“Do I need a trust?”

This is one of the most common estate-planning questions people ask — and for good reason. Trusts can feel mysterious, expensive, or like something “rich people do.” But the truth is that trusts are far more common today, and many families, parents, homeowners, and small business owners benefit from having one.

A trust isn’t just about transferring assets — it’s about protecting your wishes, simplifying the process for your loved ones, and preventing your money from ending up in the wrong hands.

Here’s a clear, practical breakdown of when a trust makes sense, what it can (and can’t) do, and how to decide if you need one.

What Is a Trust, Really?

A trust is a legal arrangement where you place assets (like your home, investments, business interests, or savings) under the management of a trustee. That trustee follows the instructions you lay out during your life, after your death, or both.

It’s essentially a rulebook for your money and property.

Some trusts take effect while you’re alive (living trusts). Others activate after you pass away (testamentary trusts built into a will).

Reasons You Might Need a Trust

1. You Want Your Kids to Inherit Responsibly

One of the most common reasons parents create a trust is control. Without a trust, your child typically gets full access to inherited assets at either age 18 or age 21, depending on the state.

That might work fine if your child is mature and financially wise, but many parents worry about things like:

• Impulsive spending
• Friends or partners taking advantage of them
• Risky financial decisions
• Addiction or mental-health issues
• Sudden wealth being overwhelming

A trust lets you customize distribution. For example:

• “25% at age 25, another 25% at 30, remainder at 35”
• “Funds can only be used for education, housing, medical needs, or starting a business”
• “Trustee may release money for emergencies, but not lifestyle splurges”

You’re not dictating their life, just putting protections in place so they’re stable long-term.

2. You Want to Prevent “In-Law Risk”

Many people quietly admit:

“I want my kids to be protected from marrying someone irresponsible.”

A trust can help ensure:

• An inheritance stays in your child’s name as separate property
• A spouse cannot take the assets in a divorce
• The assets don’t get controlled by an ex or in-laws
• Family money doesn’t disappear into someone else’s spending habits

This is extremely common and one of the strongest arguments for trusts today.

3. You Want to Avoid Probate (and Save Your Family Time, Money, and Stress)

Probate is the court process required when someone dies with assets in their sole name. It can take 6–18 months, and legal fees easily run into the thousands.

A living trust lets your assets transfer immediately and privately — no court process. This is one of the biggest practical benefits of a trust.

4. You Own a Home

If you own a house, a trust is often the simplest way to ensure it passes quickly and cleanly to your chosen heirs. It avoids probate and ensures clarity about what happens to your property. For families who rely on the home for stability, this matters.

5. You’re a Small Business Owner

Business ownership is one of the strongest reasons to consider a trust. A trust can:

• Maintain business continuity
• Protect ownership if heirs are young
• Prevent disputes between partners or family members
• Control who receives voting vs. non-voting interests
• Prevent forced liquidation

Without planning, a business can be thrown into chaos upon the owner’s death or incapacitation.

6. You Have a Blended Family

If you’re remarried, have stepchildren, or have children from a previous relationship, a trust can prevent conflict and ensure everyone is treated exactly how you intend.

Example concerns:

• “I want my spouse supported for life, but I want the remainder to go to my kids.”
• “I want to avoid family members fighting over what’s ‘fair.’”

A trust sets clear, enforceable directions.

7. You Have Privacy Concerns

A will becomes public record during probate. A trust stays private, which is especially pertinent if you’d rather not broadcast:

• Asset values
• Beneficiary details
• Debts
• Family disagreements

…a trust keeps everything confidential.

8. You Want to Plan for Incapacity

A trust helps manage your affairs if you become sick, disabled, or unable to make decisions. A successor trustee can step in immediately, without court involvement, to manage bills, property, or business operations. This is a huge help for families during difficult times.

9. You Want to Protect a Loved One With Special Needs

A “special needs trust” allows you to leave money to a disabled child or adult without jeopardizing their eligibility for benefits like Medicaid or SSI. This is one of the most critical uses of trusts today.

When You Probably Don’t Need a Trust

Not everyone needs one. A trust might not be necessary if:

• You rent, don’t own property, and have a simple financial situation
• You have no children or dependents
• Your estate is small and beneficiaries are responsible adults
• You’re comfortable with the probate process

A will alone may be enough for simple estates.

So… Do You Need a Trust?

You want to strongly consider one if any (or many) of the following are true:

• Own a home
• Have children under 30
• Worry about in-laws or future spouses
• Want to avoid probate costs
• Own a small business
• Are in a blended family
• Want to protect assets long-term
• Value privacy
• Want smoother medical or financial decision-making if incapacitated

A trust is not about wealth — it’s about clarity, protection, and peace of mind. You’re not just distributing assets; you’re creating a roadmap for how your life’s work should support the people you care about most.

Whether your concern is your children, your home, your business, or simply avoiding chaos for your family, a trust can be one of the most valuable tools you put in place. It’s not about control. It’s about care. And planning today can save your loved ones from confusion, conflict, and costly processes later.

The post Do You Really Need a Trust? How to Responsibly Plan Ahead appeared first on Huddleston Tax CPAs | Accounting Firm In Seattle.

