Latest news with #W-2s
Time Business News
4 days ago
- Business
- Time Business News
Tips to Avoid Common Tax Filing Mistakes
Tax season can be stressful, and mistakes on your tax return can lead to delays, penalties, or even audits. Whether you file your taxes yourself or use a professional, avoiding common tax filing mistakes is crucial for a smooth and accurate process. Understanding these pitfalls and how to steer clear of them can save you time, money, and headaches. In this article, we'll cover practical tips to help you avoid the most frequent tax filing errors and ensure your tax return is accurate and complete. One of the biggest mistakes taxpayers make is rushing into filing without having all the required documents. Missing documents can lead to incomplete or incorrect returns. Tips: Collect all income statements such as W-2s, 1099s, and investment income slips. Gather receipts for deductible expenses, charitable donations, and medical expenses. Keep documentation for tax credits you plan to claim, such as education or childcare. Organize your documents in advance to avoid last-minute scrambling. Simple errors like misspelled names, wrong Social Security numbers, or incorrect addresses can cause your tax return to be rejected or delayed. Tips: Verify that your name and Social Security number match your Social Security card. Ensure dependent information is accurate and complete. Update your address if you've moved since the last tax filing. Failing to report all sources of income is a common and costly mistake that can trigger IRS penalties. Tips: Report all wages, interest, dividends, freelance income, rental income, and other earnings. Cross-check your income documents against your employer or bank statements. Remember to include side hustle or gig economy earnings like rideshare or freelance work. Your filing status affects your tax brackets, deductions, and credits. Selecting the wrong status can lead to paying more taxes than necessary or complications with your return. Tips: Understand the differences between single, married filing jointly, married filing separately, head of household, and qualifying widow(er). Use IRS guidelines or tax software to determine the best status for your situation. If you're unsure, consult a tax professional for advice. Many taxpayers miss out on deductions and credits because they're unaware or forget to claim them. Tips: Review common deductions such as mortgage interest, student loan interest , and medical expenses. , and medical expenses. Don't overlook tax credits like the Earned Income Tax Credit (EITC), Child Tax Credit, and education credits. Keep proper documentation to support your claims in case of an audit. Simple arithmetic mistakes can cause discrepancies that delay your refund or trigger an IRS review. Tips: Use tax preparation software that automatically calculates totals and credits. If filing manually, double-check all addition, subtraction, and carryover amounts. Consider professional help if you find the calculations overwhelming. Missing the tax filing deadline can result in penalties and interest on taxes owed. Tips: Know the IRS deadlines, usually April 15th for individual returns. If you cannot file on time, request an extension by filing Form 4868 to avoid late-filing penalties. Remember, an extension to file is not an extension to pay any taxes owed. Forgetting to sign and date your tax return is a surprisingly common mistake that leads to processing delays. Tips: If filing jointly, both spouses must sign the return. For electronic filing, ensure your digital signature is completed. If a third party prepares your return, make sure you review and sign before submission. Choosing direct deposit reduces the chances of your refund being lost or delayed. Tips: Provide accurate bank account and routing numbers. Avoid using prepaid debit cards for deposit as they can sometimes delay access. Double-check your bank information to ensure it matches your bank statements. Having records of your filed tax returns and supporting documents is essential in case of audits or future reference. Tips: Save digital copies and print physical backups. Organize documents by year for easy retrieval. Retain tax records for at least three to seven years, depending on your situation. Avoiding common tax filing mistakes is key to a hassle-free tax season. By staying organized, paying attention to details, and using available resources like tax software or professionals, you can file accurate returns and minimize your risk of errors. Taking the time to double-check your information, claim all eligible deductions and credits, and file on time can help you maximize your refund and reduce stress. If your tax situation is complex, consider consulting a tax professional to ensure your taxes are done correctly. With careful preparation and attention, you can avoid common pitfalls and have confidence that your tax return is accurate and compliant. TIME BUSINESS NEWS
Miami Herald
16-07-2025
- Business
- Miami Herald
What the IRS Really Knows About Your Income in 2025 - Clear Start Tax Reveals How to Stay Ahead of Surprise Tax Bill
