Embarking on the journey of becoming a landlord, whether in the commercial or residential real estate sector, is a promising venture. However, before you start reaping the benefits of rental income, it’s essential to understand the tax implications of the initial costs involved. In particular, start-up expenses play a crucial role in shaping the financial landscape for landlords. In this article, we will delve into the intricacies of start-up expenses, exploring the two broad categories and the tax deductions available to landlords.
Understanding Start-Up Expenses:
Start-up expenses encompass the costs incurred before a property is offered for rent. These can be broadly categorized into two types:
Deducting Start-Up Expenses:
Landlords have the opportunity to deduct their start-up expenses when they commence their rental business. The deduction is calculated as follows:
When filing tax returns, landlords automatically elect to deduct start-up expenses by labeling and deducting them on Schedule E or the appropriate return.
Business Entity Formation Costs:
It’s important to distinguish between start-up expenses and costs associated with forming a business entity such as a partnership, limited liability company (LLC), or corporation. While the former can be deducted based on the rules mentioned earlier, entity formation costs are subject to a different tax rule.
Landlords can deduct up to $5,000 of entity formation costs in the first year of business. Any remaining costs can be amortized over the first 180 months of the business. This rule applies to the costs incurred in creating partnerships, LLCs, or corporations related to the rental business.
Expanding Your Rental Business:
Expanding an existing rental business is not considered a start-up expense. Instead, expansion costs are treated as ordinary business operating expenses. As long as these costs are deemed necessary and within the scope of the existing rental business, they are deductible.
Geographic Considerations:
The IRS and tax court emphasize that a rental business exists within the geographic area of the property. Therefore, purchasing or seeking to purchase property in a different location is viewed as starting a new rental business. Consequently, the associated expenses for expanding into a new location are considered start-up expenses and can be deducted accordingly.
Active Participation Requirement:
A crucial point to note is that the ability to deduct start-up expenses is reserved for active rental business owners, not mere investors. To qualify for these deductions, landlords must actively engage in the management and operations of their rental properties.
Becoming a landlord is an exciting venture that comes with its share of financial considerations. Understanding the nuances of start-up expenses and the associated tax deductions is essential for optimizing the financial outcomes of your rental business. By navigating the tax landscape with clarity, landlords can make informed decisions and lay the groundwork for a successful and profitable venture in the real estate market.
As we usher in the new year, businesses in the United States are gearing up for a significant change—the implementation of the Corporate Transparency Act (CTA) on January 1, 2024. This federal mandate brings with it a fresh filing requirement for a broad spectrum of business entities, aiming to enhance transparency and curb illicit financial activities. In this article, we’ll delve into the intricacies of the CTA, exploring its requirements, exemptions, and implications for businesses.
The Corporate Transparency Act in a Nutshell:
The CTA casts its net wide, covering most corporations, limited liability companies (LLCs), limited partnerships, and certain other business entities. The central requirement of the CTA is the filing of a Beneficial Owner Information (BOI) report with the Financial Crimes Enforcement Network (FinCEN) by December 31, 2024.
Identifying Beneficial Owners:
The heart of the BOI report lies in identifying and disclosing beneficial owners—individuals who control 25 percent or more of the ownership interests in the entity or exercise substantial control over it. Each beneficial owner’s information must include their full legal name, date of birth, complete current residential address, a unique identifying number (from a U.S. passport, state/local ID, or driver’s license), and an image of the document providing the unique identifying number.
The BOSS Database:
FinCEN is set to establish the Beneficial Ownership Secure System (BOSS) to house the BOI data. This database aims to assist law enforcement agencies in preventing the use of anonymous shell companies for various illegal activities, including money laundering, tax evasion, and terrorism. Notably, the BOI reports will not be publicly accessible.
The CTA primarily applies to business entities formed by filing documents with a state secretary of state or a similar official. Additionally, foreign entities registering to do business in the U.S. fall under the purview of the CTA. However, certain entities are exempt, such as larger businesses with 20 or more employees and $5 million in receipts, as well as those already heavily regulated by the government, including publicly traded corporations, banks, insurance companies, and non-profits.
Sole proprietors and general partnerships in most states are exempt from the CTA, providing some relief to smaller businesses. However, single-member LLCs, despite their pass-through tax treatment, are subject to the CTA’s requirements.
