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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.

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February 15, 2021Categories: back taxes, filing taxes, tax notices, Tax Resolution Strategies, taxes

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

December 24, 2020 Do You Need A Tax Attorney if You Owe Back Taxes?

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.

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December 24, 2020Categories: Accountants, attorneys, back taxes, Enrolled Agent, Tax Resolution Strategies, taxes

What is a Levy? IRS and Other Asset Levies Explained

October 2, 2020

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/

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October 2, 2020Categories: IRS News, levy, Tax Resolution Strategies, taxes

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/

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September 5, 2020Categories: filing taxes, Tax Resolution Strategies, taxes

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/

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September 5, 2020Categories: filing taxes, Tax Resolution Strategies, taxes

Bankruptcy FAQ for Individuals

August 7, 2020

Filing for bankruptcy is a difficult and draining process. People often feel ashamed, scared, or confused. If you find yourself with no other options, bankruptcy can be a good way to clear out old debts, change financial patterns, and most importantly get a fresh start. Here is everything you need to know about filing for bankruptcy.

Note: Depending on what type of taxes you owe, you might not be able to wipe out your back taxes in bankruptcy proceedings. Our firm specializes in tax resolution and back tax debt settlements with the IRS. So if you’re considering bankruptcy in part because of your back tax burdens, reach out to us today for more information on how you can get tax relief.

Who Should File for Bankruptcy?

If you owe money to a creditor and cannot repay it, you can file for bankruptcy. Businesses and individuals are eligible; however there are caveats. If you have filed for bankruptcy once before, there is a waiting period before you may file again. After filing for Chapter 7 bankruptcy, you cannot claim bankruptcy again for eight years. After filing for Chapter 13 bankruptcy, you must delay a second claim for at least two years.

What Types of Debt Can I Discharge Through Bankruptcy?

You can discharge most types of debt through bankruptcy, including medical debt, credit card debt, payday loans, and mortgage debt.

Certain types of debt cannot be discharged through bankruptcy, meaning that you will still need to repay these debts even if everything else is forgiven. Debts that cannot be wiped out in bankruptcy include spousal support, child support, student loans, and back taxes in most cases.

Any debt you take on after you’ve filed for bankruptcy is ineligible to be discharged through the filing, since you did not have the debt when you asked for debt relief.

Why is Filing Bankruptcy Helpful?

When you can’t keep up with the bills, you’re under a high level of stress. Bankruptcy is never a first option for people; many have tried things like getting extra jobs, selling unwanted possessions, or asking family members for loans before arriving at bankruptcy as their best option for debt relief.

By wiping out debts, bankruptcy reduces stress immediately. Collectors are not allowed to come after individuals who are going through bankruptcy, so threatening phone calls and letters will end immediately.

A Chapter 13 bankruptcy can promote good financial habits, because in this form of bankruptcy, some amount of debt is repaid under a plan. By helping to increase financial literacy and instilling good financial habits, this partial repayment can keep people in the black once debts are discharged.

The biggest downside to filing for bankruptcy is that it impacts your credit, so you may find it difficult to take out loans for up to ten years after the bankruptcy. Your credit score also impacts things like the interest rate offered on loans and your ability to pass a tenant screening, so there are other ramifications to consider.

If you’re not sure whether a certain debt will be forgiven or which type of bankruptcy is right for you, there are resources to help you explore your options, such as credit counselors. If you are thinking of filing for bankruptcy, it’s helpful to get a counselor’s opinion on your specific circumstances and what to expect after filing.

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.

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August 7, 2020Categories: back taxes, filing taxes, taxes

Why You Shouldn’t Put Off Filing Your Taxes

June 21, 2020

With the filing deadline moving from the traditional date of April 15th to July 15th because of the coronavirus pandemic, it can be tempting to put off filing your taxes for as long as possible. Most taxpayers dread the tedious task of compiling their financial records, tax documents and filing their taxes. Unfortunately, the longer … Read More…

With the filing deadline moving from the traditional date of April 15th to July 15th because of the coronavirus pandemic, it can be tempting to put off filing your taxes for as long as possible.

Most taxpayers dread the tedious task of compiling their financial records, tax documents and filing their taxes. Unfortunately, the longer you procrastinate doing your taxes, the greater the chances that something will go wrong.

And if you owe money to the IRS, the more penalties and interest you’ll have to pay. Often, it’s a better idea to file your taxes sooner rather than later.

Here’s why.

TAX IDENTITY THEFT

Tax TheftTax return fraud is one of the most common and fastest growing forms of identity theft. Basically, an identity thief steals your employment information and Social Security number – and files a fraudulent tax return on your behalf. Then, they steal your refund, or worse, put you in a hole owing back taxes you might not actually owe.

Unfortunately, once the IRS sends your tax refund out, it’s nearly impossible to get the money back without knowing the law and regulations. One way to avoid falling victim to tax fraud is to file your taxes as early as possible. That way, you reduce the chances of tax identity theft by filing before the identity thief gets a chance to file a fraudulent return.

FIND AND CORRECT MISTAKES SOONER

Filing your tax return earlier makes it easier to fix any mistakes on your tax documents. For example, your employer might record the wrong earnings on your W-2. If you discover a mistake on your tax documents right before the filing deadline, you aren’t going to have enough time to get the mistake resolved. Your tax return will end up getting delayed and you will have to go through the process of requesting an extension from the IRS, tacking on penalties and interests, that are compounded daily, to your tax liability.

YOU MIGHT OWE THE IRS MONEY

Unfortunately, many taxpayers underestimate their tax liability during the year. That means they underpay and end up owing the government money. The IRS charges taxpayers a penalty for underpaying their taxes as well as interest on the amount of taxes that they owe.