Most business owners know the three classic pillars of client acquisition: outreach, advertising, and word of mouth. They matter (and they work), but they aren’t the whole picture. As accountants who work closely with small businesses, we regularly see companies limit their potential by assuming client acquisition is only about “getting your name out there.” In reality, sustainable growth comes from building multiple channels that work together, quietly and consistently. Here are additional, highly effective ways to acquire new clients.

1. Build Strategic Partnerships (Your Most Underused Channel)

Partnerships are one of the highest-ROI acquisition channels, and most small business owners rarely utilize them. Think: professionals who share your target audience but don’t compete with you.

For a real estate, this might include:

• roofing contractors
• window replacement companies
• HVAC repair & installation
• landscaping companies

For SaaS or tech companies, this might include:

• project management software
• subscription billing platforms
• cybersecurity firms
• CRM consultants

Why it works:
These professionals already have business owners’ trust. When they recommend you, clients approach you pre-vetted, making the sales process much shorter and conversion rates much higher.

How to do it:

• Attend industry events or local chamber meetups
• Host joint webinars or workshops
• Share resources with partners (guides, checklist PDFs, “tax season reminders,” etc.)
• Offer referral agreements if appropriate

2. Create “Evergreen” Digital Assets That Bring Clients to You

Ads require ongoing spend. Evergreen content is an asset that works indefinitely. For example:

• Blog articles answering common pain points
• Guides or downloadable checklists
• Short videos explaining common myths
• Case studies showing how you solved real problems
• Industry-specific content

This type of content positions you as the expert before the client ever contacts you.

Why this works:
People search for very specific questions when they’re confused or stressed. If your content gives them clarity, you win their trust—and often their business.

3. Local Presence & Community Authority

Even in the digital age, local visibility matters enormously. So how do you build local authority?

• Optimized Google Business Profile (posts, photos, Q&A, etc.)
• Sponsoring community events
• Teaching at local co-working spaces
• Participating in podcasts or short talks at business meetups

This builds name recognition and demonstrates you’re invested in the local small business ecosystem.

4. Client Experience as a Marketing Channel

Beyond word of mouth, client experience itself is a powerful acquisition engine. It’s not just “doing good work,” it’s creating a system where clients feel cared for, informed, and supported.

Examples:

• Automated reminders/newsletters
• Easy onboarding
• Fast response times

When the process is smooth, clients don’t just recommend you—they advocate for you.

5. Niche Specialization (Your Secret Weapon)

Generalists face tough competition. Specialists attract higher-quality leads. Specialization allows you to:

• Command higher rates
• Deliver deeper value
• Create niche-specific content
• Get more targeted referrals
• Stand out instantly

When you’re the expert for your specific type of client, you don’t compete, you attract.

6. Retargeting & Nurture Campaigns

Not every potential client signs immediately. Many need nurturing. Implementation options:

• Newsletters
• Retargeting ads to website visitors
• Follow-up reminders before important deadlines
• Industry-specific guides sent via email

This keeps you top-of-mind without being pushy.

7. Upgrading Your Website & Conversion Flow

Small business websites often leak leads—because they lack clarity and quick paths to action. Worry less about a highly optimized site and worry more about making an effective website. Include:

• clear services
• Pricing clarity (at least ranges or packages)
• Simple CTA buttons
• Testimonials or client quotes

Final Thoughts

Client acquisition is not about one magic tactic—it’s about building several channels that reinforce each other. For small businesses, the most effective growth comes from:

• Relationships
• Expertise
• Clear communication
• Visible value
• Predictable client experience

Outreach, ads, and word of mouth are only the beginning. Building a multifaceted strategy gives you resilience, consistent growth, and the ability to serve clients who genuinely need what you offer.

If you approach marketing like building a portfolio—diversified, steady, long-term—you’ll create a client acquisition system that grows your business year after year.

The post How Small Businesses Can Acquire New Clients appeared first on Huddleston Tax CPAs | Accounting Firm In Seattle.

Below is a straightforward breakdown to help you evaluate your options—and to highlight what Washington homeowners should consider before making a decision.

1. What Exactly Is A Short Sale and Is It Worth It?

A short sale happens when your lender agrees to let you sell the property for less than the remaining mortgage balance. While it can offer a clean break, it’s not a simple or fast process.

Pros of a Short Sale

• Avoid foreclosure (less damage to your credit than a foreclosure or bankruptcy).
• Potential debt forgiveness if the lender waives the deficiency (not guaranteed).
• Finally walk away from an underwater home you can’t afford to keep.

Cons of a Short Sale

• Lengthy approval process. Expect weeks—or months—of bank reviews, document requests, and follow-ups.
• Lender can still pursue the deficiency. In Washington, deficiency judgments after a short sale depend on the specific loan type and whether your lender waives the remaining balance in writing.
• Credit score impact. Less severe than foreclosure, but still significant.
• Possible tax implications. If the forgiven debt is treated as taxable income, you may owe tax unless you qualify for insolvency or an exclusion.

Is the paperwork really that bad?
Short sales require full financial disclosures, hardship letters, income proof, and repeated negotiations. It’s not a “sign and done” situation. Homeowners often underestimate the complexity, so if you’re considering this route, be prepared for administrative friction.

2. Should You Rent It Out Instead?

Renting can sometimes bridge a difficult financial season—but many homeowners underestimate the hidden costs.

The Upside of Renting

• Keeps the home as an asset so you can sell later when the market improves.
• Rent can offset part (or all) of your payment.
• Rental losses may be deductible (subject to passive activity rules).
• You maintain credit stability since you’re continuing to pay the mortgage.

