Tax season is here, and it’s time to assess your filing obligations. Whether you’re a seasoned taxpayer or facing this for the first time, understanding your responsibilities and available options is crucial. Here’s what you need to know:
Filing Requirements
The first step in navigating tax season is determining whether you’re required to file. Factors such as income level, filing status, and age play a significant role in this determination. In general, if your income exceeds certain thresholds, you must file a tax return. For the tax year 2021, here are some key thresholds:
- Single filers under 65: $12,550
- Single filers 65 and older: $14,250
- Married filing jointly under 65: $25,100
- Married filing jointly, one spouse 65 or older: $26,400
- Married filing jointly, both spouses 65 or older: $27,700
These figures are subject to change, so it’s essential to check the latest IRS guidelines or consult a tax professional for personalized advice.
Options for Delayed Payment or Filing
If you find yourself unable to file or pay your taxes by the deadline, don’t panic. The IRS offers several options to help individuals in such situations:
- Requesting an Extension: Taxpayers can request an extension to file their tax return, giving them additional time to gather necessary documents and information. However, it’s important to note that an extension to file does not grant an extension to pay any taxes owed. You must estimate your tax liability and pay any amount due by the original filing deadline to avoid penalties and interest.
- Installment Agreements: If you’re unable to pay your tax bill in full, you may be eligible for an installment agreement. This arrangement allows you to pay your tax debt over time in monthly installments. The IRS offers various installment agreement options, depending on your financial situation and the amount you owe.
- Offer in Compromise: In certain cases, taxpayers may qualify for an Offer in Compromise (OIC), which allows them to settle their tax debt for less than the full amount owed. To be eligible, you must demonstrate significant financial hardship or exceptional circumstances that prevent you from paying your tax liability in full.
Kirsten Johnson’s Expert Advice
Kirsten Johnson, a seasoned tax professional with years of experience, emphasizes the importance of proactive tax planning. Understanding your filing requirements and exploring available options can help alleviate the stress associated with tax season, she says. Don’t hesitate to seek guidance from a qualified tax advisor if you’re unsure about your obligations or need assistance navigating the process.
With tax season in full swing, taking proactive steps to address your filing obligations and explore available options can help ensure a smooth and stress-free experience. Whether you’re filing for the first time or a seasoned taxpayer, staying informed and seeking expert advice when needed is key to managing your taxes effectively.
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