| Credit for refund of overpaid taxes
If you pay your federal income taxes on time and later realize that you paid too much, you can file a claim for a refund from the Internal Revenue Service, or IRS (I-R-S).
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| Elimination of taxes through bankruptcy
Many people who can't afford to pay the taxes they owe choose to eliminate their tax liability by filing bankruptcy. Certain federal income taxes that were due more than three years ago can be discharged in a Chapter 7 bankruptcy if several conditions are met.
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| Failure to file
Failure to file your federal income tax return could result in serious financial penalties. You might even find yourself criminally charged with 'failure to file a tax return.
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| Filing outside the U.S.
If you're a U.S. citizen or resident alien, any income you make, regardless of where you made it or where you're living, is subject to federal income tax.
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| How to avoid tax trouble
The best way to avoid tax trouble is to accurately fill out and file your federal income tax return on time and pay any taxes that you owe. Always be as truthful as possible when reporting any information to the IRS, and save all relevant documentation for at least three years after the filing date.
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| Keeping tax records
It's a good idea not to throw away certain tax records in case you're audited in the future. Such records include anything related to your tax return, like W-2s (w-twos), 1099 (ten ninety-nine) forms, receipts, and canceled checks for deducted items, as well as all other relevant materials.
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| Legal deductions
The federal government allows taxpayers to write off many types of deductions from their tax returns. Most of these deductions involve restrictions and limitations, often making it difficult to know which ones you can legally use on your return.
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| Seizure of refunds for unpaid student loans
Withholding tax refunds to pay for defaulted student loans began in 1986. A student loan is considered defaulted if the borrower is at least 180 (one hundred and eighty) days late in making a payment or if other conditions of the loan aren't satisfied.
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| What if I can't afford to pay my taxes?
If you can't pay your federal income taxes, you should still file your annual tax return. Pay what you can since any partial payment reduces the amount of taxes on which you have to pay penalties.
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| What if I owe the IRS?
If you've calculated your personal income taxes and owe money to the Internal Revenue Service, or IRS (I-R-S), you have several options. The easiest method is paying the IRS by April 15 (fifteenth).
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