IRS Installment Agreement Can Help Pay Your Taxes

The IRS has the ability to grant the taxpayer the option to pay its tax liability over time if it will facilitate collection of their debt. If you are unable to pay the full amount of your debt then an installment agreement may be right for you.

The IRS is driven by the ability to collect outstanding tax debt as quickly as possible. When the IRS determines that you do not have assets that can be liquidated to cover your tax liability they will begin to look for other options. One of these options is to set up a payment plan that you can afford to pay on a monthly basis. To qualify, you must have some form of disposable income that can be applied to your tax liability monthly. This income is any income left over from all your monthly expenditures.

If the IRS grants you an installment agreement, you should remember to write down the information regarding the IRS employee that accepts your application. This can come in handy if you don’t begin to receive monthly ins

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Filing Taxes – Adoption Tax Credit

The purpose of this article is to increase the awareness of those who adopt children to the tax credit contained in The American Taxpayer Relief Act of 2012 (H.R.8) enacted on January 2, 2013. The IRS indicates that this law applies to tax years beginning on or after January 1, 2013. Since I am not an expert on tax law and the circumstances of each person is different, your tax advisor is the proper person to help you decide whether you qualify for the benefits of the Adoption Tax Credit.

The IRS Definition of the Adoption Tax Credit.

In simple terms:

The adoption tax credit offsets qualified adoption expenses, making adoption possible for some families who could not otherwise afford it. Taxpayers who adopt an eligible child may qualify for an adoption tax credit.

Tax Credit No Longer Refundable

At one point the law permitted taxpayers to get a refund from the government for qualified adopt

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Rental Income and Taxes

Have you been thinking of acquiring a rental property or renting part of your house for income? This article will go through the basics of renting property. For more information, visit the CRA web site and search for rental income.

Rental Income is when you rent property for someone else to use. Property is usually thought of as real estate, but it can be anything that can be rented like a car, snowmobile, power tools, computer and so on. The expectation is that there will be profit because if there is no money being made, there would not be any taxes owing. There would still be a requirement to report activity in most cases, but renting something generally assumes that money will be made over time.

Rental Income Versus Business Income

If you are renting a property only, this would be considered rental income. If you are providing a service that goes along with the property and charging for it, then this would be considered a business. The classic example to sho

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The Difference Between Payroll Tax and Estimated Taxes

Often tax payers find themselves owing the IRS even after they’ve paid throughout the year. This has proven to be very confusing, as well as frustrating for many who already feel they pay way too much. In order to gain control over this kind of issue, first you must understand what these taxes constitute and how they are calculated. Only then will you be able to instruct your required payments in a way that produces your desired tax outcome.

If you work as a W-2 employee, then generally you are required to remit payroll taxes. These are funds that are withheld from your check every pay day. Payroll taxes by definition are taxes both employer and employee are required to pay, and are calculated as a percentage of income paid by your employer. This tax is paid two different ways. The first way is funds that employers are required to withhold from your paycheck. The money withheld is used to cover social security, Medicare, income tax, and different insurances (unemploymen

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Cannot Pay Your Taxes?

Here in the United States of America, the collection of taxes is based on your ability to pay. Due to unfortunate circumstances, for example Coronavirus or poor financial management, you may find yourself unable to pay your tax bill.

It has been estimated that in the 2020 extended tax season, as many as a third of American taxpayers may be unable to fully pay their taxes on time.

It is a bad idea to not file income taxes, so consider filing even if you cannot pay!!!

Tax authorities have a file on nearly everyone’s wages and income. Without a filed tax return, tax authorities will create their own substitute for return often lacking deductions and credits a taxpayer would get if they filed. Filing starts clocks on the time you can be audited, the time for collection, and starts aging the tax debt for potential discharge in bankruptcy or offers in compromise. Without filing compliance, it is not possible to get or keep an installment payment agreement, nor t

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Increasing Tax Planning: A Case of a Wolf in a Sheep Skin?