While the initial BOI report filing does not expire, businesses must remain vigilant in fulfilling their ongoing duty to keep the report up to date. Any changes in beneficial ownership must be promptly reported to FinCEN within 30 days of occurrence. This continuous monitoring ensures that the information remains accurate and relevant.
The CTA underscores the seriousness of compliance by imposing hefty penalties for failure to adhere to the filing requirements. Businesses that neglect to file the BOI report or provide inaccurate information may face significant monetary fines and, in extreme cases, imprisonment for up to two years.
As the Corporate Transparency Act takes effect in 2024, businesses must adapt to the new regulatory landscape. Compliance with the BOI reporting requirements is not only a legal obligation but also a crucial step toward fostering transparency and combating financial crimes. By understanding the nuances of the CTA, businesses can navigate the reporting process with confidence, ensuring a smooth transition into this era of heightened corporate accountability.
As we approach the final stretch of 2023, individuals eager to optimize their tax savings are exploring strategic financial avenues. One particularly promising option gaining traction is making last-minute vehicle purchases. Acquiring a vehicle before the year concludes can yield substantial benefits, provided one navigates the process with a keen eye on tax implications and takes advantage of available opportunities.
1. Section 179 Deduction
A key strategy in this endeavor is leveraging the Section 179 deduction, a provision that allows businesses to deduct the full purchase price of qualifying equipment, including vehicles, in the year of acquisition. This deduction provides a direct reduction in taxable income, serving as a powerful tool for businesses looking to make significant purchases while benefiting from immediate tax advantages. It’s crucial to note that there are annual limits, making timely action crucial for maximizing the potential of this deduction.
2. Bonus Depreciation
In addition to the Section 179 deduction, another avenue worth exploring is bonus depreciation. In 2023, businesses can depreciate 100% of the cost of qualified property, including new and used vehicles, in the first year. This generous depreciation rate offers a substantial reduction in taxable income, making it an attractive option for those looking to minimize their tax liability. Understanding the specific rules and limitations surrounding bonus depreciation is essential to fully capitalize on its benefits.
3. Electric and Hybrid Vehicles
With an increasing emphasis on sustainability, investing in electric or hybrid vehicles can bring additional perks beyond environmental considerations. Federal tax credits are often available for those making eco-friendly choices, providing not only financial gains but also contributing to a greener footprint. Exploring the potential tax benefits associated with electric or hybrid vehicles can be a strategic aspect of last-minute vehicle purchases.
4. Consider Business Use
For individuals planning to use the vehicle for both personal and business purposes, there may be opportunities for deductions related to the business percentage. Maintaining detailed records is crucial to substantiate these claims and ensure compliance with tax regulations. Consulting a tax professional becomes particularly valuable in navigating the complexities of these deductions and optimizing the overall tax strategy.
5. Financing Considerations
When contemplating a last-minute vehicle purchase, exploring various financing options is a critical step. The interest paid on a vehicle loan may be deductible, providing an additional avenue for reducing taxable income. Evaluating the terms and interest rates of financing options can help individuals make informed decisions that align with their financial goals.
6. Consult with a Tax Professional
Before finalizing any significant financial decisions, especially those with tax implications, it’s advisable to consult with a qualified tax professional. They can provide personalized advice based on an individual’s unique financial situation, ensuring that decisions align with current tax laws and maximize available benefits.
7. State Tax Considerations
Beyond federal tax implications, it’s crucial to consider state-specific tax regulations. Some states offer additional incentives or have different rules regarding vehicle-related tax benefits. Researching and understanding these state-level considerations can provide further insights into maximizing overall tax savings.
8. Timing and Delivery
The timing of your vehicle purchase can impact your tax benefits. Consider the delivery date of the vehicle – it’s not always the purchase date that matters for tax purposes. Understanding the nuances of when the vehicle is placed in service and available for use is essential for accurate tax planning.
9. Record-Keeping Requirements
Accurate record-keeping is the backbone of successful tax planning. Ensure that you maintain comprehensive records of the vehicle purchase, including receipts, invoices, and any relevant communication. This documentation not only supports your tax claims but also simplifies the process in case of an audit.
10. Evaluate Your Business Structure
For business owners, the structure of your business can influence the tax benefits associated with a vehicle purchase. Sole proprietors, partnerships, and corporations may have different rules and limitations regarding depreciation and deductions. Understanding how your business is structured can help tailor your approach to maximize tax advantages.
