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Questions tagged [irs]

Internal Revenue Service which is the US Federal Tax authority.

38
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3answers
9k views

In the USA, why is the Free File software only available for people earning less than $62k?

Free File is a software by the American IRS, which allows one to easily fill out their taxes as long as they earn less than $62k per year. Is there a particular reason for such a restriction? I ...
38
votes
3answers
5k views

Taxes when transferring money

I'm a US taxpayer (non-resident alien) and I'm being pushed by a friend to do the following: He will transfer 40k from a US bank account that he owns to my personal account. I will withdraw this ...
37
votes
3answers
10k views

How do I deal with an erroneously large refund?

Alright, it's a weird complaint, I know. But I just checked on the status of my refund on the IRS Refund Status website, and the IRS had corrected upward the refund I filed for by a lot. Based on the ...
37
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5answers
5k views

How to handle the Equifax Breach this tax season?

One of the most common forms of fraud is tax return fraud. Generally you don't find out until you go to file and someone has already been kind enough to file your tax return, AND take a payment for it....
36
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5answers
13k views

IRS sent me a letter…I messed up by unwittingly taking money out of a Roth IRA and reporting it incorrectly

I recently received a letter from the IRS based on my taxes for 2015. I believe I did not understand the proper workings of a Roth IRA. I was under the impression I could pull my money out and only ...
34
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2answers
3k views

How is the taxable value of a goat determined? [duplicate]

I was reading an answer over on Law.SE, and it made me wonder about how the IRS calculates tax on barter transactions. Lets say that I do a job in January, and get paid for my work with 20 goats and ...
28
votes
3answers
8k views

Accountant/ lawyer will not return my call

I have an accountant who is also a lawyer who did my taxes for about 7 years. I received a notice from the IRS for the years that he filed the taxes saying that I owed $5,000. I sent him the notice ...
28
votes
3answers
18k views

Robocall claiming to be IRS saying they are about to sue - Is it legit?

We got a recorded call with a message claiming to be from the IRS. It said they were giving final notice and preparing to file a lawsuit against us. In our case, the message went to voicemail so the ...
28
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5answers
12k views

How does the government shutdown affect tax returns?

Has a government shutdown in the past affected tax returns? In terms of refunds, is there anything to be expected differently based on historical precedent?
25
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11answers
15k views

What do I do if my income is just a little too high for “free file”?

I live in North Carolina and I'm using the H&R Block website to file my taxes and finally at the end of everything they informed me that there's a limit to how much I could make last year and ...
24
votes
1answer
8k views

Why would the IRS ask for birth certificates or even audit a small tax return?

My daughter and her boyfriend live together, and he is the sole earner in the home. They each have a kid plus 1 together. H&R Block told them that he didn't make enough to do his return and now ...
24
votes
2answers
5k views

What is the best way to pay large tax amount owed to IRS?

I recently did a preliminary calculation of my taxes for 2018 and discovered that I am going to owe the IRS about $16,000. I do not have this amount of money in reserve. My question pertains to ...
24
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7answers
39k views

Can my employer limit my maximum 401k contribution amount (below the IRS limit)?

I contribute about 13% of my income to my company's 401k, which, at my salary, is well below the IRS limit of $17K/year (in 2012). However, with my raise this year, my benefits department told me that ...
24
votes
1answer
4k views

I am distributing an inheritance based on verbal bequests. Is this considered a gift that must be reported to the IRS?

Before my mother died recently she gave me a verbal list of bequests she wanted to make that were not in her will. Some of these exceed $14k. I will be paying them out of my own bank accounts with ...
21
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4answers
10k views

Do altcoin trades count as like-kind exchanges? (Deferred capital gains tax)

2018 EDIT: Although this post was inspirational, US Congress addressed this issue in the Tax Reform law of 2017, and any trades after Jan 1st 2018 cannot have this treatment. The few years of ...
21
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1answer
3k views

I haven't filed a return to the IRS in 10 years

My employers have always withheld taxes and for the most part I've assumed they've done it right. I have probably owed a bit some years and been owed a refund some years. Anyhow, I want to get ...
18
votes
3answers
3k views

Why would a previous year's tax deductions affect the current year's taxes?

