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Sometimes when a joint return results in liabilities in the form of penalties, tax, and interest, one spouse may be innocent. It used to be that an innocent spouse had only two years to apply for relief in such cases. Now a recent Tax Court decision loosens the restrictions in some circumstances.
Unemployment can be taxing on the individuals who lose their jobs and on their families. The search for a new job and worries about how to make ends meet can take its toll. Unfortunately, unemployment can be "taxing" in another way.
Because of the economic downturn, many individuals are, not surprisingly, finding it harder and harder to pay off their debts. For example, credit card companies recently reported that the default rate for August 2009 was the highest since the start of the recession.
While at first glance the 2009 Form 1040 looks pretty much like its predecessors, looks can be deceiving. The American Recovery and Reinvestment Act of 2009 (ARRA) and other law changes taking effect in 2009, have generated a number of new lines and schedules as well as new rules to apply when completing some standard entries.
The biggest tax story of 2009 is, of course, the American Recovery and Reinvestment Act of 2009, the economic stimulus law enacted in February of 2009.. The new law has resulted in major changes on the upcoming Form 1040.
The IRS also has a YouTube channel (http://www.youtube.com/irsvideos), featuring videos produced by the IRS on various tax topics. The videos are available in English, Spanish, American Sign Language and other languages. And those of you who prefer audio can download podcasts from the IRS's iTunes site. If you don't have an iTunes account, you can hear the same podcasts, in English and Spanish, on the IRS Multimedia Center.
Many of you may live from one return to the next, at least as far as taxes are concerned. For eleven months out of the year, taxes are the last thing on your mind.
The decision to roll over traditional IRA savings into a Roth IRA will depend on an analysis of many factors (the client's age, amount of IRA savings, retirement income needs, etc.( as well as some crystal-ball gazing (how will the up-front tax on the conversion compare to the future tax on traditional IRA distributions?)
Under the IRS's check-the-box rules, a partnership can elect out of partnership tax treatment and choose instead to be treated as an association taxable as a corporation [Reg. § 301.7701-3(c)(1)(i)]. Alternatively, state law may provide for a formless conversion of a partnership into a corporation without an actual transfer of partnership's assets or interests to a new corporation.
At a recent IRS National Phone Forum, an IRS representative said that "one of the biggest tax challenges for companies is determining whether workers are employees or independent contractors."
