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,...

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...

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...

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...

Failure to pay tax owed by the due date can result in a penalty. The deadline to file and pay your federal income tax is usually April 15. However, the due date for 2020 was extended to May 17, 2021. If you are unable to make payment by the due date the IRS will assess a penalty of 0.5% for each month the tax is outstanding with a maximum penalty of 25%. There are certain circumstances, such as for reasonable cause, where the late payment...

It is not unusual for someone to file their income tax return and realize that they have a balance due. What happens though if you owe the IRS but can’t pay the tax now? Thankfully the IRS does not come and arrest you if you can’t pay all your tax immediately. However, taxes not paid by the due date could result in penalties and interest. Don’t panic because there are options available to you. If you owe less than $100,000 and...