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Colorado Tax Law Questions & Answers
1 Answer | Asked in Tax Law for Colorado on
Q: A local bookkeeper prepared our taxes this year. She made mistakes and we want to know what legal actions we can take.

We are active duty military. We have already paid for her services. Instead of receiving a full refund, we only received partial amount.

D. Mathew Blackburn
D. Mathew Blackburn answered on Aug 3, 2018

The costs of pursuing legal action for negligence, fraud, etc... are rarely worth the time and costs. You would have to file in the county where you signed the service agreement, or where the BK's place of business is. Filing fee will probably be more than you paid for the return.

If...
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1 Answer | Asked in Tax Law for Colorado on
Q: Are life insurance and jointly-held property considered part of the deceased's estate, and thus subject to taxes?
D. Mathew Blackburn
D. Mathew Blackburn answered on Jul 5, 2018

Usually not, but can't be sure until I've seen the docs.

1 Answer | Asked in Tax Law for Colorado on
Q: Are there any Colorado penalties for withdrawing from a 401a account early and when does the IRS assess it's 10% penalty

Live in Colorado full time. Quit a job that had a 401a instead of paying into S.S. There's not a lot of money in the account and I could use the money to fix somethings around the house. My current job uses PERA for retirement instead of S.S. I know that the IRS will impose a 10% penalty... Read more »

D. Mathew Blackburn
D. Mathew Blackburn answered on Jul 3, 2018

There's no state level penalty, but you can generally exclude income as taxable to CO if you wait. Colorado FYI Publication 25 https://www.colorado.gov/pacific/sites/default/files/Income25.pdf

The federal penalty is imposed on your F1040 so you'll incur it when you file your...
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1 Answer | Asked in Tax Law for Colorado on
Q: Today I received a Letter from the city of Lansing, Income tax ordinance, section 99,

I have not Lived in Michigan since 2009, I have never received notices before, Now I have 30 days to pay $264.41 for the years of 2013 to 2014

D. Mathew Blackburn
D. Mathew Blackburn answered on Jun 16, 2018

If you believe the notices are in error you would need to respond and provide evidence that the assessment is incorrect.

1 Answer | Asked in Tax Law for Colorado on
Q: Do I pay incomes taxes on "criminal restitution"?

A realtor told me my house was worthless -said buyer gave me 215,000. Colo Real Estate Comm and Denver DA figured out that invisible buyer bought my house for 305,000 and then turned and sold it for 1,100,000. To avoid going to trial, I was given "criminal restitution" of $75,000. Do I... Read more »

Eric Steven Day
Eric Steven Day answered on Jun 8, 2018

Yes, you would have to pay taxes on the restitution you received. Any accession to wealth is taxable unless that judgment is in the form of physical pain and suffering.

1 Answer | Asked in Tax Law for Colorado on
Q: What should I do if I made an honest mistake on my income tax return?
D. Mathew Blackburn
D. Mathew Blackburn answered on May 18, 2018

The return should be amended using Form 1040X.

Once the return is filed the additional tax owed should be paid and you'll receive a notice for failure to pay penalties. At that point you can either pay the penalty or request an abatement on Form 843 requesting either "first time...
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1 Answer | Asked in Tax Law for Colorado on
Q: trustee kept my distribution (stole) but sent me a k-1 do I have to pay tax

It is a simple trust and I am supposed to receive the money. I am replacing trustee and may sue to get my money but will IRS require me to pay taxes on K-1 income that I have not received. The trust holds rental property and have not seen money the last 2 years. $9,000 annually

D. Mathew Blackburn
D. Mathew Blackburn answered on Apr 28, 2018

Assuming that the k-1 is correct you are required to report and pay any tax owed. Recovering any money owed to you is a seperate issue.

3 Answers | Asked in Business Law and Tax Law for Colorado on
Q: Are paying taxes voluntary or law?
Linda Simmons Campbell
Linda Simmons Campbell answered on Apr 11, 2018

It is the law.

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1 Answer | Asked in Business Law, Tax Law and Business Formation for Colorado on
Q: Purchasing an existing company, trying to figure out where to incorporate for best tax advantages.

I am from Colorado. I am purchasing an existing company in TX. That company will be manufacturing product in TX and I will have a partner there. The product will be built and shipped from that third party manufacturer to likely all 50 states. My question is when purchasing the company, can I set up... Read more »

D. Mathew Blackburn
D. Mathew Blackburn answered on Mar 24, 2018

Generally the best approach is to register in the state of operation. Also be aware you will pay income taxes to CO regardless of where you set up the LLC because an LLC is a passthrough entity and you are a CO resident.

You need to retain a business/tax attorney that can advise you on the...
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1 Answer | Asked in Tax Law and Bankruptcy for Colorado on
Q: My bk discharge was final in March 2017. I never filed my 2015 tax return, it’s a decent size return. What should I do?

I’m a disabled veteran and worked half the year in 2015. The only year I worked in 5+ years. VA pension so I didn’t work. I didn’t even think about my 2015 return, which as it turns out is almost 4k$. Should I still file it? Or will it affect my chapter 7 discharge?

