FAQs about IRS Penalty Abatement
  • July 12, 2021
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A tax loophole is a provision that allows taxpayers to avoid paying tax on some of their income. In general, tax loopholes are considered to be a forte of corporations and businesses but there are quite a few that individual taxpayers can take advantage of to save taxes. There are a few gaps in the tax code that are perfectly legal to leverage as a taxpayer. In this blog post, we will discuss some common loopholes in the IRS tax code that can help you save on taxes. Read on.

Capital Gains Tax

Capital gains tax is the money that you must pay the government on what you make by selling an asset at a higher price than what you paid for it. This is considered a loophole because the rate of capital gain tax is lower than the ordinary income tax rate. The income from capital gains is taxed at a rate of 15%, 7% lower than ordinary income tax, which is calculated at 22%. If most of your income is coming from investments, you are liable to pay lesser tax than you would pay on income from employment.

Related Blog Post: What ‘Not’ to Do When Up Against IRS Tax Problems

Deduction on Home Mortgage Interest

Almost every taxpayer who pays a mortgage on their house and claims itemized deductions can claim home mortgage interest deduction when filing returns. If you have an expensive home and pay mortgage interest on a big percentage of its cost, you can claim a deduction that significantly reduces your taxable income.

Health Insurance Benefits Paid By Employer

According to the Tax Code, health insurance benefits paid by an employer are not taxable. You don’t have to claim them as your income. During job hunting, if you have a choice between a higher paycheck with no benefits and a smaller paycheck plus benefits, you need to think about what you can save as the benefits that come with a smaller paycheck are absolutely tax-free.

Related Blog Post: A Guide To COVID-19 Stimulus Checks

Saving Plans for Kid’s Education

According to section 529 of the federal Tax Code, the money that you tuck away in an education fund for your kids is tax-free. There is no federal limit to how much you can contribute to your kids’ college fund but individual states have limits on the maximum amount. The good thing about this loophole is that it gives you and your spouse equal chances to save on your individual taxable income by contributing to your kids’ college fund individually.

Wrap Up

One thing to keep in mind is that tax laws change periodically. If you try to exploit a loophole that is no longer valid, it can attract IRS tax problems. It is important to consult a knowledgeable and experienced tax attorney before attempting to take advantage of any tax loophole. For help with IRS tax problems in Fort Worth and Dallas areas, The Law Offices of Nick Nemeth is the way to go. Our team of tax attorneys has extensive experience in handling tax problems and helping taxpayers resolve their issues with the IRS with favorable outcomes. To talk to one of our attorneys, call (972) 426-2553 or fill out our contact form, and we will take it from there.

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What Our Clients Have to Say

Susan WilsonSusan Wilson
03:27 25 Jan 23
I have been very pleased with the solid counsel and guidance that Nick Nemeth has provided me regarding my tax issue. I found him to be honest and straightforward which I appreciated. I was impressed with his relevant experience and knowledge . He has definitely brought me peace of mind during a difficult and stressful time.
Sarah HowardSarah Howard
03:44 14 Nov 22
I would like to thank Mr. Nick and his staff for the superb help that I received from them. My IRS problem was resolved quickly and efficiently. It took 2 visits to convince me that I was over my head. I thought that I could call the IRS, appeal my tax notices and settle on a payment plan on my own. After many phone calls to the IRS, waiting sometimes more than 4 hours with no resolution to speak of, it proved to be extremely difficult and stressful. Revisiting Mr. Nick was a huge wake up call. My account was reviewed, and a payment plan was established with the IRS within a week. I will be forever grateful to the staff who worked on my case and especially to Lorna who listened to me vent while going through this painful process.
00:33 07 Aug 22
I cannot say enough good things about Nick and his team. When I first met with Nick he was up front, honest, friendly and efficient. When I worked with one of his attorneys, Eric B, I was just as pleased. All of the staff there are nice and very helpful. I wish I hadn't waited so long to get help with my issue. Over 6yrs I tried getting through and getting anywhere with the IRS and hardly made any progress. I know this may not be the case for all, and even I thought it would take longer than it did, but 3mos and they had my situation straightened out. I still can't believe it. Thank you thank you THANK YOU for all that you did for me. This is a huge burden gone out of my life now thanks to you. If anyone needs help out there, I know you may not want to shell out more money to get their help but it may just save you in the long run.
Spoilly GirlSpoilly Girl
23:49 03 Aug 22
The Nemeth Law team is exceptional. They treat their clients like a family member who is in crisis. They want you to get the best possible outcome. I really appreciate everything that they did for me. Jake and Ashley had the greatest role in my case and it all turned out for the best for me. Thank you Nick and team for easing my fears and getting me through the long process. I'm truly grateful.
Eddie WaltEddie Walt
19:44 12 Jul 22
During a time in which competent, professional service at a fair price seems to have disappeared, Mr. Nemeth and his team are a refreshing breath of fresh air.From my first phone call to the final settlement of our case with a non-responsive IRS, they under-promised, over-delivered and were in constant courteous contact to make sure we knew exactly what was happening and where we stood.I hope to never need their services again, but, should I receive another friendly letter from the IRS...I know who to call!
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