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
About the Author
Rick Kelly has been a well respected magazine and newspaper
colunist in the fields of civic and business development for
the past twenty years.
