A Complete Guide to Types of Taxes is Now Available Online
Businesses should pay different taxes according to the company’s ownership structure, business nature, and physical location. A business tax may have a great impact on the business profitability and the business investment amount. Taxation is highly an essential factor in terms of decision-making process for financial investment. It may be paid out through wages, dividends and/or salaries. A business is usually asked to remit the type of taxes.
There are various types of taxes available in a government and each of them corresponds to various fields. Some of them are local or state income tax, federal income tax, payroll tax, sales tax, foreign tax, unemployment tax and value-added tax. Corporate financing involves different factors and aspects that are composed of these taxes classifications.
Understanding every type of tax is very important since each of them provides the real answer to a better state of economy. Many people tend to get confused about the distinctions between these terms and concepts about taxes. But today, there are already useful sources online that provides complete information. Most of the information came from reliable sources that indicated a more direct statement about a particular topic.
The issue about taxes has never been ended since it was implemented as one part of the government rules. Many people are now taking the responsibility of giving the right amount of tax while some enjoy the benefit from the refunds. And for people who are still searching for the right source about types of taxes, they have to start looking for the best sites or links available online.
Categories: Federal Tax, Income Tax, State Tax, Tax Law Tags:
Can you really settle your IRS tax debt with the Offer in Compromise option?
Have you seen the commercials on the television where a pitchman says that you can settle down your Federal tax bill for pennies? You might have been intrigued to know that it is finally possible to part with your unpaid Federal tax dues! But did you wonder about the authenticity of such commercials? Did you even think for a while whether or not it is actually possible to eliminate your tax dues? In a perfect world, you would have certainly parted with your tax bills but as you’re not living in a perfect world, it won’t be easy enough to let go of your tax bills but only in a situation where the taxpayer doesn’t have any asset or income to repay his tax debt, he would offer to settle his Federal tax debt. Just like you settle your credit card debt, you can also settle your IRS tax debt through the Offer in Compromise situation which is also known as the OIC.
Leveraging an Offer in Compromise to settle your Federal tax debt
With an enormous discount, it is possible to wipe out your tax slate clean. Only when you qualify for something that is known as OIC, the IRS will accept as little an amount as 1% of the total amount that you owe on the tax bill. Legally, it is not allowed that you can reduce your valid tax bill by the IRS. In recent years, only 25% of the OICs were accepted by the IRS but how will you know whether or not you qualify for an OIC?
Do you actually qualify for an Offer in Compromise?
You won’t be able to qualify for a deal with the IRS only when you feel the need to reduce your federal tax bills. In order to qualify for the OIC, you have to follow certain conditions like:
The condition only arises when there is some doubt regarding whether or not the IRS will be able to collect the tax bill from you, whether now or in the near future. This doubt is called “doubt as to collectibility” by the IRS.
Due to extremely dire financial circumstances, if the taxpayer has to go through economic hardship due to payment of the taxes, this would be inequitable or unfair. In such situations too, you will be able to qualify for Offer in Compromise.
The Offer in Compromise – How does this process work?
When you submit an offer to the Internal Revenue Service, this is a formal process as you can’t call them and tell them that you want to make a deal with them. The process includes a $150 application fee for filing an OIC, that you require attaching to Form 656. You might not require paying the fee when your monthly income is below poverty guidelines. If you offer the IRS to pay 5 payments within 5 months, you should send them minimum 20% of the offer along with the application. And in case you will take longer time to make the payments, you should pay the first installment with the offer. The IRS will check and scrutinize all such disclosures and then agree to the deal.
So, if you’re someone who is dreaming about consolidation of debt with regards to your federal tax debt, you will be highly disheartened. Tax debts can’t be consolidated. Either you pay them in full or settle them after taking into account the above mentioned criteria.
Categories: Federal Tax, Income Tax, State Tax, Tax Law Tags:
Fewer Americans Expect to Obtain Refunds for Taxes this Year
Fewer people expect the tax refund financial boost for the year 2013. In an American Express survey, 59 percent of the 1,500 surveyed adults stated that they expect refund for taxes down from 64 percent of the previous year.
Nineteen percent are expected to owe money coming from tax time at the same period compared to only 13 percent in the year 2012. Nearly 30 percent of the respondents who have household income that is higher than $100, 000 stated that they expect owing the IRS for this year.
Chief economist Will McBride of Tax Foundation said that the increasing number of individuals who owe taxes implies that there is an improvement in the economy. He added that people are earning more which means that they receive less from the IRS. Those who are going to owe money, majority of them stated that they will pay with cash from their savings or checking account. Nearly 15 percent expressed they are going to pay with their credit card from 7 percent of 2012.
The refund checks amounting to $2, 700 that are coveted from the previous years must arrive in handy as the consumers are dealing with the small paycheck after the 2-year payroll tax “holiday” had expired this year. Some residents stated that they will enjoy spending the expected taxes refund on a travel. These people have their different point of views and purposes depending on the amount of taxes refund that they received. It is more of the amount that can be received from the government.
Categories: Federal Tax, Income Tax Tags: