Sabtu, 20 September 2014

Several taxpayers have not filed taxes for nearly a decade



Several taxpayers have not filed taxes for nearly a decade. In fact, some have never filed their taxes. So many wonder about what will be the statute of limitations for unfiled tax returns. Some people are not in a position to pay the IRS, so they wonder if it is better to file only after when they can afford or if they should file in any case. Some have doubts about whether the officers will ask for up-to-date tax returns when they file for bankruptcy or apply for a passport. Some are concerned if they'll be arrested for not filing returns.

This article will provide answers to the most frequently asked questions about unfiled tax returns.

Suppose I haven't filed tax returns for years. Do I need to file all the missing returns?

The IRS does not have any time limit to recover taxes tax consultant jakarta selatan if you never filed a tax return - the statute of limitations never run out. But they have only limited resources, so the policy is that the taxpayers must file returns for the past 6 years in order to become tax compliant. In certain cases, you may be required to speak with a tax lawyer to determine if you need to go back even further.

Many has changed during the last 10 years and now, the IRS is getting much better at identifying people's income sources and preparing a Substitute Filed Return (SFR) for taxpayers. So if SFR is filed against you, then you will have no choice rather than to file returns for all those years that's mentioned in the SFRs.

What if I owe back taxes but can't pay? Should I really have to file anyway?

Absolutely! It is okay to owe the IRS back taxes, but failure to file tax returns will be considered as a crime.

So even when you can't pay anything to the IRS, it is still in your greatest interest to file your return. And the perfect time to have negotiation with the Internal Revenue Service is when you've got less money to pay for. In IRS terms, this is called as "Reasonable Collection Potential" (RCP). Deal with the IRS, when your RCP is lowest.

How big is the IRS penalty for unfiled tax returns?

So never try to avoid filing returns just because you can't pay for the tax money owed. Just file. You can do something about settling your tax debts later on.

Do I have to file all back taxes before I file personal bankruptcy?

Yes! you have to. Also by filing bankruptcy, it is possible to discharge most of your owed taxes. But to achieve this, you need to show your filed taxes to the bankruptcy court for all those years that you want to get discharged of the tax debts. For many people, non-filing of taxes became a huge hurdle for them in getting the bankruptcy discharge. So file all of the missing returns before applying for personal bankruptcy.

Can I get the passport if I owe the IRS for back taxes?

In general, passport issuance will not be denied merely because you owe money to the IRS however the state government has the ability to deny or revoke your passport for certain tax violations. When the passport issuance is denied, you must pay the tax arrears along with penalties and interest to have the denial lifted.

How can I file old returns if I don't have all the information?

The law wants people to do old returns to the best of their knowledge. But you may ask how to get the old tax records and financial details? Here, with the help of an IRS tax attorney, you can obtain all the missing information. They will quickly get all of the old tax forms such as 1099s and W -2's through by pulling the W&I transcript from the Internal Revenue Service. For old property bills, the IRS attorney will get in touch with city assessor and collect particulars from them. For business owners, these tax professionals will create profit and loss statements from their old bank account statements.

Rabu, 17 September 2014

Going Home? Don't Leave Your Tax Behind!



Suitcase packed? Ticket bought? Said goodbye to friends? There is a lot to organise if you decide to leave the UK to go back to your home country. And here is something else you should put on your to-do list: claim back tax.

Most of us, if we were working temporarily in the UK and leave before the end of the tax year (5 April) are entitled to claim back some overpaid tax. Here is why:

Your personal allowance

If you are resident in the UK (that is, if you meet the statutory residence tests), then you will most likely be entitled to a personal allowance. This is the amount of money you can earn tax free each year. You will be classed as UK resident if you meet the statutory residence test.

The personal allowance is £10,000 in the 2014/15 tax year and every month or every week you are entitled to 1/12 or 1/52 of it on a cumulative basis (depending on whether you are paid monthly or weekly). Say you leave the UK on 1 October 2014, i.e. halfway through the tax year, you are likely to have received only half of the personal allowance that you are entitled to for the year. So, if your income was below your annual personal allowance and you had any tax deducted from your pay, you should be entitled to a tax refund.

But what if you left the UK some years ago? Here is the good news: You can claim back tax for up to the past four tax years. However, you should be aware of the various personal allowances konsultan pajak jakarta that applied in the respective years:

2010/11: £6,475
2011/12: £7,475
2012/13: £8,105
2013/14: £9,440

If you have other income

If you had other income, such as savings, investment, property or self employment income, the situation gets a bit more complicated and your full income needs to be taken into account when calculating your tax liability at the time you leave the UK.

If you expect to continue to receive UK income after you leave the UK, HMRC will not issue a tax refund before the end of the tax year (5 April). Instead, your total tax liability will be assessed at the end of the tax year and any refund that may be due to you will be issued to you then.

What if you return to the UK?

If you return to the UK after the following 5 April (i.e. after the end of the tax year), there won't be any problems. If you intend to return before 5 April to work, you should not apply for a tax refund at the time you leave the UK. If you do so, HMRC may ask you to repay the refund you may have received. Instead, you should apply for a refund after the end of the tax year.

So, if you are leaving the UK, don't forget to your tax amongst all the packing and planning.