Are reinvested dividends taxable?

The short answer is that all dividend distributions are taxable in the year they are distributed whether reinvested or received in cash. Dividends  are reported by the investment company managing them on Form 1099-DIV. But Jeff, how can this be when I don’t personally receive the distributions because I’m enrolled in a dividend-reinvestment program?  Sorry, you’ll…

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Why Am I Getting IRS Penalties?

The IRS’s primary mission is to collect appropriate taxes from taxpayers. In the interest of enhancing tax compliance, the IRS applies various penalties under the Internal Revenue code as enacted by Congress. Some of the most common affecting the average individual taxpayer are Failure to File or Delinquency,  Failure to Pay, and  Accuracy or Negligence.  Let’s examine why…

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Injured Spouse

What exactly is an “injured spouse?” Isn’t there something called an “innocent” spouse? Yes, there is, and they are quite different. For now, let’s define an injured spouse. “Injured” spouse means there is one spouse who has a tax debt and the other spouse doesn’t. This situation normally comes about when, as a single (non-married)…

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Innocent Spouse

When we speak of the concept of Innocent Spouse, we begin by referring to one or more tax returns of a married couple who have filed Married Filing Jointly (MFJ) and who, thereby, have created a joint liability for a federal tax debt. But what if one of the two spouses, an “innocent” spouse, believes…

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