Filing Taxes in 2022: What’s New and What to Consider

The 2022 tax filing period kicks off on January 24th, allowing all taxpayers to file and send their 2021 returns. The IRS also announced that the deadline to file and pay the amount owed is April 18th instead of April 15th due to the Emancipation Day holiday.

Before filing your taxes, it's essential to know what to consider and the policies the IRS changed. Here, we provide the ultimate guide to filing taxes in 2022 by discussing critical items to note.

1. Child Tax Credit Payments

In March 2021, the IRS passed an American Rescue Plan, increasing the Child Tax Credit to $3,600 from $2,000. If you qualified for this program and didn't receive a cheque, you may get it in a lump sum by claiming the Child Tax credit. However, if you got advance payments, determine the proper amount to claim when filing your taxes.

When unsure how much money you received in an advance Child Tax credit, counter-check the letter 6419 sent by the IRS in January 2022.

In case you determine that you received less than the amount you qualify for, claim a credit on your 2021 tax return. Alternatively, repay the excess before the provided deadline if you received an excess amount.

2. Charitable Contributions

Another change to note when filing taxes in 2022 is charitable tax deductions. If you do not itemize your withdrawals (subtract them from your gross income), you may take a charitable deduction. However, the amount you are eligible for will depend on your status.

For instance, if you are married and file joint returns with your spouse, you qualify for $600.On the other hand, if you aren't and made cash contributions to a qualified organization, you are eligible for a $300 deduction on the amount you owe the IRS.

3. Claiming the Recoverable Rebate Credit

The federal government rolled out the third Economic Impact Payments in 2021 to cushion citizens affected by the COVID-19 pandemic. If you didn't qualify or were eligible and failed to receive the total amount, you can claim it when filing your 2021 taxes.

Still, if you qualified and got the funds, the IRS requires you to include the total amount in your return forms. Taking this precaution will help you prevent processing delays on your refund. It also ensures you provide accurate details on your tax records.

An ideal way to confirm the amount you received and what you can claim is using Letter 6475. Alternatively, log into your IRS online accounts to counter-check this information.

4. Child and Dependent Care Credit

The child and dependent care credits are available to citizens who paid for childcare to work or search for a job. You can also qualify if you paid the money to care for an adult-dependent unable to look after themselves.

If you fall in any of these categories, claim the child and dependent care credits to lower the taxes you owe. However, if you don't have delinquent taxes, the balance will go into your refund.

When unsure about the amount you spent on these expenses, counter-check your bank account statements. You may also get these details on your financial records or payment receipts.

5. Stimulus Checks

If you qualify for a stimulus cheque, you probably received your last one throughout 2021, beyond the 2020's tax filing deadline. When submitting your tax forms for 2022, it's vital to remember the IRS doesn't consider this payment as income.

Hence, you don't need to include it in your return documents. In case you didn't get the total amount you qualify for, you can claim them as part of the refund.

Contact Tax Industry to File Your 2021 Returns

Filing taxes in 2022 may be tricky since there are various aspects to consider. At Tax industry, we can help you determine how much you owe the IRS for 2021. We will also identify the deductions and benefits you qualify for then ensure you claim the necessary refunds. Call our offices today for help with filing your tax returns. or other special tax situations.

IRS Fresh Start Program : How It Can Help to Get Your Finances Back On Track

Paying taxes you owe to the IRS may be a daunting task when facing financial challenges. Unfortunately, failing to submit the required amount you owe can lead to fines and penalties. The IRS can also freeze your assets and seize your business.

Enrolling in a Fresh Start program allows you to clear your debt and reorganize your finances. Here, we explore avoiding the consequences of back taxes with a debt relief plan. We’ll also mention some of the Fresh Start programs you can consider and the benefits of working with the best tax relief companies.

Getting Your Finances on Track With IRS Fresh Start Program

If you have accumulated tax debt, you can get your finances back on track with the IRS Fresh Start program. The first step to this is determining the most suitable category. Some of the options you can consider are an offer in compromise, an IRS installment agreement, penalty abatement, and currently not collectible.

