THE IRS: MATTER OF TIME!

The IRS has a working system. It is a matter of time before they get to you. It may have taken all these years but your turn is around the corner and when that happens it is going to cause devastation and cost you thousands of dollars to fix that tax issue. 

Stop procrastinating and call ADVANCE TAX RELIEF today to file your tax returns. You will save yourself from a lifetime of problems that can follow you dead or alive.  

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UN-FILED TAX RETURNS FROM PREVIOUS YEARS

You missed the tax deadline April 15th, so now what?


Although the IRS has received a record number of returns this year, there are still millions of people and business owners who did not file tax returns by April 15th. The reasons for this are numerous, but the IRS research shows that often people do not file in years that their status changes, for instance the death of a spouse or a divorce. Emotional or financial hardship reasons may also cause a person not to file. And then there are some folks who have simply procrastinated. Whatever your reason is, if you did not file your taxes by April 15th, you should stop putting it off and file your tax returns as soon as possible - even if you are late.

Sure, if you file late, you might be missing out on the economic stimulus tax refund check, but the reasons for filing are more compelling, and often less painful than ignoring your obligation.

Here are some things you should consider:

1. You could lose your refund. There is no penalty for failure to file if you are due a refund; however, you cannot obtain a refund without filing a tax return. If you wait too long to file, you may risk losing the refund altogether. In cases where a return is not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund.

2. You won’t receive your Earned Income Tax Credit (EITC). Even if you are not otherwise required to file a tax return, you must file in order to receive this credit. The Earned Income Tax Credit (EITC) sometimes called the Earned Income Credit (EIC), is a refundable federal income tax credit for low-income working individuals and families. Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit. To qualify, taxpayers must meet certain requirements and file a tax return, even if they did not earn enough money to be obligated to file a tax return. The EITC has no effect on certain welfare benefits. In most cases, EITC payments will not be used to determine eligibility for Medicaid, Supplemental Security Income (SSI), food stamps, low-income housing or most Temporary Assistance for Needy Families (TANF) payments.

3. A statute of limitations applies to refunds and credits. After the expiration of the refund statute, not only does the law prevent the issuance of a refund check, it also prevents the application of any credits, including over-payment of estimated or withholding taxes, to other tax years that are underpaid. It is also worth noting that the statute of limitations for the IRS to assess and collect any outstanding balance does not begin until a return has been filed. Or put another way, there is no statute of limitations for assessing and collecting the tax if no return has been filed.

4. A “Failure to File” penalty may be assessed when you miss the tax filing deadline; the sooner you file, the more likely you are to be able to negotiate or decrease this penalty.

Regardless of your reason for not filing, file your tax return as soon as possible. You can contact ADVANCE TAX RELIEF LLC (800)790-8574 for help with filing delinquent returns. Advance Tax Relief LLC specializes in helping individuals and businesses who are unable to fully pay their taxes, either back taxes, or due to current or late filing. If you can not pay your taxes, do not let this prevent you from filing as tax settlement options may be available. For more details contact us as quick as possible.

For more information on how to file a tax return for a prior year, visit our website.

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TAX LAW CHANGES FOR 2013

“Nothing is certain except death and taxes,” ~Ben Franklin, founding father of our country.   

With the American Taxpayer Relief Act of 2012, the Affordable Care Act (ACA) Changes for 2013, and the Defense of Marriage Act (DOMA), several impactful changes have happened to the tax law in 2013. Liberty Tax Service provides a brief review of these tax changes. 

Of all the tax changes for 2013, the majority fall under the American Taxpayer Relief Act of 2012 and some, such as the American Opportunity credit and the Earned Income Tax Credit, were extended until 2017.  

One of the most impactful tax law changes for some was made to the Flexible Spending Account (FSA) and the Same-sex Marriage law. The IRS now allows for up to $500 to be rolled over from a FSA (recently capped at $2,500) or an employer can opt to offer a grace period. Additionally, the IRS will treat same-sex couples,legally married in jurisdictions that recognize their marriages, as married for federal tax purposes. The ruling stands even for those couples who do not reside in the jurisdiction where they were married. 

