Income Taxes

Authored By: Lagniappe Law Lab


About Income Tax

Individuals that earn income must generally file income taxes. The purpose of filing income taxes is to determine how much tax an individual or entity owes the government based on their income. Individuals are typically required to file a tax return with the Internal Revenue Service (IRS) each year to report their income and calculate the amount of tax they owe. While all employees are typically required to file taxes, you may either owe taxes or receive a refund for taxes previously withheld from your paycheck.

Individual federal income tax is a tax enforced by the U.S. federal government on the amount you earned (your income) the previous year. This includes your wages, salaries, capital gains (tax on your profit from selling an investment - stocks, bonds, real estate), dividends (tax on payments to shareholders of a corporation), interest, and other types of income. Taxpayers may be able to reduce their tax liability (the amount they owe the government) by taking advantage of deductions credits, and other tax benefits. Examples of tax deductions include: if you have any dependents - meaning you are married or have children if you made any charitable contributions, mortgage interest, etc.  Individual income taxes in the United States are based on the individual's filing status (married, single, etc.), income, deductions, and credits. Taxpayers may be required to file an income tax return if their income exceeds a certain amount. The tax rate for each filing status is based on the taxpayer's income level.

Louisiana has a state income tax that the Louisiana Department of Revenue administers and collects from individuals. The taxes are typically calculated as a percentage of the individual's taxable income. Louisiana residents are required to file a state income tax return if they have income that exceeds the filing threshold, which is a certain amount set by the state. The filing threshold for Louisiana residents is based on filing status and income. If a person's income is over the filing threshold, they must file a state income tax return. If you make less than the filing threshold, you will not be required to file. Louisiana also offers a number of deductions and tax credits that may reduce the amount of taxes owed.

What You Need To Know

Individual filing status refers to a person's filing status when filing taxes. A person's filing status is used to determine the amount of taxes that must be paid or the amount of refund that can be received. There are five different types of filing statuses: single, married filing jointly, married, filing separately, head of household, and qualifying widow(er) with dependent child. The filing status a person chooses will depend on their marital status and how they want to file their taxes. Your filing status is important because it can increase or decrease your tax deductions.

Tax deductions are different from tax credits. Taxpayers generally think credits are better than deductions. A tax credit can directly reduce the amount of taxes you owe (hence it credits you) or it can increase the refund you receive if you don’t pay taxes. A tax deduction may lower the amount of taxes you owe by lowering your overall income that is taxable. 

Individuals may be able to get various deductions and credits that reduce their taxable income and the amount of tax they owe. Deductions may include standard deductions, itemized deductions (mortgage interest, property taxes, etc.), personal exemptions, or retirement contributions (money towards your retirement plan). Federal tax credits may consist of Earned Income Tax Credits, Child Tax credits, Education Credits, and Retirement Savings Contribution Credits. Louisiana residents may qualify for various state tax benefits, such as exemptions, credits, deductions, and other incentives. The most common deductions include deductions for charitable donations, deductions for student loan interest payments, and credits for childcare expenses. Other deductions and credits for state income tax may include deductions for medical expenses, deductions for retirement savings, credits for energy-efficient home improvements, and credits for educational expenses.

Federal individual taxable income is the amount of taxable income that an individual must report on their federal income tax return. Taxable income includes all income. The term “income” involves more than just the amount on your paycheck. Taxable income includes your wages, salaries, investments, tips, bonuses, rental property, and other forms of taxable income such as dividends and capital gains.

Certain types of income, such as Social Security benefits, may be partly or totally free from taxation. Federal non-taxable income includes Social Security benefits, veterans' benefits, Supplemental Security Income (SSI), certain municipal bond interest, and certain items excluded from gross income under the Internal Revenue code such as gifts and inheritances.

Income is taxed at different rates (meaning the percentage you have to pay) depending on the amount earned and the filing status of the taxpayer. The tax rates for individuals range from 10 percent to 37 percent. Tax rates may change each year because tax brackets may change due to things like inflation. 

For the 2020 tax year, the federal individual tax rates are as follows:

  • 10% on taxable income from $0 to $9,875

  • 12% on taxable income from $9,876 to $40,125

  • 22% on taxable income from $40,126 to $85,525

  • 24% on taxable income from $85,526 to $163,300

  • 32% on taxable income from $163,301 to $207,350

  • 35% on taxable income from $207,351 to $518,400

  • 37% on taxable income over $518,400

Federal income taxes are paid by filing a tax return with the Internal Revenue Service (IRS) each year. Individuals must make estimated tax payments throughout the year, or have enough income tax withheld from their paychecks. The IRS uses the information on the return to calculate the amount of taxes owed. This is why you are required to file a tax return and make sure the information on your return is accurate. Taxpayers can pay their taxes using a variety of payment options, including direct debit, paper check, credit card, or electronic funds transfer.

