The 2018 tax filing season ended on April 17. For three-fourths of filers, they received a tax refund from the Department of the Treasury. Not everyone is quite so lucky. Some filers received notices from the IRS that they owe taxes. You could face several consequences if you owe the IRS money and are unable to pay. The IRS could garnish your wages to satisfy the tax debts. In addition, they could also place liens on physical properties or levies on bank accounts. You can discharge many debts by filing for bankruptcy. It is more difficult to discharge tax debts. The good news is that is not impossible. You may be able to discharge tax debts in bankruptcy if you meet all of the following criteria. You have income tax debt. Only income tax debts are dischargeable. You cannot discharge other types of taxes in bankruptcy. The taxes are at…
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The IRS officially launched tax season on January 29. You can file your tax return and possibly receive a refund. According to IRS statistics, the average tax refund was $2,782 in 2017. For many of us who receive refunds, it can be tempting to spend it on something we want and not something we need. There are smart ways to spend your refund even if it is smaller than what you were expecting. Save for an emergency: A recent survey published by Bankrate.com, a personal finance website, found only 39 percent of Americans could cover a $1,000 emergency. You could save your tax refund to pay for medical bills or rent after a job loss. These are just two examples of emergencies that could cost more than $1,000. Pay off your debts: You could use your tax refund to pay off student loans or credit cards with high interest rates….
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Our blog earlier this week talked about smart ways to use a tax refund. However, this blog also frequently discusses helpful tips for student loans. Now that tax season has begun, it is important to know how your student loans could affect your tax return. Depending on the circumstances, your student loan payments could even increase the amount you receive from your tax refund. You may qualify for a student loan interest deduction. Did you pay more than $600 in interest on your student loans during 2017? If you met this threshold, then your loan servicer should have mailed or emailed you a 1098-E form. In addition, the form is most likely available on the online portal your loan servicer uses. However, you must meet specific criteria to qualify for this deduction. REPAYE considers joint income while calculating your payments. If you are married and enrolled in REPAYE, an income-driven…
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