From understanding tax brackets to navigating audits, this presentation will provide a comprehensive overview of common IRS tax issues and strategies for tackling them.
JC
by JOE DICHIARA CPA
Common Tax Filing Errors
1
1. Math Errors
Mistakes in calculations or incorrect deductions can result in penalties.
2
2. Incorrect Filing Status
Choosing the wrong filing status can lead to overpayment or underpayment.
3
3. Missing Forms and Documents
Failing to include essential forms or supporting documentation can delay processing.
4
4. Not Claiming All Deductions and Credits
Many taxpayers overlook eligible deductions and credits, resulting in higher tax liability.
Understanding Tax Brackets and Rates
Tax Brackets
Income is divided into different brackets, each with a specific tax rate.
Tax Rates
The higher the bracket, the greater the percentage of income taxed.
Progressive Tax System
Taxpayers in higher income brackets pay a larger proportion of their income in taxes.
Deductions and Credits You May Qualify For
Standard Deduction
A fixed amount that can be deducted from taxable income.
Itemized Deductions
Specific expenses that can be deducted, such as medical expenses or mortgage interest.
Tax Credits
Direct reductions in tax liability, often available for specific circumstances.
Child Tax Credit
A credit for families with qualifying children.
Navigating IRS Audits and Notices
1
Understanding the Notice
Carefully review the notice and gather any supporting documentation.
2
Responding Promptly
Respond to the notice within the specified timeframe to avoid penalties.
3
Negotiating or Appealing
If you disagree with the IRS's findings, you may be able to negotiate or appeal the decision.
Payment Plans and Installment Agreements
Payment Plans
Short-term arrangements to pay off tax debt within a specific timeframe.
Installment Agreements
Long-term agreements to pay off tax debt in monthly installments.
Tax Debt Resolution Strategies
1
2
3
1
Offer in Compromise (OIC)
A program for taxpayers who can't afford to pay their full tax liability.
2
Penalty Abatement
A reduction or elimination of penalties for certain reasons.
3
Tax Lien Withdrawal
A removal of a tax lien from property.
Tips for Avoiding Future Tax Problems
1
2
3
1
Keep Good Records
Maintain organized records of income, expenses, and deductions.
2
File on Time
Avoid penalties by filing your tax return by the deadline.
3
Seek Professional Advice
Consult a tax professional for personalized guidance and assistance.