Let?S Talk Taxes

Let?S Talk Taxes

With tax time here, now is the time to consider how you want to claim — the standard deduction or file an itemized income tax return.  Why should you do this? It’s simple.  Often overlooked deductions can make a HUGE difference in lowering your tax bill if you decide to itemize.

The standard deductions are fine for those who have an uncomplicated tax situation.  But the amount of your mortgage interest payments, state taxes, property taxes, charitable contributions and hurricane losses, if any, could be more than the standard deduction that is given.  What does this mean? If you do not itemize, you may not save as much as you are entitled to. With this in mind, you should take a look over the following list of often missed credits and reductions before you start the process of completing your 2009 tax return:

1. Education Expenses: There are many education related deductions and credits available to you if you are making tuition payments, paying off your college degree or student loan interest or just saving for your child’s education.  You then owe it to yourself to check out the explanation of education tax benefits available on the IRS website.  http://www.irs.gov

2. Deductions for Home Office: Are you self employed? Is your home office your principal place of work?  Is your gross income more than your related deductions? You should then be able to claim this deduction.  Are you employed by a company? If so you can deduct the home office ONLY if it is for your employer’s convenience.  You MUST also pass the “exclusive use” rule to qualify for deducting a portion of your home’s expenses, including mortgage interest, real estate taxes or rent, utilities, property maintenance (mowing, snow removal) or even repairs.  Caution, this is a RED HOT issue for the IRS so be certain you pass the “exclusive use rule”.  If you don’t have an office in your home, you may still deduct your mortgage interest and real estate taxes on both your main residence and any second home.

3. Deductions for Charity: You can deduct all that you have given to charity, especially if you have given cash gifts, or in-kind donations of clothing, toiletries, food or appliances that you can then deduct at fair market value.  You should go through your receipts and your credit card statements to make sure you don’t forget all that you have given.  Only donations to 501 (c)3 organizations qualify.  If you donate items other than cash and the amount is over 0, you must have a receipt from the organization who received your donation.  Also remember that the IRS will want to see proof of cash donations, such as checks, stubs or statements from the charity.

4. Miscellaneous Expenses: Did you know that gambling losses, job search expenses, safe deposit fees, subscription to investment publications and even tax return preparation expenses could be claimed as tax deductions?  Also, unreimbursed business expenses may be eligible to be claimed as a deduction.  Your total miscellaneous expenses, however, must exceed 2% of your adjusted gross income to qualify.

5. Don’t pay in cash: Cash may be convenient but it’s also practically guaranteed to be forgotten come tax time, unless you’re one of those folks who’s great at writing down every single purchase. In some cases,  if you do not  get a receipt when you pay in cash, you will be unable to make a deduction.  When you can, write out a check or use your debit card so you can prove the purchases for the doctor visit, charitable donations and business expenses; the IRS considers a canceled check or credit card/debit card receipt to be appropriate for purposes of record-keeping.

6. Other itemized deductions: Florida doesn’t have an income tax, so for the year 2009 Form 1040, you may deduct sales taxes you pay.  You can either use your actual sales taxes paid or use the IRS table.  If you don’t itemize, and use the IRS table, then you can also deduct the sales tax you paid on big ticket items such as Cars, Furniture household items like a new kitchen.  Also, if you are a teacher, you may deduct up 0 for any school supplies you purchase.  This year the energy tax credit has been extended, so if you purchased  a new water heater, air conditioner, solar device,  or impact windows, you might be entitled to a 00 tax credit

7. Capital Losses: With the market downturn in 2009, you can deduct up to 00 in NET losses on investments.  Any losses in excess of that may be carried over to 2010.

8. Earned Income Credit:  Those taxpayers whose income is below a certain level and who have dependents may also qualify for additional tax credits. If the credit results in a refund, the IRS will mail it to you.

9. Education and Child Care Credits: Depending on your circumstances, you may be eligible for tuition payments for your dependents’ college expenses.  For those of you who have children in daycare, there is also a credit for the amount you pay to your daycare provider.  You MUST have a receipt from the provider listing their name, address, amount you paid and their Tax Identification Number.

10. Medical deductions: Be sure to include your payments for medical insurance if you receive Medicare.  You may also be able to deduct medical insurance premiums, co-pays, other out of pocket expenses, hospital, doctor, dentists and any other medical visits.  Remember that there is a 7 ½% take away before you can itemize.

11. LASTLY: Be sure to include ALL your W’2’s, Form 1099’sand any other documents which report income to you, such as bank  or brokerage statements.

Tax Deduction Checklist
The best tax deductions checklists are found in three places:

Your past years’ tax returns 2) With your tax professional 3) Through an online tax website

The IRS website provides plenty of useful information on tax filing which could end up saving you a lot of money on this year’s tax return.  Take a few minutes to go over all the information you have on taxes so you can save yourself the most in the end.

