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St. Louis Tax Law Blog

IRS collection actions business owners should be aware of

Business owners struggling with debt may be more concerned with keeping their business afloat than paying all of their creditors. This may even be the case if the IRS is one of the creditors demanding payment. Indeed, the IRS’ power to collect taxes is legendary, but business owners may not realize this until the IRS closes their doors.

Because of this, business owners should know how the IRS collection process works, as well as the warning signs that a business in danger. This post will highlight a few. 

Earned income tax credit the focus of many audits

There are a range of things that could lead the Internal Revenue Service to decide to audit a given tax return. Among these are concerns related to credits claimed in the return. One type of tax credit that is involved in quite a few audits here in the U.S. is the earned income tax credit.

This can be seen in statistics from the IRS’ most recent annual data book. Reportedly, over a third (36.7 percent) of the just over 1 million IRS audits of individual tax returns that occurred in the 2016 fiscal year were initiated over concerns related to the earned income credit.

When it comes to taxes, misassumptions can cause big problems

There are various times when making incorrect assumptions can wreak considerable havoc on a person’s life. One of these times is tax filing time. Making incorrect assumptions when it comes to one’s taxes could result in a person making critical mistakes in their tax filings. Such mistakes could put a taxpayer under significant IRS scrutiny, and subject them to the many impactful things that can go along with such scrutiny.

Among the things that can lead to a person making false assumptions in relation to their taxes are tax myths. There are a wide range of tax myths out there. A recent article on Fox Business’ website went over some of the myths that could cause particularly big problems for taxpayers, such as the myth that cash income doesn’t have to be reported.

Tax mistakes can have big consequences for small businesses

For a small business owner, there are many mistakes that could have serious ramifications for their business. Tax mistakes certainly fall into this category. Allegations of having made such mistakes could expose a business to intense Internal Revenue Service scrutiny, audits, a big tax bill or tax penalties.

So, when a business owner has been accused of making mistakes related to tax issues connected to their business, one of their top priorities may be to minimize the impacts the situation will have on them and their business. There are many different tactics and approaches which could be taken towards such a goal. Various things about the business owner, their business and the nature of the allegations against them could impact which such methods would be the best fit for the situation. Skilled tax attorneys can help business owners facing tax mistakes allegations in their efforts to find the right approach for their situation.

Big decisions can come up for taxpayers after filing

With the tax deadline coming up, many people have already finished their taxes or are just about to do so. A person can feel an awful lot of relief after finishing filing their taxes; it can feel good to be done with the process for yet another year. In the midst of such relief though, it can be important to remember that getting one’s taxes done doesn’t necessarily mean one is free from thinking of tax-related matters for awhile. Important tax-connected decisions can come up for a person after filing.

One is how to spend a tax refund. This is a decision that comes before many Americans in the wake of tax season.

Divorces can have a great many tax implications

Divorces can impact all manner of areas of a person’s life. This includes an individual’s tax situation. For one, a divorce impacts a person’s tax filing status. And this is just the tip of the iceberg of the tax implications of divorces. Examples of things a divorce and what happened in the divorce can affect for a person tax-wise include:

  • What income streams they have. In the wake of a divorce, a person can undergo a big shift in their income sources. Some post-divorce income sources, such as alimony, have special tax rules connected to them.
  • Whether they can claim their child as a dependent.
  • What sorts of mortgage and real estate tax deductions they could claim.
  • What tax issues are present when it comes to their investments.

How does Missouri’s tax rate compare to other states?

In addition to their federal tax liability, another thing that can have major financial implications for a person is what kind of state and local tax liability they have. States vary considerably in what level of taxes they place on their residents.

A recent WalletHub report compared the tax rates of the different states. The study looked at the state and local income, real estate, vehicle property and sales/excise tax rates in each state and applied them to the median U.S. household to come up with that state’s effective tax rate. It then ranked the states based on who had the lowest rate.

The upcoming credit report change and tax liens

Among the things an unpaid tax debt can expose a person to are tax liens. A tax lien can have many impacts on a taxpayer, including credit ramifications. Tax liens can show up on a person’s credit report, potentially significantly harming their credit score.

As our readers may have heard, some upcoming changes were recently announced regarding what the three main credit reporting agencies here in the U.S. will include in credit reports. Some of these changes regard tax liens.

Missouri Supreme Court hears sales tax case involving the Rams

Here in Missouri, among the big tax issues that are present for businesses are sales tax issues. Sometimes, disputes can arise between a business and the state over such taxes. Such disputes can come up for all different sorts of businesses. As a case that is currently before the Missouri Supreme Court illustrates, this includes professional sports teams.

The case involves St. Louis’ former NFL team, the Rams. One of the issues in the case is how much of the price of the tickets the Rams sold when they were still in St. Louis should have been subject to the state’s sales tax.

Retirees and tax mistakes

People in different stages of life can vary quite a bit in what tax issues are present for them. So, each age group can have its own set of tax mistakes it is particularly important to watch out for. Today’s post will be focused on tax mistakes for one particular group: people of retirement age.

Some examples of big tax mistakes that retirees could fall into are:

  • Not keeping good and accurate records of their health care spending. This could cause problems when it comes to health-care-related deductions.
  • Making tax-impacting mistakes with their retirement accounts, such as not paying attention to rules regarding minimum distributions.
  • Misunderstanding what income of theirs could be taxed. This could include not understanding what taxing rules they are subject to when it comes to things like government benefits and retirement account withdrawals.

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The Law Firm of Lance R. Drury
150 Merchant Street
Ste. Genevieve, MO 63670

Phone: 314-200-0003
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