Americans have an interesting and strained relationship with taxes and its reigning body, the Internal Revenue Service.
It turns out that 8% of Americans would rather name their kid “Taxes” than do them. Another 27% said they’d rather get an “IRS” tattoo than deal with the IRS themselves. A small group even said they’d rather clean toilets at Chipotle—for three years straight.
So, what’s the problem?
Despite how unlikely it is you’ll get audited, the threat is still very real and also quite scary. Almost 20% of individuals fear getting audited, and another 36% are nervous about making mistakes with their math. As humans, it’s only natural to think about the worst-case scenario (we’re good at that).
Keep reading for three IRS questions and answers to make your next filing day that much easier.
1. Will I Get Audited?
The chance you’ll get audited is rare but not impossible.
According to the IRS, you might even get audited several years after your tax return is filed. This point is especially true for higher-income tax returns as they’re naturally more complex than lower-income ones.
The IRS conducts about 300,000 earned income tax credit (EITC) audits every year. That number might sound high but is actually low when you consider the 25 million tax returns that get filed. So, what does this mean?
Your odds of getting audited are slim, especially if you are thorough or hire a tax attorney like those at https://silvertaxgroup.com/irs-audit-defense/.
2. Can I Claim Anything?
Do you qualify for any tax deductions? Do you have any tax credits? Well, that depends.
The IRS breaks down the difference between the two like so:
- Deductions: Can reduce the amount of your income before you calculate taxes
- Tax credits: Can reduce the amount of taxes that you owe
Whether you qualify for either of these is entirely situational. The chances are you have an inkling whether any of those apply to you. For example, you would probably know if you had an adoption credit or a work-related deduction to account for.
Still, it may be worth speaking with an attorney if you’re overwhelmed. They can help you assess what you might be able to claim.
3. What If I Can’t Pay What I Owe?
Never fear—the IRS does have steps in place for those who can’t pay what they owe.
The IRS offers an online payment plan that’s self-service, allowing you to pay off your balance over time. Here, you also have options.
You can opt for a short-term payment plan which spans 120 days or less and only an option for those who owe less than $100,000 when including tax, interest, and any penalties. You may also choose a long-term payment plan that lasts over 120 days, depending, and the amount owed is less than $50,000 when considering tax, penalties, and interest.
Got IRS Questions? You’re Not the Only One
Navigating the Internal Revenue Service comes with its share of anxiety, but it doesn’t have to be that way. The more informed you are as a citizen, the better you can maneuver your way through tax season and come out unscathed.
And don’t worry if you’ve got more IRS questions, because you’re not alone. Find your answer online, and if you can’t, contact your local tax attorney for advice and insight.
Speaking of insight . . . Our page has more where this came from; keep scrolling!