CHOOSE YOUR TAX FILING METHOD! You may wish to hire a tax professional if you have had any major changes to your income such as an inheritance, lottery winnings, an investment windfall, or the like, or simply feel overwhelmed at the thought of the task.  On the other hand, if your goal is to prepare your own tax return, there are great software programs for help with tax preparation, such as TurboTax, Quicken, or TaxAct. These programs are inexpensive and will walk you through your tax return with a series of questions that make it a relatively painless process.
INFORMATION PROVIDED ABOVE MAY NOT BE OF USE TO YOU AND THEREFORE YOU SHOULD CONSULT A TAX PROFESSIONAL CONCERNING YOUR ELIGIBILTY TO USE A DEDUCTION.  EVERY PERSON’S SITUATION IS UNIQUE.

Prior Year Tax Preparation Online

Related Past Year Tax Articles

The Savings Highway, Home Based Business or Hobby? How IRS Determines Tax Savings

The Savings Highway, Home Based Business or Hobby? How IRS Determines Tax Savings

The Savings Highway, Home Based Business or Hobby? How IRS Determines Tax Savings

The Internal Revenue Service reminds all home based business operators to follow appropriate guidelines when determining whether an activity is a home based business or a hobby, an activity not engaged in for profit.

In order to educate taxpayers regarding their filing obligations, the IRS guidelines explain the rules for determining if The Savings Highway  qualifies as a business and what limitations apply if the activity is not a business. Incorrect deduction of hobby expenses account for a portion of the overstated adjustments, deductions, exemptions and credits that add up to billion per year in unpaid taxes, according to IRS estimates.

In general, taxpayers may deduct ordinary and necessary expenses for conducting a Savings Highway business. An ordinary expense is an expense that is common and accepted in the taxpayer’s trade or business. A necessary expense is one that is appropriate for the business. Generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit.

Auditors are being told to use several tests to
determine if your “activity” is really a “hobby”
or a “business.” Hobbies get a few tax breaks,
but home-business owners get substantianly more!

If they can reclassify you as a hobby, the IRS gets
more of your money.

IMPORTANT: As A Savings Highway representative.  One of the tests that is not well
understood, has to do with how much time you
spend on the activity.

You need to prove “Material Participation” in
your Savings Highway opportunity. Here are seven ways to prove you qualify for the tax savings:

1: If you work your business at least 500 hours
per year. Tax Savings Allowed

2. If you work your business at least 100 hours per
year AND no one else working in your business
puts in more time than you do.Tax Savings Allowed
In order to determine wether the Savings Highway is a qualified home based business or hobby, taxpayers should consider the following factors:

3. The taxpayer does substantially all the work in the activity.Tax Savings Allowed

4. The activity is a significant participation activity (SPA), and the sum of SPAs in which the taxpayer works 100-500 hours exceeds 500 hours for the year.Tax Savings Allowed

5. The taxpayer materially participated in the activity in any 5 of the prior 10 years.Tax Savings Allowed

6. The activity is a personal service activity and the taxpayer materially participated in that activity in any 3 prior years.Tax Savings Allowed

7. Based on all of the facts and circumstances, the taxpayer participates in the activity on a regular, continuous, and substantial basis during such year.  However, this test only applies if the taxpayer works at least 100 hours in the activity, no one else works more hours than the taxpayer in the activity, and no one else receives compensation for managing the activity.Tax Savings Allowed

In order to determine wether the Savings Highway is a qualified home based business or hobby, taxpayers should consider the following factors:

*
Does the time and effort put into the activity indicate an intention to make a profit?
*
Does the taxpayer depend on income from the activity?
*
If there are losses, are they due to circumstances beyond the taxpayer’s control or did they occur in the start-up phase of the business?
*
Has the taxpayer changed methods of operation to improve profitability?
*
Does the taxpayer or his/her advisors have the knowledge needed to carry on the activity as a successful business?
*
Has the taxpayer made a profit in similar activities in the past?
*
Does the activity make a profit in some years?
*
Can the taxpayer expect to make a profit in the future from the appreciation of assets used in the activity?

The IRS presumes that an home based business is carried on for profit if it makes a profit during at least three of the last five tax years, including the current year — at least two of the last seven years for activities that consist primarily of breeding, showing, training or racing horses.

If an activity is not for profit, losses from that activity may not be used to offset other income. An activity produces a loss when related expenses exceed income. The limit on not-for-profit losses applies to individuals, partnerships, estates, trusts, and S corporations. It does not apply to corporations other than S corporations.

Tax savings for hobby activities are claimed as itemized deductions on Schedule A (Form 1040). These deductions must be taken in the following order and only to the extent stated in each of three categories:

*
Tax savings that a taxpayer may take for personal as well as home based business activities, such as home mortgage interest and taxes, may be taken in full.
*
Tax savings that don’t result in an adjustment to basis, such as advertising, insurance premiums and wages, may be taken next, to the extent gross income for the activity is more than the deductions from the first category.
*
Tax savings that reduce the basis of property, such as depreciation and amortization, are taken last, but only to the extent gross income for the activity is more than the deductions taken in the first two categories.

As you can see from the guidelines established by the IRS qualifying as a legitimate home based business such as The Savings Highway are extremely straight forward. (Work at your business opportunity for 100 hours a year, and intend to make a profit). Turn your everyday activities (Eating and Driving) into substantial tax savings when you join the Savings Highway today.