Audits and appeals of individual tax returns are handled by the Internal Revenue Service (IRS). A tax audit is a review of the information taxpayers provide on their returns and is used to make sure they reported accurate financial information. The IRS can conduct an audit of a taxpayer's return if it finds errors or discrepancies in the return. The IRS may also review a return if it suspects that the taxpayer has failed to report all of his or her income.

An audit can be conducted in one of two ways: through a correspondence audit or through a field audit. During a correspondence audit, the taxpayer is sent a letter from the IRS requesting additional information or documentation. The taxpayer can then respond with the requested documents or provide an explanation for the error they made on their return. 

If the IRS finds that the taxpayer's return is incorrect, the taxpayer will be liable for additional taxes, interest, and/or penalties. The taxpayer can appeal the findings of the audit if they believe that the IRS is incorrect. The taxpayer can do this by sending a written appeal to the IRS, which will be reviewed by an appeals officer. 

The appeals officer may reduce or eliminate the additional taxes, interest, and/or penalties if the taxpayer is able to prove that the original return was correct. The taxpayer can also reach an agreement with the IRS on an alternate payment plan. 

Where, How, & When To File

Where, How, & When To File

The filing deadline for federal individual income taxes is April 15th of every year. Generally, individuals who have earned income during the year must file a federal income tax return, regardless of the amount of income they have earned. There are some exceptions to this rule, such as individuals who are below a certain income threshold and do not have to file a return, or individuals who are eligible for certain tax credits. 

You can file federal income tax returns either electronically or by mail. Those who are filing electronically can use IRS-approved software or the IRS Free File program. Those who are filing by mail must fill out the appropriate tax forms and mail them to the IRS. Additionally, you can visit a local tax preparer or accountant to have your taxes done. 

Louisiana residents must file their state income tax return by May 15th of each year. You can file your return online, through the mail, or in person. For more information, visit the Louisiana Department of Revenue website.

Prepare To File Your Taxes

The most important step in filing your taxes is gathering your tax documents. This includes income statements like your W-2 forms, 1099 forms for any freelance or contract income, or K-1 forms for any self-employed income. If you itemize deductions, you'll need proof of your expense, such as receipts, canceled checks, or credit card statements. You will need to have any other documents related to deductions or credits, such as charitable donations, medical expenses, student loan interest, and alimony payments. Any forms you receive from the IRS or other tax authorities, such as 1098s or 1099s, will need to be included with your taxes. You may need to provide information from your previous year's tax return as a reference. You'll need to provide your name, address, Social Security number, and other information about yourself and your family. 

There are several different ways to file your taxes, including filing by paper, using tax software, or using an online tax filing service. You can file your federal taxes electronically or by mail. Each filing method has its own pros and cons, so decide which option is right for you before you get started. Tax software or an online tax filing service can make this process easier, as it can help you calculate your deductions, credits, and other tax-related information. Additionally, you may want to consult with a tax professional if you have any questions or need advice on filing your taxes.

There are a few important dates to be aware of when filing your taxes. The most important date is the tax filing deadline. The deadline to file federal taxes is April 15th of each year. State returns and payments are due on or before May 15th of the following year. It is important to make sure that you submit your taxes on time, as failing to do so can lead to penalties or fines. You may be able to get an extension if you need more time.


Use tax preparation software or an online program to enter your income and deductions. If you're submitting electronically, you'll need to create an IRS e-file account if you don't already have one. If you're filing by mail, print out your return and mail it to the IRS. If you're expecting a refund, you can track it on the IRS website.  

Forms for individuals to file state income tax returns can be found on the Louisiana Department of Revenue website. Louisiana offers an online filing system, which is often the most efficient way to file. You can also file by mail if you prefer. 

Once you have submitted your taxes, it is important to keep copies of all relevant documents and forms for your records. Once you have submitted your return, you should receive your refund or notice of overpayment due within a few weeks.

Legal Issues To Consider

Legal Issues To Consider Related To Income Taxes

It is important to understand when and how often you must file your taxes. Failure to do so can lead to fines and penalties. Depending on your income and deductions, you may be liable for a certain amount of taxes. You should understand the tax rate you may owe and plan your finances accordingly. Make sure you understand what deductions you can claim on your taxes. This can help reduce your overall tax liability. Be aware of any tax credits you may qualify for. 

