3 C's of the Tax Filing Season

The tax season is here, and while it may not be the most exciting time of the year, it's important to be prepared. One way to make the process less daunting is to familiarize yourself with key tax terms. In this post, we're going to focus on three "C’s" for every tax season; Collection, Compliance, and Credit.

“Collection” is a word that strikes fear in the hearts of taxpayers everywhere. It refers to the process of the government collecting taxes from taxpayers who owe. This can include things like issuing notices, levying wages and bank accounts, and even seizing property. Yikes! To avoid collection action, it's crucial to stay on top of any tax debts you may have.

“Compliance” is a word that may not be as scary but it's equally important. It refers to following tax laws and regulations. This includes things like accurately reporting your income, claiming the correct deductions and credits, and filing your taxes on time. Failure to comply with tax laws can result in penalties and fines, so it's essential to make sure you're playing by the rules.

Lastly, "Credit" is a word that can bring a smile to any taxpayer's face. It refers to tax credits that can lower the amount of taxes owed. These can include things like the Earned Income Tax Credit, the Child Tax Credit, and the American Opportunity Tax Credit. Who doesn't love a good credit? Be sure to research and claim any credits that you may be eligible for to reduce your tax liability.

The tax season can be overwhelming sometimes, but by keeping these key terms in mind, you can make the process more manageable. Stay on top of any tax debts, ensure compliance with tax laws and regulations, and take advantage of any available credits to reduce your tax liability.

If you need help with this or the prior year’s returns, we are here to help.

Happy filing!