When one leaves the workforce to retire, one would think that taxes would get easier. Unfortunately, they do not. There are a number of reasons why retirees in Connecticut may face tax audits.
Aside from paying taxes, the one thing just about everyone dreads is being picked for an audit. Tax audits, under certain circumstances, can have significant consequences. However, many people who are picked for audits really do not have a lot to worry about. The biggest cause of worry for most Connecticut residents really comes from not knowing how audits work.
The hope every Connecticut resident has when filing taxes is that they will not hear anything but good news from the Internal Revenue Service. However, months or even years down the line, there are an unfortunate few who receive letters stating they have been selected for tax audits. Audit is a word that can strike fear into anyone's heart. Not to worry, though; when it happens, taxpayers are protected by the Taxpayer Bill of Rights.
Connecticut residents who receive word that they are being audited by the Internal Revenue Service may have a lot of questions and concerns. This is completely understandable, as it can be a frightening thing if one has never been through it before. This week's column will address some common questions people may have about tax audits.
Tax day has once again come and gone. Many Connecticut residents were able to get their returns and -- if applicable -- payments submitted on time. Then there are those who may have needed to file extensions so that they have more time to figure things out. No matter what side of the fence one finds him or herself, those who did or do any of the following things may face tax audits in the future.
Those who seek professional help during tax season may believe that their tax preparer is the only person they will need to turn to in the event of an audit. While it is the tax preparer's job to defend whatever he or she did, resulting in the audit, there may be reason to seek the assistance of an experienced tax attorney. Here are a couple reasons why Connecticut residents -- particularly those who are dealing with business tax issues -- who are facing tax audits may want to think about seeking help from legal counsel.
Every year, you've completed your taxes to your best ability. You've either taken on the role of tax preparer yourself or you turned to a trusted individual to get everything filed for you. Your returns were accepted with no problem, and you paid or received a refund as expected. Then it happens -- you receive notice that you are being audited for a tax return submitted two years ago. You and other Connecticut residents like you who are facing tax audits can seek help to get through it unscathed.
Audit -- a word no tax payer wants to hear. Unfortunately, tax audits can happen to anyone, even if they have done nothing wrong. If you find yourself facing a tax audit this year, a Connecticut-based tax attorney may be able to help you get through it.
Connecticut residents may be left wondering what the new tax law will mean for them. In truth, it may help some but not others. It may be a good thing, or it may be a burden. Everyone's individual situation is different. One area that may be helped by it, though, is estate taxes.
As an entrepreneur or otherwise self-employed worker, you may have had to deal with many issues that individuals employed by others may not have had to handle. Many of these aspects may relate to financial areas of your job, as you have likely had to ensure that you obtain payments and address tax considerations as necessary. Because you are on your own, you may worry about how possible mistakes could impact your business and personal state of affairs.