It is important to understand your overall financial situation and plan for taxes accordingly. This can help you make the most of deductions and credits available to you, as well as plan for any potential tax liability. 

Overview Of Tax Problems

Taxpayers should make sure to include all applicable income and deductions as well as all other applicable information when filing their taxes in order to assure accuracy. Failure to properly file returns or provide accurate information can lead to a number of problems for taxpayers. These include: 

  • Being charged excessive fees and/or penalties due to errors in the return

  • Being subject to an audit by the IRS 

  • Failing to receive any refund to which they may be entitled

  • Failing to pay taxes on time, resulting in interest and/or penalties 

  • Missing out on potential deductions or credits that could have resulted in a lower tax bill 

  • Having trouble obtaining a loan or other financing due to an inaccurate filing history

If you fail to pay your taxes in Louisiana, you may face penalties and interest. Penalties for failing to pay taxes can range from 1-50% of the amount due, depending on the amount owed, and interest may accrue at a rate of 1.5% per month. Additionally, the Louisiana Department of Revenue may take action to collect unpaid taxes, such as filing a lien, garnishing wages, or seizing property.

Intentionally providing false information on a tax return or engaging in other fraudulent activities can lead to criminal charges.

The Louisiana Department of Revenue (LDR) is responsible for enforcing the state's tax laws and takes a very aggressive approach to prosecute individuals who are suspected of committing tax fraud. Common types of tax fraud in Louisiana include filing false or incomplete tax returns, failing to report all income, claiming false deductions or credits, and underreporting or underpaying taxes. The LDR has a number of tools at its disposal to detect tax fraud, including audit procedures, computerized fraud detection systems, and analysis of third-party data.

If you are under investigation for tax fraud in Louisiana, it is important to contact a qualified tax attorney as soon as possible. An experienced lawyer can help you understand the charges you are facing and will provide advice on how to best defend yourself in court.

Taxpayers are responsible for filing returns and paying taxes on time. If taxes are not paid on time, the IRS can impose penalties and interest. Anyone who does not pay their taxes by the due date can be considered to be paying taxes late. This includes individuals, businesses, and organizations. Depending on the type of tax and the amount due, late payment penalties can range from 5% to 25% of the unpaid tax amount. Interest on late payments is also charged and compounded daily. 

Taxpayers who are unable to pay the full amount of taxes may be able to make payment arrangements with the IRS. This can help reduce or eliminate the penalties and interest associated with late payments. 

Unpaid taxes can cause a lot of financial and legal problems for taxpayers. The IRS has the right to collect unpaid taxes through a variety of methods, including wage garnishment, bank levies, and liens. Unpaid taxes may result in interest and penalties. If taxes remain unpaid, the IRS may take legal action, including filing a tax lien or seizing property. 

The IRS has a collection statute of limitations, which is typically 10 years from the date of assessment or filing of the return. 

Taxpayers who are unable to pay their taxes may be able to enter into a payment plan with the IRS. Taxpayers may also be able to negotiate an offer in compromise with the IRS to reduce their tax debt. 

Failure to file taxes in Louisiana is a criminal offense and is punishable by a variety of penalties. Depending on the severity of the offense, a taxpayer may face civil or criminal penalties or both. Civil penalties may include a fine, the payment of back taxes, interest, and/or a tax lien. Criminal penalties may include jail time, fines, and/or probation. Additionally, the taxpayer may be required to pay back taxes, interest, and/or a tax lien as part of their sentence.

It is important to note that the Louisiana Department of Revenue takes any failure to file taxes seriously and will take all necessary steps to collect the delinquent taxes. If you fail to file taxes in Louisiana, it is important to seek professional help immediately. A qualified tax attorney can help you understand your rights and obligations and will work to ensure the best possible outcome for your case.

Unreported tax income is income that has not been reported to the Internal Revenue Service (IRS). It could include income from jobs, investments, or other sources. Examples of unreported income include cash payments from employers, income from self-employment, rental income, and income from investments. Taxpayers must report all income for the year. Failure to do so can lead to significant penalties and interest. 

Failure to file taxes in a timely manner can lead to penalties and interest. Taxpayers should file all past-due returns as soon as possible to avoid any potential consequences. Filing a return late may also result in the loss of certain deductions or credits. In addition, unpaid taxes will continue to accrue interest and penalties until they are paid in full. 

It is important to contact the IRS to discuss any tax issues and to get help filing a return. 

Taxpayers must file estimated taxes if they expect to owe more than $1,000 in taxes for the year. Failure to file estimated taxes can lead to significant penalties and interest.

