The real cost of not paying your taxes until October 15!
This time of year we often see taxpayer's looking to extend the time to pay their taxes due and asking, "what are the penalties if I do not pay my taxes due by April 15." Here I will address how to estimate the cost of not paying timely - the penalties assessed by the IRS.
I thought some readers of my blog might be interested in this fairly common topic, for which I did some research. I see if commonly where a parent buys a home in their name, and more improtantly, using their credit, the a child lives in the home and makes ll the mortgage payments. Typically, a non-owner cannot take the deduction for the mortgage interest paid and real estate taxes... this discusses the basis of law for which this deduction for the child may be possible...
If you recently purchased U.S. savings bonds and wish to know how you must report the interest income on those bonds...
If you use the cash method of accounting, as most individual taxpayers do, you generally report the interest on U.S. savings bonds when you receive it. However, you report the interest on series EE, series E, and series I bonds in either of the following ways:
Your grandson needs a car, but cannot afford the payments. As a favor, you provide the $25,000 to purchase the car. You tell your grandson to pay you back when he can, but there is no loan document. The IRS sees this payment during an audit and asks you where your interest income is for this loan. Should this happen, you will quickly understand the meaning of AFRs.
Each month the IRS publishes a series of tables known as AFRs. So what are they and why should you care?
