CAN’T PAY YOUR YOUR 2020 TAX BILL?

While many Americans get a tax refund from the IRS each year, some taxpayers owe. Sometimes the bill can be too large for some individuals to pay at once, so the IRS has several flexible options.

HOW DO I PAY WHEN I FILE?

Your payment options depend on if you file online or through the mail.

Electronic Withdrawal: Provide your bank’s routing number and your account number to have the amount withdrawn on a date of your choosing any time before Tax Day (typically April 15).

Credit Card: If you would rather pay with your credit card, there are several third-party payment companies who can process your payment. You can learn more about paying your taxes with a credit card here. 

If you owe state taxes, some states allow you to pay directly on their website using debit, credit, or electronic funds transfer.

If you need to mail in your payment, you can pay using check or money order. 

NEED HELP WITH IRS BACK TAXES, AUDIT REPRESENTATION OR SMALL BUSINESS TAX PREPARATION?

ADVANCE TAX RELIEF LLC
www.advancetaxrelief.com
BBB A+ RATED
CALL (713)300-3965 

WHAT IF I CAN’T PAY WHEN I FILE?

First, it’s important to understand that you are still required to file your tax return on time even if you can’t pay the taxes you owe on time. Filing on time will prevent you from being charged late filing penalties.

If you can’t pay your taxes when you file, you have several options. You can schedule an automatic payment from your bank, like many people do with regular bills. Make sure you schedule the payment before Tax Day! 

If you can’t pay in full by Tax Day, the IRS offers several payment plans. You can apply for a payment plan with the IRS here.

Short-term payment plan:
If you can pay your bill in full in less than 120 days, apply for this plan to pay monthly automatic payments. 

Long-term payment plan (installment agreement) option 1:
If you need more than 120 days to pay, use this plan to pay through direct debit (automatic monthly payments from your checking account). 

Long-term payment plan (installment agreement) option 2:
This plan is very similar to the plan above, but includes multiple payment options, including:

Monthly payment directly from a checking or savings account (Direct Pay)
Monthly payment electronically online or by phone using Electronic Federal Tax Payment System (EFTPS)
Monthly payment by check, money order, or debit/credit card (Fees apply when paying by card)
Change an existing payment plan:
If your current plan is not working for you or you owe more money, you can revise it online, by phone, mail, or in person.

Reinstate a payment plan:
If you previously had a payment plan and need to reinstate it for the current tax year, you can apply to use your same plan again. 

Offer in Compromise:
If you meet strict IRS requirements, you might be able to settle your tax bill for less than the full amount you owe. 

First Time Penalty Abatement:
If you meet certain guidelines, you might be able to waive failure-to-file and failure-to-pay penalties. 

What if I don’t pay my taxes? 
If you fail to pay your tax bill by Tax Day, you will begin to incur penalties and fees beginning the day after you fail to pay. 

Some of the more serious consequences include: 

A federal tax lien can be filed against your property.
Your salary/accounts can be seized through a tax levy.
You can be served a summons asking you to provide more information.

GET TAX RELIEF HELP TODAY

Advance Tax Relief is headquartered in Houston, TX.  We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more.

Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

#TaxDebtHelp #FilingBackTaxesHelp #TaxReliefHouston #BackTaxRelief #TaxAttorneysNearMe #TaxLawyer #TaxReliefFirms #OfferInCompromise #TaxResolution #LocalTaxAttorney #HelpFilingBackTaxes #TaxDebtSettlement #TaxReliefAttorneys #TaxHelp

SOME TAX TIPS AND DEDUCTIONS FOR 2020

OVERVIEW

Your tax bill isn't chiseled in stone at the end of the year. Here are some tax tips and steps you can take after January 1 to help you lower your taxes, save money when preparing your tax return, and avoid tax penalties.

UPDATE: The Treasury recently announced tax changes and updates in response to COVID-19, updates include an extension of the first installment of tax year 2020 quarterly estimated taxes to July 15, 2020. Some information in this post however requires additional IRS guidance and may require updating. We will update as soon as we receive additional guidance. Please see the latest information on tax deadlines and updates related to COVID-19 here.

If you think your tax bill is chiseled in stone at the end of the year, think again. Though it’s true that most money-saving options to defer income or accelerate deductions become much more limited after December 31, there is still a lot you can do to make the tax-filing season cheaper and easier.
Here are some tax tips to help you lower your taxes, save money when preparing your tax return, and avoid tax penalties.

NEED HELP WITH IRS BACK TAXES, AUDIT REPRESENTATION OR SMALL BUSINESS TAX PREPARATION?

ADVANCE TAX RELIEF LLC
www.advancetaxrelief.com
BBB A+ RATED
CALL (713)300-3965

1. Contribute to retirement accounts
If you haven’t already funded your retirement account for 2019, do so by April 15, 2020. That’s the deadline for contributions to a traditional IRA, deductible or not, and to a Roth IRA.

If you have a Keogh or SEP and you get a filing extension to October 15, 2020, you can wait until then to put 2019 contributions into those accounts.

To start tax-free compounding as quickly as possible, however, don’t dawdle in making contributions.

Making a deductible contribution will help you lower your tax bill this year. Plus, your contributions will compound tax-deferred. It’s hard to find a better deal.

If you put away $5,000 a year for 20 years in an investment with an average annual 8% return, your $100,000 in contributions will grow to $247,000.

The same investment in a taxable account would grow to only about $194,000 if you’re in the 25% federal tax bracket (and even less if you live in a state with a state income tax to bite into your return).

To qualify for the full annual IRA deduction in 2019, you must:
not be eligible to participate in a company retirement plan, or
If you are eligible, you must have adjusted gross income of $64,000 or less for singles, or $103,000 or less for married couples filing jointly.

