Your Tax Experts

Cryptocurrency has become increasingly popular, but it is important to understand the tax implications of investing in crypto. In the United States, crypto gains are subject to taxation and failure to pay taxes can result in severe penalties. It is important to be aware of the rules and regulations before investing in digital currencies so that you can properly report your gains and not run into any problems with the IRS. Continue reading for the basics and then see these experts for tax preparation help.

Reporting Crypto Gains
Crypto investors must report their capital gains on their income tax return. They should do this by filing a Form 1040 Schedule D, which shows all taxable investments for the year. If a taxpayer has made more than $20,000 or sold more than 200 transactions during a single tax year, they must file Form 8949 in addition to Form 1040 Schedule D. When filling out these forms, taxpayers must include information about all transactions including dates acquired, sales price, cost basis and other details regarding the investment.

Taxes on cryptocurrency are calculated using the same method as other financial investments such as stocks or bonds. Short term capital gains are taxed at ordinary income rates while long-term capital gains are taxed at lower rates. It is important to note that if you hold crypto for less than one year before selling it, then it is considered a short-term gain and will be taxed at higher rates; if you hold crypto for more than one year before selling it then it is considered a long-term gain and will be taxed at lower rates.

Taxpayers should also be aware that losses incurred when trading cryptocurrencies may be used to reduce their overall taxable income (up to $3,000 per year). This means that if you make money on some trades but lose money on others then your net loss may offset some of your taxable gains from other sources. Additionally, taxpayers who have lost money trading cryptocurrencies may be able to claim a deduction depending on their filing status and total income for the year.

Conclusion
It’s crucial for investors of cryptocurrency to understand how taxes work with crypto investments in order to avoid potential penalties from the IRS. By understanding the basics of reporting crypto gains and losses, taxpayers can ensure they accurately file their taxes each year without running into any issues with Uncle Sam! Taxpayers should also consider consulting with an accountant or tax professional who specializes in cryptocurrency investments if they need additional guidance or advice surrounding taxes associated with digital currency trading activity.

A better future starts today, and it doesn't happen by squandering all your monthly income. Although, it would be unfair to scold you as if it's always that easy to save, especially if you're not buoyant in funding. We sympathize with you if you don’t find it easy in terms of money, but sympathy will not change your life. What you need are hardcore principles to save for rainy days. Here are those principles.

Don’t save to spend

This is the first rule of saving; it's only a waste of your efforts, discipline and resources if you save and then spend it later. Usually, money depreciates in value, so if you save and spend it later, you incur a loss. Instead, save to invest. You can save to invest in investment deals that you can’t afford now, and by investment, we mean either investing in external deals or investing in yourself by acquiring better skills.

Budget

You've probably tried it before, and it didn't work for you, but that doesn't make it a futile effort. An African proverb teaches us that those who fail to plan are planning to fail. In other words, there is always a plan you're executing, whether you're conscious of it or not. Budgeting is your plan to find the cash to save. If you don't have one, you're planning to have nothing to save.

Cut expenses

Apart from planning a budget beforehand, observe your everyday spending and note the little drops of water that are becoming oceans of expenses. For example, you could prepare food instead of eating out or buying junk. You could get a roommate instead of staying alone. You can get second-hand properties instead of buying new ones.

Explore student discounts

Information is indeed powerful, and what you do not know can affect you. Ask around and discover student coupons or discounts you can use in purchasing. It might also include provisions of help to aid living conditions in terms of properties, transportation, feeding, etc.
Unashamedly pursue growth

It's okay that you are not as buoyant as others, and it's okay that you have challenges with saving, too; it becomes a problem if you are ready to settle and become pessimistic with the desire for a better life. There are more principles to saving, but at the base is having a mentality that doesn't give up. Did you fail seven times? Go the eighth time.
You already know the importance of balance in achieving a better life. However, balance is only sometimes about having everything in control; it's usually about putting the relevant measure of effort into everything. Imagine a speedboat at cruise; balance for the driver is steering the wheels excessively to the edge that opposes where the waves are crashing to. The waves are going left, and the driver drives excessively left. Understand where you need to pay excessive attention to.
 