11. Leasing vs. Buying
The decision between leasing and buying a vehicle can have different tax implications. Lease payments are typically deductible as a business expense, while owning a vehicle provides opportunities for depreciation deductions. Assessing the long-term financial impact and tax advantages of leasing versus buying is a critical consideration.
12. Utilize Tax Software
Leveraging tax software or consulting with tax professionals who use advanced software tools can streamline the process of calculating deductions and ensuring compliance with tax regulations. These tools can provide accurate projections of potential tax savings based on different scenarios, aiding in informed decision-making.
13. Explore State and Federal Incentives
In addition to potential federal incentives for electric and hybrid vehicles, some states offer their own incentives. These can include rebates, tax credits, or reduced registration fees for environmentally friendly vehicles. Researching and taking advantage of these incentives can enhance overall tax savings.
14. Plan for Future Tax Years
A well-thought-out vehicle purchase can have lasting tax benefits beyond the current tax year. Consider your long-term financial goals and how the chosen vehicle aligns with your business or personal needs. Planning for future tax years ensures that your investment continues to provide favorable tax outcomes.
15. Be Mindful of Personal Use
If you use the vehicle for both business and personal purposes, it’s essential to separate and accurately document personal use. The tax treatment of expenses and deductions may vary based on the percentage of business use, and maintaining clear records is vital for compliance.
In summary, navigating the landscape of last-minute vehicle purchases for tax savings involves a multifaceted approach. By understanding federal and state regulations, considering timing, maintaining meticulous records, and exploring various incentives and structures, individuals and businesses can unlock substantial tax benefits. Leveraging technology, seeking professional advice, and planning for the future contribute to a comprehensive strategy that extends beyond immediate tax savings, positioning individuals for financial success in the years to come.
The IRS has recently intensified its efforts to combat improper Employee Retention Credit (ERC) claims. In response to a surge in questionable claims, the IRS has taken several actions. In this article, we will delve into these actions and their implications for businesses seeking ERC relief.
1. Temporary Halt on New ERC Claims:
On September 15, 2023, the IRS announced a temporary stop in processing new ERC claims, effective until the end of the year at the earliest. This decision stems from the IRS’s concern about the rising number of improper ERC claims. While some tax experts and associations support this measure, there are differing opinions. Some believe that all valid claims should be addressed promptly, especially for businesses facing ongoing financial hardships. Despite the processing delay, it’s advisable to submit your claim now to secure a spot in the queue.
2. Slower Processing of Existing Claims:
The IRS faces a backlog of over 600,000 ERC claims, causing delays in processing. The standard processing goal of 90 days has been extended to 180 days, with even longer processing times for claims requiring further review or audit. For legitimate ERC claims, patience is essential, and having proper documentation is crucial. Those with questionable claims should consult IR-2023-169 and engage with their tax professionals to explore options.
3. New IRS Q&A Document:
The IRS released a new Q&A document with a headline that some find problematic. The document aims to provide clarity on ERC eligibility, but its wording may discourage eligible businesses. Clear guidance on qualification and non-qualification is essential. The IRS’s primary mission should be helping taxpayers pay the correct tax, not intimidating them.
4. Watch Out for Red Flags:
The ERC is a legitimate tax credit, but it has become a target for aggressive marketing to businesses that may not qualify. In a September 2023 news release, the IRS warns businesses to be cautious of improper assistance in claiming credits. The example of paying hefty fees to promoters, only to have claims disallowed, serves as a cautionary tale. The rule of thumb is to ensure the validity of your claim.
5. IRS’s Recruitment of 3,700 New Employees for Audits:
The IRS’s latest hiring effort includes the recruitment of 3,700 new employees, primarily for audit purposes. This expansion of the audit workforce will focus on high-income earners, partnerships, large corporations, and promoters. For promoters, the IRS aims to investigate those involved in peddling abusive schemes.
The IRS’s actions against improper ERC claims signify a commitment to ensuring that tax credits are granted to those who genuinely qualify. Businesses seeking ERC relief should be cautious, patient, and well-prepared to navigate these changes and protect their interests. Additionally, the IRS’s efforts to crack down on promoters of abusive schemes aim to maintain the integrity of the tax system.
