Filing taxes is something many Connecticut residents dread doing. It takes time, mistakes are easy to make, and no one wants to find out how much more they may owe the government. However, most people file them anyway because the consequences of not doing so can be significant. Once income tax returns are submitted and approved by the Internal Revenue Service, one might be tempted to throw out all documentation -- who wants to carry it around, right? Doing this is not suggested, as it can cause a person a lot of problems if the IRS eventually comes knocking.
Every year, there are Connecticut residents who struggle to pay their taxes. This year will be no different. When taxes are owed, and one lacks the funds to pay them, what can one do? This week, this column will share a few suggestions for those struggling to meet their tax obligations.
This time of year, taxes are on just about everyone's mind, as the deadline to file is fast approaching. On March 12, however, it was announced that the April 15 deadline for this year's tax season will be pushed back. The new deadline has yet to be announced, but this may help those in Connecticut and elsewhere who may struggle to meet their tax obligations this year due to the current state of the economy.
Numerous Connecticut residents have already filed their taxes for the year, and others are still working on it. Many people do not like to do their tax filings alone, so they turn to so-called professionals to do it for them. Unfortunately, some may find that doing so is a mistake. There are legitimate tax services out there, but there are also many that are not.
Wanting to reduce one's tax liability is normal. Most Connecticut residents take steps to do it. No one wants to see the government get more in taxes than it should. However, the steps one takes to limit his or her tax liability can cause problems if one is not careful. For instance, failing to declare all taxable income could have significant criminal and/or financial consequences if the Internal Revenue Service figures it out.
January is quickly coming to a close, and many Connecticut residents are gathering all the necessary paperwork they need to get their taxes filed. While they are doing their part as tax season gets underway, so are scammers. More tax scams than usual pop up between now and mid-April than any other time of year.
Thanks to a lack of funding, the Internal Revenue Service has been falling short on its duties. The IRS has been expected to operate with the fewest number of employees possible, and its agents have been unable to keep up with taxpayers. How has this been hurting Connecticut residents?
Most Connecticut residents are always on the lookout for ways to lower their tax liabilities. No one wants to pay Uncle Sam more than they have to, so it is understandable. Unfortunately, there are only so many ways that one can do this without raising any questions over legality. For business owners or those who have investment properties, tax-free exchanges are one way to avoid overpaying taxes on capital gains from the selling of property.
Owning investment property can be a good way for Connecticut residents to build wealth. Before diving into the investment property world, though, it is good to understand the tax consequences that come along with doing so. Not all are bad, but some are misunderstood.
Families take care of each other, at least most do. Sometimes, this requires offering financial assistance. Lending money to family is not without its consequences. There are even tax consequences of which some Connecticut residents may not be aware.