Can a Company Take Money Out of Your Bank Account Without Permission?

Can a Company Take Money Out of Your Bank Account Without Permission

Most individuals think that a bank is the safest place to keep their money. However, in some cases, a company can reach into your account and take out some cash without your permission. While not all companies have these powers, in some circumstances your financial institution is left without an option but to comply.

When you stop paying your credit cards, the first step is for the company to send you some collection letters or call. These letters and calls get increasingly aggressive as well as nasty as the time goes by. The company will even threaten to arrest you if you do not pay your debt, which isn’t true and violates the current law.

You will have the opportunity to defend yourself, however, if you owe the cash, there are no chances of winning the suit, and the company will obtain a judgment against you. In most cases, the judgment is powerful since it allows the company to take your cash from the bank without your authorization.

General Creditors

Although the current law allows the credit card companies to access your bank accounts in some situations, they cannot touch your account without the express authorization from you. If they take your cash, you have the legal protection against losses if you report the activity within the first 60 days. The bank will have to conduct a thorough investigation and replace the illegally withdrawn funds.

Creditor Fraud

If you make any payments with your current debit card or other forms of electronic transactions, you grant the credit card company the authority to withdraw money from your account. Electronic thieves or unscrupulous creditors can use the information to withdraw more funds than they should. Since the law protects you from loss of the unauthorized transactions and identity theft, you can report the activities in a timely way. Having the information is a way in which some people can gain access to your account.

 

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How do I get my adjusted gross income?

How do I get my adjusted gross income

Tax season is approaching quickly. Few people feel comfortable filing their taxes without a professional looking at their tax return. One of the most critical aspects of a tax return is the adjusted gross income. The adjusted gross income determines which tax bracket a person falls under. For people who are married, there are different thresholds than people who are single.

Depending on the tax return, last year’s adjusted gross income can be in different locations.

  • Form 1040, Line 38
  • Form 1040A, Line 21
  • Form 1040EZ, Line 4

However, it is essential for taxpayers to know why knowing a person’s adjusted gross income is so beneficial. There are also tax strategies that people can utilize to lower adjusted gross income.

Standard Deduction

The standard deduction lowers the taxable income that a person earns. For a single taxpayer, the standard deduction is $12,000 per year. However, a married couple filing jointly can use a standard deduction of $24,000. Without any other adjustments, a married couple earning $40,000 per year will only pay federal income taxes on $16,000 of income.

Other Deductions

There are other deductions available to reduce a person’s adjusted gross income. Each year, a person can invest money in retirement accounts like an IRA or 401(k). Each investment option offers different contribution limits.

In 2018, the contribution limit on a 401(k) was $18,500 for most taxpayers. In 2019, the contribution limit is getting increased to $19,000. Anyone who wants to reduce their tax burden should consider investing more money in pre-tax investment options.

Other Tax Suggestions

Some people feel like paying someone for tax advice is a waste of money. However, for many people, taxes are one of the largest expenses each year. As a result, paying someone to help reduce your taxes is an excellent investment. By lowering a person’s adjusted gross income, it is possible to save thousands of dollars on federal income taxes every year.

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Does Gifting Reduce Your Taxable Income?

does gifting reduce your taxable income

If you are like other hard-working individuals who are disappointed to see the IRS take a sizable bite out of their checks, you could be wondering how you can reduce the amount of taxes you owe each year. You might even be wondering if you can list gifts to friends and family as tax deductions. Although everyone would love the chance to deduct personal gifts, the IRS does not count them when calculating your tax obligation. In fact, giving any one person more than $13,000 worth of gifts means you have to pay taxes on them.

Making Your Gifts Count

The good news is that you can still find ways to help people and reduce your income tax in the process. The key is to give your gifts to charitable organizations that help others. Churches, food drives and children’s hospitals are some examples of organizations to which you can donate in exchange for tax breaks.

You only need a receipt for your donation if you are deducting $250 or less. If you donate more than that to any charitable organization, you need a written statement to prove you donated. Make sure you keep your original receipt if you are going to donate canned food or presents so that you can track the value of each gift.

Final Thoughts

Sadly, you can’t count gifts to friends and family as deductions when it’s time for you to pay the IRS. Tracking the value of personal gifts can increase the amount you owe each year because the limit on annual tax-free gifts is $13,000. Instead of giving all your money to the IRS during tax season, find charitable organizations you support and donate to them.

You can pick the causes you wish to support instead of letting the government decide how to spend all of your taxable income. Your odds of facing an audit are small depending on the amount of money you bring in each year, but you still want to keep track of your donations in case the government takes a look at your records.

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What is the difference between taxable income and adjusted gross income?

What is the difference between taxable income and adjusted gross income

When doing your taxes, you will find that there is a difference between taxable income and adjusted gross income. Understanding the difference can be useful in various areas. For instance, if you are applying for a loan or for certain kinds of benefits, they may want your adjusted gross income. So, if you supply the wrong amount, you can risk being denied for the loan or benefit.

Taxable income encompasses all your earnings. This means all the income you received for the entire year. This income can be from earning wages, social security, and any other source of income. Any source that generates money paid to you is included in your taxable income. So, if you work and earn tips or bonuses, they are included as well. It is basically a total of every source of income. However, this is generally not the amount of money you will be taxed on because you still have deductions that will be subtracted from this amount.

Adjusted gross income is your taxable income minus any deductions. This is where you get to take credit and apply it against your taxable income. There are standard deductions that are applied first. This means that there is a generic amount of money that you can subtract from your taxable income. This reduces the amount of money you have to pay taxes on. However, some people choose to do an itemized deduction. This is appropriate when your itemized deduction amount will exceed your standard deduction. So, if you have a lot of mortgage interest and medical expenses (just to name a few), you may get a larger amount than the standard deduction. This means you have to pay taxes on a smaller amount of your income.

So, when you are planning to do your taxes, know that you have to report every kind of income you received during the year. This is your taxable income. Then, you have to take a look at things you have paid for throughout the year that could be used as a deduction against your taxable income. When you subtract the two, that is your adjusted gross income.

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Can I Give Someone $1 Million Tax-Free?

Can I Give Someone 1 Million Tax-Free

You might think you can give money or property away without needing to document it on your tax paperwork, but that is not the case. At this point, you likely want to know whether or not you can give someone $1 million tax-free.

To get an accurate answer, it’s vital you know federal tax laws and consider how much you have given away in the past. As of 2018, the IRS allows you to give up to $11.1 million in your lifetime. You must also consider the $15,000 annual limit on tax-free gifts.

How It Works

The good news is that you won’t have to pay taxes even if you give someone a gift worth $20,000 in one year. The way it works is that the value of gifts over the annual limit count toward your lifetime limit. In simple terms, you can give someone $1 million in cash or property as a gift without paying as long as you did not exceed your lifetime limit.

What counts as a gift?

If you would like to know what the IRS counts as gifts, this section points you in the right direction. Any cash or property you give goes toward your annual or lifetime limit, but selling the property under the market value also counts as a gift. For example, you have a car worth $20,000 and sell it to someone for $10,000. You have given the person a $10,000 gift as far as the IRS is concerned.

If you mow the lawn for your neighbor, you have given your neighbor a gift worth what most lawn care services would charge for doing it. Medical bills and college tuition are exempt from this rule so you can give people a hand with their medical bills or student loans without paying a share to the tax man.

Final Thoughts

You can give anyone a tax-free gift of $1 million as long as you have not yet gone over your lifetime limit. The law requires you to log the value of all gifts you provide others so that it can decide when your tax obligations activate. The good news, though, is that you won’t have to keep track of your gifts if you are not a millionaire.

 

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