When you see just as many ads for tax preparers as car dealers, you know it must be that time again. One of life’s two certainties, taxes are required contributions levied by the government. Income tax is the single biggest revenue source for the U.S. federal government and was first used to fund the Civil War. Today’s system has its basis in 1913’s Sixteenth Amendment to the Constitution. All but seven states also impose an income tax on salaries, interest, royalties, unemployment compensation, dividends, and more. For perspective, Kentucky’s 2014 tax revenue per capita was $2,516, ranking 30th highest in the country.
This year, the tax deadline is Tuesday, April 18. The weekend plus the District of Columbia’s observation of Emancipation Day combine to give taxpayers an extra three days to file. Current federal forms, instructions, and publications can be found at many community outlets and online.
Individual taxpayers can prepare the return themselves, use commercial software, or use an authorized e-file provider. If you are tackling your taxes yourself and had an adjusted gross income of $64,000 or less, you can use the brand-name software of the IRS Free File program for your federal return. Last fiscal year, the IRS’s mobile app saw a 29 percent increase in users. Available for free at the iTunes app store and at Google Play, the “IRS2GO” app is intended to help taxpayers track refund status, request tax records, and look for local help.
Kentucky state forms are available online here. The state collects taxes on income brackets from two to six percent. These income tax brackets are applied to your adjusted gross income (AGI) after any qualifying deductions have been made. Any change you can make in income above the AGI line is more beneficial than a below-line deduction. The most common deductions are the Standard Deduction, the Personal Exemption, and the Dependent Deduction. Unlike deductions, credits reduce taxes directly. The most common nonrefundable individual income credits include Personal and Dependency credits, Family Size Tax Credit, Education Tuition Credit, and Child and Dependent Care Credit.
Whether you owe money or receive a refund, the IRS can seem daunting. However, it may not all be in your head. As the result of a 20-year crusade against abusive behavior by IRS agents, Congress has codified the “Taxpayer Bill of Rights.” Under it, taxpayers have the right to:
- Be informed
- Receive quality service
- Pay no more than the correct amount of tax
- Challenge the IRS’ position and be heard
- Appeal an IRS decision in an independent forum
- Finality
- Privacy
- Confidentiality
- Retain representation
- A fair and just tax system.
If you find yourself having to talk with the IRS about your return, referring to these rights may help you successfully navigate the dispute.
There’s no time like the present to get those taxes done. The Lexington bankruptcy attorneys at Bunch & Brock hope that you have found the tax season information presented here to be helpful. If you wish to learn more about how our firm can be of assistance to you, or you want to learn more about this topic, we encourage you to contact us by calling 859-254-5522 or filling out this online form.
