More Money, More Opportunities
The 2025 tax season officially begins January 27th, with employers needing to send W-2 forms by January 31st. Most taxpayers have until April 15, 2025, to file their 2024 tax returns, or request an extension. The standard Form 1040 is now the only individual tax form required. The IRS is offering expanded tools and assistance, including extended hours at Taxpayer Assistance Centers, to simplify
The author advises the couple to consult a tax expert to determine if they can claim their granddaughter as a dependent, given the mother’s lack of income and their own financial situation. Generally, the custodial parent is entitled to claim the child, but if the granddaughter lived with and was supported by the couple for more than half the year, they may qualify as a “qualifying child.” Claiming her could potentially unlock tax credits and deductions like the Child Tax Credit and Child and Dependent Care Credit. Communication
The article addresses the common concern of owing taxes and not being able to pay. It highlights that roughly 57% of American households anticipate owing taxes, and provides eight strategies for managing a high tax bill, including utilizing emergency savings, borrowing from retirement funds, seeking loans from friends/family, and exploring options like payment extensions, an Offer in Compromise, or an installment plan with the IRS. It also explains why people might owe (inaccurate W-4 forms or self-employment income)
With a $1 billion Powerball jackpot up for grabs, the article explores what a winner would realistically take home after taxes, noting the choice between a lump sum ($516.8 million, potentially leaving around $325 million after taxes) or 30 annual payments (averaging $33.3 million each, totaling $522-$631 million over 30 years). Financial experts advise seeking legal and accounting help immediately upon winning and employing someone to manage
Taxpayers should expect smaller refunds or potentially owe more this year due to the expiration of several COVID-19 assistance programs. Key changes include reduced Child Tax Credit and Child and Dependent Care Credit amounts, the elimination of COVID sick and caretaking leave credits, a reduced Earned Income Credit for some, and the removal of a charitable donation deduction. However, new tax credits related to energy-efficient home improvements and appliances, introduced by the Inflation Reduction Act, could offer some offsetting savings. Additionally, changes