Once you qualify for relief, the IRS will stop any efforts to collect the debt. For example, they will pause efforts to get a court order for seizing your assets or closing your business. They can also release a tax lien, allowing you to sell your properties.

Another way a IRS Fresh Start program can get your finances back on track is by preventing debt accumulation. The IRS will stop interests from accruing when you enroll in a debt relief plan. They will also pause imposing fines, preventing more financial losses.

How to Apply for IRS Fresh Start Program

The IRS requires everyone applying to a debt relief program to meet various requirements. You must also provide specific documents to boost the chances of consideration. In most cases, these vary depending on the program you are applying for and the amount of debt.

For example, when sending a request to be considered for the Currently Not Collectible plan, you must prove you are facing financial challenges. It’s also necessary to show that repaying the debt will lead to severe straining. Some documents you can use to support your application are your pay slip and receipts of your expenses.

When sending your application to a Fresh Start program, you must remit a direct deposit, depending on the selected category. For example, if you choose an offer in compromise, you must remit a $205 nonrefundable fee. The IRS will also require you to send an initial payment equal to 20% of your debt.

Benefits of Getting Tax Resolution Services When Applying for the Fresh Start Program

Determining the most suitable Fresh start program can be tricky due to several choices. Working with the best tax relief companies allows you to simplify this process in many ways. First, such firms have a team of experts who can help you pick the right program based on your financial situation and debt value.

These can also negotiate with the IRS for a suitable repayment program. More reasons to get professional tax resolution services are:

  • It can help settle your tax debt for a lower amount
  • Tax resolution experts can ensure you submit proper documentation
  • You will get legal representation during audits and case proceedings

Another benefit of working with the best tax relief companies is that it allows you to avoid further penalties and fines. With the help of CPAs, you can quickly file back taxes to avoid debt accumulation. It is also possible to support your Fresh Start application with verified financial documents.

Get Your Finances Back on Track With Reliable Tax Resolution Services

Working with reliable tax resolution companies can help you reorganize your finances. At Tax Industry, we have a pool of CPAs and attorneys who can guide you when applying to the IRS Fresh Start program.

With our help, you can avoid the adverse financial consequences of debt. Reach out to us today to get your finances back on track and apply to a suitable IRS Fresh Start program.

Tax Settlement – Find out if you are eligible

irs fresh start program

Paying all the taxes you owe can be challenging when facing financial problems. Failing to remit the entire amount may then lead to the accumulation of penalties and interest. The IRS can also garnish your wages or freeze your assets to prompt you to pay.

Luckily, you can avoid such consequences and repay your debt using a tax settlement. Here, we help you understand how this works and discuss ways to determine eligibility. We also highlight the benefits of tax settlement and explain why it is vital to work with an expert from Tax Industry.

How Does a Tax Settlement Work?

A tax settlement allows you to negotiate favorable debt relief terms. Depending on the amount you owe, the IRS may accept an amount less than the total debt. They can also request installment payments over a specified duration.

Since the qualification requirements of each tax settlement option differ, it is always crucial to determine if you qualify before contacting the IRS.

Once you pick the debt relief program you want to apply to, submit all needed documents alongside your request. You should also send an application fee, which will depend on the chosen tax settlement option.

After receiving your application, the IRS will check if you qualify and provide feedback.  They may then send a settlement offer, including all terms of the agreement and a payment schedule.

Benefits of a Tax Settlement

One significant benefit of tax settlement is that it allows you to prevent costly repercussions. Once you qualify, the IRS will freeze fines and penalties then stop collection efforts. They may also lift a tax lien or discharge it, allowing you to sell properties.

Another benefit of tax settlement is that it provides lenient payment terms. Instead of struggling to clear the amount with one deposit, it is possible to repay over several years or months.

For example, if you qualify for an installment agreement, the IRS will give you 72 months to clear the debt. Such favorable terms allow you to budget for the required monthly payments and avoid financial straining.