Another big change to come about this year has been the implementation of the ACA, also known as Obamacare.

Under the ACA, a new Medicare payroll tax was implemented. Medicare tax on wages, compensation and self-employment income received in excess of $250,000 married filing jointly ($125,000 married filing separately; $200,000 single) will be 0.9%. Employers collect the extra 0.9% on wages exceeding $200,000 – with no regard to the employee’s filing status. It’s important for taxpayers to speak with a tax professional regarding this tax stipulation because not everyone charged the 0.9% will qualify since it applies to filing status.  

A new Medicare tax of 3.8% may apply to investment income if the taxpayer’s AGI exceeds $250,000 married filing jointly; $125,000 married filing separately; $200,000 single.  

There is also a higher threshold for deducting medical expenses from 7.5% of AGI to 10%; except for those 65 and over, it will remain unchanged at 7.5% until 2017. 

There are more tax changes affecting individuals, including:  

• Income tax rate increases for high earners: A 39.6% rate applies to income above $450,000 married filing jointly; $400,000 single; $225,000 married filing separately. 
• Capital gain and dividend rate increase for high earners: Rate is up from 15% to 20% and applies to income above: $450,000 married filing jointly; $400,000 single; $225,000 married filing separately. 
• Personal exemption phase-out and itemized deduction limitation for high earners: Thresholds: $300,000 married filing jointly; $250,000 single; $150,000 married filing separately.  
• Permanent alternative minimum tax (AMT): Exemption amounts increased: $80,800 married filing jointly; $51,900 single; $40,400 married filing separately  
• Estate, gift and generation skipping transfer tax: Top rate increases from 35% to 40% (the $5,000,000 exemption was permanently extended). 
• Recovery Act of 2009 provisions extended for five years: Refundable child tax credit was extended, the American Opportunity Tax Credit was extended; changes were made to the earned income tax credit (EITC).  
• Pension provision: Retirement plans allow participants to transfer amounts to designated Roth accounts. 

Need Tax Help? Visit our website and contact us for a free no cost analysis! 

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2014 Tax Season to Open Jan. 31; e-file and Free File Can Speed Refunds

IR-2013-100, Dec. 18, 2013

WASHINGTON — The Internal Revenue Service today announced plans to open the 2014 filing season on Jan. 31 and encouraged taxpayers to use e-file or Free File as the fastest way to receive refunds.

The new opening date for individuals to file their 2013 tax returns will allow the IRS adequate time to program and test its tax processing systems. The annual process for updating IRS systems saw significant delays in October following the 16-day federal government closure.

“Our teams have been working hard throughout the fall to prepare for the upcoming tax season,” IRS Acting Commissioner Danny Werfel said. “The late January opening gives us enough time to get things right with our programming, testing and systems validation. It’s a complex process, and our bottom-line goal is to provide a smooth filing and refund process for the nation’s taxpayers.”

The government closure meant the IRS had to change the original opening date from Jan. 21 to Jan. 31, 2014. The 2014 date is one day later than the 2013 filing season opening, which started on Jan. 30, 2013, following January tax law changes made by Congress on Jan. 1 under the American Taxpayer Relief Act (ATRA). The extensive set of ATRA tax changes affected many 2012 tax returns, which led to the late January opening.

The IRS noted that several options are available to help taxpayers prepare for the 2014 tax season and get their refunds as easily as possible. New year-end tax planning information has been added to IRS.gov this week.

In addition, many software companies are expected to begin accepting tax returns in January and hold those returns until the IRS systems open on Jan. 31. More details will be available in January.

The IRS cautioned that it will not process any tax returns before Jan. 31, so there is no advantage to filing on paper before the opening date. Taxpayers will receive their tax refunds much faster by using e-file or Free File with the direct deposit option.