If you are not eligible for a company plan but your spouse is, your traditional IRA contribution is fully-deductible as long as your combined gross income does not exceed $193,000.
For 2019, the maximum IRA contribution you can make is $6,000 ($7,000 if you are age 50 or older by the end of the year). For self-employed persons, the maximum annual addition to SEPs and Keoghs for 2019 is $56,000.

Although choosing to contribute to a Roth IRA instead of a traditional IRA will not cut your 2019 tax bill—Roth contributions are not deductible—it could be the better choice because all withdrawals from a Roth can be tax-free in retirement.

Withdrawals from a traditional IRA are fully taxable in retirement. To contribute the full $6,000 ($7,000 if you are age 50 or older by the end of 2019) to a Roth IRA, you must earn $122,000 or less a year if you are single or $193,000 if you’re married and file a joint return.

The amount you save for making a contribution will vary. If you are in the 25% tax bracket and make a deductible IRA contribution of $6,000, you will save $1,500 in taxes the first year. Over time, future contributions will save you thousands, depending on your contribution, income tax bracket, and the number of years you keep the money invested.


2. Make a last-minute estimated tax payment
If you didn’t pay enough to the IRS during the year, you may have a big tax bill staring you in the face. Plus, you might owe significant interest and penalties, too.

According to IRS rules, you must pay 100% of last year’s tax liability or 90% of this year’s tax or you will owe an underpayment penalty.

If your adjusted gross income for 2018 was more than $150,000, you have to pay more than 110% of your 2018 tax liability to be protected from a tax year 2019 underpayment penalty.

If you make an estimated payment by January 15, you can erase any penalty for the fourth quarter, but you still will owe a penalty for earlier quarters if you did not send in any estimated payments back then.

But, if your income windfall arrived after August 31, 2019, you can file Form 2210: Underpayment of Estimated Tax to annualize your estimated tax liability, and possibly reduce any extra charges.

A note of caution: Try not to pay too much. It’s better to owe the government a little rather than to expect a refund. Remember, the IRS doesn’t give you a dime of interest when it borrows your money.

3. Organize your records for tax time
Good organization may not cut your taxes. But there are other rewards, and some of them are financial. For many, the biggest hassle at tax time is getting all of the documentation together. This includes last year’s tax return, this year’s W-2s and 1099s, receipts and so on.

How do you get started?

Print out a tax checklist to help you gather all the tax documents you’ll need to complete your tax return.
Keep all the information that comes in the mail in January, such as W-2s, 1099s and mortgage interest statements. Be careful not to throw out any tax-related documents, even if they don’t look very important.

Collect receipts and information that you have piled up during
the year.

Group similar documents together, putting them in different file folders if there are enough papers.

Make sure you know the price you paid for any stocks or funds you have sold. If you don’t, call your broker before you start to prepare your tax return.

Know the details on income from rental properties. Don’t assume that your tax-free municipal bonds are completely free of taxes. Having this type of information at your fingertips will save you another trip through your files.

4. Find the right tax forms
You won’t find all of them at the post office and library. Instead, you can go right to the source online.
View and download a large catalog of forms and publications at the Internal Revenue Service website or have them sent to you by mail.
You can search for documents as far back as 1980 by number or by date.
The IRS also will direct you to sites where you can pick up state forms and publications.

5. Itemize your tax deductions
It’s easier to take the standard deduction, but you may save a bundle if you itemize, especially if you are self-employed, own a home or live in a high-tax area.
Itemizing is worth it when your qualified expenses add up to more than the 2019 standard deduction of $12,200 for singles and $24,400 for married couples filing jointly.
Many deductions are well known, such as those for mortgage interest and charitable donations.
You can also deduct the portion of medical expenses that exceed 7.5% of your adjusted gross income for 2019 (10% of AGI beginning in 2020).

6. Don't shy away from a home office tax deduction
The eligibility rules for claiming a home office deduction have been loosened to allow more self-employed filers to claim this break. People who have no fixed location for their businesses can claim a home office deduction if they use the space for administrative or management activities, even if they don’t meet clients there.

As always, you must use the space exclusively for business.
Many taxpayers have avoided the home office tax deduction because it has been regarded as a red flag for an audit. If you legitimately qualify for the deduction, however, there should be no problem.

\You are entitled to write off expenses that are associated with the portion of your home where you exclusively conduct business (such as rent, utilities, insurance and housekeeping). The percentage of these costs that is deductible is based on the square footage of the office to the total area of the house.
A middle-class taxpayer who uses a home office and pays $1,000 a month for a two-bedroom apartment and uses one bedroom exclusively as a home office can easily save $1,000 in taxes a year. People in higher tax brackets with greater expenses can save even more.

One home office trap that used to scare away some taxpayers has been eliminated.

In the past, if you used 10% of your home for a home office, for example, 10% of the profit when you sold did not qualify as tax-free under the rules that let homeowners treat up to $250,000 of profit as tax-free income ($500,000 for married couples filing joint returns).

Since 10% of the house was an office instead of a home, the IRS said, 10% of the profit wasn’t tax-free. But the government has had a change of heart. No longer does a home office put the kibosh on tax-free profit.

You do have to pay tax on any profit that results from depreciation claimed for the office after May 6, 1997. It’s taxed at a maximum rate of 25%. (Depreciation produces taxable profit because it reduces your tax basis in the home; the lower your basis, the higher your profit.)

7. Provide dependent taxpayer IDs on your tax return
Be sure to plug in Taxpayer Identification Numbers (usually Social Security Numbers) for your children and other dependents on your return. Otherwise, the IRS will deny any dependent credits that you might be due, such as the Child Tax Credit.

