Understanding the Home Sale Gain Exclusion. Part 1
Taxpayers could plan on how to apply the principal residence tax break of $250,000 for single taxpayers and $500,000 for married ones when getting married or divorced, or when converting another property into your home. In both marriage and divorce situations, a home...
Did You Request an Extension to File Your Tax Return?
The deadline for taxpayers to file their tax return, if an extension was requested, is October 15. It is reported by the IRS that an estimated 11,000,000 taxpayers do not file their tax return each tax year. As a result, every tax year million of taxpayers leave...
Have You Defaulted on an Agreement with the IRS?
Taxpayers should not ignore their past due tax debts. Many taxpayers have either entered into an agreement with the Internal Revenue Service to pay their tax debts and have failed to honor the agreement or have completely disregarded IRS notices for payments. Taxpayer...
Are you Qualified for the Earned Income Tax Credit?
The earned income tax credit (EITC) is not for every taxpayer. As your income increases, the credit is reduced and it is phased out at an income threshold. Many taxpayers who illegally claimed the earned income tax credit are receiving letters from the Internal...
Are You Taking Good Care of Your Business?
Many small business owners are unknowingly filing the wrong tax return form for their business, do not file their business tax return, incorrectly file their business return by themselves, do not properly keep records, and do not have a spreadsheet or do not use any...
Taxpayer Abused by Husband Gets Relief.
In Gans v. Commissioner, the taxpayer prevailed over the IRS by establishing that she was abused by her husband, among others, and consequently qualified for relief from joint tax liability. Marriage carries many tax consequences that could be minimized through...
Are you Planning to Pay Less Tax Next Year?
Planning the type and sources of your income could save a lot money in taxes. The source of your income determines your tax rates and tax liability. Taxpayers benefit from the lowest rates available when they have diverse sources of income, like real estate, stocks,...
Some Taxpayers Might Need to Opt-Out of the Advance Child Tax Credit.
The Advance Child Tax Credit would cause some taxpayers to owe taxes when they file their tax return for tax year 2021, unless taxpayers who are employees adjust their tax withholding and self-employed taxpayers pay quarterly estimated tax or pay more in...
Do You Plan To Reduce Your Tax Liability In Case of Divorce?
Taxpayers' tax liabilities could be drastically changed after a divorce. However, when a couple is contemplating a divorce, a discussion with their lawyers and tax advisors related to tax implications of their divorce could greatly help in controlling the tax...
Did You Use the Correct Tax Filing Status?
Taxpayers should use the correct tax filing status to avoid audit issue. Taxpayers must openly discuss their specific situation with their tax preparers and provide adequate documentation to prove their tax filing status. Many taxpayers have been audited by the...
Resole Your Tax Debts Before It’s Too Costly!
Taxpayers should take their tax due notices seriously and explore their available options. In 2020, it is estimated that 25 million taxpayers could not pay their taxes or failed to file their returns. The pandemic has made the matter worst and the number is expected...
Be Proactive in Filing Your Tax Return!
It costs taxpayers more money to resolve tax problems. Many taxpayers are currently receiving notices of tax due or notices of intent to levy or to seize their properties from the Internal Revenue Service. This unfortunate outcome could, most of the time, be avoided...
Understanding the Advance Child Tax Credit.
A taxpayer may claim a child tax credit for a qualifying child under the age of 17 who is a dependent on his or her tax return. Taxpayers may also claim a partial child tax credit for dependents who are over the age of 16 and dependents who do not have the required...
How to Take Advantage of Tax Credits Available for Taxpayers Living Overseas.
US citizens and resident aliens are taxed on their worldwide income. Your tax filing obligations follow you wherever you are. The good news: there are several tax rules to avoid double taxation and to lower tax liabilities. Taxpayers should keep track of their...
Income is not Treated Equally under the Tax Code.
The source of your income determines your tax rates and tax liability. Taxpayers benefit from the lowest rates available when they have diverse sources of income, like real estate, stocks, bonds, mutual funds, and other sources. The income that you receive from these...
Do not Panic! Do Not Wait for More than 30 days to Answer IRS Letters!
Even though taxpayers are liable for every position taken on their tax return, however, the code and regulations allow taxpayers to shift the liability for the penalty to others when the taxpayer could prove there was reasonable cause. As per the Internal Revenue Code...
Knowing Your Tax Return Could Protect You and Save You Money.
Tax returns could be very complicated for taxpayers. Regardless of the level of complication, all taxpayers could tremendously benefit by knowing their tax return or by asking questions. Hiring a tax preparer to prepare a tax return does not confer an...
