Why are Tax Issues So Important in Divorce? Divorce or separation can be stressful and can turn someone’s world upside down. However, when it happens divorce settlements often result and marital assets don’t always get distributed the way you expect. We explore situations in which divorce affects income taxes and your tax liability including property transfers and noncash property settlements. Do You Have to Pay Tax on Alimony? Alimony is...
What To Do When Being Audited
An audit is an examination of the financial information reported on a tax return to determine whether that information is correct according to current tax law. You have the burden of proof to substantiate the deductions claimed on their tax return. A tax audit is usually initiated with a letter. You then have a specified number of days to provide the appropriate documentation and/or appeal. You can expect the audit to be conducted by mail or in...
How Do I File Taxes If I Get Paid Under the Table
For many people who get a paycheck taxes can be a breeze. What happens though if you get paid under the table? What if you are only paid in cash? Do you have to report that income? It is important to note that there is a difference between getting paid in cash and paid under the table. Typically an employee who is paid “on the books” will receive a salary and have taxes taken out from that. The amounts withheld will include social security,...
Who Is Responsible for a Deceased Person’s Taxes
It is said that death and taxes are the two guarantees in life. The passing of a loved one is stressful enough without having to worry about the deceased person’s taxes. What happens to the tax filing though when a person dies? Do you have to notify the IRS and if yes how? When someone dies they are referred to as the decedent and for federal purposes most decedents have a filing requirement if his or her income exceeds the standard...
Get an Advance of the Child Tax Credit
It costs money to provide for a child’s needs and the pandemic has just presented additional challenges. Thankfully the IRS knows this and gives eligible taxpayers a credit on their income tax return for claiming a child.The credit is $3,000 for each child between the ages of 6 and 16 years old and $3,600 for each child under 6. The American Rescue Plan increased this amount in 2020 and also allowed for an advance of the credit to be received...
Tax Audit Help
A tax audit is a stressful event. Receiving a letter from the IRS is enough to make most people break into a cold sweat. Such a response is not surprising considering that the IRS can put a lien on your property and garnish your wages. Furthermore, state agencies such as the California Franchise Tax Board and New York State Taxation and Finance can take similar action. Cities that have an income tax may also audit you. Why Did I Get Audited An...