The April 15 tax deadline is set by statute and will remain in place. However, the IRS reminds taxpayers that anyone can request an automatic six-month extension to file their tax return. The request is easily done with Form 4868, which can be filed electronically or on paper.

IRS systems, applications and databases must be updated annually to reflect tax law updates, business process changes and programming updates in time for the start of the filing season.

The October closure came during the peak period for preparing IRS systems for the 2014 filing season. Programming, testing and deployment of more than 50 IRS systems is needed to handle processing of nearly 150 million tax returns. Updating these core systems is a complex, year-round process with the majority of the work beginning in the fall of each year.

About 90 percent of IRS operations were closed during the shutdown, with some major work streams closed entirely during this period, putting the IRS nearly three weeks behind its tight timetable for being ready to start the 2014 filing season. There are additional training, programming and testing demands on IRS systems this year in order to provide additional refund fraud and identity theft detection and prevention.

HAVE IRS PROBLEMS? CALL US!

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FIVE WAYS TO IMPROVE YOUR FINANCIAL SITUATION - ADVANCE TAX RELIEF LLC

If you are having trouble paying your debts, it is important to take action sooner rather than later. Doing nothing leads to much larger problems in the future, whether it's a bad credit record or bankruptcy resulting in the loss of assets and even your home. If you're in financial trouble here are some steps to take to avoid financial ruin in the future.

If you've accumulated a large amount of debt and are having difficulty paying your bills each month, now is the time to take action--before the bill collectors start calling.

1. Review each debt. Make sure that the debt creditors claim you owe is really what you owe and that the amount is correct. If you dispute a debt, first contact the creditor directly to resolve your questions. If you still have questions about the debt, contact your state or local consumer protection office or, in cases of serious creditor abuse, your state Attorney General.

2. Contact your creditors. Let your creditors know you are having difficulty making your payments. Tell them why you are having trouble-perhaps it is because you recently lost your job or have unexpected medical bills. Try to work out an acceptable payment schedule with your creditors. Most are willing to work with you and will appreciate your honesty and forthrightness.

Tip: Most automobile financing agreements permit your creditor to repossess your car any time you are in default, with no advance notice. If your car is repossessed you may have to pay the full balance due on the loan, as well as towing and storage costs, to get it back. Do not wait until you are in default. Try to solve the problem with your creditor when you realize you will not be able to meet your payments. It may be better to sell the car yourself and pay off your debt than to incur the added costs of repossession.

3. Budget your expenses. Create a spending plan that allows you to reduce your debts. Itemize your necessary expenses (such as housing and health care) and optional expenses (such as entertainment and vacation travel). Stick to the plan.

4. Try to reduce your expenses. Cut out any unnecessary spending such as eating out and purchasing expensive entertainment. Consider taking public transportation or using a car sharing service rather than owning a car. Clip coupons, purchase generic products at the supermarket and avoid impulse purchases. Above all, stop incurring new debt. Leave your credit cards at home. Pay for all purchases in cash or use a debit card instead of a credit card.

5. Pay down and consolidate your debts. Withdrawing savings from low-interest accounts to settle high-rate loans or credit card debt usually makes sense. In addition, there are a number of ways to pay off high-interest loans, such as credit cards, by getting a refinancing or consolidation loan, such as a second mortgage.

Tip: Selling off a second car not only provides cash but also reduces insurance and other maintenance expenses.

Caution: Be wary of any loan consolidations or other refinancing that actually increase interest owed, or require payments of points or large fees.

Caution: Second mortgages greatly increase the risk that you may lose your home.

You can regain financial health if you act responsibly. But don't wait until bankruptcy court is your only option.

NEED TAX HELP? CONTACT THE EXPERTS TODAY BY PHONE OR WEB!!

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CHARITABLE ORGANIZATIONS - DONATING YOUR TIME!

Volunteering your time can be personally rewarding, but it is important to consider the following factors before committing yourself:

Make sure you are familiar with the charity's activities. Ask for written information about the charity's programs and finances.
Be aware that volunteer work may require special training and the devotion of a scheduled number of hours each week to the charity.

