What is income tax?
Income tax are the taxes placed upon businesses and individual’s incomes. For an individual, this applies to all income earned; however, for a business it may be only on the net income. There are several different types of systems in place. An income tax system may be regressive, progressive or proportional. Each tax system may have a different definition when it comes to income. Most income tax system also deductions that lower the amount of income earned.
Every year across the United States individuals are required to file their income taxes. Some individuals may receive a refund, while others find instead they owe taxes to the state and/or federal government. Tax laws change yearly and often individuals find themselves with income tax questions. Read below where tax Experts have answered questions filing income tax.
When does the statute of limitations begin expiring on income taxes owed?
The statute of limitations for income taxes that are owed begins to expire from the date of assessment. The date of assessment is the day that the tax return was filed. So if an individual had not filed a tax return for a certain year, the statute of limitations on the taxes due would not begin until the income tax return was filed. However if an individual were to have to file an amended return, then the date of assessment would change from the date the income tax return was originally filed, to the date the amended income tax return was filed.
If an individual has not filed income tax for several years can the individual file those income tax returns now?
In many cases, if an individual has not filed an income tax for several years, the individual should file an income tax for those years that they have not filed for. Even if the individual did not feel that the individual made enough to report, because if it should have been reported and any income taxes were owed, then those income taxes have accrued penalties. Refunds may be limited to years that are still within the statute of limitations for refunds.
What is the statute of limitations for investigating income tax returns?
For examination the statute of limitations begins on the date of assessment, which is the day that the income tax return was filed, that or April 15th of the year after the income tax return is filed. The statute of limitations for examination is three years, unless the individual had made an agreement for the term to extended; this agreement must be in writing. However it should be noted that if the IRS believes that a misstatement done criminally of either the deductions or income can be opened for 7 years.
Income tax is taxes that are enforced by a tax agency on the income of businesses or individuals. There are several different types of income tax systems across the world, some of which allow tax deductions. If an individual has not filed an income tax for several years, it will be beneficial for them to file an income tax return for each year as there may be taxes that are owed that will have accrued penalties. Any income tax questions can be asked of the Experts.