914 Tax

Which Tax Records to Keep and For How Long. Do This And Avoid Tax Problems Later.

October 11, 2021

Whether you are expecting a nice tax refund or preparing to write a big scary check, you know that April 15 is the annual tax filing deadline. What you may not know, however, is that tax day is every day at the IRS, and the tax agency is always reviewing the information taxpayers and business owners have provided.

That means that keeping tax records is about more than just smart bookkeeping – it is an integral form of self protection. You see, millions of Americans get letters from the IRS stating they owe back taxes or requesting more information about their tax returns.

It may be disconcerting, but the IRS has the right to request additional information months, or even years, after the return you filed has supposedly been processed and accepted. In fact, the much feared tax agency can request additional documentation for up to three years after the annual tax deadline has come and gone.

We help people resolve their back tax problems and often settle with the IRS for less than the amount they owe, but in order to do this, we need to provide the right records. That’s where having your tax records saved can be the difference between settling your tax debt or not.

As a result, it is important to retain your tax records and keep certain tax documents on hand, just in case the IRS asks for them. Here are the most common tax records and how long you should keep them around.

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.

Save The Tax Returns Themselves

In most cases the IRS will have up to three years to question the figures you reported on your tax return, or otherwise challenge the information you provided. You may think the tax year is over, but for the IRS the final curtain does not fall for a full 36 months.

For this reason, it is generally a good idea to keep your old tax returns for a minimum of three years. You do not necessarily have to print and retain hard copies of your tax returns – electronic documents are fine as long as you will be able to access them quickly should you need them.

If you fail to keep copies of your tax returns, you can still access them by asking the IRS for transcripts. It is best to keep your own records, and doing so will make your life a lot easier.

Pay Stubs and W2 Forms

As with the tax returns themselves, it is generally a good idea to keep your W2 forms for a minimum of three years. This will provide you with the documentation you need should the IRS find a discrepancy between the amount of income you reported to the agency and the figures your employer provided.

It is also a good idea to retain at least your year-end pay stubs, not only to help reconcile them with the W2 forms but also for other forms of income documentation. If you are applying for a mortgage, for instance, the lender may ask to see several years’ worth of tax returns, pay stubs and other income documents, and having them on hand will make the application process faster and easier.

Income and Dividend Forms

The IRS looks at all of the income you report when you complete and submit your tax returns, but the agency does not just take your word for the accuracy of those figures. Instead, the IRS uses sophisticated matching programs to compare the amount of income you reported from various sources with what they receive from third party sources.

Those third-party sources could include your bank and credit union, your brokerage firms and mutual fund companies and any other places that provide you with income. It is therefore a good idea to hold onto any income related forms you receive for at least three years, and possibly longer if you run your own business or earn income from gig work or freelancing.

Once again, these income documents can do double duty, serving as backup if the IRS questions the numbers on your tax return but also giving you the information lenders and others might need down the road. If you store these documents electronically you will not even need to worry about buying a file cabinet, so there is really no reason to not keep them around.

Filing taxes can be a stressful experience, but the difficulty does not end when you click send on your e-filed tax return. Even after that return has been filed and accepted, the IRS could still question or challenge your numbers, and that is why it is so important to retain the backup documentation until the challenge window has passed. Now that you know what to retain and for how long, you can rest a little easier when tax time rolls around.

If you do run into tax trouble or the IRS states you owe back taxes, 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.

Key Things to Look for in a Tax Relief Firm

August 9, 2021

No one wants to be on the bad side of the IRS, yet that is where millions of taxpayers find themselves each and every year. As enforcement efforts ramp up at the IRS, the number of letters and communications landing in mailboxes is continuing to increase and one of them could land in your mailbox.

If you do receive a notice from the IRS, it is important to act fast, especially if you cannot afford to pay what the IRS says you owe. You may be tempted to do nothing or ignore the situation, but every day you wait will just make an already bad situation that much worse.

The good news is you may not have to pay what the IRS says you owe! There are a number of programs designed to give taxpayers relief, in many cases allowing them to settle their tax debts for much less. But before you can enjoy that financial relief, you need to find the right partner, and here are some key things to look for.

