So You Want a Bigger Tax Refund

Tax Day 2017 has come and gone and, along with many other Americans, you were expecting a little more of a kickback on the refund check. Also like many other Americans, you may want to take steps to ensure a bigger refund, but life gets in the way and before you know it, it’s Tax Day Next Year. One thing to keep in mind is that a tax refund is a return of your own money, so the apparent windfall … Read more

Paying for College: Your CSS Profile

About 400 post-secondary schools use the CSS/Financial Aid PROFILE, and application for this goes hand in hand with the Free Application for Federal Student Aid, or FAFSA®. While the CSS application is more involved than FAFSA, it’s a resource for funding that’s otherwise not available through a FAFSA application on its own. What is the CSS/Financial Aid PROFILE? This process accesses non-federal financial aid for post-secondary education. It’s administered by the College Board, the creator and administrator of the SATs. … Read more

Tax Scams: What to Avoid in 2017

The Internal Revenue Service released its Top Tax Scams for the 2017 tax season. While most tax fraud, particularly that involving identity theft, happens early in the tax season, scammers and con artists are on duty the entire year preparing. Therefore, information stolen this year could be used against you next year, so stay prepared against tax malfeasance.Phone scams — con artists impersonate IRS agents. IRS agents will not threaten arrest, deportation or seek immediate payment through a single payment … Read more

Credit Reports 101

Credit is a curious concept. If you don’t have any, you want some. When you do have it, you may not want so much! Credit reports describe your life in financial terms, but for many, the logic and nature of these reports aren’t easy to follow. Considering the importance personal credit reports have on many aspects of one’s life, few can afford to ignore how their credit reports stack up. Three-for-One: The Major Credit Bureaus For those new to the … Read more

The Difference Between Credit Unions and Banks

When it comes to financial services such as checking and savings accounts, personal loans and basic investments, a person can turn to either a bank or a credit union. Yet many consumers recognize little difference between the two, save for their type. Since each provides similar services in similar ways, pinpointing a reason to choose one institution over the other isn’t immediately obvious. So what, then, is different between the two? Let’s take a closer look to illustrate the advantages … Read more

Tax Season Opens January 23, 2017 – Paul Gaulkin CPA

On your marks. With just enough time to recover from the holidays, the Internal Revenue Service opens for business for the 2016 tax year on Monday, January 23. Expecting over 150 million individual returns through the season, the IRS accepts tax filing until Tuesday, April 18, 2017. The usual deadline of April 15 falls on Saturday, which would normally push to the following Monday. Emancipation Day, a legal holiday in Washington, D.C., happens April 17 and so last-minute filers receive … Read more

Understanding the Kiddie Tax – Paul Gaulkin CPA

kids

If a dependent child is subject to the kiddie tax and has more than $1,900 of net unearned (investment) income for the year, his or her net unearned income is taxed to the child at the additional rate of tax that the parent would be required to pay if the child’s net unearned income were included in the parents’ taxable income. This applies regardless of the source of the assets creating the child’s unearned income as long as the child … Read more

Step Transaction Doctrine – Paul Gaulkin CPA

Trust

The step transaction doctrine means that two or more transactions are mutually dependent so that only the overall end result is significant for tax purposes. This means that, two or more steps, significant in themselves, if view in isolation, may be disregarded altogether or consolidated into one transaction. The Supreme Court has stated that “if one transaction is to be characterized as a ‘first step’, there must be a binding commitment to take the later steps.” The step transaction doctrine … Read more

Educational Savings Bonds Tax Exclusion – Paul Gaulkin CPA

education definition

A tax exclusion is provided for interest earned on U.S. savings bonds used to finance the higher education of the taxpayer, the taxpayer’s spouse, or dependents according to Code section 135. Timing of Purchase The bonds must have been purchased after December 31, 1989, and the exclusion is available only to the individual who purchased the bonds. The purchaser of the bonds must have reached the age of 24 and be the sole owner of the bonds. The bonds must … Read more

IRS Survey, Compliance Check & Examination Defined – Paul Gaulkin CPA

person inspecting

There are three types of ways the IRS will generally check a tax return for proper accuracy and accounting. These three include the survey method, compliance check and examination. Survey Method Returns can be surveyed by the IRS without the taxpayer ever being notified. Agents can survey a return if they believe an examination would result in no material change in tax liability. This procedure is available only if the agent has not contacted the taxpayer or the taxpayer’s representative, … Read more