Category: 2020 Tax Bill

20 Interesting Facts About Your Taxes

5/3/2021

Wanting to learn more about your taxes? As we prepare for tax day on May 17th, here are some interesting facts to help inspire you to keep learning about your taxes and to get your taxes in on time!

We've been spending the last few months talking about and discussing how best to prepare for your 2020 taxes with tips, suggestions, and up-to-date news information as it is released. We are now counting down to May 17th, the final day to get your 2020 tax return filed with the IRS. A gentle reminder to all of our readers, this time will come and go very quickly. If you haven't started on your taxes for 2020, now is the time to do so. If you are considering working with us at Hoods Tax and Accounting Service to prepare your taxes, please get them to us sooner rather than later. As you can imagine, we are getting busier by the day as this year's tax date approaches, and we want to make sure to prepare your taxes efficiently and get them in as quickly as possible. Please reach out and contact us now to begin this process!

To ease your process of doing your taxes over the next few weeks, we also recommend that you go back and read some of our most recent blogs. If you have just found yourself here on our blog, you will find a plethora of important tax information to make your tax prep for 2020 a breeze and will help calm and collect your fears and concerns. Remember, if you need more time to prepare your taxes, you have many options. First and foremost, make sure you do something. One of the first steps you need to take is to reach out and discuss your situation with the IRS. Not doing anything about your taxes is the worst decision you can make. Even if you can't pay right away, getting your tax return in with a note or explanation of why you can't pay is a great first step. Be proactive, stay in communication with the IRS, and you might be surprised how supportive and understanding they might be. Remember, they are people too. They all went through the pandemic just like you, and understand the trials and tribulations that you and your family might be going through financially.

For today's blog, we are going to continue our discussion about taxes but will be doing so in a little different way than we have been over the last few months. We are going to be sharing some interesting and important facts about your taxes that you may or may not know! We hope this blog will help you become even more proficient in your knowledge of taxes and inspire you to keep learning about them. Please know if that if you want to learn more or would like to talk about your taxes, please don't hesitate to reach out!

The federal tax code is more than 70,000 pages long, which has grown quite a bit since it was first written. In 1913 when the tax code was created it was only 400 pages long.
Every year the IRS will issue more than 800 different kinds of tax forms and schedules.
New York City and Illinois have the highest corporate tax rates in the world.
This fun fact is for all of our clients, readers, and friends who still file their claims on paper every year. At least 20% of all paper returns will have at least one error on them, raising the number of audits happening every year and delaying many tax returns.
Tax day wasn't always on April 15th. Even before the pandemic, tax day has made its way through the calendar over time. Starting in 1913, March 1st was tax day. In 1918, tax day was moved to March 15th, and finally, in 1954, our current tax day was determined.
Withholding income taxes began in the 1940s because the government needed a very steady flow of cash to help fund the second world war. The Current Tax Payment Act of 1943 had companies withhold income taxes from their employee's paychecks to make ongoing payments to the government on their behalf. Before this, between 1916 and 1943, Americans paid their taxes annually or quarterly.
Before the second world war, only about 1.1% of working-aged Americans filed a tax return.
According to the IRS and as of February 21, the average income tax refund is around $3,125
Two devastating floods happened in Johnston, PA that killed thousands of people and destroyed the town. To help recover from these tragedies, the state taxed alcohol to help raise money to rebuild. By 1942, there was enough money to completely rebuild the town. However, while the destruction of these floods was slowly fixed and went away, the alcohol tax did not. It remains to this day and brings in almost $200 million every year!
New York has a separate tax on prepared foods, which will cause it to be taxed twice. It is first taxed as a food and then is taxed as a prepared food.
In 2005, Tennessee required drug dealers to anonymously pay taxes on the illegal substances they were selling.
In many states, tax is tacked on to the admission into race tracks and casinos.
People who are 100 years old and are not dependants in New Mexico are tax-exempt.
On average, taxpayers will spend about 11 hours every year preparing and doing their taxes.
Willie Nelson created and recorded an album titled "IRS Tapes" whose sales went to cover his tax debts.
The president is not exempt from paying taxes, they are expected to pay like anyone else.
According to Forbes, the IRS receives over 140 million individual tax returns and collects over $950 billion in taxes.
Our tax code is made up of some 4 million words. It is constantly changing, as we have mentioned frequently in past blogs. Since 2021, our tax code has changed over 4,500 times.
For all of our readers and future customers interested in working with us at Hoods, more than half of everyone who files a tax return, about 57%, will file their taxes by working with tax preparers!
Are you still convinced that paper filing is still the best way to go? E-filing has officially become universal and almost 90% of all individual tax returns are done so by e-filing!

We hope you've been inspired by today's blog! While we know many of you have been dreading and not enjoying preparing your 2020 tax return, we hope you learned a little more about our tax system and some interesting facts to help cool your displeasure about filing this year! Please remember that we are your leading experts and tax preparers in the Goose Creek area to help with tax prep, throughout tax prep season, the best accounting services in Goose Creek, the best tax preparation in Goose Creek, business consulting in Goose Creek, bookkeeping in Goose Creek, or payroll services in Goose Creek, we are here for you! Our phone lines and inboxes are waiting for you. Don't hesitate! Please stay safe, everyone. We will see you soon!

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What Happens If You Can't Pay Your Tax Bill?

4/20/2021

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Concerned if you'll be able to pay your tax bill this year? Today we are going to be talking about what to do if you're unable to pay your taxes on time!

