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There are two types of bad debt that are deductible on a personal income tax return: business bad debt and non business bad debt. Deductible business bad debts are debts that became worthless in the year they were to be deducted. Non-business bad debts are deductible if they meet certain requirements.
→ Read MoreIRS uses private debt collection agencies to collect unpaid taxes.
→ Read MoreLosses are deductible up to the amount of “adjusted basis”. However, individuals cannot deduct losses unless they are either: (1) incurred in a trade or business, (2) incurred in a transaction entered into for profit, (3) arising from fire, storm, shipwreck or other casualty, or (4) from theft. Deductible losses do not include losses from the sale of capital assets, like stocks and other investment securities. Those are capital losses to which special rules apply
→ Read MoreFor tax years before 2006, you must be in full compliance will all filing and payment requirements before completing an application for OIC. This means that you must have had filed your returns on time and if any taxes were owed in the past, payments were made on time.
→ Read MoreA SIMPLE IRA, also known as a “Savings Incentive Match Plan for Employees” is most common among small employers who have less than 100 employees. When Congress created SIMPLE IRAs, it intentionally imposed harsh penalties on early withdrawals because this type of retirement plan is specifically designed to force lower wage workers to save for retirement. Unlike other retirement plans, loans against the value of a SIMPLE IRA are not permitted.
→ Read MoreA single member LLC is viewed under the same conditions as a sole proprietorship for the purposes of taxes. LLC’s with two or more members are viewed as a partnership. As with any business, the business owner does not withhold employment taxes from his earnings to account for employment taxes. Because of this, LLC members must pay self-employment taxes. Silent members are not considered self-employed by the company, so they owe no self-employment taxes, regardless of owning a share. However, silent members are responsible for paying income taxes on any share distributions that they do receive from the company.
→ Read MoreIf the fair market value of the property at the time of the gift to you is less than its adjusted basis, your basis depends on whether you have a gain or a loss when you dispose of the property. Your basis for figuring gain is the same as the donor’s adjusted basis. Your basis for figuring loss is its fair market value when you received the gift. If the fair market value of the property is equal to or greater than your its adjusted basis, your basis is the donor’s adjusted basis at the time you received the gift.
→ Read MoreThere are times when an attorney is necessary, but also many times when you can handle the problems yourself with a little patience and good records. The only time that it is truly necessary to hire an attorney in the event of an audit is when the IRS is charging you with a crime.
→ Read MoreExplanation of how to save income tax by giving income-producing property as a gift to family members.
→ Read MoreTax avoidance is legal; tax evasion is not.
→ Read MoreFind the right lawyer for your legal issue.
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