Who Is Eligible for a Tax Settlement?

The IRS has requirements to determine if applicants qualify for a tax settlement offer. While these will differ based on the relief program you select, some aspects are common.

First, you should be able to show that repaying your debt in full will cause financial challenges. Besides, you must file all past tax returns before submitting your application.

Another qualification requirement is that your debt must be within the maximum limit of the selected relief program. For example, when applying for a Fresh Start program, the amount you owe, including penalties, must be less than $50,000.

Since determining eligibility for tax settlement can be challenging, it is advisable to consult a relief expert. With their guidance, you can identify the most suitable program based on your debt and financial situation.

Tax Settlement Services Offered by Tax Industry

Tax Industry provides a wide range of settlement services to help you deal with debt. For example, we have attorneys who can negotiate with the IRS on your behalf or stop a wage garnishment. We also offer tax debt relief services where our liability experts assess your situation and eligibility for various settlement options.

More services you can get at Tax Industry are:

  • A federal tax lien release
  • Filing back taxes
  • Audit representation

Working with Tax Industry liability experts is the best way to increase the chances of qualifying for a settlement. Since they understand the requirements for each relief program, they can ensure you provide the needed documentation. They may also help you avoid issues that affect your eligibility for various settlement programs.

Contact Tax Industry to Apply for an IRS Tax Settlement

Tax Industry provides you with all the skills and expertise needed when negotiating with the IRS. With our guidance, you can apply for programs like installment agreement, offer in compromise, or penalty abatement. If you are looking for reliable tax debt relief services, contact us today to consult our experts.

Tax Evasion, Fraud and the Statute of Limitations

When calculating or filing back taxes, you may make various mistakes, leading to remitting an amount that is less than what you owe. While the error may be minor or accidental, the IRS may consider it as fraud or a way to evade paying taxes.

Since the difference between tax evasion and fraud is confusing, you should learn about the two to avoid getting in trouble with the IRS. Here, we provide more details about these two aspects to help you differentiate them. We'll also discuss what you should do if you find yourself in such situations to avoid further consequences.

What is Tax Evasion?

Tax evasion refers to using illegal methods to avoid paying your taxes in full. For example, you may fail to submit the relevant tax filing forms then refuse to remit any amount even after an assessment.

Since the IRS can determine the taxes you owe them using documents sent by third parties like your employer, they can easily detect evasion.  This issue will then lead to penalties and criminal charges depending on the gravity of the situation.

What is Tax Fraud?

Tax fraud is the deliberate misinterpretation of information regarding your taxes or failing to include some details on your return forms. An example is when you do not disclose all income sources to reduce the amount due.

Other examples of tax fraud are:

  • Using the wrong social security number
  • Claiming false deduction
  • Claiming personal expenses as business spending
  • Filing under the incorrect status

When you commit tax fraud, you may face criminal charges and get a maximum sentence of three years or a fine of up to $100,000. In some cases, you might have to pay an additional amount equal to 75% of the taxes you avoided.

Statute of Limitations for Tax Evasion and Fraud

A statute of limitations is the maximum period that parties in a dispute have to start legal proceedings from when the issue occurred.  The law gives the IRS three years to audit your returns if they suspect you provided wrong information and evaded taxes.

During this period, the body will review your accounts and financial details to track expenses and income.

If they detect that you failed to disclose about 25% of your income, they will hand over the matter to relevant authorities for prosecution. The statute of limitations for such a tax evasion charge will then extend up to six years.

Since tax fraud is not a specific crime, the statute of limitations often differs depending on the issue at hand. For example, if you fail to pay taxes, the duration will be six years. On the other hand, the law provides a maximum of three years to prosecute those who fail to supply some information or keep the required records.

It is important to note that the statute of limitations for tax evasion and fraud can be longer due to various reasons.

For example, if you commit a similar or related crime, authorities will start counting the duration from the date of your last fraudulent act. Besides, when you leave the US, they will stop counting until you go back or they locate you.