The Right Tax Relief and IRS Negotiation Experience.

When you hire a tax relief firm, you will be hiring a team of experts, and it is important that the person who works on your case will be up to the task. It is important to look for specific areas of expertise, including former IRS agents, attorneys and others who can help you negotiate with the IRS on your behalf.

The best tax relief agencies are not necessarily huge firms; some of the best are small operators with extensive experience. But no matter what the size of the firm, the tax resolution expertise of the person working on your case is what matters the most.

Compassion and Understanding

Dealing with the IRS is not just a financial problem; it is an emotional one as well. Getting a letter from the IRS is bound to be an upsetting and unsettling experience, and working with a compassionate and caring tax relief firm can help a lot.

You should not, of course, sacrifice expertise and capability for compassion, but there is no reason you cannot have the best of both worlds. Look for someone who cares about you and your situation as you interview tax relief firms and choose the one you feel best about working with.

Recent IRS Negotiation Success Stories

The IRS is a huge agency, and the tax code is endlessly complex. That enormous complexity and ever-growing structure means that past experience may no longer be relevant, so look for recent experience with the IRS in the form of testimonials and case studies.

Chances are if they have good “wins” under their belt, they know what they’re doing and they can get you a favorable outcome. Working with these experts can give you peace of mind and make it easier for you to resolve your tax problem.

Getting a letter from the IRS can be a scary experience, but it does not have to be the end of the world. You do not have to suffer financial devastation or go bankrupt to settle the debt you owe. Now that you know how to find a great tax relief partner, you no longer have to live in fear of your next trip to the mailbox.

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.

Do You Owe Back Taxes? Take These Steps to Protect Yourself and Your Finances

Few things are as frightening as opening the mailbox and finding a letter from the IRS, especially when you know you owe them money. The much feared tax agency does not contact taxpayers just to say hello and receiving communication from them is not likely to be good news.

When your heart stops pounding and you get the courage to open the letter, you get another shock – in the form of a large amount due, one you cannot possibly afford. So, what do you do, and how do you react?

The steps you take next could make all the difference, and here are some immediate actions you need to complete right away.

Step #1 – Stop Panicking, Take Action

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.

If you think you don’t owe, then you need to make a case for why you think the assessed taxes are wrong and back it up with proper documentation and proof. Sometimes, the letter you received from the IRS can be a result of a discrepancy, meaning there is a mismatch between what was reported on your return and the figures the tax agency received through other means. There could be many reasons for this discrepancy, and there could be an innocent and inexpensive explanation and resolution.

Getting a letter from the IRS is not fun, but it is not the end of the world either. Even if you owe the taxes the IRS says you do, you may be able to negotiate a lower settlement, sometimes a much lower one.

Step #2 – Find the Tax Return in Question

The communication you received from the IRS will reference a specific tax year, so it is important to find and review that return as quickly as possible. Hopefully you have retained records that include your recent tax returns, either in paper or electronic form. If not, you can request a copy from the IRS or contact your tax preparer.

Once you have your tax return in hand, you can review it carefully, looking for the discrepancies in question and seeking out your own backup information. The problem could be something like a capital gain you forgot to report or a transposed number as you were entering your income information. Gather all the information and have it ready to bring to your appointment with the tax relief specialist.

Step #3 – Do Your Own Calculations

Now that you have your tax return and your backup documentation available, it is time to do some number crunching. This can be a long and frustrating process, so we guide our clients through this process when they work with us. The clock is ticking, and interest and penalties may continue to accumulate if you wait too long to respond.

There should be a deadline listed on the form you received from the IRS, so check it and make sure you can respond by the due date. Do not forget to allow time for mailing and delivery, even if you plan to send the documents overnight.

Step #4 – Don’t Contact The IRS Directly, Contact Our Tax Relief Firm And Get The Protection You Need

The IRS is not on your side and their primary goal is to collect the taxes they believe you owe. The IRS has a number of programs in place to lower the amount owed, but for obvious reasons they do not like to talk about them.

