offseason-tax-tips

Off Season Tax Tips

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offseason-tax-tips

Most of us have made it past tax time and are looking forward to the summer. Some of us are still gathering last minute tax items and trying to finish up before October. I thought I would share a few off season tax tips that can help prepare you for a profitable 2016 Tax Year.

Create your tax strategy

Summer is a great time to go over your budget. Figure out the timing of your end of year bills. Maybe you will start saving for your property taxes over the summer so you can pay them off in 2016 instead of the beginning of 2017. Do you have a 401k or like account that you want to make sure you maximize your contribution? Summer is a great time to run those numbers. Maybe there is room in the budget for some charitable donations. Do a little spring cleaning and find old items to donate to charity. Remember to get good receipts.

Review your portfolio

Make sure you are paying yourself and making your money work for you instead of against you. Have a meeting with your financial advisor and make sure your investments meet the appropriate risk factors; you may find this annual tune makes a big difference.

Look into HSA or like plans

With the new requirements on health insurance, you will hear many people complaining about the hike in premiums. It may be in your best interest to get a health savings account (HSA) for the tax benefits as well as the yearly savings on medical items too expensive to pay out of pocket.

Get organized

If you have a business and don’t already have Quickbooks, now is a great time to take a seminar and learn one of these accounting programs. Accounting software can provide a world of information on how your business is running and also make things easier on your accountant come tax time. If you are an individual taxpayer, start organizing your receipts and making sure you are keeping organized and appropriate records.

Don’t let summer pass you by without putting in some work on your finances. If you take a little time each day to be proactive, your tax season should be much easier and you may wind up with a nice refund.

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How can I get more time to pay my IRS bill?

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We live in a pay as you go tax system. If you are a W2 employee, your taxes are taken out with each paycheck. If you receive 1099s or own a business you should make estimated tax payments quarterly. However, things do not always work out this way. This year we have an expected 28-million taxpayers who will owe for the 2015 tax return. What can you do if you can’t afford to pay? Well, an ETP might be a great option for you.

Do you need a little more time to gather the money?

If you are unable to pay your IRS balance by the due date and have received a notice of deficiency or similar notice, you may be eligible for getting an extension of time to pay. That’s right! There is a program out there that gives you a FOUR MONTH EXTENSION TO PAY!! If you need a little more time than that, this may still be a good option for your situation. Using an ETP along with another alternative arrangement to start streamlining payment arrangements could be just the tool you need to resolve your IRS balance.

Pros of using an ETP

  • Gives you time to gather funds and avoid liens and levies
  • This may be a tool to use to release current liens and levies
  • No Fee to set up this qualifying agreement
  • Can be used in conjunction with a First Time Penalty Abatement
  • Avoid having to make a financial disclosure to the IRS
  • Can be used to get balance below 50k then streamline
  • Can be used to get balance down and then enter into another program
  • Can work for individuals as well as businesses

Important!

Keep in mind this does not stop the interest and penalties from hitting your account, it just provides you some extra time to get the balance owed. Sometimes taxpayers would rather pay around 4% just to have some breathing room. Also, after you get the balance down, if your record is clear for the last few years you may be eligible to abate some of the penalties.

If you have questions about this or other alternative arrangements on an IRS or State bill, please feel free to call (410) 727-6006 or click the below button to discuss your eligibility.

How can I settle for Less with the IRS?

How can I settle for Less with the IRS?

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If you are like many taxpayers you are bombarded day in and day out with ads targeting a select group of individuals. You may hear “Settle for pennies on the dollar” , The “Fresh Start” Program, or most commonly known the Offer in Compromise.

But what does all of this mean? Read more

1099 and Small Business Owners Beware!

1099 and Small Business Owners Beware!

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hello-new-guy

1099 and Small Business Owners Beware!

The IRS has been complaining of cut backs and being short staffed for years. For the first time in years, they “found” some money in the budget. Due to workers ageing out of the system and other departures, John Koskinen, IRS Commissioner, states they now have the funds in their budget to hire 700 new employees.

What does this mean for me? Read more

Online gambling and how it effects your tax return

Online gambling and how it effects your tax return

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Online Poker Players: Beware!

Most taxpayers that are into gambling action are aware of gambling wins and losses and how they are reported on a tax return. What you may not be aware of is a new case that may set precedence to require you to report funds in foreign gaming accounts. Read more

dontbeafraid

The word Audit just got more intimidating!

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Admit it, the word AUDIT is very scary. No one wants to receive a letter that says: Hey! we are not so sure about what you claimed on your return, we’d like to “take another look.” Now the burden of proof is on YOU! Did you keep great records? If so, will they stand up to the heavy standards of IRS? Do you understand the tax law or did someone else help you with the return? No matter the answers to those questions the fact still stands, the IRS has your number.
Read more

How can the the IRS improve installment agreements?

How can the the IRS improve installment agreements?

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gonnaneed

IRS Urged to Improve Direct Debit Installment Agreements to Avoid Taxpayer Defaults

Many times I get a call from taxpayers who were previously installed into a payment arrangement with the IRS. They call for help because their payment plan defaulted. This causes many different problems for taxpayers. One the IRS may not reinstate the plan and requires a large sum of money put down to enter into a new plan. The state of Maryland can flag your driver’s license and make you pay upwards of 25% down of your entire debt. Read more

Bill-of-Rights

Your Basic Rights as a Taxpayer

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Bill-of-Rights

Taxpayer Bill of Rights

Every taxpayer has a set of basic rights that they should be aware of when dealing with the IRS for any matter. Below are a few brief descriptions of the rights and what they mean.

#1 The right to be informed
The right to be informed means several things. The tax code is very complex, and with years of study, is still not mastered by many. So what does the average person have to do to understand and be informed? It is IRS and their representatives duties to make sure forms are explained and how to comply with the tax code is made very clear to all taxpayers. If you don’t understand something, ask for clear explanations. Read more

IRS Payment Agreement

Understand Your IRS Agreement So You Can Avoid Default

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What Is an IRS Installment Agreement?

The IRS works with taxpayers to develop installment agreements that allow them to pay their delinquent balance over time and get back into compliance with both the IRS and the State of Maryland. If you enter into one of these installment agreements, you can choose how much you pay each month as long as you pay off the full amount within six years.

Installment agreements offer a great opportunity for you to pay your taxes in full on a set timeline, and they can help you avoid liens, levies, garnishments, and other potential negative consequences. However, making late payments or missing payments altogether can put you into default, which can lead to trouble.

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Do tax preparers know what they’re doing?

Do tax preparers know what they’re doing?

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The article was originally published in The Daily Record.

Consumer groups pushing federal and state lawmakers for certification and education

By: Bloomberg Ben Steverman February 16, 2016

For several years, researchers have been sending people into tax preparation offices to test the quality of the work. The results have been scary:

* A tax preparer in North Carolina wasn’t sure what to do with one client’s dividend income form. She decided to just ignore it. Read more