The Downside

• You may still lose money each month. Even a small negative cash flow adds up quickly over a year.
• Wear and tear + repairs. Vacancies, tenant turnover, and maintenance can eat significantly into your budget.
• Becoming a landlord is a job. Especially true if you self-manage.
• Depreciation recapture tax later. When you eventually sell, depreciation you’ve taken (or should have taken) can increase your tax bill.

When renting makes more sense

• You expect property values to rebound within a few years.
• You can comfortably absorb a monthly loss.
• You’re open to being a landlord or can outsource property management.
• You want to delay selling for tax reasons (e.g., conversion back to primary residence).

3. Washington State–Specific Considerations

While Washington doesn’t have a state income tax, it does have unique rules worth noting:

Mortgage Types Matter

• Washington is primarily a non-recourse state only for certain foreclosure situations—not automatically for short sales.
• Always verify whether your lender plans to waive deficiency. This determines whether you walk away clean or still owe money after closing.

Strong Tenant Protections

• If you rent, expect detailed rules around security deposits, notice periods, and habitability.
• Some cities (Seattle, Tacoma, Burien) have additional local landlord regulations.

Market Conditions

• In many Washington regions, rents are rising, but home prices may still be plateauing.
• Negative cash flow may tighten, loosen, or flip depending on your local rental market.

4. Other Options You Might Be Missing

Before deciding between renting and a short sale, consider these alternatives:

• Loan Modification
  Lenders sometimes reduce monthly payments through:
  • Lower interest rates
  • Extended loan terms
  • Principal forbearance

Not guaranteed, but worth exploring.

• Forbearance or Repayment Plan
  Temporary relief if your hardship is short-term.
• Sell With Cash to Cover the Difference
  If the deficiency is small and you can afford it, this avoids the credit impact of a short sale.
• Rent-to-Own or Lease Option
  If your market supports it, this attracts long-term tenants who may eventually purchase the home.
• Wait and Reassess
  If you are not in immediate financial crisis, holding the home longer may improve your position — especially in appreciating Washington markets.

Should You Walk Away, Rent It, or Short Sell?

Short Sale Might Make Sense If:

• You’re underwater with no realistic path to break even.
• You cannot cover monthly losses.
• You’re ready for a clean break and okay with the credit hit.

Renting Might Make Sense If:

• You believe the home will recover value soon.
• You can comfortably manage the monthly shortfall.
• You want to preserve the asset or convert it back to a primary residence later.

Other options might make sense if:

• Your hardship is temporary.
• You qualify for assistance or modification.
• The deficiency in a normal sale is small enough to cover.

Final Thoughts

Choosing between a short sale and renting out your home is stressful, and Washington’s unique housing landscape adds complexity. The right decision depends on your financial stability, your risk tolerance, and your long-term goals.

If you’re facing this decision, consider speaking with:

• A tax professional (for tax implications of short sales, debt forgiveness, and rental losses)
• A real estate attorney (for deficiency and liability issues)
• A local real estate agent (for market-specific rental and sale projections)

The more clarity you gather, the easier it becomes to choose the path that aligns with your financial future.

The post Short Sale or Rent Out Your Home? appeared first on Huddleston Tax CPAs | Accounting Firm In Seattle.

If you’re in Washington State, the rules around wage garnishment work a little differently than in other states — and that can affect both how quickly collections hit and how much the IRS can take.

What Is Wage Garnishment?

Wage garnishment happens when the IRS sends a legal order to your employer requiring them to divert part of your paycheck to the IRS to pay your tax debt.

Unlike other creditors, the IRS doesn’t need to sue you to garnish wages. After sending the proper notices, they can move directly to collection.

How much they take doesn’t depend on a percentage, it’s based on a federal formula that protects only a small portion of your income. Most people feel the impact immediately.

How IRS Collections Escalate: From CP14 to Wage Garnishment

Here’s the typical sequence before the IRS can legally take your wages:

1. CP14: First Notice You Owe

You receive a balance-due notice. Nothing drastic happens yet.

2. Reminder Notices

The IRS sends additional letters showing your growing balance with added interest and penalties.

3. CP504: “Notice of Intent to Levy” (but limited)

This is the first real warning. It tells you:

• The IRS intends to levy
• They can seize state tax refunds
• They will escalate if you do nothing

Important: CP504 does not give the IRS the legal right to garnish wages or seize bank accounts yet. It’s more like: “We’re about to get serious.”

4. LT11 or Letter 1058: Final Notice of Intent to Levy & Notice of Your Right to a Hearing

This is the big one. Once you get an LT11 (or 1058), the IRS is giving you:

• Final notice before wage garnishment or bank levy
• 30 days to respond
• The right to request a Collection Due Process (CDP) hearing

If you do nothing, the IRS is now legally allowed to garnish wages, take funds from your bank account, and seize certain assets.

What Happens After the LT11?

If you don’t respond or set up a payment plan within 30 days, the IRS can:

• Garnish your paycheck
• Levy your bank account
• Take federal payments (e.g., Social Security, vendor payments)
• File a federal tax lien

Once garnishment starts, it continues until:

• The debt is fully paid
• You set up a resolution (installment agreement, hardship status, Offer in Compromise)
• You default on your payment plan

Washington State: What’s Different About Wage Garnishment?