Be especially careful if you are divorced. Only one of you can claim your children as dependents, and the IRS has been checking closely lately to make sure spouses aren’t both using their children as a deduction. If you forget to include a Social Security number for a child, or if you and your ex-spouse both claim the same child, it’s highly likely that the processing of your return (and any refund you’re expecting) will come to a screeching halt while the IRS contacts you to straighten things out.

After you have a baby, be sure to file for your child's Social Security card right away so you have the number ready at tax time. Many hospitals will do this automatically for you.
If you don’t have the number you need by the tax filing deadline, the IRS says you should file for an extension rather than sending in a return without a required Social Security number.

8. File and pay on time
If you can’t finish your return on time, make sure you file Form 4868 by July 15, 2020. Form 4868 gives you a six-month extension of the filing deadline until October 15, 2020. On the form, you need to make a reasonable estimate of your tax liability for 2019 and pay any balance due with your request. Requesting an extension in a timely manner is especially important if you end up owing tax to the IRS.

If you file and pay late, the IRS can slap you with a late-filing penalty of 4.5% per month of the tax owed and a late-payment penalty of 0.5% a month of the tax due.
The maximum late filing penalty is 22.5% and the late-payment penalty tops out at 25%.
By filing Form 4868, you stop the clock running on the costly late-filing penalty.


9. File electronically
Electronic filing works best if you expect a tax refund. Because the IRS processes electronic returns faster than paper ones, you can expect to get your refund three to six weeks earlier. If you have your refund deposited directly into your bank account or IRA, the waiting time is even less.

There are other advantages to e-filing besides a fast refund:
The IRS checks your return to make sure that it is complete, which increases your chances of filing an accurate return. Less than 1% of electronic returns have errors, compared with 20% of paper returns.

The IRS also acknowledges that it received your return, a courtesy you don’t get even if you send your paper return by certified mail. That helps you protect yourself from the interest and penalties that accrue if your paper return gets lost.
If you owe money, you can file electronically and then wait until the federal tax filing deadline to send in a check along with Form 1040-V. You may be able to pay with a credit card or through a direct debit.

With a credit card, expect to pay a service charge of as much as 2.5%.

With direct debit, you may delay the debiting of your bank account until the actual filing deadline.

GET TAX RELIEF HELP TODAY

Advance Tax Relief is headquartered in Houston, TX. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

#TaxDebtHelp #FilingBackTaxesHelp #TaxReliefHouston #BackTaxRelief #TaxAttorneysNearMe #TaxLawyer #TaxReliefFirms #OfferInCompromise #TaxResolution #LocalTaxAttorney #HelpFilingBackTaxes #TaxDebtSettlement #TaxReliefAttorneys #TaxHelp

HOW TO ADDRESS YOUR IRS BACK TAX DEBT PENALTIES

Tax Debt Penalties

IRS penalties, at a glance:

There are many types of IRS tax penalties.

Reasonable cause and first-time abatement are the most common ways to get penalties removed.
It’s common to have to appeal penalty relief denials to get the IRS to look at your specific facts.

You can get expert help with IRS tax penalties.
What you need to know about IRS penalties

The IRS issues about 40 million penalties each year. There are almost 150 types of IRS penalties, but the most common ones are caused by late filing and late payment.

The IRS offers four options for taxpayers to get their penalties removed — if the circumstances fit.

You or your tax professional will need to investigate which options you may be able to use, and request penalty relief from the IRS.
Here’s how it works.

NEED HELP WITH IRS BACK TAXES, AUDIT REPRESENTATION OR SMALL BUSINESS TAX PREPARATION?

ADVANCE TAX RELIEF LLC
www.advancetaxrelief.com
BBB A+ RATED
CALL (713)300-3965

How to address IRS penalties

1. Understand your options, based on your facts.

Tax penalties are based on the taxes you owe, so make sure you get the tax right first. Start by double checking your return. Consider amending your return if the taxes are incorrect.
Understand the four penalty abatement options:
IRS error
Specific legal exceptions to penalties
Reasonable cause
Administrative waivers
Get the facts on your penalties:
Penalty type(s)
Amounts owed
Year(s) involved
Causes

Based on your situation, identify which penalty relief options you can use. Keep in mind that more than one option may be applicable.

2. Request penalty abatement from the IRS.
Put together your penalty abatement request for the specific option you’re pursuing.
Send your request to the proper unit at the IRS.
Use the right method to submit your request
If you’ve already paid the penalty, you may have to submit a claim-for-refund form.

If you’re requesting an administrative waiver for penalty abatement, you may be able to handle the request with a phone call to the right IRS function.

Respond quickly to any IRS requests for documents supporting your abatement request, and be prepared to argue the merits of your position.

If the IRS denies your request, appeal the decision by the deadline, and argue your position with the IRS Appeals Office.

3. If the IRS denies your request, appeal the decision by the deadline, and argue your position with the IRS Appeals Office.
Most appeals requests should be filed within 30 days of the IRS denial of the original appeal.

You’ll need to provide a chronology of events that caused you to file or pay late. Be specific on dates and provide backup documentation to support your chronology.

You may need to provide the IRS with additional legal arguments, such as a court case that supports your position.
The IRS will ask you how the unforeseen events affected your life and/or work. Be prepared to show how you couldn’t perform other critical tasks, such as making necessary payments for bills and utilities, and meeting personal and work obligations.

4. Prevent future penalties.
Make sure you file accurately and pay your taxes on time in the future.
If you have penalties related to late payments, adjust your withholding and/or make estimated tax payments.

