Taxes Levied on Corporations

A corporate tax is a direct tax being levied on corporations based on the earnings that they make. In most cases, the earnings that are used to calculate the tax they have to pay are generally computed as the gross revenue minus expenses that they incur. Expenses that corporations incur that are related to the expenditures in the owner’s equity are usually subtracted in the gross revenue in full. In most cases, deductions are often done only on the total value of the asset minus their scrap value. It is noticeable that there are the accounting rules and tax rules that state which expenses are deductible and which are not differ at some cases, which leads to a discrepancy on the figures on a corporation’s book and the actual tax that they pay. If the book-tax difference is carried over more than a year, it is referred to as a temporary difference, which then adds a new entry entitled deferred tax assets and liabilities on the accounting record book of a corporation.

A payroll tax is a direct tax levied on the payroll of a company, based on the gross wages paid to individual employees. In the United States, a payroll tax was first introduced in 1935 under the authority of the Social Security Act. Employers and employees contribute equal amounts, with the receipts used to finance retirement, health care, disability, and survivors’ programs. Unemployment compensation insurance is funded principally through a payroll tax on employers, though the rates and benefits vary from state to state. Since World War II the percentage of gross income subject to the payroll tax, as well as the upper limit of salary taxed, has risen steadily.

Payroll taxes are credited to a federal trust fund established to pay benefits to recipients as needed. But benefit payments increasingly have run ahead of tax receipts, and proposals have been made to eliminate the payroll tax and to rely on income from general tax revenues.

Due to the fact that taxation is incredibly complex, a lot of of companies and individuals end up on the wrong side of the law.  Making sense of taxes is very difficult and it would be better that you look at getting help from an affordable tax lawyer in Orlando instead of trying to figure it all out yourself.

File Back Taxes

There is no way to avoid death or taxes. Postponing either may be possible, but in the case of taxes, the longer the postponement, the more painful the possible outcome. There are some completely legitimate reasons that a tax return does not get filed, but estimated taxes must be paid even if the actual return submission will be delayed. If there are back taxes owed, postponing the inevitable will only make a bad situation worse. Taking action to file returns, regardless of what the delay to date, will not only reduce interest and penalties, but may keep the Internal Revenue Service from wanting to prosecute you. If the IRS must come after you to get their taxes, the enforced tax collection process can be very unpleasant.

If your records have been lost or destroyed by natural disasters such as floods or fires, or perhaps your house was burglarized and papers stolen along with belongings, then you particularly need the assistance of a tax attorney or accountant. These professionals are accustomed to dealing with such situations. There are many ways to reconstruct records. An experienced and knowledgeable tax accountant or attorney will have the skills and tools to locate duplicates of record, and they will know what tolerances IRS has for proofs when there is a legitimate reason why original records are unavailable. Although difficult, recreating information for up to 15 or 20 years has been done, and the tax returns successfully filed and accepted by IRS.

Many taxpayers are honest people who have always paid their taxes until some unexpected situation made paying impossible. The family may have had a medical emergency or recent job loss. Money to pay taxes owed for the previous year may have evaporated. Since they do not have the funds to pay the taxes, they fear the repercussions if they file a return. What they need to know is that there are provisions for filing a return without payment of the taxes, so that they have at least complied with the law. They can save additional tax penalties of 25 percent for failing to timely file a return. Some states will impose hefty penalties even if no taxes are owed, on those who failed to file.

Obviously it would be a great time saver if you still had the information on all returns from previous years. But the only solution to your stress and worry is to bite the bullet, start the process and get the returns filed. You need the assistance of a professional because the delays have complicated the filing process. An experienced tax attorney or accountant has guided many other clients through the same legal maze with success. They understand your fears and concerns, and they also understand how to help you through the process and assist you in dealing with the IRS.

IRS does not allow taxpayers to file their tax returns online if they are filing to pay back taxes owed. These returns must be submitted on paper as the IRS will take an extra-hard look at them and will not deal with electronic returns. A wise move is to send the returns certified mail, and have the post office return proof the filing was received, in order to have proof that IRS did receive the returns and to document the dates mailed and received.