Washington has its own garnishment protections for private creditors, but IRS collections work under federal rules and those rules override state limits.

Here’s what Washington residents should know:

1. IRS Garnishment Is Harsher Than Washington State Garnishment

For normal creditors in WA:

• Only 25% of disposable earnings can be garnished
• And you must be left with at least a minimum weekly amount

For the IRS:

• There is no flat percentage limit
• Instead, the IRS uses a federal exemption table and can take nearly everything above a small protected amount
• State protections do not shield your income from the IRS

This is why IRS garnishments are often financially devastating compared to regular creditor garnishments.

2. Washington Has No State Income Tax, But The IRS Can Still Take State Refunds

CP504 warns that the IRS can seize state tax refunds.

Washington doesn’t have state income tax, but the IRS can still take:

• Certain state-issued payments
• Business & occupation (B&O) tax refunds
• Excise tax credits
• Property tax credits (in limited cases)

Most WA residents don’t deal with state refunds, so CP504 sometimes feels less threatening, but don’t ignore it as it’s still a major warning sign.

3. Community Property Isn’t a Factor Here

Unlike places like California or Texas, Washington is a community property state, but federal IRS enforcement around wages typically targets the person who owes the tax. However:

• Joint bank accounts can be levied
• Joint refunds may be taken (injured spouse relief may help)
• Non-debtor spouse income is usually safe unless accounts are mixed

If you’re married and one spouse has tax debt, separating finances early can prevent messy levy situations.

4. Washington’s High Cost of Living Increases Hardship Eligibility

When requesting IRS hardship (Currently Not Collectible), the IRS uses national and local living cost standards.
Seattle-area housing, utilities, and transportation costs are significantly higher than average, meaning you may qualify for hardship more easily.

Many Washington clients successfully avoid garnishment by demonstrating that IRS collection would cause economic hardship.

How to Stop a Wage Garnishment Before It Starts

You must act before the levy hits your employer’s payroll department. Here are your options once you receive an LT11:

1. Request a CDP Hearing (strong protection)

Stops all collection until the case is reviewed.

2. Set Up an Installment Agreement

Even a modest payment plan stops wage garnishment.

3. Request Currently Not Collectible (Hardship) Status

If you can prove that you cannot afford to pay after covering living costs, the IRS will pause all collection.

4. Submit an Offer in Compromise

If you qualify, you may settle for less, but this takes time.

5. Have a Tax Professional Intervene

A representative can:

• Contact the IRS immediately
• Stop garnishment before it begins
• Negotiate repayment terms
• Request penalty relief
• Ensure you’re protected from enforcement

With a wage garnishment at stake, timing matters more than anything.

Washington Residents: What to Do Right Now if You Received CP504 or LT11

If you received a CP504:

• You still have time
• Contact the IRS or a professional
• A payment plan or IRS communication is often enough to pause escalation

If you received an LT11:

• You have 30 days
• The IRS can garnish wages after that
• Set up a plan or request a hearing immediately

If wage garnishment already started:

• It can be reversed
• A payment plan or hardship request often stops it
• A professional can usually get garnishments released faster

CP504 and LT11 aren’t just routine IRS letters, they’re the final steps before wage garnishment. For Washington residents, understanding how federal rules override state protections is crucial.

The earlier you act, the more options you have. Waiting until after garnishment begins will severely limit your paycheck and strain your financial life.

The post Wage Garnishment, CP504, and LT11: What Washington State Residents Need to Know Before the IRS Takes Action appeared first on Huddleston Tax CPAs | Accounting Firm In Seattle.

This guide walks you through what a CP14 is, who gets it, how to pay it, and when deeper issues (like liens or levies) might come into play.

What Is an IRS CP14 Notice?

A CP14 is the IRS’s first official notice that you owe tax for a specific year. It’s not a penalty by itself, it’s the IRS saying: “We processed your return, and it shows a balance due.” The CP14 lays out:

• The amount you owe
• Any interest or penalties that have accrued
• Your payment due date
• Instructions for how to pay

It’s the IRS’s polite nudge before they escalate the situation.

Who Receives a CP14?

You may get a CP14 if:

• You filed a return but didn’t pay the full amount owed
• You underpaid based on withholding or estimated taxes
• You filed late and owe resulting penalties
• The IRS adjusted your return and found you owe more

Even people who believe they are fully paid up sometimes receive CP14 notices due to:

• IRS processing delays
• Mismatched W-2 or 1099 information
• Math corrections
• Missing payments the IRS hasn’t credited yet

The most important thing? Don’t ignore it.

Do You Actually Owe the Amount on the CP14?

Not always. Before paying, check:

• Is the tax year correct?
• Does the amount align with your return?
• Did you already make a payment that isn’t showing yet?
• Did the IRS make an adjustment you disagree with?

If anything looks off, you or your tax professional can call the IRS or send a written response. Sometimes a simple payment misapplied to the wrong year causes the entire issue.

