IRS Tax Debt : Power of IRS to Collect It & What You Should Do

irs tax debt offer in compromise

When a taxpayer has a tax debt , the Internal Revenue Code provides a number of legal provisions that can be used by the IRS  to collect it. The IRS tax debt can actually increase the demand periodically on account of interest on the tax debt, penalty sum for the delay in tax payments etc. …

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What is Hobby Loss Rules ?

What is Hobby Loss Rules

What is Hobby Loss RulesThe term “Hobby Loss Rule” is quite significant and basically states that the expenditure  to pursue a recreational activity which is not recouped as the law allows deduction of expense only to the extent of income earned by the hobby or recreational activity.  Internal Revenue Code (IRC) §183  provides the law to  curb perceived loss deduction abuses by hobbyists. Simply put , while in case of a  business activity , one gets deduction of  all expenses/losses incurred even if there is no profit , the same benefit is not available if the  activity is treated as hobby .In case of hobbies , the expenses related to the hobby are only deductible up to the amount of any income you earned from your hobby. This is termed as  hobby loss rules . The hobby loss rules apply to individuals, S corporations, trusts, estates, and partnerships, but not to C corporations

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Ultimate Tax Filing Preparation Checklist

Tax season has  started and  you must have started to think about your tax filing . In order to cruise through this annual ritual smoothly , we have suggest you to use this checklist. This will smoothen the process of filing your taxes.  The tax filing  check list has been prepared for a wide audience , so some of the items listed may not  apply to your specific tax situation.

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How Long Do You Have to Keep Tax Records ?

The records that were basis for various claim in the tax return is required to be kept for at least the time upto which the IRS has power to initiate any kind of action under Internal Revenue Code.You should keep all receipts, canceled checks, and other evidence to prove amounts you claim as deductions, exclusions, or credits. Also note that there is no expiration date for audits on taxes not filed or taxes filed fraudulently. Therefore , if such is the case , one must preserve the records forever. You will need every single document if and when the IRS catches up with you. You will also most probably need a very good lawyer. In other words ,records should be retained for as long as they are important for any income tax law .

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What are 1031 Exchange Property?

qualified properties

qualified properties1031 Exchange of property saves you a lot of tax . Use this calculator to find out tax savings due to  1031 exchange . But this tax benefit accrues to a tax payer only if the properties qualify for 1031 exchange treatment. So, before you think to defer gains on a property ,one must understand clearly  the type of property or assets that qualify as qualified use property for 1031 exchange purposes. For a successful deferment plan under section 1031 of IRC,, it must be examined if all the conditions are satisfied by the said properties .

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How to Amend Taxes : 5 Things You Need to Know !

how to amend taxesAmending tax return may be needed because as the famous saying goes – to err is human. So ,you may just find that  there are certain error(s) in your tax return filed with IRS . This knowledge of errors in tax return require that you take immediate corrective step for rectifying the mistake and file  an amended tax return .Please note that , the IRS may , while processing your tax return , may rectify  mathematical or clerical errors on a return, therefore such error does not require any action on your part . But , any error which is not clerical error , must be rectified by filing a revised or amended return specially if there’s a change in your filing status, income, deductions, or credits.

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IRS Refund Expected Date Finder

IRS refund schedule for 2019 is out and you can very well estimate the expected date of direct deposit of refunds and the by mail . Just select the date of filing of your tax return ( return receipt date by IRS) and you will get expected date from the little calculator below

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