White Plains New York Tax Blog

An overview of the sales and use tax

On behalf of Lee David Auerbach, Esq. of Auerbach Law Group, P.C. posted in federal and state tax collections on Thursday, November 14, 2019.

Like other states, New York imposes a tax on the sale of certain retail goods and services. Also like other states, the law allows cities and other local governments within New York to impose their own additional sales taxes.

Although consumers may think otherwise, it is actually the merchant that bears the responsibility to the state or local government to pay whatever sales tax is owed. When the merchant charges a sales tax over and above the cost of the item or service, it is on a practical level just recouping the money that it will owe to the state regardless. The merchant should be careful to set aside this money and pay it in a timely fashion to the state.

Making tax repayment arrangements with the state

On behalf of Lee David Auerbach, Esq. of Auerbach Law Group, P.C. posted in federal and state tax collections on Wednesday, November 6, 2019.

Our law office has previously discussed how New Yorkers who wind up owing the IRS back tax payments can work with the IRS in order to repay those taxes without being reduced to poverty. t is important, however, that taxpayers in and around White Plains not lose sight of the fact that state and local authorities also impose taxes on citizens. As with the federal government, the State of New York has a Department dedicated to collecting tax revenue that goes unpaid for whatever reason.

Specifically, New York's Department of Taxation and Finance enforces taxes imposed under state law. Like the IRS, this Department offers several options to people who have gotten behind on the taxes they owe to the state and who want to avoid the full force of the state's collection efforts.

Controversies of the reasonableness of executive pay

On behalf of Lee David Auerbach, Esq. of Auerbach Law Group, P.C. posted in tax controversies on Thursday, October 31, 2019.

One of the most generous tax deductions available to businesses, as well as not-for-profits, is the ability to deduct an employee's pay. For the most part, this is not controversial. After all, all but the smallest companies need to have employees to help with the running of the business's affairs. So, the IRS and other authorities will generally allow compensation to be deducted as a necessary business expense, so long as the employees in question are legitimately on the company's payroll. However, these matters can become more complicated as businesses grow and their top leaders demand higher pay.

All compensation must be reasonable in the eyes of the IRS before it will allow a deduction. This means that, at the time the employee and employer agreed on the compensation to be paid, the wage must have seemed commensurate with the type and volume of the work being performed. The IRS actually evaluates a number of factors when deciding whether compensation is reasonable.

Not-for-profits can run in to tax trouble

On behalf of Lee David Auerbach, Esq. of Auerbach Law Group, P.C. posted in tax controversies on Saturday, October 26, 2019.

Many people in White Plains and other parts of New York may wish to set up a not-for-profit corporation and then apply for an exemption from income taxes and, by extension, other state taxes as well. This is most often referred to as 501(c)(3) status.

The idea behind this wonderful tax benefit is that it allows people to perform work which promotes the common good and which, in many cases, relieves the government from some of its responsibilities.

What self-employed individuals need to know about taxes

On behalf of Lee David Auerbach, Esq. of Auerbach Law Group, P.C. on Thursday, October 24, 2019.

Working for yourself comes with many benefits. It is the concept of freedom that draws most people to this career path. However, self-employment also requires a great deal of responsibility. While an employer used to take care of matters like withholding income for taxes, it is now your job to ensure you are abiding by New York state and federal tax law. This involves keeping accurate records of income and expenses and working with a tax specialist to set up a plan to pay your taxes independently.

Additional fees: Self-employment tax

Can I use bankruptcy to take care of my tax debt?

On behalf of Lee David Auerbach, Esq. of Auerbach Law Group, P.C. posted in federal and state tax collections on Friday, October 18, 2019.

Many New Yorkers may wonder what good it would do to work out payment arrangements directly with the IRS and other taxing authorities if they are able just to file for bankruptcy protection.

While, contrary to popular belief, it is possible to discharge certain tax debts in a bankruptcy, there are many exceptions to this rule. In other words, getting rid of a tax debt is not simply a matter of making a trip to the local bankruptcy court and getting a discharge.

Reality stars reach civil settlement with state collectors

On behalf of Lee David Auerbach, Esq. of Auerbach Law Group, P.C. posted in criminal/civil tax litigation on Friday, October 11, 2019.

This blog recently reported on the fact that two famous real estate professionals and reality stars were facing federal tax evasion charges which they adamantly denied. Their case with the federal government remains pending.

It recently came to light that the couple settled up a bill for back taxes with taxing authorities in another state. By all accounts, this settlement concluded a civil dispute with the state regulator. There was no report state-level criminal charges were in play.

More on the tax consequences of family loans

On behalf of Lee David Auerbach, Esq. of Auerbach Law Group, P.C. posted in tax controversies on Friday, October 4, 2019.

Although this blog has touched on the subject before, it may be helpful to review the possible consequences of family loans.

Many residents of White Plains and other parts of the greater New York City area may find family loans to be both advantageous and convenient. For those who may have no credit or marred credit, a loan from a wealthier family member can be a real lifesaver.

We can help stave off IRS collection efforts

On behalf of Lee David Auerbach, Esq. of Auerbach Law Group, P.C. posted in federal and state tax collections on Friday, September 27, 2019.

Previous posts on this blog have described the broad powers the IRS has to pursue a person's wages and property in order to collect a delinquent tax debt. For instance, the IRS has the power to use wage levies, which work a lot like garnishments. Unlike traditional garnishments, though, the IRS does not have to go to court before issuing a wage levy.

Moreover, the levy is not capped; instead, the IRS can take the excess over a certain minimum amount. The minimum amount is just a little over $1,000 a month, which is not much for someone to live off, particularly in the areas around New York City.

The business versus hobby distinction

On behalf of Lee David Auerbach, Esq. of Auerbach Law Group, P.C. posted in tax controversies on Friday, September 20, 2019.

Many people in White Plains and the other communities around New York City have hobbies. In most cases, people probably think of a hobby as something that a person spends money on in order to get a non-financial benefit, like relaxation or personal satisfaction.

There are, however, many hobbies in which a New Yorker can also make a little extra cash. By way of example, someone who likes to sew may do a few projects for others and make some money for their work.

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