Financial Operations Insights, Templates, and Best Practices
Does My Child Need to File a Tax Return?
If your dependent child has earned income, you may wonder if they need to file a tax return. If they are receiving W-2s in their name, it’s reasonable to think they might. However, it depends on their age, how much they earn, and other factors.
Shielding Yourself from IRS Penalties
As a CPA or tax advisor, the last thing you want is for your clients to overpay taxes. But you also don’t want them to underpay and have to deal with penalties. While you might not be able to help your clients avoid penalties completely and forever, you can educate yourself about the potential penalties so you can inform your clients of the risk. Avoidance is always preferable to learning the hard way.
Does the IRS Check Your Bank Account?
Can the IRS access your bank account? In the past, they didn’t unless the taxpayer was being audited. However, due to policy changes during the Biden administration, the IRS now has access to bank records without having to notify the taxpayer.
How Far Back Can the IRS Go to Audit My Return?
Not all audits are disastrous. But what about previous years? How far back can the IRS go? Is there a statute of limitations on taxes when it comes to audits? Technically, the IRS has three years after the filing deadline to start an inquiry for a specific year. However, some exceptions may extend their reach to six years or even longer.