By seeking the services of a qualified tax relief firm like ours, you will gain access to a world of knowledge, including insider information about programs that could save you thousands of dollars and get you back on the good side of the IRS. The sooner you our tax relief firm the better off you will be.

Dealing with the IRS is rarely a pleasant thing to do, but ignoring a tax due notice will not make it go away. Delaying will just make a bad situation even worse, so it is important to act quickly. The good news is that tax relief firms exist for this very purpose, so you can settle your debt without sacrificing the rest of your financial life.

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.

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

How to Amend a Tax Return for a Prior Year

February 15, 2021

Tax returns can often be filed with incomplete or incorrect information, leading you to more tax trouble than you bargained for. If you filed early, you might have overlooked income from a temporary job or a side gig, only to get a 1099 or late W2 for the income earned.

Other filers may eventually realize that they were entitled to an extra deduction or exemption. The Internal Revenue Service routinely processes a significant number of amended returns each year and provides a specific form for changing the status of an earlier tax return.

Individual income tax returns filed with the IRS can be amended up to three years after the due date of the original return by filing IRS Form 1040X. However, we strongly suggest consulting a tax resolution professional to help with your amended return. They can often file multiple years of unfiled tax returns, help you settle for a fraction of what you owe, and at the very least save you a headache.

Note: 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. I help people find tax relief and sometimes settle their tax debt for a fraction of what’s owed Feel free to find me on the web at: Ron Friedman CPA Tax Relief Pro.

How Amended Tax Returns Work

Returns containing simple math mistakes are usually corrected automatically and do not require an amended return. Filing an amended return should be considered after the filer realizes the need for a change in filing status, income, allowable deductions or credits. The statute of limitations generally allows three years for each filer to claim any tax benefit not included on a prior return.

An increase in reported income is likely to result in additional tax due, but an additional deduction or allowable tax credit could result in a refund.

Unreported income is a common oversight and it’s better to report your income than it is for the IRS to come after you and add penalties and interest to your tax debt.

Prior to tax year 2019, Form 1040X is not eligible for electronic filing and must be mailed in, this is also why we recommend hiring a professional to do this for you. A separate Form 1040X is necessary for each year being amended, and each must be mailed in its own envelope to the address provided in the instructions.

The amended return essentially adds the corrections to the original return. There is a block of space on the form to explain all changes. The explanation for each line change should include the line number followed by a clear reason for the change. Lines that entail no change need no explanation. A copy of the original return itself should not be attached, but any added IRS forms must be included to support the changes. Any other supporting documents necessary to substantiate the amendment will also need to be attached.

It can take several weeks for the IRS to process an amended return. An amendment to the federal return might also require a change to the state tax return of the filer, especially if an increase in income is to be reported.

OWE BACK TAXES?

If you’re going to owe money to the IRS after filing your return, it’s important to note that only experienced firms like ours are able to handle tax debt cases since negotiating with the IRS requires specialized skills that often fall outside of the scope of most conventional accounting, tax, and tax law firms.

My firm specializes in tax problem resolution. As a CPA, and a Federally Authorized Tax Practitioner, I can represent you before the IRS. I serve clients virtually so don’t hesitate to reach out.  If you want an expert tax resolution specialist who knows how to navigate the IRS maze, reach out to my firm and we’ll schedule a no-obligation confidential case consultation to explain your options to permanently resolve your tax problem. Feel free to find us on the web at: Ron Friedman CPA Tax Relief Pro.

Do You Need A Tax Attorney if You Owe Back Taxes?

December 24, 2020

Just because you owe back taxes doesn’t mean you need a tax attorney. The same is true for hiring an accountant to resolve your tax debt. The professional to choose when looking to resolve your tax debt issues should  primarily focus in tax resolution.

If you owe the IRS back taxes, it’s best to have the right tax relief firm representing you for the best possible result. Don’t try to face the most brutal collection agency on the planet alone. You’ll be sorry you did.

Note: If you already have a tax problem and owe more than $15k to the IRS or state but can’t pay in full, contact our firm today. We help people find tax relief, file years of unfiled tax returns, and sometimes settle their tax debt for a fraction of what’s owed.