If you are considering assisting with door-to-door fund-raising, be sure to find out whether the charity has financial checks and balances in place to help ensure control over collected funds.

Tip: Although the value of your time as a volunteer is not deductible, out-of-pocket expenses (including transportation costs) are generally deductible.

NEED TAX HELP? CONTACT THE EXPERTS TODAY BY PHONE OR WEB!!

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Contact the Tax Experts today!!!

COMPULSORY HEALTH INSURANCE STARTS NEXT MONTH - ARE YOU READY?

Beginning in January, everyone, with certain exceptions, is required to have minimum, essential health care insurance. This issue has received a significant amount of press coverage recently, both negative and positive. Regardless of your opinion related to the issue, the mandatory insurance requirement, together with the accompanying penalties for not being insured, premium assistance credits, and insurance subsidies, all begin in 2014. The new marketplace, also called exchanges, where insurance policies can be purchased, have debuted already, but with mixed success. These new provisions are all part of the Affordable Care Act (sometimes referred to as Obamacare) that are being phased in over a number of years.

How this will affect you and your family will depend upon a number of issues:

Already insured - If you are already be insured through an employer plan, Medicare, Medicaid, the Veterans Administration, or a private plan that provides minimal, essential health care, then you will not be subject to any penalties under this new law.

Those exempt from the mandatory insurance requirement - The following individuals are exempt from the insurance mandate, and will not be subject to a penalty for being uninsured: 

• Individuals who have a religious exemption
• Those not lawfully present in the United States
• Incarcerated individuals
• Those who cannot afford coverage based on formulas contained in the law
• Those who have an income below the federal income tax filing threshold
• Those who are members  of Indian tribes
• Those who were uninsured for short coverage gaps of less than three months
• Those who have received a hardship waiver from the Secretary of Health and Human Services, who are residing outside of the United States, or who are bona fide residents of any possession of the United States.

Help for those who can’t afford coverage - Individuals and families whose household income is between 100% and 400% of the federal poverty level will qualify for a varying amount of subsidies to help pay for the insurance in the form of a Premium Assistance Credit. The lower the income, the more substantial the credit, which slowly phases out as the income increases, and is totally eliminated when the income reaches 400% of the poverty level. For those in the lower income levels, the subsidy will usually cover the bulk of the insurance costs. 

To qualify for that credit, the insurance must be acquired from an insurance exchange operated by the individual’s or family’s resident state, or by the federal government when the state does not have an exchange. These exchanges have been up and running (more or less) since October 1, 2013, allowing individuals and families to apply for coverage which will become effective as of January 1, 2014. 

There has been considerable negative press related to the federal exchange. The federal Internet site has not been functioning efficiently, but the administration says the problems will be corrected so everyone who needs to, can apply. Individuals who reside in states with their own exchange will use their state’s exchange and should not be concerned with the federal exchange. In general, the state-run exchanges seem to be operating smoother than the federal exchange, but some of the state exchanges have also had their problems. Some insurance companies offering insurance through an exchange also offer assistance in signing up through the exchange without going through the website. But be cautious - to be eligible for a subsidy, the insurance must be purchased through an exchange. If you purchase a policy directly from an insurance company without going through an exchange, you won’t be qualified for a subsidy, regardless of your income level. 

It is important to note that the subsidy is really a tax credit based upon family income. It can be estimated in advance, and used to reduce the monthly insurance premiums; it can be claimed as a refundable credit on the tax return for the year; or it can be some combination of both. However, it is based upon the current year’s income and must be reconciled on the tax return for the year. If too much was used as a premium subsidy, some portion may need to be repaid. If there is an excess, it is refundable. 

If household income is below 100% of the poverty level, the individual or family qualifies for Medicaid. 

