Tax Relief

Did you know tax relief is available to help lower your tax liabilities? Find out how to obtain tax help through Military Relief, Innocent Spouse Relief, Disaster and Emergency Assistant Relief and more.


Tax Relief

After Congress successfully got through a one-year "patch" and reached the "serious consideration" stage, the now-annual "tax extenders" packages are poised waiting for the right moment to jump onto the legislative bandwagon. Read about some of the most common forms of tax extender relief options available below.

Military Tax Relief

The Heroes Earnings Assistance and Relief Tax Act (HEART) was supposed to provide more than $1.2 billion in tax benefits to members of the military who are receiving combat pay, saving for retirement or purchasing homes. The bill eased certain rules in order to allow military families to qualify for the earned income tax credit (EITC), make penalty-free withdrawals from pension plans and access amounts in health flexible spending arrangements. 

The bill was supposed to also enable thousands of active-duty military families to qualify for the economic stimulus payments, even when a spouse does not have a Social Security number. Under prior law, some families were denied stimulus payments because one spouse was an immigrant and did not have a Social Security number. 

Disaster Assistance and Emergency Relief

Special tax law provisions may help taxpayers and businesses recover financially from the impact of a disaster, especially when the federal government declares their location to be a major disaster area. Depending on the circumstances, the IRS may grant additional time to file returns and pay taxes. Both individuals and businesses in a federally declared disaster area can get a faster refund by claiming losses related to the disaster on the tax return for the previous year, usually by filing an amended return for tax relief.

The IRS also offers audio presentations on Planning for Disaster. These presentations discuss business continuity planning, insurance coverage, recording keeping and other tips to stay in business after a major disaster.

Innocent Spouse Relief

By requesting innocent spouse relief, you can be relieved of responsibility for paying tax, interest, and penalties if your spouse (or former spouse) improperly reported items or omitted items on your tax return. Generally, the tax, interest, and penalties that qualify for relief can only be collected from your spouse (or former spouse). However, you are jointly and individually responsible for any tax, interest, and penalties that do not qualify for relief. The IRS can collect these amounts from either you or your spouse (or former spouse).

  1. You must meet all of the following conditions to qualify for innocent spouse relief.
  2. You filed a joint return.
  3. There is an understated tax on the return that is due to erroneous items (defined later) of your spouse (or former spouse).
  4. You can show that when you signed the joint return you did not know, and had no reason to know, that the understated tax existed (or the extent to which the understated tax existed). 
  5. Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understated tax.                  

Innocent spouse relief will not be granted if the IRS proves that you and your spouse (or former spouse) transferred property to one another as part of a fraudulent scheme. A fraudulent scheme includes a scheme to defraud the IRS or another third party, such as a creditor, former spouse, or business partner.

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