What Should I Do?

Settling an IRS tax debt can be a very stressful task. Finding the right help can be just as daunting. Tax resolution is a niche area of tax practice. The right professional who is engaged to resolve your income tax debt should have specialized knowledge and training in tax collection rules and regulations, as well as an appreciation of those charged to collect them. There is both science and an art to resolving income tax debt matters. Consumers should be informed of what to look for when seeking help.

Tax resolution firms spend a lot of money getting your attention, claiming they can drastically reduce or even eliminate your tax debt by applying for legitimate IRS hardship programs. The truth is, most people don’t qualify for these programs. As a result, these companies are unable to resolve the tax debtor’s problem and, very often don’t even correctly complete the required paperwork for the programs the IRS offers. It leaves taxpayers still in tax debt and, to add insult to injury, they don’t provide refunds for work not completed.

The three professions that are allowed to represent taxpayers before the IRS are CPA’s, licensed attorneys and Enrolled Agents. Each designation carries with it its own licensing/certification requirements. However, not all CPA’s, licensed attorneys and/or Enrolled Agents are created equally. You wouldn’t hire a trust and estate attorney to defend you in criminal court, similarly you shouldn’t hire any CPA, attorney and/or Enrolled Agent to solve your income tax debts.

Obtaining certification as a tax resolution specialist requires the applicant to meet certain educational, experience and character requirements. They must also pass a very rigorous examination, demonstrate their expertise in tax resolution and adhere to a Code of Professional Ethics.

OWE BACK TAXES?

It’s important to note that only experienced firms like ours are able to handle tax debt cases since negotiating with the IRS requires specialized skills that often fall outside of the scope of most conventional firms.

Our firm specializes in tax problem resolution. We serve clients virtually so don’t hesitate to reach out.  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 tax consultation to explain your options to permanently resolve your tax problem.

Avoid These 5 Common Tax Filing Mistakes That Can Get You In Tax Trouble

October 2, 2020

Whether you file the simple 1040EZ or a complex 1040 and a raft of schedules, making a mistake on your tax form could lead to big tax trouble. Something as simple as a math error or unsigned form could invite extra attention from the IRS.

The tax agency sees those mistakes every year, and IRS representatives warn taxpayers to be careful when filling out their forms. Even if you think you have everything filled out perfectly, it never hurts to double-check and look for these common tax day errors.

 

#1 – Assuming Your Tax Pro Prepared Your Taxes Properly

Blindly trusting your accountant or tax preparer to file your taxes correctly can be costly. Of course you want to assume they do a great job, and most tax professionals do, but letting them file without your thorough review is a mistake.

We resolve back tax problems for people, and often what gets people in trouble is a simple mistake; like forgetting to report income, missing deductions, or taking too many deductions.

These are sometimes honest mistakes that if not caught early, can trigger red flags and have  the IRS sending you letters of balances due.

No one knows your financial situation better than you do so it’s important you double check your return so you’re not blindsided with an unwanted surprise.

 

#2 – Waiting Until the Last Minute

Filing taxes is stressful enough. You do not need to make things worse by waiting until midnight on April 15 to get your return in the mail. Give yourself plenty of time to gather all the necessary documents and complete your return.

Keep in mind that unexpected problems could interfere with your last-minute tax filing plans. Getting your taxes done early is the only way to protect yourself from unforeseen circumstances that can delay your tax filing.

 

#3 – Failing to File on Time

If you cannot file your return on time, you can ask for an extension by filling out a single form. Even if your documents are in disarray, there is no excuse for not filing on time. Filing an extension gives you six more months to get everything in order and complete your return.

Keep in mind that you will still need to estimate the tax you owe and make your payment, even if you file an extension. Filing an extension extends the amount of time you have to get your return to the IRS, but it does not provide a reprieve from your tax debt. If you wait to make your tax payment, you will get hit with penalties and interest.