Federal Reserve statistics say that almost 21% of applications for a credit card are rejected. In my experience, nobody likes rejection, whether it's asking someone out on a date, interviewing for a job, or requesting help from someone. It's because of the false belief that when your application is denied, you're the one rejected. It's not true, though; don't get sad because an application was denied – simply strategize and go again. Here are certain things to include in your strategy; if it has to do with getting a credit card.

Figure out your current standing

Credit card lenders review your credit score and credit report to scrutinize your application. Mortgage loans are usually examined from the three main credit bureaus (Equifax, TransUnion, and Experian), but credit card applications care about your credit report and score alone. Unfortunately, you won't always know which of the three reports will be checked, so it's better to review the three credit reports and your credit score before you apply.

Gauge yourself and improve your credit score

The action you need to take would differ based on the situation, but the following pointers should help direct you:
 

• Pay off your credit card balances.
• Check and resolve errors in your credit reports. There could be mistakes in them.
• Avoid late payments
• Become an Authorized user of any well-managed credit card you are added to.

Get what works for you

Look for credit cards that are tailored to your needs. By impulse, you may be looking for the one that fits your spending style. However, pay attention to the ones that match your credit score range. If you have a fair credit score, applying for premium rewards cards is a waste. As you work towards getting a better score, use one that is tailored towards your needs.

Your income capacity

Apart from your credit history and score, the card issuer will also look through the details about your income. The point of a credit card history is to show the issuer that you will likely pay your credit obligations; however, it takes your current income and earning power to show that you are capable of making the payments – not just likely. Include your household income on your credit card application if you have access to them. Funds from sources like investment income, child support, alimony, disability benefits, etc., can be added too.

Request a reconsideration

Even when your application is denied, you can request a reconsideration. Most issuers have a line you can call to do this. Your approach should be to ask for more information and plead your case. If you have a solid argument, they can allow it, but even if they don't, ask for the reason and fix it – then reapply.

Reasons your applications could be denied
 

• There is a credit freeze, and the issuer is unable to access your credit report.
• You already got a welcome offer from the issuer in the past and are ineligible for a new one.
• You have too many credit card inquiries on your credit report, especially if they are recent.
• You opened too many credit cards that are new in a short while.

Once you identify why your application, you can know how to defend yourself and change their mind, however, no one is obligated to reconsider your application, so do not be rude – politeness can make the difference.
 

According to the Internal Revenue Service, "an offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can't pay your full tax liability or doing so creates hardship." It's considered based on four significant circumstances:
 

• Your ability to pay

 

• Your income/earning power

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• Your asset equity

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• The average expenses you incur consistently

It is officially supposed to be the last resort because of its exclusivity. The IRS even advises that you get a professional and check their qualifications before you file for an offer in compromise. It’s that tough to get, but here are tips to help you do it better.

1. Deal with it yourself, or hire an attorney

To determine whether you should deal with the tax issue yourself or hire an attorney depends on how huge the amount is. For less than $10,000, you can take care of the issue yourself instead of paying others to do it. There might be other ways to handle your tax debt, so I advise you to get expert advice, but you can do that through unofficial means. Friendly advice from an expert, an expert blog or interview, etc. Be careful of scams, though.

2. Report accurately and ensure that all the required tax returns are current and they are accounted for

The IRS will do a background check on your report, and it's hard to bypass their scrutiny. It's best to be accurate upfront. The IRS does not consider any OIC candidates that have missing returns.

3. Review all germane financial documents and cross-reference the figures with all your total tax liability

You should speak with an experienced tax attorney to review the figures and match them with the IRS Collection Financial Standards before you submit the OIC request.

What if the Request Was Denied?

The IRS can deny your application for an offer in compromise; if this happens, you are entitled to file an appeal by submitting Form 13711, known as "Request for Appeal Offer in Compromise." However, you must do it within 30 days of a rejection notice. If you need an attorney to help you with it, you must provide the IRS with a copy of a Power of Attorney; this authorizes them to process it on your behalf.

The re-application must deal with all the issues raised in the original rejection, and you must do it with evidence. Try to get things right from the first time; a re-application means you're now doing things on the IRS terms. You most likely will have to increase the amount you are offering to pay.

