If you can't quite put your finger on copies of your tax returns, the IRS can help you out. marcnorman/iStockphoto/ThinkStock We all know it's important to save your tax returns after you've filed them. There are any number of reasons you could need a copy of your return later on: a mortgage or refinancing application, loan applications, tax preparation for the next year. Worst-case scenario, you'd definitely want to have them handy if you happen to be audited by the IRS. How long should you hang on to your returns — do you need to have stacks of papers going back decades? The IRS recommends that you keep them for three years. That's the statute of limitations on audits, assuming you've actually filed returns, haven't committed fraud and declared all of your income. (If you haven't filed returns at all, the IRS can come after you at any time; if you've neglected to report 25 percent or more of your income, it's six years.) But nobody's perfect. Sure, there are … [Read more...] about How IRS Tax Return Transcripts Work
One benefit of joining the military is the pension you will receive after 20 years. How is it taxed? videodet/iStock/Thinkstock When you choose a life of service with the United States armed forces, you make a lot of sacrifices. One of the benefits, however, is your military pension, which you receive upon retirement after active duty beyond 20 years. This means if you joined the Armed Forces at 20, you could potentially retire around age 41. Of course, there are going to be tax concerns, but if retirement is looming on the horizon, we can help you get informed about your options. The size of your pension depends on your pay grade, but it lasts a lifetime. If you retire after 20 years, your pension is a percentage of your basic pay. But if you remain in the military for 40 years, your pension is 100 percent of your basic pay. Additionally, military pensions increase each year to adjust for cost of living. There are three different programs of retirement [source: Military.com]: … [Read more...] about How is your military pension taxed?
Most financial analysts would never advise borrowing from a 401(k) retirement account, but there are exceptions to the rule. See more retirement pictures. Compassionate Eye Foundation/Marcy Maloy/Getty Images A 401(k) is an employer-sponsored retirement account. It's a long-term investment account designed to reward employees who wait to cash out until retirement, while it penalizes those who withdraw money early. That said, there are a couple of ways to tap the funds in your 401(k) well before retirement without incurring taxes and penalties. First, let's briefly explain how a 401(k) works. An employee chooses to set aside a percentage of each paycheck before taxes and invest it in an employer-approved investment portfolio. The IRS limits how much an individual can invest annually in a 401(k) before taxes. The 2014 cap is $17,500; workers over 50 can make additional payments of up to $5,500 [source: IRS]. Many employers offer to match a portion of employee contributions, … [Read more...] about Can you avoid paying taxes on a 401(k) cash-out?
Estate taxes may be imposed on estates that are valued at or above one million dollars. One way you can minimize your estate tax is simply by reducing the value of your estate. If it's below one million dollars, no estate tax will be owed. One way to minimize the value is to make lifetime gifts. Some gifts over $12,000 may be susceptible to a gift tax [source: Axa Equitable]. Some lifetime gifts that do not trigger a gift tax include: Gifts made to your spouse, if he or she is a United States citizenGifts (under a certain monetary amount) made to your spouse, if he or she is not a United States citizenGifts made to certain charitiesTuition or medical expenses paid on behalf of others may sometimes be considered lifetime gifts [Source: Axa Equitable]. Another way to minimize your estate taxes is to transfer your assets into an irrevocable trust. (This transfer may or may not be subject to a gift tax.) If your inheritor doesn't need the assets from your estate, it would be a good idea … [Read more...] about How to Minimize Estate Tax
You might assume higher fuel taxes would cut into the profits of the trucking industry. But taking a bigger-picture approach helps explain why industry associations actually advocate for a tax increase. Jetta Productions/Getty Images Truck drivers in the United States use a lot of diesel fuel — 38 billion gallons (144 billion liters) a year, according to the American Trucking Associations (ATA) industry group. So you might think it's one group that clearly wouldn't want to see a federal fuel-tax hike, as it would increase its costs. After all, truckers already pay a hefty 24.4 cents per gallon in federal tax on diesel fuel, which is significantly higher than the 18.4 cents per gallon that car drivers pay on gasoline purchases federally, according to the U.S. Energy Information Administration. That's why it probably will come as a surprise that ATA, the umbrella organization of state trucking groups and industry-related conferences and councils, has been pushing Congress and … [Read more...] about Why the Trucking Industry Actually Supports Higher Fuel Taxes