Georgia residents who have had all or part of their debt canceled by a lender normally have to report the amount as taxable income. However, for mortgage debt that has been canceled, homeowners may be able to take advantage of a tax exclusion.
As the owner of a small business, tax season is not likely to be your favorite time of year. Not only is it a complicated process to file your individual taxes, but now you must ensure that your business taxes meet federal guidelines and that you avoid an audit whenever possible. Fortunately, there are some tax breaks available to those who own businesses. Throughout the year and when you are filing during tax season, keep these in mind.
Georgia residents may be in the habit of filing a tax return each year. However, depending on an individual's filing status and income, that may not be necessary. Typically, people don't have to file if their income is less than the standard deduction and personal exemption combined. For a single filer over the age of 65, that amount would be $11,900.
In some cases, Georgia residents may want to give loved ones money for their IRAs. They may be concerned that doing so will be a taxable event, however. As long as the amount that is given is under the annual federal gift tax exclusion amount, people do not need to worry about that issue.
Many Georgia residents have likely heard about the sexual harassment lawsuit that was filed against former Fox News Chairman and CEO Roger Ailes. Gretchen Carlson, a former Fox News anchor, brought sexual harassment allegations against Ailes that quickly became very public. After Carlson's lawsuit was filed, six other women told their stories about Ailes to New York magazine, and Ailes stepped down from his position at Fox News.
Georgia residents may be familiar with the idea of a marriage penalty on federal tax returns. The concept relates to tax scenarios that provide greater advantages to unmarried partners than to those who tie the knot. While many ignore these issues as they wed, some may allow these financial matters to influence their consideration of getting married.
Many Georgia residents look forward to the Olympic Games, but it is not just the nation's sports fans who are cheering on Team USA in Rio de Janeiro. Athletes who earn medals also receive handsome cash prizes, and returning American athletes will arrive home to find Internal Revenue Service standing in line to receive its share. However, few Team USA members will have an Olympic tax bill as high as record-breaking swimmer Michael Phelps who will owe the IRS about $55,000 after winning five gold medals.
Many parents rely on summer day camps and day care for their children in Georgia each year. The care that is provided to their children may be eligible for a credit on their federal income tax returns called the "child and dependent care credit."
Most Georgia residents know that they need to keep copies of certain tax records, but they may not know which ones they need to hold on to or for how long they should retain them. Generally, people should keep copies of all of the documents that they used to arrive at the numbers they put on their tax returns. This may include their W2s, 1098s, 1099s and certificates of creditable coverage under the Affordable Care Act, along with other relevant documents.
Georgia residents who are planning their retirements often forget to take into account taxes. Even people who have put a lot of thought into building their retirement portfolios have no idea what they will owe the IRS once they start making withdrawals from their savings. A retiree that is taxed at 15 or 25 percent will have a much more difficult time making money last than a retiree whose income is not taxed.