Tax Debt Relief

One of the first steps to enjoying tax debt relief is learning the language of the IRS, so that you can talk to a professional about your options. You've already gotten all the notices and forms from the IRS, but they're hard to decipher and you just keep putting off resolving your tax debts. It's time to learn about some common tax terms to help you start talking about your taxes with the professional who can help you with your tax debt relief. AGI -- Adjusted gross income, AGI, is all the income you receive over the course of the year such as wages, interest, dividends and capital gains minus such things as contributions to a qualified IRA, some business expenses, moving costs and alimony payments. Deductions are expenses that the Internal Revenue Service allows you to subtract from your AGI to arrive at your taxable income. The adjusted gross income is the first step in calculating your final federal income tax bill. The fastest ways to tax debt relief is to think back over the past years and remember what expenses you have incurred and then locate the back-up papers that go with them. Credits -- After you figure your AGI, the next step is to use government credits to reduce the amount of money that you owe. Tax credits are more valuable than deductions because they directly cut the amount of tax you owe, rather than reducing the amount of taxed income. Talk to a licensed professional, there may be helpful laws that you are not aware of to get you on the path to tax debt relief. Standard deduction -- This is a fixed dollar amount that a taxpayer can subtract from their income. The standard deduction is available to all filers and is determined by the taxpayer's filing status. The amounts change each year because of inflation adjustments, but you can find the current standard deduction levels by talking to a professional about tax debt relief. Itemized deductions -- These are expenses that can be deducted from your AGI to help you reach a smaller income amount upon which you must calculate your tax bill. Itemized deductions include medical expenses, other taxes (state, local, property and sales tax), mortgage interest, charitable contributions, casualty and theft losses, unreimbursed employee expenses and miscellaneous deductions such as gambling losses. When you itemize, make sure to get help in order to maximize your tax debt relief. Exemption -- This is an amount that the IRS lets you subtract from your income to reflect all the people who count on your income. Exemptions can be claimed for yourself, your spouse and your dependents. The IRS allows a set amount for each exemption and, as with deductions; this total is subtracted from your adjusted gross income to come up with your final, lower earnings amount upon which you must figure your tax bill. Your personal exemption amount is in addition to any deductions, either standard or itemized, that you claim. Learn More at www.citizenstaxrelief.com