Kiddie Tax

Kiddie Tax

Episode 88: In this episode, Timalyn explains what the Kiddie Tax is, why it was created, and how it may affect children with investment income. She also walks through when parents may need to file IRS Form 8615 or make the election to report their child's income using IRS Form 8814. What is the Kiddie Tax? The Kiddie Tax was created to prevent taxpayers from shifting investment income to their children to take advantage of lower tax rates. Timalyn explains that unearned income, such as interest, dividends, and capital gains, may be taxed at the parent's tax rate instead of the child's when certain requirements are met. Who may be subject to the Kiddie Tax? For the 2026 tax year, the Kiddie Tax may apply if a child's unearned income is more than $2,700. Remember, it's not just about how much income your child has. Their age, student status, earned income, and whether they provide more than half of their own financial support all play a role in determining if the Kiddie Tax applies. IRS Form 8615 If your child is subject to the Kiddie Tax, IRS Form 8615 [https://www.irs.gov/pub/irs-pdf/f8615.pdf] is used to calculate the tax. Timalyn also explains that this form requires information from the parent's tax return, so having the same tax preparer complete both returns can make the process much easier. IRS Form 8814 If your child's only income is interest and dividends, you may be able to elect to report that income on the parent's tax return instead of filing a separate return for your child. This election is made using IRS Form 8814 [https://www.irs.gov/forms-pubs/about-form-8814], but only if the IRS requirements are met. What should parents do? Timalyn reminds listeners that every situation is different. Before deciding how to report a child's investment income, make sure you understand which rules apply and whether additional taxes may be due. If the calculations become too complicated, working with a qualified tax professional can help ensure everything is reported correctly. Need Tax Help Now? If you're unsure whether the Kiddie Tax applies to your child or which filing option is right for your family, Timalyn recommends working with a qualified tax professional. To schedule a consultation, visit:https://www.bowenstaxsolutions.com/ [https://www.bowenstaxsolutions.com/] As we conclude Episode 88, we encourage you to connect with Timalyn on social media. You can subscribe to this podcast on Spotify, Apple Podcasts, YouTube, and many other podcast platforms. Remember, Timalyn Bowens is America's Favorite EA, and she's here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today's episode. For more information about tax relief options or filing your taxes, visit:https://www.bowenstaxsolutions.com/ [https://www.bowenstaxsolutions.com/] If you have any feedback or suggestions for a future episode, please submit them here:https://www.americasfavoriteea.com/contact [https://www.americasfavoriteea.com/contact] Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for tax-related issues, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.

