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How Do I Deal With Tax Issues in Texas?

Dealing with tax issues can be confusing and frustrating. Your taxes may seem to go up every year and end up getting less in your tax refund. To make it more complicated, tax laws keep changing and you are expected to make sure you comply with all the updates and pay your taxes by the deadline. While you do not want to overpay on your taxes, it is also important to make sure you pay the full amount of your tax payments you may end up in tax debt. If you owe money to the IRS, they will try and collect through tax liens, levies, or even garnishment of your wages. Unpaid taxes can also get hit with tax penalties and interest on the debt that continues to make your tax debt grow. No matter what your tax issue may be, speaking with a Socorro tax attorney will help you understand the current tax laws.

Federal Tax Issues

Income taxes at the federal level are administered by the Internal Revenue Service (IRS). The IRS reviews individual and business tax records and tax filings. If there are inconsistencies between a taxpayer’s return and what is reported to the IRS, the IRS may contact the taxpayer to review the tax issue or send a tax bill. If a business or individual has to go to tax court to deal with tax disputes, a tax litigation attorney can represent the taxpayer. If the taxpayer does not file their taxes or does not pay their taxes on time, the IRS may send a notice to the taxpayer and include failure to pay penalties, underpayment penalties, failure to file penalties. If the IRS suspects fraud, there are additional tax fraud penalties and the individual could even be charged with criminal tax fraud. Businesses may also have to deal with federal tax issues. Most small businesses, partnerships, and corporations have to pay federal taxes, which can be even more complicated than personal income taxes. Tax planning can help a company reduce its tax burden but the IRS may dispute the company’s taxes, including accounting methods, depreciation, deductions, and claimed tax credits.

Texas Tax Issues

In addition to federal taxes, there are also state tax issues. In some cases, the city or county may have additional local tax requirements. Even in states without income tax, there may be issues involving real estate tax, estate planning taxes, and corporate taxes. Other state tax issues may include driver’s license holds, residency disputes, or use tax issues. For state tax problems, you can get a consultation with a tax law lawyer in your area for legal advice.

How Do I File for a Tax Extension?

If you need to file an extension because you can’t file your taxes by April 15, you can file a form requesting an extension through your tax professional, CPA, online tax services, or on the IRS website. An extension gives you more time to file your tax return but it does not extend your time to pay. When filing an extension, you have to estimate your tax liability and pay the tax estimate or else you may face late payment penalties and interest.

What Taxes Do I Owe?

Determining what taxes you owe depends on your situation. If you make over a certain amount of money, taxpayers owe state and federal income tax. Income tax includes income from any source, which includes wages, interest income, and even gambling winnings. Taxpayers also owe a portion of their payroll taxes, including Social Security and Medicare. Payroll taxes are generally taken out of the worker’s paycheck.

Do I Have To Pay Taxes if I’m Self-Employed?

If you are self-employed as an independent contractor or because you own your own business, you will likely need to make quarterly filings of your estimated taxes. This will account for your income, Social Security, and Medicare taxes. Self-employed taxpayers will be responsible for paying payroll taxes that are normally split between the worker and the company. As a self-employed taxpayer, you can also take advantage of certain deductions that are part of your business expenses. A tax lawyer can give you more legal advice on filing taxes for the self-employed.

What Can I Do if I Can’t Pay My Tax Bill?

If you can’t pay your tax bill, it is better to get help instead of just ignoring it. If you ignore your tax bill, your tax debt will continue to increase with interest and penalties. If the IRS wants to collect the tax debt, they can levy your accounts and put a tax lien on your property. You may be able to negotiate a tax settlement with the IRS, including a payment plan or offer in compromise. An offer in compromise allows taxpayers to lower their tax liability if they are qualified and the IRS agrees to the settlement. An installment plan agreement does not lower tax liability but sets up a payment plan to avoid a tax lien.

What Happens If You Get an IRS Tax Audit?

A tax audit is an examination of the taxpayer’s accounts and financial records. An IRS audit involves reviewing the taxpayer’s information to make sure the taxes are reported correctly. Tax audits can be based on suspicious returns flagged by a computer program or they can be random. If you get notice of a tax audit in the mail and you suspect there may be a problem, you can contact a tax law firm for an initial consultation about your rights and options.

How an Attorney Can Help

An attorney can often resolve your particular legal issue faster and better than trying to do it alone. A lawyer can help you navigate the legal system, while avoiding costly mistakes or procedural errors. You should seek out an attorney whose practice focuses on the area of law most relevant to your issue.

Tips on Approaching an Initial Attorney Consultation

• Use the consultation as a means of gaining a better understanding of your legal situation.
• Ask the attorney how many cases similar to yours he/she has handled. An attorney’s experience and knowledge can speak to their expertise (or lack of) in addressing your situation.
• Your attorney should be able to articulate roughly how long a case like yours will take to resolve and what sort of procedures to expect.
• Determine how comfortable you are working with the lawyer and/or law firm.

Points to Consider Before Hiring a Lawyer

Experience. Regardless of the type of legal matter you need help with, an experienced attorney will usually be able to get you better results.

Competence. Determine an attorney’s expertise by asking about their track record for the issue you need help with resolving.

Fit. There are plenty of good attorneys out there; make sure you find one you are comfortable working with.

Common legal terms explained

Personal jurisdiction – Requirement that a particular court have authority over a person, in order to bind that person to the judgment of the court, based on minimum contacts. International Shoe Co v. Washington is a landmark Supreme Court case outlining the scope of a state court’s reach in personal jurisdiction.