What Is Backup Withholding Tax? Backup withholding tax is an IRS requirement used to collect taxes on certain types of income payments that are not subject to regular tax withholding. Investors should know that backup withholding is a tax that is levied on investment income. The withholding is at an […]
Taxes
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What Is an Intentionally Defective Grantor Trust (IDGT)? An intentionally defective grantor (IDGT) trust is an estate-planning strategy used to freeze an individual’s assets for estate tax purposes but not for income tax purposes. The intentionally defective grantor trust is set up as a standard grantor trust, but with a […]
NUA – What Is Net Unrealized Appreciation? NUA or net unrealized appreciation is the rise in the value of an employee retirement plan when a lump-sum distribution is made into a taxable account. Instead of being taxed as regular income, the difference in value is taxed at long-term capital gains […]
What Is a Service Charge? A service charge is an additional fee covering administrative, processing, or service costs that are provided when purchasing a product or service. Typically, a service charge covers additional benefits that are linked to the principal product or service that is being purchased. Usually, the fee […]
What Is a Grantor Retained Annuity Trust (GRAT)? A grantor retained annuity trust (GRAT) is a financial tool used in estate planning to reduce taxes on substantial financial transfers made to family members. In these arrangements, an irrevocable trust is established for a specific length or period of time. When […]
Fresh Start Program – How To Start Over with the IRS The IRS Fresh Start Program offers debt offers relief options to delinquent taxpayers. The program makes it easier for taxpayers to pay off significant tax debt and penalties legally. Taxpayers who are unable to pay their Internal Revenue Service […]