 

#4 – Not Making a Backup or Keeping Good Records

Making backup copies of your tax returns, income documents and schedules is an essential part of tax planning and preparation. Set up a folder or file box and use it to store your tax documents as they come in, and then scan each one before you put it away.

Once you have completed your return, be sure to make copies of every document, including your W-2 form and tax schedules, before sending the return to the IRS. If you file electronically, be sure to save a PDF copy of your return before completing the final step. Save all of those electronic tax documents on your computer or cloud storage device. Ordering a lost copy of a past year’s return from the IRS is time-consuming and expensive. You can save time and money by making your own backup copies. If the IRS audits you or requests more information from you, all your records will be extremely helpful in the process.

 

#5 – Ignoring Letters From The IRS After You File Your Taxes.

Sometimes the IRS will send follow up correspondence, especially if you owe money to the IRS. It can be easy to ignore the first few letters. Even if you have the intention of paying your taxes soon you should still take action and either get on an installment agreement or reach out to a tax relief firm if your financial situation requires it.

OWE BACK TAXES?

Our firm specializes in tax problem resolution. We serve clients virtually so don’t hesitate to reach out.  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. https://www.914tax.com/contact-us/

What is a Levy? IRS and Other Asset Levies Explained

Falling behind on your debts is never a fun place to be. It’s less fun when a levy is placed on your assets. In this article, we take a look at what an IRS levy is, why it happens, and what you can do about it.

Note: If you have any tax trouble or 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 https://www.914tax.com/contact-us/. Often, we can resolve your IRS levy without you having to talk to the IRS. Call today.

 

What is an IRS Levy?

Simply put, if you owe back taxes and you ignore the IRS, the IRS can seize your property, take money from your bank accounts, or sell your assets in order to satisfy the balance due.

The IRS will give you plenty of notices via mail before they take this step. If you do not satisfy the debt or make payment arrangements by the specified date, the IRS will attempt to take the amount of the levy directly out of your bank account.

 

Other types of levies

Private creditors may issue a levy against your bank account with a court order. Court orders are not required for levies by government agencies. The creditor must notify you of the upcoming levy at least 21 days before removing any funds from your account. You may not withdraw money or close the account during this waiting period.

Funds earned from child support, social security, unemployment, workers’ compensation settlements and certain other types of government agency payments are exempt from levy. You must request the exemption and offer proof of the source of the funds.

 

Wage Garnishments

Government agencies may also garnish an employee’s wages for back taxes, child support and other delinquent payments required by law.

The IRS has the authority to levy up to 85 percent of the employee’s paycheck. The levy notice will be sent to your company’s payroll or human resources department. You must then withhold the appropriate amount of money from the employee’s paycheck and send it to the IRS or state tax board. The employee must provide a wage garnishment release if he is able to work out a payment arrangement.

If you are behind on your taxes, the IRS may levy most payments from federal agencies. This includes railroad retirement benefits, Medicare supplier and provider payments, payments on contracts between your company and a government agency, federal retirement annuities and travel reimbursements.

You may apply for a hardship exemption if the levy will cause your company undue financial distress. Companies going through bankruptcy proceedings are automatically exempt from IRS levies.

 

Seizing Your Assets

The IRS may also seize your real estate and personal property such as a car or boat. You will receive a 30-day notice indicating that seizures will follow if you do not pay your outstanding taxes or contact the IRS to make payment arrangements. This authority also extends to property and money you own that are being held by another party, such as life insurance cash value. The government sells its seized property at auction to recover some of the funds owed by delinquent taxpayers.

 

What To Do If You Have An IRS Levy

Back taxes don’t just disappear if you ignore them long enough. Putting your head in the sand will cause the problem to get worse.

If you have back tax debt, we highly recommend you reach out to our firm first. Our clients never have to talk to the IRS, and tax resolution through our firm can save you money and time in the long run. You might also be eligible for other IRS relief programs or get your penalties reduced or removed. Reach out to our firm today for a consultation. https://www.914tax.com/contact-us/

Think Tax Filing Season is Over? Why You May Need to File an Amended Return

September 5, 2020

Few people look forward to tax filing season. Unless you are an accountant who loves tax season, you probably dread this time of year, and you are thrilled when your return is in and your refund is on the way or your tax debt is all paid off.