The effects of tax avoidance and tax planning on the society has been a controversial issue for a long time yet governments the world over still have difficulty addressing it. It is believed that all these started from the beginning when business agreements were written by the government or associates of government to favour their family, friends or associates that are in business. Unfortunately, tax planning schemes are a legally accepted business practices for which tax professionals are paid huge sums of money to offer tax planning advisory services for both personal and corporate decision making.

According to Investopedia, tax planning is the analysis of a financial situation or plan from a tax perspective. It is an exercise undertaken to minimize tax liability through the best use of all available resources, deductions, exclusions, exemptions, etc. to reduce income and/or capital gains (businessdirectory.com). Tax planning therefore encompasses many different considerati

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IRS Statute of Limitations – Do Taxes Ever Expire?

Many Americans believe that an IRS debt is a debt for life and that the tax collector can hound them to the grave. Thankfully, that is not the case! There are statutory time limits restricting the ability of IRS to examine and collect taxes. Taxes do expire at some point and in many cases IRS does not get the money they were legally entitled to collect.

Basically, IRS has 10 years from the date they send out their first bill to collect the tax. The federal tax collector must get the cash before the clock runs out. The 10 Year Rule does not apply to state taxes as each sets its own statutes.

For tax assessments made after November 5, 1990, the IRS cannot collect the tax after 10 years from the date of the tax assessment absent special circumstances. If you never file a tax return, there is no statute of limitations on IRS requiring you to file, but as a matter of policy, IRS generally only requires non-filers to file the last 6-7 years. If IRS files for you by doing a S

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Property Taxes – What Taxes Do You Pay If You Have an Investment Property?

In Australia there are no investment property taxes as such, however your property sale may be subject to Capital Gains Tax (CGT). The purchase and sale of your property in Australia will be subject to Goods and Services Tax (GST) and your rental income will be subject to Income Tax.

GST is paid on almost everything in Australia at a rate of 10% on the purchase price of your property. GST must be paid on all property that is connected with Australia. With regard to residential property in Australia that is purchased and rented out, the investor can make a claim on input tax credits. That is any GST paid on goods and services purchased to maintain the property can be claimed as input tax credits. These input tax credits can be claimed on a Business Activity Statements (BAS) as a refund and reduce the amount of GST paid overall.

If your Investment Property is held as in a Trust or purchased by a Company, the Trust or Company must register for GST if it’s turnover i

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Beneficiary and Fiduciary Liability for Income, Gift and Estate Taxes

It can be either a blessing or a curse to be appointed as the Personal Representative of an estate or Trustee of a trust (collectively a “Fiduciary”). One of the most over looked aspects of the job is the fact that the U.S. Government has a “general tax lien” on all estate and trust property when a decedent leaves assessed and unpaid taxes and a “special tax lien” for estate taxes on a decedent’s death. As a result, when advising a Fiduciary on the estate and trust administration process it is important to inform them that with the responsibility also comes the potential for personal liability.

On many occasions a Fiduciary may be placed into a position where assets passing outside the probate estate (life insurance, jointly held property, retirement accounts, and pension plans) or trust, over which they have no control, constitute a substantial portion of the assets (real property, stocks, cash, etc.) subject to estate taxation. With

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How To Minimize The Impact Of High Property Taxes

Property tax is a form of tax that is directly levied on all types of real estate property. These taxes can be really worrisome for the property owner, as they tend to rise steadily over time. Since people usually take a mortgage for their property, an added charge that increases with time is a further inconvenience. Instead of worrying when tax time rolls around, here are some steps you can follow to minimize the impact of high property taxes.

Limit Curb Appeal

Property tax is levied on the assessed value, which is determined by a tax assessor. The assessed value is calculated taking in various factors like the attractiveness of the house, comparison with neighboring houses, and also the general vicinity. So to ensure that your assessed value remains reasonable, you can avoid any fancy surface alterations, as this ensures that your house doesn’t appear too primped-out.

Avoid Structural Changes

The simplest way to e

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