For many taxpayers—especially self-employed individuals, business owners, and retirees—the obligation to make quarterly estimated tax payments can feel like a minefield. The U.S. tax system requires you to pay as you go, and the IRS doesn’t wait until April to assess whether you’re meeting your obligations. If you’re short on those payments, you could be penalized at a rate that, while technically 7%, can feel closer to 11% once you factor in that penalties are nondeductible.
Fortunately, there’s a silver lining: you can often avoid or erase those penalties altogether with smart withholding strategies—even late in the year.
This article will explore how estimated taxes and withholding differ, what the IRS expects from taxpayers, and the savvy strategies you can use to avoid unnecessary penalties.
The U.S. operates under a “pay-as-you-earn” system, meaning taxes must be paid as income is earned. If you’re a W-2 employee, your employer handles this for you. But if you’re self-employed or earn income outside traditional employment—through a side hustle, rental property, investments, or a small business—you’re expected to pay taxes throughout the year in four estimated tax installments.
These quarterly payments are due on:
April 15
June 15
September 15
January 15 (of the following year)
Failing to pay enough during any quarter can lead to underpayment penalties, regardless of whether you pay in full by the tax filing deadline.
Withholding refers to the taxes automatically deducted from paychecks, Social Security benefits, pensions, or IRA distributions. Here’s the kicker: the IRS treats withheld amounts as if they were paid evenly throughout the year, even if they’re actually withheld in December.
That’s a powerful advantage over estimated payments.
The IRS provides three “safe harbor” rules that can help you avoid underpayment penalties:
90% Rule: You pay at least 90% of your total tax liability for the current year through withholding or estimated payments.
100%/110% Rule: You pay at least 100% of the prior year’s tax liability (or 110% if your adjusted gross income was over $150,000).
Annualized Income Installment Method: You pay based on actual income earned per quarter, useful for those with fluctuating income.
Using a withholding strategy late in the year can help you retroactively meet these rules—especially the second one.
The IRS allows you to manipulate the timing of your withholding in several legal and creative ways. Unlike estimated payments, which must be made on specific dates, withholding is treated as if it occurred evenly throughout the year unless otherwise allocated.
Let’s say you realize in December that you underpaid by $5,000 in estimated taxes. Rather than writing a large check (and still being penalized for the missed quarterly deadlines), you might:
Instruct your employer to withhold an extra $5,000 from your year-end bonus.
Take a qualified IRA distribution, withholding the full amount for taxes, then redeposit it within 60 days.
Adjust W-2 job withholdings or issue a special payroll draw through your own company with added withholding.
All these strategies work because of the way the IRS allocates withholding.
If you operate an S-corporation or C-corporation and pay yourself through payroll, consider issuing a year-end bonus. By withholding additional federal and state income taxes, you can “catch up” on any shortfalls without incurring penalties.
Quick and easy to implement
Helps reduce estimated tax penalties
Payroll taxes are deductible business expenses
Triggers additional Social Security and Medicare taxes
Must be run through payroll and properly documented
If you or your spouse still hold a W-2 position, simply adjust the W-4 form and increase withholding for the remainder of the year. Use the IRS’s Tax Withholding Estimator to find the right amount.
Suppose you’re short $3,000 on estimated payments. Instruct your employer to withhold an extra $1,500 from your final two paychecks in December.
This one is genius—but only for those who can follow the strict rules.
Take a distribution from your traditional IRA, withhold 100% of the withdrawal for taxes, and redeposit the gross amount back into your IRA within 60 days. You’ll avoid tax on the distribution but benefit from the large withholding.
You take a $10,000 distribution on December 15 and withhold the entire $10,000. Then, on January 30, you replace the $10,000 in the IRA. Result: no tax liability on the distribution, but the IRS treats the $10,000 withholding as if paid throughout the year.
Track your quarterly payments using IRS Form 1040-ES.
Set calendar reminders for all quarterly deadlines.
Use accounting software or a professional bookkeeper to monitor income spikes that may trigger the need for additional withholding.
Coordinate with your spouse to leverage W-2 income for joint withholding.
Assuming the penalty only applies at year-end – it’s calculated quarterly.
Forgetting to account for investment income or side gigs.
Missing the 60-day window on IRA rollovers.
Not communicating with your tax advisor until tax time.
John, age 74, discovers in December that his required minimum distribution (RMD) pushed him into a higher tax bracket. He hadn’t made any estimated payments during the year. His advisor recommends taking another IRA distribution of $15,000 and withholding 100% for federal taxes. Since the IRS treats it as evenly withheld throughout the year, John avoids penalties.
Maria, who owns an S-corp, is short $8,000 in tax payments. In December, she issues herself a $20,000 year-end bonus with 40% withholding. The IRS allocates that withholding across all four quarters, helping her avoid a penalty even though the bonus was paid in December.
Kevin and Lisa both earn income—Kevin is a freelancer, and Lisa works for a large firm. Instead of making quarterly estimated payments, Lisa increases her W-2 withholding each fall. By year-end, their withholding meets the 110% safe harbor based on last year’s return.
While many withholding strategies are simple to understand, implementing them correctly requires precision. A small mistake—such as failing to redeposit an IRA withdrawal—can result in unintended tax bills or penalties.
A tax professional can:
Help you run projections using actual year-to-date income
Calculate safe harbor thresholds
Coordinate timing and documentation for strategic withholding
Provide IRS forms and instructions tailored to your tax situation
The best tax strategy is one that keeps you in control—and nothing spells control like knowing how to avoid unnecessary penalties. Strategic withholding can be a game-changer for many taxpayers, offering flexibility and forgiveness that estimated payments don’t.
Whether you’re nearing year-end or simply planning ahead, use the tips and techniques in this guide to maximize your compliance, minimize penalties, and breathe easier come tax season.
When in doubt, talk to your tax professional about how withholding can work for you.
For self-employed individuals, balancing today’s financial needs with future security is crucial. One powerful strategy to achieve both goals is setting up a retirement plan designed specifically for small business owners and freelancers. Not only do these plans help secure your retirement, but they also provide immediate tax savings. Let’s dive into the available options, their benefits, and how to choose the best one for your situation.
When you work for yourself, you’re responsible for your retirement — there’s no employer 401(k) match or corporate pension to fall back on. A self-employed retirement plan helps you:
Each retirement plan has unique advantages and requirements. Here’s a breakdown of the most popular ones:
When selecting a retirement plan, consider:
Most self-employed retirement plans allow contributions to be deducted from your taxable income, reducing your overall tax bill. Some plans, like Solo 401(k)s, also offer Roth options for tax-free withdrawals in retirement.
Deadlines:
Let’s explore a few scenarios:
Case 1: Sarah, the Freelancer
Case 2: James, the Consultant
A good retirement strategy evolves as your income and business grow. Consider:
Setting up a self-employed retirement plan isn’t just about securing your future — it’s a smart tax-saving strategy today. By choosing the right plan, you can maximize contributions, minimize your tax bill, and create long-term financial stability.
👉 Ready to get started? Consult with a tax professional or financial advisor to choose the best retirement plan for your business and make 2024 the year you invest in your future!
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.
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
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