How to Pay a CP14 Balance

If the amount is correct, the fastest ways to pay are:

1. IRS Online Account
   You can pay directly from a bank account via your IRS Online Account.
2. Direct Pay
   A simple one-time payment option straight from your checking or savings account.
3. Debit or Credit Card
   Accepted, but fees apply.
4. Installment Agreement
   If you can’t afford to pay it all at once, you can request:
   • A short-term payment plan (up to 180 days)
   • A long-term installment plan (monthly payments)
   • These can be set up online if the amount is below certain thresholds.
5. Mail a Check
   Old-school, but acceptable, just be sure to include:
   • Your name
   • Tax year
   • Last four digits of your SSN
   • Notice number (CP14)

Never send cash.

Do You Need a Tax Levy to Pay the CP14?

No, the CP14 itself does not mean a levy is happening. A levy is when the IRS takes money from your bank account or wages, and it’s a last resort, not a first step. The escalation path typically looks like:

1. CP14 – first notice that you owe
2. Additional reminder notices
3. CP504 – “Notice of Intent to Levy” (a warning)
4. Letter 1058 / LT11 – final notice with levy rights
5. Actual levy if no payment or arrangement is made

You can prevent levies entirely by:

• Paying the CP14 balance, or
• Setting up a payment plan

As long as you communicate with the IRS or have a tax professional represent you, levies are avoidable in most cases.

What If You Cannot Pay?

If the balance is too high, you still have options:

• Installment agreements
• Currently Not Collectible status (if you have financial hardship)
• Penalty abatement (sometimes available if it’s your first issue)
• Offer in Compromise (rare but possible if you qualify)

A tax professional can evaluate which option fits your situation.

Should You Hire a Tax Professional for a CP14?

You may want help if:

• The balance seems wrong
• You received multiple notices
• You’re worried about IRS enforcement
• You have unfiled returns
• You’re dealing with large amounts or repeat CP14s

A CPA or enrolled agent can review transcripts, correct errors, negotiate payment plans, and make sure you’re protected.

Ultimately, A CP14 is not an audit, a lien, or a levy, it’s simply the IRS letting you know you owe a balance. The key is to take action early, verify the amount, and handle payments or disputes before it escalates.

With the right guidance, a CP14 can be resolved cleanly (and often quickly), leaving you with peace of mind and a clear path forward.

The post Understanding IRS Notice CP14: What It Means, Why You Received It, and What to Do Next appeared first on Huddleston Tax CPAs | Accounting Firm In Seattle.

“Am I responsible for someone else’s tax bill?”

The answer depends on timing, filing status, state laws, and available IRS protections. Here’s how to understand your options and how to protect yourself financially moving forward.

1. First, Don’t Panic: Tax Debt Isn’t Automatically Shared

Borrowing a phrase from Douglas Adams: don’t panic. Tax liability is not contagious. You don’t “inherit” someone’s tax problems just because you’re married or related.

However, the IRS does have the power to take a joint refund, garnish certain payments, or place liens on community property in specific circumstances.

So before making decisions, gather the facts. Start with:

• IRS account transcripts (you can request them directly if you have an authorization)
• Years and amounts owed
• Whether the debt originated before marriage, during marriage, or after death
• Whether returns were filed jointly or separately

This gives you a timeline and the timeline determines your exposure.

2. If the Debt Happened Before Marriage: You Are Generally Not Liable

Good news: If your spouse built up tax debt before you were legally married, you’re not personally responsible. But — and this is where people get blindsided — if you file joint returns, the IRS can take:

• your joint refund
• joint credits
• shared assets (in community property states)

This is where Injured Spouse Relief comes in.

What Injured Spouse Relief Does

If you file jointly and the IRS applies your refund to your spouse’s old tax debt, injured spouse relief can give you your portion of the refund back.

This does not erase their debt.
It just protects you from losing your refund.

It’s common, effective, and often misunderstood.

3. If the Debt Happened During the Marriage: Your Liability Depends on Filing Status

If your spouse owes taxes from years you filed jointly, both partners are fully responsible, even if only one spouse earned the income.

This is called joint and several liability, and it’s one of the strongest reasons some couples reconsider filing jointly.

Two potential protections:

• Innocent Spouse Relief

If your spouse understated income, over-claimed deductions, or otherwise filed incorrectly without your knowledge, this program can remove your responsibility.

• Separation of Liability Relief

For divorced, separated, or no-longer-living-together spouses, this divides the tax bill between individuals rather than binding both 100%.

These cases can be complex, especially when records are missing. Documentation matters.

4. Living in a Community Property State Complicates Things

Community property states (e.g., California, Washington, Texas, Arizona) follow the principle that income earned during marriage belongs to both spouses. That means the IRS may treat:

• income,
• assets,
• and even some refunds

as jointly owned, even if you file separately.

Your separate return may still include half your spouse’s income. And the IRS may use your half to satisfy their debt. This is where a tax professional becomes critical.

5. What If the Debt Is Discovered After a Spouse Passes Away?

If a loved one dies with unpaid tax debt:

• You do not personally inherit the IRS liability.
• But the estate may be responsible before any inheritance is distributed.

The IRS can:

• make claims against the estate,
• reduce estate value,
• or delay distribution to heirs.

If the surviving spouse filed any of the tax years jointly, they may still share liability. In many cases, estate attorneys and tax pros work together to minimize fallout.

6. What If You Discover Debt Belonging to a Parent or Relative You Might Inherit From?

You cannot inherit someone’s tax debt. However:

• The estate must pay tax debts before distributing assets.
• A large IRS bill can erase an inheritance.
• You may be involved as executor or beneficiary, which may require filing back returns or managing payment plans.

