Tax Relief Starts Here
Tax Relief and Tax Problems
The longer you put off facing your IRS problems the more costly and complicated they can become, you can’t avoid a delinquent tax situation. Your IRS problems will not simply disappear magically, eventually you will have to face and resolve your liability, but you don’t have to do that alone.
The tax specialists and attorneys in the TaxRelief.net network are only one phone call away. They are ready to promptly attend to and obtain the tax resolution you are seeking. As tax relief companies, they will work with you to fully understand your particular tax related circumstances our tax analysts will determine the best possible outcome in order to eradicate all your IRS problems.
Some of the possible solutions tax professionals can help with are installment agreements, offer in compromise filings, qualifying you for financial hardship, penalty abatement filings, innocent spouse relief and more.
During your free consultation our tax specialist will answer any questions you might have and explain the criteria required to begin resolving your IRS problems today, explaining the possible savings and or avoidance of consequences you will achieve through taking decisive action today and how, if you decide, to begin the IRS resolution process immediately.
Upon qualifying for the criteria necessary for the Tax Relief Program and being accepted we will immediately contact the IRS with a Letter of Representation and Power of Attorney establishing that we are representing you and that all further contact will be handled on your behalf. Additionally, if the IRS has already taken actions against you, we will, and in most cases, successfully request forbearance and receive temporary reprieve of any actions taken against you until such time as your case can be resolved.
Preparation and cooperation between your tax specialist and yourself is essential as they will be working hard on your behalf, you too will be working hard supplying all the information and documentation requested from you by way of a detailed list we provide you. Time is of the essence, so promptly and carefully complete the list we supply you with, and the sooner your tax problems will get resolved. During the interim TaxRelief.net and your tax attorney or specialist will handle any negotiations between the state or IRS. Once you have completed the prepared information and documentation we will submit your offer, based on our recommendations for the most advantageous outcome for you, to the IRS for a maximized probability of acceptance of your offer of Installment agreement, or other alternative relief solution.
Average American Debt
The American citizen has a number of different kinds of taxes levied upon him. While taxes differ from state to state, the tax liabilities definitely can be worrisome. Depending on where you live, how you live and how you earn your bread and butter, these different taxes are tagged upon you. The most common kind of tax that factor in a great deal when calculating the average American tax debt is income tax. This is perhaps the heaviest tax levied upon the American citizen. It is estimated that Americans can lose north of 35% of their paychecks in income taxes.
Another kind of tax is the business tax which is different from income tax. This is also known as the corporate tax and it is supposed to be levied upon the profits that a particular business makes. However, necessary expenses can be directed from the total amount of business tax to bring it lower. When you have employees working under you your company will also be subjected to payroll taxes. In this case scenario the employer’s taxes must match the amounts. Disability insurance, federal withholdings, Medicare and various other state withholdings are added to the average American tax debt. Many Americans and businesses are looking for ways to find tax relief.
Profits derived from the sale of an asset that was purchased at a price lower than that at which it was sold is also liable to be taxed. This tax is known as capital gains tax. However if the opposite happens, that is, a person requires an asset for a higher price and sells it for the price lower than the buying price he can deduct that loss from the total tax payable amount. Generally the average American tax debt has Capital gains tax levied upon the sale of authority, bonds and stocks. Inheritance taxes also form part of the various taxes that the United States government levees up on the average American citizen. This tax is payable when a taxpayer dies and the property under his ownership transferred onto his heirs. In cases where the inheritance is given to charity or left behind for a spouse then it is exempted to this tax.
Another popular kind of tax initiated by the government is sales-tax which is also known as consumption. This is levied upon at the point of purchase for all kinds of goods and services. Sales tax is usually a specific percentage of the selling price and this percentage varies from state to state. Then you have property taxes which as the name suggests are imposed on the ownership of property. They are to be paid on real estate as well as personal property and even vehicles, boats, recreational vehicles and many other business inventories.
Also counted in the average Americans tax debt is excise tax. This tax is based on the value of the product under consideration. Actually they are valued on the quantity of the product. Examples include gasoline, CDs, cigarettes and other such products bought or sold in large quantities.
How to Avoid an Audit
A tax audit is every businessman's nightmare, and is better prevented than cured. If you are stuck in a situation where you have to undergo an audit it is best to be clear about where you stand in terms of the IRS watchdogs. When stuck in such a situation you need to know how to avoid an audit. When you crunch numbers to file your tax returns make sure that you do not do a sloppy job. This can raise a red flag at the IRS and provide them reason to conduct an audit. The IRS has options in its computers to rectify manual and mathematical mistakes or if you have claimed deductions higher than the limits set by the tax code. But a continuous stream of mistakes can catch the eyes of the IRS and become grounds for conducting an audit. This is one of the most crucial aspects when looking how to avoid an audit.
Thus, you must know how the IRS selects individuals and businesses for an audit. The IRS utilize their computers to compare your tax returns with businesses that fall in your income bracket and compare the variations through using the DIF Score which takes those tax returns which have the possibility of generating additional audit revenue. This formula utilizes variables like your family size, profession, your income and deductions along with your area of residence. So if you're living in an upper-class area but showing an income of a middle or lower class area then you have to explain this anomaly to the IRS. This may put you in an awkward situation and have you looking around for ways on how to avoid an audit.
