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You have just received an inheritance. What do you do now? You could spend it on some extravagance, but you would be better off doing two things first: assessing the tax ramifications and thinking about some investment options.

"Death taxes" are somewhat misunderstood, as people can find the two types of death taxes confusing. Estate taxes apply to the front end of the wealth transfer process and are subtracted from the overall value of the estate. They only apply to huge estates and reduce the size of your inheritance upfront; you have no further tax obligation. The Tax Cuts and Jobs Act (TCJA) increased the estate tax lifetime exemption amounts to $11.58 million for single filers and $23.16 million for married couples filing jointly in tax year 2020.

Inheritance taxes, where they exist, apply to recipients. There are no federal inheritance tax...

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With businesses and individuals taking steps to return to normal living, there's a lot of pent up consumer demand to spend. The new term "revenge shopping" implies that consumers will be making up for lost time with a boom in products and experiences they couldn't purchase during the lockdown.

The National Retail Federation estimates that retail sales will increase between 6.5 to 8.2 percent this year over last year to a total of $4.4 trillion, exceeding the 4.4 percent average during the previous five years. Of those who plan to indulge in a few revenge purchases, the 2021 McKinsey consumer sentiment report found that around half of consumers admit to being pandemic-fatigued and intend to splurge on things like high-end fashion, beauty, and electronics.

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MoneyTips

You have just received an inheritance. What do you do now? You could spend it on some extravagance, but you would be better off doing two things first: assessing the tax ramifications and thinking about some investment options.

"Death taxes" are somewhat misunderstood, as people can find the two types of death taxes confusing. Estate taxes apply to the front end of the wealth transfer process and are subtracted from the overall value of the estate. They only apply to huge estates and reduce the size of your inheritance upfront; you have no further tax obligation. The Tax Cuts and Jobs Act (TCJA) increased the estate tax lifetime exemption amounts to $11.58 million for single filers and $23.16 million for married couples filing jointly in tax year 2020.

Inheritance taxes, where they exist, apply to recipients. There are no federal inheritance tax...

Best States to Die In... For Taxes

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Applying to one college is work. You’ll need to complete essays, transcripts, and pull together other documents just to complete one application. So applying to multiple schools is like a part-time job. While there’s no magic number, there is a ballpark amount of colleges you should consider applying to based on your needs and affordability. […]

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Few things are more frightening than opening your mailbox and finding a letter from the Internal Revenue Service. You may wrack your brain wondering what you've done to receive an IRS notice. But there’s no need to pretend it didn't arrive or go on the lam.

Relax. The IRS sends out millions of letters each year for a variety of reasons. An IRS letter does not necessarily carry bad news – and if it does, ignoring it is not going to make the situation any better. Take a deep breath, resist the urge to panic, and follow these tips to help you get past your initial shock.

1. Read the Letter Promptly – Putting off opening the letter won't help you, and delaying can even cause you harm. In many cases, the IRS is simply seeking more information or clarification of some aspect of your tax return, which makes it time-sensitive by definition.

2. Check for Incorrect Information – Review the notice for any errors such as a misspel...

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Chances are that if you have student loans, you need every bit of extra cash that you can get. Did you realize that your student loans might be able to generate some cash for you?

Under certain circumstances, you may be able to save on your tax bill by deducting the interest that you pay on your student loan. The total deduction from your taxable income could be as much as $2,500. As a final bonus, you do not have to itemize to claim this deduction.

To be eligible for the deduction, your loan must meet certain qualifications. It must have been made to cover qualified education expenses as defined in IRS Publication 970, including tuition, fees, and most room and board charges. The loan cannot have come from a relative or via a qualified employer plan, and the e...

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