How can I get my tax refund?

Your tax refund transfer will be faster if you e file it accurately. The IRS will direct deposit in your bank, member FDIC, within in around 3 weeks. However, if you mail your return, you’ll probably have to wait a much longer time to receive your refund. To avoid delays in refund transfer and get max refund, consult with our tax professional today.

What are the requirements to e file a tax return?

You really should e file, there are lots of reasons to do so. We will take care of your filing process electronically. However, you need to provide us with last year’s AGI information. If you don’t know what it is, then you can use the IRS Get Transcript to get your previous year’s AGI.

What are your tax preparation fees?

We only charge $120 as tax prep fees. Moreover, you get unlimited access to tax advice from a tax professional on any of the tax topics without any additional service fees. Our pricing is transparent. There are no hidden e file fees or additional fees for the tax help we provide.

Am I eligible to pay self-employment income tax?

Different limitations apply on individuals with different financial records. If your net income is above $400, you need to file a tax return, but if your income is below $400, you may still need to fill out the form just according to the filing requirement.

How can I file a return for previous tax years?

Filing for previous year can be done. We can e-file for 2 previous years. Older returns more than 2 years old must be paper filed. Furthermore, IRS does not allow taxpayers to e file prior year returns via self-preparation websites.

Do you also offer legal advice?

We do not provide legal advice. We don’t represent taxpayers in front of state agencies or the IRS. However, our professional credentials allow us to offer you audit support as a tax preparer.

What kind of deductions am I eligible for?

Everyone is eligible for some kind of deductions or tax credits. However, the amount of tax could be different for each individual because of their income. Although, business owners and self-employed persons might get a slight advantage on saving the cost during audit defense.

Which tax software do you use for tax preparation?

We use ATX but we can use any tax software as we have access to paid versions of these tax tools.

Usually, when is the due date of the Ohio Tax Return?

The deadline for tax return in Ohio is usually fixed on April 15, unless it arrives on the weekend or is otherwise devised to change by the IRS. We recommend you to file the returns earlier as you can amend returns if the tax situation changes.

Family Loans and the Gift Tax

What you need to know…

Family Loans and the Gift Tax. Monetary gifts to friends and family members made can be up to $17,000 per year (2023) without any issues on Taxes. There are two ways to handle gifts over the “free” limit. One is that you file a gift tax return and the other method is to loan the money to your family in a proper manner. Any amount over the $17,000 per year must be handled by documenting the amount as a loan to avoid Filing IRS Gift Tax Returns.

“Gift Loans.” It is important for you to properly document the loan in writing.

What’s the most common problem that individuals make? It is that they do not document the Family Loans and the Gift Taxes especially if they are not going to ask interest for it. The truth is that even if you are not going to ask for an interest rate, you still have to document it in your File for the IRS. If you are going to ask for an interest, you have to document terms of payment and the collateral involved in the loan just to have everything in black and white.

Likewise, if you will not do this properly, you may find yourself paying gift Taxes on the loan. The good thing about documenting these loans is that you do not have to use a lawyer for it unless the loan is for a mortgage. You just need to write it on your own, this document is calls a “note”.

Family Loans: The Note

Once you have the note, it is important for you to keep it safe. Especially if the money loaned from you is going to be for mortgage or purchasing a property. Most of the time, these loans that are used for mortgages will usually undergo legalization through a title company or a lawyer. The reason why it is important for the loan to be acknowledged in writing is to get the benefit for Income Taxes on mortgage interest.

This note will also make it very clear to you, the borrower and the IRS that the money obtained from you is a loan and not as a gift. So this is a clear way of establishing financial obligation to the borrower.

Most of the time, people who are loaning money to their relatives would usually not ask for an interest. However, if you don’t provide an interest amount in the note, the IRS may force you to use their nominal rate. This is what you call imputed interest. The definition of a loan is that it should have interest rate and that interest is taxable by the IRS. Yes, Taxes are always involved.

Using a Demand Loan to your benefit

Within the note, the time period of the loan is required. Using a Demand Loan means that you can demand for the amount to be paid in full whenever you want. But you can just use this for formality with the IRS in terms of computing the imputed gift. Both you and your borrower can still arrange the payment schedule and options informally.

Imputed gift Taxes will be determined on an annual basis on the demand loan. Within a year, the interest needed to be paid in a year will be given a total amount of $16,000 aside for those larger loans. With this management, you can maximize the amount of total free gifts and save on possible Taxes. Just imagine all the things that you can do if you use the “demand Loan” properly. If you are going to “gift” money to someone, there is no reason to pay Taxes on it too. Setting up the proper structure is important to limit your Taxes. There are various ways to limit your Taxes. You can use a demand loan and use your lifetime benefits of gift Taxes.

Conclusion

If you Gift (2023) $17,000 or less per year to someone it is a “free” transaction on your income tax Returns. But if you gift more than $17,000 (2023) to any one person in a year, you MUST either File a Gift Return for Taxes OR properly document it as a loan with a proper Note. You would just need to be compliant with the Federal interest rates set. We would recommend that you check with an accountant or a tax lawyer, BEFORE you get yourself into trouble. These rates can be found on the IRS’ web page. Still, if you have any questions, please feel free to ask.

Family Loans and the Gift Tax

What you need to know…

Family Loans: The Note

Using a Demand Loan to your benefit

Conclusion

Akron Income Tax Co.