Your finances should be presented in a way that they do not attract the attention of the tax man. For example, if you are self-employed this automatically provides you more room to hide income or create deductions by converting your personal expenses into business expenses. Be prepared to substantiate expenditures as deductibles.When thinking of how to avoid an audit if you are being paid in cash; there are various areas of potential abuse that the IRS is carefully monitoring. These include but are not limited to unreported income, high risk-high income taxpayers, offshore credit card users, investors in abusive schemes and promotions and finally the high income non-filers.
During the audit the IRS focuses on items which are not substantiated by the tax payer. How can you substantiate your business travel? Keep a record of the business mileage and purpose of the travel in a diary. If you are spending more than $75 on meals or entertainment, then keep receipts so that you can get a deduction, for expenses less than $75, keep notations in your diary but in both cases make sure you hang onto the receipts. If you do not provide the receipt you will be unable to claim a deduction. To keep it very detailed and make life easy for both you and the tax man, record the value of the receipt, the name and location of the place, name of the person, their business relationship with you, and what was discussed at the meeting to substantiate expenses. Just remember that the IRS needs proof on paper and that is all you need when you think of how to avoid an audit.
IRS Audit Myths
When it comes to IRS tax audits there are many myths surrounding the procedure as well as the selection criteria of the IRS. The main aim of the IRS or internal revenue services is to check what additional income in terms of taxes they can generate from businesses and individuals. It is commonly considered that if you have a home office you are a prime target for IRS audits. This may have been true when earlier working from home was a new phenomenon. However, since there are many businesses running from home today it is more acceptable and better manage at the IRS. A home business is reviewed in order for the claims and deductions to be verified and substantiated accurately.
Many people commonly believe that if you file your tax return after the audit season then you can avoid being caught in the IRS audits. However, the odds are in your favor only because you are going against the system. But if your tax returns do not make sense to the IRS you can be audited for up to three years after the IRS receives your tax return. Therefore, anomalies cannot be hidden forever they can simply be delayed. It is commonly believed that if you make money under a certain amount then the IRS audits are not applicable to you. However, this is a false claim and the IRS sends random audits across income levels and also takes time to investigate them. The purpose of IRS audits is not to look at people who are making money to harass them; it is simply to check if someone is evading taxes. That is the criteria which determine IRS audits.
An audit does not have anything to do with filing your tax return and having it accepted by the IRS and receiving your refund. That is a separate process, and you can still be audited up to three years after your tax returns have been filed with the IRS. If the information on your tax return does not match the details of the person who files it then you can be audited. Using the services of a tax professional also does not help you evade IRS audits. Some tax professionals often prepare listings of inaccurate deductions to assure you a good return from the IRS and build your trust in them. However, a true professional will file authentic deductions and even represent you during an audit if required.
If you carefully itemize all your deductions the IRS can scrutinize them even more clearly, which makes them more alert to catching mistakes or missing information which might be grounds for an IRS audit. Similarly if you file a business loss you may still be audited. Filing business losses will generally mean more paperwork and a more alert IRS individual on your case. Make sure your numbers are hundred percent accurate in order to avoid IRS audits. Further, filing separately from your spouse has no effect on your probability for being selected for IRS audits.
When filing tax returns the average American citizen is eligible to make claims for a number of different tax deductions. By making claims of tax deductions you can actually bring down the amount of money you owe to the IRS. In other cases it can bring you a larger tax debt refund.
The standard deduction is the most commonly claimed tax deduction. However, there are many other tax deductions that you may be liable to claim. Being unaware of their own rights many individuals fail to make these claims and others do not even take them into consideration. The result is that taxpayers end up paying more than they owe.
In order to successfully make tax deduction claims you will be required to have adequate receipts and documentation. Since many individuals are careless about keeping proper documentation they fail to make the tax deductions they are eligible to on their annual tax returns. This is why tax attorneys recommend that you prepare your paperwork through out the year so that you can make the tax deductions you are entitled to during the tax season.
Medical expenses happen to be the most frequently overlooked tax deductions. In order to successfully make a medical expense deduction claim the amount of money you spent seeking medical treatment should be more than 7 1/2% of your income. Although this may seem like quite a large amount of money there are a great number of American citizens that are eligible to receive this tax deduction. When you add up the health care costs in families with multiple children the amount often overshoots 7 1/2% of the taxpayer’s income. Similarly families with one of the members facing a life-threatening disease often have to incur exceptionally high medical costs.
Charitable donations are also eligible for tax deductions. This is why it is important to keep track of all the donations that you make to charities. However, there are certain kinds of charitable donations that that you can make these claims for and for that you will need to consult a tax attorney. In order for a charitable donation to liable for tax deductions the particular charity organization that you donate to should have the approval of the IRS tax attorney. You can find out whether a particular charity organization is approved by the IRS by visiting their website.
In case you have been afflicted by a natural disaster you also eligible to what is known as the natural disaster tax relief. This deduction was put in place to help taxpayers recover the loss of property and belongings in natural disasters. Again, not for you to qualify for this kind of tax deduction the loss that you incur should make up a certain percentage of your total income. The minimum level is set at 10% in most regions however it may vary from state to state. The IRS has information regarding tax help in disaster situation.
The bulk of American citizens lose out on claiming the tax deductions they are eligible to receive by law because of the simple fact that they are unaware of the existence of such laws.