Preventing Tax Evasion and Fraud Charges

Tax evasion and fraud have significant consequences on your finances and reputation. Hence, it is vital to avoid such cases by remitting the correct amount and providing accurate information when filing taxes.

If you cannot pay all your taxes in full, consider working with liability experts to apply for installment agreement programs. These can also help you file your taxes to avoid errors that may appear as fraudulent attempts.

Reach Out to Tax Industry to Deal With Tax Evasion and Fraud Charges

When facing a tax evasion or fraud charge, it is crucial to get the proper representation. At Tax industry, we have qualified attorneys to help you navigate tax laws and disputes. These experts can guide you in proving honest mistakes like calculation and typing errors.

If found innocent, we will assist you in choosing a Tax debt relief program to clear your tax debt. Contact us now to consult our liability experts.

How to Find Out How Much You Owe in Taxes to the IRS

When you owe taxes to the IRS, it is essential to clear them to avoid debt accumulation. Taking this precaution also prevents the consequences of unpaid taxes like federal liens and financial audits.

Unfortunately, it may be challenging to calculate your debt since the fines and penalties accumulate with time. Here, we discuss four methods to find out the amount you owe the IRS. We'll also highlight the steps to follow when using each and discuss why it is advisable to work with tax resolution experts when determining your tax debt.

1. Call the IRS

One ideal way to determine the taxes you owe is by contacting the IRS via phone between 7:00 am and 7:00 pm. This method is suitable if you do not know how to use the online tool or prefer to talk to a representative for clarification.

Since the IRS receives many calls, you may have to wait for about thirty minutes to connect with their staff. The best strategy to avoid staying on hold for an extended period is to call as early as possible.

If you want to contact the IRS to determine the amount of personal taxes you owe, you can use 1-800-829-1040.  On the other hand, if you are calling on behalf of a business, use 1-800-829-4933.

Once you get connected with a representative, they will request various details to confirm your identity. Some of the information they may need is your social security number, date of birth, and filing status. They will then use this data to check your profile and inform you how much you owe.

2. Using the IRS Online System

The IRS provides you with a tool to view your tax status and payment history. While the system can help you determine the amount you owe, it is not available all the time. The periods you can log in are Monday-Saturday, 6 am-9 pm, and 10 am-12 am on Sundays. 

When using the portal to check your tax balance, you need to confirm your identity. The system will require you to provide various details like:

  • Social security number
  • Date of birth
  • Email address
  • Mobile phone number
  • Filing status
  • A bank account number 

Once you log in to your account, you can confirm the balance you owe. Still, it is crucial to note that the system takes about 24 hours to update. Hence, you may not view the most recent penalties and fines.

3. Mailing the IRS

Another way to determine the taxes you owe is by mailing the IRS. Once they receive your request, they will send you a transcript of your account. This document includes one-year taxes, excluding the penalties and fines.

While mailing the IRS may help you determine the taxes owed, it has some drawbacks. For example, the transcript will not provide an accurate tax debt quotation. Besides, you will need to wait for some time to get feedback, which means that the penalties will continue to accumulate.

4. Consulting Tax Relief Professionals

The best way to determine your tax debt is by consulting liability experts. Such include tax attorneys, CPAs, and enrolled agents.

When working with these experts, all you need is to provide them with various identifying details. After that, they will determine the exact amount you owe, including penalties.

The main benefit of working with tax liability experts is that you will have an accurate figure of your debt. Besides, they can guide you in selecting a repayment program that is suitable for your financial status.

Contact Tax Industry to Find Out How Much You Owe

Working with a tax liability professional is the simplest way to determine your total debt. At Tax Industry, we have a team of experts specialized in tax resolution. 

With their services, you can avoid lengthy processes of contacting the IRS. Further, they can help you negotiate favorable installment repayment terms and forgiveness programs. Contact us now to consult with a tax liability expert.

Delinquent Taxes and How to Handle Them

The IRS requires each taxpayer to remit the taxes they owe before the provided deadline. If you do not send the whole amount, the debt accumulates with an interest of 1.5% each month up to 25%. Besides, your account becomes delinquent, implying that you now owe the IRS and are subject to debt collection.

