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Tax planning involves a lot of paperwork. From receipts and bank records to previously filed tax returns, many important papers need to be collected and then stacked away securely. When it comes time to file a return, having receipts of expenditures and income statements allows you to calculate taxes quickly and accurately.Many times, due to... Continue reading →

Income tax results from a taxpayer’s earnings, while consumption tax is charged on the products and services that an individual purchases. Even though most countries use income tax, this was not always the case. The United States has a history of principally using consumption tax and favoring it over income tax.Some believe that consumption tax... Continue reading →

Knowledge about tax laws and the tax code allows individuals to reduce their liabilities while increasing their savings. Along with this obvious benefit, taxpayers also learn to avoid owing back taxes by keeping up with tax policy changes.Sometimes, individuals miscalculate their taxes because they’re not aware of the expiration of a tax break. Even when... Continue reading →

When seeking relief from back taxes, it’s important to consider the penalties that the IRS charges on unpaid balances. The penalty starts at 0.5 percent and reaches a maximum of 25 percent. Tax debt amount increases every month because the IRS charges penalties on the total amount due; this, combined with monthly interest, rapidly increases... Continue reading →

The IRS has various payment plans that are specifically designed to help individuals with different financial conditions resolve their back taxes. Taxpayers that are not financially capable of paying their entire tax debt in a single payment may qualify for an Installment Agreement. There are various kinds of Installment Agreements, each with different resolution requirements... Continue reading →

Knowledge of tax deductions and credits help individuals plan their taxes throughout the year. Some tax breaks are time sensitive and if a taxpayer does not take advantage of them before they expire, they lose the chance to save. Everyone can keep themselves current about the latest deductions by subscribing to online resources that provide... Continue reading →

When calculating your taxes, you need to ensure that you do not claim tax deductions and credits that you do not qualify for. If the IRS processes your tax return and finds that you claimed a deduction or a credit that you aren’t eligible for, they will make the correction and send you a notice... Continue reading →

In an effort to reduce their tax liability, taxpayers can use qualifying deductions and credits. There are various tax breaks available to both taxpayers and businesses. Some of the common ones that millions of taxpayers qualify for are The Earned Income Tax Credit (EITC), and Child and Dependent Care Credit.The Earned Income Tax Credit also... Continue reading →

If you are considering applying for an Offer in Compromise (OIC) to achieve tax debt resolution, be sure to check the qualifications. After you apply for an Offer in Compromise, the IRS will request information on your income (from all sources), liabilities and assets. The information required can vary depending upon the amount of tax... Continue reading →

The IRS follows certain rules and processes when collecting a tax debt. When the IRS discovers that you have unfiled returns, they will likely file a substitute tax return on your behalf to ascertain the amount you owe. If you filed a tax return and the taxes due were not paid, then the IRS will... Continue reading →