Avoiding Legal Situations
Taxes are an ever-present reality, and if you don’t properly manage yours, you could be held liable by agencies like the IRS. You really don’t want to land in tax court. There are literally thousands of pages of tax code, and as more things become taxed, that code becomes more complex. However, you do have rights, and there are often more alternatives than you may realize.
A great example is bankruptcy. If you’re totally without any ability to pay the taxes you owe, there could be a release from financial responsibility through varying chapters of bankruptcy; but keep in mind, you can’t use this option too often. Also, if you don’t play your cards right, you may find the government taking control of your assets.
Many a home has gone into foreclosure for failure to pay associated taxes. It may take a few months, or even a few years, but eventually, you can have your property seized out from under you, and evicted. Wouldn’t it have been better to work with a tax professional, and set up a payment plan?
You need to be smart about your taxes. Following, we’ll briefly explore a few things you might want to consider as regards managing your taxes.
1. Plan Out Your Tax Management in Advance
Did you get a new job? Decide whether you’ll let the company you work for manage your taxes, overpay a little, and give the government an opportunity to return you a sum in April of every year, or if you’ll personally manage your own taxes.
A lot of people prefer to let the companies they work for withhold some of their earnings for taxes. Some people don’t like that. Sometimes you don’t have a choice.
If you’re working independently, you may need to file a 1099, and if you’re going to do that right, you need to know how to itemize deductions. Still, there are online tutorials, and if you’re making a small enough income, you won’t be a top priority even if you make a few mistakes.
That said, as you grow successful, an audit could produce back taxes you didn’t know you owe; so be very careful.
2. Work With Professionals to Find Different Solutions
You may want to contact a professional group such as Rockwater Associates tax resolution to examine your particular situation, and help you determine what the best course of action really is.
You might be neglecting to deduct a few legitimate things, or you might be deducting them wrong. Should you, for example, deduct mileage by the mile, or take a standardized annual deduction for vehicular use? Professionals can help you figure out what the best move is.
3. Secure a Local accountant You Can Trust
A local accountant can also help you if you’re self-employed or otherwise filing taxes in a way that differs from the status quo. It’s better to go with an individual than a service like Liberty Tax, or something similar.
While corporate groups can be helpful, and a fast solution in a pinch, you’re generally going to save more with accountants who aren’t corporate. It’s up to you.
Getting Over Tax Problems Legally
Secure a local accountant you can trust, work with professionals to find different solutions, and manage your taxes in advance strategically whenever you have income that the government may have some legal claim to for whatever reason.
It’s a lot better to overpay, and have the government send you some money back, than it is to have a home or other assets seized.