GET TAX RELIEF HELP TODAY
If you think that you may need help filing your 2018/2019 tax return or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more.

Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

#TaxDebtHelp #FilingBackTaxesHelp #TaxReliefHouston #BackTaxRelief #TaxAttorneysNearMe #TaxLawyer #TaxReliefFirms #OfferInCompromise #TaxResolution #LocalTaxAttorney #HelpFilingBackTaxes #TaxDebtSettlement #TaxReliefAttorneys #TaxHelp

THINGS NOBODY TELL YOU ABOUT WHEN YOU START A SMALL BUSINESS

Wondering how to start a small business? Launching your own company can be a rewarding experience and a great way to make money and build a dream. But before you launch your startup, you need to be aware of a number of things that are critical to reach your business goal.

Creating a business is not a simple task — it includes important details that you have to put in place. The more you know going in the more control you have to become a successful entrepreneur

NEED HELP WITH IRS BACK TAXES, AUDIT REPRESENTATION OR SMALL BUSINESS TAX PREPARATION?

ADVANCE TAX RELIEF LLC
www.advancetaxrelief.com
BBB A+ RATED
CALL (713)300-3965

What Do I Need to Start a Business?

To jump start your journey, you have to start somewhere. One of the good places to begin is answering “What do I need to start a business?” Here are some things you should know about before starting your own business:

1 – A business plan
A business plan is an essential tool to outline a roadmap for your company. It is a written guide that helps you project the future of your business and gives you a clear direction of what to plan and expect. A business plan should be professional and should set out to grow your company. This vital document should include your company profile, vision, mission, business goals, company description, market analysis, business structure, strategies, product line, financial predictions and funding request.

2 – A business structure
Examine and research all the different business structures that exist and decide the best option for your business: sole proprietorship, partnership, corporation, S corporation, or Limited Liability Company (LLC). Your business structure will affect your business growth and taxation. Not all new businesses qualify to start as a Limited Liability Company or a sole proprietorship. Get more in-depth information before you determine a legal structure by talking to a tax pro or lawyer.

3 – Register your business with your state government
You need to register your business with your state government. Obtain an Employer Identification Number from the IRS and with your state revenue agency. In many states, businesses established as sole proprietors don’t need to register with the state unless they operate under their own name. The legal name you use to register your business will be used to legally operate and obtain financial help if needed.

4 – Find out your tax requirements
You need to know your business tax requirements. Your business structure determines the type of tax return you have to file with the IRS. At the federal level, business taxes include the income tax, the self-employment tax, taxes for employers and the excise tax. At the state level, business or corporate taxes requirements depends on the legal structure of your company and the state where it does business. The more organized you are with your taxes, the fewer fees and penalties you will pay.

5 – Separate your business and personal finances
It is important to separate your business from your personal life to avoid money issues and financial consequences. You need to open a separate business bank account. With this account, keep track of the money received from your business and you can establish a good financial history for future funding requests.

6 – Seek legal advice
All entrepreneurs should seek legal advice before starting a new business. Most business owners think of legal counsel only when they run into a problem, but legal consultation is the best way to prevent trouble and set the company on the right path. Keeping your business out of trouble or preventing business issues with the help of an attorney is the best proactive preparation. A legal problem can critically impact the operation of a company.

7 – Build a business emergency fund
An emergency fund can cover your expenses in a time of a business “drought” and help you avoid financial disaster. It can also help cover your tax requirements. Move money every month into an emergency fund to build your savings and be prepared for any financial situation so you can focus on developing and growing your business.

Make sure you cover all bases before starting your business and remember to stay organized, prepared and ahead of the game. Planning is a vital part of a successful business.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018/2019 tax return or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX. We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

#TaxDebtHelp #FilingBackTaxesHelp #TaxReliefHouston #BackTaxRelief #TaxAttorneysNearMe #IRSLawyer #TaxReliefFirms #OfferInCompromise #TaxResolution #LocalTaxAttorney #HelpFilingBackTaxes #TaxDebtSettlement #TaxReliefAttorneys #IRSHelp

TAX TIPS FOR 2020 TAX SEASON

Tax Preparation, Small Business Tax Preparation

Yes, it’s that time again. Something called tax season, like it’s some sort of holiday.

Still, it is coming and, like every year before, we want to provide some tips to prepare for the 2020 tax season. Some of the advice will sound familiar, but it bears repeating.

Some involve changes to the way the IRS and tax rules have evolved.

Since there is no point delaying, except to procrastinate about a chore nobody likes, let’s get this party started

Tip #1 - As Always, Get Organized
If you ignored last year’s advice to get your files organized for when tax time rolled around again, now you get to hear it again.

It's important to get organized. Create either a digital or printed form of every source of income and expense so your tax professional can get your return done in a timely manner. From now on, gather them and file them away as you go, so the 2021 tax season starts off on the right foot.

The very first thing you need to know is the social security number of everyone you list on your tax return - yours, your spouse’s or domestic partner’s, and your kids’.

Here are examples of records you'll want to keep:

Income Records
W-2, provided by your employer
1099 - MISC forms, provided from anyone you worked for as an independent contractor.
Social security income statements
Investment property income
Alimony payments
Debt cancellation
Game winnings (sorry, you have to)
Jury duty income
Payments of virtual currency
Expense Records
Mortgage interest
Property taxes
Medical expenses
Higher education expenses
Charitable contributions
Educator expenses
IRA and HSA contributions
Child care costs
Student loan interest

The more adulting you do, the more documentation you seem to need, right? And if you are self-employed, you also need to keep track of business expenses such as travel, supplies, equipment, and your home office.