Contact Me:

Jim Roche NJ

(908)413-5363

Easy Prior Year Taxes

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How To Settle Your Tax Debt By Negotiating A Payment Plan With The Irs: What You Need To Know If You Can?T Afford To Pay Your Tax Bill

How To Settle Your Tax Debt By Negotiating A Payment Plan With The Irs: What You Need To Know If You Can?T Afford To Pay Your Tax Bill

Qualify for an IRS Installment Agreement and Save Money by Negotiating the Lowest Possible Monthly Payments

IRS Announces Unprecedented Opportunity for Recession-Burdened Americans to Settle Outstanding Tax Debts

Struggling taxpayers may be eligible for tax breaks as the IRS eases enforcement and collection efforts to help Americans in financial distress. Because of the extraordinary challenges of today’s economy, the IRS is pledging to be more forgiving of Americans who have fallen behind on their taxes due to unusual financial hardship.

And one way you can settle your back taxes is by negotiating an Installment Agreement with the government that that allows you to pay liabilities over time.

If you cannot afford to make monthly payments and don’t qualify for another type of tax relief, such as an offer in compromise, there are other options including negotiating that your account be placed in a \”currently not collectible\” status so that you will not be required to make payments and the IRS will not pursue collection action.

What is an IRS Installment Agreement?

An Installment Agreement is a payment arrangement whereby the government allows a taxpayer to pay liabilities over time. Once a payment plan is established, the IRS will not take enforced collection action, including the levy of bank accounts or wages, as long as the taxpayer remains current with all filing and payment obligations. However, interest and penalties would continue to accrue until the outstanding balance is satisfied. Additionally, a tax lien may be filed as part of the terms of the installment payment agreement, depending on the amount of the total liability.

How to Negotiate an IRS Installment Agreement and Set Up a Payment Plan for Your Tax Debt

The IRS encourages taxpayers to pay what they owe as quickly as possible. For those individuals or businesses not able to resolve a tax debt immediately, an installment agreement can be a reasonable payment option. Installment agreements allow for the full payment of the tax debt in smaller, more manageable amounts.

In most cases, the IRS will accept some type of payment arrangement for past due taxes. In order to qualify for a payment plan with the IRS you must meet the following rules and provide the IRS with this information:

*  You must have filed all tax returns (It\’s OK to owe money but you must file).

* You will need to disclose all assets owned including all cash and bank accounts.

* You must not have adequate cash available in a checking, savings, money market, or brokerage account to pay the IRS.

* You must not have the capacity to borrow the amount owed to the IRS from other sources (i.e., a second mortgage on your home).

* You must not have adequate equity in a retirement account from which you can borrow or liquidate; for example, IRA\’s or 401K\’s.

The total dollar amount you owe usually dictates with whom the negotiations will be handled.

* Typically, IRS Revenue Officers are not involved in cases where the amounts owed are less than ,000.

* The IRS will ask you to complete a personal financial statement and if a business is involved, you will also need a business financial statement.

* The IRS has determined allowable monthly expenses for individuals, which will be matched against your actual monthly expenses.

* The difference between your monthly income and your allowable monthly expenses will be the amount that the IRS will require you to pay on a monthly basis.

These monthly payments will continue until your outstanding tax liabilities are paid in full.

What the IRS May Not Tell You About Payment Plans

It is important to note that the IRS continues to add penalties and interest while you are making monthly payments. This may cause you to be paying what you consider a large monthly payment to the IRS and your outstanding balance may in fact be increasing due to additional penalties and interest.

The IRS may not explain this to you! So be careful!

Additionally, for taxpayers that enter into an installment agreement, the IRS may require a signed waiver to extend the time IRS can collect. While it is always in the best interest of the IRS to get a signed waiver, it may not be in the taxpayer\’s best interest. If you are asked to sign a waiver, protect your rights, seek the advice of a tax resolution expert first.

The IRS in most cases, to protect their interest, will file a Notice of Federal Tax Lien, with the County Recorder’s office in the county you reside.  This will inevitably be reflected on your credit report decimating your credit (FICO) score.  In addition a recorded Federal Tax Lien means the IRS has a monetary interest (claim) against all real and personal property owned (at time of filing) and any and all real or personal property acquired in the future while the lien is in effect. Generally, the lien is effective throughout the 10 year Collection Statute of Limitations.

The Benefits of Hiring Professional Tax Representation to Negotiate your IRS Payment Plan

Whether the IRS demands full payment up-front or a payment plan that is substantially higher than what you can afford to pay, a professional tax resolution specialist can help you negotiate an arrangement for the lowest possible monthly payment and also provide you with various options for making those payments.

Additionally, if you owe more than ,000 to the IRS, you will be required to provide full financial disclosure and you will need to hire specialized tax representation to negotiate on your behalf with the IRS.

