Tag: taxes

How to Settle Your Tax Debt for Less Than You Owe

Written by Paul Belfiore on May 26, 2023. Posted in Blog, Taxes.

Bedford, NH Resident Seeks Help

Finding out that you owe the IRS a large sum of money in outstanding tax bills can be a very daunting
experience. For many, it can be difficult to come up with this unexpected amount. It is possible to
compromise with the IRS on the amount of outstanding taxes that you owe, finding an amount and
payment schedule that is more manageable. Using Form 433-A, you will provide information about your
finances, including income, assets, and investments. You will also note any outstanding debt and your
household’s monthly expenses. You will need to include supporting documents for this and a copy of
the completed Form 656. This form will outline the compromised resolution for your tax debt, including
whether this will be paid as a lump sum or monthly payments.

What to Do If You Didn’t Submit a Tax Return

Written by Paul Belfiore on May 12, 2023. Posted in Blog, Taxes.

Litchfield, NH Resident Worries About the Implications

If you missed the tax deadline for only the past year’s tax return, you should go ahead and file as soon as
possible. However, if you have missed multiple years of filing taxes the IRS will require you to submit
the past six years of tax returns. Late filers may be hit with failure-to-file penalty from the IRS. The
amount of this fine is based on the amount of unpaid taxes and how late the return is filed. This penalty
is 5% of the unpaid taxes for each month the return is late.

At What Age Do You Need to Begin Paying Federal Taxes?

Written by Paul Belfiore on April 28, 2023. Posted in Blog, Taxes.

Parents of Hollis, NH Teen Have Questions

For underaged children, filing a federal tax return is dependent on your income rather than your age. If
a minor child’s income exceeds $12,950 (for tax year 2022) they need to file a tax return. Any income
below this amount does not need to be claimed. If the teen is working for an employer, they will likely
automatically withhold taxes. To have this money refunded, a tax return will need to be filed for the
working minor. For those minors that are self-employed, if their income exceeds $400, they will need to
file a tax return. Self-employment taxes, including Social Security and Medicare contributions, will be
required on this self-employed income.

What is the Best Way to Organize Your Tax Documents?

Written by Paul Belfiore on April 14, 2023. Posted in Blog, Taxes.

Pepperell, NH Resident Looks to Get Organized

Keeping your tax documents and records organized can go a long way to making things easier when it
comes time to file your taxes. While the bulk of your tax forms and documents will arrive during January
of the following year, there are likely many receipts and other supporting documents that accumulate
throughout the year. Having a consistent routine for managing this paperwork, whether keeping
physical copies or electronic files, is key to ensuring that you have all of the necessary paperwork when
it comes time to file your taxes.

What Tax Advantages Does a Health Savings Account (HSA) Offer?

Written by Paul Belfiore on March 31, 2023. Posted in Blog, Taxes.

Litchfield, NH Resident Has Questions

The money contributed to a Health Savings Account (HSA) is 100% tax-deductible. This means that any
contributions will lower your taxable income. The interest earned on money in an HSA is 100% tax-
deferred. This means the money in the account can continue to grow without being taxed. Withdrawals
that are used toward qualified medical expenses are 100% tax-free. These expenses include
deductibles, copays, prescriptions, vision, and dental costs.

How Does Tax Debt Work Posthumously?

Written by Paul Belfiore on March 17, 2023. Posted in Blog, Taxes.

Nashua Resident Looks for Advice After Losing a Loved One

If there is an outstanding tax debt at the time of death, the IRS can place a federal lien against the
estate. The taxes must then be paid before any other debts or accounts. If this is not done, then the IRS
can pursue payment from the legal representative of the deceased person. Unpaid federal taxes have a
lifespan of ten years. If the tax debt exceeds ten years, then this is no longer able to be collected. If the
debt is under ten years, the family of the deceased will be liable for payment to the IRS.

What are the Tax Benefits of Owning a Home?

Written by Paul Belfiore on March 3, 2023. Posted in Blog, Taxes.

Amherst, NH Homeowners Looks for Future Tax Advantages

There are many tax advantages for homeowners, particularly when itemizing your taxes. If you have a mortgage on your home the interest paid each year can be deducted from your taxable income. This is only available if you are itemizing your taxes, as opposed to taking the standard deduction. If you have a home equity loan, this interest can also be deducted when filing your taxes. For those self-employed individuals, the space in the home used for business purposes can be deducted including heat, utilities, and insurance, saving you money on your overall tax bill.

How Can You Get Your Tax Refund Quickly?

Written by Paul Belfiore on February 17, 2023. Posted in Blog, Taxes.

Nashua, NH Resident Looks for a Fast Turnaround on His Return

One of the best ways to make sure you get your tax refund as quickly as possible is to file your return electronically. This eliminates the time during transit, getting your tax return at the front of the line. There is a significant backlog for paper returns and yours is unlikely to be prioritized. You should also request a direct deposit for your refund, instead of waiting for a check to be mailed.

Are the Wages Paid to a Family Member Tax Deductible?

Written by Paul Belfiore on January 13, 2023. Posted in Blog, Taxes.

Amherst, NH Family-Owned Business Looks to Hire Teenaged Family Members

Family-owned businesses have many tax advantages when employing family members. Money paid to family members reduces the net income of the business, thereby reducing the overall tax burden. In addition, insurance costs and other benefits offered to the employed family members can also be deducted from the business’ profits as an expense. When a parent is the sole proprietor and the business is not incorporated when children under the age of 18 are employed, neither the business nor the employed minor are required to pay FICA taxes. Having a family member on payroll, whether a minor child or spouse, can significantly reduce the amount of taxes owed at the end of the year.

How Will Cash App Payments Affect Your Taxes?

Written by Paul Belfiore on December 30, 2022. Posted in Blog, Taxes.

Brookline, NH Taxpayer Has Questions

With the prevalence of money exchanged on Venmo, PayPal, and other cash apps, the IRS has stated that it will be cracking down on those receiving cash app money exceeding $600 in the calendar year. The threshold for receiving third-party payments is $600. When the amount exceeds this, the recipient is required to file a 1099-K. In past years Form 1099-K was only required for gross income from cash apps exceeding $20,000 or more than 200 separate transactions during the calendar year. This change will affect many sellers who receive payment through these cash apps.