TOP 3 REASONS TAXPAYERS OWE THE IRS: TAX HELP FROM TRUE TAX RESOLUTIONS INC.
1. W-2 Employees under withholding from their paycheck.
When a employee starts a new job. The Human Resources department of the company usually gives the new hire an IRS form W-4 to fill out. This form basically lets the employer know how many exemptions the employee will be claiming on their federal tax return. Which in turn lets the the payroll department determine of much of your paycheck to send to the IRS and or state to cover your income taxes. So if you claim more exemptions than you are entitled to, you will in turn not be sending enough money to the IRS to cover the amount of taxes you will owe causing a Tax Debt.
2. Business Owner and other Self-Employed people not making the proper Estimated Quarterly Tax Payments.
When you are self-employed, unless you set a corporation and pay yourself a salary. Chances are there are no taxes being withheld from your income. That means that the IRS expects you to send in the appropriate amount of money to pay your income tax every 3 months or on a quarterly basis. If you do not make these Estimated Quarterly Tax Payments it will lead to a tax debt. You will have a balance with the IRS for what is owed along with any appropriate penalties and interest.
3. IRA and 401k Distributions
Another common way tax payers end up needing help fixing a tax problem is due to withdrawing money from retirement accounts before actually retiring or being the proper age. There are times when unexpected expenses pop up, and it is natural for a taxpayer to think about all the accounts they can access to pay off bills. The problem is if the money comes from a IRA or 401k or other type of retirement account it can cause a tax debt. The is an issue because since the money goes into the retirement account tax free, it is taxed when it is withdrawn from the account.
In addition to owing a tax balance due to withdrawing the funds, if you are under the age of 59 and a half you will receive an additional 10% penalty on top tax debt. The IRS imposes this penalty to discourage abuse of retirement accounts.
Authored by: Harold Pena-Hayes, E.A. President of True Tax Resolutions Inc. True Tax Resolutions is tax service dedicated to providing the highest caliber of tax help to the business and individual taxpayers of America. Whether you owe Federal Tax or the State Tax we can help you. We help businesses and Individuals with tax filing, including delinquent tax returns. Additionally, we help clients with tax refunds, tax extension, tax debt settlement, payment plans, wage garnishment removal, levy lifts, and obtaining hardship status. Call 773-609-4TAX or visit http://truetaxresolutions.com for a free no obligation consultation with a licensed professional.
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TRUE TAX RESOLUTIONS INC.
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