2009/07/14

4 Reasons People Get Into Trouble With the IRS

You don’t want to mess with the Internal Revenue Service. One small mix-up when handling your finances can cost you big.

For example, in recent years the IRS has increased its filing of levies, liens and wage garnishments. In fact, in 2004 alone, approximately 2.5 million levies were filed.

The experts at JK Harris & Co., one of the nation’s largest tax resolution firms, offer this list of common ways people get into trouble with the IRS.

1. Filing too many exemptions. An exemption gives you a major tax deduction, and some taxpayers can’t resist the temptation to report more exemptions than they’re entitled.

You can only claim exemptions for yourself, a spouse and for all “dependents.” Dependents have to meet specific criteria, however, so make sure you follow the IRS guidelines so that you don’t mistakenly file an extra exemption.

2. Being unaware of taxes levied for early withdrawal from certain retirement plans. If you withdraw from a retirement fund such as a 401(k) or IRA before you’re 59 1/2, you may face a 10 percent federal penalty on your investments, as well as a state penalty and an income tax on the money withdrawn.

3. Not paying enough taxes when self-employed. Many people who own their own businesses don’t know how much they have to pay in taxes. The tax structure for a self-employed person – what to pay, how to pay and what can be deducted – is decidedly complex, so it’s easy to become confused.

4. Not paying taxes on winnings. It is necessary to report all gambling winnings, including winnings from lotteries, casinos and horse races, as income.

For people who are in trouble with the IRS, there are various programs available that can provide debt relief if a taxpayer qualifies. JK Harris helps its clients determine if they meet the requirements for one of these IRS programs. Its staff includes former IRS agents, certified public accountants, attorneys, enrolled agents and other experts that offer tax services, financial planning, small business services and other assistance.

Incoming search terms:

Tags: debt relief, irs agents, irs guidelines, irs programs, paying taxes, tax deduction, tax resolution, tax structure, taxes on winnings.

Filed under Tax Refunds by taxrefunds on Jul 14th, 2009. #

Random Search Terms

how accurate is tax refund chart, hrblock com non-resident, 2010 form 5452, ird wheres my refund change in status Your tax refund is scheduled to be mailed, how long is it taking to get illinois tax refund?, how to refund taxes for visitors in houston, HOW LONG DOES IT TAKE TO GET REFUND FROM ALABAMA, did not file my nc income tax return, delay in processing 2010 tax returns reference 1201, michigan 1040-cr pell grant, how to get back tax tourists, how can i track my federal tax return, how long does it take to get your alabama tax refund for 2011, buyer incentive in illinois, disallowance relief losses canada, california tax refund delays 2011, home buyers incentives 2011 illinois, j k lasser\s, There is a delay in processing your tax return 1201, how long does it take to get wisconsin state tax refund, Michigan Tax refund delays, how long does it take california to cash my tax check, michigan preparer penalty, how long are illinois tax refunds taking, illinois state tax refund delay 2011, What do tax refund checks look like?, I e-filed my michigan state taxes but i did not get a responce yet, can i download my Form 1099-G, yhs-geneiotransfer, Georgia State income tax refund result, ga 500 tax form 2010, georgia state income tax forms 2010, what is a hold on child support, can somebody else cash a cheque from the hm revenue a customs ?, is there a way to track nys tax refund, how long does it take to get tax refund maine, when should I get my return if mailed on april 29, Maine Tax Refund Schedule, my refund check was sent from fresno when shouls i reaceive it, WHAT DAY OF THE WEEK DOES CALIFORNIA FTB DO DIRECT DEPOSIT, how long does it take to receive child support from a refund, how long after irs mails tax refund, how long is nc state tax refunds taking?