Taxation is essential for funding public services and infrastructure. However, compliance with tax regulations varies, leading to the practices of tax evasion and tax avoidance. These terms, often confused, represent two different behaviors. This article goes into the specifics of tax evasion and tax avoidance, illustrated with specific examples to clarify their differences and implications. […]
401(k) Options for the Self-Employed
As a self-employed individual, it might be easy to forget about putting money away for retirement. Unlike employees who might automatically enroll in a company-sponsored 401(k), self-employed professionals must proactively set up and manage their retirement plans. However, several 401(k) options are tailored specifically for the self-employed, offering some tax advantages and the opportunity to […]
I Amended My Tax Return – Now What?
If all goes well during tax season, you file your tax return, get a decent tax refund and wait to do it all again next year. But what happens if you file a return but then notice an error? Do you let it be or file an amended return? If there are simple math errors, […]
RMDs on Inherited IRAs
Inheriting a retirement account can be a significant financial event. However, it also comes with specific responsibilities, including the need to navigate the rules surrounding Required Minimum Distributions (RMDs). These mandatory withdrawals ensure that taxes are eventually paid on the funds accumulated in tax-advantaged accounts. Understanding how RMDs apply to inherited IRAs is essential for […]
Student Loans and Taxes: What Current Students & Graduates Need to Know
Understanding how student loans impact your taxes is crucial for both current students and graduates. Whether you’re still in school or have already crossed the stage, grasping the tax implications of your student loans can save you money and prevent potential headaches down the road. In this comprehensive guide, we’ll break down everything you need […]
Can I Do Someone Else’s Taxes If I’m Not a Professional?
Tax season often brings a mix of dread and determination as individuals and businesses prepare to file their returns. For those familiar with tax laws and confident in their abilities, the thought of helping someone else with their taxes might come up. But is it legal, advisable, or practical for a non-professional to handle another […]
Optima Newsletter – June 2024
Can the IRS Take My 401(k)? Owing back taxes is a stressful situation for many Americans. Therefore, understanding the potential consequences is crucial. One common concern is whether the IRS can seize your 401(k) retirement savings to satisfy unpaid tax liabilities. Here’s what you need to know about if the IRS can take your 401(k). […]
Tax Guide for Independent Contractors
Working as an independent contractor offers flexibility and autonomy, but it also brings unique tax responsibilities. Unlike traditional employees, independent contractors must handle their own tax obligations, which can be difficult without proper knowledge and preparation. This guide aims to provide a comprehensive overview of tax considerations and strategies for independent contractors. Understanding Your Tax […]
What To Do If You Receive IRS Notice CP523
Receiving a notice from the IRS can be a terrifying experience, especially when it pertains to something as serious as a missed payment on an installment agreement. One such notice is the IRS Notice CP523. Here’s a comprehensive guide on what it is, why you received it, and the steps you should take upon receiving […]
401(k) Loans and Withdrawals: How Do They Affect Taxes?
Although it is not recommended, sometimes borrowing from your 401(k) savings is necessary to cover unexpected expenses or hardships. When it comes to accessing funds from your 401(k) account before retirement age, you generally have two options. You can take out a loan or make a withdrawal. Each option has distinct characteristics and tax implications […]