914 Tax

Common Tax Relief Programs the IRS Offers

January 11, 2022

The old saying that nothing is certain in life except death and taxes has never been truer, or more frightening. In the current environment, fear of the IRS is creeping in, and nothing will get your heart racing quite as fast as opening the mailbox and finding a letter from the tax agency.

When the IRS comes calling, you might think that there is nothing you can do. You may worry that you will have to liquidate your assets, sell your car or even put your home on the market to afford what the IRS says you owe.

The good news is that you may not have to pay that total amount, and before you write that big check you should check out the alternatives first.

The IRS actually understands taxpayers fall behind on their taxes, and they have programs in place that can reduce the amount you owe or at least make paying the tab a little easier.

Note: As a tax resolution firm, we always recommend that you reach out to a professional who knows how to aggressively negotiate with the IRS on your behalf. If you owe back taxes, our firm can help negotiate with the IRS and potentially settle your tax debt. Call us today. Our tax resolution specialists can navigate the IRS maze so that you have nothing to worry about. Get help from Ron Friedman, CPA.

With that said, here are some of the most common tax relief programs the IRS has to offer – and how you can access them.

Payment Plans

Otherwise known as installment agreements, one of the most common ways taxpayers approach the repayment of their back taxes is by setting up a payment plan. This type of program is a popular one, and for good reason – it can greatly reduce the stress you feel as you deal with an unexpected tax bill.

There are pros and cons to this approach, and it is important to explore your other options very carefully. With a payment plan you will need to pay the entire amount you owe, but you can stretch the repayment out over months or even years. Keep in mind, however, that the IRS will continue to charge interest on the remaining balance, so this option will require you to pay more than the amount you owe.

Offer in Compromise

Another program the IRS offers is known as the offer in compromise, or OIC. This option allows eligible taxpayers to settle their tax debts for less than the IRS says they owe, and that means you could save money if you qualify for this program.

The offer in compromise is not right for everyone, and it is important to work with a tax relief expert or tax resolution specialist if you are exploring this kind of compromise. If you have significant assets, the IRS may not be willing to settle, but if you are strapped for cash the offer in compromise arrangement could be the way out of the trouble you find yourself in.

IRS Hardship Program – Currently Non-Collectable

The IRS hardship program is another option for taxpayers who are financially unable to pay what they owe to the tax agency. If you are truly strapped for cash and worrying about your tax debt, you should definitely check out the hardship program, but you should not try to work with the IRS on your own.

The hardship program has some very specific requirements, and if you make a mistake when applying you could find yourself locked out of the process. By working with a tax resolution specialist, you can increase your odds of success and possibly save yourself a lot of money in the process.

What is the best option?

As you can see, the IRS does offer a number of programs that can reduce the amount you owe – or even forgive your tax debt altogether. If you are eligible for one of these tax relief programs, you could find yourself breathing a lot easier, but the IRS is not likely to give you the information if they do not have to.

As a taxing authority and agency, the IRS has an interest in keeping these relief and resolution programs under wrap. Their goal, after all, is to collect as much money as possible and telling taxpayers that they can pay less is simply not in their interest.

For all of those reasons and more, it is important to work with a tax resolution professional whenever you are dealing with an IRS problem. Whether the debt is the result of years of unfiled taxes, a discrepancy in the amount reported and what the IRS says you owe or anything else, specific expertise can make a huge difference – and save you a lot of money in the process.

Knowing about the tax relief and favorable resolution options the IRS offers is the first start, and that education can be a huge point in your favor. Now that you know what types of programs are available, it is time to take the next step, so pick up the phone and call us, your tax resolution specialist, today. Get help from Ron Friedman, CPA.

Tax Deductions You May Be Eligible for as a Freelancer

December 24, 2021

Tax season can be a stressful time, especially for freelancers who might owe taxes at the end of the year. It can be overwhelming to look at the tax debt you owe from the profits you have made.

Our firm specializes in tax resolution and helping people who owe the IRS or state $10,000 or more. We’ve seen small business owners and freelancers get blindsided every year by a huge tax bill and often falling behind on their taxes for years on end. If that’s you, we can help. Contact our firm today to discuss your tax debt settlement options. Get help from Ron Friedman, CPA.

So, if you’re worried about how you’re going to pay your tax bill this year, try to relax. There are a wide variety of legitimate deductions you can utilize as a freelancer to bring your tax liability down. We encourage you to talk to a tax professional to see if any of the following deductions apply to you.

1. Home Office

If you have a home office, you will be able to deduct a part of your rent or home expenses as an expense for your business. Be careful though, home office deductions may require a dedicated office space so speak to a tax consultant to find out if you qualify. In addition to your home office, you can deduct any related office supplies you used over the year. Keep the receipts for paper, ink, and any other home office supplies you’ve purchased. You should also be able to deduct any technology you bought specifically for work. If you have a work computer, internet, and office furniture, those can maybe qualify you for a tax deduction. Furthermore, you can deduct any expensive software programs you need to purchase for work like Adobe photoshop or your word processor.

