For many people, their homes are their largest and most expensive asset. In addition, for many people in the middle class their net worth is mostly tied up in the equity of their home. There are many people that have had issues with their homes over the past couple of years, however. When the housing market crash in 2007 and 2008, many people found themselves under water on their mortgages where they owed more than the home was worth. In general, when anyone is removed of their obligation on paying back a debt that amount is taxable. For example, if someone owed another person $1,000 and that was cancelled, that $1,000 would be taxable. If a person was in the 20% tax bracket, they would owe $200 on the $1,000 that was cancelled. The good news for home owners that find themselves in a bad situation on a home is that mortgage debt is generally tax exempt.
Whenever money is borrowed through legal means, a person has the responsibility to pay that debt back. However, due to a variety of circumstances people have to default on their debts all of the time. If a lender cancels a debt that is... read article
The Internal Revenue Service Website has been hacked, which has compromised the personal and financial information of thousands of people. The hackers were able to gain access to over 100,000 accounts. The Internal Revenue Service has stated that there were 100,000 other attempts made, but they were unsuccessful due to incorrect information. The agency has stated that the attacks first started in February 2015.
The criminals were able to obtain taxpayer information from other sources and use it to answer personal identity questions on the website. People's date of birth, social security information and street addresses were some of the different types of information stolen. The hackers used The Get Transcript Application to gain access to taxpayer information.
The Get Transcript Application allows people to view their tax return, wages and incomes reported to the IRS and tax account information on the IRS website. It is estimated that 23 million people used the Get Transcript Application last year in order to access their tax information.
One of the reasons that the hackers were able to use the access the Get Transcript Application was because it is relatively simple to access. In order to start the process, one must provide a valid email address... read article
2015 has introduced new tax reforms on the state level, federal level and international level. These tax reforms will impact business conduct and procedures in various ways. As long as executives remain familiar with the basic changes, conducting business as usual for 2015 through 2016 should be no sweat.
Some of the key reasons why businesses may be affected in 2015 is the government’s pressure for transparency and political members’ progressive economic projections for the coming years. Such pressures make for strategic plans and firm projections difficult for some companies. In order to remain in compliance with these reforms, hiring a law firm for business tax related purposes is essential, especially with the increase demand for documentation and reportings. Below are tips and outlines of issues that may assist leaders in strategizing and preparing for a challenging road ahead.
Increased Demand for Transparency
In late 2014, an increased pressure for transparency was put on businesses, with a demand for documentation of all transactions, and reporting obligations. These changes were put in place for the sake of putting public speculations and suspicions at ease. Companies that are in... read article
April 15 is the deadline to file your federal income tax return. It is also the deadline to pay any taxes that you owe. The Internal Revenue Service can impose penalties for people who do not file their taxes by the deadline. People who owe taxes but do not pay them by the April 15th deadline may also be required to pay a penalty.
If you choose to file your taxes late, then there are a few things that you need to know. Below is a list of some of the most important things you need to know about filing your taxes late:
1.) If you do not file your taxes by the tax filing deadline, then you may be required to pay a failure to file penalty. You may also be required to pay a failure to pay penalty if you do not pay all of your taxes by the tax filing deadline.
2.) In most cases, the failure to file penalty is higher than the failure to pay penalty. Even if you will not be able to pay your taxes by the deadline, you should still try to file by April 15. You should try to pay as much of your... read article
Management of taxes is one of the most important parts of any long term financial plan, often gets neglected for many reasons, not all of them predictable. There are times in life when at the end of the year taxes will be owed instead of getting a refund. Many people work 1099 jobs where taxes are not taken out during the year and must be accounted for before tax day. There are many other reasons why taxes could be owed, such as the sale of an investment or other taxable gain.
Many times, when a large amount of money is owed for taxes it comes as a surprise to the people that owe the taxes. For most people in the United States, having to pay several thousand dollars or more in taxes is not something that can happen with money in the bank. Thankfully there are programs provided by the Internal Revenue Service that can help taxpayers slowly pay off their tax debt over time.
Payment Plans Also Called Installment Agreements
If someone owes taxes and cannot pay them on time, there are several options available to them. First of all, it is important to know that any time taxes are owed to... read article
There was speculation after Congress passed a tax-extender bill in late December 2014 near the end of its session that in combination with budgetary cutbacks the legislation might delay taxpayer filings and Internal Revenue Service (IRS) processing. In a December 18 press conference, IRS Commissioner John Koskinen warned that congressional budget cuts might delay taxpayer refunds because fewer than the normal number of IRS agents would be available to audit returns and to assist taxpayers calling in with questions.