IRS tech tools are smarter than ever - Clear Start Tax explains how income mismatches trigger audits, and what taxpayers can do to stay compliant. IRVINE, CA / ACCESS Newswire / July 16, 2025 / With the IRS expanding its data-matching capabilities through advanced systems like the Information Returns Processing (IRP) platform, taxpayers are finding themselves blindsided by CP2000 notices, audits, or unexpected tax bills, sometimes months after filing. According to Clear Start Tax, understanding how the IRS cross-checks income data in 2025 is essential to staying ahead of costly surprises. "The IRS doesn't need to guess - they already have your 1099s, W-2s, and even crypto reports before you file," said the Head of Client Solutions at Clear Start Tax. "Most IRS notices come from mismatches, not criminal intent. But if you ignore them, they can escalate fast." How the IRS Sees Your Income - Before You Even File Contrary to popular belief, the IRS doesn't wait for an audit to catch mistakes - most income mismatches are flagged automatically. The IRS's Information Returns Processing (IRP) system aggregates data from countless sources, comparing it against your tax return behind the scenes. This means the IRS often knows about your income, even if you forget to report it. The IRP system pulls in data from: W-2s from employers1099 forms from banks, brokerages, and gig platformsSSA and unemployment recordsCryptocurrency exchange reports (via Form 1099-DA, coming soon)Mortgage and insurance statementsForeign bank account data (via FATCA agreements) These records are automatically compared against your tax return. If a mismatch appears, a CP2000 notice - or worse, an audit flag - can be triggered without warning. CP2000 Notices Are the First Warning Sign A CP2000 notice is often the first time a taxpayer learns the IRS found a mismatch in their income reporting. It's not an audit - yet - but it carries serious consequences if ignored. The IRS uses these notices to propose changes to your return, often with added taxes, interest, and potential penalties. According to Clear Start Tax, the most common triggers for CP2000 notices in 2025 include: Missing or incorrect 1099-NEC or 1099-K gig incomeReporting investment income incorrectly (e.g., selling crypto without basis data)Overlooking unemployment or early retirement withdrawalsFiling with outdated employer informationOmitting foreign income or failing to disclose foreign accounts "In 2024, the IRS issued over 11 million CP2000 notices," added the Head of Client Solutions. "It's one of their most common enforcement tools - and most people don't even know what it is until they get one." Avoid Surprises by Matching Records Before the IRS Does Once the IRS has flagged your return, it becomes much harder to negotiate or correct errors. That's why Clear Start Tax encourages taxpayers to stay one step ahead by verifying all income sources and tax documents before they file. This proactive approach can prevent costly notices and reduce the risk of enforcement actions. Steps Clear Start Tax recommends include: Reconciling all 1099, W-2, and third-party data before filingRequesting wage and income transcripts from the IRSAmending prior-year returns with missing incomeResponding promptly and professionally to CP2000 or Letter 6173 noticesExploring relief options if penalties or balances are already accruing By answering a few simple questions, taxpayers can find out if they're eligible for the IRS Fresh Start Program and take the first step toward resolving their tax debt. Fresh Start Program Offers Relief - Even After a Notice For those who have already received a CP2000 notice or now owe tax due to underreported income, you still have options. The IRS Fresh Start Program helps taxpayers reduce, settle, or restructure their debt. Clear Start Tax helps clients determine eligibility and guides them through each step of the resolution process. Depending on a taxpayer's financial situation, the program may offer: Payment plans based on current ability to payReduction or removal of penalties and interestSettlement for less than the full amount owed through an Offer in Compromise "Even if you've made a mistake, there's a path forward," said the Head of Client Solutions. "What matters is responding early - and getting the facts straight before the IRS takes further action." About Clear Start Tax Clear Start Tax is a full-service tax liability resolution firm that serves taxpayers throughout the United States. The company specializes in assisting individuals and businesses with a wide range of IRS and state tax issues, including back taxes, wage garnishment relief, IRS appeals, and offers in compromise. Clear Start Tax helps taxpayers apply for the IRS Fresh Start Program, providing expert guidance in tax resolution. Fully accredited and A+ rated by the Better Business Bureau, the firm's unique approach and commitment to long-term client success distinguish it as a leader in the tax resolution industry. Need Help With Back Taxes? Click the link below: 710-3533 Contact Information Clear Start TaxCorporate Communications Departmentseo@ 535-1627 SOURCE: Clear Start Tax
Forbes
15-07-2025
- Business
- Forbes
This Week's Personal Loan Rates: July 15, 2025—Rates Move Lower Once Again
