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Articles Posted in Tax Laws

You may want to file an amended tax return if you have already filed but need to make changes.  One reason is that taxpayers commonly go to their tax preparer to have their taxes filed without having all of the information or documentation that needs to be considered when filing. This type of situation can bring on a host of negative implications, such as increased balance. Or it can cause an audit. Neither of which you want to be dealing with after you have filed.

Why Amend a Tax Return?

To put it simply, a taxpayer or a business should file an amended tax filing if filing the amended tax return will help their bottom line. For example, filing incorrectly by overstating income, or forgetting to subtract deductions that would have lowered the taxable income. Another common reason is if you would like to change your filing status. This is especially important since the Tax Laws Jobs Act came into effect.  And finally, to correct error that has resulted in you owing more money. These are just a few, but there are many reasons why one would want to amend a tax return.

Many people wonder whether or not they have to file taxes if they have a dual citizenship. First, let’s start with what this means. If are you are a citizen of both the United States and another country, like Canada or the United Kingdom, then you have what’s called dual citizenship. Unfortunately, when it comes to filing taxes, things may get a bit more complicated for you though. Do dual citizens need to file a U.S. tax return? Is it common to end up paying taxes in a country that you don’t live in? It’s important to answer these questions and clear up any misconceptions, so you do right “tax-wise” to maintain your dual citizenship.

Citizenship Is Important

Any citizen of the United States, regardless of their current location overseas, must file a U.S. tax return. They may not owe the IRS any money, due to the treaties in place with foreign countries in order to prevent double taxation from occurring, but they are still required to file a tax return – even if their income was earned in the country in which they reside.

Suddenly, your nightmare has become a reality – you owe the IRS money, and they’ve placed a lien on your property in order to recover those funds. They’ve sent notices informing you of the lien (or liens) and stated the reasons for these impending penalties. At this point, two different options are on the table – either you satisfy your debt and file to remove the lien, or for one of several very particular reasons, if the lien is not valid, then you must file to have it withdrawn or removed. In both cases, you need to seek professional help to file the proper forms and monitor the IRS’s responses. After all, tax lien removal is never as simple as it sounds. Confused as to next steps? Let’s start at the beginning.

Liens Versus Levies

What’s a tax lien versus a tax levy? The two are tools used by the IRS in order to collect funds from taxpayers who owe them money. However, there are some drastic differences between the two options. A tax lien is very much like a judgement. It’s public record, so anyone find out that you owe the IRS money once the lien if filed.  It’s mainly there to let other creditors know that the IRS has claim against your property.

Although the IRS is persistent when it comes to collecting debts owed, such as unpaid taxes, they also contract with a number of private collection agencies tasked with sending out notices and contacting people who owe back taxes. This can make the collection process a bit muddled and confusing, because there are many scammers out there claiming that people owe debts to the IRS, attempting them to trick them into paying up. These scams can be tricky and financially ruining. In order to ensure that you’re working with legitimate people contracted by the IRS, as well as paying on an actual tax debt, there are several steps that you should take when a collections notice appears in your mailbox.

What You Should Do If You Receive a Collection Notice

In order to prevent people from falling prey to scammers who claim they are working with the IRS to collect back taxes, they have set up a number of safeguards. If you receive a notice from the IRS or one of their contracted collection companies, there are a number of things that you should do in order to not only ensure that the debt is legitimate but also to make the proper payment arrangements to cover any debts that you do indeed owe.

For some people, the scariest sight imaginable can involve having an IRS revenue officer show up at their door – which is completely understandable. There are many reasons why one of these agents might pop up and visit your home or office, and none of them fall into the “good news category.” So, what do you if this nightmare becomes your reality? What are your options? Do you speak with them? Do you hand over as much financial information as you have on hand? Or do you call your tax accounting firm and request their presence to represent you in discussions with the IRS? The correct response is clearly the last one. It’s always a good idea to have professional help in these situations in the form of revenue officer representation, especially if you have someone else handle your taxes and other financial information for you.

So, let’s discuss this situation and the possible ramifications in some more detail.

Why The IRS Might Send a Revenue Officer Your Way

As many know, in March of 2020, the Coronavirus, Aid, Relief, and Economic Security Act, commonly known as the CARES Act, was signed into law by President Trump. As a part of this Act, employers received the opportunity to defer a portion of their payroll tax payments and pass that money on to their employees in order to put more money into their pockets and stimulate the economy. Unfortunately, this tax delay, which is supposed to run from September 1st until the end of 2020, left workers and their employers with plenty of unanswered questions.

What Are Payroll Taxes?

In order to understand how the payroll tax deferral works, you first need to understand the basics of payroll taxes in general. These are the taxes that your employer submits to the governor. The money is taken from your paycheck and sent to the Federal Government on a regular basis, sometimes twice a month, even though it’s deducted from you whenever you get paid.

Due to the COVID-19 pandemic and all its surrounding circumstances, the IRS chose to shift the tax filing deadline. This essentially moved the usual filing date for 2019 taxes from April 15th to July 15th. Whether you owed taxes to the IRS or they owed you a refund for that year, the applicable deadline was still July 15th , giving all taxpayers a few extra months to get their affairs in order. However, now that that date has come and gone, some people may have filed their returns but not paid any amount owed. In addition, others may not have sent in their return at all, either waylaid by the pandemic or afraid of having to pay the IRS an amount that they cannot afford. No matter which category you fit into, it’s important to know that you still have options.

Now Is the Time to File

You must file your 2019 return, regardless of whether you owe taxes or not, now is the best time to file. Yes, you will face the penalties and other fees handed down by the IRS, but with the help of a Tax Professional, they will work with you. However, nothing can be done help you if you don’t file at all.

Everyone, from small business owners to independent contractors, knows there some extremely specific advantages to incorporating. Not only do you receive some protection in case of liability, since the business is held liable, instead of you – the individual owner – (although this depends largely on the circumstances, of course), but incorporating also sets you up to be eligible for plenty of tax breaks.

Since different types of corporations are taxed at varying rates, they are also eligible for many tax breaks that individuals are not. Without a doubt, sifting through the incorporation paperwork may help you quite a bit when filing your yearly federal and state tax returns. But overall, there are five main ways that you can save money on your taxes, simply by incorporating your business. So, you need to be aware of the following advantages when making any big decisions:

1) You Won’t Have to Pay Self-Employment Tax

While it’s common for individuals and businesses to owe money to the IRS, many of them have the means to pay their tax debts when they file every year. However, not everyone can do this, leaving debts owed to the Federal Government outstanding. If you fall into this category, there are some important things that you need to know, including the following:

1) You Still Need to File Your Current Tax Return

Even if you owe the IRS money from a previous year or two, you still need to file your current tax return on time. Not filing can lead to a number of penalties, and it may void any ongoing payment agreements that you have with the IRS. It’s always a good idea to make sure that you send in that return on time, even if that return results in you owing money to the IRS.

Winning money at a casino, sportsbook, or via the lottery is a rollercoaster ride with its inevitable up and downs. Yes, it is undeniably exciting to win and stash a little extra cash in your pocket. But the downside that many forget in the heat of the moment, is that you owe taxes on those winnings, and if those taxes are not disclosed on your annual tax return or paid in full, you could end up with plenty of problems with the IRS. They will not hesitate to collect what is owed to them and more, should you profit from gambling winnings.

What Constitutes Gambling Winnings?

The IRS only requires people to pay taxes on a certain amount of the money that they win through gambling. These amounts vary, based on how the money is won. Here is a general breakdown to keep in mind when at the casino or racetrack:

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