Cincinnati Tax Problem Attorney Blog

As I have written on a number of occasions, people find all kinds of ways to get into tax troubles with the Internal Revenue Service. A surprising number of people fail to file their taxes every year. A much larger number of people find they don't have the money to pay their tax bills, especially people who are self-employed. Many small business (and some not so small business) owners fail to pay withholding taxes to the IRS and risk getting into tax trouble both on a business and a personal basis.

Paul A. Nidich
http://paulnidich.webs.com/

The nonpartisan congressional Joint Committee on Taxation found that the proposed maintenance of the Bush tax cuts for all but individuals earnings at least $200,000 and couples earning at least $250,000 would not have a particularly significant affect on the tax bills of those in the upper two brackets. The report found that the average tax increase for those earning between $200,000 and $500,000 would be $532.

Paul A. Nidich
http://paulnidich.webs.com/

Next year, Ohio becomes one of a handful of states that index their income taxes. The Commissioner of the Department of Taxation has issued new tables addressing this issue in which tax brackets will increase by .9% to account for inflation figures released by the federal government.

Although the idea seems quite a change, the actual affect, though, will not be that great. A family earning $25,000 will save $3.70 in state income taxes, while a family earning $1 million will save $26.35 a year. Article

On July 26, 1990, President George H. W. Bush signed what he declared to be "the first comprehensive declaration of equality for people with disabilities." He further called for the destruction of "The Shameful Wall of Exclusion."

Since that day, there have been many court decisions interpreting the Americans with Disabilities Act. Some of these decisions, and particularly some decisions of the Supreme Court, narrowed the scope of the law intended by Congress when it passed the ADA. This led to Congress passing the ADA Amendments Act of 2008 that President George W. Bush signed on September 25, 2008.

Paul A. Nidich
http://paulnidich.webs.com/

On April 22nd, the Senate Budget Committee approved and sent to the Senate its Budget Resolution for Fiscal Year 2011 that begins on October 1, 2010. There are many provisions that deserve notice, but one issue that has plagued estate planners and taxpayers alike has been the issue of the estate tax.

Paul A. Nidich
http://paulnidich.webs.com

The Internal Revenue Service has created a video to help small businesses understand the new tax credits that are now available after the passage of the Health Reform Legislation in March, 2010. The video lasts for a minute and ten seconds.

Your Cincinnati Tax Attorney

Paul A. Nidich
http://paulnidich.webs.com

Taxpayers can have major problems with the Internal Revenue Service when someone steals their social security number and gives it to their employer. The key is two-fold: protect your social security number from theft and respond aggressively to any notification by the IRS.

If you get this notification, immediately take the following action:

Continue reading "Tax Problem -- Identity Theft -- Someone Stole My Social Security Number" »

Employers are required to withhold three types of taxes from their employees' paychecks: income tax, social security tax, and Medicare tax. Depending upon the size of the business and the payroll, employers are then required to pay over to the government these withheld taxes within certain time periods.

Many employers who are having cash flow problems are tempted not to pay these withheld taxes to the government. Those that fall prey to this temptation instead use the withheld money to try to keep their businesses afloat. Not only is this illegal, but the IRS will usually catch up with these businesses and assert a civil trust fund recovery penalty against all people in the business whom it thinks fits the definition of a "responsible person."

Continue reading "Tax Problem -- Trust Fund Recovery Penalty" »

Employers received two new potential tax benefits in recent legislation signed by President Obama. The Hiring Incentives to Restore Employment Act (HIRE) created two new incentives to encourage employers to hire and retain unemployed workers.

The second incentive, a general business tax credit, would be allowed to businesses who retain the newly hired employee for a period of at least one year. The credit will be worth up to $1,000 per employee and will be taken on the employer's 2011 income tax returns.

Continue reading "New Tax Benefits for Employers" »

I'm sure that you have been reading or hearing a lot about extra standard deductions you should be watching our for, if you do not itemize your deductions on Schedule A. These articles probably start off, "Even if you don't itemize, you can deduct" and then they trail off into a lot of confusing words. Here's a better idea.

Schedule L walks you through the extra standard deductions that are not already shown on your basic tax return, disaster losses, taxes paid for the purchase of a new motor vehicle in 2009 after February 16, 2009, and state and local real estate taxes paid in 2009.

Continue reading "Your 2009 Federal Tax Return -- Extra Standard Deductions" »

The Internal Revenue Service recently announced that it will relax some of its standards in determining the amount of money it will accept from a taxpayer to eliminate the taxpayer's debt through its offer in compromise program.

One of the best times to negotiate an offer in compromise is during the collection due process hearing procedure. A taxpayer is entitled to a collection due process hearing when IRS takes certain steps during its attempts to collect taxes owed to it. Pay special attention to notices you receive from the IRS for the words " Notice Of Your Right To A Hearing."

Continue reading "Tax Problem - Offers in Compromise Made Easier" »

The Internal Revenue Service has two categories for taxpayers who want to avoid tax problems caused by their spouses. One is called an Innocent Spouse, while the other is called an Injured Spouse. Basically, an Innocent Spouse is a spouse who wants to avoid joint tax liability because of the bad deeds of his or her spouse where they had filed joint returns in the past. An Injured Spouse is a spouse who wants to be able to take advantage of the benefit of filing a joint return but doesn't want to lose a refund because of his or her spouse's prior IRS or child support debt.

One way to avoid this problem is to file IRS Form 8379, "Injured Spouse Allocation. The purpose of this form is to allocate any tax refund between the spouses to avoid the "injured spouse" from losing his or her refund.

Continue reading "Tax Problem - The Difference Between An Innocent Spouse and An Injured Spouse" »

As the year 2010 approached, most people believed that Congress would clean up the mess made by it by passing President Bush's 2001 estate tax changes. Estate Plans were drafted with attorneys and clients convinced that Congress would act, and the draconian changes scheduled to occur in 2010 would not take place. They were dead wrong.

Under the law as it exists today, each individual has a limited amount of property that can pass to heirs with a stepped-up basis. All other capital assets with be taxed under the capital gains structure based on the cost of the property when it was first purchased, unless there is some other provision of the tax code that affects how the property will be taxed or not taxed.

Continue reading "The Estate Tax Mess -- When Members of Congress are More Concerned with Politics than Governing" »

The House of Representatives unanimously passed a bi-partisan bill allowing cash contributions made to Haiti relief funds to be deducted on your 2009 tax return. These cash contributions must be made after January 11, 2010 and before March 1, 2010 to qualify for this special treatment. The Senate is expected to follow suit in short order.

The American Recovery and Reinvestment Act of 2009 created a new, refundable personal tax credit for 2009 and 2010. This credit is known as the "Making Work Pay" tax credit. For those who qualify, the credit equals 6.2% of earned income, up to $400 for individuals and $800 for married couples who file jointly. Most working Americans will qualify for the credit, but nonresident aliens and taxpayers who can be claimed as dependents by someone else do not qualify. There are two tests to determine whether a taxpayer qualifies for this credit.

The amount of the credit a taxpayer is entitled to take is found by filing out Schedule M on your 2009 tax return.

Continue reading "The "Making Work Pay" Tax Credit" »