Archives for March 2011

If you are a business owner, it is extremely important that you know the difference between employees and independent contractors, especially when it comes to taxes.  For employees, you must withhold income taxes and Social Security/Medicare taxes, as well as pay unemployment tax on their wages.  Conversely, you do not have to withhold or pay any of these taxes for contractors.  Misclassification could result in fines and penalties from the IRS, as well as having to pay the required taxes plus … [Read more...]

If you like to gamble, whether periodically just for fun or regularly as a way to supplement your income, you’ll want to know that there are different guidelines for amateurs and professionals.  In addition, the IRS has issued updated guidelines pertaining to gambling winnings. If you are an amateur gambler who only gambles periodically and you end up losing more money than you win, you do not get that extra amount back on your taxes.  You are only allowed to deduct your gambling losses up to … [Read more...]

In order to understand the difference between refundable and non-refundable tax credits, you must first understand what exactly a tax credit is.  A tax credit reduces the amount of tax you must pay, so if you owe $3,000 and receive a $1,000 tax credit, you now only owe $2,000 in taxes.  Here’s where the difference between these two types of tax credits becomes significant.  Once a refundable tax credit brings your total tax liability to zero, you will receive a refund of the additional amount … [Read more...]