Legal Articles

W-4: What It Is, Who They’re For, & How To Fill It Out



They sound and look complicated, but they’re not that bad, I promise. A W-4 is a tax form used by employers to withhold the correct amount of taxes from your paychecks. If you don’t fill out this form, or don’t fill it out correctly, you may end up having to pay additional taxes when you […]

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W-9s: What It Is, Who They’re For, & How To Fill It Out



A W-9 is an Internal Revenue Service (IRS) tax form. If you’re on the receiving end of a W-9, rest assured that it’s just for verification purposes. In order for the company that’s paying you to issue you a 1099 and pay their own taxes, they need to first verify your TIN (or your Taxpayer […]

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Who Needs to Pay the Self Employment Tax?



For self-employed people, tax season can bring plenty of headaches and confusion. While taxes are usually not welcomed by most people, filing federal taxes presents very special challenges for those who are self-employed. These challenges arise because whereas most people have their payroll taxes deducted with each pay check by their employers, self-employed people enjoy […]

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How to Avoid Double Taxation with Form 2553



For entrepreneurs who are incorporating their business, taxation will likely be a major issue. While many business owners may not have heard of IRS Form 2553, this form could be the key business owners need to avoid double taxation. In some instances, a corporation effectively gets taxed twice, once on its profits and again on […]

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How Do I File Income Taxes for Selling on eBay?



If you regularly sell items on eBay, you might be confused about your tax obligations. Although such activity is undoubtedly commercial in nature, you might not know how you're required to categorize the earnings that it produces. Before you file your taxes, you should talk to a seasoned tax professional to determine how best to […]

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Can the IRS Seize Money from a Life Insurance Policy After It’s Paid to the Beneficiary?



If you're named as the beneficiary on a life insurance policy, chances are good that you're anticipating a substantial windfall. The average life insurance policy's death benefit exceeds $100,000 by a substantial margin. Although it's likely that you have debts and obligations that might prevent you from spending the bulk of your benefit, it's virtually […]

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What Is the Purpose of an EEGTL Tax?



If you've recently scrutinized your paycheck, you may have noticed a novel type of payroll tax: the so-called "EEGTL tax." If you're hit with this tax during a given pay period, you'll see a notation on your full pay stub. Depending upon the formatting of your paycheck, the EEGTL line will probably appear just below […]

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Is there Any Way That I Can Write Off My Life Insurance Payments on My Taxes?



If you're like most life insurance policyholders, you're committed to ensuring that your family remains comfortable and solvent after your death. Whether your life insurance policy is structured as a temporary "term" plan or a permanent "whole" plan, chances are good that you've purchased enough coverage to support your family for many years to come. […]

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Do I Have to Pay Taxes on Capital Gains If I Trade Stocks in the U.S.?



Compared to most other investment vehicles, stocks offer attractive returns over long periods of time. However, many individual stocks can be subject to punishing volatility and temporary losses during transient periods of market weakness. For inexperienced investors, such periods of volatility can create serious headaches. During major downturns like the financial crisis of 2008, many […]

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What Is My Tax Liability on a $250,000 Life Insurance Policy?



If you're named as the beneficiary on a life insurance policy, you can look forward to a substantial payout at some point in the future. If the policy in question is a term life policy, the death benefit that you stand to receive will be identical to the policy's face value. In most cases, you'll […]

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How Can I Avoid Paying Taxes on Land That I’ve Sold?



Land ownership is governed by a complex legal framework that varies wildly between jurisdictions. The rules that govern this area of the law are typically set at the state, county and local levels. Many of these rules may come into conflict with one another. Although state-level laws generally take precedence over municipal and county-level laws, […]

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How Long Do You Have to Use Capital Gains from a Property Sale to Invest in Another Property Before Paying Tax?



If you're like most homeowners, you might not be aware that the federal capital gains tax could apply to the sale of your home. Unlike regular income tax, capital gains tax is applied to the income that you earn as a result of the sale of a tangible asset like a stock or real estate […]

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If My Spouse Filed Our Taxes Jointly Without My Knowledge, What Can I Do?



Like many aspects of a long marriage, tax issues can cause serious disagreements. In some cases, they can even lead to divorce. If you believe that the tax-related problems that you're having with your spouse are part of deeper-seated issue that may ultimately threaten your marriage, you may wish to speak with a marriage counselor […]

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If You Lose Money in the Stock Market, Will It Lower Your Taxes at the End of the Year?



Whether you're an investing professional or a total market novice, the idea of losing money probably makes you uncomfortable. There's no shame in this fact. Folks who can stomach the idea of losing significant amounts of cash probably shouldn't be managing their own investments. It takes diligence, ambition and a competitive spirit to be successful […]

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How Do I File Taxes on a 1099-A Foreclosure?



It goes without saying that the foreclosure process is painful and drawn-out. Every year, tens of thousands of American families lose their homes to foreclosure. In the wake of the housing crisis, foreclosure rates have spiked to historical highs. In some places, local courts are struggling with a huge backlog of foreclosed homes and may […]

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Do You Have to Pay State or Federal Taxes on Money Received from a Life Insurance Policy?



Life insurance windfalls can be substantial. If you're named as a life insurance beneficiary, there's a good chance that your eventual payout will change your financial situation for the better. Depending upon the amount of debt that you're carrying on your ledger, your payout could significantly change your lifestyle. Even if you have a relatively […]

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Am I a 1099 Employee or Is My Boss Doing Something Illegal?



The American tax code confers numerous benefits and protections on full-time employees. For instance, full-timers are not responsible for withholding their own taxes or determining the value of their financial obligations to Social Security and Medicare. In addition, full-time employees are generally eligible to receive employer-sponsored health insurance, retirement accounts, life insurance and other fringe […]

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Are There Any Tax Benefits to Reinvesting Your Dividends from Mutual Funds?



If you're heavily invested in mutual funds, chances are good that you've thought through the tax implications of your holdings. For instance, you're probably aware that long-term capital gains are taxed at lower rates than short-term capital gains. As such, it's almost certain that you hold your mutual fund investments for longer than a year […]

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If I File My Taxes Online, Is There a Maximum That I Can Claim for Charitable Donations?



The current U.S. tax code is rife with potential deductions, credits and exemptions that can significantly reduce the average taxpayer's tax liability. If you earn a significant amount of income and own your own home, there's a good chance that you're already "itemizing" your tax deductions. This is the process of claiming multiple tax deductions […]

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How Do I Organize My Tax Receipts and Bills for Tax Documentation Purposes?



Preparing for "tax time" can be difficult. If you received income from multiple sources or maintain a diversified investment portfolio, you may wish to talk to a qualified financial planner or tax preparation specialist. Although retaining a qualified professional to help you file your taxes can cost a significant amount of money, it may pay […]

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