U.S. citizens who are living abroad are still required to
file a federal income tax return. This is true, even if they are no longer earning any income from activities based in the U.S. However, while these individuals are obligated to file, they may not be obligated to pay any tax on their earnings. This tax break is available under a provision called the Foreign
Income Exclusion. To take advantage of this arrangement, it is important to understand how to qualify for it.
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Individuals who have immigrated to the United States must abide by the IRS rules for resident and non-resident aliens. While there are special considerations for these individuals who file tax returns, they are still required to submit their returns on the annual deadline along with naturalized U.S. citizens. The IRS allows for three categories of immigrants: resident aliens, non-resident aliens, and dual status taxpayers. Choosing the proper tax status is important because it directly affects the way immigrants file their returns.
Taxpayers who are selected for auditing by the Internal Revenue Service may not know that they have the option to appeal the agency's findings. Those who do appeal have the opportunity to defend themselves in tax court. While the idea of defending yourself against the IRS can be daunting, appearing in the tax court doesn't have to be a frightening experience. If you decide to appeal your audit findings, learning about the tax court process can help you prepare for making your case.
An IRS wage garnishment is an extremely difficult process to deal with. The federal government has given the Internal Revenue Service the authority to garnish employee earnings, and the agency often resorts to this action in severe cases of back tax debt. Once the IRS begins garnishing your wages, it will generally continue to do so until the entire tax bill is paid in full, no matter how long that takes. Despite its authority, the IRS has to follow certain wage garnishment guidelines.
Have you been hit with a notice that the Internal Revenue Service (IRS) will be "examining" your income tax return? If so, you're being audited. The fear of an IRS audit is enough to intimidate many taxpayers into complying with whatever calculations the agency comes up with. However, IRS agents can make mistakes during tax preparation too, and you shouldn't feel pressured to agree to their findings right away. The good news is that the agency makes it relatively easy for taxpayers to file an appeal of their audits.
When the tax deadline approaches, many business owners may be worrying about the IRS fines and penalties they could face. Some of these fees are associated with the IRS filing process itself, but others may be assessed after an IRS review of a completed return. What are some of these fines? How can an entrepreneur avoid these penalties? Here are some small business tax suggestions for escaping the most common IRS penalties.
When you own and operate your own business, you'll have to deal with many financial concerns over the years. Some of these issues could pose a real danger to your company, especially if they affect your ability to take on new clients or deliver your products to customers. One way to avoid many of these problems is to hire a qualified financial professional to shoulder some of your responsibilities for you. Both accountants and tax attorneys can be of great help, but how do you know which professional to hire? Here's a quick overview of the differences between the two.
The Mortgage Forgiveness Debt Relief Act, which was originally passed in 2007, was recently extended through the 2012 tax year. This law provides a substantial tax break for homeowners who lost homes to foreclosures by allowing them to avoid taxation on their cancelation of debt. The federal government extended the Mortgage Forgiveness Debt Relief Act using the Emergency Economic Stabilization Act in an attempt to revamp the lagging U.S. economy.
As a result of the economic crisis of recent years, many American taxpayers have applied for and received cancelation of some debts such as mortgages, car loans, and credit card bills. One thing that some citizens may not know, though, is that their canceled debt may be subject to income tax by the IRS. While the tax bill they get at the end of the year may be considerably less than the debt that was canceled, it may still put a strain on the household budget. The best way to prepare for this is to speak with a tax professional to find out if your canceled debt is taxable well in advance of the income tax deadline.
Have you gotten a letter from the Internal Revenue Service in the mail? If you have, you may have been nervous just to see the IRS return address in the envelope corner. However, the majority of IRS correspondence that is sent out is relatively harmless. In a few cases, though, IRS notices can bring bad news such as a stressful tax audit or a tax collection. Here's a quick overview of the types of IRS notices that are commonly mailed and how you can handle IRS correspondence.
