Facebook page. Business fan pages are not eligible.
• Winners will be announced on the BTH Tax Blog Facebook page on March 1, 2012

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This tax season, you may want to do what millions of people do and hire a tax preparer to help you file your income tax return. To choose the best professional to help you with your specific tax needs, there are several criteria that you should consider. When making this important decision, be sure to take the following factors into account:

Tax Preparation Experience

To ensure that you receive the proper assistance, never enlist a non-accountant friend to help. You need a qualified tax professional to help you avoid any costly mistakes on your return. Read more »

Because taxes can significantly impact the economy by changing the cash flow available to both individuals and businesses, a presidential candidate’s view on taxes has become an increasingly hot topic during the past several election seasons.

Each presidential candidate’s view on tax policy is different. Some candidates weigh heavily on the standpoint that tax money should be used to stimulate the economy, while others believe that taxes should be severely cut in order to stimulate the economy. Taking a look at the history of how the candidates voted on taxes – as well as the stances that they have taken – can give us a good idea as to how they’ll handle taxes if elected into office.
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