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Archive for December, 2012

Celebrity Starletts Owe Back Taxes

December 19th

If you read online Hollywood gossip columns, you undoubtedly saw the news this month that the IRS had seized Lindsay Lohan’s bank accounts for unpaid taxes the actress still owes. According to reports, Ms. Lohan apparently has $233,904 in owed federal back taxes from the years 2009 and 2010, and also owes money for 2011.  Pamela Anderson has also had financial trouble reported this month, owing both Federal and state taxes.

Working To Resolve Quickly

Fellow “Scary Movie 5” actor Charlie Sheen, reportedly has loaned Lohan $100,000 to help take care of her mounting debt. But the “Liz & Dick” star is still allegedly distraught over the latest blow to her stalled comeback. The New York Post quotes a source that said “Lindsay…says she didn’t know anything about it … she’s broke and it’s not her fault.” Lohan’s managers have stated they are on track to address her tax debts swiftly. And, they have hired the proper tax debt lawyers in an attempt to resolve the issues by the end of the year.

Pamela Anderson’s debt is from two tax liens. The first is for unpaid taxes in 2011 and the IRS says the “DWTS” star owes them $259,395. The second lien has been filed by the State of California for $112,118. This one is also for money she owes from 2011. Anderson’s rep isn’t commenting at this point. The star reported tax problems back in 2009 as well.

Anderson didn’t fare well on the “Dancing With the Stars: All-Stars” this past season as she was the first one to be sent home. She is said to have signed up for a new British show called “Dancing on Ice,” hoping extra revenue from that show will make a dent in her tax liens.

 

Struggling To Pay Back Taxes, Get A Fresh Start

December 12th

Instituted to help distressed middle class Americans still caught in the crunch of the lingering recession, the IRS implemented a Fresh Start initiative. The goal is to make it easier for individual and small business taxpayers to pay back taxes and avoid tax liens. It helps people get back on their feet by addressing their delinquent income tax debts and taking full advantage of the special program.

Streamlined Installment Agreements

The Fresh Start provisions now open the door to a larger portion of distressed taxpayers to resolve their problem of owing back income taxes. Making sure the door stays open means that more taxpayers will have the ability to use streamlined installment agreements to catch up on back taxes. Under the Fresh Start initiative, the maximum dollar criteria for streamlined installment agreements has been raised from $25,000 to $50,000 and the maximum term has been raised from 60 months to 72 months.

These installment agreements generally do not require a financial statement, but a limited amount of financial information may be required in the application process. As a direct result, more taxpayers will have the ability to use IRS installment agreements to catch up on back IRS income taxes owed. Taxpayers who owe up to $50,000 will now be able to enter into an installment agreement with the IRS.

What is necessary for a distressed taxpayer to connect the dots in a tax resolution case and obtain an expanded installment agreement should be guided by the help of an experienced tax debt lawyer. The question remains whether the majority of distressed American taxpayers will take advantage of the opportunities presented by the IRS Fresh Start Initiative.

 

End Of Year Tax Tips

December 5th

Holiday season is a busy time of year; it’s easy to get distracted. But now is also a time to start thinking about your finances – specifically, what steps you can take before December 31 to help save you money on your 2012 tax return. Some strategies could help reduce your tax debts come next April. Any one of them could be especially helpful if lawmakers don’t act to extend the many popular tax credits set to expire at the end of 2012.

5 Tax Steps To Take Now

Make a donation. Consider moving charitable donations normally made in early 2013 to the end of 2012. Donors can get a full deduction if the taxpayer has proper documentation. For cash contributions of less than $250, you must retain either a bank record that supports the donation, such as cancelled checks or credit card receipts or a written statement from a qualified charity.

Accelerate medical expenses. The threshold for deducting these expenses, now 7.5% of adjusted gross income, rises to 10% next year for most taxpayers. If your out of pocket 2012 medical expenses are close to the 7.5 percent floor this year, you may want to take advantage and schedule appointments not covered by insurance before end of the year.

Set up a health savings account for 2012. Qualified taxpayers can make 2012 contributions to HSAs as late as April 15, 2013, but the account has to exist by year end.

Make an extra mortgage payment, or pay down principal. Usually taxpayers can’t pay more than one month of mortgage interest, but if you can, it will help if you think the mortgage-interest deduction will be curbed next year.

Write next semester’s tuition checks before year end. The American Opportunity Tax Credit allows qualified taxpayers to get a benefit this year for next spring’s tuition if the payment is made before year end—even though the credit is set to expire for 2013. For more information, see IRS Publication 970.

If you have any questions about how to further reduce your tax liabilities, consult with a tax debt attorney today.

 
 
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