Law & Legal & Attorney Tax Law

Income Tax Return Laws

    Failure to File

    • If you do not file an income tax return or contact the IRS to discuss the reason you will file a late return, it will file a substitute return for you using information gathered from other sources. This means the substitute return will not reflect all the deductions or exemptions you might have taken on your own return. When the substitute return is filed and your tax bill is assessed, the IRS will start the collection process, which can include wage garnishment, attaching your bank account and placing a tax lien on your property.

    Self -Employed Tax

    • If you are self-employed, an independent contractor or a sole proprietor, you must pay a self-employment tax if you make more than $400 a year in net profits. To pay the tax, you should file a Schedule SE form (available for download on the IRS website) and attach it to your 1040 form (the individual income tax return).

    Charities or Non-profit

    • Charitable or nonprofit organizations that do not file a tax return for 3 consecutive years will lose their tax exempt status and must begin to pay income taxes, according to a new law that became effective on May 17, 2010. Any financial contributors to these types of organizations will lose the right to deduct their contributions on their income tax returns. The law does not apply to churches.

    Small Business Credit

    • The Affordable Care Act became law on March 23, 2010. One of its provisions is the Small Business Health Care Tax Credit. Employers may take this credit on their income tax returns if they pay more than half the cost of single coverage for their employees.

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