Frequently Asked Tax Questions

 

We get many tax questions coming our way daily. We do our best to thoroughly answer our clients. Our team compiled some of these questions so you have something to refer to when you need it last minute. Keep reading for answers to these frequently asked tax questions.

 

Is a TIN the same as an EIN?

 

A tax identification number (TIN) is a nine-digit number assigned to businesses by the IRS. Every company in the United States has a tax ID number. 

 

An employer identification number (EIN) is also a nine-digit number issued by the IRS. The IRS uses the EIN to identify taxpayers liable to file business tax returns. You do not need to have employees to get an EIN.

 

So what is the difference between a TIN and EIN? TIN identifies individuals and businesses to ensure tax compliance. You add your TIN in tax returns and other documents that you file with the IRS. An EIN is a type of TIN. It is used when identifying business entities instead of individuals.

 

Is tax evasion a felony?

 

Yes, tax evasion is a serious violation and a felony. Individuals and companies that fail to pay their taxes result in substantial financial penalties and/or criminal charges.

 

If you owe past due money, receive puzzling correspondence from the IRS, or your return has been selected for an audit, we are fully qualified to assist you before the IRS or the Franchise Tax Board. We specialize in collection and appeals representation.

 

What tax bracket am I in?

 

Federal income tax brackets are different for single filers, heads of household, and married people who file jointly and separately. These change from year to year, so it is important to check which one you are in. This article breaks down the tax brackets for 2021.

 

When is tax season?

 

Tax season typically starts on January 1st and ends on April 15th (Tax Day) every year. During this time, individuals, companies, and tax preparers gather information and file for the previous year’s taxes.

 

The upcoming 2021 tax season ends April 15, 2021. You must file your taxes to avoid penalties and fees.

 

How are taxes calculated?

 

The IRS goes through several complex steps to calculate income taxes. The following categories and steps are included when determining your taxes:

  1. Gross income
  2. Adjusted gross income (AGI)
  3. Taxable income
  4. Personal exemptions
  5. Tax brackets
  6. Tax credits

 

If you want further details and explanations on tax calculations, contact us!

 

Tax Questions

 

Hire a Tax Accountant From PL Consulting

 

Our professionals at PL Consulting and Bookkeeping Plus will assist you in tax planning, accounting, tax returns, and more. We ensure you file your taxes on time and accurately. 

 

Our team serves the Baltimore, Maryland area and beyond. We customize our services to each client. Your ideas are unique to your business, and we understand that. We help you maintain good records and financial statements.

 

Do you have tax questions or want to learn about how our tax and accounting services can help your business? Call us at 410.764.3731 or contact us on our website to schedule an appointment with one of our accounting professionals.

 

 

Posted on Categories Tax Planning