Penalty for noncompliance – The penalty for noncompliance will be the greater of either a flat dollar amount or a percentage of income: 

• For 2014, $95 per uninsured adult ($47.50 for a child), or 1 percent of household income over the income tax filing threshold
• For 2015, $325 per uninsured adult ($162.50 for a child), or 2 percent of household income over the income tax filing threshold
• For 2016 and beyond, $695 per uninsured adult ($347.50 for a child), or 2.5 percent of household income over the income tax filing threshold

Flat dollar amounts - The flat dollar amount for a family will be capped at 300% of the adult amount. For example, in 2014, the first year for the penalty, the maximum penalty for a family will be $285 (300% of $95). But for 2016, the maximum penalty jumps to $2,085 (300% of $695). The child rate will apply to family members under the age of 18. 

Overall penalty cap - The overall penalty will be capped at the national average premium for a minimal, essential coverage plan purchased through an exchange. This amount won’t be known until a later date. 

IRS PROBLEMS? CONTACT US TODAY!

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TEN IDIOSYNCRATIC-BUT-REAL TAX DEDUCTIONS - ADVANCE TAX RELIEF LLC

1. Hire your significant other. If your significant other is hanging around your business, then you should consider putting them to work. In Bruce v. Commissioner, Bruce hired his live-in girlfriend to manage his rental properties. One of her responsibilities included running Bruce’s household. Though the Tax Court said her chores around the house counted as nondeductible personal services, he was able to deduct one quarter of her wages as a business expense.

2. Feeding Fido. Are you feeding a pet? It might be considered a charitable donation. Or, is a pet on your property helping your customers? If so, you may be eligible for tax deductions on pet food and vet bills, among other animal expenses. Past cases such as Seawright v. Commissioner have proven that some pets may increase your chances of receiving tax deductions.

3. Caring for feral cats. In 2011, Tax Court ruled that a California woman who was taking care of some 70 feral cats in her house was allowed to claim some of her expenses as qualifying tax deductions. If you decide to deduct caring for stray animals, keep your receipts and ask a local shelter for a letter describing how your spending advances their work.

4. Oil up those biceps. In the past, a pro bodybuilder was able to deduct the cost of oil used in competitions as a business expense. Though the Tax Court ruled against the use of supplements and food for special muscle-building diets.

5. It may be time to get a private plane. In past cases, such as French v. Commissioner, the Tax Court allowed the French family to deduct business travel on their personal plane, this included fuel cost and depreciation.

6. Free beer and burgers. If you have ever gifted your customers with free beer or food in an attempt to improve your profit margins, then you may be able to use this business expense as a tax write-off. The Tax Court has ruled in favor of such expenses in the past.

7. Baby sitter. Parents may receive tax deductions for baby-sitting fees. The IRS has considered such fees charitable contributions in the past.

8. Build a swimming pool. When a taxpayer with emphysema built a pool in his backyard, he was just doing what the doctor ordered. He swam in it twice a day to better his lung capacity. Because he swam in the pool more than the other members of his family, the Tax Court allowed him to deduct the cost of the pool, the cost of heating the pool, and the cost of treating the pool with chemicals as a medical expense.

9. Make your money back on breast implants. If you are an exotic dancer you may be able to claim a depreciation deduction for new “stage props.” A judge ruled in favor of Cynthia Hess, or better known as “Chesty Love,” to uphold a deduction for surgical implants.

10. African Safari. Owners of a dairy business were able to claim their African Safari as business expense because it was a necessary research for their business. The IRS let it slide.

These tax deductions may not apply to you, however we know many more ways to get you the deductions that you are entitled to. If you need help to reduce your tax liability and you owe over $10,000 to the IRS or State, be sure to call Advance Tax Relief LLC. Our Licensed Agents can start resolving your tax burdens today.

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Warning: Key IRS Collection Steps Taken By IRS Revenue Officers

1) Federal Tax Lien

When taxpayers have IRS delinquent tax debts and they have ignored initial attempts by the IRS to collect the back taxes owed, IRS revenue officers will take the real collection action of filing a Federal tax lien. An alert that a Notice of a Federal Tax Lien has been filed will be sent to you in the mail. A Federal tax lien means that an official Notice of a Federal Tax Lien has been filed with the local County Clerk where you reside or in the county where your business operates.

