Insurance World

Getting a letter in the mail from the IRS can be very intimidating to the taxpayer. This is because the media & sometimes family & friends portray the IRS in such a negative light that we can overreact. But, there is really no need to worry until you open up the letter and see what it says as there could simply be a minor error on your tax return.

Follow the IRS Instructions in the Letter

First, read the letter to understand exactly what the IRS claims is an error on your income tax return. If the error is minor, such as a missing signature or an incorrect social security number, often times the IRS will just ask you to review your tax return & provide the correct information by a certain date. Make sure that you follow through & provide the correct information by the due date. If you used a tax preparer to file your return, make sure to consult with them as well before sending in the requested information to the IRS.

An Error Doesn't Mean You Are Necessarily Getting Audited

Receiving a letter from the IRS indicating that you have errors on your tax return doesn't necessarily mean that you will be getting audited. Mistakes happen & the IRS realizes that as they make them too. So, don't worry about a potential audit should your tax return have a minor error on it.

What if you Discover a Material Error

In some instances, as you are reviewing your return you may discover a material error such as incorrectly reporting marital status, deductions, or income. If this is the case, you should notify the IRS & file an amended tax return. You will need to complete FORM 1040x which cannot be filed electronically. It is best to have a licensed tax preparer (i.e. CPAs, EAs) complete the FORM 1040x for you even if you filed your original tax return on your own. The licensed tax preparers are more experienced and aware of potential mistakes when filing the amended return.

Your Refund Will Be Delayed

It is almost a certainty that your refund will be delayed if you are notified of an error as detailed above. Your refund is calculated based on the tax return information you provide and thus will not be processed quickly if the IRS needs to confirm certain details with you first.

Ryan S. Himmel is the founder of BIDaWIZ - the online marketplace for trusted answers from licensed business professionals (i.e. CPAs, CFAs, CFPs & More).

Visit us at BIDaWIZ to get help with your irs issues from top tax experts.

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Many people who had no other choice but to declare bankruptcy despair that maybe they will no longer have a life after bankruptcy. Unfortunately, many people take the easy way out, leaving a grieving family behind without support and without their loved one. What they do not understand is that there is a life, even after that bankruptcy had been declared.

First of all, remember that the world will not end simply because the credit rating has gone sour. There is still that chance to earn money, even if the money earned is not as much as it used to be. Once that money comes in, there is still the chance to pay up the loans. There is even that chance to get a better credit rating score.

Second, there are financial institutions that offer second chances. Even after bankruptcy, they can offer a mortgage after bankruptcy so that family or individual can once again own a home. Although that new home may not be as grand as the previous one, it should get that roof over the head and safety from the elements. What is important is that the family can still stay together and support each other.

Third, simply because bankruptcy is declared there is no other way to apply for other credit cards if that is really the need. There are credit card issuers who do offer great deals for new applicants, even if those applicants had been declared bankrupt. They would require some documentation, but if the job earns the dollar, then there is a chance to get that approval.

Fourth, bankruptcy does not mean that no one will offer a job or that skills cannot be used to earn money. There are many ways to earn money, even if that money is not in the league earned in the past. So, if there is a skill as an assistant and in the past the profession was as an executive, offer that skill and get a job. Any job will do, take pride out of it, just get that money in the pocket.

What is important to remember is that bankruptcy is no longer a rarity these days. In fact, it is rare for people not to declare bankrupt. But this does not mean giving up. There are still ways to have a life after bankruptcy. All one needs to do is have that determination and perseverance to earn a living. Forget about luxury until the life reestablishes itself.

For more information on getting a Mortgage After Bankruptcy, visit our Life After Bankruptcy resource page.

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