When it comes to working in people’s homes, the working arrangements are often casual and wages are paid out in cash. This grey area can lead to confusion for both parties, but determining if a nanny or an at-home caregiver is considered a household employee can make tax filing simpler for everyone involved. To learn more, see the full TurboTax article.
Having a side gig can help you make ends meet or build your rainy day fund. Income from freelance work, running your own small business or working at a second job brings in extra income without requiring you to quit your day job. But, like your main source of income, a second job or side gig must be reported on Form 1040 at tax time. To learn more, see the full TurboTax article.
The IRS treats a Pell grant as a scholarship, which means it’s possible that you’ll have to report the grant money on your tax return and maybe even pay income tax on the money. For details, see the complete TurboTax article.
With a 529 plan, you can stack up the books, not the debt. No matter how old your child is, it might be time to consider a qualified tuition program (QTP), also known as a 529 plan. For many families, such a plan offers a more convenient way to save money for college. To find out more, see the full TurboTax article.
Eligible colleges or other post-secondary institutions must send Form 1098-T to any student who paid “qualified educational expenses” in the preceding tax year. Qualified expenses include tuition, any fees that are required for enrollment, and course materials required for a student to be enrolled at or attend an eligible educational institution. To find out more, see the full TurboTax article.
Common lifestyle changes, like getting a job or getting married, can change your tax liability. To avoid being caught off guard by an unexpected tax bill or huge tax refund, you’ll need to adjust your withholdings on your paycheck. To find out more, see the full TurboTax article.
Careless mistakes at tax time can leave people paying more money to the IRS. Those mistakes are avoidable through awareness of and strict adherence to the tax rules, including deadlines. See the full TurboTax article to learn the five most common IRS penalties and how to avoid them.
Certain red flags in a tax return are sure to draw scrutiny by the IRS. Some are easy to sidestep. Others, can’t be helped. These include:
To find out more, read the full TurboTax article.
If you paid interest on a qualified student loan, you may be able to deduct some or even all of that interest on your federal income tax return. Student loan companies use IRS Form 1098-E to report how much you paid in interest. Borrowers get a copy of this form, and so does the IRS. To learn more about who sends it and what to do if you don’t receive one, see the full TurboTax article.
Most taxpayers who pay interest on student loans can take a tax deduction for the expense—and you can do this regardless of whether you itemize tax deductions on your return. The rules for claiming the deduction are the same whether the interest payments were required or voluntary. To learn more about claiming the deduction, see the full TurboTax article.
TurboTax can help you take advantage of tax breaks to ease the financial burden of sending kids to college, including tax credits, tuition deductions, tax-free savings and more. To learn more about what is available and who is eligible, see the full TurboTax article.
The earlier you begin socking away savings, the much better off you’ll be in your “golden years.” By using some tax tips, you can end up paying little or no taxes after you retire. To learn more, see the full TurboTax article.
The chance to be creative—and the opportunity to be your own boss—makes working as a musician exciting. Launching and maintaining your music business usually involves paying some basic business expenses, and you can deduct these on your tax return. See the full TurboTax article for some of the top business deductions and expenses for self-employed musicians, as well as some tips to guide you through filing your tax return.
Even if your current retirement income plan doesn’t provide maximum tax benefits, you can still restructure your payment strategies to optimize your tax results. For money-saving details, see the full TurboTax article.
The federal government offers two tax credits that reduce your tax bill on a dollar-for-dollar basis for your school-related expenses—the American Opportunity credit and the Lifetime Learning credit. To find out more, see the full TurboTax article.