Glossary

Unfiled tax returns can lead to IRS penalties, interest, and enforcement actions, including substitute returns, liens, and levies.

A W-4 form allows employees to inform their employer of how much federal income tax should be withheld from their paycheck based on their filing status and dependents.

IRS wage garnishment is a collection action that allows the IRS to take a portion of your wages directly from your employer to satisfy unpaid tax debt.

A wage levy allows the IRS to garnish a portion of your paycheck to collect unpaid tax debt, continuing until the debt is paid or resolved.

Willful neglect refers to a taxpayer’s intentional disregard for tax laws, resulting in increased penalties and potential criminal prosecution.

Willful tax evasion is the deliberate and intentional act of avoiding taxes through illegal means, such as hiding income or falsifying documents, leading to severe penalties.

Withholding allowances are claimed on Form W-4 and determine the amount of federal income tax withheld from an employee’s paycheck.

A tax write-off is an expense that taxpayers can deduct from their taxable income, reducing their overall tax liability.

Year-end tax planning involves reviewing financial decisions and taking steps to reduce tax liability, such as maximizing deductions and contributing to retirement accounts before the year ends.