Do You Keep Correct Documentation of Expenses as a Partner or Shareholder Employee?
The Tax Cuts and Jobs Act of 2017 (TCJA) brought many changes to the tax code. Among many other changes, it redefined the deductibility of business expenses and disallowed the deduction of out-of-pocket expenses paid by employees on their personal tax return....
Do You You Keep Required Documentation for Your Car Expenses Deduction?
Improper car expenses deduction documentation is termed the “unpardonable sin" in an Internal Revenue Service (IRS) audit. As self-employed or business owners when taxpayers received letters from the IRS telling them that they are the subject of an IRS audit, there is...
Did You Hire Your Children to Lower Your Tax Liability?
You can hire your children to lower your tax liabilities. If you have not taken the advantage of the tax benefit of hiring your kids because you want them to focus on their school activities, why not changing your focus to get a huge tax saving and give your children...
Do You Have a Tax Debt After Filing Your Return?
Taxpayers should take their tax due notices seriously and explore their available options. It is estimated that in 2020, 25 million taxpayers could not pay their taxes or failed to file their returns. The pandemic has made the matter worst and the number is expected...
The Tax Season has Ended. What’s Next?
The 2020 tax filing season has ended. There were many more surprises and challenges. This tax season, like the 2019 tax season, was very difficult because of all the recent changes from the Jobs Act of 2017 and all the recent Acts enacted by Congress and signed into...
Did You Review Your Tax Return Before You Sign It?
The tax filing deadline has arrived, May 17, 2021. Taxpayers are advised to request an extension to October 15, 2021 if they cannot file on time. Compound interest on tax due starts on May 18, 2021. Taxpayers are liable for the accuracy of their tax return....
Decreasing Tax Liability by Contributing to a Qualified Retirement Plan.
The tax filing deadline has arrived, May 17, 2021. Taxpayers are advised to request an extension to October 15, 2021 if they cannot file on time. Compound interest on tax due starts on May 18, 2021. There is still time to legally lower your tax liability. Many...
Are You Among Taxpayers who Left Unclaimed Money with the Treasury?
Every tax year million of taxpayers leave unclaimed money for the Treasury. Some taxpayers still file paper returns and do not request direct deposit. As a result, some errors are more likely to go undetected and some checks went uncashed. An estimated more than 2...
Do you Take Correct Deduction for your Home Office?
More taxpayers are using their home as office space or to run their business. The number of taxpayers working from home has increased because of the pandemic. Many business owners have cancelled their business lease contract. It is very likely that you have taken some...
Are you Filing the Correct Form for your Business and Keep Good Record?
Many small business owners are unknowingly filing the wrong tax return form for their business, do not properly keep records, and do not have a spreadsheet or do not use any software to track their profit and loss from their business venture. This is not standard...
What the Court Says when IRS Denies International Travel for Tax Debts over $50,000?
The Internal Revenue Code Section 7345 is Not Unconstitutional. In Craig Thomas Jones, plaintiff, v. Steven T. Mnuchin, in his official capacity as Secretary of the Treasury; Charles P. Rettig, in his official capacity as Commissioner of Internal Revenue;...
How Do You File Your Tax Return as a Surviving Spouse?
The Covid-19 pandemic or other circumstances of death have caused this tax season 2020 to be the last tax return for taxpayers who did not survive to see this new year. The deceased representative, the executor, might have to file the last tax form or forms and wonder...
Are You Reducing Tax Liability with Contribution to a Qualified Retirement Plan?
The new tax filing deadline is May 17, 2021. There are several ways to legally lower your tax liability. Many individuals and businesses have used them over years to minimize their taxable income and thus lower their tax due. Besides the most commonly used tax...
A Look at Some Key Provisions of the American Rescue Plan Act.
Congress passed H.R. 1319, the American Rescue Plan Act (the Act) and President Biden signed it into law on March 11, 2021, to relieve the financial burdens facing many taxpayers and to accelerate the recovery of the economy. The Act is a $1.9 trillion relief package...
Do Innocent Spouses Get Relief in Recent Cases?
Recent court cases have shown how it is very difficult for taxpayers to prevail in courts when they seek innocent spouse relief. Marriage carries with it many tax consequences that could be minimized through careful tax planning strategies. Marriage planning should...
Do You Have an Agreement with the IRS or a Tax Debt that you Neglected?
Taxpayers should not ignore their past due tax debts. Many taxpayers have either entered into an agreement with the IRS to pay their tax debts and have failed to honor the agreement or have completely disregarded IRS notices for payments. A taxpayer should not ignore...
