What can one do to avoid an audit?
- May 9th, 2023
- David Greene
- Comments Off on What can one do to avoid an audit?
I often get asked this question just after tax season. There is nothing you can do to guarantee that you will never be audited. However, by following three simple rules, you can minimize your chances of being audited and, if…
What has to be filed for the non-custodial parent to claim the child as a dependent?
- April 19th, 2023
- David Greene
- Comments Off on What has to be filed for the non-custodial parent to claim the child as a dependent?
This question deals with the same problem the reader had last week, but in a different way. If a taxpayer seeks to claim dependent children after a divorce but is not the custodial parent, he must file Form 8332 with…
Is an ex-spouse only responsible for one half the taxes on a return with delinquent taxes?
- April 14th, 2023
- David Greene
- Comments Off on Is an ex-spouse only responsible for one half the taxes on a return with delinquent taxes?
I have been asked this question before. The general answer is that a spouse owes all of the taxes because he signed the return. For a joint return the signers are jointly and severally liable for the tax. This means…
How can the IRS deny a taxpayer’s exemption for his child?
- April 12th, 2023
- David Greene
- Comments Off on How can the IRS deny a taxpayer’s exemption for his child?
Usually, when the IRS denies your exemption for a child, it means that someone else filed before you did, claiming the same child as an exemption. This usually arises when a stepparent and biological parent both claim the exemption. However, in…
What are Estimated Taxes and do I have to pay them?
- April 6th, 2023
- David Greene
- Comments Off on What are Estimated Taxes and do I have to pay them?
Estimated taxes are taxes one has to pay in advance of the tax being due. They are required for people who earn income from which no payroll taxes are withheld. A “W-2” employee is one who gets a regular payroll…
Are there any exceptions to the rule that canceled debt is counted as income?
- March 29th, 2023
- David Greene
- Comments Off on Are there any exceptions to the rule that canceled debt is counted as income?
When a taxpayer is unable to pay all of a debt and the creditor cancels the unpaid part, the amount of the canceled debt is generally treated as income to the taxpayer under federal tax law. The creditor reports this…
Do I need to report the sale of stock on my tax return?
- March 27th, 2023
- David Greene
- Comments Off on Do I need to report the sale of stock on my tax return?
The short and simple answer is yes. When you purchase stock or any type of security, you are doing so with the money you have earned after taxes. This type of investment creates a basis in the new asset you have acquired….
Does using a paid tax preparer guarantee a correct return?
- March 23rd, 2023
- David Greene
- Comments Off on Does using a paid tax preparer guarantee a correct return?
Unfortunately, the answer is “no.” Many preparers make mistakes from time to time for various reasons on both personal and corporate returns. In fact, the IRS recently released a study that found that 71% of S corporations who used paid…
Is a spouse responsible for the partner’s pre-marital tax debt?
- March 21st, 2023
- David Greene
- Comments Off on Is a spouse responsible for the partner’s pre-marital tax debt?
If one is single when the unpaid tax liability accrued, only the one who incurred the tax debt is responsible for paying those taxes. The IRS cannot take the other spouse’s property or levy her income to pay those taxes. …
Mistakes In Tax Return Preparation (Part 2)
- March 2nd, 2023
- David Greene
- Comments Off on Mistakes In Tax Return Preparation (Part 2)
Recently I stated that I can think of ten mistakes that are most often made when preparing a tax return. In that blog I listed 5 and in this blog I will tell you the remainder. Here they are: (6)…