Posts by Ruth Ann Michnay, P.A.
The IRS “What Ifs” for Struggling Taxpayers – Tax Related (C-1)
The IRS “What Ifs” for Struggling Taxpayers – Tax Related (C-1) What if I can’t pay my taxes? Don’t panic – you may qualify for a self-service, online payment plan (including aninstallment agreement) that allows you to pay off an outstanding balance over time. Onceyour online application is complete, you’ll receive immediate notification of whether yourpayment…
Read MoreThe IRS “What Ifs” for Struggling Taxpayers – Debt Related (B-4)
The IRS “What Ifs” for Struggling Taxpayers – Debt Related (B-4)What if I file for bankruptcy protection?Debts discharged through bankruptcy are not considered taxable income. If you are anindividual debtor who files for bankruptcy under chapter 7 or 11 of the Bankruptcy Code,a separate “estate” is created consisting of property that belonged to you before…
Read MoreThe IRS “What Ifs” for Struggling Taxpayers – Debt Related (B-3)
The IRS “What Ifs” for Struggling Taxpayers – Debt Related (B-3)What if I am insolvent? A taxpayer is insolvent when his or her total liabilities exceed his or her total assets. Theforgiven debt may be excluded as income under the “insolvency” exclusion.Normally, a taxpayer is not required to include forgiven debts in income to the extent…
Read MoreThe IRS “What Ifs” for Struggling Taxpayers – Debt Related (B-2)
The IRS “What Ifs” for Struggling Taxpayers – Debt Related (B-2)What if my debt is forgiven?The tax impact of debt forgiveness or cancellation depends on your individual factsand circumstances. Generally, if you borrow money from a commercial lender andthe lender later cancels or forgives the debt, you may have to include the cancelledamount in income…
Read MoreThe IRS “What Ifs” for Struggling Taxpayers – Debt Related (B-1)
The IRS “What Ifs” for Struggling Taxpayers – Debt Related (B-1)What if I sell my home for a loss?Losses from the sale of personal–use property, such as your home or car, are notdeductible. It is not eligible for the capital gains loss of up to $3,000 annually.IRS Publication 523, Selling Your Home, explains the tax…
Read MoreThe IRS “What Ifs” for Struggling Taxpayers – Job Related (A-4)
The IRS “What Ifs” for Struggling Taxpayers – Job Related (A-4) What if I withdraw money from my IRA?Generally, early withdrawal from an Individual Retirement Account (IRA) prior to age59½ is subject to being included in gross income plus a 10 percent additional tax penalty.There are exceptions to the 10 percent penalty, such as using IRA funds…
Read MoreThe IRS “What Ifs” for Struggling Taxpayers – Job Related (A-3)
The IRS “What Ifs” for Struggling Taxpayers – Job Related (A-3) What if my employer goes out of business or into bankruptcy?Your employer must provide you with a Form W-2 showing your wages and withholdingsfor the year by January 31 of the following year. You should keep up-to-date records orpay stubs until you receive your Form W-2.…
Read MoreThe IRS “What Ifs” for Struggling Taxpayers – Job Related (A-2)
The IRS “What Ifs” for Struggling Taxpayers – Job Related (A-2)What if my income declines?There are many tax credits that are subject to income limitations. If you had a reductionin income this year you may be eligible for some credits or deductions. For example,the Earned Income Tax Credit is available for working families and individuals.Eligibility…
Read MoreThe IRS “What Ifs” for Struggling Taxpayers – Job Related (A-1)
The IRS “What Ifs” for Struggling Taxpayers – Job Related (A-1)What if I lose my job?The loss of a job may create new tax issues. Severance pay and unemploymentcompensation are taxable. Payments for any accumulated vacation or sick time also aretaxable. You should ensure that enough taxes are withheld from these payments or makeestimated tax…
Read MoreThe IRS “What Ifs” for Struggling Taxpayers
The IRS “What Ifs” for Struggling TaxpayersFor the next several weeks, we will be discussing the IRS “What Ifs” for StrugglingTaxpayers.People facing financial difficulties may find that there’s a tax impact to events such as jobloss, debt forgiveness or tapping a retirement fund. For example, if your incomedecreased, you may be newly eligible for certain…
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