earned vs unearned income

Earned vs. Unearned Income: What’s the Difference?

When it comes to filing taxes, the distinction between earned and unearned income might seem like a minor one. However, the IRS doesn’t think so, and if you mix up earned and unearned income on your tax returns or forget income sources of either type, you could end up with a lot of tax problems on your hands.

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is debt forgiveness taxable 

Is Debt Forgiveness Taxable?

Most people struggle at one time or another to their pay bills. Often, the payments fall further and further behind, and climbing out from the debt cycle feels hopeless.

If you’re in this situation, you may have asked the bank, credit card company, or another creditor to write off or forgive your debt — usually for much less than is due on your account. In some cases, the lender will agree and stop trying to collect due to time, circumstances, or other contributing factors.

What you may not know is that when the lender writes off your debt, they may assign you a form 1099-C (cancellation of debt). This 1099 gets sent to the appropriate taxing agencies, and it will appear in your IRS file for the year the debt was charged off or forgiven. But what does a 1099-C really mean? Do you have to do anything after a creditor writes off your debt? What is your responsibility? In this article, we’ll answer those questions and explain the basics of how debt forgiveness affects taxes.

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irs collection due process

Understanding Your Collection Due Process (CDP) Rights

If you have an outstanding tax debt and you’re facing collection actions, you may want to consider a collection due process (CDP) appeal. A CDP appeal offers you an opportunity to pause IRS collections and speak directly with an IRS settlement officer. These officers have significant power and can approve a resolution that normal IRS employees would never be able to approve.

However, the CDP appeals process can be intimidating and confusing for many taxpayers. If you’re considering a CDP appeal or are currently facing liens and levies from the IRS, read this article to learn more about your rights and the appeals process.

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irs fresh start program

A Quick Guide to the IRS’ Fresh Start Program

If you’ve heard about the IRS’ Fresh Start program for tax debt relief, you may be wondering whether you qualify and what options are available to you. Fresh Start is a helpful initiative that makes it easier for some taxpayers to pay their back taxes and avoid bad consequences like liens, levies, and wage garnishments.

However, there’s also a lot of misinformation and misunderstanding about Fresh Start. The program isn’t a magic wand that can wave away your tax problems. If you want to take advantage of the tax relief programs available under Fresh Start, you’ll need to understand your options and get prepared for a process that’s rarely simple.

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taxpayer rights

Have Tax Issues? Know Your Taxpayer Rights

When you’re dealing with an IRS audit or threatening letters and collections based on outstanding tax liability, it’s easy to feel powerless. What can you do when a federal agency has it out for you?

One of the great things about living in the United States is that our government recognizes that people have certain rights that can never be taken away. Our Constitution describes these rights in the Bill of Rights, which are the first 10 amendments to the Constitution. So, no matter how bad your tax situation seems, no matter the amount of tax debt, and no matter how aggressive the IRS’ tactics feel, remember: you have rights!

Your strategies to deal with your tax problems should begin with that knowledge. In this article, we’ll outline some of your key legal rights when you’re dealing with a tax issue.

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single member LLC

Is It Worth It to Create a Single-Member LLC?

Working for yourself is both rewarding and challenging. You’re in complete control of your business, but it can also be tough to get others to recognize you as a real business.

For some people, a limited liability company (LLC) provides a solution. An LLC can offer a bridge between operating as a sole proprietorship and acting as a corporation for tax purposes. And for individuals who are also their whole business, a single-member LLC (SMLLC) is a great place to start.

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being audited by irs and no receipts

Help — I’m Being Audited by the IRS, and I Have No Receipts!

It’s the type of nightmare that could make a person wake up in a cold sweat: you get a letter that says the IRS is going to audit your business, and you haven’t kept any kind of organized records. You’re missing all sorts of documentation and receipts for business expenses.

If you’re facing this worst-case scenario, you’re probably a little stressed. We’re here to help, and to tell you that you can get through this — you don’t need to flee to Mexico or buy a fake mustache and glasses. In this article, we’ll talk through your situation and explain how to put yourself in the best possible position to survive your audit.

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buying a house with a tax lien

Buying a House With a Tax Lien? Here’s What You Should Know

You’ve done it! After months of saving, searching, and paperwork, you’ve found the house of your dreams. But as you proceed with the deal, you got a nasty surprise: the current owners didn’t pay their property taxes for several years, resulting in the IRS putting a lien on the house. You are in love with the property but don’t know what to do about the lien, and your realtor is advising you to walk away.

If you’re facing this stressful situation, you should understand what a tax lien is, what it takes to get rid of one, and what to do next. Keep reading to learn more.

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coronavirus relief taxes

How Will Coronavirus Relief Affect My Business Taxes Next Year?

The coronavirus pandemic has impacted our economy, businesses, and lives in unprecedented ways. Many businesses found themselves in an uncertain position as we began to feel the full effects of the shutdown.

To try and prevent economic disaster, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act on March 27, 2020. The law provides more than $2 trillion in relief to protect Americans from the economic impact of the virus.

As part of this program, businesses can apply for and receive support for the cost of payroll, overhead, and other business expenses. However, because the COVID-19 crisis and the resulting supportive programs are so unprecedented, many people are unclear how these relief efforts will impact business taxes next year. In this blog, we’ll break down what you need to know.

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How to Solve Tax Problems

These 5 Methods Can Solve Most Tax Problems

Millions of Americans struggle with tax issues every year, from minor debts and unfiled returns to liens, levies, and garnishments. If you’re struggling with an unresolved tax issue, keep reading and learn about several proven tax resolution methods that may be able to solve your problem.

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