7. Should You File Married Filing Separately (MFS) to Protect Yourself?

If a spouse has unresolved or undisclosed tax issues, MFS can shield:

• your refund,
• your credits,
• and part of your income.

BUT it also comes with downsides:

• loss of certain credits
• higher tax rate in some situations
• limited deductions

MFS is a protection strategy; it’s not always the cheapest one, but often the safest.

8. When to Bring in a Professional (Hint: Sooner Than Later)

Hidden tax debt almost always benefits from professional guidance, especially when:

• community property laws apply,
• the marriage is strained or ending,
• you need to file for injured or innocent spouse relief,
• you’re processing debt of a deceased loved one,
• you’re unsure how much liability applies to you.

A CPA or enrolled agent can:

• interpret transcript data,
• protect your refund,
• help file the correct relief forms,
• negotiate with the IRS,
• and prevent costly mistakes.

In cases involving divorce or estate administration, an attorney may also be needed.

9. When You Don’t Have Documentation

Many people panic when receipts or old records are missing. The IRS allows reasonable reconstruction:

• bank statements
• mileage logs recreated from calendars
• emails
• employer records
• IRS transcripts
• third-party financial statements

A professional can help rebuild records safely and legally.

Final Thoughts

Discovering that a loved one hid tax debt is painful. But you do have options and you’re not automatically responsible for someone else’s financial past. The key is understanding:

• where the debt came from,
• when it occurred,
• how you filed,
• and what protections apply in your state.

If this situation is hitting close to home, you don’t have to navigate it alone. A qualified CPA can give you clarity, advocate for your rights, and help you move forward with a plan that protects your financial future.

The post What to Do When You Discover a Loved One’s Hidden Tax Debt: A Guide for Spouses, Heirs, and Families appeared first on Huddleston Tax CPAs | Accounting Firm In Seattle.

The tax is intended to support public safety programs, including expanding Seattle’s non-police emergency response teams. While city officials describe the measure as essential to filling a projected budget gap of over $140 million by 2027, many business owners and residents worry that higher sales taxes could further strain affordability and consumer spending.

What This Means for Local Businesses

Sales tax increases often have ripple effects. For small retailers, restaurants, and service providers, a higher rate can lead to reduced customer spending, especially as consumers weigh every dollar amid inflation and rising living costs.

A Seattle café owner or boutique retailer, for example, might find it harder to keep prices competitive when nearby cities in King county maintain slightly lower tax rates. Even small differences can impact sales volume over time.

The proposed 0.1% increase may sound minor, but on large purchases—like a $25,000 vehicle—it adds about $25 in taxes. For customers already stretched thin, those small increments add up.

A Balancing Act: Safety vs. Affordability

City leaders supporting the measure argue that it’s a necessary investment in public safety and community well-being. Mayor Bruce Harrell’s 2026 budget proposal allocates $9.5 million to expand the Community Assisted Response and Engagement (CARE) department, doubling the city’s non-police crisis response team from 24 to 48 responders.

Opponents, however, emphasize that Seattle’s cumulative taxes (from transportation and education levies to property and business taxes) are squeezing both residents and small businesses. As Council member Maritza Rivera noted, “We’re essentially taxing people who are already struggling.”

What Small Business Owners Can Do

If you operate a small business in Seattle, now’s the time to plan ahead:

1. Adjust pricing and cash flow forecasts. Even minor tax rate changes can alter your margin projections.
2. Communicate clearly with customers. If price adjustments are needed, explain why. Transparency builds trust.
3. Look for tax credits or deductions. Work with your CPA to identify federal or state incentives that can offset local tax burdens.
4. Monitor upcoming city budget developments. New levies or restructuring (like business & occupation tax changes) could affect you further.

Seattle’s entrepreneurs are resilient, but every tax increase makes operating in the city more challenging. Balancing civic investment with economic sustainability remains one of the biggest issues facing the city’s business ecosystem.

The post How Seattle’s Proposed Public Safety Sales Tax Could Impact Small Businesses appeared first on Huddleston Tax CPAs | Accounting Firm In Seattle.

Why It’s Usually Disallowed for W-2 Employees

Before 2018, unreimbursed employee expenses (such as using your cell phone or paying for home internet for work) could potentially be deducted as a “miscellaneous itemized deduction” subject to a 2% of AGI floor. But the Tax Cuts and Jobs Act (TCJA) changed that. Starting with tax years 2018 through at least 2025, that class of deductions is suspended.

What that means is even though you may incur those phone or internet costs for your job, those expenses typically can’t reduce your federal taxable income if you’re a W2 employee. The law removed most “unreimbursed employee business expenses” from being deductible for those who aren’t in certain narrow categories.

So unless you fall into a special category (for example, some state or local officials, certain performing artists, or certain other qualified employees), the deduction isn’t allowed federally.

Are There Requirements to Reimburse in Washington State?

Some states have laws requiring employers to reimburse employees for necessary business expenses, including remote work costs or job-required tools/phones. Washington and Seattle are among jurisdictions that do have some requirements or protections in this area.

The city of Seattle, in particular, has a wage-theft ordinance that calls for reimbursing employees for necessary business expenses incurred.

However, Washington state law does not broadly require private employers to reimburse all business expenses (like your personal phone bill) under all circumstances.