If you are not opting for a re-application, you can wait longer than the 30-day re-application window and fill out a new form. However, you will have to change the offer significantly.

Eligibility

The eligibility is based on the following:

 

• Value of your assets

 

• Ability to pay

 

• Present and future income

 

• Present and future expenses

 

• The possibility that the circumstances can change

 

• If the offer is in the interest of the state.

Your application could be rejected if:

The offer you made is too low, and the government thinks you can still pay in full from your earnings in the future. In cases like this, the IRS should tell you what they think you can pay.

You did not provide adequate information that validates your financial condition.

You are not current on tax payments for the current year. The IRS expects that you’re a risk if you keep failing to pay the current ones.

You have been convicted of a severe crime in the past.

You should be aware that the process takes a long time, sometimes up to a year or even more. In addition, you must remain compliant for the next five years before the OIC can become final. Even after that, a little slip grants the IRS the right to annul the agreement and demand that you pay the amount you thought you'd escaped in full.
 

Income taxes are a type of tax that the government deducts from income generated by individuals and businesses. It requires that the taxpayer files an annual income tax return to decide the tax obligations. It might seem like an uncomfortable deduction now, but the government uses it to pay certain obligations, fund public services, and provide relevant goods for the citizens.

Types of Income Tax

1. Individual Income Tax
You could also call it personal income tax; it is deducted from the individual's salaries, wages, and other types of income. However, due to deductions and exemptions, most individuals don't pay taxes on all their incomes. It is calculated by deducting your adjusted gross income from your standard deduction.

2. Business Income Tax
The Revenue Service in charge of taxes also deducts from corporations, partnerships, small businesses, and even self-employed contractors. Although, it depends on the business structure, owners or shareholders, corporation, and of course, the income generated. It is calculated by deducting the business' operating and capital expenses from the generated revenue.

3. State and Local Income Tax
This is applicable only in certain states in the USA. From a surface approach, this means that it will be more expensive to live in those states. However, states that do not deduct this tax have other means of taking it. Plus, tax laws are dynamic and often tampered with, so using tax to predict a state's living conditions is usually irrelevant.


Calculating your income tax

There are tax calculators online that you can use to calculate how much you might be owing based on location and other relevant factors. However, it is only sometimes accurate because of how complicated tax channels can become, but it should give you a pretty solid idea.

If you’d like to go about it manually:

i. You should add all the sources of taxable income and properties you generated in a tax year together.

ii. Then calculate your adjusted gross income (AGI). It is the taxable amount on the income and properties that you own.

iii. Then subtract the taxes you are eligible for from your AGI.

Non-taxable Income

There are cases when taxes cannot be deducted from certain types of income. You should know that there are exceptions to the general guidelines surrounding the issue of non-taxable revenues, so it is advised that you speak to a tax professional in your area before you make conclusions. However, there are categories that you should be aware of.

i. Gifts

The giver incurs the tax on gifts. So, when your employer gives you anything, they shouldn't demand its tax from you.

ii Disability wages

If an employee is declared temporarily or permanently disabled, they can be eligible for disability pay. Disability wages can become taxable only if the payments are taken from an insurance policy where the employer prayed the premiums.

iii. Certain states waive income taxes.

In the USA, it includes Nevada, Texas, Florida, Alaska, South Dakota, Tennessee, New Hampshire, Wyoming and Washington.

iv. Partnership income.

v. Insurance that your employer provides.

vi. Life insurance payouts.

vii. Scholarship and Financial Aid.

viii.  Welfare benefits.

ix. Child support payments, inheritance, cash rebates from returned goods you bought, etc.
 

Taxes... The law says they were designed to take money from the people to help build the community into a better place for the people. However, what we have seen so far seems to negate precisely that. Wealth is not evenly distributed amongst the people, so it should be a contribution based on your means; the richer give more. In this article, let's show you how rich people avoid paying commensurate taxes with their status and what you can learn from it.

