Basic Legal Information for US Taxpayers

The United States tax code is complex and ever-changing, but it is important for all taxpayers to understand their basic rights and obligations. This guide will provide you with a general overview of the laws that apply to taxpayers in the United States, including information on filing taxes, audits, tax collection, and taxes for businesses and freelancers.

Filing Taxes

Every taxpayer is required to file a federal income tax return each year, unless they meet certain exceptions. The deadline for filing taxes is April 15th, but taxpayers can request an extension if needed.

If you are self-employed or have certain types of income, you may also be required to pay estimated taxes throughout the year. Estimated taxes are quarterly payments that are made to the IRS to cover your expected tax liability for the year.

Audits

The IRS audits a small percentage of taxpayers each year. An audit is a review of your tax return to ensure that you have accurately reported your income and deductions.

If you are audited, you will receive a letter from the IRS explaining the audit process and what information you need to provide. You have the right to be represented by a tax professional during an audit.

Tax Collection

If you owe taxes to the IRS, they have a number of ways to collect the debt, including levies and wage garnishments. A levy is a legal seizure of your property or assets to pay your tax debt. A wage garnishment is a court order that requires your employer to withhold a portion of your paycheck and send it to the IRS to pay your tax debt.

If you are unable to pay your tax debt in full, you may be able to negotiate a payment plan or an offer in compromise with the IRS. A payment plan allows you to pay your tax debt over time in installments. An offer in compromise is a settlement agreement that allows you to pay less than the full amount of your tax debt.

Taxes for Businesses and Freelancers

Businesses and freelancers are subject to a variety of taxes, including income tax, self-employment tax, and sales tax.

Income tax is a tax on the profits of a business. Self-employment tax is a tax that self-employed individuals pay to cover their Social Security and Medicare taxes. Sales tax is a tax that is paid on the sale of certain goods and services.

Businesses and freelancers are also required to file estimated taxes quarterly.

What is Considered Taxable Income?

Taxable income is any income that is subject to income tax. Taxable income includes wages, salaries, tips, bonuses, commissions, investment income, and business income.

There are a number of deductions and credits that can be used to reduce your taxable income. Some common deductions include the standard deduction, itemized deductions, and the child tax credit.

Other Important Tax Laws

In addition to the laws discussed above, there are a number of other tax laws that are important for taxpayers to be aware of. These laws include:

• • Gift tax: A tax on gifts that are given to individuals.
  • Estate tax: A tax on the assets that are left behind when a person dies.
  • Generation-skipping transfer tax: A tax on gifts or inheritances that are passed on to grandchildren or other generations without going through the parents’ generation.

Additional Information

Here is some additional information on some of the topics discussed in the guide:

• • Filing taxes: If you are unsure whether you need to file a tax return, you can use the IRS’s interactive tax assistant tool.
  • Audits: If you are audited, you have the right to be represented by a tax professional. You can find a list of tax professionals in your area on the IRS’s website.
  • Tax collection: If you are unable to pay your tax debt in full, you may be able to negotiate a payment plan or an offer in compromise with the IRS. You can find more information on the IRS’s website.
  • Taxes for businesses and freelancers: If you are a business owner or freelancer, you should consult with a tax professional to learn about the specific tax laws that apply to you.
  • What is considered taxable income? There are a number of deductions and credits that can be used to reduce your taxable income. You can find more information on the IRS’s website.
  • Other important tax laws: If you are considering making a large gift or inheritance, you should consult with a tax professional to learn about the gift and estate tax laws.

Conclusion

This guide has provided you with a general overview of the laws that apply to taxpayers in the United States. If you have any specific questions about your tax situation, you should consult with a tax professional.