7 Reasons to Work with a Tax Resolution Professional to Resolve Your Back Taxes

May 11, 2022

When you owe money to the IRS, it is hard to think about anything else. While being in debt is never fun, no matter who the creditor is, the IRS enjoys almost unlimited power to collect the money they are due.

Unlike your mortgage lender or credit card company, the Internal Revenue Service has the power to attach your wages, raid your bank account and even take your freedom. No other creditor even comes close in terms of its power and influence, and taking on the agency on your own could be asking for trouble.

If you have received a notice from the IRS, you need to act fast, and you need the right assistance in your corner. Taking on the IRS requires specific expertise, and that is why it is so important to work with a quality tax resolution company. Here are seven reasons why working with a tax resolution specialist could save your good name – and your bank account.

You gain specific expertise. The IRS is a specialized agency, and you need expert advice and guidance to get the most positive resolution.

It will give you peace of mind. Just being contacted by the IRS can make your heart beat a bit faster, but working with a tax resolution expert can set your mind at ease once you hire a tax resolution specialist. Generally, once you hire a tax resolution expert you won’t have to meet or speak with the IRS. They will handle all communications and correspondence with the IRS.

The tax resolution process could save you a lot of money. Tax resolution professionals are experts at settlements, and working with one could save you a ton of money.

Timely action could save your home and property. If you wait too long, you could put your home, business, bank accounts and personal property at risk. Time is of the essence when it comes to resolving tax issues, and timely assistance could make a world of difference.

You will feel less alone. Few things feel as lonely as fighting the IRS on your own. When you work with a tax resolution expert, not only do you not have to go it alone but they actually step into your shoes to represent your best interests.

You will have a chance to file missing returns. When faced with a big tax bill, it is easy to do nothing, but failing to file legally required tax returns could have serious consequences down the line. If you have years of unfiled returns, a tax resolution expert can help you catch up.

You could save your credit score. Unresolved issues with the IRS will reflect badly on your credit report, lowering your credit score and making it harder to borrow money or qualify for a mortgage. Timely tax resolution could preserve your stellar credit score and help you avoid those serious consequences.

Owing money to the IRS can be pretty frightening. There is a reason those three letters strike so much fear into the hearts of ordinary citizens, even those who have done nothing wrong.

If you are in trouble with the IRS, you cannot afford to ignore the issue, so act fast and get the help you need today. Working with a tax resolution expert carries a host of benefits, starting with the nine outlined above.

Most likely, you wouldn’t go to court without a lawyer. Similarly, it’s best not to deal with the IRS without expert representation which can be provided by a tax resolution expert, who by training, is also a CPA, attorney or enrolled agent.

Reach out to our firm and we’ll schedule a no-obligation confidential case evaluation to explain your options in full to permanently resolve your tax problem. 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?

Operation Hidden Treasure: Cryptocurrency And Your Taxes

November 30, 2021

Cryptocurrency has become an incredibly popular way to invest, but the tax side of this virtual coin can be difficult to navigate. The IRS has gone back and forth over the years on it’s stance on cryptocurrency, making it confusing even for the most diligent investors.

In March of 2021, the IRS announced Operation Hidden Treasure in order to crack down on cryptocurrency reporting. If you’ve bought and/or sold cryptocurrency recently, it’s important to declare your crypto correctly on your tax forms in order to avoid fraud and evasion charges.

Here’s what you need to know:

Before we jump into it, if you know you owe IRS back taxes on your crypto gains, it’s important to reach out to a tax resolution firm like ours who is skilled in negotiating back tax debt with the IRS. We can help you file amended returns and get you back in compliance, while potentially negotiating with the IRS on your behalf. Contact us today for a consultation. Get help from Ron Friedman, CPA.

What Is Operation Hidden Treasure?

Operation Hidden Treasure is a joint effort by the IRS Civil Office of Fraud Enforcement and its Criminal Investigation Unit. This operation is designed to search for unreported income from cryptocurrency.

Operation Hidden Treasure has trained agents to examine the blockchain in order to find signs of tax evasion. Blockchain is the digital ledger that tracks your cryptocurrency mining and transactions. The signs that IRS agents look for are marked as signatures that make it easier to detect further fraudulent activity.

Crypto users have found ways to skirt reporting requirements by sending multiple transactions under a certain dollar amount, or pouring their virtual currency into shell corporations, different countries, and cold storage. The IRS is also collaborating with European law enforcement agencies to tackle international fraud.

How To Protect Your Assets

The IRS considers virtual currency to be property akin to gold, rather than money, and is taxed accordingly. If your only crypto transaction this year was purchasing crypto with US dollars, then that does not need to be reported, according to the IRS FAQ on their website. However, if you sold your crypto or you traded your crypto for any goods or services, then that does need to be reported.

When you sell your crypto, keep track of its value when you purchased it, and its value when you sold it. While crypto and the IRS can both be murky subjects, your transparency is the key to protecting your financial assets from future tax audits.

To get ready for the upcoming tax season, it’s important to get your portfolio organized. If you have bought, sold, or traded crypto in the past year, contact a tax lawyer or a tax resolution firm like ours for advice on how to report your cryptocurrency transactions.

Need Tax Relief?

