Hopefully this won’t come as breaking news, but it’s that time of year again. You know, the one that evokes one of life’s two certainties (Hint: it’s the one that happens once a year). Whether you’ve already filed your taxes, are racing to meet the April 18 deadline, or even anticipating a refund or dealing with a tax bill, our experts and reporters offer insight on tax-related questions you may have…but are too afraid to ask.
Tax Time Dos and Donts
Needless to say, the IRS is vigilant in its quest to find inaccuracies on our tax returns. Here are some line items that tend to come under the microscope more than others.
If you can afford to write a check and pay off your tax debt, that’s your best bet. But if you don’t have the cash available to do that, read on. There are other options.
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The IRS suggests that paying your taxes with a credit card is convenient and safe. That may be true, but it isn’t cheap.
A little-known fee makes paying your taxes with plastic really expensive. That’s because the IRS contracts with companies to handle credit card payments. And the government doesn’t pay those companies for the service; you do.
Taxes on Cancelled Debt
When you lose a home or investment property, or have an automobile repossessed, typically you’ll receive a 1099-A form. Because the dollar amounts involved in these transactions can be large—involving tens or even hundreds of thousands of dollars—this is one area where you truly can’t afford to get it wrong.
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Creditors who forgive $600 or more are required to file Form 1099-C with the IRS. Nearly 2.7 million of these forms were processed by the IRS in 2009 and that number is expected to increase for the 2010 tax year.
Taxes and Your Home
If you received a federal tax credit to help buy your house, you may be wondering whether you have to repay it. The short answer: Maybe.
Lenders are increasingly asking that borrowers pay one-twelfth of their property taxes each month as part of an increased mortgage payment. Not sure what an impound account is? Keep reading.
Image: paul stumpr, via Flickr.com