When you sign your tax return and send it in,  you may think that tax filing season is finally over, and that the IRS will not be bugging you for another year. That’s unfortunately not the case. Millions of Americans get letters from the IRS stating they owe more money or asking for more information. So there are times when you may need to revisit your old return and file an amended one.

NOTE: If you have back tax debt, are under audit, or have multiple years of unfiled tax returns, we highly recommend readers to reach out to our firm first. Our clients never have to talk to the IRS, and tax resolution through our firm can save you money and time in the long run. You might also be eligible for other IRS relief programs or get your penalties reduced or removed. Reach out to our firm today for a consultation. https://www.914tax.com/contact-us/

So when should you file an amended return, and how do you go about it? Here are some key things you need to know.

 

You Forgot to Report All Your Income

If you neglected to report all of your income, it is only a matter of time until the IRS finds out, and when they do you could be on the wrong side of a big bill. So instead of waiting for the IRS to catch up, fess up by filing an amended return.

Be sure to gather up all of your documents and compare the income you reported to the new total you have now calculated. If you owe any additional tax, you will want to pay it right away to avoid interest and penalties.

 

Brokerage Forms are Sometimes Late

If you have stock market holdings and own mutual funds, you will be receiving forms from the brokerage firms that hold those accounts. Those forms will provide details of the dividend income and capital gains you received, so you can provide accurate filings to the IRS.

What you may not know is that those brokerage and mutual fund statements are sometimes sent out late. Worse yet, the numbers are often updated after the fact, meaning the information you filed on your original return may no longer be accurate.

If you receive an updated 1099 from your brokerage firm or mutual fund company, you may need to file an amended return to account for the discrepancy. If you fail to update your own numbers, the IRS could come after you for additional taxes and penalties.

 

You Got a Tax Bill But You Know You Don’t Owe It

This can be tricky and it’s best to have representation from a tax resolution firm like ours. If the IRS is sending you letters claiming you owe money, but you’re certain you don’t owe, then filing an amended return can sometimes do the trick.

Another thing to note is that the IRS makes mistakes. So having an IRS Relief firm like ours on your side can help clear these mistakes and settle your tax debt.

 

You Forgot to Claim a Legitimate Credit or Deduction

Sometimes an amended return can reduce the amount you owe if you forgot to claim a legitimate tax credit or deduction.

Even if you have already filed your return, you can still go back and claim any credits or deductions you may have missed.

 

File Your Amended Return Within Three Years

You only have a limited amount of time to file an amended return, so you need to act quickly. In most cases you will need to file your amended return within three years, and if you miss the deadline you could be out of luck.

If you think you need to file an amended return, check out your tax records for the last three years. If you identify any potential issues, or overlooked credits and deductions, it is time to file your amended return.

Tax filing season may be over, but you can always file an amended return. As long as you are within the allowable time period, you can adjust your already filed returns to reflect previous omissions, or take advantage of overlooked deductions.

 

OWE BACK TAXES?

Our firm specializes in tax resolution. We serve clients virtually so don’t hesitate to reach out.  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. https://www.914tax.com/contact-us/

Four Things Your Tax Preparer Won’t Tell You (and How It Can Get You In Tax Trouble)

Tax time will be here (again) before you know it. If your tax return is a simple one, you may be up to filing the return yourself. But if your situation is somewhat complicated, seeking the help of a qualified professional is probably the best move.

Our firm specializes in helping people resolve their back tax problems such as filing years of unfiled returns, settling your back taxes with the IRS, or negotiating favorable payment plans often unknown to the common taxpayer.

There are millions of people getting threatening letters from the IRS every year and we can help. But how did these mostly honest people end up in trouble in the first place?

When you hire a professional to do your taxes, you assume that the person doing your taxes is an expert, with years of training, the right licenses and certifications and the expertise needed to do the job and do it right. In many cases, that blind trust is not too bad, but you cannot simply pick any old tax preparer.

