CEO David King and Lead Tax Attorney Phil Hwang discuss these circumstances and what you should do if you’re thinking your refund could be at risk for IRS seizure.
While stocks may seem like an effortless path toward financial stability, they do affect your taxes. Understanding what’s expected when you file can keep you out of trouble with the IRS.
While taxes are inevitable, you want to make sure that you’re not paying more than you have to. You can legally reduce your taxes by using strategies that you may not be aware of.
Worried about the IRS garnishing your refund? There are a few instances where this could happen. CEO David King and Lead Tax Attorney Phil Hwang discuss these circumstances and what you should do if you’re thinking your refund could be at risk for IRS seizure.
The responsibility of payroll taxes falls on the shoulders of employers, although they come from employee paychecks. The federal government, Social Security and Medicare heavily rely on taxes from employee wages.
IRS revenue officers are now tracking how unpaid payroll taxes were spent during their “trust fund investigation.”
Payroll Taxes Used for the Employer’s Benefit
Employers will now face more penalties for payroll fraud. This can include wrongfully spending payroll taxes or pocketing it for themselves. Maintaining a luxury lifestyle while owing payroll taxes can now lead to prosecution.
Revenue officers are being instructed to pull employer 1040 tax returns to learn whether the money that benefited them was reported as income. If the money was not reported as income, the RO will submit the returns and investigation records to the civil audit division. Another option is that the RO will refer the case to the IRS Criminal Investigation Division to review for criminal prosecution. The course of action made by the RO depends on the severity of the case.
What This Means for Business Owners
Business owners should utilize their tax professionals and seek advise to avoid any possible criminal activity. It’s important to review and track where the payroll money goes for the year. If you know that some of your payroll tax money went to yourself as an employer, you should prepare to amend your income tax returns before the IRS catches up to you.
Avoiding handling this matter could put you in a worse financial situation, or even lead to prosecution.
Payroll Tax Debt
If you are currently in unaffordable tax debt, Optima’s team of tax professionals may be able to aid your case. Optima Tax Relief is the nation’s leading tax resolution firm with over a decade of experience helping taxpayers with tough tax situations.
Many taxpayers are hesitant about calling the IRS for several reasons, including the long wait time to speak with a representative. A phone call could take hours that you may not have to spare in your day to get answers to simple questions. The IRS launched what they believe to be the answer to this problem: voice bot options.
How the IRS Voice Bot Works
Generally, voice bots are artificial intelligence that allow callers to interact using verbal responses. Taxpayers with simple questions about payments, notices and other tax related inquiries can now avoid waiting for a live person to become available.
The voice bot offers services in both English and Spanish, aiding a large percentage of Americans.
Which Lines Have a Voice Bot?
While the IRS states that numerous lines now have voice bot options, it seems this feature will best be suited for Automated Collection System toll-free lines, Accounts Management, discussing payment plan options, and frequently asked questions.
So far, the voice bot has answered over 3 million calls. The IRS continues to add functions to help more taxpayers resolve their issues quickly.
Future Voice Bot Enhancements
Upcoming 2022 enhancements for the automated feature includes:
Account and return transcripts
Payment history
Current balance owed
The Economic Impact Payment line will also have responses for frequently asked questions.
Need more assistance?
Optima Tax Relief is the nation’s leading tax resolution firm with over $1 billion in resolved tax liabilities.
With the rise of gas prices and the decline of the housing market, it’s no secret that the United States is experiencing inflation. Inflation doesn’t stop at gas and housing, though, as the state of the economy also impacts your taxes. The IRS updates certain tax provisions annually to account for inflation, so your tax and investment plans should change accordingly.
Inflation and Standard Deductions
Standard deductions rise during inflated tax years. For 2022, the deduction for joint filers is expected to rise to $25,900; an $800 difference. Single filers and married taxpayers filing separately now have a standard deduction of $12,950. This is a $400 difference from last year. Heads of households now have a standard deduction of $19,400 for 2022, which is a $600 difference. The 401(k) limit has been increased as well, making it $20,500.
2022 Marginal Rates During Inflation
The marginal rates (based on income level) are as follows:
Incomes greater than $539,900 ($647,850 for joint filing) have a rate of 37%
Incomes greater than $215,950 ($431,900 for joint filing) have a rate of 35%
Incomes greater than $170,050 ($340,100 for joint filing) have a rate of 32%
Incomes greater than $89,075 ($178,150 for joint filing) have a rate of 24%
Incomes greater than $41,775 ($83,550 for joint filing) have a rate of 22%
Incomes greater than $10,275 ($20,550 for joint filing) have a rate of 12%
Incomes of $10,275 or less ($20,550 or less if filing jointly) have a rate of 10%
Alternative Minimum Tax During Inflation
The AMT tax exemption for the 2022 tax year has also increased due to the economy. It is now $75,900 and begins to phase out when your income reaches $539,900. Married couples filing jointly have a minimum of $118,100 and begins to phase out at $1,079,800.
What You Can Expect
Although the IRS has made some inflation adjustments, several provisions of the tax code have yet to be amended. This means that taxpayers will pay more for the 2022 tax year.
You should review your spending and update your financial plans and investment accounts to avoid problems with the IRS in the future. Not all taxpayers may be affected by the inflation, but some state and federal provisions have not been updated to reflect the times. A tax professional can help you plan according to your state provisions and your current income level.
For Assistance with Tax Debt During Inflation
Our tax professionals will review your case and inform you on how to move forward in your tax relief journey. Optima Tax Relief has a team of dedicated and experienced tax professionals with proven track records of success.
