June 2018 Archives

Accountants, attorneys and audits

Maryland residents who have unresolved tax issues may benefit from using the services of both accountants and attorneys. The services that they offer complement each other. In many cases, both the client and the accountant benefit from working with an attorney.

Bitcoin is not the only important cryptocurrency

If you ask around the office, the cryptocurrency most people will have heard of is Bitcoin. It's the oldest and is seen as the focal point of the cryptocurrency revolution. It is sort of the gold standard for these coins. It's also the coin that a lot of people made extreme amounts of money on during the rally in late 2017, when a coin that once sold for pennies reached $20,000 per coin.

How federal tax liens are treated in a foreclosure

When a homeowner in Maryland or any other state fails to pay taxes, it could result in a lien being placed on that person's property. Eventually, it could lead to the property being sold at auction. In one case, a home was auctioned twice to two different bidders after an individual failed to pay both local and federal taxes. Multiple auctions occurred because the local authorities failed to communicate with federal authorities.

Why taxpayers shouldn't worry about audits

While most Maryland residents may be nervous about an IRS audit, the chances of actually being audited are relatively low. Only 1 percent of those who make under $200,000 will have their returns examined. Of those who make more than $1 million, roughly 12 percent can expect to have their returns examined. It is also important to know that no single deduction is guaranteed to trigger an audit.

How new tax laws impact expense deductions

As a general rule, the IRS says that Maryland residents who have side gigs that lose money are engaging in hobbies as opposed to businesses. This means that they can't use that loss to offset any other income that they may have generated. In past years, individuals could deduct hobby expenses that were more that 2 percent of their adjusted gross income up to the amount of income the hobby generated.

Steps to take during a business tax audit

Maryland business owners may not like the thought of an IRS audit. In addition to the time needed to resolve the matter, a company could owe more money to the government. However, it is important to remain calm and polite throughout the process, and it is rarely a good idea to go into a meeting with the IRS alone. Instead, bringing in the company's accountant can be helpful in answering the government's questions.

IRS sends notices for many different reasons

For most Maryland residents, the idea of taxes becomes important once or twice each year, then it moves to the background again. Following filing though, a few people in the state can expect letters from the Internal Revenue Service. Getting a letter from the IRS is often a stress-inducing event, but it does not have to be. Indeed, on average, less than seven people out of a thousand will be audited. There are other reasons the IRS might contact a taxpayer after returns are filed.

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