IRS Intent to Levy

Episode 87: In this episode, Timalyn talks about the CP504 Notice of Intent to Levy. She explains what this notice means, what can happen if it is ignored, and some of the options taxpayers may have to stop IRS collection actions before things get worse. What is the CP504 Notice of Intent to Levy? The CP504 is a notice from the IRS letting taxpayers know that the IRS intends to levy if the balance is not resolved. Timalyn explains that this is not a notice you want to ignore. The IRS is letting you know that collection action may be coming if you do not take steps to resolve the balance. Can the IRS really levy you? Yes. The IRS has the authority to levy under Internal Revenue Code Section 6331(d). A levy can affect bank accounts, wages, business income, state tax refunds, Social Security benefits, and even property. If you would like a more of liens [https://youtu.be/mqrNa7lxCGA?si=B4uxxA5y860IamD_] and levies [https://youtu.be/YGMPaYmhwS4?si=JakAOtvNSD_sfAra], Timalyn discusses those topics in Episodes 2 and 3 of the podcast. What should you do if you receive a CP504? The first thing Timalyn recommends is opening the notice and reading it carefully. Review the balance due, the penalties, and the interest being charged. Ignoring the notice allows penalties and interest to continue growing. If you have the ability to pay the balance in full, that may be the quickest way to stop additional collection actions. What if you cannot pay the balance in full? If paying in full is not an option, Timalyn explains that taxpayers still have options. An Installment Agreement [https://youtu.be/RqsIEkKHBxM?si=0Et7U_VG1LN1WcO9] may allow you to make monthly payments over time. If you'd like to learn more see Episode 10 [https://youtu.be/RqsIEkKHBxM?si=0Et7U_VG1LN1WcO9] of the podcast. If paying the tax debt would create a financial hardship, you may qualify for Currently Not Collectible Status [https://youtu.be/dT52NrAVxXQ?si=ageeks8ViV36XQYL], which can temporarily delay IRS collection actions. See Episode 23 [https://youtu.be/dT52NrAVxXQ?si=ageeks8ViV36XQYL] of the podcast. For some taxpayers, an Offer in Compromise [https://youtu.be/xfNeCmG2IFE?si=EvwRf_oYmnnbxRU0] may also be worth exploring. Timalyn has several podcast episodes discussing Offer in Compromise qualifications and related topics. What if you do not agree with the amount owed? If you believe the IRS balance is incorrect, Timalyn recommends reviewing your IRS account transcripts before contacting the IRS. Review your IRS transcripts before calling so you understand what the IRS says you owe. You may also want to explore your appeal rights if you disagree with the IRS determination. Can the IRS file a tax lien too? Yes. Timalyn explains that taxpayers dealing with a levy situation may also receive a federal tax lien. A tax lien lets other creditors know that the IRS has a legal claim against certain assets. Depending on your situation, a lien can create challenges when selling or financing property. What is the main takeaway? Timalyn's biggest message in this episode is simple: do not put your head in the sand. Open your IRS mail, verify what you owe, understand your options, and communicate with the IRS before collection actions begin. Need Tax Help Now? If you have received a CP504 Notice of Intent to Levy and would like help understanding your options, Timalyn invites you to schedule a consultation. [https://www.bowenstaxsolutions.com/⁠] Getting help sooner may prevent additional collection actions. As we conclude Episode 87, we encourage you to connect with Timalyn on social media. You'll be able to subscribe to this podcast on Spotify, Apple Podcasts, YouTube, and many other podcast platforms. Remember, Timalyn Bowens is America's Favorite EA, and she's here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today's episode. For more information about tax relief options or filing your taxes, visit www.bowenstaxsolutions.com. [https://www.bowenstaxsolutions.com/⁠] If you have any feedback or suggestions for an upcoming episode topic, please submit them here: https://www.americasfavoriteea.com/contact [https://www.americasfavoriteea.com/contact]. Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.

Tax Withholding

Episode 86: In this episode, Timalyn talks about tax withholding and why it is so important to review throughout the year. She explains how the pay-as-you-go tax system works, who should be paying attention to their withholding, and how a simple checkup now may help avoid tax bills, penalties, and interest later. What is tax withholding? The United States has a pay-as-you-go tax system. That means taxes are supposed to be paid throughout the year as income is earned. For most employees, employers withhold taxes from each paycheck and send those payments to the IRS on the employee's behalf. Who needs to pay attention to withholding? Most people think about withholding when it comes to wages, but it can apply to other types of income as well. Timalyn discusses withholding for wages, pensions, retirement distributions, Social Security income, and other sources of income that may create a tax liability. What happens when there is not enough tax withheld? When enough tax is not being paid throughout the year, taxpayers often end up owing when they file their return. Depending on the situation, they may also face penalties and interest. This can include an underpayment of estimated tax penalty if they did not pay enough throughout the year. What if you are self-employed? For taxpayers who do not have an employer withholding taxes, estimated tax payments may be required. These payments are generally due four times a year and help taxpayers stay current with their tax obligations throughout the year. Timalyn reminds listeners that they are making payments throughout the year, not filing tax returns every quarter. How do you know if you are on track? The IRS offers a free Withholding Estimator that can help taxpayers determine whether they are having enough withheld or paying enough through estimated tax payments. Timalyn also shares that she has free educational resources available that walk taxpayers through common withholding situations and filing statuses. How can you avoid penalties? One of the easiest ways to avoid penalties is to review your withholding before the end of the year. Timalyn explains that taxpayers generally want to make sure they have paid enough throughout the year to avoid underpayment penalties and unnecessary interest charges.What should you do next? Timalyn encourages listeners to do a withholding checkup and review their current tax situation. Whether the income comes from wages, a pension, retirement distributions, Social Security, self-employment, or investments, making adjustments now may help avoid problems later. Need Tax Help Now? If you would like help reviewing your withholding or calculating estimated tax payments, you can schedule an appointment through the Bowens Tax Solutions website. If a paid consultation is not the right fit, Timalyn also offers free educational resources through her YouTube channel and Tax Tips with Timalyn. As we conclude Episode 86, we encourage you to connect with Timalyn on social media. [https://linktr.ee/AmericasFavoriteEA] You'll be able to subscribe to this podcast on Spotify, Apple Podcasts, YouTube, and many other podcast platforms. Remember, Timalyn Bowens is America's Favorite EA, [https://www.americasfavoriteea.com/] and she's here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today's episode. For more information about tax relief options or filing your taxes, visit https://www.bowenstaxsolutions.com/ [https://www.bowenstaxsolutions.com/]. If you have any feedback or suggestions for an upcoming episode topic, please submit them here: https://www.americasfavoriteea.com/contact [https://www.americasfavoriteea.com/contact]. Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.

