Tax Avoidance – Legal Way to Limit Taxes

Tax Avoidance: Legal Strategies to Limit Taxes Tax avoidance involves using strategies and techniques that are within the bounds of the law to reduce the amount of tax you owe. Unlike tax evasion, which is illegal and involves intentionally not paying taxes that you owe, tax avoidance is a legitimate …

Qualifying Relative Definition and IRS Guidelines

Qualifying Relative Definition A qualifying relative is a person who meets certain criteria set by the IRS. These criteria include: Relationship: The person must be related to you in one of the following ways: child, stepchild, foster child, sibling, parent, grandparent, grandchild, aunt, uncle, niece, or nephew. They can also …

Homestead Exemption Definition and How It Works With State List

What is Homestead Exemption? The main purpose of the homestead exemption is to protect homeowners from excessive property taxes and potential foreclosure. By reducing the taxable value of their property, homeowners can lower their overall tax liability and potentially save a significant amount of money each year. There are several …

Gross-Income Test: Understanding the Meaning and Mechanics

What is the Gross-Income Test? The Gross-Income Test is a method used by the Internal Revenue Service (IRS) to determine if an individual or household is eligible for certain deductions and credits on their tax return. It is an important tool in calculating taxable income and ensuring that taxpayers receive …

Form 1045 Application for Tentative Refund What it is

What is Form 1045 Application for Tentative Refund? Form 1045 Application for Tentative Refund is a tax form used by individuals and businesses to claim a refund of overpaid taxes or to carry back a net operating loss (NOL) to a previous tax year. It is filed with the Internal …

Exemption Types and FAQs: How They Work

Exemption Types and FAQs: How They Work What are exemptions? Exemptions are deductions that reduce taxable income. They can be claimed for various reasons, such as having dependents, being blind or disabled, or incurring certain expenses. What are the different types of exemptions? There are two main types of exemptions: …