For those considering bankruptcy because of the weight of student loan debts, they likely have unfortunately learned that discharging such debt is notoriously difficult. Essentially, bankruptcy debtors seeking to eliminate student loan debts must follow a rigid standard and show that their financial situation is going to persist and that they have made a good faith effort in paying them. However, courts have held this bar so high that few debtors actually qualify.
The theme of TurboTax commercials reminds us that the fear of the unknown can really control our lives and force us to procrastinate on completing our tax returns. We may fear that we may make mistakes that will lead to unfathomable penalties. We may also fear the power of the federal government to collect on back taxes.
The beginning of April is a very popular time to talk about tax refunds; unless, of course, you are poised to owe Uncle Sam money. Nevertheless, it is still important to think about your tax return in terms of the interest free loans that you may be giving to the federal government because of the withholdings in your paycheck.
While the potential for a startup company to be worth millions of dollars after inception drives many entrepreneurs, the reality is that new businesses do not always realize a profit in their first year of operation. Some many not may not make money for a couple years before becoming profitable (e.g. Amazon). During this period, new businesses may not be required to pay federal income taxes (because of the lack of profit), they still must be responsible for payroll taxes; an expense that is not tax deductible, of course.
Flipping houses may be an attractive way to make money. Taking a distressed house, making repairs and putting it back on the market seems easy enough, especially when you have a penchant for craftsmanship or a good relationship with a contractor. Nevertheless, as much money as you think you will make flipping houses, always remember that Uncle Sam will want his cut.
When a lender decides to cancel a debt (most likely because it is deemed uncollectable) it usually is a benefit to the consumer despite the negative effect on his or her credit rating. Nevertheless, the cancellation of a debt could have important tax implications.
Who knew that when the Atlanta Falcons led the New England Patriots 28-3 midway through the third quarter in Super Bowl LI that the Patriots would prevail? Ask any Patriots fan and they believed. Indeed, they probably put their faith in their team with their wallets before the game by placing bets.
For many businesses, January is the start of a new fiscal year. It definitely begins with promise and optimism especially if the previous year ended strong. But there are also substantial responsibilities when it comes to preparing a federal income tax return. Indeed, there is a duty to ensure that you provide accurate information to the federal government, but as more electronic information is passed between businesses, it is increasingly important to guard against scams.
We want to begin this post by wishing our readers a Happy New Year, and a happy and prosperous 2018. Part of achieving that goal involves the proper preparation of business tax returns. While the April 15 federal income tax filing deadline is months away, tax season can be very busy for tax attorneys, accountants and business owners alike. So it is important to plan diligently. In doing so, it is important to maximize the deductions afforded by the U.S. Tax Code. With this post, we will highlight the importance of properly writing off furniture and technology used in a business.
While we all would like to enjoy the holiday season, we understand that our clients have much more going on than just holiday parties and end-of-year celebrations. Of course, there are timesheet and vacation expenditures, annual reports that must be prepared and, of course, tax preparation tasks.