IRS Pledges Greater Flexibility to Help Distressed Taxpayers

Although the IRS is pledging to be kinder and gentler to taxpayers in these challenging times, you will still need to meet your installment payment requirements. However, the IRS has announced that they will try to be more flexible with taxpayers who miss an installment payment.

“We need to ensure that we balance our responsibility to enforce the law with the economic realities facing many American citizens today,” IRS Commissioner Douglas Shulman said. “We want to go the extra mile to help taxpayers, especially those who’ve done the right thing in the past and are facing unusual hardships.”

If a taxpayer with an existing installment agreement is worried about missing a payment because of a job loss or other financial hardship, Shulman has assured the public that a missed payment will no longer lead to an automatic end to that agreement.

Additionally, the IRS has announced that it is more likely to forgive a missed payment and they’ve instructed staff to not automatically default someone who is having trouble.

Frequently Asked Questions about IRS Payment Plans

What do you have to do to be eligible for an installment agreement?

To be eligible for an installment agreement, all returns that are due must first be filed.

What are the payment terms?

Installment agreements generally require equal monthly payments. The amount of an installment payment will be based on the amount owed and on the taxpayer’s ability to pay that amount within the time legally available for the IRS to collect. By law, the IRS has the authority to collect outstanding federal taxes for ten years from the date of assessment.

What are the conditions of an installment agreement?

As a condition of an installment agreement, any refund due in a future year will be applied against the amount owed. Therefore, taxpayers may not get all of their refund if they owe certain past-due amounts, such as federal tax, state tax, a student loan, or child support. The IRS will automatically apply the refund to the taxes owed. If the refund does not take care of the tax debt, then the installment agreement continues until all of the terms are met.

Does interest stop with an installment agreement?

Interest does not stop accruing until the entire obligation is paid. An installment agreement is more costly than paying all the taxes owed now. Penalties and interest continue to be charged on the unpaid portion of the debt throughout the duration of an installment agreement.

Are there fees to set up an installment agreement?

The IRS charges a user fee of to set up the installment agreement. And it is possible for an installment agreement to be reinstated if the agreement defaults.

Also, installment agreements may be restructured to include additional amounts owed in one agreement. Reinstating or restructuring an existing installment agreement will cost an additional user fee.

What are enforced collection actions?

Generally, IRS enforced collection actions (levy against personal or real property) are not made while an installment agreement request is being considered, or:

While an agreement is in effect,

* For 30 days after a request for an agreement has been rejected, and

* For any period while a timely appeal of the rejection or termination is being evaluated by the IRS.

Can my installment agreement be defaulted?

Yes. Failure to make timely payments can default the agreement. A defaulted installment agreement could subject a taxpayer’s account to enforced collection action and potentially have a negative effect on a taxpayer’s credit standing.

What is an annual statement of balance due?

In accordance with the law, installment agreement taxpayers receive an annual statement from the IRS. The statement provides the amount owed at the beginning of the statement period, the payments (credits) posted to account(s), any fees or assessments, and the ending balance. Currently, the annual statement is sent each year in July.

For more information on negotiating an IRS Installment Agreement or to get professional tax advice on reducing your IRS debt, visit www.taxresolution.com for a free tax relief consultation or call 866-477-7762.

Michael Rozbruch is one of the nation\’s leading tax experts. A Certified Tax Resolution Specialist (CTRS), licensed CPA in the state of Maryland and the founder of Tax Resolution Services (http://www.taxresolution.com/), he helps individuals and small businesses solve their IRS problems and is dedicated to educating the public on tax planning and other strategies for managing their personal and business finances.

Prior Year Tax Preparation Online

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Past Years Tax - How To Prepare Your Past Year Tax Returns

Filing Your Past Year Tax Returns

• If you have not filed your tax returns in a while, you might owe back taxes to the IRS.
  The easiest way to fix this is to prepare and file the past years tax return
• The IRS is holding on to millions of dollars of tax refund money, owed to people who have not prepared or filed their tax returns. It is also possible that you would be owing money to the IRS - either way you need to file a return.
• Creditors, Home Loan lenders need a tax return as proof of your financial health
• If you have not filed for the past 5 years ie. 2004, 2005, 2006, 2007 or 2008 taxes, you will still be able to file your prior year returns this year.
• The IRS allows you to file your past year taxes providing your taxes are current through 2009.
• For example- If you didn’t file your tax return for income earned in 2007. The original deadline for that was April 15th, 2008. To be eligible for a refund you must file your 2008 tax return by April 15th, 2010.

Preparing a past year tax return requires that years tax formsTo file a prior year tax return you would need to find the past year tax forms.

Past Year Tax Return Online

• Filing your past years taxes online is easy. You do not need to locate pas year tax forms or go to a tax preparer and pay hundreds of dollars.
• Secondly, when you file your past year taxes online, you get an immediate confirmation.
• In fact there are only a couple of tax websites which can do your past year tax online.

Let?S Talk Taxes

Let?S Talk Taxes

With tax time here, now is the time to consider how you want to claim — the standard deduction or file an itemized income tax return.  Why should you do this? It’s simple.  Often overlooked deductions can make a HUGE difference in lowering your tax bill if you decide to itemize.

