BACK OWED TAXES
Make sure you really owe the money
First make sure you really owe money. If you owe a lot more tax than you expected, find out why.
Read your completed return carefully and look for errors. It’s easy to add the same income twice, or to forget an important deduction.
If you expected to qualify for a deduction or credit, and your tax return doesn’t show it, make sure you answered all the questions correctly.
One missed question or checkbox can cause you to miss out on tax benefits you may be entitled to.
Another way to determine if something is amiss is to compare this year’s return to your tax return from last year. If your tax situation has not changed drastically, but your tax bill has, find out why.
If you owe money because you received a letter from the IRS, don’t automatically assume the IRS is correct.
They make mistakes, too. Call or write to the IRS for clarification.
If you still don’t understand the problem and it’s a significant amount of money, seek professional help.
Minimize penalties and interest
Large tax bills are worse when you pay penalties and interest on top of the original amount owed. You can minimize penalties and interest in three ways:
- Exceptions to underpayment of tax penalties
If you underpaid your taxes this year, but you owed considerably less last year, you generally don’t pay a penalty for underpayment of tax if you paid or had withheld at least as much as you owed last year, and you pay by the due date this year.Enter last year’s tax liability, so TaxAct can determine if the safe harbor rule reduces your penalties and interest.
You may also be able to reduce your penalties and interest using the annualized income method if you received more of your income in the latter part of the year.
- Ask for an abatement of penalties
The IRS often reduces or removes penalties and interest on the penalties if a taxpayer writes a letter explaining the situation.For example, if you had an unusual tax event, you made an honest mistake, or you or your spouse had a serious illness, the IRS may waive the penalties.
Be sure to ask for an “abatement” in your letter.
- Pay as quickly as possible
If you owe tax that may be subject to penalties and interest, don’t wait until April 15 (April 18, 2016 for 2015 taxes) to file your return.
Send an estimated tax payment or file early and pay as much tax as you can.
Ask for an installment plan
If you can’t pay the tax by the time it is due, don’t avoid the bill. It will only get worse. File Form 9465, Installment Agreement Request, to set up installment payments with the IRS.
The IRS must allow you to make payments on your overdue taxes if you owe $25,000 or less, you can show that you cannot pay the amount you owe now, you can pay off the tax in three years or less.
You must also agree to comply with the tax laws, and you or your spouse must not have had an installment agreement with the IRS in the past five years.
BUSINESS TAX FILINGS
This would include the following entities:
- Sole Proprietorships
- S Corporations
- Limited Liability Company (LLC)
There is nothing like the way busyCPA’s approach your business’s finances. We believe in taking an innovative approach to your business taxes within the means of tax laws.
BusyCPA’s tax experts know how to alleviate your entity’s tax burden by aligning your business goals with clever tax structure designed to your business’s past, present and future trajectory. We know how critical tax planning is to the success of any entity. We pride ourselves on an in-depth knowledge of the current tax laws to create an approach that is aligned with your personal and business goals. Although paying taxes is an inevitable part of life for any individual or organization, we are here to make your finances our goal.
BusyCPA believes that the tax financial services should go a step further to provide you with applicable and understandable insight that is beyond the numbers. By truly understanding you and your business’s financial personality, we are revolutionizing the way a CPA firm can impact your business not only to manage finances and taxes, but also to determine profitable new product lines, help diversify investments, and provide a variety of other consulting and business services.
INDIVIDUAL TAX RETURNS
With all the tax laws and write offs in today’s IRS regulations, it is hard to see what we can deduct. Consumers often don’t know what can be written off and what the IRS will come back and haunt you for later. BusyCPA can help you sort thru this mess and clear the air. In this day and age it’s just too easy to overlook deductions and credits to which you are entitled. Even if you use a software program, a CPA can help you tremendously.
With our services, here’s what you get…
A meticulously reviewed tax return that complies with Federal & State law based on the status listed below:
- Marital Status. Your marital status on the last day of the year is your marital status for the entire year.
- If You Have a Choice. If more than one filing status fits you, choose the one that allows you to pay the lowest taxes.
- Single Filing Status. Single filing status generally applies if you are not married, divorced or legally separated according to state law.
- Married Filing Jointly. A married couple may file a return together using the Married Filing Jointly status. If your spouse died during 2012, you usually may still file a joint return for that year.
- Married Filing Separately. If a married couple decides to file their returns separately, each person’s filing status would generally be Married Filing Separately.
