The IRS has the authority to audit any tax return. Optima CEO David King and Lead Tax Attorney Philip Hwang explain what an audit is and help taxpayers understand what they can do to stay on the right side of the IRS. (One important tip: The IRS sends audit notices through the U.S. Postal Service. “Audit notices” coming to you over the phone or email can safely be considered a scam.)
The IRS sent out more than 5 million math error notices to individuals, many of them having to do with the economic impact payment issued in 2020 and 2021. Optima CEO David King and Lead Tax Attorney Philip Hwang help explain what this notice means and provide guidance on what to do if one is received in the mail.
Individuals that earned income throughout the tax year have the option to make non-deductible (after-tax) contributions to an IRA and benefit from tax-deferred growth. One of the most common risks that taxpayers take is paying additional taxes when withdrawing their money from their retirement accounts. Before making after-tax contributions to a traditional IRA, it is important for taxpayers to have an understanding of the rules and how to avoid the double tax trap on withdrawals.
There are certain contribution rules and limits that most taxpayers are not aware of with the IRA withdrawal process. Here are the rules taxpayers need to know about when making non-Roth after-tax IRA contributions:
Certain financial institutions where an IRA is kept could cause certain issues such as the institution restricting an individual to add more than $6,000 per tax year. Banks also do not track, report, or verify if an individual made a pre-tax or non-deductible IRA contribution. The responsibility is left up to the taxpayer.
For those who choose to make after-tax contributions to an IRA, are required to give the IRS a heads up that they have already paid taxes on those dollars by using Form 8606. Individuals who fail to report, track, and file the form will most likely lose the ability to shield part of their IRA withdrawal from a tax penalty when the money is withdrawn.
Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.
If you’ve received a notice from the IRS, you could be at risk of having IRS action taken against you. Some of the most common tactics that are used by the IRS is filing a tax lien or levying an individual’s assets. Optima CEO David King and Lead Tax Attorney Philip Hwang help taxpayers understand the difference between a lien and levy and how to stay on the IRS’ good side.
Individuals who fail to file their tax returns or pay off their tax liability with the IRS are at risk of having a federal tax lien filed against them. Optima CEO David King and Lead Tax Attorney Philip Hwang discuss options a taxpayer has in order to mitigate the impact of a tax lien being filed by the IRS.
