Generally, debt that is forgiven or canceled by a lender is considered taxable income by the IRS and must be included as income on your tax return. Examples include a debt for which you are personally liable such as mortgage debt, credit card debt, and in some instances, student loan debt.
Lending money to a cash-strapped friend or family member is a noble and generous offer that just might make a difference. But before you hand over the cash, you need to plan ahead to avoid tax complications down the road.
Let’s say you decide to loan $5,000 to your daughter who’s been out of work for over a year and is having difficulty keeping up with the mortgage payments on her condo. While you may be tempted to charge an interest rate of zero percent, you should resist the temptation. Here’s why.
Many tax benefits are available to help you pay higher education costs, whether for your children or yourself. Let’s take a look at what’s available and how you can take advantage of these benefits to ease the financial burden of paying for education. Continue reading
Income tax may be the last thing on your mind after a divorce or separation, but these events can have an impact on your taxes. Alimony and a name change are just two of the items you may need to consider. Here are some key tax tips to keep in mind if you get divorced or separated.
You should always keep a copy of your tax return for your records. You may need copies of your filed tax returns for many reasons. For example, they can help you prepare future tax returns. You’ll also need them if you have to amend a prior year tax return. You often need them when you apply for a loan to buy a home or to start a business. You may need them if you apply for student financial aid.
If you can’t find your copies, the IRS can provide a transcript of the tax information you need or a copy of your tax return. Here’s more information, including how to get your federal tax return information from the IRS.
You probably don’t get as many paper forms in the U.S. Mail as you used to. But when you do, do you draw conclusions about the business that sent them based on what their forms look like?
Whether or not you think you do, most people make judgements on businesses based on collateral materials. You might notice that there’s no company logo, or that there are unnecessary blank fields. Maybe the print is very light or blurry, and there’s no message at the bottom thanking you for your business and your payment.
How you present yourself on paper does matter. There’s a lot of competition out there, and you need to use all of the tools available to you to stand out. QuickBooks provides one way to do so with its simple forms customization features.
Whether you play the lottery, roll the dice, play cards, or bet on the ponies, all of your gambling winnings are taxable and must be reported on your tax return. If you gamble, these tax tips can help you at tax time next year: Here’s what you need to know about figuring gambling income and loss.