What is a Qualifying Child for the Child Tax Credit – IRS Publication 972

A qualifying child for the child tax credit is someone who meets the qualifying criteria of seven tests: age, relationship, support, dependent, joint return, citizenship and residence. 1. Age test To qualify, a child must have been under age 17 –

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Sales & Other Dispositions of Capital Assets – IRS Form 8949

IRS Form 8949, Sales and Other Dispositions of Capital Assets must be used to report most capital gains and losses. Any properties you own for investment purposes and most properties you own for personal purposes (ie your house) are for the

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Posted in Capital Gain, Capital Loss

IRS Tax Filing Extension Form 4868 & Tax Paying Extension Form 1127A

Tax day is upon us - remember to at least get you application for automatic extension post marked today using IRS Form 4868 Or if your Adjusted Gross Income is under $57,000 you can file an automatic extension request online using Free

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Posted in Paying Taxes, Tax Guidance & Preparation

Basis for IRS Certificate of Lien Discharge

Having the IRS put a tax lien on you absolutely sucks in many regards. It not only impacts your credit score, it carries a stigma that permeates into the workforce. Having an IRS Tax Lien discharged can be like transcending

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Tax Advantages of Employing Your Children

Payments for the services of a child under the age of twenty-one who works for his or her parent whether or not in a trade or business, are not subject to federal unemployment taxes (FUTA). These exceptions are not the case with a corporation (C

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Paying Estimated Taxes IRS Form 1040-ES

As a general rule, you must pay estimated taxes if both of these statements apply: 1) You expect to owe at least $1,000 in tax after subtracting your tax withholding (if you have any) and tax credits, and 2) You

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Posted in Estimated Taxes, Paying Taxes, Tax Guidance & Preparation

IRS Fresh Start Initiative: Apply for Extension of Time to PAY with Form 1127A or Request an Installment Agreement with IRS Form 9465FS

If you don't have the money to pay your taxes you should file your return on time and pay as much as you can with the return to eliminate the late filing penalty and minimize the late payment penalty/interest charges.

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Posted in Installment Agreement, IRS Collections, IRS Enforcement, IRS Mediation, IRS Penalties, IRS Penalty and Interest Abatement, Partial Payment Installment Agreement, Paying Taxes, Tax Guidance & Preparation

Statutory Employee

I've found myself needing to specifically clarify what the definition of statutory employee means for IRS employment tax purposes. Statutory employees include: 1. full-time life insurance agents, 2. certain agent or commission drivers, 3. traveling salespersons, and 4. certain homeworkers. Statutory

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Start Up Expenses

The two major start up business expenses are the costs to organize and the costs of normal business expenses incurred prior to the beginning of business or the point where the business is ready to receive revenue. Sole proprietors do not normally have costs

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Posted in Business Expense, Sole Proprietor, Start up costs

Acquisition Debt and Divorce

Generally speaking IRS regulations provide that debt incurred to acquire the interest of a spouse or former spouse in a residence, incident to divorce or legal separation, may be treated as acquisition indebtedness under IRC Sec. 163 (mortgage interest deductions) without regard to the treatment

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Posted in Basis, Debt, Family, Gift Tax, Home Office, Marriage, Tax Guidance & Preparation
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