Claim all the tax breaks you’re entitled to
Donald Trump’s acknowledgement last fall that he had not paid federal income tax in years left some questioning why they should have to pay taxes.
“I think you pay taxes because it’s the right thing to do,” National Taxpayer Advocate Nina Olson said.
Trump has not released his tax returns. But The New York Times reported last year that he claimed more than $900 million in losses in 1995, enabling him to pay nothing in taxes for as many as 18 years.
Asked during a presidential debate in October whether he used the loss to avoid paying taxes, he said, “Of course I do.”
The Tax Policy Center estimates that about 44.5 percent of taxpayers will pay no income taxes for 2016.
“Just because people don’t pay federal income tax doesn’t mean they don’t pay any tax,” center fellow Roberton C. Williams wrote on its website.
“In fact, nearly everyone pays something. Three-fifths of those who don’t owe income tax work, and thus pay Social Security and Medicare payroll taxes. And almost everyone pays state and local sales taxes, excise taxes or some other levy.”
Penalties for non-payment of taxes can add up. There are penalties for failing to file your tax return, and for failing to pay your taxes.
The IRS advises people to file their tax returns even if they can’t afford to pay what’s due. The agency will work with taxpayers to set up installment plans if they are unable to afford the tax bill all at once.
“In most cases,” the IRS said, “the failure to-to-file penalty is 10 times more than the failure-to-pay penalty.”
Ernst & Young’s EY Tax Guide 2017 lists 50 of the deductions that people are most likely to overlook. It can be purchased at Amazon.com and other book sellers.
— AP
