The price of employing an accountant depends on several variables, such as the location of the business, the complexity of the client's financial condition, and the accountant's level of expertise. Professional tax preparation can cost anywhere from $176 to $27, by the Association and the national of Accountants. It's possible to save cash by buying tax accounting software and completing the process independently.

Box 3 on Form 1099-MISC is where "Other Income" is reported. The Medicaid and Social Security taxes that would normally be withheld from income in Box 3 are not paid by the self-employed. Sales commissions, prizes, and legal settlements are all valid forms of income to report in Box 3. You are still responsible for paying earnings tax on the amounts listed in Box 3.

1099-INT tax forms show that you received interest throughout the tax year. During the month of February, the Internal Revenue Service may send you a Form 1099-INT, or maybe more than one. Keep it safe, since it may have a significant influence on your tax situation.

Did you know that large corporations avoid paying taxes by taking advantage of loopholes in the tax code? Learn more about how they do it and what you can do to fight back.

Generally speaking, governments levy an income tax on firms and individuals for profits within their borders. Each taxpayer must file an annual income tax return to ascertain their tax liability.