The Internal Revenue Service (IRS) is responsible for ensuring that individuals and businesses comply with the tax laws and pay their fair share of taxes. One of the ways the IRS does this is through audits, which are examinations of an organization’s or individual’s accounts and financial information to verify the accuracy of reported income … Read more
401(k) plans offer a tax-advantaged way to save for retirement, but withdrawals from these accounts are subject to taxation. Understanding the tax implications of 401(k) withdrawals is crucial to avoid unexpected tax burdens and penalties. Tax Treatment of 401(k) Contributions and Withdrawals Contributions to a traditional 401(k) plan are made pre-tax, reducing your current taxable … Read more
Understanding Tax Audits and Deadlines Tax audits are crucial mechanisms employed by tax authorities to scrutinize and verify the accuracy of taxpayers’ financial records and tax returns. These audits ensure compliance with tax laws and regulations, safeguarding the integrity of the tax system. In general, tax audits are subject to specific time limitations, known as … Read more
Understanding LLC Tax Filing Requirements Limited Liability Companies (LLCs) are pass-through entities, meaning their income is not taxed at the corporate level but rather passed through to the individual owners who report it on their personal tax returns. Even if an LLC has no income, it may still be required to file a federal tax … Read more
Understanding the Implications of Under-the-Table Payments Receiving payments under the table, also known as “off-the-books” or “cash payments,” refers to income earned without official records or reporting to tax authorities. While it may seem appealing to avoid taxes, this practice is illegal and can lead to severe consequences, including audits, penalties, and even criminal charges. … Read more
The year 2021 brought unprecedented challenges, including the COVID-19 pandemic and natural disasters like the winter storms in Texas. In response, the Internal Revenue Service (IRS) and the Treasury Department extended tax filing and payment deadlines to provide relief to taxpayers. This article provides a comprehensive overview of the tax deadline extensions in 2021, including … Read more
The Internal Revenue Service (IRS) has a vested interest in tracking the movement of money, especially when it comes to large sums. This includes gifts, which are subject to gift tax if they exceed a certain amount. The IRS has several methods at its disposal to discover unreported gifts, including: Form 709: This form is … Read more
Yes, the IRS can seize your IRA or 401(k) for back taxes. However, there are rules about how much the agency can take at once. The IRS may also seize pension money you have a right to receive now or in the future, known as vested pension rights. What Kinds of Accounts Can the IRS … Read more
Filing taxes can be a daunting task, and even the most diligent taxpayers can make mistakes. While some errors may be minor and have no significant consequences, others can result in penalties and interest charges from the Internal Revenue Service (IRS). Understanding the potential penalties for tax mistakes is crucial to avoid costly surprises and … Read more
Tax season is a time of year when many people look forward to receiving a refund from the government. However, for some, the possibility of having their tax refund garnished can be a source of concern. In this article, we will explore the circumstances under which your tax refund can be garnished, who has the … Read more