Taxpayer asks: A tax client was issued a 1099-MISC for rental income received in 2006. Box 1 of the form showed $1000 when the correct number should have been $500. My client contacted the issuer, but the issuer will not correct this error. Please advise as to what I should do. Taxgirl says: Gosh, this…
No, no Lee Marvin, Ernest Borgnine or Charles Bronson here. It’s the IRS’ annual Dirty Dozen: tax schemes to avoid. The top schemes to avoid for 2007 (the list for 2006 is here), many of which have already been noted on this site, are: 1. Telephone Excise Tax Refund Abuses. 2. Abusive Roth IRAs (specifically…
When Congress first introduced the wacky legislation that is the current federal estate tax situation (an exemption that gradually rises to $3.5 million per person, is eliminated in the year 2010 and returns in 2011 to its “old self”) most folks assumed we had plenty of time to fix it. 2010 seemed years away. Now,…
Taxpayer asks: For the past few years, I’ve earned a little bit of self-employed income here in Philly. I never paid the city’s Business Privilege Tax (BPT) until 2006, when I paid all my delinquent business taxes, plus interest and “court costs.” Can I deduct those back taxes on my 2006 federal taxes? If so,…
I heard an estimate today that 20% of each dollar earned in the US next year will be spent on health care. Somebody is clearly getting rich. Maybe that’s why the Internal Revenue Service (IRS) is gunning for pharmaceutical companies. After announcing a huge settlement with GSK just months ago, the IRS announced a similar…
Taxpayer asks: Have seen many 4-digit codes on “Where’s my Refund?” Do you have the de-coder ring? Specifically, what does 1301 and 1201 mean? Taxgirl says: According to the Internal Revenue Service (IRS), 1201 is a “catch-all” code when no other code applies and 1301 is a code that means that a prior return is…
The most recent news out of the Anna Nicole Smith camp is that her Will does not provide for anyone other than her now deceased son, Daniel. In fact, it specifically excludes afterborn children and future spouses. Of course, the wrench in all of this is that Daniel predeceased Anna Nicole, thus likely creating an…
Bush’s tax plan has suggested severely limiting the mortgage deduction and eliminating deductions for interest on home-equity loans or mortgages for vacation homes. So today’s Fix the Tax Code Friday question is: Should we eliminate the deduction for home mortgages? Or should we limit the deduction to first time home buyers?
Taxpayer asks: I made $400 from my freelance work. Why didn’t I receive a form W-2? Does this mean that I don’t have to report the income? Taxgirl says: You don’t receive a form W-2 if you’re classified as an independent contractor (more on that in future posts). You’ll receive a form 1099 from the…
And I thought my tax contest was cool. Turbo Tax is hosting a tax contest with no other than… Vanilla Ice? Yep, it’s true. Rap about taxes and get some free software. Taxgirl isn’t involved in any way except to be agog at the news. It’s nice to see that Vanilla Ice finally got work…