E. Napoletano

Writer and Columnist at Freelance

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Articles

How to Amend a Tax Return: How and When to File Form 1040-X

1 month ago | wsj.com | E. Napoletano

You can file an amended return directly with the IRS for free, or you can use the tax prep method you used to originally file. You should file an amended return if you find an error or omission that causes you to owe more taxes. If you find an error that reduces your tax liability, you should file the amendment if the cost is less than the savings. While filing taxes is ideally a one-and-done affair, about three million people each year find they need to update a previously filed return.
Tax Credit vs. Deduction: What’s the Difference?

1 month ago | wsj.com | E. Napoletano

Tax deductions reduce your taxable income. Tax credits directly reduce your tax liability. There are two types of tax deductions: above the line and below the line. There are three types of tax credits: refundable, partially refundable and non-refundable. Tax deductions and tax credits are ways to whittle down what you owe to Uncle Sam. Both lower your tax bill, but do so in different ways.
Estimated Tax Payments: What They Are and Who Needs to Make Them

1 month ago | wsj.com | E. Napoletano

Key takeawaysYou should make quarterly estimated taxes if you owed more than $1,000 when you filed your return. Estimated taxes need to cover either 90% of this year's tax liability or 100% of last year's tax liability (110% if you earn over $150,000). You can pay for free online, by mail or in person. You might think of April as “tax time,” but U.S. taxpayers are required to pay taxes throughout the year.
What Is an Expense Ratio?

1 month ago | wsj.com | E. Napoletano

While countless tout commission-free trades on assets including exchange-traded funds and mutual funds, these investments are far from free. There’s a not-so-hidden cost of ownership for both and called an expense ratio, and there’s no opt-out box to check when you own these investments. Expense ratios are the annual costs you’ll pay to own an ETF or mutual fund. Even though these fees have recently declined, every dollar you pay in fees eats into your overall investment returns.
What Is a W-4 and How To Complete It?

1 month ago | wsj.com | E. Napoletano

Key takeaways A W-4 tells your employer what to withhold from your paycheck to cover your income taxes. You will complete a W-4 when you start a new job. Consider filling out a new W-4 if you are unhappy with your withholdings or if you have major life changes. A surprise such as a promotion or birthday celebration can be exciting, but surprises are generally less welcome when it comes to taxes.
How to Fill Out a Form 1040

1 month ago | wsj.com | E. Napoletano

Form 1040 is the form you fill out to complete your tax return. There are several additional Schedules and worksheets to complete to help you calculate your deductions and credits. You can fill this out by hand, but it's easier to use tax software or hire a tax preparer to complete your return.
What Is a Good Credit Score?

1 month ago | wsj.com | E. Napoletano

The definition of “good” is often tough to quantify in finance. From stock prices to the size of your retirement nest egg, a “good” one depends heavily on who’s making the assessment and when. Thankfully, there’s one finance realm where “good” has a more precise definition: credit scores. Scores range from 300 to 850, and while what is considered a good credit score can vary slightly depending on the scoring agency, it’s typically between 660 and 780.
How High Will Jumbo CD Rates Go in 2023?

1 month ago | wsj.com | E. Napoletano

If you have a significant chunk of cash to stash, you’re in luck: Jumbo CDs—generally requiring a $100,000 minimum deposit—have better rates than investors have seen in years. There’s a catch, though. In an unusual situation, many regular CDs offer higher yields than jumbos without the hefty deposit minimum and steep early withdrawal penalties jumbos entail.
What Is the Standard Deduction?

1 month ago | wsj.com | E. Napoletano

It might be challenging to think of the Internal Revenue Service as offering taxpayers choices. After all, income taxes aren’t optional. However, the IRS empowers you with one clear choice every time you file: You can reduce your taxable income by itemizing your deductions or by taking the IRS’s standard deduction. When you itemize, you add up expenses in various eligible categories and use the sum to reduce your taxable income.
What Happens If You File Your Taxes Late—And How to Avoid Big Penalties

1 month ago | wsj.com | E. Napoletano

Key takeawaysIf you don't pay your taxes by April 15, you could owe failure-to-pay penalties and interest. If you don't file your return on time and don't owe anything, there is no penalty, but you could lose access to your tax return. If you don't file on time and owe taxes, you are charged a failure-to-file penalty on top of the failure-to-pay penalty, plus interest. There is a difference between filing your tax return late and paying your taxes late.