Therefore, the sooner you file and pay any remaining taxes, the smaller your financial penalty and interest will be. If you can’t pay up front, you might have tax relief options.

IMPORTANT: 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 relief programs or get your penalties and interest forgiven. Reach out to our firm today for a consultation.  http://taxreliefprowestchester.com/contact/.

GET IT OVER WITH

There’s no better tax relief than just finally taking care of your taxes. If you are one of the many taxpayers that get stressed over taxes, you will actually feel better if you don’t procrastinate filing your tax return.

Just get it over with so it’s not hanging over your head! The peace of mind you get from not knowing where you stand with the IRS is worth it. It’s often not as bad as you think, even if you owe back taxes, having a firm like ours represent you can be worth it in the long run.

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. http://taxreliefprowestchester.com/contact/.

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July 7, 2020Categories: filing taxes, tax extension, tax notices, Tax Resolution Strategies, taxes

How to Handle Your Taxes During an Economic Crisis

Whether it is a global pandemic shutting the economy down for months on end, a stock market crash that leaves formerly giddy investors frightened and nervous or a housing crisis that makes real estate a risky bet, living through tough economic times is never easy. Even so, how you handle yourself and your money during … Read More…

Whether it is a global pandemic shutting the economy down for months on end, a stock market crash that leaves formerly giddy investors frightened and nervous or a housing crisis that makes real estate a risky bet, living through tough economic times is never easy.

Even so, how you handle yourself and your money during the crisis could make all the difference in the world, and if you do it right, you could emerge stronger, wiser and richer on the other side.

Doing TaxesHandling taxes can be especially difficult during times of crisis. With your income uncertain, it can be hard to predict how much you might owe the IRS or how you can make those payments. And if you are self-employed or a gig worker, this economic uncertainty can be even greater.

So what can you do about your taxes when the economy takes a downturn? Here are some tips to make tax time less taxing when crisis strikes.

Research Filing Extensions and Be Aware of New Deadlines

When economic turmoil strikes, tax filing deadlines may be extended or otherwise relaxed, so do your homework and see how much time you really have. If you are struggling to make your tax payment, you may have some breathing room after all.

In the wake of the COVID-19 pandemic, the IRS extended the normal tax filing deadline from April 15 to July 15, and many state and local governments followed suit. The same may happen in future crises, and it never hurts to find out for sure.

File Promptly if You Are Expecting a Refund

Getting extra time to file can be a welcome relief if you owe money to the IRS, but if the tax agency owes you, it makes sense to file as quickly as possible. The processing of tax refunds is often disrupted during a crisis, with short staffing and different procedures suddenly in place. The sooner you file, the sooner you will have your tax refund money, and that cash could make a world of difference to your financial situation.

How you handle that tax refund is important as well, so think about what you will be doing with the money while you are waiting for it to arrive. If you have the extra cash to do so, contributing to an IRA or other tax shelter could reduce the amount you owe going forward, giving you even more money to work with in the years to come.

File Promptly if You Are NOT Expecting a Refund or Might Owe Back Taxes

The IRS is starting to enforce collections again, but they’re also not oblivious to the financial crisis we’re in. With almost 40 million Americans unemployed we now have the highest unemployment rate since the Great Depression.

The outlook is still uncertain and the IRS knows Americans need to get back to work and buying things to stimulate the economy. It’s tougher to do that with a huge tax bill weighing you down.

So right now, the IRS will likely consider settlements and more favorable terms to taxpayers in trouble, especially if their income drastically decreased due to COVID-19. So it’s important to file your taxes and be current in order to explore tax relief options.

IMPORTANT: We highly recommend readers to reach out to our firm first. Our clients never have to talk to the IRS, and resolving your IRS and state tax problems through our firm can save you money and time in the long run. You might also be eligible for other relief programs or get your penalties and interest forgiven. Reach out to our firm today for a consultation https://taxreliefprowestchester.com/contact/.

Are Your Investments Down? Use It To Reduce The Amount You Owe

It is easy to feel depressed when the stock market is tumbling and reaching new lows every day, but there could be a silver lining to that financial cloud. Engaging in strategic tax loss harvesting now could reduce your tax bill substantially when filing season rolls around. Tax-loss harvesting is when you sell investments at a loss in order to reduce your tax liability.

If you have investments that have not worked out like you hoped, selling them now and locking in the loss can be a great way to offset capital gains and lower your taxable income. This strategy is not the right choice for everyone, but it can be effective in certain circumstances.

Whether the world is in the midst of a global pandemic, the stock market is in free fall or real estate is suddenly on sale, the economic crises that are triggered can make tax time even more difficult.

If you want to stay financially solvent and avoid penalties, interest and other serious consequences, the strategies listed above can help you do it.

Our firm specializes in tax resolution. We also 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://taxreliefprowestchester.com/contact/.

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August 28, 2020Categories: back taxes, filing taxes, tax extension, tax notices, Tax Resolution Strategies, taxes

Recent Posts

  • How to Amend a Tax Return for a Prior Year
  • Do You Need A Tax Attorney if You Owe Back Taxes?
  • Avoid These 5 Common Tax Filing Mistakes That Can Get You In Tax Trouble
  • What is a Levy? IRS and Other Asset Levies Explained
  • Think Tax Filing Season is Over? Why You May Need to File an Amended Return

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Ron Friedman Tax Relief Pro

150 White Plains Road
Suite 310, Tarrytown, NY 10591
Tel: (914) 712-6919
Fax: (914) 631-0939
ron@ronfriedmancpa.com

Recent Posts

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IRS Circular 203 Disclosure: Any tax advice on this website (or any attachment hereto) is not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed under U.S. tax law.
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