Tax Breaks: When Family Members Can Become Legal Liability, Space Exploration And Tax Liability, Digital Assets And Taxes, Tax Questions And Tax Credits
Currently, more than 25 states and the territory of Puerto Rico have filial support laws on the books that make a child responsible for their parent's unpaid medical bills, and even bankrupcty filial laws in some places. These laws have been around for a while, but they are rarely enforced, though that has started to change recently. Understanding these tax implications can help navigate the complexities of handling estates with international ties. The IRS has released a draft of Form 1099-DA, the next step in the agency's efforts to bolster crypto tax reporting and follows proposed regulations published last year. The proposed regulations would, among other things, require brokers to report sales and exchanges of digital assets to the IRS on the new Form 1099-DA. In some circumstances, gains, losses, and basis information would also have to be reported, much like the 2008 requirement that brokers report the cost basis of certain securities to the IRS when a sale occurred.
Dear Tax Question of the Week: So I tried filing my taxes with Turbo Tax, and I received a notification that I couldn't file electronically, so I would have to print off the papers and mail them. I was afraid it was too close to the deadline to do it through the mail and I went to H&R Block and filed them. I didn't realize Turbo Tax had already charged my card and apparently filed my taxes. So now I've received two refunds for the same amount and I don't know where to go from here. How do I fix my mistake?
The twice-filed tax return is the easy part—you don't need to do anything right away. If a second tax return is submitted under the same Social Security number, the IRS will typically flag the second return, reject the return, and send you a letter. If you receive two refunds, you'll want to take action so that you don't get a bill (plus interest) later. If your refund was issued as a paper check and you haven't cashed it, write "Void" in the endorsement section on the back of the check and return it to the IRS. Include a note stating "Return of erroneous refund check" and explain why you're returning the check—a quick explanation is okay, there's no need to write a novel.
If your refund was issued as a paper check and you cashed it, you'll want to pay it back immediately. Write "Payment of Erroneous Refund" on the check or money order, the tax period (here, it's the 2023 tax year), the account type (in this case, IMF for an individual), and your taxpayer identification number (Social Security number or individual taxpayer identification number). Mail it to the IRS. Again, you'll include a note stating "Return of erroneous refund check" and explain why you're paying it back. If your refund was a direct deposit, contact your bank or financial institution and have them return the refund to the IRS. Since there's no paper trail, the IRS wants you to call 800-829-1040 to explain why the direct deposit is being returned.
No matter how you return the refund, keep excellent records in case the IRS follows up. If you mail a check or money order, keep a copy and send using a traceable method (ideally, certified mail). If you work directly with the bank, keep a note of the date you asked for the check to be returned, along with the name of the person you spoke to. Stay tuned for more updates in the coming weeks. Cheers!