Individual

 

If You’re an
Individual

Individuals owe taxes under their own name and SSN, not under a business name or EIN. Individuals are generally wage earners, retired, or unemployed. Individuals may also own businesses (the business taxes and individual taxes are separate), or may earn money from sources such as investment accounts or income properties. ALG Tax Solutions can help with a variety of tax services for individuals including preparing income tax returns, resolving tax problems with the IRS or State of Michigan, and representing the individual in the case of an IRS or state tax audit.

 

Common Tax Problems for Individuals

  • The individual claimed too many tax exemptions at work, so a large tax bill is owed at the end of the year.
  • One spouse owes a significant amount of taxes but the other spouse does not.
  • Both spouses owe a significant amount of taxes jointly, but they are now separated or divorced.
  • The individual is unemployed and did not withhold sufficient taxes.
  • The individual cashed out a retirement after losing his or her job. The individual uses all the money for their cost of living and paying off debt, and little to no taxes are withheld, so the individual gets a large tax bill at the end of the year.
  • The individual retired and did not do any tax planning prior or during the transition. Little to no taxes were withheld from the retirement funds, so the individual gets a large tax bill at the end of the year.
  • The individual owns or previously owned a business, which has outstanding business debt. The IRS and/or state made the individual personally responsible for the business debt owed.
  • The individual’s tax return is being audited due to unreported income, overstated expenses, a mistake on the return, or a mistake on the part of the IRS or state.
  • There is a tax lien attached to property that the individual would like to sell.
  • The IRS or state has placed a levy on wages.
  • The IRS or state has garnished all funds in the individual’s bank account and/or frozen the account.
  • The individual has not dealt with the back tax balances for many years.

CBPP Report: Ten Myths and Realities on Estate Taxation

The Center on Budget and Policy Priorities issue a report on ten myths and realities on estate taxation.  There is interesting data such as only the richest 2 in 1,000 estates actually pay estate taxes or the estates that do pay estate tax typically pay less than 1/6 of the value of the estate tax.

The Center on Budget and Policy Priorities  conducts research and analysis at the federal and state levels on public programs and fiscal policy.

Trust Fund Penalty – Rules for DBA and Single Member LLC

Generally, the IRS has to assess trust fund penalties to make individuals in a corporation personally liable for unpaid payroll taxes.  The word “corporation” has meaning in tax law.  If the business is not considered a corporation, then the owner is automatically personally liable for unpaid payroll taxes.  Read this blog for more information on the trust fund recovery rules for DBAs and Single Member LLCs.  Continue reading…