The standard deductions are fine for those who have an uncomplicated tax situation.  But the amount of your mortgage interest payments, state taxes, property taxes, charitable contributions and hurricane losses, if any, could be more than the standard deduction that is given.  What does this mean? If you do not itemize, you may not save as much as you are entitled to. With this in mind, you should take a look over the following list of often missed credits and reductions before you start the process of completing your 2009 tax return:

1. Education Expenses: There are many education related deductions and credits available to you if you are making tuition payments, paying off your college degree or student loan interest or just saving for your child’s education.  You then owe it to yourself to check out the explanation of education tax benefits available on the IRS website.

2. Deductions for Home Office: Are you self employed? Is your home office your principal place of work?  Is your gross income more than your related deductions? You should then be able to claim this deduction.  Are you employed by a company? If so you can deduct the home office ONLY if it is for your employer’s convenience.  You MUST also pass the “exclusive use” rule to qualify for deducting a portion of your home’s expenses, including mortgage interest, real estate taxes or rent, utilities, property maintenance (mowing, snow removal) or even repairs.  Caution, this is a RED HOT issue for the IRS so be certain you pass the “exclusive use rule”.  If you don’t have an office in your home, you may still deduct your mortgage interest and real estate taxes on both your main residence and any second home.

3. Deductions for Charity: You can deduct all that you have given to charity, especially if you have given cash gifts, or in-kind donations of clothing, toiletries, food or appliances that you can then deduct at fair market value.  You should go through your receipts and your credit card statements to make sure you don’t forget all that you have given.  Only donations to 501 (c)3 organizations qualify.  If you donate items other than cash and the amount is over 0, you must have a receipt from the organization who received your donation.  Also remember that the IRS will want to see proof of cash donations, such as checks, stubs or statements from the charity.

4. Miscellaneous Expenses: Did you know that gambling losses, job search expenses, safe deposit fees, subscription to investment publications and even tax return preparation expenses could be claimed as tax deductions?  Also, unreimbursed business expenses may be eligible to be claimed as a deduction.  Your total miscellaneous expenses, however, must exceed 2% of your adjusted gross income to qualify.

5. Don’t pay in cash: Cash may be convenient but it’s also practically guaranteed to be forgotten come tax time, unless you’re one of those folks who’s great at writing down every single purchase. In some cases,  if you do not  get a receipt when you pay in cash, you will be unable to make a deduction.  When you can, write out a check or use your debit card so you can prove the purchases for the doctor visit, charitable donations and business expenses; the IRS considers a canceled check or credit card/debit card receipt to be appropriate for purposes of record-keeping.

6. Other itemized deductions: Florida doesn’t have an income tax, so for the year 2009 Form 1040, you may deduct sales taxes you pay.  You can either use your actual sales taxes paid or use the IRS table.  If you don’t itemize, and use the IRS table, then you can also deduct the sales tax you paid on big ticket items such as Cars, Furniture household items like a new kitchen.  Also, if you are a teacher, you may deduct up 0 for any school supplies you purchase.  This year the energy tax credit has been extended, so if you purchased  a new water heater, air conditioner, solar device,  or impact windows, you might be entitled to a 00 tax credit

7. Capital Losses: With the market downturn in 2009, you can deduct up to 00 in NET losses on investments.  Any losses in excess of that may be carried over to 2010.

8. Earned Income Credit:  Those taxpayers whose income is below a certain level and who have dependents may also qualify for additional tax credits. If the credit results in a refund, the IRS will mail it to you.

9. Education and Child Care Credits: Depending on your circumstances, you may be eligible for tuition payments for your dependents’ college expenses.  For those of you who have children in daycare, there is also a credit for the amount you pay to your daycare provider.  You MUST have a receipt from the provider listing their name, address, amount you paid and their Tax Identification Number.

10. Medical deductions: Be sure to include your payments for medical insurance if you receive Medicare.  You may also be able to deduct medical insurance premiums, co-pays, other out of pocket expenses, hospital, doctor, dentists and any other medical visits.  Remember that there is a 7 ½% take away before you can itemize.

11. LASTLY: Be sure to include ALL your W’2’s, Form 1099’sand any other documents which report income to you, such as bank  or brokerage statements.

Credit Counseling

Tax Deduction Checklist
The best tax deductions checklists are found in three places:

Your past years’ tax returns 2) With your tax professional 3) Through an online tax website

The IRS website provides plenty of useful information on tax filing which could end up saving you a lot of money on this year’s tax return.  Take a few minutes to go over all the information you have on taxes so you can save yourself the most in the end.

CHOOSE YOUR TAX FILING METHOD! You may wish to hire a tax professional if you have had any major changes to your income such as an inheritance, lottery winnings, an investment windfall, or the like, or simply feel overwhelmed at the thought of the task.  On the other hand, if your goal is to prepare your own tax return, there are great software programs for help with tax preparation, such as TurboTax, Quicken, or TaxAct. These programs are inexpensive and will walk you through your tax return with a series of questions that make it a relatively painless process.
INFORMATION PROVIDED ABOVE MAY NOT BE OF USE TO YOU AND THEREFORE YOU SHOULD CONSULT A TAX PROFESSIONAL CONCERNING YOUR ELIGIBILTY TO USE A DEDUCTION.  EVERY PERSON’S SITUATION IS UNIQUE.