For the first time in several years, I'm preparing the income tax filing for my family. Since a professional did the preparations last year, we had no electronic records to directly load into the ...
17
votes
4answers
21k views

Will depositing $10k+ checks each month raise red flags with the IRS?

I am a freelancer that runs a small design business (LLC) and I have one client in particular that I regularly do more than $10k per month worth of business with. Sometimes I'll deposit a check for $...
15
votes
3answers
3k views

What does an IRS interview request entail when called in to verify expenses for a sole proprietor small business?

I received an IRS audit for the following: I had to call them within 10 days to confirm receiving the letter. And I've scheduled an appointment 2 weeks later. They basically said I just need to ...
15
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2answers
17k views

Get a human when calling the IRS hotline 800-829-1040 with a question about your taxes?

How do I get to a human when calling the IRS? I keep hitting stupid automated robots.
15
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2answers
27k views

ITIN Application - IRS requesting original passport

I have filed joint tax return for 2012 tax year. My wife is not eligible for SSN (she's on H4 visa) so we included the W7 form (application for ITIN) into the package. This year the rules became more ...
12
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5answers
5k views

Does the IRS reprieve those who have to commute for work?

Consider someone who for either family or affordability reasons is unable to live in San Francisco, where they make their living. Their daily commute is long. The cost of the commute is nontrivial, ...
12
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2answers
41k views

Does the IRS track every check deposited by me?

Is there a maximum amount limit on exceeding which the tracking starts? Or does each and every check deposited by me gets tracked by IRS for reconciliatory purposes?
12
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2answers
13k views

How can I avoid being fined or penalized because my accountant might have failed to file my taxes on time?

I decided to use a CPA because my tax situation got complicated this year. I have attempted to contact my accountant several times and cannot get a response from him at all. It is now after the ...
12
votes
3answers
6k views

When do dual citizens (Canadian & American citizenship) need to file U.S. income taxes?

I'm a Canadian-US dual citizen (born in the US to Canadian parents) but I've lived in Canada my whole life (aside from the first 3 weeks). I've never had an American passport or a SSN. I've never ...
12
votes
3answers
2k views

Does IRS Direct Pay use Bank of America or is this a scam?

I went onto the IRS website today to make a payment. In the security part of the address bar it is written Bank of America: My question is this: Is this truly the IRS payment site, or some kind of ...
11
votes
1answer
957 views

Paid for education in previous year, became a student in this one

Me and my wife moved to the US in the 2016 and she enrolled in the community college in the end of the 2016 for spring term 2017. So I paid the tuition in 2016, but she became a student in 2017. ...
11
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3answers
1k views

Is it a gift or not?

IRS rules are not always black or white, and something that I find myself struggling with is what is considered a gift. Hypothetically, suppose I am moving soon and have a broken leg so I cannot do ...
10
votes
3answers
769 views

Can you be penalized for setting an arbitrarily high number of allowances on your W-4?

I withheld too much in taxes this year. I will benefit a good amount from the Lifetime Learning Credit, which I hadn't heard about until today. Even if I don't pay a cent in taxes for the rest of the ...
10
votes
1answer
446 views

How can I self report and undo Roth IRA contributions, due to exceeding the AGI limit?

Contributions for Roth IRAs can be made through April 15 of the following year. Without getting into philosophical arguments about dollar cost averaging, my general principle has been to put the money ...
10
votes
1answer
145 views

If the IRS asks for a proof for a medical expenditure, can we provide a scan, or do we have to provide the original receipts?

In the United States, one can deduct part of the expenses a taxpayer paid for medical and dental care for themselves, their spouse, and their dependents. In case the IRS asks for a proof, are scans of ...
10
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2answers
1k views

How To Report Cryptocurrency Earnings?

I invested in a decentralized bitcoin business and earned about BTC 0.4 this year in interest from it, but there is no official business - it's purely autonomous (very hard to explain). I also "mined"...
9
votes
2answers
1k views

Can yearly tax free gifts to a person in the U.S. be sent in multiple checks?

I'd like to give someone a monetary gift, well under the current $14,000 Annual Gift Tax Exclusion limit; however, I'd like to send them multiple checks throughout the year. I'd heard about this in my ...
9
votes
1answer
1k views

Correct way to get paid from a web design?

