Who doesn’t love a good bonus? Whether it’s a performance-based reward, a holiday surprise, or a signing bonus, getting extra money on top of your salary always feels great. But before you plan how to spend it, you might notice something frustrating: your bonus check is smaller than you expected. So, what happened? Taxes happened. …
Finance/
Taxes
Federal Income Tax Brackets & Rates for 2025
Each year, the IRS adjusts federal income tax brackets to reflect inflation, ensuring that taxpayers aren’t unfairly pushed into higher tax brackets due to rising wages. The tax rates for 2025 follow the same progressive tax system, where different portions of income are taxed at different rates. Here’s what you need to know about the …
Moving between states can make tax season tricky. One common question is whether you must file taxes in two states after relocating. The answer depends on factors like where you earned income, how each state defines residency, and their specific tax laws. Many people feel overwhelmed by the idea of dual-state filing, worrying about double …
A tax refund occurs when the amount of taxes paid or withheld throughout the year exceeds the taxpayer’s total tax liability. This overpayment, whether due to payroll deductions, estimated payments, or refundable credits, is returned to the taxpayer by the IRS. Understanding the tax refund timeline is essential for effective financial planning. Knowing when to …
Claiming exempt status means no federal income tax is withheld from your paycheck. This option is available to employees who meet specific criteria and expect to owe no federal income tax for the year. While it can provide immediate financial relief, especially during times of hardship, it requires careful consideration to ensure compliance with tax …
MAGI, or Modified Adjusted Gross Income, is a key figure in tax and financial planning. It starts with your Adjusted Gross Income (AGI) and adjusts it by adding back specific deductions or exclusions. MAGI determines eligibility for tax benefits, healthcare subsidies, and other government programs. Understanding your MAGI helps you maximize tax savings and plan …
Receiving gift money from parents can be a generous way to support your goals, whether it’s funding education, buying a home, or simply saving for the future. However, many people wonder: do I owe taxes on the money my parents gave me? This question often arises due to widespread confusion about gift tax laws and …
An IRS transcript is a detailed record of a taxpayer’s account, showing all transactions, payments, and adjustments related to their tax return. These transcripts use transaction codes to summarize various account activities, such as payments, credits, or refunds. One such code, Code 766, often raises questions due to its impact on a taxpayer’s account balance. …
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