If you have delinquent taxes, it is crucial to clear them to avoid getting in trouble with the IRS. This measure also stops the penalties from accumulating, saving you from repaying a hefty amount.

Here, we provide more details about delinquent taxes and the best ways to deal with them. We will also discuss the precautions you can take to avoid owing the IRS in the future.

What Happens When I Have Delinquent Taxes?

Once the deadline for paying taxes passes, the IRS will start the collection process. The first step they will take is sending a notice to your mailing address. 

This document states the amount due and the consequences you may face if you do not pay. It also indicates how much the penalties and fines will accumulate until you clear the balance.

It is vital to contact the IRS after receiving the notice to develop a payment plan. If you do not do this, they may take various debt collection actions.

For example, the IRS can freeze all your bank accounts and assets. Besides, they may file a federal tax lien, affecting your ability to get financial credit.

How to Handle Delinquent Taxes

The best way to deal with delinquent taxes is by responding to the notice sent by the IRS in time. If possible, pay the total amount you owe and update your filing documents. In case you cannot repay in full, it is advisable to consult a tax liability professional.

With their help, you can determine the most suitable installment program based on your financial situation and the amount you owe. Further, it will be easier to negotiate with the IRS for an installment payment program.

Repaying Delinquent Taxes

The IRS offers various programs to help you pay delinquent taxes. These include an installment agreement, offer in compromise, and currently not collectible. The installment agreement plan allows you to repay debts that are equal to or less than $50,000. In most cases, the IRS will give you 72 months to clear the total amount.

Offer in compromise is a tax relief program that allows you to pay less than what you owe. Still, you will need to remit an agreed lump sum amount and then pay the balance over a specified duration. 

When facing financial hardships, you may not be in a position to pay your tax debt. In such a case, the IRS can declare your account currently not collectible to stop recovery attempts. To qualify for this relief program, you must show that paying your debt will cause severe hardship.

How to Avoid Delinquent Taxes

Delinquent taxes often result from minor calculation errors and failing to provide correct information. Hence, it is essential to double-check all figures when filling your forms. Alternatively, use the IRS online system to avoid miscalculations or hire an expert to file your taxes.

More strategies to prevent a tax debt are:

  • Filing under the correct status
  • Reporting all your income
  • Reviewing all your details before submitting tax forms

Another way to avoid delinquent taxes is by ensuring you remit the total amount owed by the due date. Further, understand all the taxes that apply to your filing status to ensure you pay the correct amount.

Get Professional Help to Deal with Delinquent Taxes

Handing delinquent taxes without the help of an expert can be challenging. At Tax Industry, we provide reliable tax resolution services. Our experienced attorneys and CPAs can help you qualify for a repayment program by providing all the needed documentation.  Reach out to us now to book a consultation appointment and resolve your tax liability.

Payroll Tax Debt Relief

The IRS requires employers to deduct a part of employees' wages as payroll taxes and contribute an equal amount. Failing to remit all the withheld money within the given deadline can land you and your company's finance department in trouble. 

In most cases, the IRS will impose accruing penalties and tax lien. If declared guilty, the party liable for failing to remit collected amounts may also serve jail time or pay hefty fines. 

It is crucial to clear the payroll tax you owe to avoid such issues. Here, we discuss how you can use various relief programs to repay the IRS and prevent business closure.

Dealing With Payroll Tax Debt

Once the IRS realizes that your business owes payroll taxes, they will assign your case to a revenue officer. This expert will then contact you by sending a notice requesting compliance with tax filing. In the document, they will indicate the reason for reaching out and the amount that you owe. They will also state the fines imposed and the likely consequences of failing to repay. 

When you receive such a communication, it is essential to ensure that the details indicated are correct. Confirm that the amount due is the right one by comparing the document against your tax forms.

After that, respond to the revenue officer to acknowledge receipt of the notice. This measure will indicate cooperation and the willingness to clear your debt. If you cannot repay the amount due in full, contact a tax resolution expert to help you set up a payroll debt relief plan.

