Monday, February 21, 2011

Questions for the Tax Lady: February 21st, 2011

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: The IRS is taking $50 per month out of my pay check. They've been doing it for over a year, how can I get them to stop?

Answer: What you are experiencing is an IRS wage garnishment. Just one of the collection methods the IRS uses to collect on unpaid tax debts. There are a couple of ways to get the garnishment removed:

  1. Pay the entire balance of your tax debts in full.
  2. Negotiate an installment agreement with the IRS. This allows you to pay your debt in manageable monthly payments, instead of forced collections.
  3. Show the IRS you have a hardship and cannot afford to repay your debts at all, right now. This involves divulging your finances and bills to the IRS so they can see - in black and white - that you simply cannot afford to pay your debt right now.

If you don’t take some action, the IRS will keep garnishing your wages until your debt, with penalty and interest, is completely paid off. My recommendation: talk to a tax professional and get this handled ASAP!

Question: If I refinance a mortgage on a building and then pay it off, does the depreciation on the building continue?

Answer: The short answer is: YES. I have to assume this is a business-related building, not a personal use, or you wouldn’t be depreciating it, right? The depreciation should continue until you sell the property or take it out of use.

Additionally, the refinance costs may actually add to the amount you can depreciate. If your refinance included non-deductible fees and expenses, talk to your tax professional about how they can be depreciated.

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