Easy Prior Year Taxes

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Getting Free Tax Help Can Save You a Bundle

Getting Free Tax Help Can Save You a Bundle

You can not avoid taxes.  That is why you have to pay your taxes diligently so that the IRS will not knock on your doors.  However, getting your taxes in order can be very costly.  From preparation and filing process to settling your past due taxes, all these entail considerable expenses.  That is why it would be a welcome relief if you can get free tax help.  This is particularly important if you need help with past due taxes.  Fortunately, there are many ways how you can get free tax support services.   

One of the easiest ways to find free tax help is to use the Internet.  There are lots of online tax service providers that will give free tax advice for you.  However, not all online tax support services are reliable.  You have to choose wisely so you will not be scammed by so-called tax experts.  To make your life easier, you can check the services of Free Tax Support.  This is one of the most trusted and leading tax support service providers today.  It can offer you free tax advice and provide help with past due taxes.  Signing up with Free Tax Support is very easy.  The best thing is that you can get a free tax kit from Free Tax Support.  The Tax Kit includes free tax forms, guides on how to reduce your taxes, and documentations on how to handle tax issues with the IRS.  

You can also fill up an online form provided by Free Tax Support.  For example, if you have problems with your tax payments and you want help with past due taxes, then you can specify these problems and submit your query online.  The professional tax agents of Free Tax Support will contact you and provide free tax help for you.  So aside from the free kits that you can easily download, you stand to benefit from the free tax advice given by certified tax agent of Free Tax Support.  This is probably the best service that you can get today.  And if your problems are too complicated and involve legal actions, then the service can refer a good tax attorney for you.  Having a tax attorney will speed up the process of resolving your tax troubles.  

You can also get free tax help right from the website of the IRS.  If you simply want to understand some tax issues that are bugging you, simply search the website of the IRS and you might get the answers you need.  The IRS also provides free tax forms if you ever you need them.  However, if your problem concerns tax delinquency and you need specific help with past due taxes, then using the IRS website may not be enough.  You have to consult a tax professional so you will know what options you have and the necessary steps you need to take in order to solve your problems.   That is why you will be better off getting the services of Free Tax Support because a professional tax agent will provide real help for you in order to solve your complicated tax problems.

Prepare Prior Year Taxes Now

How Your Bookkeeping Can Boost Your Tax Deductions

How Your Bookkeeping Can Boost Your Tax Deductions

One of the keys to bringing your tax strategy full circle is your bookkeeping. It’s one thing to know what’s deductible and how to maximize your business deductions, but unless that gets reflected in your bookkeeping, it’s as if the tax planning never happened at all. Use this checklist!

Use this checklist to make sure your bookkeeping is maximizing your travel, meals and entertainment deductions.

____ Get reimbursed for business expenses you pay for personally. Ever been to a restaurant that only takes cash? Or taken a taxi that only accepts cash? Or misplaced your business credit card and had to use your personal credit card? These are just a few examples of when we have to pay our business expenses with personal funds. It’s easy to miss these expenses so keep an envelope handy and put all of your receipts in this envelope. Then you’ve got it handy when you complete your expense report.

____ Code meals that are 50% deductible to a separate account to keep them distinct from other expenses that are not subject to this 50% rule. Many times I see just one meal account in the chart of accounts. The problem with this is that while meals are generally only 50% deductible, some meals are 100% deductible. The mistake that I see most often when I review a prospect’s prior year tax return, is all meals are treated as only 50% deductible (because they are all coded to one account) and there is no strategy to identify meals that are 100% deductible.

____ Code meals that are 100% deductible to a separate account to make sure these are deducted in full and not combined with meals that are only 50% deductible.

____ Code your entertainment expenses to a separate account from meals and travel.

____ Code your travel expenses that are not meals and entertainment expenses to a separate travel account. Too many times I have seen an account named “Travel, meals and entertainment” (it happens to be a default account in a popular bookkeeping software) and everything gets lumped into this account. Business travel is 100% deductible so separate it out as part of your bookkeeping system. Otherwise, you will have to sort through that account at the end of the year, or worse, you may forget to sort through that account and everything in the account is treated as only 50% deductible!

____ Use the memo section in your bookkeeping software to make notes about who, what, when, where, how much and the business purpose of your travel, meals and entertainment expenses. This is a great way to strengthen your documentation.

How does your bookkeeping match up?

Proper bookkeeping will boost your tax deductions, particularly for travel, meals and entertainment. This is an area where deductions are regularly missed and not properly documented, but once you know the rules and use my system, you’ll find more and more deductions!

** Important Tip! **

Keep your bookkeeping current! What does current mean? One easy way to make sure you are staying current is to review your Balance Sheet and Profit & Loss Statements once a month. Do this review when you receive your monthly bank statement. Simply reconcile your bank statement and then review your financial statements.

