Blog

June 14, 2013

This week’s blog focuses on the Child and Dependent Care Tax Credit (CDCTC). This credit reduces your tax liability based on a percentage of the amount of money spent on child or dependent care for the year. The requirements to qualify for the CDCTC are as follows:

The Nanny Tax

June 3, 2013

Now that school has ended and the kids are home for the summer many families will be hiring part-time or full-time help to look after their children. It is important to be aware of what is commonly called the “nanny tax” when hiring a babysitter or nanny for an extended period of time. Depending on how much you pay your babysitter/nanny you may owe Social Security and Medicare taxes (FICA) and/or the Federal Unemployment Tax (FUTA).

Still Waiting for Your Refund?

May 17, 2013

If you were due a refund from your federal return, chances are that you have already received it. According to the IRS, 9 out of 10 refunds are issued within 21 days after the IRS receives your return. If, however, you were due a refund this year, timely filed your return, and still have not received your refund, one of a few things may be happening. A common reason for a delay in receiving your refund is because of an error on your return. An error can delay the processing of your return, thus postponing the receipt of your refund.

A Quick Primer on Amended Returns

May 3, 2013

Now that the April 15th filing deadline has passed the last thing anyone probably wants to think about is their taxes. But what do you do when you realize after filing your taxes that you qualified for a credit you did not take? Or you receive a W-2 or 1099 you forgot to include on your return? If you made a mistake on your 2012 tax return you can fix any errors by filing an Amended Return. An Amended Return is filed using Form 1040X, which can be found here. Note that an Amended Return cannot be filed electronically.

PTIN’s Still Required

February 5, 2013

In late January of this year, a less than wise judge from the U.S. District Court for the District of Columbia enjoined the IRS from requiring tax return preparers to complete simple competency tests and attend continuing education courses each year. As a result of that ruling, pretty much anyone off the street can now prepare your return for you, regardless of his or her level of competence with tax preparation. To make matters worse, the ruling also initially threw out the requirement that tax return preparers must obtain and maintain a preparer tax identification number (“PTIN”). The IRS required PTIN’s in order to track tax preparer returns.

January 11, 2013

I picked on some news outlets a few weeks ago due to their shoddy reporting on the tax consequences of cancellation of debt from the foreclosure of a principal residence. Just a few days later, I came across some articles that misapplied the potential consequences of cancellation of debt from the forgiveness of student loans. This time, the two biggest offenders are the New York Times (again) and the American Bar Association Journal. You can link to these articles here – NYTimes and here –ABAJournal. I even decided to comment on the ABA article (scroll down to comment 12).

Cancellation of Debt Articles Misguided

December 21, 2012

A few months ago, I took a less than reputable reporter to task for publishing an article on the outrageous tax bills American athletes faced for winning medals at the Olympic Games. Well, misguided reporting on tax law has happened again. Numerous times in fact, but I can only keep up with so much. The current misapplication of tax law concerns the impending expiration of the Mortgage Debt Relief Act of 2007, which is a side story to the fiscal cliff negotiations.

Our Guarantee

November 29, 2012

An attorney’s job is to facilitate a resolution, not add to the problem, particularly when it comes to tax issues. The employees here at The Alexander Law Firm, LLC take service to our clients very seriously. We try to employ the best possible practices for customer service and evaluate our strengths and weaknesses on an ongoing basis. We are not perfect, but we are trying.

November 10, 2012

Today’s blog post serves as a warning for couples with joint tax liability contemplating or in the midst of a divorce. Joint tax liabilities are often assigned to one of the spouses as part of the division of assets and liabilities. Once the divorce decree is signed, sealed and delivered, the spouse relieved of the tax liability often believes this is the end of the story. WARNING – Relief of joint tax liability in a divorce decree does not in and of itself actually relieve the spouse of his/her liability with the IRS.

October 26, 2012

I received a call the other week from a non-client taxpayer who was in the process of filing some back tax returns and ran into an issue. This taxpayer is a non-custodial parent of a son from a previous relationship and knew the ex-partner did not claim the son because the ex-partner had no filing obligation. The taxpayer, otherwise qualified to claim the son, asked the custodial parent to sign Form 8332. Form 8332 is the IRS form generally used to release an exemption from a custodial to non-custodial parent.

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