Filers who end up owing taxes will incur some interest and possibly penalties. The IRS will work with taxpayers who want to pay their taxes and who may need to make payment arrangements.

IRS wants people to file their tax returns. Taxpayers who want to be totally up front and get back on track will find the process fairly quick and simple. The mistake that will cause the biggest problem is to take no action at all. Ongoing failure to take action and file returns, with or without payment of taxes, is hard to justify in the opinion of the IRS. Honest efforts to do the correct action as soon as possible will usually prevent the most severe consequences. Putting off the obligation will only increase the costs and penalties.

Tax and Your Well-Being

Tax and Your Well-Being

Tax issues and tax problems are some of the very threatening things to your well- being. There are three common mistakes many people make to find trouble with the IRS. These people delay needlessly. They try to exemplify themselves. They normally would appoint some inefficient agents for their work and finally fall into circumstances where they would need more help.

A tax attorney provides the relevant services in such situations, e.g. penalty abatement petitions, offer in compromise cases, business strategy sessions and full audit representations. They also provide help in preparation and tax return filing. … Read more at 2011 Tax.

Tax and Your Well-Being

Tax issues and tax problems are some of the very threatening things to your well- being. There are three common mistakes many people make to find trouble with the IRS. These people delay needlessly. They try to exemplify themselves. They normally would appoint some inefficient agents for their work and finally fall into circumstances where they would need more help.

A tax attorney provides the relevant services in such situations, e.g. penalty abatement petitions, offer in compromise cases, business strategy sessions and full audit representations. They also provide help in preparation and tax return filing. Get help from the tax attorney to save on your taxes, to stop giving extra to the IRS, to settle your property-related issues and acquire installment agreement, to lessen your interest amount and penalties, and so on. With the help of a good IRS tax attorney, you can attain very favorable settlement of issues related to taxes, and also you can lower your tax liability significantly. The “offer in compromise” program from IRS helps the taxpayers settling down their debt in taxes.

What is the offer in compromise program from IRS?

This program helps to lessen your tax liability to a significant extent if you can prove you’re unable to pay your taxes. Looking at your affordability, IRS will issue an order so that you can pay a few pennies for every dollar that you owe. This is in fact a very nice strategy most taxpayers use; and once done properly, it saves a lot of money. But you have to be extra careful. A professional having adequate knowledge of all IRS procedures must be hired. This professional will be able to find out the least amount the IRS will charge from you. An offer that is not correctly submitted with necessary documentation may be rejected and finally you might have to pay a lot extra.

This “offer in compromise” can really save you huge money. Do you have the idea that there is only limited time with the IRS for collecting back taxes? The professional tax attorney can determine when the time limit of the IRS runs out for collecting taxes. In majority of the cases, there is very small amount of time in the hands of the IRS for collecting unpaid taxes. A careful evaluation of exactly when this time runs out is necessary. Then you may be saved. In case the time period has already run out, or it is going to run out soon, all your problems might end.

Using certain delaying tactics, the time limit of the IRS may be made to run out. As soon as the IRS goes out of time, all their collection actions have to stop.

The IRS has to give you back all your property rights.

Failing to file your tax returns

There could be many reasons why many people cannot file their income tax returns on time. Even though there are certain innocent reasons, the fact in majority of cases is that they cannot afford their taxes.

It becomes difficult getting back to the system once this happens. Suppose you filed for 1998. Then you didn’t file for 2000 as you couldn’t afford to pay your taxes. Afterwards in 2001, you were afraid to file again. So since then you have not been filing your returns. Is there anything you can do now?

It is a criminal offence to not file your tax returns. But nobody so far has been prosecuted criminally who has filed back returns voluntarily before getting caught. The key is to file before being caught by them.

IRS penalties

The penalties of IRS may be even 100 percent to 150 percent of original unpaid taxes. The extra penalties are sometimes so high that it becomes truly very difficult to pay back the whole balance.

The penalties imposed by the IRS are meant for punishing the rule-breakers. But the IRS can forgive you and save you from paying the extra. You need to give a convincing explanation to the IRS, requesting not to punish you as you were not guilty.