Form W-4 and Employee Tax Withholding

This article deals first with Form W-4, Employee’s Withholding Certificate, and then gets into the specific types of taxes that are withheld in regards to employee wages, salaries, and tips. As usual, there’s the disclaimer that this article is not an exhaustive treatment of this subject. Specifically, this article primarily goes into the purpose of [...]

Who is an Employee as Defined by the IRS?

When people say the word “employment” they mean that they work for a living. That’s the colloquial definition. When people talk about their employer, they mean the person or company from which they derive income due to labor. However, these colloquialisms don’t necessarily correspond to the tax definition of what an employee is. This differentiation [...]

What is the self-employment tax and who pays it?

The self-employment tax seems to lend itself to an intuitive definition. What is the self-employment tax? It’s a tax on the self-employed. Who pays the self-employment tax? The self-employed pay, clearly. However, there’s more to this than meets the eye due to the nuance associated with the nexus of real life and arbitrary rules. This [...]

Innocent Spouse and Other Similar Tax Relief

So…your spouse or ex-spouse effed up on your joint tax return, either deliberately or accidentally. The IRS sends a letter to both you and your spouse or ex-spouse and is now requesting money from not only him/her, but you. How is this fair? You’re not the one that made the mistake or purposely misled them. [...]

The Basic Tax Implications of Bankruptcy

Bankruptcy is simple, the hard part comes later. But when you’ve hit the end of the road in terms of your debts and other liabilities, you really should declare bankruptcy. Refusing to do so is like refusing to throw up when you’ve had too much to drink, it only makes things worse. So declare bankruptcy; [...]

The Premium Tax Credit

The premium tax credit is available for those who sign up for the Healthcare.gov Marketplace otherwise known as Obamacare (the latter nomenclature may be somewhat pejorative, but that’s not really for me to decide). This credit therefore requires you to get insurance through the government sponsored exchange. It is only available under those circumstances. As [...]

How to Account for the Sale of Business Property on Your Tax Return

When you sell income producing property related to your business, like machinery or a moonwalk. You have to report that sale somewhere on your return. The result can be an ordinary gain or loss or a capital gain or loss. Unlike income generating property not used in a business, property used in an organized business [...]

Credits for Dependents – Children and Others

On the first page of your Form 1040 on the grid-like formatting under the personal information section is the area where you articulate your dependents. Within the last couple years, the tax benefit received for claiming dependents on your return has changed fundamentally. Let’s jump in so you can understand how these changes affect your [...]

Passive Activities and Their Accompanying Loss Limitations

This article deals with the nuts and bolts of passive activities and specifically the deductibility of their losses. This is a subject that should be important to people because more and more individuals have investments that qualify as passive activities, and as such could use an introduction into what they are, how their losses are [...]

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