Monthly Archives: October 2013

Chapter 7 and 13 Bankruptcy

Chapter 7 Bankruptcy
 
Chapter 7 provides the most attractive choice for those who want to eliminate their heavy debt burden without paying any of it back.  Some of the choices are as follows:
 
A.    You receive a complete fresh start.
 
B.   You have immediate protection against creditor’s collection efforts and wages garnishment on the date of filing. 
 
C.  Wages you earned and property you acquired (except for inheritances) after the bankruptcy filing date are yours, not the creditors or bankruptcy court.
 
D,  Your case is often over and completely discharged in about 3-6 months.
 
 
Chapter 13 Bankruptcy
 
A Chapter 13 bankruptcy is preferable to a Chapter 7.  A Chapter 13 bankruptcy is the only choice if you are behind on your mortgage or business payments and you want to keep your property.  A Chapter 13 bankruptcy allows you to make up over due payments and to reinstate the original mortgage agreement.  Also, people file Chapter 13 bankruptcy because they have too much income to file Chapter 7 bankruptcy or have the kind of debt that is non dischargeable.
 
 For more information on Chapter 7 and 13 bankruptcy, contact Robert Burch or your attorney.
 

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2014 Tax Season Delayed following Government Shutdown

The Internal Revenue Service announced on Tuesday that it will delay the start of the 2014 tax filing season by approximately one to two weeks due to delays caused by the recent closure of the federal government.

Citing the need for “adequate time to program and test tax processing systems,” the service announced that it expected a one- to two-week delay in the start of tax season, and that it would start accepting and  processing 2013 individual tax returns no earlier than Jan. 28, 2014, and no later than February 4.  Tax season had been expected to start on January 21.

 According to Acting  Commissioner Danny Werfel, the service was exploring options to shorten the expected delay, but also noted, “Readying our system to handle the tax season is an intricate, detailed process, and we must take the time to get it right.  The adjustment to the start of the filing season provides us the necessary time to program, test and validate our systems so that we can provide a smooth filing and refund process for the nation’s taxpayers.”  The official start date will be announced in December.

 For more information regarding tax season delay, contact Robert Burch at (773) 779-4447 or visit www.accountingtoday.com

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What Are the Differences Between A Traditional IRA vs. Roth IRA?

Some of the distinct fundamental differences between a traditional IRA and Roth IRA are as follows:
 
Traditional IRA: 
A.  Am I eligible?  Individuals under age 70 1/2 with earned income or spouses with earned income are eligible to contribute to a Traditional IRA.
 
B.  Maximum Annual Contribution – 2013 tax year:  $ 5,500 ($6,500 age 50 and older).
 
C.  Tax-Deductible Contributions – You may be able to deduct some or all of your contributions depending upon your adjusted gross income and whether you or your spouse are covered by an employer’s retirement plan.
 
D.   Withdrawals – A 10% penalty applies if withdrawals are done prior to 59 1/2.
 
E.  Distribution – Minimum distributions are required beginning at age 70 1/2.
 
Roth IRA:
 
A. Contributions – Unlike a traditional IRA, Roth IRA contributions are not deductible from your adjusted gross income.
 
B.  Advantage – You may withdrawal earnings tax free and penalty tax free at age 59 1/2, if the account is at least five years old.
 
C.  You can keep contributing to a Roth IRA after age 70 1/2.
 
D.  Individuals are allowed to contribute the same amount as a traditional IRA.
 
For more information regarding IRAs, contact Robert Burch at (773) 779-4447.
 
 

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IRS Operation Halts during Government Shutdown

How does this affect me?

A. You should continue to file and pay taxes as normal. Individuals who requested and extension of time to file should file their returns by October 15, 2013.

B. All other tax deadlines remain in effect, including those covering individuals, corporations, partnerships and employers. The regular payroll tax deadlines remain in effect as well.

C. You can file your tax return electronically or on paper-although processing of paper returns will be delayed until full government operations resume. Payments accompanying paper tax returns will still be accepted as the IRS receives them.

D. Tax refunds will not be issued until normal government operations resume.

E. Tax software companies, tax practitioners and Free File will remain Available to assist with taxes.

F. No live telephone customer service assistance will be available, however most automated toll-free telephone application will remain operational. IRS walk-in taxpayer assistance centers will be closed.

For more information on IRS Shutdown limitations, contact Robert Burch at (773)779-4447 or visit taxprotoday and irs.gov.

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Victims of Identity Theft and Prevention

Consumers need to know that identity theft is more prevalent during tax season and holidays.  Identity thieves may use your information to file a fraudulently tax return and claim a refund.  In other cases, the identity thief uses the taxpayer’s personal information in order to get credit cards, personal loans, mortgage, etc.  The legitimate taxpayer may be unaware that anything has happened until they file their return or apply for credit. On the prevention side, the IRS has taken numerous steps to protect taxpayers by putting new processes in place for handling tax returns.

To report identity theft, fraud, or misuse of Social Security number, the national’s consumer protection recommends that you take the following steps:

Step 1  Place a fraud alert on your credit file by contacting one of the three companies:

        A.  Equifax – 1 800 525-6285

        B.  Trans Union   1 800 680-7289

        C.  Experian  1 888 397-3742

Step 2   Review your credit report for inquires from companies you have not contracted;                   accounts you did not open; and debt on accounts that you cannot explain.

Step 3   Close any accounts you know, or believe, have been tampered with or opened                     fraudulently.

Step 4   File a report with your local police or the police in the community where the                        identity theft took place.

Step 5   File a complaint with the Federal Trade Commission by calling them at 1-877-438-              4338.

For more information about identity theft, contact Robert Burch at (773) 779-4447 or visit IRS Identity Theft Protection page at IRS.gov. home page.

 

 

 

 

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Tax relief in Disaster Situation Claiming Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year.  Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax refund, depend on other income factors.  Individuals may deduct personal property losses that are not covered by insurance or other reimbursements.  For more information, contact Robert Burch at (773) 779-4447.

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