Greensburg Pennsylvania Tax Attorney Blog

What should you know about the IRS during tax season?

When tax season rolls around, Pennsylvanians just like you are worrying about the possibility of debt due to tax delinquency or other tax-related problems. John A. Cochran, Esquire, is here to help if you find yourself buried under debt because of missed taxes or other tax-related mistakes and issues.

The first thing to know is that you absolutely shouldn't treat the IRS like a regular debt collection agency. They have the ability to deliver a Notice of Levy if you are in debt and haven't made any contact or tried to work out payments. The IRS has the authority to seize any of your assets, which includes retirement income, benefits, your bank accounts, wages, and more.

What happens if I file taxes late?

As with any tax dispute, it is important to address any problem associated with filing or paying your Pennsylvania or Federal taxes after the deadline has passed. However, it is not always entirely clear what, if any, consequences will arise from procrastination. 

One of the most common points of confusion is whether it is more important to file in a timely manner or wait until you are able to pay everything you owe. While this is a complicated question depending on your situation, there are a few predictable outcomes.

Understanding a power of attorney

It can be scary to think about, but at some point in your life you may become too old or infirm to competently manage your financial affairs. Mental incapacitation can leave you open for manipulation by an unscrupulous party seeking to siphon off your wealth, or at least, leave your finances vulnerable to other parties who may simply not have your or your family’s best interests at heart. That’s where a power of attorney comes in. You have the option of granting someone in Pennsylvania power of attorney duties to handle your estate in the event you are unable to do so.

According to the American Bar Association, a person you assign power of attorney to is called your agent. You may assign any number of powers to your agent, including managing your finances or selling or buying assets. You must spell out these powers officially in a document. When the time comes to act on them, the agent will present the document to activate the power. For example, an agent may present such a document to buy a piece of property on your behalf. If you wish, your power of attorney can handle your estate plan as well, including implementing your will.

Building trusts for cy pres evaluation

Planning for the management of a sizable estate in Pennsylvania might well include establishing a charitable trust. This is a noble gesture as well as a potential tax relief. However, one must typically understand the way the court is involved in the maintenance and re-evaluation of trusts in order to ensure the longevity of the charitable pursuit.

There are various tools the state might use to dissolve or restructure charitable trusts. The Cornell Law School defines one such tool, the cy pres doctrine, as a safety net for trusts that become impractical. Essentially, the court would assess the trust's designated purpose and redirect its resources towards a purpose as close as possible to the original. 

What are the end-of-life taxes in Pennsylvania?

When Pennsylvania residents first learn that the government imposes taxes even after death, many are confused or upset. After all, death is a natural and unavoidable part of life. It might seem unfair that the government takes a cut of your lifetime assets. This news can be a bit misleading, however.

Pennsylvania has specific laws that determine how to tax inheritance. Learning about these policies can help you and your beneficiaries rest at ease.

The perils of naming a family member as a trustee

Pennsylvania parents want to do all they can to make sure their children’s trust is well administered and that their children will successfully inherit the assets in the trust. Some adults may decide they cannot trust anyone but family to be a trustee, and put one of their own siblings in charge of the trust. However, this actually can be a bad idea and invite more trouble than it is worth.

According to a piece run on CNBC.com, a parent’s sibling might seem like the best choice as a trustee, as the person is not only a family member, but the sibling may even the most qualified of the people the parent knows. Unfortunately, a trustee has responsibilities to the trust that might fray a loving familial relationship. Sometimes problems arise between children, with one or more believing they are entitled to more assets than the trust allows. Since a trustee is obligated to carry out the terms of the trust, this can put the aunt or uncle in the position of refusing a niece or nephew’s wishes.

Are you an employee or independent contractor?

You may run into a situation where an employer in Pennsylvania wants to classify you as an independent contractor. This means you will be responsible for paying all employment taxes. However, it also means more than that when it comes to the relationship between you and your employer. 

The IRS is strict about worker classification. Your employer cannot simply say you are an independent contractor just to get out of paying employment taxes. There are actually specific rules that define what is an employee and what is an IC. 

Step 1 is have a will. Step 2 is to constantly update it.

Many people are overwhelmed by the thought of tackling their estate plan. It is an inherently difficult topic to ruminate and discuss because at the center of it all is the idea of death. You are preparing for your inevitable death, and what happens to your life savings and collections when it arrives. That's incredibly hard to get past, and it can drive people away from the estate planning process -- even though it is an incredibly important part of your life.

One of the easiest ways to begin planning your estate is to just go one step at a time, and to do so with experienced legal counsel by your side. Creating a will is the best place to start. This document is at the heart of every estate plan, and it's mere existence can do wonders for you, your beneficiaries, and your loved ones.

Health care power of attorney and estate planning

Estate planning means taking an active role in your family’s future. By getting your affairs in order, and organizing and determining the disbursement of your assets, you’re looking out for your loved ones once you’ve passed on. Your own future, however, is also paramount when it comes to estate planning.

Creating a health care power of attorney can be an important facet of your estate plans. By issuing this authorization, you’re not only aiding your family, but you’re also taking care of your own interests. If you’re currently taking steps to plan for your future, understanding what a health care power of attorney entails can be beneficial.

Contact

John A. Cochran, Esquire
140 S. Main St.
Suite 301
Greensburg, PA 15601

Phone: 724-216-0704
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