Tax season can be a stressful time, especially if you find yourself facing a hefty tax bill that you can’t pay in full. The good news is that the IRS offers solutions to help taxpayers manage their tax debt, including installment agreements and short-term extensions. In this article, we will explore these IRS payment plans and how they can provide financial relief to individuals and businesses struggling with their tax obligations.
Understanding the Challenge
Life is unpredictable, and there may be times when unexpected financial burdens prevent you from paying your taxes in full by the due date. Whether it’s a sudden medical expense, a job loss, or any other unforeseen circumstance, the IRS understands that not everyone can meet their tax obligations on time.
IRS Payment Plans Explained
1. **Installment Agreements:**
An IRS installment agreement is a structured payment plan that allows you to pay your tax debt over time. It’s an excellent option for those who can’t pay their full tax bill upfront. Here’s how it works:
– **Application:** To get started, you’ll need to apply for an installment agreement. This can typically be done online, by mail, or in some cases, over the phone.
– **Payment Amount:** The IRS will work with you to determine a monthly payment amount based on your financial situation. It’s crucial to be honest and accurate when providing your financial information.
– **Fees:** Keep in mind that there may be setup fees associated with installment agreements. However, these fees are generally lower for low-income taxpayers.
2. **Short-Term Extensions:**
If you need a bit more time to pay your tax bill but believe you can do so within 120 days, you can request a short-term extension. Here’s what you should know:
– **No Setup Fees:** Unlike installment agreements, there are no setup fees for short-term extensions.
– **Penalties and Interest:** You will still be subject to penalties and interest on the unpaid balance during the extension period. However, the penalties are typically lower than those associated with installment agreements.
Benefits of IRS Payment Plans
Now that you understand the basics of IRS payment plans, let’s explore why they can be a lifeline for individuals and businesses facing tax debt:
1. **Financial Relief:**
IRS payment plans provide immediate financial relief by allowing you to spread your tax payments over an extended period. This can prevent you from draining your savings or going into debt to cover your tax bill.
2. **Avoiding Collection Actions:**
By entering into an IRS payment plan, you can avoid more severe collection actions such as wage garnishment, bank levies, or asset seizures. This protects your financial stability and peace of mind.
3. **Customized Plans:**
The IRS works with you to create a payment plan that suits your financial situation. Your monthly payments are tailored to your ability to pay, ensuring that you can meet your other essential financial obligations.
4. **Improved Credit Score:**
While your tax debt remains unpaid, it can negatively impact your credit score. Setting up an IRS payment plan and making consistent payments can help you rebuild your credit over time.
5. **Reduced Penalties:**
Although you’ll still incur interest on the unpaid balance, the penalties associated with IRS payment plans are generally lower than those imposed for failing to pay taxes on time without an agreement.
How to Apply for IRS Payment Plans
Applying for an IRS payment plan is a straightforward process:
1. **Gather Necessary Information:**
Before applying, gather your financial information, including details about your income, expenses, and the amount you owe. This will help the IRS assess your ability to pay.
2. **Choose the Right Plan:**
Decide whether you want to apply for an installment agreement or a short-term extension based on your financial circumstances and how quickly you can pay your tax debt.
3. **Apply Online or by Mail:**
You can apply for an installment agreement or a short-term extension online through the IRS website. Alternatively, you can submit Form 9465, Installment Agreement Request, by mail.
4. **Await Approval:**
Once you’ve applied, the IRS will review your request and notify you of their decision. If approved, they will provide details on the terms of your payment plan.
Conclusion
Dealing with tax debt can be overwhelming, but the IRS payment plans discussed in this article can offer a lifeline during challenging financial times. These options provide a structured and manageable way to address your tax obligations without resorting to drastic measures. Whether you opt for an installment agreement or a short-term extension, taking proactive steps to address your tax debt can lead to financial stability and peace of mind. Remember, when in doubt, seek guidance from tax professionals or IRS representatives to ensure you make the best choice for your unique situation.
Two tax term that hold significant value are ‘safe harbor.’
Moreover, five more tax terms that bring great benefits are ‘tax-advantaged expensing without recapture.’
To establish and safeguard your safe-harbor expensing, you, your corporation, or your partnership must formally elect, on your tax return, to utilize the de minimis safe harbor for assets valued at $2,500 or less (or $5,000 with applicable financial statements, as explained later).