Negotiating Payroll Tax Debt Relief With the IRS

The IRS allows employers and business owners to negotiate payroll tax debt. In most cases, the agreed repayment method differs depending on the nature of the liability. It may also vary based on the party liable for not remitting the taxes.

One relief option the IRS provides is an installment payment agreement. This mainly involves clearing the total amount owed, including penalties, within a given period.  During this time, the IRS will still impose penalties on due taxes and any late payment.

You must file all taxes for previous years and pay a processing fee to qualify for installment agreements. Besides, you should pick an appropriate plan depending on the amount owed and your ability to pay. Some of the options to consider are streamlined installment agreement and in-business trust fund.

If your business is still running, the IRS will only allow you to repay using an in-business trust fund. With this program, you can clear debts equal to or less than $25,000. Still, you must repay the total amount within 24 months or the provided collection statute expiration date (CSED).

On the other hand, if the IRS closed down your business due to debt, you can enter a streamlined installment agreement. This program will help you clear debt equal to or less than $25,000 within six years. Once your business qualifies for this plan, the IRS will not file a tax lien.

Benefits of Hiring an Expert for Payroll Tax Debt Resolution

When owing the IRS, it is crucial to consult a tax attorney before seeking debt relief. This can help you determine the best way to resolve the issue while considering your company's goal. They will also guide you in selecting a relief program that will not lead to significant financial straining.

Another benefit of consulting an expert is they can identify when your business is at risk of closure. This way, you can take precautions to avoid it and negotiate for favorable repayment terms.

Contact Tax Industry for Debt Relief

Working with a tax resolution expert allows your company to avoid the consequences of payroll tax debt. At Tax Industry, we have a team of experienced lawyers and CPAs to help you deal with the IRS. With their skills, you can negotiate for installment payments to prevent business closure and lawsuits. Contact us today to enroll for payroll tax debt relief.

How to Negotiate a Payment Installment Agreement with the IRS

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Owing taxes to the IRS often leads to fines, penalties, and, in some cases, financial audits. It may also affect your credit score and damage your business reputation. Fortunately, the IRS provides various programs to help taxpayers repay what they owe.

One popular and convenient tax relief program with negotiable terms is an installment agreement. Applying and qualifying for this plan is an effective way to avoid debt accumulation and clear the entire amount over some time.

When applying for tax relief, it is crucial to determine how to negotiate with the IRS. Here, we discuss the installment agreement options available and their requirements. We will also explain how to confirm if you qualify and mention the methods you can use to boost the chances of qualifying.

Installment Agreements You Can Negotiate With the IRS

The IRS provides several installment payment agreements for different categories of debt. Each of these has specific aspects that you must meet to qualify. The first and most common one is guaranteed installment, available to those who owe income tax equal to or less than $10,000.

Another option is the streamlined agreement used to clear debts of up to $50,000. If you qualify for this category, you have to repay back taxes in 72 months.

The IRS also provides a partial payment installment agreement for those who cannot afford the minimum repayment amounts for the other packages.

Negotiating Payment Installment Agreements With the IRS

Before contacting the IRS, you should first understand the requirements for each installment agreement plan. This way, you can prepare the needed documents and set up costs for negotiation.

To qualify for guaranteed installment, you must not have any tax debt for the last five years. Besides, you should prove that you cannot pay the entire amount at once.

If the IRS accepts your application, you will have a maximum of three years to clear the debt. Moreover, they will require a setup fee of $31 when you make a direct debit agreement through OPA(Online Payment Agreements). You must also pay an additional $149 for OPA. If you don't use this tool for the application, the fees will increase to $107 and $225, respectively.

When applying for a partial installment agreement, you should be able to prove that you cannot pay the debt in full. Further, you need to clear any past tax or fine and ascertain you are not bankrupt. The IRS will require fees similar to those charged for the guaranteed installment option to set up this plan.

