Tax Relief on Loan Interest


by Anna Chumakova on April 02, 2019  0 Comment

Tax Relief on Loan Interest
Anyone paying off their loan can appreciate an opportunity to make the repayment process easier, regardless of the amount of debt they carry. Especially those of us who struggle to get their ends to meet at the end of the month should take advantage of any chance to write off a portion of their payments. Fortunately, the IRS offers individual and business taxpayers quite a few tax relief options on loan interest. For certain types of loans, the IRS allows you to deduct the interest on your yearly tax return. Let's explore different types of interest and see when each qualifies for a tax deduction. Business Loan Interest Generally, the interest on business loans, including mortgages on business property and ...

Promissory Note Tax Implications


by Anna Chumakova on April 02, 2019  0 Comment

Promissory Note Tax Implications
A promissory note is a legal document in which one party promises in writing to pay a certain amount of money to another party by a certain date. Promissory notes are often used for providing investment loans or loans to friends or family who can't obtain finances through traditional institutions. A promissory note obligates the borrower to repay the debt. As such, a default on your promissory note could result in serious tax issues. Whether you are a lender or a borrower on a promissory note, it would serve you well to know how this IOU (I owe you) document works and how it affects your income taxes. Components of a Promissory Note For tax purposes, you need to consider a ...

Resolving Tax Debt From a Spouse


by Anna Chumakova on January 10, 2019  0 Comment

Resolving Tax Debt From a Spouse
Typically treated as a single unit, married couples can still separate their assets and liabilities for tax filing purposes. Your liability for your spouse's debt will be determined by your relationship status and how you filed your taxes.  Several filing strategies can help you protect your assets from being garnished because of your spouse's debt. In terms of the law, married couples are deemed as a single unit with shared income, assets, and liabilities. However, in the tax filing process, the distinction might be made between the two individuals, particularly when one spouse owes back taxes. Whether you are liable for your spouse's taxes will depend on the status of your relationship when the debt was incurred and how you ...

IRS Personal Taxes


by Anna Chumakova on December 05, 2018  0 Comment

IRS Personal Taxes
Owing taxes to the IRS is a serious matter that must be resolved as soon as possible to avoid unpleasant consequences and unnecessary stress. Once you've realized that you owe a hefty tax bill, you must be proactive about the situation, especially if you find yourself unable to pay in full right away. Whether you are short on money due to an emergency or some significant life event, you need to know what to do next and what mistakes to avoid. Costly Mistakes — What Not to Do Before we go into details about what to do if you owe taxes, let's look at some common mistakes taxpayers make. Not Filing Your Return Many taxpayers tend not to file a ...

How to Get Extension on Taxes


by Anna Chumakova on December 02, 2018  0 Comment

How to Get Extension on Taxes
If you can't file your taxes on April 15, apply for a tax extension right away to get another six months to file your taxes. With a tax extension, you will avoid penalties for not filing your taxes, which exceed penalties for not paying by tenfold.  Unlike payment agreements, a tax extension only grants you additional time to file, not to pay. Sometimes life happens to all of us and things could get in the way of our most sincere intentions. You might find yourself unable to submit your tax return on time because you are simply behind on your to-do list. Or, you might already be in debt and delay filing your return because you can't pay your next ...

Taxes for Rideshare/Uber Drivers


by Anna Chumakova on November 28, 2018  0 Comment

Taxes for Rideshare/Uber Drivers
If you recently began driving for Uber, whether full-time or just to make some cash for holidays, you need to know about the tax implications of providing ridesharing services. When you are self-employed, as is the case with Uber drivers, your income tax filing requirements are completely different than those for employees. To prevent any unpleasant surprises, such as tax debt, let's review what changes are in store once you start working for yourself, and discuss your new tax filing process. Uber Drivers Tax Classification Uber drivers are classified as independent contractors providing driver services. At the end of the year, they usually receive Form 1099 instead of a W-2 used for employees. Since Uber drivers are non-employees, Uber doesn't ...

What to Know About IRS Installment Payments


by Anna Chumakova on October 30, 2018  0 Comment

What to Know About IRS Installment Payments
The IRS offers a variety of installment-plan options to help taxpayers pay their tax debt. Although it might be easier to pay the amount you owe in smaller increments, all installment agreements generate penalties and interest.  Both short-term and long-term plans are available, depending on how much you owe, and special setup-fee options are available for low-income taxpayers. Thing's aren't looking good. You've hit rock bottom. Tax debts are at your doorstep and you have no way to make the payments — or do you? If that description sounds applicable to you, then keep reading to learn what you can and should do to improve your debt situation. No solution is going to be completely flawless, but installment payments could ...

IRS Penalty Calculator


by Anna Chumakova on October 29, 2018  0 Comment

We all know that we should file our tax returns and pay any additional taxes owed on time. The major reason is because the Internal Revenue Service (IRS) levies penalty fees and interest for late filings and payments, which start accruing immediately after the due date of the tax return. The good news is that those penalty fees are standardized and can be calculated and accounted for, should you need to file your tax return or send your payment late. The better news is that both penalties and interest stop accumulating once you pay off your balance. Tax Extension Unsurprisingly, the best option is to always file your tax return on time and pay your balance in full by the ...

IRS Payment Agreement


by Anna Chumakova on October 29, 2018  0 Comment

IRS Payment Agreement
The IRS offers various plans and programs for individuals and businesses who are behind on their taxes. Depending on the amount you owe and other circumstances, you could qualify for a short-term or long-term installment agreement. In rare cases and under specific conditions, you could be eligible for an undue hardship plan or offer in compromise. For many individuals, the tax season can be the most stressful time of the year. While many of us are simply anxious about filing our taxes on time and are impatient to get our tax refunds to celebrate or buy something nice, others might feel completely overwhelmed by the amount of paperwork required for filing and the amount of taxes that they owe. Belonging ...

Insolvency Worksheet


by Anna Chumakova on October 29, 2018  0 Comment

Getting all or portion of your debt pardoned can help you or your business start afresh. To take advantage of debt cancellation, it is important to follow all the requirements and have the right information about your options. Learn what debt cancellation entails, what steps to take right after, and how an insolvency worksheet can help you avoid falling back in debt again. Canceled Debt as Income When a debt (such as a credit card or a loan) gets canceled, the debtor must report the canceled debt as income. Numerous exceptions exist that may allow the debtor to exclude the canceled debt from their income, such as if there is a foreclosure on the debtor's primary residence or bankruptcy. Another common ...