A woman reviewing her paperwork for income taxes

Do I Have to Pay Taxes on a Lawsuit Settlement?

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If you’ve been involved in a lawsuit or settlement and have been awarded a sum of money, you might think that money is yours to spend, free and clear. You’ve paid back the entitled parties, your lawyer got his or her cut, and now you’re ready to buy yourself something nice!

Unfortunately, the IRS is also waiting for their portion of your settlement. You might not even realize that you owe taxes on your lawsuit settlement until you receive a 1099 at tax time. Depending on the type of lawsuit and the types of damages awarded, a portion or potentially all of your settlement funds could be taxed as income.

If you’ve been awarded funds from a legal settlement, it would be smart to use a portion of that money to pay an experienced accountant for tax preparation services to make sure that your settlement is taxed correctly. Your accountant can make sure that your tax return is properly prepared; and if you are unable to pay your tax bill, they can help you with payment options. Read more

A person consulting with a tax resolution specialist

What Exactly Can a Certified Tax Resolution Specialist Do for You?

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Many people fall behind on their taxes, start to receive notices from the IRS, and/or find themselves in a troublesome situation with the Internal Revenue Service. If you find yourself in this unfortunate situation, you may receive advice about seeking out a certified tax resolution specialist. What does this mean? How can they help?

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A couple looking at a property with a realtor

How to Find Out if a Property Has a Lien on It

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Whether you are in the market to buy a new house, or you are thinking about listing your own home for sale, you don’t want any surprises. Finding out if a property has a lien on it before the sales process gets started will save you a lot of headaches.

A lien is issued against a home title when a creditor has a financial stake in the property. This happens because of unpaid debt, which can be related to a mortgage, tax debt, unpaid contractor’s bills, and more.

Often, if a lien is found on a property during the buying process, the real estate deal falls through and the sale doesn’t happen. Most lenders will not approve a loan for a property that has a lien against its title. However, if you want to know how to secure a home loan when dealing with a tax lien, there are ways around the lien.

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A business owner sitting at a table

How to Know Which Accounting and Auditing Services Make Sense for Your Business

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Not many small business owners or entrepreneurs particularly enjoy the accounting aspect of their business. For most people, it’s a tedious but necessary task that must be endured in order to keep doing business.

If you have simple finances and few employees, you may still be handling the books yourself. But at some point, the task may grow beyond what you alone can handle. This points many business owners in an awkward spot—large enough to need some accounting help, but not large enough to require a full-time accountant or financial department.

If you’ve found that accounts receivable or accounts payable are not up to date, or payroll details have been missing, it’s time to seek help with your accounting needs. This means asking a basic question about which accounting services are best for your small business. If you are concerned about IRS tax audits, or find yourself in need of an internal financial statement audit to reconcile some mismatching numbers, you might seek out an accounting firm with tax law experience.

Check out 10 Bookkeeping Tips for Small Businesses to make sure you haven’t missed any best practices for your accounting functions. It will help you ask better questions when choosing an accounting and auditing service.

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A business owner on the phone while reviewing his accounts

What Triggers an IRS Audit? And Am I (or My Business) at Risk?

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There are few things in life that inspire fear and anxiety like finding out you are being audited by the IRS. Just thinking about the potential implications for your personal life and your business can be headache-inducing, at the very least. But is there anything you can do to avoid an audit? After all, audits are random, aren’t they?

While only IRS insiders know the actual algorithm responsible for audit triggers, we know that there are a few red flags that can put you on the short list for an audit.

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A woman working on a computer to remove a lien

How to Remove a Tax Lien (so You Can Refinance Your House)

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If you’ve got a tax lien on your house, you’ve probably got questions about it—and for most people, the number one question is “how do I get rid of it so I can refinance or sell my home?”

The short answer is that you should be able to pay off your state or IRS tax debt in full to get rid of your lien. But as with just about everything involving taxes and tax debts, the process can get a lot more complicated than that.

In this article, we’ll provide some general information about liens and talk in detail about the steps to get rid of a home tax lien. We’ll also explain how an experienced tax professional can help make the lien removal process a whole lot easier in many cases.

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a bookkeeper or accountant recording information in a notebook and discussing graphs and charts with another professional

What Is the Difference Between Bookkeeping and Accounting?

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While bookkeeping and accounting both support healthy finances and accurate financial records for businesses, they are not the same thing. Although they work together, they perform separate functions and require different skillsets. And if you want to make wise financial decisions (and avoid costly tax penalties), you need both.

Bookkeeping is actually a building block for good accounting. With greater accuracy and organization in your ledger, you set yourself up for greater success with accounting.

If you find that your business is struggling with financial forecasting and analysis, you might benefit from stronger foundational bookkeeping. Hiring a bookkeeping service can be a great way to strengthen your business’s finances. While many small business owners start out handling the finances themselves, hiring financial professionals can bring huge benefits for their business. The knowledge of financial best practices can help keep your business healthy and growing.

However, you may not know what kind of financial help you need. If that is the case, let’s dive deeper into the differences between bookkeeping and accounting.

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a student carrying her books and walking

Are Student Loans Tax Deductible?

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Going to college can be a time of growth and excitement, not to mention set you up for a productive career. But for many graduates, student loans are the college hangover that just won’t go away.

Student loan debt can follow you around for most of your adult life, causing financial stress and impacting your daily decisions. Yes, the Biden Administration has recently made some key changes to help borrowers of federal student loans, including up to $10,000 in debt cancellation (or $20,000 for Pell Grant recipients) for low- and middle-income households. But that may be just a drop in the bucket for borrowers who still owe significantly more than these caps.

While student loan repayments are not tax deductible, the IRS does offer some relief by letting you deduct student loan interest from your federal taxes. No matter how long it takes you to pay off your student loans, if you pay loan interest, you may be eligible for a deduction on your tax return. There is no limit to how many years you can take that deduction.

If you are just learning about this now, and are kicking yourself for not taking this deduction in previous years, there’s good news there as well: you can file an amended tax return to fix any mistakes made on prior returns, and potentially get back an extra refund.

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an adult child discussing financial matters with a parent

Can I Claim My Parents or an Adult Child as Dependents?

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With many families seeing the economic benefit of multi-generational households, there’s another benefit you may be wondering about: tax breaks.

If you support someone in your family financially, such as a parent or adult child, you may be able to claim them as a dependent even if you don’t live in the same household.

The IRS has a few tests to help you determine if your financial support allows you to claim a qualifying child or a qualifying relative. The tax credit depends on how your dependent is qualified; the credit for a qualifying child is $2,000 and the credit for a qualifying relative is $500.

Figuring out whether your support qualifies you to claim a dependent can be a little tricky in some cases.

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reviewing Venmo and Zelle payments while filling out a package address

Do You Have to Pay Taxes on Venmo and Zelle Payments?

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Payment apps have made it easier than ever to split the bill when you go out with friends, but new rules in the tax code might add some extra complication to apps like Venmo and Zelle.

You can still split the bill with friends without any tax implications, but if you receive $600 or more tagged as “goods and services,” or if you have a business account with a payment processing app, you will receive a Form 1099-K for reporting this income to the Internal Revenue Service on your 2022 income tax return.

If you use multiple payment platforms to receive payments, you may not receive a 1099-K tax form, but that doesn’t mean you don’t have to report this income on your taxes. Keep reading to see what rules apply to you, and how this change will affect your payments and taxes. If there is any confusion, you should talk to a tax professional about your specific situation.

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