Knowing how to maximize your deductions for travel, meals and entertainment is a key part of a successful tax strategy.

Prepare Prior Year Taxes Now

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What if I lost my last year tax return?

What if I lost my last year tax return?

It happens every year. Just when you get motivated to get rolling on your taxes, you realize you can’t find the return you filed last year.

First off, don’t panic if you can’t find the return. Yes, you need it to know what you claimed last year and how those claims relate to this year’s return. All is not lost, however. The IRS will provide you with a copy of your past tax returns if you ask nicely. Here is how to go about it.

The IRS will not send you the actual income tax return. The agency, however, will send you their version of it. This is known as a tax return transcript and is a layout of the information you provided.

It is essentially your return, but doesn’t look like it. You can rely on the transcript as though it was your original return.

When you contact the IRS to get the transcript, it is important to understand there are two types available. As is usual with the IRS, there are two choices just to confuse you. The first is the tax return transcript that is essentially the return you filed. The tax account transcript is your original return as modified by any changes made by the IRS or you. Which one is the correct one? If the IRS has not contacted you about an issue with the return, it is the tax return transcript. If they have, it the tax account transcript.

The IRS will give you any return for the past three filing years. The service is free. To get the copy, you can call the IRS at 800-829-1040. Alternatively, you can get a copy by filling out and mailing in IRS Form 4506-T. It takes two weeks to a month for the agency to get the copy to you. If you discover you have a problem just before the relevant filing deadline, file for an extension so you don’t run afoul of filing laws. Remember, you have to pay any taxes due regardless of the extension, so try to guesstimate what you will owe.

If you lose a past tax return, there is no need to panic. The IRS will be happy to send you a copy. After all, an audit agent probably has the file on their desk as we speak!

Prepare Prior Year Taxes Now

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Three (3) Secrets to a Successful Tax Return!

Three (3) Secrets to a Successful Tax Return!

How do you find a tax preparer that is right for you?

First, not all tax preparers are the same. I wrote an article about this last year titled: Tax Returns: Are They All Created Equal?

HOW DO YOU FIND A TAX PREPARER THAT IS RIGHT FOR YOU?

First, not all tax preparers are the same. I previously wrote an article about this last year titled: “Tax Returns - Are they really all created equal”, and you may be as surprised as other readers about just how much tax return preparation can vary.

In fact, I calculated the average savings I typically find from annual tax savings, reducing professional fees and audit assessments. In total, the average savings are:

- ,750 Annual tax savings

- ,000 Audit defense savings

- ,000 Reduced audit assessment savings

- ,000 Reduced legal fees

- ,000 Reduced tax return preparation fees

This is a total average potential savings of ,750! Your tax preparer does make a difference! How much more could you do with these savings?

Second, the right tax preparer for you depends on what is important to you. Take a minute to answer this question:

WHAT MAKES YOUR TAX RETURN SUCCESSFUL?

How you answer this question will impact what type of tax preparer you need on your team. I’ve asked this questions to clients, prospects and colleagues. I have compiled the most popular answers and what it means to you as you find the tax preparer for your team.

ANSWER #1: Paying the least amount of tax legally

Your tax preparer needs to:

- Know the tax law very well and know how to be creative legally.

- Ask you a lot of questions about your situation in order to understand your situation and goals.

- Have a review process where at least one other person reviews your return solely for the purpose of how to reduce your taxes legally.

HERE ARE SEVEN (7) QUESTIONS YOU SHOULD ASK YOUR TAX PREPARER TO DETERMINE IF IT’S A GOOD FIT:

Q1: Can you tell me about the other ___________ (your industry) you service?

A: Your tax preparer needs to know how the tax law applies to your situation. Having other clients in your industry or with similar investments indicates that the tax preparer is likely to be familiar with the tax laws that impact you.

Q2: Who will be working on my tax return?

A: It’s very common (and a good business practice) for tax preparers to have staff prepare your tax return. You want to make sure the other people working on your return have the same level of expertise.

Q3: What is your tax return review process?

A: Tax preparers who are focused on reducing your taxes will have this built into their review process. Usually it involves having another experienced tax preparer review the return solely for the purpose of finding ways to reduce your taxes.

Q4: What would you have done differently on my past tax return?

A: Show the tax preparer you are interviewing your prior year tax return. Creative tax preparers will be able to give you at least one idea of what you can do to reduce your taxes by looking at your tax return for just a few minutes. If it’s creativity you are after, this is a great question to ask! But don’t expect the tax preparer to give you all the details right then and there - that’s why you pay them!

Q5: How much can you save me in taxes?

A: While it’s difficult for any tax preparer to answer this in just a few minutes of looking at your past tax return, it is possible for them to know if they can save you taxes after spending 30 minutes with you.

Q6: What deadlines do you impose on clients?

A: This may seem like an odd question for minimizing your taxes but it has a direct impact. If your tax preparer allows you to provide your information a week before the tax return is due, it’s very unlikely that the tax preparer will have the time to focus on your return to truly minimize your taxes. Tax preparers that want to reduce your taxes want your tax return information early and will communicate that to you.