If you fail to pay your estimated taxes on time, you may be subject to a penalty. The penalty is based on the amount of the taxes owed and the length of time the taxes remain unpaid. The IRS charges an interest rate of 5% for every month the taxes remain unpaid. Additionally, the IRS may impose a late payment penalty of 0.5% of the unpaid taxes for each month the taxes remain unpaid, up to a maximum of 25%. 

If you are facing financial hardship and are unable to pay your estimated taxes, you can request an installment agreement or offer in compromise with the IRS. An installment agreement allows you to make monthly payments towards the taxes owed while an offer in compromise allows you to settle the taxes owed for less than you actually owe. 

In some cases, the IRS may waive the penalty if there is reasonable cause. For example, if you had a medical emergency or other reasonable cause that prevented you from filing, the IRS may waive the penalty. 

Misuse of tax credits or deductions is a form of tax fraud that can lead to significant penalties and interest. It involves claiming credits or deductions to which a taxpayer is not entitled, such as claiming an excessive amount of credit or misstating income or expenses. It can also involve claiming a credit or deduction that is not allowed by the IRS. 

Taxpayers should be careful to ensure that their tax returns are accurate and that they do not claim any credits or deductions to that they are not entitled. In addition, taxpayers should be aware of any changes to the tax law that may affect their eligibility for credits or deductions. 

Underpayment of taxes is when a taxpayer does not pay the full amount of taxes owed. This could be due to an incorrect calculation of taxes or not having enough funds to make the payment. Underpayment of taxes can result in interest charges, late payment penalties, and other fees. In some cases, the IRS may also impose criminal penalties for tax evasion. It is important to be aware of the consequences of underpayment of taxes, to file accurate tax returns, and make full payments on time. 

Tax Terms

Familiarize Yourself With Tax Terms And Concepts

Before you start filing your taxes, it’s important to understand some of the basic concepts and terminology used in the tax process. For example, you should know the difference between a deduction and a credit, and be familiar with terms like adjusted gross income (AGI) and taxable income.

Common tax terms can be found on the Internal Revenue Service (IRS) website. Tax terms and definitions are important to understand when filing taxes. These terms can include definitions of types of taxes, tax laws, tax deductions, credits, tax rates, and other related terms. Here are also some helpful definitions and explanations of tax terms: 

Adjusted Gross Income (AGI)

Capital Gains Tax

Gross Income

Individual Filing Status

Itemized Deductions

Personal Exemptions

Retirement Contributions

Standard Deduction

Tax Brackets

Tax Deductions And Credits

Tax Filing Status

Taxable Income

Tax Liability

Tax Withholding

Tax Refund

Tax Returns

Adjusted Gross Income (AGI) Total income from all sources after deductions for certain items such as medical expenses, moving expenses, and alimony is made. 

Capital Gains Tax A tax on the profits from the sale of a capital asset such as real estate. 

Gross Income Total income from all sources before deductions are made. 

Individual Filing Status Individual filing status refers to a person's filing status when filing taxes. A person's filing status is used to determine the amount of taxes that must be paid or the amount of refund that can be received. There are five different types of filing statuses: single, married filing jointly, married, filing separately, head of household, and qualifying widow(er) with dependent child. The filing status a person chooses will depend on their marital status and how they want to file their taxes. 

Itemized Deductions These deductions are allowed for certain expenses, such as mortgage interest, state and local taxes, charitable donations, medical expenses, and certain other expenses. 

Personal Exemptions This is an amount that can be deducted for each taxpayer and any dependents. 

Retirement Contributions This includes deductions for contributions to qualified retirement plans, such as IRAs and 401(k)s. 

Standard Deduction This is the flat amount that is subtracted from an individual's taxable income to reduce their overall tax burden. 

Tax Brackets Tax brackets are the range of incomes that are taxed at different rates.

Tax Deductions And Credits Tax deductions reduce your taxable income, while tax credits reduce the amount of tax you owe.

Tax Filing Status Your filing status determines how much tax you owe. There are five filing statuses: single, married filing jointly, married filing separately, head of household, and qualifying widow(er) with dependent child

Taxable Income Taxable income is the amount of money you earned that is subject to tax. This includes income from wages, investments, and other sources. 

Tax Liability The amount of taxes owed for a particular year. 

Tax Withholding Tax withholding is the amount of money that is withheld from your paycheck each pay period and sent to the IRS.

Tax Refund The amount of money received from the government if the amount of taxes paid during the year is more than the amount of taxes owed. 

Tax Returns are the forms that taxpayers must file their taxes with.

Last Review and Update: Feb 23, 2023
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