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Category Archives: Federal Tax Help

2015 Tax Filing Date Announced

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2015 Tax Filing Date Announced

2015 Tax Filing Date Announced

2015 Tax Filing Date Announced

2015 Tax Filing Date Announced – The tax filing date for the New Year has recently been announced by the IRS. Tax filing will begin on Tuesday, January 20th, 2015. In addition, as part of the tax extenders package which President Obama signed into effect on December 19, 2014, all taxpayers can file at the same time.

Although the tax extenders package was approved just weeks ago, the Internal Revenue Service has announced that the 2015 tax season will be begin in a timely fashion. The opening date is actually 10 to 11 days earlier than it was in previous tax seasons. In addition, rather that having a tiered tax season opening, the new legislation allows all taxpayers to begin filing at the same time.

In IRS Commissioner Koskinen’s remarks about the new tax extenders package, he said that, “[w]e have reviewed the late tax law changes and determined there was nothing preventing us from continuing our updating and testing of our systems.” He went on to say that IRS employees would continue an aggressive schedule of testing over the next month in order to complete the final stages of preparation of their tax systems for the timely opening of the 2015 tax season.

Although the tax extenders legislation was passed by both houses of Congress and signed into effect by President Obama just weeks before the end of the year, it reinstates many valuable tax breaks that had expired at the end of 2013. Its tax saving provisions will allow both individual taxpayers and businesses owners to save valuable 2014 tax dollars. The bill, aptly named the Tax Increase Prevention Act of 2014, is certainly a welcome holiday treat for many!

If you have tax questions or a tax debt you are unable to pay, our tax settlement professionals are happy to discuss your tax resolution options free of charge. For more information about our services, visit us today at www.professionaltaxresolution.com or call us at 877.889.6527. With over 16 years in the business of resolving tax debt, we have a thorough understanding of tax law together with the experience to know which settlement option will be the best fit for your specific set of circumstances.

Happy New Year to All!

Tax Deadline for Citizens Living Abroad

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Tax Deadline for Citizens Living Abroad

Tax Deadline for Citizens Living Abroad

Tax Deadline for Citizens Living Abroad – The tax filing deadline for United States citizens living abroad is on the horizon. That deadline is June 15th (pushed to June 16th for 2014). This automatic two month tax extension is granted to all overseas residents and does not require an extension request. The only condition for claiming the extension is for the taxpayer to attach a written statement when the return is submitted stating that both the primary residence and main place of business are outside of the country.

If a taxpayer residing abroad is unable to file a tax return within the automatic two month extension period, they must then file a written request to gain an additional four month extension. Although neither a late filing penalty nor a late payment penalty will be assessed on any returns covered by these extension periods, interest will normally accrue on any tax amount owed. As is true for taxpayers residing within the United States, all tax returns for United States citizens residing outside the county must be filed by the October 15th tax extension deadline.

The United States is one of a few countries that requires its citizens living abroad to pay income taxes. This filing requirement applies to any United States citizen who earns more than $10,000 ($20,000 for a joint return) in any given year. Although rule applies even when some or all of the income is earned outside the country, certain income earned from foreign sources is exempt from taxation. In addition, taxpayers can sometimes claim a tax credit on their United States tax return for taxes paid outside of the county.

On top of filing an income tax return, United States citizens residing abroad are required to submit an FBAR Report if they hold foreign assets in excess of $10,000. Although the deadline for submitting the FBAR Report to the United States Department of Treasury is June 30th, some of the information contained in the report is required for the tax return due two weeks earlier. Ownership in foreign businesses and holdings of other foreign assets must be itemized on the FBAR Report while Income from these same sources is required for the income tax return.

If you are a United States citizen residing abroad, our tax settlement professionals can help you evaluate and meet your tax filing requirements. The CPAs and Enrolled Agents at Professional Tax Resolution are experts in the area of foreign tax compliance and can help you evaluate your foreign income reporting requirements. Our experienced tax settlement professionals offer a free, no obligation consultation to answer any tax question or to discuss tax resolution optionsfor a tax debt you are unable to pay. For more information about out full range of tax services, call us at 877.889.6527 or visit our website at www.professionaltaxresolution.com.

