5 Common Tax Misunderstandings that Could Cost You

Paying federal and state income taxes is a responsibility of all wage earners in the United States. While federal taxes are filed by people every year, the tax system is complex and there are many misunderstandings and misconceptions about the federal tax system. There are five misunderstandings in particular that could actually end up costing you.

Easy Tax Credits and Deductions that Help you Save Money

Tax season can be a stressful time. Many people dread it, and some people look forward to a refund. When doing your taxes, it is important to get all the tax breaks that you are entitled to. Therefore, you need to be aware of the tax deductions that are available to you. Here are some easy claims and tax credits and deductions that can help you save big time.

So You Want to be an Accountant? Consider These 5 Things First

Accounting isn't the most exciting career choice, but it is a steady job where there is ample jobs. Are you considering a career as an accountant? Here are a few tips that you may want to deliberate before joining the ranks of other certified public accountants.

Property Tax Myths and Misconceptions

Anyone who owns a home or building is required to pay property taxes each year, which can fluctuate over time due to several different factors. Property taxes are often added to the mortgage that is paid each month. Although most people pay property taxes, there are a few common myths and misconceptions that are easy to believe.

How to Grow Your Local Tax Practice

Growing a local tax practice takes a strategic marketing effort. You might be the best tax professional in your city. However, if prospective tax clients are not aware of your services, your business will not flourish. Although the tax preparation industry is competitive, it is possible for you to grow a thriving business in the face of the competition. Here are 5 marketing actions you can take to grow your local tax practice.

Is It Cheaper to Live in a State Without Income Tax?

Each year when you file your income tax returns, your attention understandably is focused on the total amount of money you paid in taxes. This often includes taxes paid to the federal government as well as to the state government. It is common for some individuals to pay 18 or 20 percent or more of their gross income in income taxes, and you understandably want to reduce this financial burden, if possible. This is such a tremendous sum of money that you may even be thinking about relocating to a state that does not have a state income tax to save money. While this may seem ideal at first, a closer look at this option can be revealing.

3 Common Misconceptions About Tax Season

Tax time brings with it everything from a great deal of tension and stress to a load of burning questions. We can't do anything about the tension and stress, but here are answer to 3 of the most frequently asked questions during tax time.

1. What happens if I don't file by the tax deadline?

If you miss the deadline, at most, the IRS will simply charge you one of two kinds of fees: failure to file or failure to pay fees. Since the failure to file fee is significantly higher than the failure to pay fee is, it's always a good idea to file, even if you can't pay.
If you fail to file, the IRS will charge you 5% of your unpaid taxes per month, while if you fail to pay they will only charge you 0.5 of 1% per month. If you only miss the deadline by a few days, there is very little - if any - penalty.

2. Will I pay less if my spouse and I file jointly or separately?

Before 2001, the standard deduction for a married couple filing jointly was less than what they would pay if they filed individually. This was sometimes referred to as a "marriage penalty." Today joint filers are allowed to claim exactly twice as much as they would each be able to claim individually. There are still significant advantages to filing either jointly or separately, however, depending on your situation.

Advantages of filing jointly:

If you are a married couple with a single wage earner, filing jointly gives you a double deduction

• Married couples are only eligible for certain tax credits such as earned income credits, lifetime learning credits, child and dependent care credit, American opportunity credits and deductions for adoption expenses. If you are married and choose to file separately you cannot claim these credits.
• You don't have to file jointly to claim a child tax credit but the $1,000 credit doesn't begin to phase out for joint filers until $110,000 in income, whereas it phases out at $55,000 for single filers

Advantages of filing separately:

• The IRS allows you to deduct medical expenses in excess of 10% of your income. If one person makes significantly more than the other person, it might be advantageous to file separately if the person with the lesser income also has large medical bills.
• By filing jointly, both parties are legally liable for any mistakes or misinformation on a tax return. If one spouse has a complicated tax return for any reason, it might be smart to file separately.

3. Do I have to file income taxes if I didn't make much money?

If you make less than the minimum income requirement for the tax year, you don't have to file. For 2016, if you were under 65, you need to file if you made more than $10,350 if you are a single filer and $20,700 if you are married and filing jointly. The limits are slightly higher for persons aged 65 and older. If you are married and filing singly, however, the minimum is $4,050 regardless of age.

William Doonan is a tax law and legal expert in New York.

Don’t Make These 5 Tax Mistakes This Year

With the tax deadline fast approaching, millions of Americans are gathering their receipts and looking for ways to maximize their refund. Unfortunately, a simple error can delay your refund or mean that you leave money on the table. The following are the most common tax-filing errors according to the IRS.

4 Steps to Avoid Complications During Tax Season

Tax season can be extremely stressful with the vast amounts of work that have to be done as a tax professional. At the same time, it can be extremely rewarding and a chance to show new clients what you're capable of. If you want to do your best this tax season, here are four things to avoid complications.