The Collection Due Process (CDP) hearing is often your last chance to avoid an IRS levy or the filing of a federal tax lien. It is a critical right that all taxpayers have before the IRS takes certain enforced collection actions, but you only get this right if you...
Month: September 2019
TAX CONSEQUENCES OF A HOME FORECLOSURE
A home foreclosure is treated as a taxable transfer of your home. It is possible that you could have income from this transaction and need to pay taxes, which would likely be taxed at the capital gains rates. However, there are some cases where you may be able to...
TAX CONSEQUENCES OF SELLING A RENTAL PROPERTY
You will generally owe capital gains tax when you sell a rental property for a gain. If you have a large gain on the sale, this could result in a significant tax bill. You may also owe depreciation recapture tax. This applies to offset all of the depreciation...
TAX PROBLEMS FOR SELF-EMPLOYED TAXPAYERS
Self-employed taxpayers generally have more control over their tax situation. You can make the following decisions related to your taxes: What business expense deductions to claim What business entity to use, such as a partnership or C-corporation How much to pay in...
AUDIT RED FLAGS FOR SELF-EMPLOYED TAXPAYERS
Self-employed taxpayers who use Schedule C have a higher audit risk than other taxpayers. You have the right to claim all of your ordinary and necessary business expenses as a deduction, but the IRS is also more likely to select your return for a tax audit. Your best...
TAX ISSUES FOR REAL ESTATE AGENTS
Many real estate agents operate their businesses as sole proprietorships. They have unique (and often complicated) tax issues because they need to incur and track a lot of expenses in order to make commissions. This can lead to IRS or state tax problems if you don’t...
TAX PROBLEMS FOR TRUCKERS
The Tax Cuts and Jobs Act (TCJA) has been a mixed bag for taxpayers, with some benefiting and others paying more in taxes. One group of taxpayers that is paying more in taxes under the TCJA is truck drivers, specifically company drivers who are not owner-operators....
WHAT TO EXPECT DURING AN IRS TAX AUDIT
When you receive a notice that your tax return is being audited, it will generally cause some anxiety. Even if you think you did your taxes correctly, it’s impossible to know with certainty that the IRS won’t find something wrong with your return. The audit process...
WHAT HAPPENS IF YOU DON’T PAY PAYROLL TAXES?
When a business runs short on cash, it can be tempting to stop paying payroll taxes so you can use that money to operate the business. This is a bad idea because of the steep penalties you’ll face for failing to remit your payroll tax deposits on time. You’re almost...
WHO IS ELIGIBLE FOR AN OFFER IN COMPROMISE?
The IRS Offer in Compromise (OIC) program allows taxpayers to settle their debt for less than they owe, but the eligibility requirements are fairly strict. You must meet all of the following conditions just to be considered for an OIC. No Unfiled Tax Returns The IRS...