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I was working when I was in my 20's and I was dumb and never filed taxes - I thought they were done for me - but I was an independent contractor - (20's)
Hello - Certain back taxes can be discharged in bankruptcy, generally, those that are more than 3 tax years old, for which a return was timely filed, and presuming there was no fraud, etc., in the taxpayer's conduct. It's a pretty mechanical test. I actually wrote a blog post explaining this much more, which I am including here as a link.
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1. If I just want to file my taxes, Since I’m an beneficiary of an estate Should I hire a regular Accountant or will a Estate Tax Attorney be more efficient ? 2. If I want to file my taxes AND am questioning some of the accounting of the estat...
Although it may at first glance sound like overkill, if you want to do things right I would consult with both an estate tax attorney and a CPA. It's important to understand that we have different mentalities. The CPA is in a better position to evaluate the numbers and the propriety or accuracy of any accounting that the personal representative or executor may have done. They can also advise you on what returns you will need to file. Most tax attorneys do not file tax returns and that's probably a good thing. A good estate tax attorney will advise you on things that a CPA may not or may simply not think about. This might include certain elections you need to make (such as rolling over IRAs) and why you should or should not make them. When it comes to estate administration you basically have only one chance to get it right, and there can be some very unforgiving deadlines and consequences you need to be aware of. If you spend a few bucks in fees so be it, especially if there is more than a few bucks in the estate.
You should probably hire in New York, if you can, since there may also be state tax considerations that are very important, especially since New York taxes everything that moves and many things that do not. You should meet any advisor(s) in person. Also, when it comes to selecting a tax attorney I definitely, positively recommend only considering someone with an LL.M. in tax. It is such a complex area of law that without that training it is very hard to see the big picture. I'll admit I'm biased on that, but it's true. I can provide a good CPA recommendation for New York. Good luck!See question
That's true. As one of my colleagues mentions whether you are ACTUALLY an "independent contractor" depends on your relationship with your employer. If we assume that you are (and that the employer did not have to withhold taxes for you or pay employment taxes for you), be sure to check with your accountant. You will have to pay self employment taxes (this is different than your regular income tax), since your employer did not do so for you. Click the link below for my article on the differences between employees and independent contractors.See question
I personally give my accounting / bookkeeping firm all of my usernames and passwords to all of my accounts for pretty much everything. I obviously trust them and their procedures for keeping my information secure. This allows them to manage all of my company's affairs without my even having to be involved. They download all of the banking information they need into their systems. I never have to provide receipts or even email them much. It's a great arrangement since I am a tax attorney, and do not know or want to know about the bookkeeping side of the equation.See question
We are getting divorced and he filed the '11 return and "cut and pasted" my signature. The IRS returned the entire file asking for original signatures. Then he filed electronically w/o my knowledge (or the attorneys knowledge). We owed a substa...
First, I'm sorry to hear of this, which is undoubtedly causing you some distress. I agree with my colleagues in that I think your first step is indeed to contact the IRS, or have a tax professional contact them, and let them know that your signature is invalid. The IRS doesn't want forged documents running around anymore than you do. Your husband should know, or care, that the return is signed under penalties of perjury as well. The Service is paying more attention these days to duress-type situations. If you are able to do this then you would file an married filing individually return for that year (I assume the divorce is not yet final).
Let's assume that you're not able to work it out, however, and the return is accepted as valid with you being jointly and severally liable for the full amount. If that is the case you might qualify for one of the "spousal" remedies: injured spouse, innocent spouse, allocation of liability or equitable relief. Which of these might apply depends in large part on whether there was an item of income that you did not know about or benefit from (such as if your husband opened an IRA in your name, lost money gambling without your knowledge, etc). It also depends upon whether there was under-reported income (i.e. he didn't put down the hidden income or loss), or underpaid tax (i.e. everything was basically correct but you didn't pay all of the tax).
These would be issues to look at in the event you are unsuccessful in straightening it out at this point. As a tax attorney in Naples and Fort Myers, Florida I would be pleased to advise you if this is the case. Hope this helps!See question
Hello, I bought a condo in Mar 2007 as a primary Residence, but due to financial hardship i moved to a cheaper place and rented this condo in 2009 Jan. On Sep 2011 Bank foreclosed this condo as i was not making payments from last 10 months. ...