With the original date of tax season come and gone, and with just around a month left before the new tax day of May 17th is here, there is still much to be done and much to be considered. While you do still have time to get your taxes in and prepared, you are cutting it down to the wire, which can cause a huge amount of stress and can lead to you making mistakes on your taxes in a rush to get everything finished. These mistakes can lead to a halt in getting your refund back and it could land you with a pretty sizable fine. The best way to avoid all of this is to work with tax preparers, like all of us at Hoods! However, this time of year when we are extremely close to tax day being upon us, we are just as busy as you could imagine. To help us help you, if you're still looking for us to help you with your taxes, please contact us as soon as possible!

With tax season on the minds of so many Americans this year, we have to stop and realize the effects this past year put on our finances and taxes. We know and understand the potential strain and confusion that you've gone through due to the pandemic; the loss of your job, being put on furlough, unemployment, returning to the working world again, making sure you've received all of the stimulus payments available to you, and now we have landed on a brand new tax day. While the most recent economic relief plan that the president released, which included our third stimulus check and the forgiveness of a big chunk of unemployment funds, taxes are still going to come calling and many will still have to pay a decent amount of money. Not only were many American hit with a surprising tax bill due to unemployment, but some were also bumped into new tax brackets, some dealt with self-employment taxes after starting their own business to make it through the last year, and others are dealing with multiple I9s and W2s from working multiple jobs to get through this year. This and many other new stressful situations have made this tax season one of the most unique and difficult to date for the average taxpayer. We've been discussing a lot of tips and how-tos to deal with this year's tax season, but today we are going to be changing the conversation a little and will be talking about some of the more challenging issues some Americans could be going through; what happens when you are unable to pay your tax bill?

First and foremost, take a deep breath and don't panic. The IRS uses the same sentiment on their website when you ask this question. If the IRS is telling you not to panic, then you are going to be okay. If you are unable to pay the full amount it is recommended by the IRS that you should still file your return by the deadline and pay as much as you can. This will help you avoid penalties and interest.
Don't waste any time, go right to the source. The IRS has published a number to contact them directly to discuss payment options with them if you are unable to pay your tax bill. Please call them at 800-829-1040.
The IRS may also be able to provide some kind of relief to you if you are honest and reach out right away and explain your financial situation. Not filing isn't an option.
You might be able to receive relief in the form of getting a short-term extension to pay, an installment agreement, or an offer in compromise.
You might also have the option of delaying collection by reporting your account as currently not collectible until you pay in full.
When you do follow through with this process, the IRS might in some cases, be able to wave any penalties that might arrive. Please note that they will not be able to wave any interest charges that will accrue on unpaid tax bills.
This year alone, 125 million Americans received a tax refund, leaving 43 million Americans that broke even or were left owing money. Know that you are not alone in your stress and worry as you read this.
When you chose to do a monthly installment plan, you will fill out an online payment agreement application after you file your return.
You can also send in the 9465 tax form when you mail in your taxes. This form will let the IRS know that you are interested in a payment or installment plan. This will give you 72 months to pay your bill. You can only use this option if you owe $50,000 or less in taxes.
Please note that you cannot use a payment plan or installment plan unless you are completely caught up with your taxes. If you haven't done them in a few years and you decide to try and get a payment plan, it will be denied,
When you request an offer in compromise after you explain to the IRS why you cannot pay, you will make them an offer on what you feel like you can reasonably pay. If they accept your offer, then you will only have to pay what you've offered. It is a compromise that allows you to settle your debt for less than the total amount that you owe.
You do have the option to file for an extension. However, remember that when you do this it will only help push back the date of when you need to file your taxes and has nothing to do with the money you owe.
If you're still at a loss on what to do, you can send in a little money every month the reduce penalties and interest that will build up down the road. This is also a boost in your direction as it will make you look good in the eyes of the IRS.
Make sure you are utilizing all of your deductions and tax credits that can be applied to your tax bill, this might drastically bring down the amount that you'll end up owing.
Asking for an extension to pay your taxes can give you up to 120 days to pay the IRS in full.
The current interest rate on payment plans is only 3%, which isn't terrible.
Know that if you do choose to do an offer in compromise (OIC) you will have to be very open and honest about your finances and your personal life to prove that you indeed are unable to pay. While this can be a saving grace for many people, this can also be a long-drawn-out process than the other examples of help and action that we've talked about today.
You will have the option to pay your taxes with your credit card. Discover, Visa, American Express, and MasterCard are all accepted by the IRS.
Remember that while it is not a fun or pleasant experience to owe a tax balance and not being able to pay it, in reality, it only becomes a true problem if you choose to do nothing about it and choose not to reach out and talk to the IRS.

As we've mentioned before, not filing is never an option. File your taxes and you will be able to take care of the rest. The key to this situation is to be proactive about it. If you stay silent and choose to do nothing, that's when it gets messy. If you need help or have any questions, please don't hesitate to reach out. We will make it to and through this tax season in one piece and together! Remember, if you are looking for the best accounting services in Goose Creek, the best tax preparation in Goose Creek, business consulting in Goose Creek, bookkeeping in Goose Creek, or payroll services in Goose Creek, we are here for you! Our phone lines and inboxes are waiting for you. Don't hesitate! Please stay safe, everyone. We will see you soon!

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Hoods Tax &
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20 Interesting Facts About Your Taxes

What Happens If You Can't Pay Your Tax Bill?

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​Hoods Tax &Accounting Blog

20 Interesting Facts About Your Taxes

What Happens If You Can't Pay Your Tax Bill?

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Hoods Tax &
Accounting Blog