Charity Donations

This is a common one, but there are rules to follow. Itemize specific expenditures in the charity and declare them. Other conditions must be met, but claiming a charitable deduction legitimizes them for about a 60% deduction from the adjusted gross income. For most wealthy people, their legal taxes can be more than how much they donate, so it makes sense to them to do a direct good in society instead of letting the government do it.

Property taxes

Property taxes can be avoided, but they also need to be itemized for the tax slash to be possible. Based on location laws, there are different rules guiding it, though. Usually, they include ownership disability, veteran status, property function, depreciation in business or rental properties etc.

Business expenses

For instance, if you own a store, you can deduct what it costs to get goods; freelance workers can deduct costs incurred from running a website. You could check tax software available online to help you calculate possible deductions for your industry.

Inherit properties/assets

This is for long-term thinkers. Tax properties are deducted at profit sales; however, if the property is not sold but passed to an heir instead, the value is adjusted to its current worth when the owner dies. For instance, an asset that goes high in value from $10,000 to $100,000 is passed to an heir. If the heir sells the asset immediately for $100,000, capital gains will not be deducted; that's about $90,000 going untaxed.

Trusts

It is possible to create an irrevocable trust and transfer your assets into it. The trust will now be legally recognized as the owner of those assets, and an heir will be named as the beneficiary whenever death happens. Since the assets do not pass-through probate, no inheritance or estate tax is deducted along the way. Anyone could do this, but it is pretty expensive to create a trust. Also, estate tax isn't charged until the value is at $12.6 million or more, and most states do not charge inheritance tax.

Family limited partnership

It is possible to create a partnership and transfer the ownership of assets to it. The heir will then be gifted an ownership interest, and the value incurred from the interest will be discounted as required by the estate tax rules. Again, it can be expensive to set this up, so it's only necessary if you have significant estate taxes that will be taxed.

Cutting down on your federal tax bill is an excellent way to manage your finances and have more to save. Paying more than you should is an unnecessary hole in your pocket and expenses. There might be other ways to reduce your taxes, but it depends on your state's tax laws; perhaps you should review it and see conditions that will benefit you.
 

Life runs mainly on the survival of the fittest mode; the resources out there seem limited, and the person who takes more wins. It's worse in the finance sector because money is perceived to be the means of ruling the world. Loaners want to cheat you and make as much profit as possible from the deal. While there are illegal ways to do this, some are smart enough to make the cheating legal. Unfortunately, terms and conditions are read by less than 10% of the borrowers.

Here are some things to consider in a loaning contract to ensure you are not cheated. Ask your loaners if they are available and their approach concerning them. The tips can also help you identify a scam.

Agreeing to waive the standard fee.

Standard fees are payments you make when you get a loan. Different companies have different names for it; it might be called "application fee," "trust fee," etc. If an organization claims to run a loan system that doesn't require you to pay any of this, they are likely out to cheat or even scam you altogether.

Undefined Payment Date.

This one might seem outrageous, but it does happen. The loan organization can leave the payment date blank and expect you to sign the contract. The first approach is when you and the organization do not even have a defined date that you agreed on for payment. That is a way for the organization to pick any date and force you to pay – or lose your collateral.

On the other hand, both parties might have agreed on a date, but it wasn't included in the terms and conditions. Oral contract forms are also allowed, but contract conditions must be recorded, and both parties should have a similar copy. Ensure the organization you are taking the loan from includes the payment date in the contract. This trick can be transferred to interest rates too.

Absence of possible arbitration or mediation later.

Loan contracts are meant to include the possibility of renegotiation in case you can't keep up with payments. It might require that certain conditions be met, but they should be there. Although it isn't mandatory, it's best to look for an organization willing to include this in the contract.

Extreme consequences of defaulting.

This is usually the most common one. Loan organizations can inflate the penalty of defaulting because you don’t have a choice but to pay it. That’s a legal thing to do as long as you agree to it. So, ensure you understand what you have to lose and evaluate the differences before you sign the contract.

You might only sometimes know who is out to scam you, so ensure you comb through social media and confirm the reliability of an organization before you take a loan from them. Reviews online can be trustworthy, but you can go further to doing groundwork research with people in the industry too. Trust your gut, and don't let emotions cloud your judgement too.