If you are interested in the streamlined installment agreement, you must have a total tax debt, including penalties of less than $50,000. Unlike in other relief programs, the IRS does not require you to provide any verification of your assets during the negotiation process.

You will pay $105 to create a new agreement and $45 to reinstate an existing one when setting up this plan. But, if you use a direct debit agreement, the IRS will charge you $52.

Tips for Negotiating a Payment Installment Agreement

Understanding how to apply and negotiate for tax relief can increase the chances of qualifying. If you have an online payment agreement, use it to set an installment payment plan. Alternatively, apply by mail by printing out form 9465 and filling in all the needed details.

In the application, mention how much you can repay each month. However, ensure that the amount you state will allow you to clear the balance within the provided period. Other items to include are:

  • Payment date
  • Any needed documents
  • A cheque for your set up fee

Since selecting the right payment installment plan and negotiating with the IRS may be challenging, it is advisable to contact a tax liability expert. This will guide you in the entire process and help you pick the most convenient plan for you.

Contact Tax Industry to Negotiate an Installment Agreement

Getting professional help when negotiating for debt relief with the IRS can increase the chances of qualifying. At Tax Industry, we offer reliable tax resolution services. Our experts can help you work out the right installment agreement plan to avoid debt accumulation and penalties. Reach out to us today to schedule a consultation.

6 Ways to Reduce Your Chance of an IRS Audit

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Failing to abide by various tax laws can lead to a financial audit by the IRS. While the causing error may be minor, the process can be costly and time-consuming. Such procedures can also halt your business if the IRS freezes your accounts, leading to significant losses and a lower client retention rate.

While it is not a guarantee, taking some precautions when running a business and filing taxes can reduce the chances of an IRS audit. Here, we discuss six of those factors to help you protect your business and avoid penalties.

1. File Taxes Within the Provided Time

Sometimes, you may not have enough money to pay all the taxes you owe the IRS. Regardless, it is essential to ensure you provide your revenue information by filing back taxes. This step indicates that you acknowledge owing money and will pay when possible.

It also allows you to apply for various IRS programs to stop penalty accumulation. These may include an offer in compromise, installment payment, and currently not collectible.

If you do not file past taxes before the provided deadline, you may raise suspicion with the IRS leading to a financial audit. It also affects your chances of qualifying for relief programs to help you repay what you owe in the long run.

2. Claim the Right Deductions and Exemptions

Claiming a higher deduction or an exemption you do not qualify for can cause trouble with the IRS. Protect yourself from tax bills and penalties by ensuring the exemptions you claim are correct.

If you have limited knowledge about this procedure and its requirements, consult a professional. By taking this measure, you can determine what you qualify for and avoid an IRS audit.

These experts will also ensure that all the details you provide when remitting taxes are correct. For instance, they will counter-check your W2 and Form 1040 to ascertain that the information provided by your employer matches yours.

3. Submit Payroll Withholdings

If you are an employer, it is essential to remit all employee tax deductions to the IRS. Besides that, ensure you submit payroll reports to indicate how much your workers earn and their total tax payable.

Since processing this information manually is challenging, it is advisable to get payroll software. Such platforms can reduce the chances of making tax errors related to payroll, protecting your company from audits.

4. Provide the Right Documents

When claiming a tax refund or deduction, you should attach supporting documents to avoid fines, penalties, and audits. Some of the needed items are:

  • Form W-2 for the employed
  • Form 1099-G for the unemployed
  • Records of additional income
  • Records of expenses

Other than that, it is advisable to attach canceled cheques, receipts, and explanation letters. While these documents may not be legally necessary, they can significantly reduce the chances of an audit.

5. Confirm Your Figures

One aspect that may raise a lot of suspicion with the IRS is submitting wrong tax calculations. Prevent such mistakes by double-checking your tax forms before sending them. Moreover, consider filing your taxes electronically since it notably reduces the chances of making errors.

Another way to ensure you provide the correct figures is by gathering all your financial details before starting the filing process. This way, you prevent including unconfirmed information about your income or expenses.