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. Rates on personal loans declined last week, giving qualified borrowers a chance to secure a more affordable interest rate and finance a project, purchase or even unexpected bills. From July 7 to July 12, the average fixed rate on a three-year personal loan was 13.72% for borrowers with a credit score of at least 720 who prequalified on personal loan marketplace. The rate was 14.36% the previous week, according to The average rate on a five-year personal loan fell 0.43 percentage point last week to 19.21% from 19.64%. Well-qualified borrowers may be offered rates well below average. The rate you'll actually receive depends on various factors, like your credit profile and the loan terms you choose. These rates are accurate as of July 12, 2025, and based on the three-year fixed rate. Related: Best Personal Loans Personal loan rates fluctuate frequently, and each lender determines and sets different rates. While your rate isn't guaranteed until you sign your loan agreement, you can get an idea of average lender rates below. The table below compares personal loan rates for three- and five-year terms to help you understand rate trends. Lenders typically consider your loan term and credit history to determine your interest rate. Your credit score plays a major role in the interest rate a lender offers for a personal loan. Lenders use your credit profile and other factors to evaluate your risk as a borrower. In general, the higher your credit score, the lower the interest rate you'll receive. The table below compares average personal loan interest rates by credit score, showing how much your score can affect your rate and how much you could save over time. Since each lender sets its own personal loan rates, use these three simple steps to compare personal loan interest rates: Prequalify. Prequalifying with multiple lenders lets you find and compare potential personal loan interest rates. You'll see terms and amounts you may be eligible for without impacting your credit score. It's not an offer of credit, however, and your loan isn't guaranteed until you submit a formal application and sign your loan agreement, which will affect your score. Review your offers. After prequalification, review and compare your offers. In some cases, the lowest rates may not be the cheapest loan option since origination and other fees can increase your cost of borrowing. Comparing all of the loan features can help you find the best option for your situation. Submit an application. After you've compared choices, collect all necessary documentation, including your bank statements, W-2s and photo identification. Submitting an application results in a hard credit inquiry, which temporarily dings your credit score. Related: 5 Personal Loan Requirements To Know Before Applying We recommend you get a personal loan only when it's necessary. If you're considering a personal loan, these steps can help you understand if it's the right choice: Identify why you need funds. Before taking out a personal loan, understand how you would use the funds. Some common personal loan uses include home improvement, debt consolidation and covering emergency expenses. It's best to avoid using personal loans for nonessential expenses that you could potentially save up for, like vacations and holiday gifts. Determine how much financing you need. Once you identify why you need the funds, calculate how much you need to cover your costs. This amount will typically inform you of the loan amount you need or if you can use an alternative. Consider personal loan alternatives. If you only need to borrow a small amount of money, such as under $2,000, consider alternative options such as a payday alternative loan (PAL) or a buy now, pay later service. Find a lender that fits your needs. If you can't find an alternative that fits your needs, find a personal loan lender that provides sufficient financing. Pro Tip In some cases, getting a personal loan may not be the best decision. For example, we don't recommend a personal loan if you can't afford the monthly payments or if you can wait to save up the money you need. Personal loans are available through a variety of institutions, which should help you find a lender that meets your needs. Your credit profile and financing needs typically determine the best lender for you. You can get personal loans from: Banks: Best for in-person banking or if you have an existing banking relationship. Best for in-person banking or if you have an existing banking relationship. Credit unions: Best for existing credit union members or those who meet a local credit union's eligibility requirements. Best for existing credit union members or those who meet a local credit union's eligibility requirements. Online lenders: Best for an online-only experience with flexible requirements. Frequently Asked Questions (FAQs) Once you have your interest rate, loan term and amount borrowed, you can calculate your loan payments. A personal loan calculator can help with this. High personal loan interest rates are a result of current market conditions and/or low credit scores. Lenders set their interest rates based on the economy and your credit profile. If you want to get the lowest rates possible, work on improving your credit score and debt-to-income (DTI) ratio before applying.