This advantageous safe-harbor election removes the hassles associated with:
The term ‘safe harbor’ signifies that the IRS will approve your expensing of the qualified assets as long as you adhere to the safe-harbor rules.
For asset purchases that do not qualify for safe-harbor expensing, there is no issue: Section 179 expensing and Section 168(k) bonus depreciation are both available options.”
Overview
You aim to have your safe-harbor expensing ready for implementation by January 1, 2024, which is why you’re reading this article in September 2023. We’re providing this information well in advance to ensure you have ample time to establish your safe harbor for the upcoming year.
If you’ve utilized safe-harbor expensing in previous years, you should find your prior-year safe-harbor election on those respective tax returns.
If you’re a small business that has chosen the $2,500 limit for safe-harbor expensing, let’s consider a scenario where you purchase two desks, each costing $2,100. The invoice indicates a quantity of two, a total cost of $4,200, along with a sales tax of $378 and a $200 delivery and setup fee, bringing the total to $4,778.
Before adopting the safe harbor option, you would typically have treated each desk as a capital expense, totaling $2,389 ($4,778 ÷ 2). Subsequently, you would have either utilized Section 179 expensing or depreciation for both desks. Additionally, you would have maintained the desks on your depreciation schedule until they were eventually disposed of.
However, with the safe harbor provision, you can expense the desks as office supplies. This eliminates the necessity to include the desks in your accounting books, simplifying your financial record-keeping process.
Safe Harbor
When put into practice, involves the following:
The de minimis safe harbor consists of two options, and which one applies to you depends on whether you have what’s called an “applicable financial statement” (AFS) for your business. If your financial statements have been subject to a certified public accountant (CPA) audit or a similar process, then you have an applicable financial statement.
The key difference between having an AFS and not having one is as follows:
Creating the Safe Harbor
Filing taxes can be a daunting process, but for some, it’s much more than that – tax audits. This stressful situation involves having the IRS put your tax return under a microscope to see if you reported all your income and to see if you overstated your deductions and expenses. The IRS’s main goal in an audit is to assess more taxes, penalties, and interest. It’s an intimidating experience that most Americans dread facing!
An IRS audit can cause even the most squeaky-clean of taxpayers to become fearful and anxious when faced with defending themselves to an auditor. It’s understandable why the majority feel powerless in this situation. You also have to understand and get comfortable with, in the eyes of an IRS auditor, you are guilty until proven innocent. Navigating the tax code on your own is not a good place to be.
Tax audits don’t have to be a source of fear as long as you’ve remained compliant with all the rules and regulations. The best way to ensure peace of mind is to work with an experienced Tax Resolution Specialist who represents clients in such matters and has a good track record. Contact our firm for a complimentary no-obligation consultation to assess your situation. https://calendly.com/premierbusinessstrategist/freeconsult
An IRS audit can be a very time-consuming and intrusive exercise that can include a visit from the auditor. Audits can also be conducted remotely. This method, known as a desk audit, involves sending documents through fax or mail to evaluate accuracy and compliance with established law.
Filing taxes is a complex process and the IRS seeks to ensure accuracy by auditing income tax returns. These examinations may be focused on certain deductions, particularly if taxpayers have claimed for more than what their reported incomes suggest – but this does not necessarily indicate any wrongdoing or misconduct. The IRS can also select your return to be audited for no reason at all. These are referred to as “random” audits to ensure compliance with tax laws.
Taxes are a fundamental pillar of our society and the government strives to ensure that everyone is compliant. To this end, random audits from both Federal and State authorities may be conducted in order to verify taxpayers’ income as well as expenses incurred throughout the year; making sure all taxation payments due remain accurate.
Preparing for a tax audit should be an ongoing process. To avoid any problems, ensure that all deductions taken are backed up with proof and every receipt is kept on file along with the return – you never know what may arise in the future! It’s important to remember: only declare items that can easily be defended – your documents are a crucial piece to your defense. Ensure each tax record remains safely stored away for at least seven years as per IRS regulations.
Protect your finances and future by taking the time to review your tax returns before signing off, even if you have a professional do them. A thorough examination of the documents will not only help ensure accuracy in filing but also offers an invaluable opportunity for you to gain knowledge on taxes – safeguarding against potential penalties or interest charges related to inaccuracies down the line.
