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Qualifying For The Home Office Deduction
If you use a part of your home exclusively for business purposes, you might be eligible for the home office deduction. Available for homeowners and renters, this deduction is applied to all types of homes. Generally, you cannot deduct items related to your homes, such as mortgage interest, real estate taxes, utilities, maintenance, rent, depreciation, or property insurance, as business expenses. You may deduct expenses, however, that are exclusively for business purposes. The home office deduction is ...
read more »What To Do When Your Wages Are Garnished
When back taxes go unpaid, the IRS can place a levy on a taxpayer’s wages, property, right to property, and bank accounts. Worse, the tax agency does not need a court order to do so. When it comes to your wages, you may want to review some basic steps to avoid a garnishment: File Back Tax Returns If you did not file a return for any year, you should file as soon as possible. An IRS ...
read more »Missing a Filing Extension
If you believe that you won’t be able to file your tax return on time, you should request an extension before the filing deadline. To file for an extension, use Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. After you file the form, you automatically receive 6 additional months to file. Businesses may use Form 7004 or Form 1138 to file for ...
read more »When The IRS Seizes Property
If a taxpayer owes back taxes and did not make satisfactory efforts to resolve them, the IRS can ultimately seize the individual’s property. The government can seize the property, bank account, wages, or a taxpayer’s assets to recover unpaid taxes. Typically, seizing physical property is the last resort method. IRS Collection Action When the IRS seizes property, they will sell the taxpayer’s interest in the property and apply the proceeds to back taxes. Before the sale, the ...
read more »Common Deduction And Credit Errors
Making errors in deductions and credits can ultimately result in having to pay back taxes. Additionally, after the filing deadline, any taxes owed will be compounded by penalties and interest. In order to avoid an IRS issue, taxpayers should avoid deduction and credit errors, such as: Claiming Charitable Contributions A large number of taxpayers deduct charitable contributions on their returns. Only contributions to charities that are eligible to be deducted should be considered. To avoid making a ...
read more »The Dangers of Failing to File
Failing to file a tax return can lead to serious consequences. Taxpayers that do not file their tax returns before the filing deadline face penalties and interest on the taxes owed. The penalty is charged every month on the total back taxes. Due to the accumulation of penalties and interest, the amount of unpaid taxes increases substantially with time. Penalty For Non-Filing Failure to file a return and failure to pay taxes are different kinds ...
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