If you do get in trouble with the IRS and they claim you owe $10,000 or more, reach out to our tax resolution firm and we’ll schedule a free, no-obligation confidential consultation to explain your options in full to permanently resolve your tax problem. Get help from Ron Friedman, CPA.

8 Ways to Get Ready for Tax Season and Avoid a Back Tax Problem

The holidays are here. Not to be a Grinch but, right around the corner is a less fondly anticipated time of year. Before you know it, you will be taking down the Christmas tree, pulling down the holiday lights and getting ready for the tax season to come.

Tax season is decidedly less fun than holiday season, but the two times of year do have one thing in common. Just like the holidays, tax season requires lots of preparation and planning, and if you want to be ready, you need to start early.

Why am I writing this article? It’s not to spoil your holiday cheer, it’s because we’ve seen what it’s like when you’re not prepared. We help people who fall behind on their taxes and owe the IRS tens of thousands of dollars in back taxes, and it’s often because they simply failed to prepare and they procrastinate on their taxes.

So if you don’t want to end up owing the IRS a ton of money, Here are 10 ways to get ready for tax season and reduce your stress level as this annual ritual approaches.

#1 Organize your records.

Now is the time to drag out last year’s tax return, pull out your most recent pay stub and get organized before the season starts.

#2 Settle any back taxes you might owe.

If you have years of unfiled returns or have a tax issue for anything besides the current year, you should get this handled now, before the upcoming tax season. When April 15th comes around, your tax professional is likely swamped with returns and they’ll pay less attention to your back tax debt. We recommend reaching out to a specialized tax relief firm like ours who handles complicated tax debt cases all year round.

#3 Defer bonuses and incentive pay.

If you’re going to owe taxes, it might make sense to defer getting paid so you can lower your taxable income. If you can, you might want to defer any bonuses and incentive payments. You can also defer payments from retirement accounts and IRAs to save on current-year taxes.

#4 Look for additional deductions.

Now is the time to make those last-minute donations to charity, so start writing those checks and gathering up those household goods. Be sure to get a receipt and save your cancelled checks so you can substantiate your charitable giving if a question should arise later.

#5 Expand your education.

Not only can taking a class improve your business or career prospects and help you get ahead, but that additional education could also lower your tax bill. You might qualify for a generous tax credit or take a good tax deduction for investing in your future.

#6 Up your retirement savings.

The end of the year is the perfect time to increase your 401(k) contributions and make your annual IRA investment. Maxing out your 401(k) and IRA contributions is one of the best ways to reduce your tax bill while saving for the future.

#7 Sell your losers and let your winners run.

if you have substantial capital gains in your stock portfolio or crypto portfolio, selling your losers could lower your tax bill. You can use those losses to offset your capital gains and save money on your taxes.

#8 Estimate your income for tax planning.

You will not know the exact amount of income you received until all your documents are in, but you can estimate your compensation and start doing some advance tax planning. This can be key in preventing back tax debt since you wont be blindsided by a large tax bill come April 15th.

Tax season will be here before you know it, and now is the time to get ready. You do not have to wait until April to start your tax planning, and the sooner you get started, the sooner you can put this unpleasant task behind you.

Need Tax Relief?

5 Things That Can Unexpectedly Raise Your Taxes

July 3, 2021

Proper tax planning is a year-round proposition. You cannot afford to wait until April to start planning your taxes and assessing your tax liability.

Knowing which factors can raise your taxes is one of the best ways to keep more money in your pocket. These five factors can unexpectedly raise your taxes owed at the end of the year.

Note: 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.

#1 – Cashing in Your Retirement Plan

There are many reasons not to cash in your retirement plan early, but the tax penalty is one of the biggest ones. If you take the proceeds from your 401(k) plan in cash instead of rolling it over into an IRA, you will have to pay taxes on the money you withdraw. Even worse, you will be subject to a 10 percent penalty. By the time you are done, you could lose up to half your hard-earned retirement plan to taxes and penalties.

#2 – Working as a Freelancer

Working for yourself is great, but it can trigger a tax nightmare. Freelancers and other self-employed workers are subject to the self-employment tax, which represents the combined employer and employee share of the Medicare and Social Security tax. That tax hit can be substantial, especially if you plan to fail for it and set money aside.

#3 – Failing to Take Your RMD

You cannot keep retirement funds in your account indefinitely. You are required to start pulling money from your IRA and workplace retirement plans when you turn 70. If you fail to make that required minimum distribution (RMD), you could face a hefty tax penalty. The penalty for failing to take the RMD can be substantial.

#4 – Skipping Your IRA Contribution

If you are used to making an annual IRA contribution, skipping that contribution could cost you money. Before you skip your IRA contribution, take the time to run the numbers and see how the decision will affect your tax bill.

#5 – Paying Off the Mortgage

Paying off the house can be very freeing, but it can also raise your taxes. Mortgage interest is deductible if you itemize your deductions, and losing that deduction could leave you owing more to the IRS. That may not be a reason to keep a mortgage, but it can be an important consideration.

Owe Back Taxes?

If you know you’ll have outstanding tax debt and owe more than $10k to the IRS or state but can’t pay in full, contact our firm today. We help people find tax relief and sometimes settle their tax debt for a fraction of what’s owed Get help from Ron Friedman, CPA