As you work through the 2013 tax year, proper record keeping is important if you want to reduce your tax liability. It becomes critical if you expect to off-set positive income with losses from other business activities – especially if some of that activity was passive.
This year’s deadline to file individual federal income tax returns, Form 1040, is Monday, April 15. Before you know it, the deadline will be here. In filing your income tax return this year, here are some helpful reminders.
As we head into the tax filing season, taxpayers are always looking for ways to lower their tax burden. As Judge Learned Hand once wrote: “Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes. Over and over again the courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.”
I often counsel and represent people and businesses with past and current tax problems. By “tax problems” I mean they owe back taxes and/or they have not been filing tax returns. The start of a new tax year provides these people and businesses the opportunity to start off the year correctly and to stop the bleeding from the past mistakes.
I enjoy reading the tax news put out by the U.S. Department of Justice’s Tax Division. It always amazes me that people try over and again to argue the same tax schemes for which others have already been busted and sent to jail. I like to report on some of the prosecutions in order to educate people to be vigilant in their tax planning and tax reporting.
The Internal Revenue Service in May announced more changes to its tax collection policies as part of its Fresh Start Initiative to help financially distressed taxpayers deal with their tax debts.
A family limited partnership is often created in estate planning and used as a means to easily transfer business assets owned by the parents when they are ready to start gifting interests in the business assets to their children.