Did you know everything about your family's finances? Did you rely on your spouse to handle it all, including filing income tax returns? If the IRS later comes after your former spouse and you, you may qualify as an "innocent spouse," which means that you may not be held liable for any wrongdoing by your ex-spouse during the marriage.
It just is not always possible for many Massachusetts residents to meet their financial obligations. Medical emergencies, job losses and other catastrophic events can quickly drain any monetary resources a family may have. Another event that can result in an adverse financial event is owing taxes. Fortunately, more than one way exists to deal with tax collection cases.
Many Massachusetts residents find themselves in dire financial circumstances due to IRS obligations. Whether they can pull themselves out of the situation depends on a variety of factors, and some will find that their best debt relief option involves much more than tightening up the budget or trying to work out a deal with creditors. In many cases, the best way to resolve the situation is to file bankruptcy. However, many people believe that taxes and bankruptcy just do not mix.
Almost for as long as there have been computers, there have been scammers and hackers misusing them for nefarious purposes. That remains true to this day, with new scam tactics arising every day.
We’ve discussed previously the importance of proper estimated tax payments if you have a profitable hobby or so-called “side-gig.” It’s understood and fairly well-known that if your side project brings in more than $1000 per year (via cash, check, bank account transfers, electronic currency or other source), you need to report that income, even if you don’t receive a 1099-MISC, W-2 or other similar tax form. You can also deduct qualified business expenses for a side gig just like you’d be able to with a full-time job.
Especially since 9/11, the federal government keeps a close eye on monies, assets and accounts held by American citizens that come from foreign countries. In order to determine whether a Massachusetts resident or entity must file a Report of Foreign Bank and Financial Accounts and/or IRS Form 8938, a party must review the FBAR requirements and the reporting requirements of the IRS. Having to file one may not mean having to file the other, depending on the circumstances.
Changes coming as a result of the 2018 Tax Cuts and Jobs Act could leave some alimony recipients – and payers – out in the proverbial cold in 2019. Next year will bring the end of a very popular tax credit that allows alimony payers to deduct payments from their overall taxable income. This means that, for the wealthiest Americans, their entire yearly income will be taxed at the 37 percent tax rate, not just the amount left over after paying alimony.
Achieving a Better Life Experience (ABLE) accounts are savings accounts that allow disabled persons and their loved ones to save money for disability-related expenses. Such expenses could include technological advances to aid in independence, home renovations for accessibility, and dental/medical costs not covered by government benefits (like social security disability income (SSDI), supplemental security income (SSI), Medicare or Medicaid).
With the expanding popularity of short-term rental programs like “HomeToGo,” “AirBNB” and “HomeAway,” increasing numbers of homeowners are offering to let strangers use their houses, apartments and condos. These involve allowing someone to use the home for a set time for a fee, similar to staying in a hotel.
As we have noted in prior posts, small business owners must be vigilant in keeping good records not just for tax season, but throughout the year. Not only is this a practice that is vital to business success, but mistakes and inaccuracies can lead to audits.