10 Tax Facts Every Functioning Adult Should Know
It can be hard to break down the information in the US tax code. However, there are some key tax facts every adult should know.
Always file your return or an extension by the due date
The penalty if you miss the filing deadline can be detrimental. You may be hit with penalties and interest, which could quickly add up.
Saving for retirement could help you at tax time
Different retirement accounts have different tax implications. However, utilizing them could help you lower your tax burden.
If the IRS contacts you, you must answer them
Always reply to IRS notices as soon as you can. When a person owes back taxes the worst thing he or she can do is ignore the notices from the IRS.
Even if you can’t pay your tax bill, still file your return
No matter what, always file your return. Although you may still face penalties and interest, the burden will probably be less if you at least file your return. You won’t be hit for that penalty in addition to the others.
Bankruptcy can be useful if you have a high level of tax debt
Although bankruptcy should not be entered into lightly, it may be the best option if you have a high level of debt. Consult with a tax lawyer to determine your options.
If you are in too deep in owed taxes or debt, there are options
It might seem daunting to face mountains of debt whether it be in taxed or other forms. However, there are
Estate taxes may not be as scary as you think
According to legal research from AskTheLawyers.com, as of 2015, estates are exempt from taxes up to $5 million. Unless your estate is a multi-million dollar one, you may be okay on the taxes side.
A tax lawyer can help with estate planning to lower your taxes.
Estate lawyers are able to recommend options that could lower taxes for your estate. These lawyers can set up trusts, help you designate beneficiaries, or even use gifts to lower your burden.
You can give up to $14,000 in gifts before gift liability sets in.
You can give gifts to others in an effort to decrease your estate. You can gift a loved one up to this amount to help with anything they may need.
Designating a beneficiary may help you tax situation
If you have an annuity, IRA, or other fund, you can designate a beneficiary to whom the funds would got to when you pass. This could help both with estate planning.
Every functioning adult should be familiar with a few facts about taxes. If you need additional help, it can be useful to seek out assistance from a tax professional.