For state employees, there is a statute that requires reimbursement for mileage when using a private vehicle for official state business. (RCW 43.03.060)

That said, employers often still choose to reimburse or subsidize remote work expenses or phone/internet costs to retain employees or for fairness, especially in remote & hybrid environments.

So bottom line: it’s not guaranteed by state law in Washington that private employers must reimburse you for your phone or internet, but in Seattle there is local protection, and your employer may choose or be required by local ordinance to cover necessary work costs.

How the TCJA Plays Into This

The Tax Cuts and Jobs Act is central to this question. Because of TCJA:

• The miscellaneous itemized deductions category (which included unreimbursed employee expenses) is suspended for tax years 2018–2025.
• That means those expenses, even if legitimate business costs, generally no longer reduce your taxable income if you’re a W2 employee.
• The TCJA also increased the standard deduction significantly, which means fewer taxpayers itemize (further reducing the utility of itemized deductions).

Because of these changes, most employees today must rely on their employer to reimburse job-related costs, rather than claiming them on their taxes.

What You Should Do (and Ask Your Employer)

1. Check your company’s reimbursement policy
   Find out whether your employer already has a policy for reimbursing job-required phone or internet usage. If the cost is material, it’s reasonable to ask.
2. Document your usage
   If you’re asked to use your personal phone or service for work, maintain logs showing minutes, data usage, or portion devoted to work vs personal. This supports your case if seeking reimbursement or negotiating.
3. Negotiate a stipend or cost-sharing
   Many employers now offer monthly stipends or reimbursements for remote work needs. It’s not guaranteed, but if they require you to invest personal resources, it’s fair to approach this topic.
4. Plan for 2026 changes
   Currently, the suspension of miscellaneous deductions is scheduled to last through 2025. If the tax law changes afterward, these deductions might return (though that’s uncertain).
5. Consult HR or a legal advisor
   If your work situation has nuances (you’re remote, required to use private tools, etc.), HR or legal counsel may clarify whether local rules apply or whether you have standing for reimbursement.

Final Thoughts

Many employees still wonder whether they can deduct their cell phone or home internet when required by their job. The reality now is that for most W2 employees, federal law (thanks to TCJA) prohibits that deduction for tax years 2018–2025. That makes employer reimbursement (or stipend) even more important.

In Washington/Seattle specifically, the law does provide some local protections (especially in Seattle), but it’s not a blanket requirement for every employer. If your employer is asking you to use personal resources for work, it’s reasonable to ask for compensation or partial reimbursement (especially given the legal changes on the deduction side).

The post Can a W2 Employee Deduct Phone & Internet Because of Job Requirements? appeared first on Huddleston Tax CPAs | Accounting Firm In Seattle.

It’s not unusual for families in this situation to feel blindsided by a tax bill in the thousands, even when total income seems modest. Let’s unpack why that happens, what to do about it, and how to plan better for next year.

1. Why Mixed Income Creates Tax Trouble

When you’re a W2 employee, your employer automatically withholds income and payroll taxes each paycheck.

When you earn 1099 income, though, no taxes are withheld. You’re treated as self-employed, responsible for:

• Income tax on your net profit after business expenses
• Self-employment tax (15.3%) for Social Security and Medicare
• Quarterly estimated payments if you expect to owe over $1,000

That means if you earned an extra $10,000 in 1099 income and didn’t track expenses or pay quarterly estimates, you could easily owe $3,000+ at filing time.

2. Why You Might Owe So Much

A large balance due usually comes down to a few common issues:

• No estimated tax payments during the year
• Self-employment tax on 1099 earnings
• Missed deductions that could’ve lowered taxable income
• Overlooked credits or special deductions (like the Qualified Business Income (QBI) deduction)

Even part-time side work can tip the balance if you’re not prepared for those extra tax obligations.

3. Handling Each Type of Income

For the Traditional Employee (W2 Income)

If you have one or more W2 jobs:

• Double-check for excess Social Security withholding if you worked for multiple employers.
• Review whether itemizing deductions makes sense for you.
• Look into credits like the Saver’s Credit or student loan interest deduction if eligible.

For the Freelancer, Consultant, or Side Hustler (1099 Income)

Independent contractors and small business owners report income and expenses on Schedule C.
Common deductible expenses include:

• Software, supplies, and tools used for business
• Advertising, website hosting, and online promotions
• Professional education or certifications
• Phone, internet, and home office (percentage used for work)
• Mileage or vehicle expenses for business travel

Keeping organized records and separating personal from business spending makes this process much easier.

For Dual Earners (W2 + 1099)

If you have both types of income in the same year, it’s critical to:

• Track all deductible expenses for your self-employed work
• Adjust W4 withholdings at your job to cover taxes on freelance income, or
• Make quarterly estimated payments to the IRS directly

Without that extra withholding, the IRS will treat your 1099 earnings as completely untaxed — and that’s where the big April bill comes from.

4. When the Same Employer Issues Both a W2 and 1099

This can raise eyebrows at tax time. If a company treats you as both an employee and an independent contractor, you’ll need clear documentation that your 1099 work was truly independent (for example, project-based work outside normal job duties, with control over your hours or methods).

Keep emails, invoices, or contracts showing that separation in case of an IRS or state inquiry.

5. DIY Software vs. Hiring a CPA

If your finances are relatively simple and you’re comfortable following detailed prompts, reputable software can handle W2s and 1099s, including Schedule C, QBI, and depreciation.