Beware of IRS Penalties at Tax Time!

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Beware of IRS Penalties at Tax Time!

Beware of IRS Penalties at Tax Time!

 

Beware of IRS Penalties at Tax Time! Tax time is a good time for taxpayers to be reminded of some of the penalties that can be assessed by the IRS and State Tax Agencies for failure to comply with set deadlines for the filing of tax returns and the payment of tax amounts due. Since penalty amounts accumulate over time and are usually combined with interest charges on any outstanding tax balances, they can result in significant increases to the amounts owed to the collecting tax agencies.

Outlined below are some of the penalties that come into play at this time of year:

Penalty for a Bounced Check

The penalty for a disallowed check or money order made payable to the United States Treasury is 2% of the amount of the check for checks of $1,250 or more. If the amount of the check is under $1,250, the penalty is $25 or the full amount of the check, whichever is less. The penalty fees for disallowed payments cover electronic payments as well as paper checks.

Late Filing Penalty

The penalty for the late filing of a tax return is 5% of the unpaid tax balance for each month or partial month that the return is late up to a maximum penalty of 25 %. A minimum penalty of $100 or 100% of the tax due, whichever is less is imposed for any tax return that is more than 60 days overdue.

Late Payment Penalty

The penalty for failing to pay tax amounts due is assessed at a rate of 0.5% for each month or partial month that the tax balance remains unpaid after the filing deadline. This percentage is reduced to 0.25 % for any taxpayer who has entered into a valid installment agreement with the collecting tax agency. Taxpayers who have filed for a 6 month extension and have paid at least 90% of the tax amount due at the time the extension was filed are exempt from paying a late payment penalty provided they pay the balance of any taxes owed at the time the extended return is filed.

The assessment of a tax penalty must be officially communicated to the taxpayer by means of an IRS Letter, an IRS Notice or a similar type of written notification from one of the State Tax Agencies. Each written penalty notice must include an explanation of why the penalty is being assessed and how the amount of the penalty was calculated. Upon receiving an official notice informing you of the assessment of a tax penalty, the best course of action is always to address the issue immediately before tax balances accumulate beyond what they already are.

If you have received a penalty notice or have a tax debt you are unable to pay, our tax settlement professionals are happy to discuss your tax resolution options free of charge. For more information about our services, visit us today at www.professionaltaxresolution.com or call us at 877.889.6527. With over 16 years in the business of resolving tax debt, we have a thorough understanding of tax law together with the experience to know which settlement option will be the best fit for your specific set of circumstances.

 

Gift and Estate Tax Changes Expected to Occur at the End of 2012

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The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act which was signed into law in 2010 increased the amounts of the estate, gift and generation skipping tax exemptions and, at the same time, lowered the tax rates for each of these taxes. However, unless Congress takes some action before the end of the year, the estate tax benefit benefits provided by this law will expire on December 31, 2012. The major provisions of the 2010 Tax Relief Act are outlined below together the changes that will take place on January 1, 2013 if Congress does not take further action.

Gift Tax

  • Current

The gift tax exemption is $13,000 per year for gifts made by any one person to any number of people. There is a lifetime gift tax exemption of $5,120,000 for gifts made above the $13,000 limit.

  • January 1, 2013

The gift tax exemption will remain at $13,000 per year (with a possible increase for inflation) for gifts made by any one person to any number of people. The lifetime gift tax exemption for gifts made above the $13,000 limit is scheduled to revert to $1,000,000.

Generation Skipping Tax

  • Current

The GST exemption is $5,120,000 with a tax rate of 35% on amounts above the exemption limit.

  • January 1, 2013

The GST exemption is scheduled revert to $1,390,000 per year (with a possible increase for inflation) with a tax rate of 55% on amounts above the exemption limit.

Estate Tax

  • Current

The estate tax exemption is $5,120,000 with a tax rate of 35% on amounts above the exemption limit. Portability of unused estate tax exemptions of one spouse to the surviving spouse is allowed.

  • January 1, 2013

The estate tax exemption is scheduled revert to $1,000,000 per year with a tax rate of 55% on amounts above the exemption limit. Portability of unused estate tax exemptions of one spouse to the surviving spouse will no longer be allowed.