As a public record, a Federal Tax Lien is a recording of the back tax debts of a taxpayer that are owed to the IRS. Such a public notice reads: “There is a lien in favor of the United States on all property and rights to property belonging to this taxpayer for the amount of these taxes, and additional penalties, interest and costs that may accrue”. A Federal tax lien immediately affects your credit history and stands as a potential alert to the general community of your IRS tax problems.

2) IRS Bank Levy

If you do not respond to a Federal tax lien, the IRS will levy your bank accounts. IRS revenue officers use bank levies to access funds directly from your personal accounts. If you have received an IRS Notice of  a Bank Levy, time is of the essence. When IRS revenue officers issue an IRS Bank Levy, your bank is legally obligated to freeze all of your accounts for 21 days.

During this three week period, you have the opportunity to resolve your delinquent tax debt. After the 21 days pass, the bank sends the IRS whatever funds are in your account to cover your tax debt. If there is enough money in your bank account to cover the entire tax debt, this amount will be sent to the IRS.  Once the bank has sent funds to the IRS, it is almost impossible to obtain a refund.

3) Wage Garnishment  or Paycheck Garnishment

If the IRS announces that they are going to garnish your paycheck, it is bad news across the board. For IRS revenue officers, a wage garnishment is very effective way to collect a delinquent income tax debt. The revenue officer will notify your employer of the garnishment, informing your employer of your unpaid tax debt. Once your employer has been notified, they are required by law to send a specified portion of each paycheck  to the IRS.  A portion of the paycheck that would have been paid to you will now be paid to the IRS. This paycheck garnishment remains in effect until your tax debt is paid off or until the IRS agrees to release the garnishment.

If you are self-employed, your are not safe from such a garnishment. The IRS revenue officers can send a wage levy to your clients and levy your accounts receivable. Those clients are required to send any funds they owe your business to the IRS to cover the delinquent tax debt. In addition, your reputation is tarnished with your clients, both because they know about your tax problems and they went through the uncomfortable experience of having to deal with IRS Revenue Officers.

4) Asset Seizures

If there is a tax lien against your property, it means IRS revenue officers are claiming the property as a back-up financial resource if you are not able to cover your tax debt. If IRS revenue officers decide the only way to collect a delinquent tax debt is through an asset seizure, they will issue a tax levy against your property. Once the tax levy has been issued against property, the taxpayer has 30 days to act before the asset seizure will be enacted..

Once the 30 days has passed, you will receive no further notice from the IRS before your assets are seized . The IRS has the power to seize and sell your property and assets in order to cover your tax debt. In general, they will not seize a primary residence. Asset seizure does not only mean hard assets, but soft assets as well. Hard assets include property houses, boats and cars, but the IRS also can seize soft property in the form of retirement accounts, rental income, commissions and the cash value of your life insurance policy. To avoid asset seizures by IRS revenue officers, you need to take action once the string of actions by the IRS revenue officers begin.

If you have been contacted by IRS revenues officers or you have been alerted to collection actions by IRS revenue officers, please get in touch with the Advance Tax Relief LLC. Call 800.790-8574 for a free consultation or fill out our contact form.

ADVANCE TAX RELIEF LLC - We Are The Tax Experts 

December 2013 Individual Due Dates

December 1 - Time for Year-End Tax Planning 

December is the month to take final actions that can affect your tax result for 2013. Taxpayers with substantial increases or decreases in income, changes in marital status or dependent status, and those who sold property during 2013 should call for a tax planning consultation appointment. 

December 10 - Report Tips to Employer 

If you are an employee who works for tips and received more than $20 in tips during November, you are required to report them to your employer on IRS Form 4070 no later than December 10. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 12 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.

