914 Tax

Tax Relief Options for Small Business Owners

February 14, 2022

If you are running a small business, you have an unwanted partner who will dig into your pocket every year, it’s the IRS. The IRS wants to know what you are doing, how much you are earning and most importantly how much you are paying in taxes. The tax agency is becoming increasingly aggressive in this regard. While the audit rate for individual returns has been hovering at far less than 1%, the audit rate for small businesses can be as much as 10 times higher.

It does not matter if you operate as a sole proprietor and use Schedule C to claim your income or if you are set up as a corporation (C or S), partnership or LLC/LLP – the IRS is watching what you do, and if they think you are not paying your fair share they will certainly come calling. When that demand letter from the IRS arrives, knowing what to do next can make all the difference, and the more you educate yourself the easier it will be to deal with, and eliminate, the tax debt.

Note: As a tax resolution firm, we always recommend that you reach out to a professional who knows how to aggressively negotiate and defend you against the IRS on your behalf. If you owe back taxes or are under audit, 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.

Small business owners are increasingly the target of enforcement efforts by the IRS, but the IRS does have some programs in place to make paying what those business owners owe easier. In some cases, those small business tax relief and tax resolution programs let you settle for less than what you owe but qualifying is not as straightforward as you might think.

For businesses that may be eligible, the assistance of a tax resolution specialist is absolutely critical. These experts can help guide you through the process and make sure you qualify, so you can rest a little easier and get back to building your business.

Payment Plans/Installment Agreements

If the amount your small business owes to the IRS is relatively small and you do not want to deal with additional hassles, it may make sense to pay the entire bill in full. If paying in full would be a hardship, the IRS does offer payment plans, and setting one up can make paying back what you owe easier and more financially palatable.

Keep in mind that interest will continue to accrue while the debt remains outstanding, and that is something to think about.

Offer In Compromise

If you’re under a lot of financial hardship, it may make more sense to try for

an offer in compromise (OIC), a special IRS program that could allow you to pay back less than you owe.

The offer in compromise program is a popular one with individual taxpayers and small business owners. If paying the entire amount would create a financial hardship for you, your family or your business, a tax resolution specialist can help you make the case to the IRS that you deserve a break.

What’s the best option?

Each of these options has its pros and cons, and it is important to understand how these programs work and who qualifies to use them. If your small business is in trouble with the IRS, taking the right action right away could reduce the amount you owe, give you some breathing room and allow you to focus on your clients – not on your taxes.

Running a small business has its challenges, but those difficulties are nothing compared to the stress and anxiety small business owners feel when dealing with the IRS. With so many small business owners now in IRS crosshairs, it has never been more important for freelancers, gig workers and the self-employed to have an advocate in their corner.

If you find yourself on the wrong end of an audit, a tax bill or an enforcement action from the IRS, the steps you take next are absolutely critical. Trying to take on the IRS on your own is a dangerous, and potentially expensive, thing to do, and you should always contact a tax resolution firm.

By working with an expert, you can gain access to vital information about small business settlement programs the IRS offers. You can gain access to the expertise you will need to settle your tax bill for less than you owe and get back in the good graces of the IRS. Time is of the essence when the IRS comes calling, and with the interest and penalty clock ticking you do not have one second to waste. So call us, your tax resolution expert, for a case evaluation. Get help from Ron Friedman, CPA

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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.

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Four Ways Freelancers and Gig Workers Can Trim Their Tax Bills

December 10, 2021

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

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

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

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

#1. Fund a Health Savings Account

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

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

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

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

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

#3. Take the Home Office Deduction

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

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

#4. Push Income Into the Next Year

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

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

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

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

Owe Back Taxes and Need Tax Relief?

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

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How to Recognize an IRS Tax Scam – and What to Do if the Tax Due Notice is Real

July 24, 2019

Hearing from the IRS is bad enough, but being contacted by a scammer posing as the IRS is even worse, or at least just annoying and frightening. IRS scams are everywhere these days, and they take many different forms. Even sophisticated taxpayers have been fooled by these fakers, sometimes losing thousands of dollars in the … Read More…

Hearing from the IRS is bad enough, but being contacted by a scammer posing as the IRS is even worse, or at least just annoying and frightening. IRS scams are everywhere these days, and they take many different forms. Even sophisticated taxpayers have been fooled by these fakers, sometimes losing thousands of dollars in the process.

