What Are The Basic Rules for Innocent Spouse Equitable Relief
Disparte Tax Law Blog
by qdisparte
5M ago
When you file a joint income tax return, the law makes both you and your spouse responsible for the entire tax liability, which is called joint and several liability. The IRS provides innocent spouses equitable relief if appropriate. Joint and several liability applies not only to the tax liability you show on the return but also to any additional tax liability the IRS determines to be due. Moreover, that applies even if the additional tax is due to the income, deductions, or credits of your spouse or former spouse. You remain jointly and severally liable for taxes, and the IRS can still colle ..read more
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Pass Through Entity Elective Tax Payment
Disparte Tax Law Blog
by qdisparte
1y ago
California has passed legislation to allow owners of pass though entities such as partnerships and S-Corporations to bypass the state and local tax (SALT) cap of $10,000 for individuals. For taxable years beginning on or after January 1, 2021, and before January 1, 2026, California law allows an entity taxed as a partnership or an “S” corporation to annually elect to pay an elective tax at a rate of 9.3 percent based on its qualified net income. The election shall be made on an original, timely filed return and is irrevocable for the taxable year. State and Local Tax Deduction Limited to $10,0 ..read more
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The Charitable Contribution Deduction
Disparte Tax Law Blog
by qdisparte
1y ago
Section 170(a) provides, subject to certain limitations, a deduction for any charitable contribution, as defined in § 170(c), payment of which is made within the taxable year. A charitable contribution is a donation or gift to, or for the use of, a qualified organization. Moreover, it is voluntary and is made without getting, or expecting to get, anything of equal value. Types of Qualified Organizations To qualify for a charitable contribution deduction, you must contribute to a qualified organization. Qualified organizations include nonprofit groups that are religious, charitable, educational ..read more
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IRS Audit Statute of Limitations
Disparte Tax Law Blog
by qdisparte
1y ago
The Internal Revenue Service (IRS) makes every effort to examine tax returns as soon as possible after they are filed. Moreover, an IRS audit can take time to complete, but the IRS cannot extend the audit indefinitely. To ensure timely tax examinations, Congress has set deadlines for assessing taxes and making refunds or credit of tax. Additionally, the timeline is called the IRS audit statute of limitations. These deadlines are called statute of limitations. Without statute of limitations, a tax return could be examined and tax assessed, refunded, or credited at any time, regardless of when t ..read more
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Does My Business Qualify for the Employee Retention Credit?
Disparte Tax Law Blog
by qdisparte
1y ago
What is the Employee Retention Credit? The Employee Retention Credit is a fully refundable tax credit for employers equal to 50 percent of qualified wages that Eligible Employers pay their employees. This Employee Retention Credit applies to qualified wages paid after March 12, 2020, and before January 1, 2021. The maximum amount of qualified wages taken into account with respect to each employee for all calendar quarters is $10,000, so that the maximum credit for an Eligible Employer for qualified wages paid to any employee is $5,000. The Cares Act Provides Pertinent Guidance Sectio ..read more
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EDD Statute of Limitations for Collections
Disparte Tax Law Blog
by qdisparte
1y ago
The Tax Branch (TB) of the Employment Development Department (EDD) administers the collection, accounting, and auditing functions of California’s payroll tax program. If a business owes an EDD Tax Liability, the EDD statute of limitations for collection is important to analyze. Moreover, the program consists of Unemployment Insurance and Employment Training Tax, which are employer contributions, and State Disability Insurance and Personal Income Tax, which are withheld from employees’ wages. Each year, the EDD collects more than $76.5 billion dollars in payroll taxes and processes more than 51 ..read more
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California Sales Tax Nexus
Disparte Tax Law Blog
by qdisparte
1y ago
How does a business know if it has a California sales tax nexus? Even though use tax is owed by consumers, RTC section 6203 requires retailers who are “engaged in business in this state” to collect the California use tax owed on their sales to California consumers and remit the tax directly to the CDTFA. What does engaged in business in the state of California mean exactly? RTC section 6203 expressly provides that the term retailer engaged in business in this state “means any retailer that has substantial nexus with this state for purposes of the commerce clause of the United States Constituti ..read more
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Does Bankruptcy Extend the IRS Statute of Limitations?
Disparte Tax Law Blog
by qdisparte
1y ago
If you have filed a bankruptcy, your IRS statute of limitations may be affected. Most people who are considering bankruptcy are doing so for a fresh start. The IRS also offers the Offer in Compromise as a fresh start for those who qualify. However, what people may not realize is that filing a bankruptcy petition can have important ramifications for their taxes. In other words, does bankruptcy extend the IRS statute of limitations? The IRS generally has three years to assess taxes against taxpayers. This timeline is known as the IRS statute of limitations on assessment. Internal revenue code 65 ..read more
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Is Debt Discharge Income Taxable?
Disparte Tax Law Blog
by qdisparte
1y ago
Debt exists where you borrow money and are legally obligated to repay a fixed or determinable amount at a future date. You may be personally liable for a debt or may own a property that’s subject to a debt. The IRS audits issues such as debt discharge income. If you have received an IRS audit letter, contact a tax attorney as soon as possible to discuss your options. What is Debt Discharge Income? Debt is considered canceled in the amount that you don’t have to pay if it is forgiven or discharged for less than the full amount you owe. Moreover, the law provides several exceptions in which the ..read more
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What is an IRS Audit Reconsideration?
Disparte Tax Law Blog
by qdisparte
1y ago
Have you received a notice from the IRS saying your tax return was audited (or the IRS created a return for you) and you owe taxes, and you disagree with the tax the IRS says you owe? The IRS typically mails an audit report (sometimes called an examination report) to you within a few weeks after conducting an audit. This report explains any proposed changes to your tax return. You should review the complete audit report, including the report’s attachments to figure out which changes you think may be incorrect. If you don’t have this report or can’t locate the repo ..read more
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