NEED HELP WITH IRS BACK TAXES, AUDIT REPRESENTATION OR SMALL BUSINESS TAX PREPARATION?

ADVANCE TAX RELIEF LLC
www.advancetaxrelief.com
BBB A+ RATED
CALL (713)300-3965

Tip #2 Look for Changes in Tax Law

Each year, the government tries to play with the tax legislation, ostensibly to simplify things. We all know how that goes.
You'll want to find out whether any of the changes impact you, from laws such as the Tax Cuts and Jobs Act to whether deductions or credits you applied for last year are still available.

Make sure you use the correct tax forms. The IRS updates its forms every year. To ensure you have the absolute latest, check with the IRS website and make sure your tax preparer is up to speed, too.

One piece of good news is that the IRS can no longer penalize you for not having health insurance in 2019. The bad news is, if you live in certain jurisdictions like Washington, D.C., you may still get dinged by the local or state government.

Check for forms 1095-A, 1095-B, and 1095-C indicating whether you and your family had health coverage. If you don’t receive one automatically, ask your human resources department or your insurer to obtain a copy.

Tip #3 Determine Whether to Itemize

This question has become less important since the new standard deductions came into play. However, it can still be beneficial if you are eligible for certain deductions and tax breaks.

For example, if you had a lot of medical expenses last year and you met the 10% threshold, you will need to itemize to claim these expenses. If you are filing business taxes, you may have the ability to write off expenses such as business equipment. Perhaps you meet the criteria for one of the few remaining tax credits. It’s worth it to find out.

Tip #4 Go to Identity Theft Central

The IRS has a new site providing online access to information about identity theft and data security protection for taxpayers, tax professionals, and businesses. When someone steals personal identification to commit tax fraud, that makes it the feds business.

The federal government isn’t known for moving quickly, but in the case of identity theft, they have really run with the ball to make sure your data is safe and that nobody can get your refund but you. But, hey, it would be nice if one of these thieves would pay your taxes once in awhile, wouldn’t it?

Another tool the IRS has created is the online-only Identity Protection PIN Opt-In Program:

The IP PIN is a six digit number that provides a second layer of protection for your Social Security Numbers.

Taxpayers are eligible for this voluntary program if they filed a tax return last year from one of the states listed on the website.

You can also download a copy of the new publication to read up on this program - Publication 5367, Identity Protection PIN Opt-In Program for Taxpayers.

If you decide to use this program, you must do it online. You cannot get an IP PIN issued over the phone.

Tip #5 Take Advantage of Free IRS Assistance with Your Taxes

The IRS has an array of options and tools to help you with filing, preparing your tax return, or researching questions about taxes. The official website is updated with changes to tax law, helpful information about every form and publication you may need, and is actually pretty easy to use.

One tool is the Interactive Tax Assistant. It takes you through a series of questions and provides answers based on your input. It cuts down on guessing where to find information. You can also use it to determine your filing status, your eligibility for certain credits or deductions, or answer other general questions.

While we know you don’t love the smell of taxes in the morning (or any other time of day), we still want to make sure you have all the tools and information you need to keep the 2020 Tax Season under control. While you get your taxes completed, take the time to put some processes in place to make it easier next year.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018/2019 tax return or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX.  We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more.

Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

#TaxDebtHelp #FilingBackTaxesHelp #TaxReliefHouston #BackTaxRelief #TaxAttorneysNearMe #IRSLawyer #TaxReliefFirms #OfferInCompromise #TaxResolution #LocalTaxAttorney #HelpFilingBackTaxes #TaxDebtSettlement #TaxReliefAttorneys #IRSHelp

TAX IMPLICATIONS FOR REAL ESTATE INVESTORS WHO FLIP HOMES

Taxes for Flipping Houses, Back Tax Debt, Audit Help

The number of home flipping sales is on the rise. As the real estate market across the country is booming, house flipping is becoming a lucrative job option.
However, there is still a lot of confusion around taxes and flipping houses for profit. Read on to learn more about taxes on flipping houses.

Flipping Houses and Capital Gains Rules
In many cases, real estate is considered a capital asset, and the sale of the home can qualify for preferential capital gain tax rates. However, when you’re in the trade or business of flipping houses for profit this may not be the case.

Normally, if you purchase a piece of real estate to fix up and sell it at later date, the profit is taxed under the capital gains rules. There are even more favorable rules if the property qualifies as your principal residence. If you live in it more than two years during the five-year period preceding the sale, you can often exclude the gain from taxation altogether under special rules for homeowners.

However, the IRS classifies individuals who actively purchase and remodel real estate for profit on a continuing basis as dealers rather than investors. For these people, the real estate is treated as inventory, rather than capital assets, and the profits on the sale of those properties is treated as ordinary income, subject to the self-employment tax.

Rolling Proceeds to Avoid Taxation
Another source of confusion is that many potential flippers believe they can avoid taxation if they roll the proceeds of the sale into purchasing another project to flip (i.e., the property ladder theory). The truth is, if you’re considered to be in the trade or business of flipping real estate, this is not possible, as this treatment isn’t allowed for property held for resale.

Flipping Houses: Tax Deductions
House flipping is obviously a costly business, with numerous expenses incurred along the way. If you are operating as a business you may think you can find tax deductions to lower your tax obligation. Unfortunately, most of the home flipping expenses are not immediately tax deductible. Instead, they must be capitalized into (i.e. added to) the basis (the original value) of the residence. Capitalized costs include:

The cost of the home itself
Direct materials
Direct labor
Utilities
Rent
Indirect labor
Equipment depreciation
Insurance
Production period interest
Real estate taxes allocable to each project

You then get a tax benefit from these expenses when you sell the property as the taxable gain is reduced by the amount of basis in property.