I agree that the first question you need to ask is whether this could be a "capital" (generally, investment property) asset at all. That is a fact specific determination. Some of the factors include whether and how you advertised the property, whether you rented it to a friend or family member versus making it available to the public, and whether the rent was at fair market value. Here I do not believe that it would be treated as a capital asset allowing you to take a capital loss, in part because your investment in the property was for a majority of the time as a personal residence, and I don't think the facts are strong enough to support a business characterization for this property.
That said, the issue then is whether you have COD (cancellation of debt) income. The law says that you have COD income where you no longer have an obligation to pay an otherwise legally enforceable debt. There are exceptions to this rule, however. I believe here you would fall under the "insolvency" exception under IRC Sec. 108, which basically says that you will not be considered to have COD income by the amount by which you are "underwater" in your finances (that is, your liabilities minus your assets). In short, your tax consequences may be minimal. Tell your accountant to have a look at Form 982 when filing your return.
Hope this helps!See question
We filed chapter 7 over a year ago and have been dismissed since June 2010. Now we are needing a car loan around the end of the year. We have no more debt except our home. Our truck was just paid off last month. What should our next step rebui...
By "dismissed" I assume that your bankruptcy was "successful" - that is, you received a discharge, the estate was administered (that is, if you had any non-exempt property you either repurchased it or surrendered it), and the case was closed. I assume that it wasn't dismissed for another reason, such as failing to submit all the paperwork, etc.
It sounds like you have indeed received your "fresh start" and you can begin rebuilding your credit immediately. While the bankruptcy technically stays on your credit report for up to 10 years your remaining debt account (the home) will be current as you pay. Over time this will raise your credit score. Hopefully you'll get the decent interest rate you are looking for.
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I recently completed a deed in lieu of foreclosure for 2 condos. The two banks will send me a 1099 form each (forgiveness of debt) by next year. When I do my taxes next year, one of these 1099 forms froms will not be taxable because one of the c...
As a tax attorney in Naples Florida (ground zero, basically, for the real estate crash), I consider this issue all the time. You are correct in that what would otherwise be taxable income from the forgiveness of indebtedness / cancellation of debt (COD) is excluded from income under the The Mortgage Forgiveness Debt Relief Act, up to $1M. I assume the amount forgiven is less than this.
The IRS standard for "insolvency" is simply the amount by which your liabilities exceed your assets at the time the debt is cancelled. Valuing your property is easy in the case of cash accounts, etc (face value), and a reasonable methodology for valuing most other tangible assets will be acceptable (e.g. a home appraisal) for these purposes.
One "gotcha" in this equation are qualified retirement accounts such as IRAs and 401(k)s. Even thought these accounts are protected from creditors under common law they DO count towards the value of your assets. Another important fact (this one in your favor) is that your liabilities are calculated prior to the cancellation of the debt. As such, you get "credit", so to speak, for that amount of debt prior to the asset being liquidated (i.e. your foreclosure).
Bankruptcy under the relevant Internal Revenue Code provision (Sec. 108) is distinct from the insolvency exclusion and therefore in my view no, you would not need to file bankruptcy in order to get relief from these tax consequences.
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HAD THE MEETING WITH THE TRUSTEE AND I WANTED TO USE MY 401K. NEED THE MONEY. DON'T HAVE A JOB and iam berearly making it?
While I generally advise clients to do absolutely everything possible to avoid withdrawing from retirement accounts, if you must to survive you may do so in a Chapter 7 without prejudicing your bankruptcy. This is because you are making this conversion "post petition", that is, after your filing date. The result is in all likelihood the same in a Chapter 13 since this does not reflect a new source of income but rather the liquidation of an asset. Be sure to check, however, whether you must seek court approval to make this sale if you are in a Chapter 13.See question
y art at Art Festivals in Florida and else where. Will I be jeopardizine my Unemployment compensation by getiting the Certificate and selling my Art? I think I can and would only have to report taxes collected to the appropriate state and income t...
As a Florida attorney with extensive sales and use tax experience I can tell you I am unaware of any provision of Florida law that requires the state to report sales and use tax collected or paid by Florida businesses to other states, which is what presumably would "jeopardize" your rights to NJ unemployment compensation. While I am unfamiliar with New Jersey law, I believe the relevant issue is HOW New Jersey requires you to report income or employment. Check the eligibility requirements on the state website, and the forms you completed or received from the unemployment offices. It may require you to report NJ employment / income, "all" such income, or perhaps there is no such requirement at all.See question