Does the IRS Owe You A Refund?

Episode 85:  In this episode, Timalyn shares how tens of millions of taxpayers may be due a refund from the IRS. Unfortunately, the refund won’t be automatic, and there is a clock ticking. That is why Timalyn is discussing it in today’s episode.   What happened? During the COVID-19 pandemic era, the IRS continued to assess taxpayers' accounts with penalties and interest. Well, the commissioner and the United States have found them to be wrong in doing so. That is the short version of Abdo v. Commissioner, 162 T.C. (2024), and Kwong vs. United States, 179 Fed Cl. 382 (Nov. 2025) [https://www.govinfo.gov/content/pkg/USCOURTS-cofc-1_23-cv-00267/pdf/USCOURTS-cofc-1_23-cv-00267-0.pdf] The courts ruled that the COVID-19 pandemic era was a disaster period, from January 20th, 2020, to July 10th, 2023. This means that under §7508A(d) the IRS was not to impose penalties and interest. The IRS National Taxpayer Advocate stated that “tens of millions of taxpayers may be entitled to refunds or abatements of penalties and interest that the IRS assessed during the nearly 3.5-year COVID-19 federal disaster period. [https://www.taxpayeradvocate.irs.gov/news/nta-blog/tens-of-millions-of-taxpayers-may-be-eligible-for-significant-tax-refunds/2026/04/]” Who could this affect?   The IRS may owe refunds to individual taxpayers, small businesses, trusts, estates, and corporations. This could also affect taxpayers who filed their international information returns late.   What should you do?  Timalyn believes the IRS will appeal the ruling in Kwong. Meaning refunds could be held up for months or even years. However, to protect their right to claim the refund, taxpayers must file protective claims with Form 843. These must be filed by July 10th, 2026.  How do I know if I am eligible? If you were assessed certain penalties from 2020 to the beginning of 2023, Timalyn says that you’re eligible. The easiest way to confirm this is on your tax account transcript.  You can locate this by logging into your IRS.gov [http://irs.gov] account. Timalyn wrote an article that walks you through the process that you can check out here - https://www.americasfavoriteea.com/post/how-to-get-irs-transcript-online-3-steps [https://www.americasfavoriteea.com/post/how-to-get-irs-transcript-online-3-steps]. You will look to see if penalties and interest were assessed. If they were, then you should consider filing a protective claim.  If you already feel overwhelmed, remember, you do have the right to representation.  A tax professional with Form 2848, Power of Attorney, and Declaration of Representative [https://youtu.be/9iUT-En8cAg?si=x3Ilk45eOcguWzMJ] on file with the IRS can do this for you. Only an Enrolled Agent, such as Timalyn, Certified Public Accountant, or Tax Attorney, can have a Form 2848 and be your tax power of attorney.  Timalyn also shares a company that she has taken a look at, Penalty Back. They are assisting taxpayers with seeing if they are eligible and filing the protective claim on their behalf. ***Timalyn will receive a commission if the company is successful and gets your penalty abated. You can check them out here - https://penaltyback.com/r/americasfavoriteea [https://penaltyback.com/r/americasfavoriteea] Need Tax Help Now? If you need answers to your tax debt questions, book a consultation with Timalyn via her Bowens Tax Solutions website.  Click this link [https://bookingbowens.as.me/schedule.php] to book a call. Please consider sharing this episode with your friends and family. This information might be helpful to someone who really needs it.   As we conclude Episode 85, we encourage you to follow Timalyn on social media [https://linktr.ee/AmericasFavoriteEA]. You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, YouTube, and many other podcast platforms.   Remember, Timalyn Bowens is America’s Favorite EA [http://www.americasfavoriteea.com], and she’s here to fill the tax literacy gap, one taxpayer at a time.  Thanks for listening to today’s episode. For more information about tax relief options or filing your taxes, visit https://www.Bowenstaxsolutions.com/ [http://www.bowenstaxsolutions.com]. If you have any feedback or suggestions for an upcoming episode topic, please submit them here:  https://www.americasfavoriteea.com/contact [https://www.americasfavoriteea.com/contact]. Disclaimer:  This podcast is for informational and educational purposes only.  It provides a framework and possible solutions for solving your tax problems, but it is not legally binding.  Please consult your tax professional regarding your specific tax situation.

