I refinanced my home and used part of the funds to pay off my car. Will all mortgage interest be deductible
Under the interest tracing rules only the portion of borrowed proceeds used to acquire or substantially improve your home is tax deductible on the first 1,000,000 of borrowed proceeds. If you had borrowed money on a home equity line of credit up to $100,000 the use of the proceeds is irrelevant.
I'll post up links to back this up shortly.See question
My friend is here on a work visa and doesn't want to use her ss#, can I OR we get in trouble for this? I will pay the appropriate taxes on the monies she makes
Then all the earnings on the EIN will be attributed (traceable) to your Social Security number and you will possibly receive CP 2000 notices trying to automatically adjust your personal tax returns for the additional income from the EIN omitted from your return. If the person you are loaning your soc sec number to is an illegal alien you will be committing a crime as well. If the friend does not report the income and you know it - you could also be liable for aiding and abetting income tax evasion.
Disguised Corporate Ownership
Third parties are improperly used to request employer identification numbers and form corporations that obscure the true ownership of the business.
These entities can be used to underreport income, claim fictitious deductions, avoid filing tax returns, participate in listed transactions and facilitate money laundering and financial crimes. The IRS is working with state authorities to identify these entities and bring the owners into compliance with the law.
Exposure of Tax Practitioners and the public to “aiding or assisting a false return” under IRC § 7206(2):
The crime known as “aiding or assisting a false return” is codified in IRC § 7206(2), which essentially makes it a felony for someone to “willfully aid . . . assist, procure, counsel, or advise” someone in the preparation of a document (e.g. a tax document) that is “materially” false.
Broken up into its elements, the government must prove five things, each one beyond a reasonable doubt: (1) the defendant aided, assisted, procured, counseled, or advised another in the preparation of a tax return (or another document in connection with a matter arising under the tax laws); (2) that tax return (or other document) falsely stated something; (3) the defendant knew that the statement was false; (4) the false statement was regarding a “material” matter; and (5) the defendant aided, assisted etc. another willfully (that is, with the intent to violate a known legal duty).See question
I have about 80 thousand dollars in back federal tax that was recently put on lien. My CPA advised me to have it categorized as uncollectible. After that went through, the lien was filed. My CPA says that I can sit back and not do anything. I am u...
When you are placed into currently non collectible the IRS makes a decision that you do not have enough income to live at the poverty level and therefore do not funds available to pay against the tax debt. Interest continues to run and will grow exponentially if the debt is not serviced. Most of the time the idea is to ride out the 10 year collection statue at which time the debt will not longer be collectible and the IRS will not be in a position to engage in collection actions after 10 years unless they go to court and get a judgment for the unpaid taxes which they rarely actually do. All is well if you are actually destitute. If you are hiding income or assets from the IRS you could go to jail for income tax evasion - evasion of payment. If you show any forms of taxable income in the future - W2's 1099's ect the IRS will be back...
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If I've been divorced for over 4 years, can I claim my status as single now?
Hello, this question was posted a little while ago but I had very little feedback and still skeptical. Is online gambling, particularly live blackjack, illegal in the United States? The online casino is in another country. Are there any law...
No - Online gambling is illegal in the U.S.
Net gambling winnings (gambling income less gambling losses but not below zero) are taxable as ordinary income. If you are a professional gambler losses are deductible and net winnings subject to self employment tax.
Even illegal source income is required to be reported. If you are audited you stand a chance that the IRS refers your case out to the FBI for investigation and prosecution.
Banks will toss you out if they have any idea your account holds non legal source income.See question
and am now disabled. Due to my disability the thought of the divorce never entered my mind as I was more concerned about my health. Not knowing I was still married when I filed my income tax the past 13 years I claimed single and 0. I make so litt...
Until your divorce is finalized you really only have two filing statuses available to you. Married filing joint or married filing separate. I would probably have you amend the last six years of tax returns form any incorrect filing status to married filing separate. Claiming to be exempt as a W2 employee is great way to wind up facing criminal tax charges if you wind up owing significant tax dollars. Your wife has no culpability over your filing status and this fact will not help you with the taxing authorities. :See question
boyfriend and girlfriend living in the same household
Estate tax implications: Since your not married you may have made a taxable gift for gift tax purposes of 1/2 the equity in the condo. If gift in excess of 14K you have a taxable gift reportable on form 709.
As far as income tax goes - you should be receiving two form 1098's for interest expense and then I assume you each will pay a portion of real estate taxes... Be clear on whom is deducting what with your tax professionals.
Best of luck - Dave
I would suggest you put in place a buy sell agreement in case the relationship turns bad later on...See question
Ive been working with this employer for couple of years now and he pays his employees cash weekly. At the end of the year he files for his taxes with all of his employees SSN. Now my question is should I file for tax too even though I get paid cas...
I can almost guarantee you that if the employer is not issuing you a W2 at the end of the year he or she is not withholding any taxes for you. They are treating you as an independent contractor. File your taxes and use Schedule C to report your pay... If you are comfortable - you might want to warn your employer that they could be hit with a worker classification audit and owe massive amounts of back taxes. All it would take is for one of his "employees" to file for California Unemployment. If in addition he or she is not issuing 1099's they can have their deductions disallowed related to anyone they paid over $600 and did not issue a 1099. It is also possible they could be criminally charged with aiding and abetting income tax evasion by paying in cash and not issuing 1099's.
My tax preparer added a ton of deductions i wasnt entitled too. At the time i didnt know. The IRS audited me, and requested a letter from my employeer for verification of the work related decutions. I called my tax person and she said she will wri...
Wow! You are lucky all that is at issue is money! Both you and your preparer could have gone to jail. Yes you could sue your preparer but be careful. It appears you got past the IRS without the fraud on your return being attributed to your actions. If your preparer were to successfully fend off your lawsuit by proving to a court of law in a public forum that the cheating was all yours and they can prove it... IRS or FTB might come back at you for a civil fraud penalty or seek to criminally prosecute you. I would chalk it up to a lesson learned and more closely review your tax returns in the future. I would also keep in mind this is a public forum and you have exposure here yourself so I would be careful what you say....
Here is some content from my website that might help...