Personal Tax Questions
If a person owns an incorporated business and the business owes withholding taxes, can the IRS take the individual’s personal tax return?If the business owes back withholding taxes it is possible that the IRS may put a tax lien on the business or the corporation. If the IRS puts a tax lien on the business, the individual’s personal tax return will not be taken, but the individual may be held responsible for paying the back withholding taxes. If the IRS put the tax lien upon the individual and not the business, then the individual’s personal tax return will be taken by the IRS.
If an individual has been filing taxes jointly, how will opening a business affect the individual’s personal taxes?If an individual continues to file jointly and the business has a loss then the individual will have an increase in their income tax refund. Consequently if the individual has filed jointly and the business makes a profit, then the individual’s tax refund will be decreased. Also the individual will have to pay state and federal normal income tax rates, in addition to the 15.3% tax on self-employment. The individual has the liberty to prepare their personal taxes for federal and state and see which filing status, individual or jointly, has the least the tax liability for the individual.
If an individual finds that they missed a 1098 when they filed their personal tax return, if they file a corrected return, will an audit be triggered?If an individual finds that they have missed a 1098, they can file an amended return, and the act of simply filing a will not trigger an audit from the IRS. When an individual needs to file the amended return, they need to utilize form 1040X, which is the form for correcting a return that has already been filed. Since the IRS also has received the information from the 1098 that the individual used to correct the return, the chances on an audit on the grounds of missing a 1098 form are not good, especially since it is a deduction that the individual is legally about to receive.
If an individual receives a large sum of money as a gift, will they have to pay taxes on it?In most cases if an individual receives a gift, they do not have to pay federal gift taxes, and will not have to pay personal income tax on the gift either. The tax responsibility for the gift lies with the giver of the gift. There is annual gift tax exclusion; this is the highest amount that a taxpayer is able to give yearly to any beneficiary without the requirement of their one million dollar lifetime gift exemption amount. If the gift giver is able to limit the amount of gifts yearly to within the annual exclusion amount, the that individual will not have to file a gift tax return as there will be no gift taxes due.
If a person owns a business that owes back withholding taxes the IRS may put a tax lien on the business or on the individual themselves. If it is placed upon the individual, then the individual’s person tax return may be taken by the IRS. If an individual finds that they have missed a 1098 when filing their income taxes, they are able to file an amended return, and this does not necessarily trigger an audit of the individual’s personal taxes.
Filing taxes and facing the tax season is often confusing and stressful, however there are places to turn for help. If individual’s find themselves with questions regarding their personal taxes they are always able to ask an Expert.