December 31 - Last Day to Make Mandatory IRA Withdrawals 

Last day to withdraw funds from a Traditional IRA Account and avoid a penalty if you turned age 70½ before 2013. If the institution holding your IRA will not be open on December 31, you will need to arrange for withdrawal before that date.

December 31 - Last Day to Pay Deductible Expenses for 2013 

Last day to pay deductible expenses for the 2013 return (doesn’t apply to IRA, SEP or Keogh contributions, all of which can be made after December 31, 2013). Taxpayers who are making state estimated payments may find it advantageous to prepay the January state estimated tax payment in December (Please call the office for more information). 

December 31 -  Caution! Last Day of the Year 

If the actions you wish to take cannot be completed on the 31st or a single day, you should consider taking action earlier than December 31st

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***TO BE MARRIED OR NOT TO BE MARRIED FOR TAXES***

We live in changing times. What constitutes a legal marriage has changed and will change further as lawmakers stick their fingers in the pie. Everyone feels when it comes to taxes, single individuals pay more. You hear it all the time. Lawmakers allow married people to use the most-favored tax-rate table: the highly touted Table 1, Married Individuals Filing Joint Returns.1 
True, marriage can produce a tax-rate advantage. However if both husband and wife are working making money this may not be the case. The only way to really know is to play with the numbers.

You definitely save tax money when you marry someone with a lot less taxable income than you have. For example, say you have taxable income of $213,051, and your prospective mate has taxable income of $10,100. If married and filing a joint return, you and your mate would enjoy federal income tax savings of more than $5,500. 2. Further, you realize the marriage savings year-after-year, which means that you could accumulate a sizable advantage during your lifetime.

But if you and your prospective mate are high earners the marriage penalty kicks in. For example, say you each earn $225,000 in taxable income. If you marry, you will pay more than $9,000 in additional income taxes.

Over the years, lawmakers have worked hard to eliminate the marriage penalty. In the 1980s, the marriage penalty was so bad that there were cases of couples divorcing on December 31 and remarrying on January 1. Now that the marriage penalty is far less, the ducking off to the Dominican Republic (Guam is a better choice) for a quickie divorce on December 31 followed by a quickie remarriage on January 1 has pretty much disappeared. That’s especially true when there’s not much of a marriage penalty or bonus. Say that you and your prospective mate each have $80,000 in taxable income. If you marry, you will pay about $400 more a year in federal income taxes—not close to being worth the trip to get divorced and remarried.

ADVANTAGES TO MARRIAGE

1) If your Prospective mate has small business with losses. Those losses offset your Taxable Income.
2) IRA if your single you have to have compensation, not so when you're married and the limitations of compensation increases when you're married.
3) If married the excluded amount of the gain on the sale of qualified residence is $500,000.
If you are single, you can qualify to exclude from taxation up to $250,000 (must qualify).
4) Federal estate and gift tax rules give special advantages to married couples.
For 2013, an individual’s estate qualifies for an exclusion of up to $5.25 million from estate taxes. If married, you and your mate can plan to exclude up to $10.5 million from estate taxes.
5) The unlimited marital deduction allows you to pass all assets to your spouse tax free. 

When getting married the impact on your taxes should be evaluated on a case by case scenerio. Sometimes the best answer for your taxes may be to have a huge reception without a marriage license and just live together. 

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****IRS Frivolous Tax Return Penalty****

You may have to pay a penalty of $5,000 if you file a frivolous tax return or other frivolous submissions. If you jointly file a frivolous tax return with your spouse, both you and your spouse each may have to pay a penalty of $5,000. A frivolous tax return is one that does not include enough information to figure the correct tax or that contains information clearly showing that the tax you reported is substantially incorrect.

You will have to pay the penalty if you filed this kind of return or submission based on a frivolous position or a desire to delay or interfere with the administration of federal tax laws. This includes altering or striking out the preprinted language above the space provided for your signature.

This penalty is added to any other penalty provided by law.

Penalty for bounced checks If you write a check to pay your taxes and the check bounces, the IRS may impose a penalty. The penalty is either 2 percent of the amount of the check - unless the check is under $1,250, in which case the penalty is the amount of the check or $25, whichever is less.

