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