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Anna is a writer and editor who holds a bachelor's degree in Economics from the University of California, San Diego. Having diverse interests, Anna enjoys writing on a wide range of topics. Presently, she lives in Encinitas, California, with her husband and two cats.
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 ...
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 ...
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 ...
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 ...
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 ...
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 ...
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 ...
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.
Unsurprisingly, the best option is to always file your tax return on time and pay your balance in full by the ...
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 ...
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 ...
Solvable is a for-profit company that helps customers resolve their tax problems, but a free service for consumers. Partners cannot pay us to guarantee favorable editorial reviews or ratings. We do not publish favorable (or unfavorable) editorial reviews or assessments at the direction of an advertiser or partner. We always work to put consumers first and do our best to provide value in meaningful ways, but our reviews are subjective.
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Solvable is compensated by some of the companies seen on our website. Most often, Solvable receives fees when one of our readers clicks, fills out a form, applies for, or receives a financial product from one of our partners. We also earn fees for capturing consumer stories and writing about them, displaying advertising, having our partners sponsor certain parts of the site, and writing content that may be relevant to our partner and their audience. This compensation may impact where products appear on this site, including article pages, comparison listings, the order in which they appear or if they will even appear on a given page, and our matching recommendations. Solvable has not written about, reviewed, or rated all financial products available to consumers.
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Marketing tax resolution, tax preparation, tax audit help and general tax assistance.
Referrals to services that help consumers with tax resolution, tax preparation, tax audit help and other tax issues.
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Free Solvable Services
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We hope that you find Solvable helpful in your efforts to get a fresh start.
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Business Loans Advertiser Disclosure
Business Loan offers that appear on this site are from companies or affiliates from which solvable may receive compensation. This compensation may impact how and where products appear on this site (including for example, the order in which they appear or whether a lender is “featured” on the site). solvable does not include all Business Loan companies or all types of offers available in the marketplace.
Business Loans are those loans that are for commercial use and any property and/or proceeds from the proposed request will be used by the requestor for commercial purpose only and not for any personal, family or household purposes.
Most of our Business Funding Partners or affiliates, do not require collateral for business loans; however, please note that it is possible to be offered another product by the lender depending on your needs and if the underwriting requirements dictate the same. Traditional bank and SBA loans generally are known for collateral requirements.
There is no one-size fits all business loan. Rather there are several types that will likely be offered and or discussed with you upon completing your request. Business Funding Partners determine the underwriting criteria necessary for approval, you should review each Partner’s terms and conditions to determine which business funding option works for your business’s financial situation. All reasonable efforts are made to provide and maintain accurate information. All rates, fees, and terms are presented without guarantee and are subject to change pursuant to each Partner’s discretion. There is never a guarantee your business will be approved for credit or that upon approval your business will qualify for the advertised rates, fees, or terms shown. Lender terms and conditions will apply and all products may not be available in all states. Ask your loan representative for details.
Student Loan Refinancing Advertiser Disclosure
Student loan offers that appear on this site are from companies or affiliates from which solvable may receive compensation. This compensation may impact how and where products appear on this site (including for example, the order in which they appear or whether a lender is “featured” on the site). solvable does not include all student loan companies or all types of offers available in the marketplace.
Potential savings may vary based on the interest rates, balances and remaining repayment term of the loans you are seeking to refinance. Your overall repayment amount may be higher than the loans you are refinancing even if your monthly payments are lower. Variable rate options will fluctuate over the term of your loan with changes in the LIBOR (or other index utilized by the lender) rate, and will vary based on applicable terms and presence of a cosigner. Fixed interest rates may be based on applicable terms and presence of a co-signer. Additional terms and conditions, and rates are subject to change at any time without notice and may not be available in all states or for all types of current student loans. Such changes should only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Lenders are required to provide every potential borrower with disclosure information before they apply for a private student loan. The Lender you select is required to provide you with an Application Disclosure and an Approval Disclosure within the application process before you accept the terms and conditions of your loan. solvable is not a lender or creditor, it does not offer, extend or alter credit terms. Only participating lenders can perform the full application and deliver the required disclosures, please ask your lender about rates, terms, fees, and potential discounts that may be available for each product.
Certain federal and private student loans may not be eligible for consolidation/refinance.
Certain consolidation/refinance plans may result in higher monthly payments or negative consequences (i.e. prepayment penalties).
Consolidation/refinance may lead to other negative results, such as loss of grace periods.
Loans in default generally cannot be consolidated until completion of a repayment trial plan so tell your lender if you are in default and determine relevant options (be wary of those asking for upfront fees as well)
Other options or programs may fit your needs (i.e. personal loan, debt consolidation and/or debt relief). Consult your financial and/or tax advisor prior to making any decisions.
Solvable is not a creditor as it does not offer, extend or alter credit; rather it is an online market lead generator that allows consumers to shop and compare rates, terms and costs associated with financial products such as mortgages, auto loans, personal loans, student loans, etc. solvable does not originate or fund any product it markets; rather it has a network of lenders or Partners/affiliates. You may choose to speak with one or more of these lenders or Partners/affiliates to determine what your actual terms and savings may be. Only a lender can provide you with a formal application for credit, your inquiry form here is merely an expression of interest and/or intent to obtain credit or assistance. You must discuss your actual credit situation and fill out the lender’s required documents prior to obtaining an extension of credit. Network lenders may not have the best or the lowest rates so you are encouraged to continue to shop and compare additional lenders, credit unions, local financial institutions, etc. to ensure you are truly getting your best deal for your situation.
You should contact your tax professional or other financial advisor to determine if you can actually realize savings by refinancing when it can extend the life of your current loan. You should ask the lender about all terms, rates, fees and costs associated with each product and if you will realize a net tangible benefit from the same. All initial estimated savings is done by trying to calculate what your rate may be; however, solvable does not have that information and cannot guarantee potential savings or that lenders will approve you for such product that would warrant those savings. Rates are not guaranteed and change daily. Lenders/Brokers/Dealers/Partners that perform the actual underwriting will have to determine if you meet their underwriting criteria which is unknown to solvable at the time of matching/offer/quote delivery. All amounts are estimates and examples only and do not represent an actual offer.