2. Insurance Premiums

If you work from home, you may be able to deduct your health insurance costs or any other insurance that is required for your job. If you have to purchase liability or malpractice insurance, that is a work-related deduction.

3. Travel Costs

If your work requires you to travel, the cost of that travel is a deduction. Hotel costs, mileage, and even food you eat during work trips are deductible expenses. However, if you are partially traveling for work and luxury at the same time you have to be careful. Any portion of your trip used for a personal vacation is not a deduction. You can only deduct expenses that are specific to your work costs.

4. Advertisement Expenses

If you’ve spent any money advertising your business, you can use that expense as a write-off. Any type of advertisement will qualify as a deduction whether you created online ads or utilized influencer marketing for sponsored posts. If you spent money on promoting your business, record that expense for your tax records.

5. Car Expenses

If your automobile is an integral part of your work, you can deduct expenses that are associated with it. You can itemize costs like auto insurance, gas, and any maintenance work you had to pay for. However, you can only deduct the expenses you utilized while working. If you used your business car as a personal car, you cannot deduct all of these expenses and will need to figure out the percentage of time you used your car to work.

6. Occupational Licenses

If your freelancing job requires you to pursue a license in your field then that license becomes a business expense. You may not have to renew your license annually but in the year you pay to renew, you can deduct that from your tax costs.

Owe Back Taxes and Need Tax Relief?

While many of these tax breaks may seem incredibly appealing, filing them incorrectly can result in an audit or the IRS disallowing your deductions and charging  you penalties and interest on your tax debt, making your problems worse.

If you want an expert tax resolution specialist who knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem. Get help from Ron Friedman, CPA.

Four Ways Freelancers and Gig Workers Can Trim Their Tax Bills

December 10, 2021

It is hard to beat the freedom and flexibility of freelancing and gig work. When you work for yourself, you can set your own hours, turn your home into an office and even ditch the daily commute.

All that is great, but there is one thing about freelancing that is much less pleasant. Compared to their corporate counterparts, self-employed individuals face an additional tax burden, an expense that takes many of them by surprise.

Note: If you end up falling behind on your taxes and the IRS or state claim you owe $10,000 or more, reach out to our tax resolution firm and we’ll schedule a free, no-obligation confidential consultation. Get help from Ron Friedman, CPA.

If you love the freedom of gig work but not the big tax bill, you need to think ahead. A little proactive planning can go a long way, so you can keep more of your hard-earned money in your pocket. Here are four smart strategies you can use to trim your tax liability and get more out of your freelancing and gig work.

#1. Fund a Health Savings Account

If you work for someone else, there is a good chance your boss picks up part of your health insurance costs, but freelancers and gig workers do not have that luxury. These self-employed individuals face additional challenges when it comes to health care, seeking affordable policies on the open market and saving money where they can.

One way the self-employed can save money and trim their tax bills is with a health savings account. Eligible individuals can contribute to a health savings account on a pre-tax basis, taking a serious tax deduction while making their health care more affordable. This tax savings can be a very big deal.

#2. Contribute to a Retirement Fund for the Self-Employed

Freelancers and gig workers need to look out for their own retirement, but there are plenty of options available. The annual contribution limits on retirement plans for the self-employed are among the most generous around, so you may be able to shelter a significant portion of your earnings from the tax man.

If you have a tax ID for your freelance business, you may be able to contribute to a solo 401(k). This plan works much the same as a traditional 401(k) plan, but the contribution limits could be even higher. Even if you do not have a tax ID, you can shelter part of your freelance or gig work income with a SEP-IRA or similar retirement plan.

#3. Take the Home Office Deduction

If you work out of your home, taking the home office deduction could save you a lot of money. If you are eligible for this valuable deduction, you could write off a portion of your property taxes and other home ownership costs, reducing your tax bill and keeping more money in your pocket.

There are specific rules regarding the home office deduction, so check with your tax preparer to make sure you qualify. If you can take the deduction, be sure to keep accurate records, and take photos of the office in your home.

#4. Push Income Into the Next Year

Freelance income can be notoriously unpredictable. One month is great, while the next is terrible. Yearly earnings can be just as variable, making tax planning difficult.

If you are having a particularly good year, you may be able to reduce your current tax bill by pushing some of that income into the following 12 months. When the end of the year approaches, delaying client invoices and moving income into the next year could save you money in the long run.

Once again, it is important to consult a tax professional before implementing this strategy. The IRS has established strict rules concerning income reporting, and you do not want to run afoul of the tax agency.

As a self-employed individual, you face some serious tax challenges, including the dreaded self-employment tax. That higher tax burden makes smart planning essential, and you can start that planning with the four tips listed above.

Owe Back Taxes and Need Tax Relief?

If you want an expert tax resolution specialist who knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem Get help from Ron Friedman, CPA.