Consult a tax pro who specializes in this area for more guidance on flipping houses and tax deductions.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018/2019 tax
return or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX.  We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

#TaxDebtHelp #FilingBackTaxesHelp #TaxReliefHouston #BackTaxRelief #TaxAttorneysNearMe #IRSLawyer #TaxReliefFirms #OfferInCompromise #TaxResolution #LocalTaxAttorney #HelpFilingBackTaxes #TaxDebtSettlement #TaxReliefAttorneys #IRSHelp

HOW TO SETTLE YOUR BACK TAX DEBT FOR PENNIES IF YOU QUALIFY

Tax Relief, Tax Debt Help, Tax Attorneys, Small Business Tax Preparation

WHAT IS AN OFFER IN COMPROMISE

An OIC is an agreement between you and the IRS that lets you settle your liabilities for an amount lower than what you really owe. However, this is not something everyone can take advantage of, and there are certain criteria to be met in order to qualify for an OIC. The OIC should be considered only when all other payment options have been assessed and exhausted, which can require turning to a tax professional for assistance.

WHO IS ELIGIBLE?

The IRS will look at your assets, ability to pay, income, and expenses to determine whether you are eligible for an OIC. This will include verifiable information with regard to your investments, available credit, retirement plans, other assets, and cash. If you can demonstrate that you are unable to wholly fulfill your tax liability or show that doing so will lead to severe financial hardship, then the IRS might agree to an OIC. If you are involved in open bankruptcy proceedings, you are ineligible for an OIC.

NEED HELP WITH IRS BACK TAXES, AUDIT REPRESENTATION OR SMALL BUSINESS TAX PREPARATION?

ADVANCE TAX RELIEF LLC
www.advancetaxrelief.com
BBB A+ RATED
CALL (713)300-3965


PRESENTING AN OFFER IN COMPROMISE

Before presenting your offer, it is important to file all your tax returns that are due or past due. You must also make all estimated tax payments for the current year. If you are a business owner and have employees, it is essential you pay all federal tax deposits for the current year before submitting your offer. Once you meet this criteria, you must come up with a realistic offer the IRS might look at favorably. The IRS usually applies a formula for this offer that is based on any leftover monthly income after your allowed expenses, plus any income available from your assets.

Keep in mind that failure to pay your OIC installments on time will be treated as a default which will remove you from the OIC program and require you to pay the remaining balance of the original tax debt. New tax problems, including penalties and interest recalculated from the date of the OIC agreement, will be assessed. The IRS is not likely to enter into a second settlement agreement with you.

CHOOSING A PAYMENT SCHEDULE

Your initial payment will depend on the offer you make and the payment option you choose. There are two payment options to choose from, once you arrive at an OIC.

Lump Sum: Here, you can submit a 20% down payment on the total offer amount along with the application. In this case, the IRS will send you a written confirmation if your offer is accepted. The rest of the amount will then have to be paid in five or fewer installments.

Monthly Payments: You can repay the IRS through monthly payments spread out over a period of up to 24 months, or monthly payments that extend up to the remaining statute of limitations of your tax debt. Here too, the initial payment has to be submitted along with the application. You must keep paying the monthly installments till the IRS arrives at a decision on your offer.

You might be exempted from making the initial payment or sending the application fee if you are eligible for a Low-Income Certification. You will not be required to pay monthly installments for the period your application is under consideration.

WHAT HAPPENS WHEN THE IRS MAKES A DECISION

Once you have submitted your offer, it can take months for the IRS to arrive at a decision. If you do not hear from the IRS within two years of the date the agency receives your offer, you can take it to mean that your offer has been accepted.

When an offer is accepted, you will have to accede to the offer terms outlined. As with any tax debt, all refunds you expect to receive in the calendar year, will go toward your tax debt. Until you completely pay your debt in full, your federal tax lien will not be released. Also, remember that some of the information related to the offer terms may be available to the public for review. If your offer is rejected, you will have 30 days to appeal the IRS’ decision.

OTHER WAYS TO SETTLE YOUR BACK TAX DEBTS

In addition to an Offer in Compromise, there are some other to pay off your tax debt to the IRS. They include:

Partial Payment Installment Agreement: This is a recent option offered by the IRS. Under this, you can sign up for a long-term payment plan to pay off a reduced amount of your tax debt. This is an installment agreement and can help you negotiate the lowest possible monthly amount to pay your back taxes.

Other Types of Installment Agreements: Here, you can set up a monthly installment plan to pay off the IRS. There are two types of installment agreements; one is free and the other has a fee. With either option, you choose the amount of monthly payment as long as you can pay your tax debt within the timeframe. A long-term installment plan allows you to pay your taxes within six years, and has an associated fee based on how you choose to make your payments: by check, money order, direct debit, or other online payment methods. In a short-term installment plan, you must pay your tax debt within 120 days, and there are no fees to enter into this plan. If you are unable to pay your tax bill within the 120 days, you will have to apply for the long-term installment plan and pay the associated fees. In all cases, penalties and interest continues to accrue on the unpaid balance, and you will be billed for all remaining penalties and interest with your last tax payment.

Filing for Bankruptcy: By doing this, you may be able to discharge some types of income tax debt with a Chapter 7 or Chapter 13 bankruptcy proceeding. However, the rules are strict and you should check to see if you qualify to write off your tax debt under this clause before actually filing for bankruptcy.

Not Currently Collectible: Under this program, the IRS voluntarily gives you a breather of about a year so you can get your finances in order. This can come in handy, particularly when there is an imminent IRS lien, levy, or seizure looming over you. Taxpayers in serious financial trouble and without sufficient monthly income to pay necessary living expenses may qualify for this program.

