Know the Impact of Bankruptcy on Your Taxes

Know the Impact of Bankruptcy on Your Taxes

The term bankruptcy is considered as a legal status of an individual or company that happens to be unable to repay their incurred debts from their creditors. In most cases, bankruptcy is being imposed by the court orders. It is usually initiated by the debtor. However, sometimes the weight of the issue is given to the debtor from the creditors.

YOU ARE ONE OF 50,000,000 AMERICANS WHO MUST F...
YOU ARE ONE OF 50,000,000 AMERICANS WHO MUST FILL OUT AN INCOME TAX RETURN BY MARCH 15. FILE YOURS EARLY. – NARA – 516201 (Photo credit: Wikipedia)

The IRS pub 17 2013 signifies the legal implications on income taxes. This involves the possibility of declaring bankruptcy and its variable forms. Chapter 11 bankruptcy pertains to the debts of the person being reorganized. In this scenario, the debtors have ways to repay some or total amount of their debts. The Chapter 7 bankruptcy involves the liquidation of the debtor’s assets and liabilities. In this situation, the debtors have no means to repay most, if not, the total amount of their debt.

How can Bankruptcy Create an Impact to Debts

Basically, filling of bankruptcy is very complicated. This makes it important for you to consult a bankruptcy lawyer to ensure that all actions you make are done appropriately. In general, bankruptcy does not create impacts to your income tax return, even if there is a cancellation of debt, which is normally taxable on your tax returns.
The reason behind this is that any sources of debts discharged in bankruptcy are excluded from the incomes under the income tax regulations. The regulations pertaining to bankruptcy in relation with income tax returns are:

1. If you are being audited, filling of bankruptcy will not stop the auditing. However, it will stop the collection process while the bankruptcy is on pending status. Moreover, the time collection activities stop, such as during the time that you are deemed as not collectible or during the processing of the compromise state is extended. Always consider these concerns before declaring bankruptcy.

2. Not all of tax debts are entitled for discharge in bankruptcy. Items that are considered as priority debt are not dis-chargeable, as well. This includes student loans, child support, fines stemming from committing of felonies, and drunk driving cases. The priority debts should be fully repaid, which are classified under the Chapter 13 bankruptcy.

Forgiveness of debt is usually considered as taxable income. However, it becomes ineffective to insolvency and bankruptcy. Sometimes, it is good to present offer in compromise by settling your tax debt. It is still suggested to confer your debt issues with a tax professional and bankruptcy attorney in order to come up with a set of appropriate course of action. This can help you eliminate the possibilities of applying legal actions, which are not suitable for your specific case.

IRS Publication 17

IRS Publication 17 For 2013

If you want to do your own taxes, you need to understand the process. Fortunately, you do not need a degree in accounting to figure out how to do your own taxes. The best chance that you have to get through your taxes without making a mistake is to consult the document put out by the IRS for that purpose. IRS Publication 17 is a great guide for those working on their own taxes.

IRS Building
IRS Building (Photo credit: afagen)

IRS Publication 17 is still the most useful IRS publication for figuring out exactly how your income taxes work. The document breaks down the process of preparing your taxes into fairly easy steps, a real necessity for those who still prepare taxes by hand. The document is still useful for those who prepare online, though, as it does contain some basic information that most of the online services glass over. IRS publication 17 is easily the most valuable document that you can use if you are working on preparing your own taxes, and it is fortunately also a free document.

Pub 17 2013 can currently be found on the IRS’s website at . This document is likely to be updated when tax season gets a bit closer at hand, and revisions are likely if issues occur that changes the tax landscape. Remember that Pub 17 2013 is only a guide, and that more definitive information likely needs to come from a tax professional. If you are comfortable working on your own, though, this guide is your best tool.

TaxCaster: The Mobile Tax Calculator For Taxpayers

TaxCaster: The Mobile Tax Calculator For Taxpayers

Tax calculators are popular tools for consumers these days. Before filing one’s taxes, a person can take advantage of a calculator. Such tools require some personal and financial information in order to generate a tax refund estimation. An individual will know in moments whether they owe money or will be receiving money from the Internal Revenue Service. With that in mind, TaxCaster from TurboTax is the best option available.

The national debt clock outside the IRS office...
The national debt clock outside the IRS office in NYC. (Photo credit: Wikipedia)

Currently, TaxCaster is available for iOS and Android devices. A smartphone user can download this app in minutes and start using it right away. The app asks for basic information upon the first use and subsequent uses. Such information is necessary to figure out a person’s tax situation. After a user enters their annual income information, the app will return a rough estimate of their tax refund or dues.

There are plenty of other tax calculator options on the market. Unfortunately, most of them don’t provide accurate responses for taxpayers. TaxCaster is known for its accuracy and simplicity. Other programs, especially mobile apps, don’t really stack up to TaxCaster right now. The average tax calculator asks for a lot of extra, unnecessary personal information, too. No taxpayer should be forced to divulge such information.

TaxCaster offers plenty of benefits over the competition. As a tax calculator, it requires only moments to receive a refund estimate. Customers will immediately know whether they owe money to the IRS, too. In the end, a tax calculator like TaxCaster is a fantastic option for most taxpayers. Anyone with a mobile phone or Internet access can utilize this app with ease.

Last Minute Tax Tips When Using Turbo Tax

Last Minute Tax Tips

Are you going to use Turbo Tax 2013 to file your taxes this year? Before you head to TurboTax.com, take a moment to read through these tips. With the deadline approaching, you need to know what to do at the last minute to make the filing process successful.

files
files (Photo credit: cali.org)

1. File the Paperwork Electronically

Did you know that Turbo Tax 2013 allows you to e-file your paperwork when you are done? This can save you a lot of time; it really only takes a few minutes. You will instantly submit your tax files so that you do not miss the deadline; you can even do this just hours before the cutoff time.

