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May I start by saying that tax laws, or for that matter any laws, do not necessarily follow rational or economic discourses but rather reflections of the desires of those who have the Power? Who are those? Congress folks, lobbyers, and instruments of distortion which create certain cultural perceptions that end up in the tax codes. By tools of distortion I mean the media including Hollywood. If the media program the citizens for certain good or ill, the allocation of economic resources may adhere to that programming including provision of the tax code.
When the government wants to do mischief, they can easily afford it. Once upon a time when you prepared your taxes, you added your income, subtracted your expenses according to the law, again I repeat, according to the law, and then you found your net taxable income. You paid .
Medical expenses, property taxes and interest, church contributions are deductible as itemized deductions. Sometimes you may have some of these deductions and, your CPA or tax attorney may say that you cannot deduct those. “I cannot?” you inquire in disbelief. “ What are you talking about?” you protest. Maybe this guy does not know what he is doing. You walk away and go somewhere else. But the reality is that your CPA may have been right after all. That leads to talking about the standard deductions vs. itemized deduction.
Generally speaking if you have a debt cancellation you can expect income. So if you don’t pay your credit card debt, the credit card company will send you a 1099 for the amount of debt cancelled as though it is income you have earned. That income must be included in your tax for the year. The same thing occurred with mortgage cancellation of debt until pressure came from taxpayers years ago and congress responded by giving reprieve to mortgage cancellation of debts. But like everything else given by the government, you are extracting skin over a bone. It is painfully given. In other words there will be strings attached. Strings or no strings the change was a very welcome.
IRS Holy Ten of Capital Gain and Losses
We pay taxes. The government collects money and we have problems. Why? You would think that we would collect some money and then spend what we have on what we deem necessary. We may want a lot of things but we may have limited money. So we only spend on what we should spend on to avoid borrowing money. Much like any rational human being. But the underlying assumption is rationality…and that is a big assumption.
Sojourning with the IRS now we want to talk about Education Credit and deductions. A brief note about deduction and credit is in order. Credit is a reduction of taxes dollar for dollar. So if you owe one hundred dollars and you have eighty dollars credit, it would be subtracted from the one hundred leaving you with only twenty dollars of tax debt. Deduction, however, does not give you as great a benefit as credit. Deduction for example may reduce the income and then the tax will be a percentage of that income. So a deduction benefits you percentage wise of the tax owed, not the full tax as the credit.
People generally think of the amount of taxes we pay that will be different from one filing status to another which is correct. The filing status can also affect the tax benefits such as credits you may get, for example, if you have a child and you file as head of household.
The following is a summary for business tax return updates and announcements as well as for individuals. Those that can benefit from this post are not for our usual readers who are in need of tax help. Instead, this post offers tax help for those who are in compliance and have already filed their taxes. This post essentially helps taxpayers at the complete other end of our spectrum of readers. If you have filed any of the described returns before the dates mentioned below contact your tax preparer for tax help.
Just because you don't have your W-2 does not mean you shouldn't file. Doesn't mean you shouldn't delay filing either (unless of course delaying through an extension). As obvious as that may sound it's what many taxpayers do when in this situation. Surprisingly, many people find themselves with tax problems beccause of not filing their taxes due to not having all the information they need to prepare the taxes. The IRS doesn't care if you have all of your data to file their taxes. They want tax returns submitted to determine if money is owed to them. In fact, the IRS will submit returns on your behalf if they don't receive one from you. This is a common reason for back taxes to be owed. Below are a few options that can solve the problem of missing a W-2 (or any tax form for that matter).
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