While there are no guarantees the IRS will accept any of these settlement offers, knowing your options when it comes to paying off tax debt can only serve to benefit you. Settling your tax debt can be confusing, and having a tax professional on hand can be a big help.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018/2019 tax return or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

Advance Tax Relief is headquartered in Houston, TX.  We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

#TaxDebtHelp #FilingBackTaxesHelp #TaxReliefHouston #BackTaxRelief #TaxAttorneysNearMe #IRSLawyer #TaxReliefFirms #OfferInCompromise #TaxResolution #LocalTaxAttorney #HelpFilingBackTaxes #TaxDebtSettlement #TaxReliefAttorneys #IRSHelp

CONSEQUENCES WHEN YOU OWE THE IRS (TAX DEBT RELIEF)

Let’s face it. When you owe the IRS and can’t pay, it’s tempting to ignore the issue. Usually, this boils down to fear of the unknown.

If you contact the IRS, will it get you in even more trouble

The reality is, you should only be afraid if you ignore the issue. If you ignore the tax bill you owe, the IRS can eventually force you to pay using several tools – like federal tax liens, levies, and wage garnishments. And that’s on top of penalties and interest that will pile up.

The good news: The IRS offers options when you can’t pay the taxes you owe – from simple extensions of time to monthly payment plans – and even programs for people in financial hardship situations.

But if you’re still weighing whether to get in touch with the IRS – here are the Top 10 consequences of ignoring your tax bill.

1. You’ll get IRS notices.

The IRS has to notify you of your tax bill and send certain notices before doing anything else, like collecting your balance with enforcement tools. In and of themselves, IRS letters and notices are a minor nuisance – but if you ignore them, they’ll lead to more significant actions.

2. The IRS will put you in automated collection.

The IRS Automated Collection System (ACS) is your likely next stop if you ignore the notice. ACS is the primary IRS function that collects back taxes. ACS can issue liens and levy bank accounts and wages. The notices you receive from ACS will start to explain more serious consequences if you don’t comply by the deadline.

NEED HELP WITH IRS BACK TAXES, AUDIT REPRESENTATION OR SMALL BUSINESS TAX PREPARATION?

ADVANCE TAX RELIEF LLC
www.advancetaxrelief.com
BBB A+ RATED
CALL (713)300-3965

3. The IRS can take your refund.

If you owe taxes to the IRS and end up with a tax refund due to you in a later year, the IRS will keep the refund. That’s true regardless of whether you’re in an agreement to pay. The good news is that your refund will reduce the tax bill you owe, also reducing your interest.

4. Interest will build up on your balance.

On top of your tax bill, the IRS is going to charge you interest. As the balance grows, so does the interest. The current rate is 5% annually.

5. The IRS will charge you penalties.

On top of interest, the IRS charges a failure to pay penalty on your unpaid tax balance (0.5% per month). But that penalty rate doubles to 1% per month if the IRS has sent you many notices to collect and you haven’t made arrangements to pay. There is a little good news, though. Once you set up a payment agreement with the IRS, the penalty rate drops to 0.25% per month.

6. The IRS could publicly file a federal tax lien.

If you owe taxes to the IRS and got a notice about the balance due, but you didn’t pay, the IRS can file a Notice of Federal Tax Lien. A federal tax lien alerts creditors about your tax debt, which basically protects the IRS’ interest in your assets, if you try to sell property or borrow against it.

Because federal tax liens are public information, many people don’t want the negative impact to their reputations. Also, a lien will negatively impact your access to credit.

Note: Declaring bankruptcy won’t get rid of your tax debt and associated liens.
Practically speaking, even though the IRS has the right to file a Notice of Federal Tax Lien on a smaller balance, the IRS normally won’t file one if you owe less than $10,000. And the IRS usually won’t file a lien if you enter into certain payment agreements.

7. The IRS can seize your money and assets.

You might have heard that the IRS can “seize your assets.” Essentially, that’s a levy (not to be confused with a lien). However, the IRS usually only seizes money. It’s a huge hassle for the IRS to seize houses, boats, etc., and then sell them. 

In fact, the IRS only seizes property a few hundred times a year.
The most common levies are:

Wage levies (also called wage garnishment) – The IRS takes some of your wages to pay your tax bill. If you get into a payment agreement with the IRS, the IRS will normally stop the levy.

Accounts receivable levies – The IRS takes the money you’ve earned as a small business or independent contractor. If you get into a payment agreement with the IRS, the IRS will stop the levy (although you might have to jump through some hoops to make sure your clients or customers stop sending money to the IRS).

Bank levies – The IRS takes money from your bank account. Again, if you get into a payment agreement with the IRS, the IRS will typically stop the levy.
For individuals, levies can create a huge hassle and disrupt your ability to pay your bills. For businesses, levies can be devastating. By disrupting cash flow, levies can make it impossible to pay your employees, purchase supplies and inventory, and run your business.

8. A revenue officer might show up.

Revenue officers are IRS employees who collect tax debt, usually when you owe large amounts of back taxes, owe for continuous years, and/or have unfiled back tax returns. You’ll want to comply with all your revenue officer’s requests by the deadline, because they have the authority and the duty to quickly enforce back tax issues by filing liens and issuing levies.

9. You may not be able to travel abroad.

Recently, the IRS added a new tax-collection tool to its list. If you owe more than $51,000 and the IRS has tried to collect from you before, but you’re not in a payment agreement or other arrangement with the IRS, the IRS can label you a “seriously delinquent” taxpayer. When that happens, the State Department can restrict your passport.

