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January 2016 Archives

IRS may audit some returns for up to 6 years

Receiving a notice of audit from the Internal Revenue Service is something that many Georgia residents have worried about at one time or another. The penalties for concealing income or inflating expenses can be severe, but the IRS is generally given only three years to audit income tax returns. While this may come as a relief for those with anxieties about mistakes or omissions that they may have made long ago, there are a number of exceptions to the three-year rule.

IRS promises better customer service during 2016 tax season

Georgia residents who called the Internal Revenue Service with questions during the 2015 tax season will likely remember spending long periods on hold or being abruptly disconnected. Only 37 percent of the calls made to the IRS between Jan. 1 and April 18 of that year were put through to a customer service representative, and switchboards disconnected 8.8 million calls to prevent callers being left on hold for extremely long periods.

IRS plans to move services online could hurt taxpayers

According to the annual report delivered by the National Taxpayer Advocate, the Internal Revenue Service's plans to go high-tech could reduce taxpayer rights and increase filing costs in Georgia and nationwide. The federal tax agency has spent millions of dollars to improve its online services since 2014.

Steps to protect assets that will not result in additional taxes

Many Georgia residents are concerned that long term health care costs uncovered by Medicare or Medicaid will eat up their inheritances and leave them little or nothing to pass on to their loved ones. To avoid this situation, it is not uncommon for older individuals or couples to protect assets such as their homes by deeding them to their children or other heirs while they are still alive. However, doing this can lead to eye-watering tax bills.

Taxpayer focus shifting to concerns about capital gain

An increase in the estate tax exemption for 2016 that takes individual estates valued at $5.45 million or less out of danger of being subject to federal estate taxes has now shifted taxpayer concern in Georgia and throughout the country from estate tax liabilities to income taxes that might be due on the capital gain when an asset is sold. The tax rate on a long-term capital gain can be as high as 33 percent for some people, but there are ways to save on taxes with a little planning.

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