I did a website design for another company (Basically, I sold them a completed website) for a flat $500. They're telling me I need to file a W-9, but I don't see why because I'm not a contractor for ...
9
votes
4answers
659 views

Are tax deductions voluntary?

If I did something that I know is a deductible expense and did not deduct it, is that a sanctioned tax filing? The result is that I would end up paying MORE tax. This also results in me reporting a ...
9
votes
2answers
609 views

What increases your chance of being audited?

What increases your chances of being audited? Having a home office? Small business? what decreases your chances? Does hiring an accountant do your taxes makes it look more credible to IRS agents?
9
votes
2answers
688 views

How to fill the IRS Offer In Compromise with an underwater asset?

I owe about $6k in back taxes, and simply don't have the money--it's hard for me to find even minimum wage jobs in the current economy, and I am burdened with consumer debt. After speaking with the ...
9
votes
1answer
594 views

What are the consequences of IRS “reclassification” on both employer and employee?

To begin, let me clarify that this question is not about how to avoid IRS reclassification. I want a better understanding of the consequences when it happens. Here, I am referring to when the IRS ...
8
votes
2answers
597 views

Claiming income/deductions on an illegal apartment

We are currently renting a basement out to some friends of ours. We are asking a fraction of the price of what its worth. I understand the risk of renting without a certificate of occupancy. The ...
8
votes
1answer
11k views

ITIN application rejected, and IRS lost one of our passports. How to get back the lost passport?

I have filed my 2012 tax return jointly with my wife, along with my wife's ITIN application, back in late March. In April, I got a letter for IRS ITIN department saying that we should send my wife's ...
8
votes
2answers
719 views

How to treat blog income for tax purposes & report PayPal income to the IRS?

I made a small amount of money for a blog I write, and I'm wondering how to enter it into my tax form. I was paid via PayPal so I have no W-2. (And not reporting it to the IRS is not a viable option.) ...
8
votes
1answer
998 views

How can I prove to the IRS that I didn't receive income that an employer incorrectly reported?

I received a notice from the IRS a few days ago regarding my 2012 filing. One of the companies I contracted for filed paperwork stating they paid me about twice what I actually received. It seems like ...
8
votes
2answers
326 views

What are these “new IRS requirements” that H&R Block refers to when forcing me to change my password?

Attempting to log into H&R Block's website to file my taxes, as I've done for the last several years in a row, I'm now being prompted to "Update your account settings so they meet new IRS ...
8
votes
1answer
372 views

How can I resolve the IRS letter about owing tax on cancelled debt when I did make credit card payments on a payment plan?

My wife had defaulted on her credit cards in late 2012/early 2013 due to financial circumstances. In mid-2013, we setup payments with issuer and that was that. We filed taxes for 2013 and didn't ...
8
votes
1answer
935 views

What should I use as the cost basis for stock that was purchased before becoming a US resident?

I held some stock in Australia for 14 years and 4 months that has enjoyed some healthy long term capital gains in that time. Recently I became a US Resident for Tax Purposes under the Substantial ...
8
votes
1answer
102 views

Applying prior year federal refund to prior year owed tax

If I were due a federal refund in 2011 and owed in 2012 and did not file either year, can I apply the 2011 refund to the 2012 bill? I know I can no longer claim the refund for 2011. Will the IRS ...
8
votes
1answer
215 views

Figuring out if I receive US income?

I'm located in the UK and sell apps through Apple App Store, Google Play etc. I have completed W8-BEN forms at the request of Apple, Google. Now I'm looking to invest in US stocks, to do so, I need ...
8
votes
1answer
195 views

Deducting moving expenses - what about item replaced after being broken in move

During a qualified move that coincided with a job change (an IRS requirement for this particular deduction), an item that was shipped arrived at the new location broken, a replacement was bought. ...
7
votes
6answers
28k views

Can I use an FSA from multiple employers in a year?

My current employer offers an FSA. For 2014 I have opted to contribute the maximum allowed which is $2,500. If, after using that $2,500, I switched employers and they also offered an FSA would I be ...
7
votes
1answer
283 views

If I helped my friend to file taxes; can I represent her on a phone call with FTB?

I helped my friend to amend taxes. However, Franchise Tax Board is still not satisfied - they expect that on form 565 box 24 we should pay $800 annual fee for her General Partnership. General ...