Monday, November 23, 2009

Questions for the Tax Lady: November 23rd, 2009

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question #1: What is the head of household filing status?

In addition to filing as a single taxpayer, you can also file your tax return as “head of household.” Typically, if you qualify then your tax rate will be lower and you will be able to receive a higher standard deduction. However, in order to qualify you must meet the following IRS requirements:

1. You are unmarried or “considered unmarried” on the last day of the year.

2. You paid more than half the cost of keeping up a home for the year.

3. A “qualifying person” lived with you in the home for more than half the year (except for temporary absences, such as school). However, if the “qualifying person” is your dependent parent, he or she does not have to live with you. See Special rule for parent, later, under Qualifying Person.

For more information including rules on qualifying persons, check out IRS Publication 501.

Question #2: Will an accepted Offer in Compromise remove a bank levy?

Unfortunately, having your offer accepted will not automatically remove a wage garnishment or bank levy. However, it will resolve your tax debts with the IRS so that you can request to have the levy released. For more information regarding how to get tax levies released, check out this blog entry on the Tax Relief Blog.

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