But if you’re:

• Missing receipts
• Unsure how to estimate expenses
• Getting both W2 and 1099 from the same business
• Or you owed a surprising amount last year

…it’s worth having a CPA review your situation. A professional can reconstruct missed deductions, identify planning opportunities, and often save more than their fee in reduced taxes or penalties.

6. Missing Receipts? You Still Have Options

If you don’t have every receipt, you can still make reasonable estimates based on:

• Bank and credit card statements
• Online order history (Amazon, suppliers, subscriptions)
• Calendar entries or mileage logs
• Notes showing the date, purpose, and amount of expenses

Estimates should always be honest and backed by a consistent pattern, not guesses — but the IRS allows reconstructed records when originals are missing.

7. How to Stay Ahead Next Year

• Track income and expenses all year, not just in April.
• Use a separate account for freelance or business activity.
• Pay quarterly estimates or adjust your W4 to increase withholding.
• Use accounting apps like QuickBooks Self-Employed, Keeper, or Wave to categorize transactions.
• Review your tax situation midyear with a professional to avoid surprises.

8. The Bottom Line

Juggling both W2 and 1099 income is increasingly common — especially with the rise of remote work, gig platforms, and side hustles. But it also means taking extra care to track deductions, plan ahead for self-employment tax, and make timely payments.

With a little organization and proactive planning, you can turn mixed income from a tax headache into a manageable, even profitable, part of your financial picture.

The post When W2 and 1099 Collide: How to Handle Mixed Income Without Overpaying Taxes appeared first on Huddleston Tax CPAs | Accounting Firm In Seattle.

Here’s how to understand those roadblocks, reframe your approach, and boost your odds of success.

Why So Many Small Businesses Hit Roadblocks

There’s two main reasons:

1. Strict underwriting criteria

Banks and lenders typically expect established track records, strong credit, consistent cash flow, and collateral. This is why many business owners are denied a loan because their business was too new or didn’t meet revenue thresholds.

2. SBA myth versus reality

Many small business owners assume that the Small Business Administration (SBA) will be their safety net when banks turn them down — but that’s not quite how it works.

The SBA doesn’t lend money directly to businesses. Instead, it partners with banks, credit unions, and specialized lenders, providing a government-backed guarantee on a portion of the loan. This guarantee reduces the lender’s risk, making it more likely they’ll say “yes” to small businesses that don’t meet traditional lending criteria.

However, while SBA loans are often more accessible than conventional business loans, they’re not quick or simple to get. The process can be slow and documentation-heavy, involving layers of financial statements, tax returns, business plans, personal financial disclosures, and sometimes even collateral appraisals.

Some entrepreneurs describe it as “a full-time job just applying for it.” The typical SBA loan timeline ranges from 30 to 90 days, depending on the lender, your business complexity, and the loan type. Even after approval, it can take weeks before funds are released.

Additionally, while the SBA backs part of the loan, you’re still on the hook for repayment. Lenders will often require personal guarantees, meaning your personal assets could be at risk if your business defaults.

That said, when approved, SBA loans can be one of the most cost-effective funding options available — offering lower interest rates and longer repayment terms than most alternatives.

What You Can Do Differently (And Better)

If you’ve been knocked back once or twice, take these strategic steps to improve your odds next time:

1. Tell the full financial story, not just numbers

Many lenders dismiss applications that look flat or incomplete. Use projections, narrative context, and growth plans.

2. Build stronger leverage before applying

Things that help include:

• A solid 6–12 months of bank statements showing consistent revenue
• Reducing unnecessary expenses to improve margin
• Establishing a separate business bank account
• Building or repairing personal credit

3. Start with smaller, safer credit tools

If a full loan fails, go for a line of credit or a credit card you can responsibly manage — small successes build confidence with lenders. Business owners often advise starting small with a line of credit.

4. Approach multiple lenders in parallel

Don’t rely on one bank. Talk to credit unions, local banks, SBA lenders, fintech or online platforms, community development funds, and peer networks. Your success might come from unexpected places.

5. Prepare for time and friction

If you’re going the SBA route (or even bank loans), expect 30–90 days from application to funds. Delays are common and paperwork often pivots during underwriting.

What to Watch Out For (Pitfalls to Avoid)

• Predatory lenders with extremely high rates or hidden fees
• Overbidding your capacity — don’t borrow more than your business can reasonably repay
• Taking on debt for non-essential expenses because it compounds risk
• Failing to understand the terms — always read the fine print (collateral, late fees, covenants)

When to Bring in Professional Help

• If you’re repeatedly rejected but believe your business is fundamentally sound
• If you’re dealing with complex alternatives or bridging financing (e.g. factoring, revenue-based lenders)
• When structuring guarantees, interest, repayment schedules, or refinancing

A CPA or business finance advisor can help you model realistic repayment capacity, clean up financial statements, and package your application more compellingly.

It’s no mystery why so many small business owners feel treated like second-class citizens in the lending world. But giving up isn’t the answer. The difference comes from persistence, narrative clarity, and strategy, not just raw numbers.

Don’t let one denial define your path. Use it to recalibrate, strengthen your foundation, and come back with proof you belong in the lending game.

The post Tips to Improve Your Chance of a Small Business Loan appeared first on Huddleston Tax CPAs | Accounting Firm In Seattle.