Have you ever heard the expression, “What you focus on expands”? I invite you to consider this idea for a moment as I discuss what gets so many people in trouble with the IRS.
Most of the time it starts out innocently enough. You prepare your tax returns and much to your surprise you owe the IRS a sum of money you simply do not have. It could be $1000, $2000, $10,000. It could be more or it could be less. Let’s just agree that whatever the amount it seems impossible for you to be able to pay all at once. So, what do you do? You decide not to file your taxes.
The next year, the same thing happens, and again you are afraid to file because now you owe more. You fear the IRS will demand payment in full. Each successive year, the fear Read More
No one ever said, “I feel closer to my spouse because we file taxes together.” Just the opposite – talking about money seems to ignite far more arguments than it puts out.
It’s a bit radical food for thought, but here are a few reasons why you might want to say “Sweetheart, let’s file separately this year.”
Much as you love your partner in crime, you don’t want to be handcuffed to their mistakes or oversights. Filing separately ensures that you aren’t shackled to your spouse’s tax evasion issues, and thus have to owe on their behalf. (If you’re already in this pickle, don’t hesitate to meet on TaxConnections – we help innocent spouses!) Read More
“I didn’t do it! She did!” you say, as you sit in my office explaining the current, messy state of your financial affairs. Let’s say your wife failed to report her income from running a daycare facility out of your home, and since she handles your taxes, you had no idea. Now you’re separated, on the road to divorce, the IRS is calling you more often than your mother, and you need to know your options.
When married taxpayers file jointly, the letter of the law states that both taxpayers are “jointly and severally liable” for the tax, and “any additions to tax, interest, or penalties that arise as a result of the joint return even if they later divorce.”(IRS) That “severally” means that each spouse is entirely responsible for the whole sum of taxes, interest and penalties. So, even if one spouse earned all the income, the other spouse is just as Read More
Self-employment has its perks: managing your own time. Only being responsible to your clients and yourself (no middle management – Wahoo!). Being able to sing at the top of your lungs while you work. But one of the downfalls comes around the middle of April every year: taxes.
Working for yourself means you are responsible for your taxes. There’s no employer deducting from your wages as you go. Thus, it’s up to you to keep track of your earnings, and very importantly, understand what you can and cannot write off as a deduction.
Knowing what you can and cannot write off gets tricky, fast. Here are a few basics to get you started: Read More
Many times, it starts by accident. You file one return, only to be surprised that you owe more money than you can pay, and you duck your head in the sand like an ostrich for a few years, hoping the problem will go away. Unfortunately, it doesn’t. The problem grows bigger, snowballing into owing thousands of dollars.
It doesn’t help matters that the IRS is becoming increasingly aggressive in its collection efforts. They’ve even increased the number of audits conducted – and small wonder why. The government needs all the money it can get, and its primary source of income is you!
If you haven’t filed taxes in a few years or more, here’s what you can do.
• First, you have to file any and all missing tax returns. The IRS won’t resolve a liability Read More
What is the fastest way to get into deep trouble with the IRS?
You may think you know the answer, but you don’t.
It’s not: Not paying your taxes. The real answer is sticking your head in the sand and attempting to hide from the IRS. Maybe if you don’t pay taxes, the IRS will just go away – right? Wrong! That line of thinking is how a little debt turns into a mountain of financial problems. We can help, but as they say, an ounce of prevention is worth a pound of cure.
What happens if you can’t pay your taxes? (It’s not as bad as you think!)