Kevin Scott Neiman
Kevin Scott Neiman answered on Mar 22, 2018

For each return that is more than 60 days past its due date, IRS will assess a minimum failure to file penalty. The failure to file penalty runs at a severe rate of 5% up to a maximum rate of 25% per month of lateness.

1 Answer | Asked in Tax Law for Colorado on
Q: I got premium tax credits for health insurance. I am married, but I only included my income on the application.

The application said I have to file taxes jointly if I am married accepting tax credits. What is going to happen? Do I file jointly or married filing seperatley and pay back credits? I dont want to get in trouble. Did I go about this the wrong way?

Linda Simmons Campbell
Linda Simmons Campbell answered on Mar 21, 2018

You are supposed to list the total household income when you apply for the credit. You need to file correctly (married filing jointly) and then you will likely owe back some/all of the credits you received. You can only file married filing separately and still receive the credit in limited... Read more »

1 Answer | Asked in Tax Law for Colorado on
Q: If they are garnishing from my pay check will they still take my tax refund
D. Mathew Blackburn
D. Mathew Blackburn answered on Mar 7, 2018

Yes

2 Answers | Asked in Tax Law for Colorado on
Q: I have been dealing with a audit for 2 years with a 80k price tag. After sending proof, I learned I was double charged.

Can anything be done?

D. Mathew Blackburn
D. Mathew Blackburn answered on Feb 24, 2018

Hire an attorney.

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2 Answers | Asked in Child Support and Tax Law for Colorado on
Q: Is there a deadline on when child support is considered current for a tax year?

Per parenting plan, we alternate claiming our child. It is his dad's turn but he owes support from last year. Is there a date by which he has to be current? 12/31/17? Does the amount of arrears make a difference? He owes $150? Can I claim my son since he is behind?

Stephen J. Plog
Stephen J. Plog answered on Feb 5, 2018

There is no specific deadline in statute. If your orders contain no deadline, the general presumption would be that if you file first you file first and have done nothing wrong. There is also no amount. He could be behind $1 or $1,000,000 and would still lose the right to claim the exemption if... Read more »

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1 Answer | Asked in Tax Law for Colorado on
Q: If there is only a temporary court order for visitation and we have not been to court for final orders can she file tax

We are not married but have a final disposition the end of March. Can she file taxes without the final disposition?

Stephen J. Plog
Stephen J. Plog answered on Feb 5, 2018

Without a court order in place allocating the dependency exemption, if the child resides primarily with her or she had the child the majority of the time for 2017, IRS Code would say she gets to claim the child. If you all shared equal time you could consider filing a forthwith motion with the... Read more »

1 Answer | Asked in Tax Law for Colorado on
Q: What forms do I need to send the IRS for my one and only part-time employee?

I have 1 part-time employee that started working for me last fall. He is my first employee. I paid him just under $1000 over 2 payments and withheld 6.2% for SS and 1.45% for medicare. TurboTax is assisting with his W2. Are there other forms, like a 944 that I have to send to the IRS? How do I pay... Read more »

D. Mathew Blackburn
D. Mathew Blackburn answered on Jan 27, 2018

You will need to file and remit tax for the 944 for withholding and SS, 940 for futa, uitr-1 for CO unemployment tax, and the CO withholding forms. Along with the w-2. You also have to file a notice of hiring with the CO department of labor.

2 Answers | Asked in Tax Law for Colorado on
Q: With the new tax bill, is it true I can only write off $10,000 of my property taxes now? What if I paid more than that?
Timothy Canty
Timothy Canty answered on Jan 3, 2018

It's true. Property tax, sales tax and state tax deduction cannot exceed $10,000.00 per year. You may be able to deduct more property tax than that in 2018 (though not sales or income tax) if you pre-paid taxes in 2017.

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1 Answer | Asked in Tax Law for Colorado on
Q: Retirement annuity payout

I received an annuity payout from my deceased mother's retirement account (funded with pre tax $). Approximately 80K. What are the federal and state tax implications? Origin of account was in NE and I live in CO. Funds were wired directly to me.

D. Mathew Blackburn
D. Mathew Blackburn answered on Dec 13, 2017

It depends. You'll need to hire an expert to determine tax realization and recognition depending on how the annuity was originally purchased, whether with pre / post tax dollars.

2 Answers | Asked in Tax Law for Colorado on
Q: I inherited a farm for which I have income to report my share of the proceeds from the sale of livestock and coop dist

Do I need to pay self employment tax on this if I don't actually farm the land?

D. Mathew Blackburn
D. Mathew Blackburn answered on Nov 10, 2017

If you're not actively participating in the business then no you are not subject to SE tax. Also farms have alternative SE calculations that may come into play. I would suggest hiring a professional to help with this. The Schedule F looks simple enough but there are numerous traps for the unwary.

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1 Answer | Asked in Tax Law for Colorado on
Q: Do business owners sometimes need to file their individual taxes and business taxes together?
D. Mathew Blackburn
D. Mathew Blackburn answered on Oct 24, 2017

If you own your business as a sole-proprietorship, a Single-Member LLC, or a Multi-Member LLC where the other member is your spouse then the business return will go on your F1040 Schedule C (One for each spouse for the marital LLC). Otherwise the entity type will determine the type of return to be... Read more »

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