To claim the earned income credit, married taxpayers must file joint returns, IRS confirms. It disagrees with and won’t follow a 2016 Tax Court decision that allowed the credit to a married taxpayer who filed a head-of-household return but whose correct filing status, the Court concluded, was married filing separately.
Dividing a traditional IRA with your ex-spouse the wrong way can be costly, as a 35-year-old man found out in this case. After the couple filed for divorce but before the marriage was dissolved, he depleted his IRA and gave her half the funds.He reported the payout as taxable income on his 1040 and paid […]
It’s the start of summer. But that hasn’t put a stop to IRS phone scams. The latest involves fraudsters impersonating agency employees and calling victims to inform them of bogus certified letters that were returned to IRS as undeliverable. The callers reference the Revenue Service’s Electronic Federal Tax Payment System and tell victims to pay […]
Consider this opportunity if a child or grandchild is toiling at a summer job: You can contribute to a Roth IRA for him or her…up to $5,500 for 2017, but not more than the child’s earnings. Inside the Roth, earnings grow tax-free. The payin counts toward your $14,000 gift tax exclusion ($28,000 if married). This […]
Payments for the sale of franchise contracts are tax-favored, as shown here. They can qualify for capital gains treatment. A business sold all of its assets to a third party, including waste management contracts with three municipalities under which it had the exclusive right to collect and dispose of trash in the cities. The seller […]