Tax audits can be intimidating, but with a little foresight and the right representation it doesn’t have to cause stress. Staying organized throughout the year is key for having peace of mind when tax season rolls around. Finding an experienced professional who understands your individual needs will help make dealing with the audit as painless as possible.
Take the worry out of representing yourself in front of the IRS, which is like going to court without a lawyer. Let our expert team lift this from your shoulders and navigate the IRS on your behalf. Schedule a no-obligation consultation to explore your options and get on track toward permanently resolving any worries you have over having to meet with and defend yourself in an IRS or State income tax audit. https://calendly.com/premierbusinessstrategist/freeconsult
Tax season can be a time of great anticipation for millions of Americans with dreams of a nice, big, refund check coming soon. Yet this year, many Americans may find themselves surprised and coming up short on their refunds.
Many taxpayers have been shocked to find that this year, instead of a big tax refund check arriving in the mail, they are being saddled with an unexpected bill from Uncle Sam. The combination of recent tax law changes and updated employer withholding tables has left individuals scrambling to figure out how to pay for their new IRS obligations due at filing time.
If you’re worried about a looming tax bill, never fear: there are measures you can take to ensure that your taxes don’t unexpectedly balloon. From budgeting tips to what do when the worst happens, these strategies will have your wallet breathing easy throughout the year!
Ignoring an IRS debt could ultimately result in serious consequences. It is in your best interest to be aware of any outstanding amount as soon as possible, providing time for tax planning and sourcing the necessary funds.
Don’t let late payments rack up and cause costly penalties and interest. Be proactive about filing your taxes so you’ll have a good idea of what will be owed, if anything, that is needed to be paid on time.
With the recent changes in tax law, your paychecks may have grown more generous – but don’t get too excited! They could mean less of a refund or an unexpected bill when you file. Make sure to stay informed and plan ahead so unpleasant surprises won’t come back to haunt you this filing season.
To prepare for tax season, it’s important to monitor your paychecks and ensure that the right amount is withheld. If you see a decrease in federal taxes being taken out of each paycheck, adjust this with your employer immediately – even though it may mean taking home less every month. Doing so can help protect you from federal and state tax debts and penalties later!
With just your final paycheck from last year and a few additional details, you can gain insight into what kind of tax refund or balance due to expect come filing season. It pays to take the time for preparation now so there are no unpleasant surprises later! However, please note that you should never use your 2022 final paycheck to prepare your return. You’ll need the actual W-2 from your employer in order to file a complete and accurate return.
To be prepared for tax season, compile all necessary records of your income, credits and deductions to estimate what you owe. Leverage the power of a reliable tax preparation software or use an everyday calculator with those numbers in hand to better understand your financial situation.
Ignoring a tax bill isn’t an option; the IRS will always come knocking. Settling it quickly can save you from further financial trouble, so don’t delay. Your taxes may burden your wallet now, but they’ll take hefty chunks out of your future if left unresolved!
Dealing with the IRS can be a daunting experience for many taxpayers. Even getting the IRS on the phone these days is nearly impossible. Without proper guidance, and expert help, attempting to negotiate your own tax problem is like going to court without a lawyer – not a wise move!
Struggling with tax burdens from the IRS or State? Our experienced team knows the IRS’s “ins and outs”, knows how to navigate the IRS maze and is here to assist you in finding a resolution that works best for your unique situation. Take advantage of our knowledge and expertise by booking an appointment with us today – take control of your taxes, and your life, before they become unmanageable! https://calendly.com/premierbusinessstrategist/freeconsult
Paying taxes is a fact of life, but when the amount is excessive, you may not have the funds to pay in full. Making a mistake on your taxes can be costly as well, and if you plug in the wrong numbers, the IRS will surely come calling.
Whether you owe money to the IRS due to an innocent oversight, a lack of funds, or something else, ignoring the problem will not make it go away.
Once you owe money to the IRS, the clock is ticking, and all the while penalties and compounded interest will be piling up. So what should you do if you owe back taxes? Here are some critical steps to take.
Until you know how deep the hole is, you will not be able to start digging your way out. Before you do anything else, you should assess the situation, going through your old tax returns, reviewing communications from the IRS, and adding up what you owe the tax agency.
