Taxes
The traditional individual tax filing season ended two months ago (those of us on extension still have a few months to go), but the IRS is still in the news. Most notably, the Senate has confirmed Billy Long as the new commissioner of the IRS (you can read more about that in a bit as part of our Deeper Dive below). How Long’s tenure might impact the future of the IRS and tax administration is still a question, but far from the only one. Still to be determined? What the tax picture might look like during the next filing season…
Gross income definitionGross income is the total amount of money you earn — such as your wages from a job or profits you might make from selling a stock — before taxes. Business and retirement income, tips, rents and any interest earned are all considered income by the IRS. You may need to know your gross income if you want to apply for a loan or an apartment. Your gross income is also the starting basis for calculating how much you owe in federal taxes.How to calculate gross incomeTo figure out what your gross income is, simply add up all…
There are two main categories of work in the eyes of the IRS — 1099 contractors and W-2 employees. These two types of work involve different tax forms and come with different tax obligations for employers and workers. Generally speaking, W-2 employees have taxes withheld from their paychecks by their employer, while 1099 contractors are responsible for paying taxes on their ownThe difference between 1099 work and W-2 work also depends on the nature of the employment relationship — and there are strict rules about which kinds of workers can be given each classification. Here’s what to know.1099 workers get that…
Understanding how much you may owe in taxes means keeping track of a lot of different numbers and terms. One of the most important numbers is taxable income: the amount of money on which you have to pay income tax.Here’s what to know about taxable income, how to calculate it and some basic strategies for reducing it.According to the IRS, most income is taxable unless it is tax-exempt by law. Taxable income can take the form of earned income, such as wages and salaries, as well as unearned income, such as profits from the sale of investments or property.Some common…