If you do not want to be the next victim, you need to educate yourself about how these scams originate, what forms they take and how the perpetrators prey on an inherent fear of the IRS.

Here are some warning signs to look out for when someone claiming to be from the IRS comes calling.

1 – The tax bill comes out of the blue. Notices of taxes due are rarely surprises. If you have always paid your taxes on time, a past due notice or other scare tactics should be met with skepticism.

2 – The “agent” threatens to have you arrested. IRS agents are scary, but they will not threaten you with arrest or imprisonment before the audit process has even begun.

3 – You are offered relief in exchange for immediate payment. The process of paying overdue taxes and resolving tax disputes is long and complicated. Offers of immediate settlement are common signs of a scam.

4 – The caller asks you to pay your bill with gift cards. The IRS does not accept iTunes gift cards or prepaid phone cards as payment for taxes due. If the “agent” on the other end of the line asks for these payments, just hang up.

5 – You receive a phone call or a message on your cell phone. The IRS does not use phone calls as a primary means of communication. If you are not in current negotiations with the IRS, the tax agency will never call you.

6 – The communication comes via email. If you owe money to the IRS or the agency has questions about your return, they will contact you via U.S. mail. Notices of tax due that come in the form of email are always scams – and the emails themselves often harbor dangerous viruses and other malware.

Now that you know how to spot an IRS collection scam, what happens if the communication is real? What should you do if you do receive an old-fashioned snail mail notice saying you owe additional taxes? Here are some key steps to take if that dreaded letter shows up in your mailbox.

Contact A Tax Resolution Professional

If you owe back taxes to the IRS, there are some definite benefits to hiring a tax resolution service. These companies exist for a reason, and they can provide a way out for taxpayers who feel overwhelmed by the whole process.

Negotiating with the IRS on your own can be intimidating, and the tax agency may not offer you the best terms. Tax resolution firms are used to dealing with the IRS, and more often than not they can get you a better deal.

Verify Their Contact Information or Contact the IRS Directly

While it is uncommon, some scammer is using the U.S. mail to perpetrate their schemes. Before you write a check, contact the IRS and make sure the communication is legitimate.

You should look up the IRS phone number at their website irs.gov, instead of simply calling the phone number in the letter you received. If the letter is a scam, the phone number provided will send you to the perpetrators of the fraud. If you want to know the truth, contact the IRS directly.

Think About How Much You Can Afford to Pay

Paying a huge tax bill is sure to be a burden, even for middle and upper-class taxpayers. If you know you cannot afford to pay the entire amount due, think about how much you can pay, either in monthly installments or all at once.

The tax agency is often willing to work with taxpayers to pay off the amount they owe, and payment plans are common. If you plan to go this route, it pays to seek professional help – an experienced tax resolution expert can help you work out a compromise or payment plan you can afford.

Take Interest and Penalties into Account

If you receive a notice of additional taxes due, time is of the essence. Once that notice goes out, the clock starts ticking, and interest and penalties can add up fast.

The sooner you act, the sooner you can start to settle your obligation, so you can set your mind at ease and get on with the rest of your life. No one likes to owe money to the IRS, and simply being contacted can be enough to set your heart pounding. If you do find yourself in such a situation, it pays to act fast – and seek the help of an experienced tax settlement professional.

If you want an expert tax resolution professional 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. Contact Me – Ron Friedman, CPA CTRS.

 

Till next time,

Ron

Founder and President of Ron Friedman Tax Relief Pro
taxreliefprowestchester.com
ron@taxreliefprowestchester.com
Stop IRS Hotline: 1-800-TAX-FIX0 (829-3490)

As the best tax resolution and relief company in Westchester County, NY, and the tri-state area, Ron Friedman Tax Relief Pro has specialists to stop the IRS and help troubled tax payers get out of IRS debt. If you have back taxes owed, unfiled tax returns, IRS levies, liens, seizures or wage garnishments, we at Ron Friedman Tax Relief Pro can help you settle for a fraction of what you owe. As trusted, credible tax resolution specialists, we are vested in our client’s well-being and financial security.