Offer in Compromise - Doubt as to Liability

Episode 84: In this episode, Timalyn talks about a type of Offer in Compromise that may help taxpayers when the IRS made a mistake and assessed taxes they do not actually owe. She explains what a Doubt as to Liability Offer in Compromise is, when it may apply, and why documentation matters when dealing with the IRS. What is a Doubt as to Liability Offer in Compromise? A Doubt as to Liability Offer in Compromise, also called DATL, is used when there is a legitimate dispute about whether the tax debt is actually owed or if the amount the IRS assessed is correct under the law. Timalyn explains that sometimes the IRS does make mistakes, and there are situations where taxpayers are assessed taxes they were not actually responsible for. Who may qualify for this option? This option may apply if you truly believe that you do not owe part or all of the tax debt that was assessed and you have documentation to support your position. What form is used? Taxpayers who believe they qualify can complete Form 656-L, which is the Offer in Compromise for Doubt as to Liability. The IRS will review the documentation before deciding whether to accept or deny the offer.When can’t you use this option? There are situations where this option is no longer available. For example, if the tax debt was already decided by a final court judgment, if you are currently in bankruptcy, or if another IRS department is still actively working the same issue. Timalyn also explains that if you requested an audit reconsideration, you generally want to wait for that process to finish before submitting a DATL offer. What kind of proof do you need? You need documentation and a written explanation showing why the tax debt is incorrect. Timalyn shares an example involving 1099-K forms where taxpayers actually reported the income correctly, but because there was no separate breakout on the tax return, the IRS believed income was missing and assessed additional taxes. By providing reports and documentation showing the income was already included, they were able to get the issue corrected. Why is documentation important? Timalyn explains that the less information you provide, the more digging the IRS may do. Not providing a written statement explaining why the tax debt is incorrect can cause the offer to be returned without further consideration. That is why it is important to make sure your documentation clearly supports the story you are telling the IRS. Is this the same as financial hardship? No. Timalyn reminds listeners that Doubt as to Liability is different from Doubt as to Collectability. DATL is specifically for situations where there is a legitimate dispute about the tax itself, not because someone cannot afford to pay the balance. Need Tax Help Now? If you have questions about whether a Doubt as to Liability Offer in Compromise may apply to your situation, Timalyn invites you to send her an email or schedule a consultation through the Bowens Tax Solutions website. If you’d like to see if you’re a good fit to work with her to fight the IRS, you can book a consultation at: https://www.bowenstaxsolutions.com/ [https://www.bowenstaxsolutions.com/] As we conclude Episode 84, we encourage you to connect with Timalyn on social media. You’ll be able to subscribe to this podcast on Spotify, Apple Podcasts, YouTube, and other podcast platforms. Remember, Timalyn Bowens is America’s Favorite EA, and she’s here to fill the tax literacy gap, one taxpayer at a time. Thanks for listening to today’s episode. For more information about tax relief options or filing your taxes, visit: https://www.bowenstaxsolutions.com/ [https://www.bowenstaxsolutions.com/] If you have any feedback or suggestions for an upcoming episode topic, please submit them here https://www.americasfavoriteea.com/contact [https://www.americasfavoriteea.com/contact] Disclaimer: This podcast is for informational and educational purposes only. It provides a framework and possible solutions for solving your tax problems, but it is not legally binding. Please consult your tax professional regarding your specific tax situation.