 |
| |
|
|
|
|
Ask Susan Responses
| |
Taxes: IRS |
|
| |
More Ask Susan |
|
| |
| |
I haven't filed income taxes for eight years. I don't think I owe anything but I'm still nervous about contacting the IRS. I don't know what to expect. Should I get a CPA to do this for me?
-Stacy |
|
| |
|
Dear Stacy,
Whether you have to file a tax return depends on your filing status, age, and income. From the IRS website, listed below are the filing status, age, and amount of gross income that would require you to file.
1. Single, under 65, and your gross income was at least $7,200
2. Single, 65 or over, and your gross income was at least $8,300.
3. Married, filing a joint return, you and your spouse were both under 65, and your gross income was at least $12,950.
4. Married, filing a joint return, one spouse is 65 or over, and your gross income was at least $13,800.
5. Married, filing a joint return, both you and your spouse were 65 or over, and your gross income was at least $14,650.
6. Married, filing a separate return, and your gross income was at least $2,800, regardless of your age.
7. Head of household, under 65, and your gross income was at least $9,250.
8. Head of household, 65 or over, and your gross income was at least $10,350.
9. Qualifying widow or widower with a dependent child, you were under 65, and your gross income was at least $10,150.
10. Qualifying widow or widower with a dependent child, you were 65 or over, and your gross income was at least $11,000.
Unless you fall into one of the categories, there no need to worry! If you did fall into one of the categories any of the past eight years, you should file your past returns as soon as possible. Continuing to ignore the situation will only make things worse.
I recommend contacting the IRS at 800-829-1040. They are there to help you and can even make payment arrangements if necessary. If in fact you do not owe any past taxes, there are no penalties or fines. Wouldn’t that be a relief?!
Susan
|
|
| |
| |
I heard that any debt that is forgiven including a charge off,you have to pay income taxes on it. I have three charge offs and nothing was ever sent to me or written to me telling me I had to pay taxes on it. -Barry |
|
| |
|
Barry,
I understand your confusion. Credit terminology is almost as confusing as tax terminology! A "charge off" is not necessarily a forgiven debt. The term "charge off” means that your creditor, for their own tax purposes, has internally reclassified your account from profitable to unprofitable. In other words, you may still owe the debt.
The creditor will send you an IRS Form 1099-C, Cancellation of Debt, if they consider it forgiven. Until that time, you should not have to pay income tax on the charged off account.
Since I am not a trained accountant, you may want to call the IRS to verify. They can be reached at 800-829-1040.
Susan
|
|
| |
| |
I owe the IRS approximately $20,000 dating back to 1999, and most of that is due to interest and penalties. I was thinking about an offer in compromise, but I don't have much money. I have heard some stories that the IRS has taken pennies on the dollar to settle some cases. My questions are: 1) Do you have any knowledge about this kind of settlement? 2) Do you have to have all the money up front or will they take a certain amount and then take payments so that there is an end in sight? -Iris |
|
| |
|
Dear Iris,
In my opinion, it never hurts to ask. The IRS will may agree to a compromise if it is made on one or both of the following grounds: (1) Doubt as to the liability of the amount owed, or (2) Doubt as to your ability to fully pay the amount owed.
If the IRS accepts your offer, you may be able to pay from a percentage of future earnings.
From what you’ve told me, you might fit the requirements. You can get the correct forms by calling 800-829-3676.
Good Luck,
Susan
|
|
| |
| |
I took out a cash advance on one of my credit cards and then got behind on the payments. I got a call from the credit card company and they said if I didn't pay them, they were going to report me to the IRS and I would have to pay taxes on the money I owed. Can they do this? -Cate |
|
| |
|
Dear Cate,
Your credit card company is telling you that they are planning to forgive your debt. The credit card company will issue you Form 1099-C, Cancellation of Debt and you will be expected to report the cash as income.
The only way you wouldn’t owe taxes on the money is by proving to the IRS that you are insolvent. Being insolvent means that you have more liabilities than assets.
Before you get knee-deep in the tax code, my recommendation is to visit with a credit counselor to see if they might be able to negotiate a repayment plan with your creditor(s). Trained professionals are standing by at 800-762-2271.
Good Luck,
Susan
|
|
| |
| |
Last year when I filed my income taxes, I used a rapid refund loan from the bank to get my $2,000 back quicker. The IRS was supposed to send my refund to the bank to pay off my loan. Instead, the IRS sent the check to me. So I kept it. I figured it was their mistake and it was up to the bank and the IRS to work it out. But the bank has reported me to the credit bureau. How can I get this off my report? -Martin |
|
| |
|
Martin,
"Finders keepers, losers weepers," does not apply to legal contracts.
You signed a loan contract with the bank agreeing to repay the $2,000 that they loaned you. If you don't repay, the bank has the right to try to collect the debt and to report the account to the credit bureau. If you want the bank to report the account as paid, you'll need to pay back the loan.
Susan |
|
|
|
|
|
