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Austin Tax Defense Law Blog

What are payroll taxes that are due?

Employers have a number of duties that need to be fulfilled in order to run a legal and successful business in Austin. One of these responsibilities is that of collecting, reporting and paying payroll taxes, as required by both federal and state law. Additionally, if the employer is the IRS defined responsible party, the employer might be personally liable for taxes that have not been reported. Even if a payroll service is being used, a person is not relieved of their responsibility to complete their duty in a timely manner correctly.

There are a number of taxes that are included on the payroll. These include: federal and state income taxes that are withheld from the employee and paid to the IRS; FICA taxes that are withheld from employees and matched by employers; and federal and state unemployment taxes. In addition to paying these taxes, either yearly, semi-weekly or monthly, depending on the size of the payroll and legal requirements, these taxes also need to be reported on various IRS forms.

What documents do you need for an IRS audit?

Texas residents may be concerned about getting selected for an audit by the Internal Revenue Service. However, having knowledge about what the process can entail and what a person's rights are in the process can go a long way toward addressing many concerns. First of all, its important to know that an audit does not always mean that there is a problem. It is possible someone is selected for an audit based on a statistical formula. Tax returns are compared against similar tax returns with the help of a computer program. Tax returns can also be selected for an audit if they involve issues with other taxpayers whose audits were selected for audit.

The IRS will provide the selected individuals with a written request for the specific documents that will be needed as proof to support the income, credits or deductions being claimed. All of these documents would have already been used to create the tax returns; they are not new ones. The request will also state how the documents should be presented, and when doing so it is important to ensure they are organized according to year, in order to prevent errors or misunderstandings.

The dangers of tax misconceptions

How common are tax misconceptions in the U.S.? Pretty common, the results of a recent GOBankingRates survey suggest.

The survey results point to many Americans not having the right information about key tax details. For example, of the people polled:

  • 30 percent weren’t able to correctly identify the tax filing deadline for this year (April 15)
  • 68 percent didn’t know that you can still accrue late payment penalties when you are on a filing extension
  • Only 14 percent were able to correctly identify the 2018 standard deduction for single filers ($12,000)

Know your rights during an IRS audit

As a taxpayer, you have several rights when dealing with the Internal Revenue Service (IRS). It is good to know these rights all the time, but this knowledge is especially important if you have been selected for an IRS audit because your rights as a taxpayer do not go away when there is a tax dispute.

Some of your rights as a taxpayer include the right to:

  • Be informed. Under this right you are entitled to receive clear explanations on IRS forms and in correspondences with the IRS. It also means you have the right to be informed about any decisions the IRS makes about your account.
  • Challenge the IRS’s position. You can raise objections and provide additional documentation in a timely manner and expect your objection to be fairly considered by the IRS.
  • Appeal an IRS Decision. You can seek an impartial administrative appeal for many IRS decisions, including penalties.
  • Finality. You are entitled to know the amount of time the IRS has to audit a specific tax year or that you have to challenge the IRS’s position. You also are entitled to receive notification when the IRS has finished an audit.

What Tax Reform Means For Your 2018 Return

The tax reform bill passed by Congress in 2017 has resulted in a number of changes that are important to keep in mind as you begin preparing your 2018 tax return (that's right; tax day is just around the corner now that the calendar has turned to 2019). 

It Is Not Too Early (Or Too Late)

April 15. "Tax day". A day that is synonymous with the idea of filing your income taxes with the IRS.

Cultural institutions such as The Simpsons have based episode plots around a character working frantically to get their tax return in order and in the mail by the time the post office closes on April 15. 

My Spouse Completed Our Taxes Incorrectly. What Should I Do?

When tax season comes around, your spouse usually files a joint return. After all, filing as a married couple is much easier than filing individual returns. However, something went wrong last year: Your spouse must have made an error on the return, and now you are being penalized for his or her mistake.

This happens every year to numerous Americans. Fortunately, the Internal Revenue Service offers a form of relief that shields spouses from the ramifications of an inaccurate tax return.

What you need to know before, during and after a tax audit

It would be an understatement to say that it's stressful to receive notice from the IRS that you are being audited. The best way to combat your nerves is to be prepared -- and to have an experienced tax law attorney on your side every step of the way.

Here are some preliminary steps you can take to be ready before, during and after an audit from the IRS.

How can you qualify for an offer in compromise?

Getting a letter saying you owe money to the IRS ranks right up there with learning you have to get teeth pulled. It is anxiety-inducing, and you want it over quick. If you do not have the money to pay the IRS, it feels even worse. Before you go into full panic mode, you may qualify for an offer in compromise.

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