For many people, filing taxes to the Internal Revenue Service is a befuddling process. There's a lot of jargon. The forms can be confusing to fill out. And there can be financial and legal penalties if you make a mistake.
That's why New York-based tax attorneys Hana Boruchov and Leo Gabovich are here to help. Over the past few weeks, Life Kit has been gathering tax questions from our audience for them to answer.
Some of you wondered how to handle taxes if you work remotely. Some asked what to do if you have missing tax forms. Others asked a classic question: Do I really need an accountant?
Our experts weigh in on six queries. For more advice, listen to our podcast episode in the player above. This interview has been edited for length and clarity.
Do I really need an accountant to file my taxes? Or can I just use an online tax software?
Gabovich: If you've just got a W-2, even if you have a few common deductions because you've got kids or property taxes, there's no reason to pay an accountant hundreds of dollars. The software today is so intelligent and easy to use. You could really just spend half an hour and get it done for yourself.
Where I highly recommend an accountant is if you have your own business, are a freelancer or just want to have someone who's knowledgeable to guide you and set you up for success.
I think I need help doing my taxes. How do I find a good accountant?
Boruchov: Look at their qualifications — make sure they are licensed. We've had situations where people had returns done by someone who they thought was a certified public accountant, but they were in fact a nonaccredited individual.
Gabovich: Enrolled agents are a great resource for people who want peace of mind. They are individuals who are qualified to be tax preparers and can represent people before the IRS. They generally charge less than a CPA.
I have a lot of complicated tax issues but can't afford an accountant or a tax lawyer. Who else can help me?
Gabovich: There's a wonderful resource known as the Taxpayer Advocate Service [an independent organization within the IRS].
If you have an issue, they will assign an advocate to you who will call you or send you a letter and let you know what's going on. They can even issue orders to basically say, "Hey, IRS, you need to help out a taxpayer."
Generally, you fill out a straightforward form to describe what your issue is and what you want them to do about it. They will walk you through the process and tell you which forms to fill out. If you don't know how to do it, they will help you fill out the form.
I didn't get a 1099 form in the mail for a freelance project I did for $150. Do I still have to report it when I file my taxes?
Gabovich: You're supposed to report it. Without a 1099 present, the IRS is not made aware of that transaction. You can take the risk of not reporting it, but if you get audited, you'd still have to pay the tax on that $150 [plus interest and penalties].
If I work remotely for a company in a state with an income tax like New York, but live in another state, do I have to pay the income tax for New York?
Gabovich: It depends on where your company is headquartered. New York is particularly aggressive about it. If you are working out of state for a New York employer purely for your benefit, you still have to pay those New York state income taxes. But [many states offer credits if you are double taxed].
If you're trying to separate yourself from being taxed by the state you work in, you'd have to show why your income is not necessarily sourced from business in that state.
Help! I can't afford my tax bill this year. What should I do?
Boruchov: There are options. You can apply for a payment plan, which the IRS calls an installment agreement. You divide how much you owe by a certain number of months, with 72 months being the maximum term.
If you can't afford to pay on a payment plan, you can do what's called a partial pay installment agreement. You don't pay what you actually owe, but what you can afford to pay.
Another option is what's called an offer in compromise. It's a deal with the government where you say, "OK, I owe $50,000. There's no way I can pay for it." So you actually compromise on not just the tax, but the interest and the penalty.
There's also an option called currently not collectible [if you can't pay both your taxes and your basic living expenses]. The amount is still owed, but you're not making payments. Each state has their own statute of limitations, but it's 10 years federally.
For more advice, listen to our episode in the player above.
This episode was produced by Margaret Cirino. The digital story was edited by Clare Marie Schneider. The visual editor is Beck Harlan. We'd love to hear from you. Leave us a voicemail at 202-216-9823, or email us at LifeKit@npr.org.
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