Once you have assessed the situation, you will be in a better position to make concrete plans. If you owe a lot of money, you may not be able to pay it off all at once, but with the help of a tax relief professional, you may be able to come up with a suitable repayment plan or you may be able to settle for less than you owe.
Owing money to the IRS is no fun, but you will have to resolve this one way or another. Hopefully, you can work out a more favorable payment plan
with the IRS, one that might allow you to pay a reduced amount, but that will depend on your income, your allowable expenses, and your assets, if any.
It is important to review your monthly household budget carefully if you owe back taxes to the IRS. Every dollar you can pay back is one less dollar you will owe interest on, so think about where you can cut back and how you might be able to free up some cash.
The bad news is that you owe back taxes to the IRS. The good news is you may be able to settle the entire amount, including penalties and interest, for a fraction of what’s owed through the IRS’s offer in compromise program.
If you qualify for one of those programs, you may be able to settle your debt for less than you owe, but this is not something to tackle on your own. Work with a tax-relief expert, both to identify the proper programs and to make negotiating with the tax agency easier and more effective.
You can use the budget you reviewed earlier to identify sources of income and resources you have access to. Once that information is presented, the tax-relief expert can help you find a suitable tax compromise plan that just might save you a lot of money.
Time is of the essence when you owe money to the IRS. Once those back taxes are assessed, the clock is ticking, and every day that passes will mean higher penalties, and compounding interest.
If you want to put your tax debt behind you once and for all, you will want to act fast. The sooner you start working on your tax resolution plan, the sooner you can take your financial life back.
To help ease the stress from your situation, we offer a free, no-obligation consultation with one of our tax resolution experts. You don’t have to worry about confidentiality or cost because the consultation is free with zero gimmicks or commitments. Schedule an appointment with one of our tax resolution specialists today by clicking on this link: https://calendly.com/premiersmlbus/consult .
The tax-filing deadline will be here before you know it and pretty soon, you’ll be gathering up your receipts and plugging in numbers. I know you’re hoping for good news, and praying for a big refund in the process.
If all goes well you won’t owe anything and you might even be getting back a nice refund. But, what should you do if you owe money? If you know you owe money to the IRS, you might be tempted to not file a return, but that is the worst thing you can do!
If you fail to file on time, the IRS will come after you until you do. Worse yet, the tax agency can assess up to 25% just in late filing penalties. Plus, interest will start piling up right away. Instead of not filing, here are the steps you should take if you owe money to the IRS.
Seek Out Tax Deductions You Can Still Claim
If you find that you owe taxes, all might not be lost. As long as the April 15th tax-filing deadline has not yet passed, you can still add money to an IRA, lowering your taxable income in the process. As long as you meet the income guidelines for a deductible IRA, this step alone could lower the amount you owe or even entitle you to a refund.
Pay as Much as You Can As Soon as You Can
Speaking of paying up, it is important to pay as much as you can as soon as
you can. Even if you file for an extension, the clock will still be ticking on any required payments, and the penalties and interest can add up pretty quickly.
If you know you owe money to the IRS, paying it off should be your number one priority. That might mean squeezing your dollars extra hard or trimming your budget to the bone, but it beats paying penalties and high interest to the IRS.
Seek Professional Tax Help and Guidance
Owing money to the IRS is no joke, and dealing with the situation is not something you should try to tackle on your own. If you know you owe money to the IRS and cannot pay the bill in full, it is important to seek professional help and guidance.
A tax resolution expert can guide you through the process, helping you prepare, submit and negotiate a payment plan that works for you and the IRS doesn’t get to manage your monthly cash flow. You also may qualify for an offer in compromise, which settles your case for less than the amount owed, but it’s important to act as quickly as possible – you do not want your tax situation to get worse.
Hopefully, you will find a reason to smile when you file your taxes this year. Hopefully, you will find that you are due a refund, and you can begin making plans for the money that will soon arrive in your bank account.
If not, it is important to know what to do and which steps to take. If you owe money to the IRS, you need professional help and guidance, so call a tax relief expert right away to preserve your rights and your money.
Before you make a decision, let our firm see if we can help. We negotiate with the IRS day-in and day-out. We can potentially settle your tax debt for a lot less than you owe. Call us today to find out. Our tax resolution specialists navigate the IRS maze so you don’t have to. https://calendly.com/premiersmlbus/consult