Q7: What recent tax law changes should I be aware of? A: To minimize your taxes, your tax preparer needs to know the tax law inside and out, which includes the latest changes. Your tax preparer needs to be able to answer this question without hesitation.

ANSWER #2: Minimizing tax return preparation fees Your tax preparer needs to:

- Focus on the tax work and recommend someone else for the non-tax work (such as bookkeeping).

- Request tax information in a certain format.

- Require you to input your information online.

HERE ARE TWO (2) QUESTIONS YOU SHOULD ASK YOUR TAX PREPARER REGARDING MINIMIZING RETURN PREPARATION FEES TO DETERMINE IF IT’S A GOOD FIT:

Q1: What can I do to reduce my tax return preparation fees?

A: To minimize your tax return preparation fees, your tax preparer always needs to have your fees in mind. Ask your tax preparer what you can do to reduce your fees. If you don’t get at least 2 suggestions, your tax preparer probably isn’t thinking about how to keep your fees low.

Common suggestions include:

- Have someone other than the tax preparer do your bookkeeping. I am always skeptical when a tax preparer does the bookkeeping. First, they either charge an arm and leg or if they reduce their rates to accommodate you, it means they don’t spend their time entirely on tax issues, which could indicate their tax skills aren’t up to par.

- Organize your information. Don’t bring your tax preparer a shoebox! A tax preparer that is really focused on keeping your fees down will have forms, spreadsheets and other tools available for you to use to organize your tax return information.

- Enter your information online. Many tax preparers now require clients to input their information online. Accurately entered information can help reduce fees. Caution: Information that is entered inaccurately can increase your fees!

Q2: What is your fee structure?

A: Your tax preparer needs to be able to answer this question with confidence. Any wavering could indicate that the tax preparer knows the fees are too high for you but just doesn’t want to tell you. Unfortunately in these situations, you find out too late!

ANSWER #3: Reducing audit risk Your tax preparer needs to:

- Know the tax law very well and how to properly report your activity.

- Understand the IRS’s current “hot buttons” or “red flags.”

- Offer an audit defense plan.

HERE ARE FOUR (4) QUESTIONS YOU SHOULD ASK YOUR TAX PREPARER IN REGARDS TO REDUCING AUDIT RISK TO DETERMINE IF IT’S A GOOD FIT:

Q1: How many audits have you been through and what triggered the audit?

A: The most important part of this question is what triggered the audit. If it was triggered by how something was reported, then that may be something the tax preparer had control over (and may be a bad sign for you).

Q2: What was the outcome of the audits you have been through?

A: A return can be randomly selected for audit or selected because of a certain activity (even though it was reported correctly). So it’s important to understand the outcome of the audits. Was additional tax assessed or were there no changes? Additional tax may indicate that something was not reported properly.

Q3: Do you offer an audit defense plan?

A: Tax preparers that are confident in their work will offer an “insurance” program that covers their professional fees to handle your audit if your return is selected for audit.

Q4: What is your tax return review process?

A: Although tax returns can be selected randomly for audit, many are selected due to how items are reported on the tax return. Tax preparers who are focused on reducing audit risk will have a review process that includes another tax preparer reviewing your return solely for accuracy of reporting.

Be selective with the tax preparer you put on your team. The average savings I find for my clients is over ,000! Your tax preparer makes a difference!

Prepare Prior Year Taxes Now

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What if I lost my last year tax return?

What if I lost my last year tax return?

It happens every year. Just when you get motivated to get rolling on your taxes, you realize you can’t find the return you filed last year.

First off, don’t panic if you can’t find the return. Yes, you need it to know what you claimed last year and how those claims relate to this year’s return. All is not lost, however. The IRS will provide you with a copy of your past tax returns if you ask nicely. Here is how to go about it.

The IRS will not send you the actual income tax return. The agency, however, will send you their version of it. This is known as a tax return transcript and is a layout of the information you provided.

It is essentially your return, but doesn’t look like it. You can rely on the transcript as though it was your original return.

When you contact the IRS to get the transcript, it is important to understand there are two types available. As is usual with the IRS, there are two choices just to confuse you. The first is the tax return transcript that is essentially the return you filed. The tax account transcript is your original return as modified by any changes made by the IRS or you. Which one is the correct one? If the IRS has not contacted you about an issue with the return, it is the tax return transcript. If they have, it the tax account transcript.

The IRS will give you any return for the past three filing years. The service is free. To get the copy, you can call the IRS at 800-829-1040. Alternatively, you can get a copy by filling out and mailing in IRS Form 4506-T. It takes two weeks to a month for the agency to get the copy to you. If you discover you have a problem just before the relevant filing deadline, file for an extension so you don’t run afoul of filing laws. Remember, you have to pay any taxes due regardless of the extension, so try to guesstimate what you will owe.

If you lose a past tax return, there is no need to panic. The IRS will be happy to send you a copy. After all, an audit agent probably has the file on their desk as we speak!

Easy Prior Year Taxes

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