Category: Taxes
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Four good reasons to use an ITIN
If you do not have a social security number, perhaps because you do not have legal immigration status in the US yet, then I strongly recommend that you obtain and use an Individual Taxpayer Identification Number (ITIN). Here are four key points: No fear of INS – An ITIN is not used as an immigration enforcement tool. Many millions…
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3 Tips to avoid the individual health insurance tax penalty
If you did not have health insurance for more than two months in 2016 then you may owe a tax penalty when you file this year’s tax return. You may also hear from the IRS about the penalty if your health insurance did not meet minimum federal requirements or if the required tax filings are…
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When is it worthwhile to challenge a tax demand?
Is it worthwhile for a taxpayer to dispute a demand from the IRS or state tax authority for additional tax payment? Does the expected savings resulting from a tax case justify the cost of the dispute process? The answer, we might suspect, it that “it depends”. It depends on the type of demand, the amount and the dispute process that is…
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I cancelled pre-election tax planning offers
Tax planning has always been a larger part of my practice than tax return preparation. That means that this is my busy season. I offered a number of fixed fee tax consultations under assumptions that the 2017 tax code will be basically the same as this current year. Now that seems unlikely. There are suddenly hundreds…
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Why small business taxpayers must use QuickBooks
Note: Throughout this post the term “QuickBooks” means any electronic accounting system, not specifically the brand name product. There is evidence, as cited in the story, that the market dominance of the branded product has caused the term to be used to describe a class of electronic accounting products. I am accredited with QuickBooks and several other accounting…
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How to appeal a Pennsylvania tax penalty
Taxpayers who feel that Pennsylvania tax penalties were improperly applied may appeal those taxes. In many cases the amount of the penalty will exceed the original amount of the tax adjusted. You should explain in detail why your tax relief request should be granted and attach additional documentation, if necessary, of any supporting documents. Petitions for refund…
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The return of flat fee tax planning
This month I am bringing back the flat fee income tax planning service that I promoted a few years ago. I stopped marketing this service last year under criticism from other accountants that I was underselling the value of this type of expertise. I saw it as a great way to attract new clients that justified deliberately…
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Tax collection: Uncivil or just dumb?
Yesterday the Pennsylvania Department of Revenue sent a collection agent to the business office of a local client over a $294 shortage of payroll tax withholding in 2011 through 2014 where the state then added over $750 of interest and penalties. The total bill with interest and penalties is a little over $1100. The business…
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Tax concepts in marriage and divorce
When a married couple owes federal taxes there are different outcomes that may be applicable and available. This blog post lists some of the concepts that IRS recognizes that might be considered in any stressed marital tax settlement: Joint and several liability Injured spouse allocation and relief provisions Innocent Spouse Relief Separation of liability Equitable relief…
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Real estate flippers beware
IRS warns real estate investors to beware of tax schemes targeting real estate investors. The schemes tend to be offered by financial firms that are not professional tax advisers but promise favorable tax savings through the improper use of like-kind exchanges. Sales pitches may encourage taxpayers to exchange non-qualifying vacation or second homes. Many promoters of like-kind…