Category Archives: Federal Income Tax Law Changes

Canceled Debt – Is It Taxable or Not?

Yellow CAUTION signIRS Answers,  ‘Canceled Debt – Is It Taxable or Not?’

If you borrow money and are legally obligated to repay a fixed or determinable amount at a future date, you have a debt. You may be personally liable for a debt or may own a property that is subject to a debt.  If you see yourself in this article, and are unsure of what to do, call us at (619) 589-8680. 

Cancellation of a debt may occur if the creditor cannot collect, or gives up on collecting, the amount you are obligated to pay. If you own property subject to a debt, cancellation of the debt also may occur because of a foreclosure, a repossession, a voluntary transfer of the property to the lender, abandonment of the property, or a mortgage modification. Continue reading

Tax Reform 2015

Tax Reform 2015 Updates

The American Taxpayer wants tax reform and we’ll publish updates on what is going on inside the Senate Committee on Finance.  We’ll begin by looking at the newly formed bipartisan Tax Working Groups.

Each of the bipartisan groups will work directly with the nonpartisan Joint Committee on Taxation (JCT) to produce an in-depth analysis of options and potential legislative solutions within its assigned area, with the goal of having one final comprehensive report featuring recommendations from each of the five categories completed by the end of May.  The report recommendations, which will be delivered to Chairman Hatch and Ranking Member Wyden, will serve as a foundation for the development of bipartisan tax reform legislation.

US Committee on Finance and Tax ReformJANUARY 2015 : On January 15, five bipartisan groups were launched to analyze challenges of Tax Code, develop policy recommendations for comprehensive Tax Reform. The groups will analyze current tax law and examine policy trade-offs and available reform options within the group’s designated topic areas. Each group will be co-chaired by one Republican and one Democrat member. Continue reading

IRS chases taxpayers for old debts

Magnifying GlassSocial Security, Treasury target taxpayers for their parents’ decades-old debts

On April 10, the Washington Post led with a story that created an uproar and outrage by taxpayers across the country.  The story focused on the seizure of tax refunds by the government to repay debt that was, in some instances, decades old.

“Social Security claims it overpaid someone in the Grice family — it’s not sure who — in 1977. After 37 years of silence, four years after Sadie Grice died, the government is coming after her daughter.

Update from Forbes.  The SSA has suspended its scope of more than 10 years.  Meaning, they will not pursue alleged over-payments on any taxpayer more than 10 years.  But, did you know that the government gave itself the right to chase taxpayers for old debts indefinitely. And the easiest way to do it is through an offset. Where you ask?  When?

“To be clear, the government has long had the authority to seize tax refunds to pay back certain obligations (more on that in a moment), but in 2008, the rules that limited the time to seize funds were rewritten. The change was made in the Food, Conservation, and Energy Act of 2008 – sometimes called “the farm bill” – since, as you know, Congress is terribly fond of tossing bits of new law into totally unrelated bills (like those credit card reporting requirements inserted into the Housing and Economic Recovery Act of 2008 or how a bill called the Service Members Home Ownership Tax Act of 2009 turned into the Patient Protection and Affordable Care Act). The provision, tucked near the back of the Act, which clocks in at more than a quarter million words, says simply:

(e)(1) Notwithstanding any other provision of law, regulation, or administrative limitation, no limitation on the period within which an offset may be initiated or taken pursuant to this section shall be effective. (2) This section does not apply when a statute explicitly prohibits using administrative offset or setoff to collect the claim or type of claim involved.”

SSA’s announcement might have been a relief to some taxpayers but the law is still on the books. And so long as the law authorizes government agencies to collect on those old debts, taxpayers could be in danger of having their tax refunds seized for years to come.

And remember,  that the IRS can go as far as they want to if they suspect fraud, so make sure your taxes and records are in order, and have your taxes prepared by a tax professional, such as a CPA or EA.

GOT QUESTIONS? CALL 619-589-8680. 

At US-TaxLaws, we do more than just tax preparation. We review your previous returns. We may just review 1 or 2 years.  But if you are an in-home business, we will take a closer look to make sure you are getting all of the deductions your in-home business is permitted.  US-TaxLaws is your best source for professional tax preparation and/or financial consulting services.

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Cost Segregation? Standard Depreciation?


shutterstock_165755561Cost segregation deals with the depreciation of real estate enabling investors to dramatically increase the amount of depreciation they write off every year.

For many investors, this tax write-off can help restructure the cash flow of their properties, allowing them to make more income, while still increasing their tax benefits.


Shifting portions of the property to non-structural status allows a reduction of income tax by generating an extra 30% to 70% in tax depreciation deductions.  The result is increased cash flow.  Additionally,  extra depreciation converts ordinary rental income at your current tax rate to tax-deferred capital gain when you dispose of the property.  This effectively increases your return on investment.  The higher your tax bracket, the more savings to you.

To learn more, or to understand how cost segregation can work for you, read Understanding Cost Segregation 

MarketWatch Highlights Tax Law Changes

Have you planned for these 7 tax law changes?

CALL US - 619-589-8680Seven significant new income tax law changes went into effect at the beginning of the year as a result of two pieces of legislation:

The 2010 Health Care Reform Act
The American Taxpayer Relief Act of 2012

Although the new laws are primarily designed to increase taxes for those with higher levels of income, everyone with earned income is affected. With the first seven months of 2013 behind us, have you begun planning for these changes? Continue reading