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Do You Owe Money to the IRS? Possible Tax Resolution Strategies to Set Your Mind at Ease

July 13, 2019

  Even for honest taxpayers, the IRS can be extremely frightening. Unlike most other government agencies, the IRS has the power to attach your wages, freeze your bank account and even confiscate your property, and that is enough to send a chill up the spine of any taxpayer. If you receive a letter from the … Read More…

 

Even for honest taxpayers, the IRS can be extremely frightening. Unlike most other government agencies, the IRS has the power to attach your wages, freeze your bank account and even confiscate your property, and that is enough to send a chill up the spine of any taxpayer.

If you receive a letter from the IRS saying that you owe additional taxes, it is important not to panic. It may be a frightening situation, but there are things you can do to settle your tax debt and get back on the good side of the IRS.

Taxpayers do have options when resolving tax disputes and paying additional taxes due, and simply knowing what those options are can set your mind at ease.

As an expert Tax Resolution Firm, we encourage all readers facing a tax problem to contact us for a free consultation Contact Me – Ron Friedman, CPA CTRS.

Regardless, it’s important to an educated taxpayer so here are three strategies you can use to resolve your tax debt and get on with the rest of your life. Not all of these options will be right for everyone, but it is important to be an informed taxpayer. The IRS may be frightening, but they can be surprisingly reasonable – if you know what to say and how to approach the situation.

Review the Amount Owed And Your Tax Return In Question

If the IRS says you owe money, you should not simply assume they are right. The tax agency does make mistakes, as do tax preparers and ordinary taxpayers.

Whether you filed your taxes on your own or hired someone else to do it for you, it is important to examine your return and compare what you find with what the IRS is claiming. It pays to seek professional help for this tax review, even if you originally filed your own taxes. A professional with IRS experience may be able to uncover errors and inconsistencies you would have missed on your own, and that could end up saving you money.

There is no guarantee this review will eliminate the extra taxes the IRS says you owe, but it never hurts to be sure. There have been many cases in which taxpayers who thought they owed money to the IRS ended up owing nothing – or even being due a refund from the IRS.

Set Up a Payment Plan

Getting a notice of additional tax due from the IRS is frightening, especially if you cannot afford to pay what the agency says you owe. Keep in mind, however, that you do not necessarily have to pay the bill all at once.

The IRS is often willing to set up payment plans with taxpayers, and those payment plans could make paying what you owe easier and less stressful. Once again, it is a good idea to seek professional help and guidance here – the IRS can drive a hard bargain, and you do not want to end up with a payment plan you cannot afford.

If you fall behind on the payment plan you agreed to, you could be subject to additional enforcement action, including the tax agency garnering your paycheck or even freezing your bank accounts. Getting the help of a tax resolution professional up front can help you avoid these serious consequences.

Explore an Offer in Compromise Settlement

If you are truly unable to pay the money the IRS claims you owe, you may be able to work out a smaller payment. The IRS may not advertise this program, but the tax agency is often willing to work with taxpayers by accepting lesser amounts, especially if those taxpayers have few assets and a limited income. Sometimes these can be for a fraction of what’s owed, if you qualify.  We offer a free no obligation consultation to find out if you qualify  Contact Me – Ron Friedman CPA CTRS

If you plan to explore this last option, it is critical that you work with a tax resolution expert. These compromise offers can be extremely complicated, with legalese and language that can be difficult to understand. You do not want to make a misstep here, and you want to ensure that paying the compromise account will result in a complete settlement of your tax bill.

Few things are as frightening as getting a letter from the IRS. That official-looking letterhead is bad enough, but what the letter says is even worse. If you receive such a letter, you need to take positive steps right away. Ignoring the situation will not make it go away, and the sooner you start exploring your tax resolution options the better off you will be.

If you want the help of an expert tax resolution professional 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. Contact Me – Ron Friedman CPA CTRS.

Till next time,

Ron

Founder and President of Ron Friedman Tax Relief Pro
taxreliefprowestchester.com
ron@taxreliefprowestchester.com
Stop IRS Hotline: 1-800-TAX-FIX0 (829-3490)

As the best tax resolution and relief company in Westchester County, NY, and the tri-state area, Ron Friedman Tax Relief Pro has specialists to stop the IRS and help troubled tax payers get out of IRS debt. If you have back taxes owed, unfiled tax returns, IRS levies, liens, seizures or wage garnishments, we at Ron Friedman Tax Relief Pro can help you settle for a fraction of what you owe. As trusted, credible tax resolution specialists, we are vested in our client’s well-being and financial security.

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