Tax Offset
A tax offset happens when the government uses a tax refund to pay off certain debts you owe. It's an important concept to understand to avoid surprises when you file your taxes.
Nonrefundable Tax Credit
A nonrefundable tax credit can reduce your tax liability, but unlike a refundable credit, you won't get any of it back as a refund if it exceeds what you owe. It’s an important tool for lowering your overall tax burden.
Refundable Tax Credit
A refundable tax credit is a special type of tax break that can give you money back, even if it reduces your tax bill to zero. It's a helpful way the government can give financial assistance to taxpayers.
Self-Employment Tax Deduction
The self-employment tax deduction allows self-employed individuals to deduct half of their self-employment tax, reducing their overall tax burden. This deduction helps level the playing field with traditionally employed taxpayers who don't pay the full self-employment tax.
Statutory Notice of Deficiency
A Statutory Notice of Deficiency, often called a "90-day letter," is a formal IRS notice that proposes changes to your tax return, meaning they believe you owe more taxes. This notice is a key step in the tax dispute process.
Tax Credit
A tax credit is a direct reduction of your tax liability, meaning it lowers the amount of tax you owe dollar-for-dollar. It’s a valuable tool to help taxpayers save money.
Tax Deduction
A tax deduction is an expense that you can subtract from your gross income to lower your taxable income, ultimately reducing the amount of taxes you owe. They're a key way to lower your tax bill.
Tax Extension
A tax extension gives you more time to file your tax return, but it doesn't give you more time to pay any taxes you owe. Understanding tax extensions is crucial for avoiding penalties.
Tax Forgiveness for the Deceased
"Tax Forgiveness for the Deceased" refers to the tax implications that arise when someone passes away, including whether their tax debt is forgiven or how their estate is handled. Understanding this area can help you navigate a difficult time with clarity.
Tax Garnishment
A tax garnishment is when the IRS or a state tax agency takes money directly from your paycheck or other income to pay off overdue taxes. It’s a serious matter that can affect your finances, but understanding it can help you avoid it.