Here Are the Top Reason Why Seniors Get In IRS Trouble
Tax evaders and shady business owners aren't the only ones to find themselves in trouble with the IRS.
Fixed-income seniors can end up in trouble with the IRS more often than you’d expect, and here are five of the most common issues.
1. Not Reporting All Income
Taxes do not go away when you retire. Social security, part-time work, and pensions are all susceptible to taxes.
RMDs or Required Minimum Distributions are mandatory withdrawal thresholds calculated based on your previous year’s balance divided by the life expectancy factor set by the IRS.
During your working years, employers automatically withhold federal and state taxes, but retirees must manage their own tax payments.
You can choose to withhold 7%, 10%, 12%, or 22% of your monthly payments. The more you withhold, the higher taxes you may pay on tax day. The less you withhold, the higher your tax refund will be.
The goal is to cover your tax liability to avoid penalties and manage your finances effectively.
4. Phishing Emails and Fake IRS Calls
Seniors are more likely to be targeted by phishing emails and fake spam calls that pretend to be from the IRS.
So, keep a sharp eye out for any company that cannot be verified with a quick online search.
5. Not Filing Annually
Failing to file taxes is an easy mistake, and many senior citizens fall victim to it. The IRS requires you to pay taxes on things such as social security, pensions, and IRAs.
Conclusion
Suppose you are a senior or considering retirement. In that case, it may be time to consult a tax professional who can guide you through your specific tax situation and help determine if you are taking all the correct steps toward continued financial stability. Contact Ovation Tax Group today and take the first step toward financial freedom.
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