Only five U.S. states currently have no state sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. However, this doesn’t mean they are tax-free—many of them still collect other taxes such as income tax, excise tax, or local municipal taxes.

Stock option taxation depends on the type of option you receive. Statutory stock options (such as incentive stock options or employee stock purchase plans) may trigger alternative minimum tax rules, while nonstatutory options can create taxable events at multiple stages. Because the rules can be complex, it’s wise to seek advice from a qualified tax professional.

Always keep records related to property purchases, improvements, and upgrades, since they can reduce taxable gains when you sell. In addition, documents that establish the cost basis of inherited stocks or assets are essential for heirs when reporting future taxes.

If you’ve lived in your home for at least two of the last five years, you may qualify for a capital gains tax exclusion of up to $250,000 for single filers or $500,000 for married couples. You can also reduce taxable gains by including eligible expenses such as capital improvements, settlement fees, and closing costs.

The AMT system was designed to ensure high-income earners pay their fair share of taxes. To lower your AMT liability, you can manage your adjusted gross income (AGI) by maximizing pre-tax contributions (like retirement plans and flexible spending accounts), choosing tax-efficient investments, and claiming every credit you qualify for.

Common errors include math mistakes, typos, or using the wrong section of a form. Other frequent slip-ups are automatically claiming the standard deduction without checking itemized deductions, missing eligible credits, failing to indicate refund instructions, and making errors when sending payments.