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.
For Georgia residents who are still waiting to receive their state income tax refunds, the end may finally be near. The state greatly slowed the processing time for state income tax refunds beginning in February due to issues with tax fraud and associated IRS issues.
According to figures from the National Taxpayers Union, Americans spent 3.8 billion hours completing tax paperwork in 2009. The tax code is almost 4 million words long. While most people are happy to get a tax refund, going through W-2s and other tax forms is not what most taxpayers consider to be fun. On average, four out of every five taxpayers gets a refund, which commonly goes toward investments or a vacation.
United States citizens from Georgia and all other states still have to file a U.S. federal tax return even if they are living in another country. Some new rules are in place for 2015 tax returns, and new technology agreements could help the IRS catch delinquent taxpayers living overseas.
Many Georgia residents are concerned that long term health care costs uncovered by Medicare or Medicaid will eat up their inheritances and leave them little or nothing to pass on to their loved ones. To avoid this situation, it is not uncommon for older individuals or couples to protect assets such as their homes by deeding them to their children or other heirs while they are still alive. However, doing this can lead to eye-watering tax bills.
An increase in the estate tax exemption for 2016 that takes individual estates valued at $5.45 million or less out of danger of being subject to federal estate taxes has now shifted taxpayer concern in Georgia and throughout the country from estate tax liabilities to income taxes that might be due on the capital gain when an asset is sold. The tax rate on a long-term capital gain can be as high as 33 percent for some people, but there are ways to save on taxes with a little planning.
Georgia entertainment fans may be interested to learn that Abby Lee Miller, who stars on the TV show "Dance Moms," has been charged with bankruptcy fraud and other offenses. The federal grand jury indictment, which was issued in Pennsylvania, claims Miller concealed income she earned while working on the popular Lifetime show.
Georgia residents may be surprised to learn that no payments were required from the filers of more than a third of all 2012 federal income tax returns. The number of Americans who do not earn enough to pay any federal income tax peaked at over 40 percent in 2009 as the financial crisis pushed the economy into recession, but it has been falling steadily since.