If you don’t have a passport, this restriction will prevent you from getting one. If you already have a passport, you won’t be able to renew it until you are removed from the “seriously delinquent” list.

10. The IRS could give your case to a debt-collection agency.

If after a few years the IRS has failed to collect your tax balance, the IRS can turn your account over to a private debt collector. Like you’d experience with most debt-collection agencies, if your case goes here, you’ll receive calls and inquiries from strangers. In short, not paying can lead to years of hassle.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018/2019 tax return or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.
Advance Tax Relief is headquartered in Houston, TX.  We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and 

Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

#TaxDebtHelp  #FilingBackTaxesHelp  #TaxReliefHouston #BackTaxRelief #TaxAttorneysNearMe  #IRSLawyer  #TaxReliefFirms  #OfferInCompromise #TaxResolution  #LocalTaxAttorney  #HelpFilingBackTaxes  #TaxDebtSettlement #TaxReliefAttorneys #IRSHelp #TaxRelief

PREVENT A SMALL BUSINESS TAX AUDIT (BACK TAX DEBT RELIEF)

Because small businesses typically receive much of their income in cash and may receive few or no information statements, the IRS sees them as likely candidates to under report income. 

According to the IRS tax gap study, 63 percent of income subject to little or no information reporting was misreported. This makes small businesses a prime target for IRS audits. To lower the chances of an audit and prepare to defend a tax return in the event of an IRS audit, small businesses should conduct their own informal audit.

SELF-AUDIT STEP ONE: CHECK THE BANK ACCOUNT 

One of the IRS’s first tests in an audit is to analyze the small business’s bank accounts to ensure the bank deposits match total revenue reported on the return. Significant, unexplained deposits would signal possible unreported income to the IRS.

If these amounts are, in fact, income, the small business must report that on the tax return and pay any applicable tax.

NEED HELP WITH IRS BACK TAXES, AUDIT REPRESENTATION OR SMALL BUSINESS TAX PREPARATION?

ADVANCE TAX RELIEF LLC

www.advancetaxrelief.com

BBB A+ RATED

CALL (713)300-3965 

But if the deposits are not income, the small business should organize and prepare documentation showing the source of the deposits and why they aren’t income. This could include loans or sales tax collected for state or local governments.

It is also recommended that small-business owners not mix business and personal transactions. To that end, they should have separate checking accounts, credit cards, etc., for business and personal use.

SELF-AUDIT STEP TWO: CHECK DEBIT AND CREDIT CARD PAYMENT RECORDS 

The IRS uses Forms 1099-K for debit and credit card payments to identify income that should be reported on business tax returns. If a small business records credit card sales in its accounting system, it should reconcile total credit card sales to Forms 1099-K at the end of the year. Alternatively, the IRS could compare the amounts received from merchant card transactions to its sales by month. Monthly inconsistencies in the proportion of card transactions to sales could trigger a second look.

The IRS also does a trend analysis for many types of businesses, comparing income reported with Form 1099-K from similar businesses. For example, suppose a certain kind of retail business typically reports 40 percent cash income and 60 percent credit card income, and the IRS has these statistics. If a business’s return shows $100,000 of income, $95,000 of which is reflected on the Forms 1099-K, the IRS might suspect that the business is underreporting its cash income.

Discrepancies between a small business’s reported income and the amounts on its Forms 1099-K do not necessarily mean a small business is misreporting income. A discrepancy could result, for example, when Forms 1099-K double report information on Forms 1099-MISC.

In these cases, small businesses should examine any inconsistencies to identify the cause and either resolve it on their tax return or prepare documentation to defend the return against an audit.

SELF-AUDIT STEP THREE: CHECK THOSE DEDUCTIONS AND CREDITS

Small businesses may be eligible for certain deductions and credits that may require additional supporting documentation. A home office, business use of a car, employees’ pay and other operating expenses can add up to significant tax benefits, and all of these items must be well-documented and substantiated.

Small-business owners should not only keep records of their business expenses to support their deductions and credits, but they also should double-check their eligibility for the tax benefit. For example, the home office deduction requires exclusive use of the space for business purposes. If business owners also use a home office for personal reasons, such as using the office as a spare room for guests, they may not claim the home office deduction.

SELF-AUDIT STEP FOUR; GET PROFESSIONAL HELP

Many small-business owners may not have the time or expertise to prepare their own taxes, let alone audit their own return. Getting assistance from a local tax expert who specializes in small business returns can help lower their risk of an audit, which, in turn, can lower their risk of costly penalties.

GET TAX RELIEF HELP TODAY

If you think that you may need help filing your 2018/2019 tax return or past due tax returns, you may want to partner with a reputable tax relief company who can help you get the max refund and reduce your chances for an IRS AUDIT.

 Advance Tax Relief is headquartered in Houston, TX.  We help many individuals just like you solve a wide variety of IRS and State tax issues, including penalty waivers, wage garnishments, bank levy, tax audit representation, back tax return preparation, small business form 941 tax issues, the IRS Fresh Start Initiative, Offer In Compromise and much more. Our Top Tax Attorneys, Accountants and Tax Experts are standing by ready to help you resolve or settle your IRS back tax problems.

Advance Tax Relief is rated one of the best tax relief companies nationwide.

#TaxDebtHelp #FilingBackTaxesHelp #TaxReliefHouston #BackTaxRelief #TaxAttorneysNearMe #IRSLawyer #TaxReliefFirms #OfferInCompromise #TaxResolution #LocalTaxAttorney #HelpFilingBackTaxes #TaxDebtSettlement #TaxReliefAttorneys #IRSHelp