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Lev
Lev, Tax Advisor
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My husband has a tax lien. If I pay off the lien amount to

Resolved Question:

My husband has a tax lien. If I pay off the lien amount to the IRS, is that tax deductible for my taxes?
Submitted: 4 years ago.
Category: Tax
Expert:  Lev replied 4 years ago.

If you file a joint tax return with your spouse - part of the tax lien payment which is attributable to the actual property tax, state income tax, or real estate taxes are deductible on the schedule A.

The interest, penalties, or legal fees are not deductible.

 

Let me know if you need any help.

 

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22616
Experience: Taxes, Immigration, Labor Relations
Lev and 4 other Tax Specialists are ready to help you
Customer: replied 4 years ago.
I don't file a joint return. We file Married filing separately, but we could. He actually has the debt and lien from a trust fund recovery penalty from a former corporation. I was just wondering that if I were to pay his taxes, would that amount be a tax deduction for me?
Expert:  Lev replied 4 years ago.

You may not deduct taxes paid for someone else.

However - your spouse - if you file a separate tax returns may be able to claim that deduction.

"the debt and lien from a trust fund recovery penalty from a former corporation" - that is not clear what would be the payment for...

If that is an income tax or an employment tax or sales tax debt of the corporation - these are not deductible on the personal tax return.

If the payment includes property taxes or real estate taxes - these might be deductible.

penalties and interest on the tax debt may not be deducted.

Also - depending on the type of corporation - the debt may be deducted on the corporate tax return and in some situations may the deduction may be passed to shareholders.

The information you provided are not sufficient to determine the nature of the proposed payment and thus it is hard to tell if part pf that payment may be deducted on the tax return.

 

Customer: replied 4 years ago.

Sorry for the confusion-

How about this?

If my husband pays his IRS tax lien that came from a trust fund recovery penalty, , is that a tax deduction/write off from his personal income taxes?

Expert:  Lev replied 4 years ago.

...pays his IRS tax lien that came from a trust fund recovery penalty...

 

We need to know what actually is included into that payment.. what type of taxes are owned, etc.

If that is an IRS tax lien - it is not connected to property or real estate taxes - so that issue is out of picture.

I assume that it will include

- interest - not deductible

- penalties - not deductible

- employment taxes - not directly deductible, but may be partly deductible for the corporation - in some situation the deduction may be passed to shareholder

- income taxes owed by the corporation - not deductible

- sales taxes owned by the corporation - not deductible

Also if your husband pays something for the corporation - that may be considered as his loan to the corporation. If the corporation is not able to pay the loan back - that may be claimed as business loss.

 

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