On December 29, 2014, the IRS said that it anticipated opening of the 2015 tax filing season as normally scheduled on January 20, 2015, when the agency would begin processing electronic and paper tax returns as usual. Commissioner Koskinen said that the tax extender legislation enacted ten days earlier on December 19 had had no effect so far on the continued updating and testing of IRS systems.
But by early January, two weeks before the start of the tax filing season, taxpayers were apprehensive. They braced for a season of misery. Commissioner Koskinen had advised agency employees that the budget revisions would reduce the scope of taxpayer services and that "realistically [IRS agents] would have no choice but to do less... read article
The rumor mill was abuzz, but alas, it was all just rumor. The Internal Revenue Service will not be issuing an emergency tax deadline extension in 2015, although there was talk of a possibility earlier in the year. The IRS announced in December 2014 that it would begin accepting tax returns on January 20, 2015 and anticipated no delays in tax returns this year. While the budget cuts to the Internal Revenue Service operating budget were fueling the possibility of delayed returns, the federal government said that everything was on running on time to begin processing tax filings.
The result of this adaptability by the revenue agency means that there will be no tax deadline extension this year. However, those who have not prepared their taxes as of now are eligible for an extension as long as they request it by midnight April 15. 2015. which is a hard deadline in most tax filing seasons. It will be the same this year, regardless of the deadline extension anticipation. While the interest on the extended taxes owed will only be 5%, that is not the case with the penalty for a late filing. The penalty can be upwards to 25% and is... read article
Tax laws are constantly changing. It is important for you to take note of these changes when you are doing your taxes. Below is a list of some of the 2015 tax law changes that you will need to know about:
Health Insurance Penalty
The Affordable Care Act requires that every person in America have health insurance. People who do not have health insurance are required to pay a tax penalty. The penalty for not having health insurance in 2014 is one percent of your total household income or $95 per person, which ever one is greater.
However, the fees are even greater in 2015. The penalty for not having health insurance in 2015 will be two percent of your total household income or $235 per person. These fees can really add up, so you want to make sure that you have health insurance so you can avoid paying those fees.
401 (K) Limits
The limit on the amount of money employees are able to contribute to their 401K plan will increase to 18,000. This is a $500 increase from 2014. The catch-up allowance for people who are over the age of 50 has also increased. People are now allowed to make an additional $6,000... read article
What actually happens to Americans who either forget or flat out refuse to file their taxes?
Have you ever wondered what will happen if you forget or simply refuse to file your taxes? The answer to that question is quite simple. Nothing good comes from not filing your taxes.
To state it simply, there’s no hiding from the IRS. Any IRS worker will tell you to pick a payment option, and to honor your agreement terms. The last thing you need is to deal with the hefty fines, mountains of paperwork, and even jail time that can come with not filing your taxes.
Let’s Say You Haven’t Filed Your Taxes At All
If you’ve skipped filing your taxes all together, you’re guaranteed to have to pay a five percent monthly fee on whatever amount you owe. It will max out at 25 percent. Waiting more than 60 days to file can cause you to have to pay a $135 fine or 100 percent of the taxes you currently owe.
Understanding Filing Extensions
If you’ve managed to get an extension and haven’t paid your taxes, that doesn’t mean you have until October 15th to file your taxes. That’s right, you won’t have an extra six months to... read article
One of the last things anyone wants to go through is an extensive legal battle with the IRS, but unfortunately this is an all too common occurrence. The U.S. tax system is complex and can be difficult to navigate. Because of the complexity of the tax system, people often find themselves facing huge penalties, including fines or even jail time, for failing to hire the appropriate tax professionals for guidance. Once you find yourself in poor standing with the IRS, it is vital that you secure an experienced tax attorney to ensure that all of your rights are protected and all of your options are exhausted. A tax attorney deals with these matters all of the time, this is their area of expertise, so it is better that you hire one to assist you sooner rather than later.
There are many reasons to hire a tax attorney, with one of those reasons being the fact that your attorney is exempt from testifying against you, based on attorney-client privilege. The same cannot be said for a CPA or tax preparer that may and very likely will be called upon to testify against you in a court of law. You want a professional... read article