Independent Contractor —
If you are contracted to do work according to your own methods and you are not subject to external control by an employer beyond the results of such work, you are considered to be an independent contractor.
Individual taxpayer Identification Number —
If you do not qualify for a Social Security Number, this is the number you receive for tax identification purposes. Such numbers tend to be assigned to resident aliens living in the United States.
Innocent Spouse —
In order to help you when you are being subjected to IRS problems because of your spouse’s (or your ex-spouses) liable actions, the IRS developed guidelines for tax relief where you can qualify under certain circumstances as an innocent spouse. This designation means that if you can prove you qualify within those guidelines, you may not be subject to the taxes accrued by your spouses or ex-spouses. Such a designation is known as Innocent Spouse tax relief. You must prove that at the time the tax return was signed, you did not know, or have reason to know, about the understatement of tax. With this and other circumstances taken into consideration, the person applying for Innocent Spouse Relief must prove that it would be unfair to hold the unknowing spouse liable for the understatement of tax. To request innocent spouse relief, you have to file Form 8857
IRS Form 1040 —
Individual Income Tax Return for individuals and married couples who are required to file with the IRS. In addition, Form 1040EZ is for incomes of less than $100,000, but cannot be used if the taxpayer received the advanced earned income credit. Form 1040PC is a paper tax return prepared on a computer using approved IRS tax preparation software.
IRS Form 1065 —
Tax return for business or partnership income. Form 1065 is so partnerships can report income and expenses for the previous tax year.
IRS Form 1120 —
Corporation Income Tax Return for incorporated businesses to report income and expenses for the previous tax year.
IRS Form 940 —
Annual Unemployment Tax Return. Under the Federal Unemployment Tax Act (FUTA), each business reports tax based on the amount paid to each employee. The tax applies to the first $7000 paid to each employee in a year after subtracting any exempt payments. FUTA tax along with state unemployment systems provides unemployment compensation to individuals who have lost their jobs.
IRS Form 941 —
Quarterly tax return/ payments. Businesses that withhold wages from their employees are required to file Quarterly Federal Tax Returns. These returns are filed each calendar quarter. Any business that pays more than $2500 in net taxes is required to make quarterly deposits to authorized financial institutions.
IRS Form W-2 —
Employers must provide employees with a statement of how much they earned in wages, tips and other compensation from the previous year in a W-2 form (by January 31 of each year). The W-2 form shows State and Federal taxes, social security, Medicare wages and tips withheld.
IRS Form W-4 —
Employee’s Withholding Allowance Certificate. Completed by the employee, a W-4 determines how much of a person’s paycheck is withheld for Federal income taxes based on an estimated number of deductions.
IRS Revenue Agents —
Employees of the Internal Revenue Service who are responsible for the process of taxation and auditing. Revenue Agents are not involved in collections.
IRS Revenue Officers —
Employees of the Internal Revenue Service who are responsible for collecting back taxes. Revenue Officers tend to be assigned to field offices in certain geographical areas to handle taxpayers based in that specific location.
Installment Agreement —
A negotiated agreement between you and the IRS to allow you to pay a delinquent tax debt over a specified period of time. Once an Installment Agreement is in place, all other IRS collection activities in regards to your tax debt are ended. The IRS is flexible regarding the payment amounts of Installment Agreements as long as your tax debt will be paid off before the statute of limitations expires. With an Installment Agreement, there are definite requirements, such as staying current on the filing and paying of all future tax returns for as long as the Installment Agreement is in place. Penalties and interest will continue to be charged as the tax debt is being paid, although the amount of the penalties is reduced during the period of time that covers the Installment Agreement. In addition, the IRS charges a nominal fee to setup an Installment Agreement.
Itemized Deductions —
Expenses claimed on an individuals tax return that are subtracted from the adjusted gross income to determine taxable income. Examples of itemized deductions include medical expenses, taxes paid (other than federal taxes), interest, charitable contributions, and employee business expenses.