With January 1, 2103 fast approaching, taxpayers are anxious to see what, if any, action will be taken by Congress. If Congress does nothing, the exemptions for gift, generation skipping and estate taxes will revert to their 2009 levels and the tax rates for amounts above the designated exemption levels will increase to 55%. On the other hand, if Congress votes to extend the Tax Relief Act, the exemption limit for these taxes will remain at $5,120,00 with a possible inflation adjustment and the tax rate for amounts above the exemption limits will be held at the current 35%. Barring a full repeal of the estate tax, the third alternative would be the passage of some sort of compromise law that would place exemption limits and tax rates somewhere in the middle of the 2009 levels and those set by the Tax Relief Act of 2010.

If you owe back taxes due to a gift or inheritance, we can help you determine whether the assessed amounts are accurate based on past and current estate tax laws. Very often, the process of accurately interpreting the law and making use of tax benefits the law provides can result in a significant reduction in the tax amount owed. Following this analysis, our experienced tax settlement professionals will resolve any existing tax debt in the most effective way available. For more information about our tax debt resolution services, visit us today at www.professionaltaxresolution.com. Contact us by phone at (877)-889-6527 or by email at info@protaxres.com to receive a free, no obligation consultation.

Choosing a Tax Settlement Professional

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The help of a qualified tax settlement professional can be an invaluable asset in attempting to resolve any type of back tax issue. However, the selection of a reputable tax professional can be a difficult task in itself. It is important to verify any advertised credentials before hiring because many individuals and companies who advertise tax settlement services are actually marketing agents and salespeople with no professional qualifications. Tax law is so complex and the policies and procedures of the IRS are so complicated that it takes an individual who is both knowledgeable and experienced to successfully negotiate a tax settlement agreement.

 Some things to look for:

  • Select a well established individual or firm, one that is likely to still be around to answer questions after the return has been filed.
  • Select an individual or firm with a verifiable physical address.
  • Search the internet to make sure there are no registered complaints about the professional under consideration.
  • Check out available references, reviews, and ratings from the local Better Business Bureau.
  • Choose a professional who specializes in tax settlement issues. Such and individual will be the most familiar with all of the tax settlement options available and will have experience in negotiating tax settlement contracts with the IRS.
  • Select a tax settlement professional with a verifiable licensing history. Certified Public accountants, enrolled agents, and attorneys are the only individuals who can represent taxpayers before the IRS in matters other than returns they have actually prepared.
  • Select a tax settlement professional who is affiliated with a professional organization. Such organizations hold their members to a code of ethics and provide opportunities for continuing education.

 Some things to avoid:

  • Avoid tax settlement professionals who make extravagant promises about the percentage of tax debt they can eliminate.
  • Avoid tax settlement professionals who base their fees on a percentage of the amount of the settlement they obtain.
  • Avoid tax settlement professionals who have no verifiable licensure or physical address.
  • Avoid tax settlement professionals who are unwilling to sign the returns and agreements they prepare.
  • Avoid tax settlement professionals who have negative reviews, a history of registered complaints, or low ratings with the local Better Business Bureau.

Many taxpayers are slow to resolve their back tax issues and contact a professional only after making numerous attempts to resolve a tax debt on their own. These attempts have often been unsuccessful because the IRS is made up of many unconnected departments with specific functions, making the system difficult for an inexperienced individual to navigate. In addition, while IRS employees are generally very knowledgeable, it is their job to collect taxes rather than to act as an advocate for the delinquent taxpayer. A tax settlement professional will be experienced at negotiating with the IRS and will know how to communicate with them effectively on the client’s behalf.

If you are in need of any type of tax settlement services or have tax debt, the tax specialists at Professional Tax resolution can provide you with the help you need.  Because our professionals are familiar with all of the available tax settlement options and are experienced at negotiating tax settlement agreements with the IRS, we can ensure that you will receive the maximum tax advantage for your specific financial situation. For more information about our tax settlement services, visit us today at professionaltaxresolution.com. Contact us by phone at (877)-889-6527 or by email at info@protaxres.com to receive a free, no obligation consultation.