Do You Have a Dreadful Schedule C or Schedule A on Your Tax Return?
The tax filing season runs from February 12, 2021 through April 15, 2021! A majority of taxpayers are currently facing the sad reality resulting from a fraudulent Schedule C or Schedule A. In many instances, the harm is devastating because some taxpayers have...
Could a Divorce Settlement Allows a Non custodial Parent to File Head of Household?
The tax filing season runs from February 12, 2021 through April 15, 2021!Some taxpayers have been audited by the Internal Revenue Service because they illegally claim either the earned income tax credit (EITC), the child tax credit (CTC), or other credits for the...
Are You Qualified for the Other Dependent Credit and the Child Tax credit?
A taxpayer may claim a child tax credit for a qualifying child under the age of 17 who is a dependent on his or her tax return. Taxpayers may also claim a partial child tax credit for dependents who are over the age of 16 and dependents who do not have the required...
Do You Know if You Are Qualified for the Earned Income Credit?
The earned income tax credit (EITC) is not for every taxpayer. As your income increases, the credit is reduced and it is phased out at an income threshold.In light of the elimination of most personal deductions, be more vigilant by looking for any schedule C on your...
Should the Bruneaus’ Case be Another Alert for Taxpayers?
Taxpayers are liable for the accuracy of their tax return. Unfortunately, many taxpayers do not know the content of their personal or business tax return. The Internal Revenue Service will not process a return until the taxpayer declares and signs that "Under...
How t he New Covid-19 Related Legislation Impacts Taxpayers and Businesses?
The Consolidated Appropriations Act, 2021, H.R. 133, passed by both houses of Congress on December 21, 2020 and signed into law on December 27, 2020 contains, among others, many COVID-19 related provisions: A second round of direct cash assistance payments of $600 for...
Are You Ready to File Your Tax Return?
Taxpayers should only prepare their tax return when they have all their required tax documents. The return cannot be file with the IRS before the official start date of the tax season. Taxpayers who receive early payments for their return get a high interest loan...
Filing a Deceased Taxpayer Last Tax Return
The pandemic or other circumstances of death happened in the past year have caused this tax season 2020 to be the last tax return for taxpayers who did not survive to see this new year. The deceased representative, the executor, might have to file the last tax form or...
Last Month to Plan a Tax Savings Strategy.
We are at the end of a year that has proven to be a year of lot of changes in many aspects. This year, we have seen tremendous changes in our way of living that will carry over to years to come. However, the changes that the pandemic has brought to the tax laws mainly...
Part 5 of 5. Do You Have a Year-End Tax Planning Strategy?
The following are some of the areas you could explore as tax saving strategies to help you minimize your tax liability as part of your year-end tax planning strategy. December 31 is the last day to plan or revise your existing plan. Qualified Business Income...
Part 4 of 5. Do You Have a Year-End Tax Savings Strategy?
The following are some of the areas you could explore as tax breaks to help you minimize your taxable income as part of your year-end tax planning strategy. Reduction in Business Interest Limitation. The CARES Act reduced the limitation on the deductibility of...
Part 3 of 5. Do You Have a Year-End Tax Savings Strategy?
The following are some of the areas you could explore as tax breaks to help you minimize your taxable income as part of your year-end tax planning strategy. Child and Dependent Tax Credit. For 2020, you may claim as much as a $2,000 credit for each child under age...
Part 2 of 5. Do You Have a Year End Tax Savings Strategy?
The following are some of the areas you could explore to gain tax breaks to help you minimize your tax liability as part of your year-end tax planning strategy. Prepay Expenses Using the IRS Safe Harbor. IRS regulations contain a safe-harbor rule that allows...
Part 1 of 5. Do You Have a Year-End Tax Savings Strategy?
Tax legislation enacted at the end of 2019, as well as new tax laws enacted in 2020 in response to the coronavirus pandemic (COVID-19), will affect your 2020 income tax return. These legislations contain many new provisions which are likely to minimize your 2020 tax...
Setting Up Your Business
Starting a business could be very exciting. Regardless of the type and size of your future business, you must conduct your research and get professional advice before you start your business. You could learn a lot from a successful business owner. Many professionals...
Do You Legally Claim Your Business Travel Deduction?
There is what is called the “unpardonable sin" in an IRS audit. As self employed or business owner when you received a letter from the IRS telling you that you are the subject of an IRS audit, there is one record that receives special attention. This record can create...