"Money Talks" host Bil Lako, CFP®, shares the top 10 most common mistakes taxpayers make when filing their income tax returns.
In general, you must file a tax return if your gross income exceeds the total of your personal exemption and standard deduction. You should also file a return if you will be due a refund. For a chart of filing requirements for 2009 returns, read this C.P.A. Insight.
If you hire a nanny to care for your children while you are at work, you will also need to take care of your tax responsibilities as an employer. For more information on what you must withhold, how to report it to the IRS, and how the rules differ for teen-age babysitters, read this C.P.A. Insight.
For 2010, the AGI restriction on converting a traditional IRA to a Roth IRA will be lifted. This will allow your wealth to grow tax-free, with no required distributions. For more information on converting a traditional IRA to a Roth IRA and one important caveat to take into consideration when doing so, read this C.P.A. insight
If you work abroad, and your income is taxed in the foreign country in which you work, you must still report that income on your U.S. income tax return. However, there are treaties in place to help mitigate double taxation. For more information on reporting foreign-earned income, read this C.P.A. Insight.