My soon to be ex-wife is a real estate agent and in good faith when we were still together I trusted her to file the taxes.We haven't been together for the past 5 years, we now do our taxes separately. My problem is that a couple of months ago i recieved a packet from the IRS informing me that my soon to be ex-wife claimed ridiculous deductions and now owes 30,000 dollars from the taxes that for she filed for us. She supposely claimed dry-cleaning,car maintence, and many other unnecesary things for her job. I requested information for the years that she filed the taxes and it say SHE filed a Schedule C and Schedule SE and it says that she is Self-Employed. Okay, so now "we" owe 30,000 to the IRS, What can I do?? I didn't claim those deductions, plus what we owe is more then what i make in ONE year alone. She makes more then eighty thousand in a year. Will I be held liable for it? Or is there a way that i can make her solely responsible for it since she claimed it?
2007-05-17 08:02:36 · 7 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
It wouldn't be unusual for a real estate agent to be self-employed rather than an employee. And car expenses OR mileage would be a legitimate deduction.
Did she get a 1099 for those years, or a W-2? That would indicate how she was classified.
If you signed joint returns for that time period, you are equally liable with her for any additional taxes, and they'll get it from whichever of you they can - telling the IRS "but I trusted her to do them correctly" won't make any difference.
Your best bet now would be to find a CPA and have him or her go over everything and advise you. It might not be as bad as you thing - some of the items might be legitimate, so the total actual bill could be far less than the $30K.
2007-05-18 03:25:12 · answer #1 · answered by Judy 7 · 1⤊ 0⤋
A real estate agent working as an independent contractor is a self-employed individual working under an independent contractor agreement and is not an employee. An independent contractor controls how the work is accomplished. A real estate agent may use his own business name and may work out of his home office. The agent is independent of the real estate company that employs him, but he must follow the terms and conditions of the independent contractor agreement. A real estate agent is responsible for paying their own quarterly taxes. They will receive a 1099 at the end of the year instead of a traditional W2 that an employee would receive. Real estate agents have to pay full social security taxes and are not eligible for unemployment. Most licensed real estate agents are considered statutory nonemployees by the IRS, and are treated as self-employed individuals if a few conditions are met. 1.Payments for their services as real estate agents are the direct result of sales or other efforts, and are not related to the number of hours they worked. 2.The firm and agent have entered into a written contract that stipulates the agent will not be treated as an employee for federal tax purposes
2016-05-21 22:00:17 · answer #2 · answered by ? 4 · 0⤊ 0⤋
All the answers are correct, but the answer to your question is Yes, real estate agents are considered self employed.
As a self employed person, she can take expenses on the sch C. Business percentage of car maintenance is a valid expense. Dry cleaning is not unless it is a uniform (Gold Blazer from Century 21 is a uniform. A suit she bought at Sears is not)
Both of you need to sit down with a tax professional (CPA or Enrolled Agent) review the returns in question and re-do the returns (but don't file them) then make an appointment to meet with the IRS agent handling the case. Make sure your CPA or EA goes with you (or for you with a Power of Attorney) You might just get the amount reduced.
2007-05-17 08:36:47 · answer #3 · answered by Mark S 5 · 3⤊ 0⤋
There is nothing unusual about a real estate agent filing Scedule C as a self-employed person.
If you filed a joint return, the IRS considers you as responsible for this debt as your wife. Innocent spouse relief doesn't look promising to me, you were aware of her self-employment and you filed a joint return with her. You were negligent, not ignorant.
Fortunately, you haven't divorced her yet. Get yourself an attorney and negotiate your property settlement so that she pays the IRS out of her part of the marital assets. Soon.
2007-05-17 17:25:39 · answer #4 · answered by ninasgramma 7 · 0⤊ 0⤋
If you filed a joint return with your wife then you are equally responsible for the taxes with her. You had to have signed the return in order to file it as married filing jointly. You can try filing an "innocent spouse" form with the IRS for the years that they are asking for money for. I've included a link to the IRS innocent spouse guidelines.
2007-05-17 08:11:50 · answer #5 · answered by Anonymous · 4⤊ 1⤋
PepsiLime's answer is correct. Find a CPA or Enrolled Agent that can help you with the innocent spouse issue and other aspects of the problem.
2007-05-17 08:17:24 · answer #6 · answered by Anarchrist 5 · 1⤊ 0⤋
This situation sucks but fortunately for you, you should be able to file for innocent spouse relief or separation of liability which is for joint filers who are divorced . You can file form 8857 with the IRS, and for more info you can go to IRS.gov and get publication 971.
good luck to ya
2007-05-17 08:16:07 · answer #7 · answered by reciprocityabound 3 · 1⤊ 1⤋