The fact that the person you hire is allowed to do taxes is no guarantee of quality, or even of qualifications. Here are five things your tax preparer may not tell you, and how they can earn you with an unwanted tax bill at the end of the year.

Note: The COVID-19 tax relief, forgivable loan programs and stimulus checks all have different and unforeseen tax consequences that you’ll need to consider. If you have any tax trouble or 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  https://www.914tax.com/contact-us/

 

#1. A Lot Of Tax Preparers Have No Tax-Specific Training or Expertise

The fact that an individual, or an employee of a large tax preparation company, is allowed to complete tax returns means almost nothing. The tax preparer is not required to have tax-specific training or expertise to obtain the paid preparer tax identification number (PTIN) they need. The only requirement for getting the required PTIN is the completion of a simple form – one that takes about 15 minutes to fill out.

Before you hire any tax professional, you should ask about their specific training, qualifications and expertise. Find out how long they have been doing taxes, ask about audits they have been involved in and share your personal tax situation. Above all, do not hire anyone until you feel comfortable with their ability to handle your tax return properly.

A CPA or Enrolled Agent licensed by the IRS is your best bet when looking for qualified tax professionals. We hear horror stories from our tax relief clients all the time where the tax preparer messed up something on their tax return or didn’t give the client the right tax strategy, so they ended up with a burdensome tax bill.

 

#2. They Won’t Be Preparing Your Return

It is an open secret in the world of tax preparers that returns are prepared in stages. That means the owner of the firm or the most experienced professional will probably not be the one who initiates your return.

Instead, a junior associate will likely enter your income information and other relevant data, identify potential deductions and tax credits and give your return a quick review. Once that is done, a senior advisor or tax preparer should look at the return, verify that it is correct and sign off on it.

This can often cause a communication breakdown causing issues that could land you with a large tax debt. Most taxpayers blindly trust their tax pro and don’t thoroughly review the deductions and tax return draft.

If you are not comfortable about this multi-step process, it is important to share your concerns with your preparer. The sheer number of tax returns large firms handle during a busy season makes this multi-step process necessary, but it is important to know how things work and what you can do to ensure the right level of attention.

It’s also extremely important to review the return in full detail to avoid any unwanted surprises, audits, or unforeseen tax debt.

 

#3. I May Not Research Unusual Deductions and Tax Breaks

Professional tax preparers tend to be a pretty conservative bunch, and that is good news when it comes to your chances of being audited. It can be bad news, however, for your overall tax bill.

Your tax preparer will no doubt apply the most common deductions and tax credits to your return, things like the deduction for educational expenses and health care costs and the earned income and retirement tax credits. What they may not do is research more unusual tax credits and deductions, even if they could potentially save you money.

If these special circumstances apply to your return, you should discuss the situation with your tax preparer and look for ways to include them with your filing. You may need to pay an extra research fee or renegotiate the cost of preparing and filing your return, but the tax savings could be worth the extra cost.

 

#4. CPA Does Not Mean Tax Relief Pro

When clients get into tax trouble or get behind on paying their tax debt, they often turn to the very same tax pro that prepared the return. Unfortunately, most CPAs and tax preparers are not skilled in tax relief.

Tax relief means they know all the available programs the IRS has to settle your tax debt or give you favorable payment terms that don’t drown you in penalties and interests. Even if they think they know, they often aren’t experienced in negotiating with the IRS on your behalf.

It is easy to assume that every CPA is a tax relief expert. After all, the CPA designation is one of the most difficult professional statuses to obtain, and only the most qualified accountants get to put the letters CPA on their business cards.

Even so, not all certified public accountants are tax relief experts, and many do not know any more about settling your tax debt than you do. Some CPA firms prepare tax returns for their clients as a courtesy, but their staffs may not have specific training or expertise in tax law, or tax relief negotiations.

If you have back tax debt, we highly recommend readers to reach out to our firm first. Our clients never have to talk to the IRS, and tax resolution through our firm can save you money and time in the long run. You might also be eligible for other IRS relief programs or get your penalties reduced or removed. Reach out to our firm today for a consultation https://www.914tax.com/contact-us/