6. Avoid Rounding Off

While working with whole numbers when filing taxes may appear simpler, it may land you in trouble. Truncating or rounding off your figures can lead to inconsistency between your tax forms and financial documents.

Reduce the chances of an IRS audit by using figures as indicated on your payslip or receipts.  This measure will increase calculation accuracy and ensure your supporting documents match the information provided to the IRS.

Contact Tax Industry Today for Professional Services

Filing your taxes without professional help can increase the chances of errors, leading to audits. At Tax Industry, we offer professional filing services to help you avoid issues with the IRS.

Our experts will use your financial documents and information to calculate what you owe and ensure they submit the correct information. Reach out to us today for reliable tax preparation and tax resolution services.

6 Common Back Tax Mistakes

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Each year, the IRS requires citizens to remit a certain amount of taxes based on their revenue. Unfortunately, when facing financial challenges, you may find it hard to pay what you owe. In some cases, you may also make mistakes when calculating your taxes and remit a lower amount.

If you owe taxes from previous years, it is essential to clear them as soon as possible. Besides, take various precautions to protect yourself and your business from audits and asset freezing.

Are you wondering which mistakes to avoid when owing to the IRS? Read on to discover six common blunders people make with back taxes and how you can prevent them.

1. Failing to Confirm Details on the Notice Letter

Once the IRS notices that you owe them taxes, they will send a notice explaining the reason for the contact and instructions on handling the issue at hand. Most people often fail to confirm the details indicated then end up repaying an amount higher than what they owe.

After receiving notice, confirm if the details indicated are correct. You can do this by comparing it with tax forms from the year in question. This way, you can correct an erroneous tax bill and prevent paying higher fines and penalties.

2. Not Responding to the IRS

Most IRS notices often indicate that you should respond by a certain date. Failing to do this can cause wage garnishment and bank account or asset freezing, worsening your financial situation.

Most IRS notices often indicate that you should respond by a certain date. Failing to do this can cause wage garnishment and bank account or asset freezing, worsening your financial situation.

3. Delaying to Select a Payment Plan

The IRS offers payment plans to help clear back taxes when facing financial problems. Still, most people delay selecting a suitable tax debt relief program, leading to interest accumulation. Waiting too long to start repaying the debt also affects credit scores and financial credibility.

The best way to avoid this issue is by picking a suitable repayment plan quickly. Some of the programs to consider are installment agreement, offer in compromise, and IRS Fresh Start.

4. Paying Taxes with Credit

Another common mistake with back taxes is borrowing money to repay it. While you may want to clear your debt faster, it is crucial to consider your financial situation. Taking out a loan or paying tax bills with a credit card charging a high-interest rate will further affect your finances.

In the long run, you will end up spending a significantly high amount. Avoid further damage to your assets by applying for a suitable IRS repayment program. This way, you have more time to clear the debt with limited straining or financial pressure.

5. Failing to Seek Professional Help

While you may find it less expensive to deal with the IRS alone, it may lead to costly mistakes. Without professional help, you may reduce the chances of qualifying for a repayment program. Moreover, you increase the chances of higher penalties and fines after failing to abide by IRS policies.

Working with a tax resolution expert can help you deal with back taxes more efficiently. These experts will ensure you select a payment plan that is suitable for your financial status.

6. Inadequate Documentation

If you do not keep proper records of your interactions with the IRS, it may be hard to provide evidence for a claim. Besides that, following up on your application may be challenging and time-consuming.

Avoid this back tax mistake by keeping copies of all documents shared by or with the IRS. Further, ensure you note the name of the personnel you converse with for simplified follow-up. If possible, record these conversations as you may need them for future reference.

Contact Tax Industry to Help Deal with Back Taxes

Seeking professional help when handling back taxes can help you avoid the discussed errors. At Tax Industry, we offer specialized tax resolution services to help you deal with IRS debt.

Our experts can help rectify erroneous tax bills and guide you in picking a suitable repayment program. Contact us today for back tax filing and tax relief services.