2. See if You Can Get an Extension

If you’ve been on TurboTax.com and you think you’re going to miss the deadline, you might want to file for an extension. The government will give you – if you are approved, of course – an addition six-month period to file your taxes. Wouldn’t you like to take care of them in October instead of April?

3. Know the Penalties

There are two main penalties that you can get if you use Turbo Tax 2013 or TurboTax.com and you do not get the tax documents in on time. The first is for failure to file, and the second is for failure to pay. Both could cost you up to an additional 25 percent of the total amount that you already owe. However, the IRS often gives extensions for people who have filed and not paid. You should at least get the paperwork in by the deadline, and you could end up avoiding both penalties, even if you don’t have the money to pay the taxes right now.

With these three tips and Turbo Tax 2013, you can reduce what you owe, avoid penalties, and make tax season a lot less stressful than it would be otherwise. The tools at TurboTax.com give you the power to file your taxes successfully without a Certified Public Accountant (CPA), so you’ll actually be able to keep all of the return that you get this year.

Tax Carnival Ecstasy – March 28, 2013

Tax Carnival Ecstasy – March 28, 2013

Welcome to the March 28, 2013 edition of Tax Carnival Ecstasy. In this edition we start out with an article from Bill  Smith on the recent fight between H&R Block and TurboTax over the advertisements that Intuit has been running about part-time tax preparers. We also have a great article John Schmoll from Frugal Rules on why financial adviser compensation is an issue when selecting a professional to invest your money. Hope that you like all the articles, share on Facebook, tweet, bookmark, and come back real quickly.

Tax time
Tax time (Photo credit: slworking2)

filing

Bill Smith presents Turbo Tax Television Ads Will Continue posted at 2011 Tax, saying, “H&R Block has failed its lawsuit and injunction attempts two times against Intuit’s TurboTax.”

Bill Smith presents An Overview Of The Turbo Tax Military Edition posted at 2011 Taxes, saying, “Preparing and filing your taxes on time and to your best advantage may be difficult at any point in your life, but being in the military may pose additional challenges.”

retirement

John Schmoll presents Financial Advisor Compensation – Why it Matters posted at Frugal Rules, saying, “A financial advisor can be a great way to help you grow your portfolio when you have long term goals in mind. Make sure you do your homework and hire one that you feel right about and best fits your needs and goals.”

taxes

Bill Smith presents Innovations For Turbo Tax 2013 posted at 2013 Taxes, saying, “Professional accounting can help business owners save time and resources, and the Turbo Tax 2013 CPA Select edition by Intuit may be the ideal solution for tax filing season.”

Bill Smith presents Tips For Maximizing Your Return posted at 2009 Tax, saying, “When you use free Turbo Tax 2013follow, it is important to make sure that you maximize your return.”

Bill Smith presents Easy Online Tax Filing With Free Turbo Tax 2013 Software posted at 2009 Taxes, saying, “Having expert tax assistance can be the best way to avoid financial penalties, complete your filing on time, and maximize your refund.”

Bill Smith presents TurboTax Helps Users Get More Accurate Tax Returns posted at 2010 Tax, saying, “Each year, Americans are forced to go through last year’s financial information and prepare a tax return.”

Bill Smith presents The Benefits Of Using TurboTax 2013 To File Your Taxes posted at 2012 Taxes – Free Tax Filing Options, saying, “If you have never used Turbo Tax before, you need to consider filing your taxes with this computer program this year.”

That concludes this edition. Submit your blog article to the next edition of tax carnival ecstasy using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

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Tips For Maximizing Your Return

With The Free Turbo Tax 2013 Software

When you use free Turbo Tax 2013, it is important to make sure that you maximize your return. The free TurboTax software makes this easier than it has ever been before since you will be asked a series of questions about your finances; these questions are much clearer than the labels on the tax documents, so you will really understand what you are being asked and what you need to say. The software will then plug your answers into the right boxes so that you have fully official tax documents with all of the right information in the right boxes.

English: To do to migrate to free software?
English: To do to migrate to free software? (Photo credit: Wikipedia)

Declare Your New Home
One of the best ways to increase your return if you just bought a new home is to list it as your primary residence with the free Turbo Tax 2013 software. You can then get the Homestead Deduction, which can save you hundreds on your state taxes. The free TurboTax program may also be able to help you determine if you deserve a Federal First Time Home Buyer Credit for the year, which can be applied to your Federal taxes, making your one home save you money twice.

Itemize Your Deductions
The free Turbo Tax 2013 software makes it very easy to make a list of your itemized deductions. You should always do this to check and see if the itemized deductions are going to be more than your standard deduction. By using the free TurboTax software to make the list, you can make a wise decision about which deduction will be larger.

Use the Correct Forms
One of the nicest things about the free Turbo Tax 2013 software is that it can help you check to see which form you are using when you enter information. This can make a huge difference. For example, a 1099-MISC form will not include taxes that have already been paid out, so you will be taxed on the totals. A W-2 form, though, will include those taxes that were already deducted, so you may get money back. Use the free TurboTax software to select the type of form that you have so that you do not pay your taxes twice. This way, you actually get all of the money that is owed to you.

Erase the Fees
Finally, the free Turbo Tax 2013 software helps you maximize your return simply because you do not have to pay any fees to a CPA. You can do everything yourself, even if you have never studied accounting or tax law. The free TurboTax software is very easy to use, even for those who are doing their taxes for the first time. By erasing the extra fees, you get to keep all of your return.