Liberty Financial Solutions, LLC: We worry about the IRS so you don't have to...
How individuals often find themselves in IRS trouble:
How Individuals Often Find Themselves in IRS Trouble (Part 2)
Just a follow-up to a blog post we made just a few weeks ago, here's another list of common pitfalls you want to stay away from.
As we've discussed before, paying taxes is a civic responsibility that every working American is subjected to. However, millions of Americans find themselves in hot water with the IRS. Some intentional and others are inadvertent, but understanding the common ways people get into tax troubles can help in avoiding these pitfalls.
Here are 5 "more" common ways taxpayers get themselves into IRS trouble. If you find yourself owing $10,000 or more to the IRS or state, reach out to our tax resolution firm for a free consultation at 817.995.5008 or email us at info@libertytaxdefenders.com.
1.) Misclassifying Workers:
Business owners might be tempted to classify workers as independent contractors rather than employees to save on taxes. However, if the IRS determines this is a misclassification, it can lead to back taxes and penalties. Payroll tax problems and trust fund recovery penalties are not a situation you want to be in.
2.) Not Making Estimated Tax Payments:
Self-employed individuals and some other taxpayers often need to make quarterly estimated tax payments. Failure to make these payments or underestimating the amount can result in penalties and often a surprise tax bill. If you're self-employed and think you may need to start making estimated tax payments, please reach out to us: 817.995.5008.
3.) Not Reporting Foreign Income:
U.S. citizens and resident aliens are typically required to report worldwide income, including from foreign trusts and bank accounts. Overlooking or intentionally omitting this can lead to substantial civil and even criminal penalties.
4.) Engaging In High-Transaction Or Cash Businesses:
Those engaged in businesses that deal primarily in cash transactions (like restaurants, construction, or salons) are often on the IRS radar for underreporting income. Keep good records in case of an audit. Believe us when we tell you that the IRS can reconstruct your income even if you deal with all cash; in fact, they're good at it.
5.) Ignoring State Tax Obligations:
While much focus is on federal taxes, individuals also have state tax obligations. Neglecting to file state returns or not paying state taxes can lead to trouble at the state level.
What happens if you land in tax trouble?
IRS problems, once initiated, can escalate quickly, leading to hefty fines, penalties, or even legal actions. Being aware of these common pitfalls and ensuring compliance can help individuals maintain a clear record and avoid unnecessary complications with tax authorities. When in doubt, it's always advisable to seek advice from tax professionals or experts in the field.
If you're facing IRS problems and owe $10,000 or more in back taxes or are being audited, reach out to our tax resolution company at 817.995.5008. We'll schedule a free and confidential consultation to explain your options thoroughly and help you permanently resolve your tax problem https://www.libertytaxdefenders.com/.
To your success!
P.S. Make sure you get your FREE copy of our SPECIAL REPORT: "The 7 Secrets The IRS Does NOT Want You To Know!" (simply click on the link in the previous sentence, scroll down to the second section of our home page, and download your copy today!)
Or, email us at: info@libertytaxdefenders.com for your FREE COPY!
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