The bottom line is that you must report all your income, file your return and pay your tax by the due date to avoid interest and penalty charges.

If you are an individual or a business and been assessed by the IRS tax penalties and wish to abate these penalties, contact us as quickly as possible.

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*I can’t pay the IRS what I owe, what are my options?

If you are not financially capable of paying back the IRS, you may be able to negotiate an Offer in Compromise, where you can settle your back taxes for less than you owe. If the IRS accepts your offer, you can pay the amount agreed upon, and all federal tax liens or levies are removed.

Negotiating an Offer in Compromise can last up to 18 months and be very complicated. About a quarter of all offers are accepted so it is highly recommended that you get a tax professional to help.

ADVANCE TAX RELIEF - We Solve Tax Problems
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IRS Filed A Tax Lien Against Me? ADVANCE TAX RELIEF LLC

A lien is a public record on your property that says you owe the IRS money. It tells creditors that the IRS has a claim on all your property, including property you buy after the lien is filed. If a lien is attached to your property, you cannot sell that property without a clear title.

If you pay your debt to the IRS, the lien will be released within 30 days. If you never pay your debt, the lien will usually be released automatically 10 years after it is issued.

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DON'T THREATEN IRS EMPLOYEES - ADVANCE TAX RELIEF LLC

Gary McDevitt Arrested for Threatening to Kill an IRS Employee

On July 25, 2013, in the Middle District of Florida, Treasury Inspector General for Tax Administration (TIGTA) special agents arrested Gary McDevitt for a threatening communication transmitted in interstate commerce, and threats of force to intimidate an officer of the United States. [1] 

McDevitt’s arrest was based on a June 12, 2013 indictment. According to court documents, during a telephone communication transmitted from Florida to Illinois, McDevitt threatened to kill a Revenue Officer (RO) of the Internal Revenue Service. McDevitt endeavored to intimidate and impede the RO, who was acting in an official capacity, because of a notice of levy filed on McDevitt’s bank account. [2]

McDevitt was released on a $25,000 unsecured bond and was ordered to avoid contact with the RO. [3] A trial date has been set for September 3, 2013. [4]

[1] M.D. Fla. Return of Warrant for Arrest filed July 26, 2013.
[2] M.D. Fla. Indict. filed June 12, 2013.
[3] M.D. Fla. Release Bond filed July 26, 2013.
[4] M.D. Fla. Criminal Docket filed June 12, 2013

Owe the IRS and need help? Call or contact us via web today!

ADVANCE TAX RELIEF - We Solve Tax Problems
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Some Facts for Mortgage Debt Forgiveness

If your mortgage debt is partly or entirely forgiven during tax years 2007 through 2012, you may be able to claim special tax relief and exclude the debt forgiven from your income. Here are 10 facts the IRS wants you to know about Mortgage Debt Forgiveness.

1. Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence.
2. The limit is $1 million for a married person filing a separate return.
3. You may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure.
4. To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence.
5. Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion.
6. Proceeds of refinanced debt used for other purposes for example, to pay off credit card debt do not qualify for the exclusion.
7. If you qualify, claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attach it to your federal income tax return for the tax year in which the qualified debt was forgiven.
8. Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the tax relief provision. In some cases, however, other tax relief provisions such as insolvency may be applicable. IRS Form 982 provides more details about these provisions.
9. If your debt is reduced or eliminated you normally will receive a year-end statement, Form 1099-C, Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.
10. Examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven in Box 2 as well as the value listed for your home in Box 7.

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What is the IRS Automated Collection Systems?

A computer based auto-dialer collection system that monitors delinquent taxes at this point. Accounts can remain at this stage for up to a year. ACS collectors seek to know a delinquent taxpayer's financial profile, including income, expenses, and assets. This is one of the best times to negotiate an Installment Agreement or CNC status.

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Contact the Tax Experts today!!!