Yahoo
08-07-2025
- Business
- Yahoo
Little Rock bartender reacts to ‘no tax on tips' in ‘Big Beautiful Bill'
LITTLE ROCK, Ark. — A new federal tax break touted as a win for service workers may not be quite the windfall it first appears. As part of the recently passed 'Big Beautiful Bill,' a sweeping budget proposal championed by former President Donald Trump, Section 70201 eliminates federal income tax on tips, but only up to a point. Beginning in 2025, workers in tip-based jobs can deduct up to $25,000 in qualified tips from their taxable income. The deduction is set to last through the end of 2028. It applies only to cash or charged tips that are formally reported on IRS forms, such as W-2s or Form 4137. Arkansas food relief groups brace for impact after SNAP cuts in 'One Big Beautiful Bill' For Jordon O'Donald, a bartender at Brewski's in downtown Little Rock, the news sounded like a welcome break. She has worked in the industry for eight years and relies on tips to support her and her son. 'Some weeks it's $900 to $1,000, sometimes more, sometimes less,' she said. 'You really don't ever make the same money every single time.' But her excitement quickly gave way to skepticism after hearing the fine print. 'Looking at it as a whole, it's honestly not the best,' she said. 'It sounds good, but I feel like we're just going to end up paying more money at the end of the year.' O'Donald isn't alone in that concern. While the bill's headline suggests service workers will stop paying taxes on their tips, the reality is more complicated. Only the first $25,000 of qualified tips are exempt. Anything earned beyond that is still fully taxed. And there are other restrictions: The deduction phases out for single filers making over $150,000 and joint filers earning over $300,000. Self-employed individuals must show a profit to qualify. The business cannot fall under 'specified service trades' like law, accounting, consulting, or athletics. Taxpayers must include a valid Social Security Number and, if married, file a joint return. O'Donald says the cap could even discourage some workers from pushing past that $25,000 mark. 'Yes and no… because I feel like I would be striving to make under the $25,000 instead of trying to make over it,' she said. Things to know about 'no tax on tips,' Trump's tax pledge that's in the GOP budget bill The Treasury Department has been given 90 days to publish an official list of occupations that 'customarily and regularly' receive tips—something that may further limit who qualifies. Still, supporters say the measure is a step toward giving frontline service workers more breathing room in a volatile industry. But O'Donald offers a warning to anyone who's celebrating too soon. 'Yes, I feel like they would be excited,' she said. 'But like I tell everyone—read the fine print.' Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
New York Post
20-06-2025
- Business
- New York Post
Haven't filed your taxes yet? You might be able to get an Amazon gift card
Discover startups, services, products and more from our partner StackCommerce. New York Post edits this content, and may be compensated and/or receive an affiliate commission if you buy through our links. TL;DR: Simplify your state and federal taxes with H&R Block Tax Software Deluxe on sale for $39.99 with code FILEEASY. Tax season may feel far away, but that's not the case for everyone. If you took an extension or have just complicated taxes, it's worth it to get a little extra help on your taxes as soon as you can. If you don't want to get caught with last-minute fees, try H&R Block Tax Software Deluxe to file your state and federal taxes. It's only $39.99 (reg. $59.99). You even get the option to get a 2% bonus on your tax refund if you put it onto an Amazon gift card. Advertisement H&R Block Tax Software Deluxe makes filing easier by guiding you through your return with a simple question-and-answer format. Instead of worrying about complicated forms, the software helps you navigate over 350 credits and deductions, whether you are claiming mortgage interest, reporting investment income, or managing retirement accounts. It is designed to help you find every deduction you qualify for, so you can feel confident you are getting the largest refund possible. Importing your information is quick, too. You can easily bring in W-2s, 1099s, 1098s, and even your previous returns from TurboTax or Quicken. Once your information is loaded, you can see real-time updates on your refund amount as you work through your return. H&R Block also offers free in-person audit support, so if the IRS comes calling, you have access to expert help. Plus, you get access to more than 13,000 articles and FAQs to help answer any questions along the way. Your work is saved directly to your computer, allowing you to come back and finish when you are ready, without worrying about losing your progress. Use code FILEEASY to get H&R Block Tax Software Deluxe for $39.99. StackSocial prices subject to change.