- Head of Household. The Head of Household status generally applies if you are not married and have paid more than half the cost of maintaining a home for yourself and a qualifying person.
- Qualifying Widow(er) with Dependent Child. This status may apply if your spouse died during 2010 or 2011, you have a dependent child and you meet certain other conditions.
Establish a game plan in what you can do to get ahead for next year’s return. Such as potential deductions and how to reduce your liability.
We will teach you about adjusting your payroll withholding and how they work.
Lastly, our clients can feel confident that they are receiving the best return possible, because our tax preparers meet stern continuing education requirements to changes in IRS and State regulations.
IRS AUDIT REPRESENTATION
Nothing strikes fear in the hearts of people more than receiving an IRS Audit letter in the mail. Audits take significant time away from your business and family, requiring you to gather mounds of records substantiating each and every item reported on your tax return and develop a comprehensive understanding of tax law.
The IRS leaves no stone unturned in its mission to determine the accuracy of your tax return. If you don’t comply with the Auditors’ wishes, the IRS will recalculate your tax and send you home with a hefty tax bill as your parting gift.
Many taxpayers decide to handle a tax audit themselves, and discover they may have been “penny wise,” avoiding a representative’s fee, but “pound foolish,” because they received a substantial bill for a significant tax deficiency.
You see, IRS Auditors are trained to extract more information from you than you have a legal obligation to provide. IRS Auditors know that most people fear them and are ignorant of their rights. As a result, they know they can use that fear and ignorance to their advantage.
Rarely do our clients even have to talk with the IRS. We handle it all for you so that you need not take time off of your business or job to handle the bureaucracy and paperwork of the IRS. No lost wages or business. You simply forward notification of an audit to us and we handle it from A to Z.
Federal Tax Liens can really make your life miserable! When your taxes are not paid the IRS establishes a lien against all of your assets (especially real estate). This gives the IRS the legal right to collect taxes from the sale of your assets, which includes just about everything you own.
The lien can be against you, your spouse, or your company. A lien against your company would seize your accounts receivables. At this point everything you own is just one short step away from becoming the property of the United States Government.
Liens filed against you by the IRS also show up on your credit report and often prevent you from opening a checking account or borrowing against any assets, like your home. The banks don’t want the extra work when the IRS comes in to take your money.
With a Federal Tax lien on your record you can’t get a reasonable loan to purchase a car. Think about paying 18-22% interest on a car that is already too expensive. You definitely cannot buy or sell any Real Estate. The list is endless.
NON-FILED TAX RETURNS
WAGE GARNISHMENTS & LEVIES
If the IRS garnishments (seizes) your wages, part of your wages will be sent to the IRS each pay period until:
You make other arrangements to pay your overdue taxes, The amount of overdue taxes you owe is paid, or The levy is released.
Part of your wages may be exempt from the levy and the exempt amount will be paid to you. The exempt amount is based on the standard deduction and the number of personal exemptions you are allowed. The IRS mails Publication 1494 (PDF) with the levy which explains to your employer how to determine the amount exempt from levy. Your employer will provide you with a Statement of Exemptions and Filing Status to complete and return within three days. If you do not return the statement in three days, your exempt amount is figured as if you are married filing separately with one exemption. If you have other income sources, the IRS may allocate the exemptions to the other income source and levy on 100% of the income from a particular employer.
Levies can really do a lot of damage and even ruin your life. A levy is the IRS’s way of getting your immediate attention. What they are saying is, we have tried to communicate with you but you have ignored us. Levies are used to seize your wages and whatever other assets you have. If you own it, they can take it. That includes checking accounts, auto’s, stocks, bonds, boats, paychecks, and even Social Security checks!
Imagine waking up one morning and finding all your bank accounts have been cleaned out. They will take every dime. If this amount did not cover what is owed, they’ll keep taking your money until you cover your tax liability. They know that levying your bank account will cause checks to bounce, alerting many people that you have tax problems. But they don’t care! Their sole objective is to collect the taxes owed. Period.
As bad as that is, a worse method is a wage levy (or garnishment). That’s when most of your pay check goes to the IRS, they don’t leave you enough to pay the bills, and most of your check goes to the IRS each and every week until the debt is paid.
If that doesn’t accomplish what they want, they’ll pull out all the stops. They’ll seize your assets, and sell them at auction. That includes everything you own; home, cars, boats, jewelry, motorcycles, insurance policies, retirement funds, anything of value.
We are often able to get those levies released and help you get out of this terrible situation. Our goal is to get you even with the IRS with what you can afford so you can start life anew.