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Category Archives: Planning

Summer Tax Basics – Tax Tips to Keep You Ahead of the Game!

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Summertime Tax Tips!

It’s summertime and probably the last thing you want to think about is taxes! However, I am an organizer and I like to be prepared so at least I feel like I am ahead of the game…. Here are some easy and simple summer tax tips that will help you save money! Most people wait until December to start thinking about their taxes, but in actuality planning half way through the year is a better tax planning strategy.

First Things First

Have you filed your 2012 Tax Return (remember to file and take care of your taxes so back taxes do not incur)? If you were given an extension in April DO NOT procrastinate any longer. Finish your taxes NOW! If you wait until the last minute to meet the October 15th extension deadline, your return will be sloppy and rushed (the same thing goes for last minute April returns). You do not want to forget any tax deductions or make any filing errors.

Get Organized

I realize that now is the time to be outside in the sun. However, just take a couple minutes and organize your 2012 tax filing materials. Now go ahead and do the same thing for your 2013 taxes. It will make filing next year’s return seem painless!

It is very important that you keep some type of system for filing and organizing your tax information. It can be a desk drawer in your home office, an accordion file or a very large filing cabinet…. The important thing to remember is to choose something that works for you and stick with it. The system should make everything easy to find. Nice labels for things such as charitable deductions, medical bills, business expenses, etc. are recommended. Just remember to keep everything in place!

Keep Day Camp Receipts

If you have young children like I do, this tip is important! The IRS allows parents to claim a child’s day camp expenses the same way that they can claim the Child and Dependent Care Credit to help cover the day care costs for children while they are working. Many people do not realize this or forget to claim summer day camps. It is important to note that overnight camps do not qualify, only day camps.

Assess Your Estimated Taxes

Estimated tax payments are needed if you have income that isn’t subject to withholding. The IRS wants to know that you going to pay taxes on all of your income. To avoid a tax penalty, it is critical that you do not underpay your taxes. Summer is great time to recalculate your estimated tax situation in order to keep on track so there are no surprises!

If you have tax questions or 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.

5 Ways to Get Caught Cheating on Your Taxes

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As unemployment and the economy continue to loom over America, you may be tempted to cheat on your taxes since what you owe seems like too much to pay. This is never a good idea. With penalties, fees, interest, and in extreme cases, jail time as possible consequences, cheating on taxes is simply not worth it. If you do have issues with paying and need tax settlement help, consulting a professional on a legally maximizing your deductions or setting up payment plan is a far safer option.

Here are 5 common tax deduction cheats that the IRS looks for:

Commuting Costs associates with going to and from work can never be deducted, even if your workplace is hours away. The burden of an expensive commute lies solely on you, because it is non-deductible expense.

Volunteering While donated goods and cash can be deducted, the services you have donated cannot. This applies even if you can calculate the value of the service. However, if costs are incurred while you are volunteering, those can be deducted.

Pets Since pets are not considered dependents, personal pet costs including food, medical bills, and grooming are not tax deductible.

Remodeling Your home improvements are considered personal expenses. You cannot claim them as tax deductions.

Gym membership Unless you have a diagnosed medical condition that causes your doctor to specifically prescribe a gym or health club membership, your membership cannot be deducted. The difference is that the first is a medical deduction, and the second is just beneficial.

If you want to avoid mistakes on your tax return and receive the deductions that you qualify for, our experienced tax settlement professionals can help. We can also work with you if you have filed your taxes and cannot afford to pay in full. Please visit professionaltaxresolution.com for more information on our tax resolution services. You may also call us at (877) 889-6527 or email info@protaxres.com to receive a free, no obligation consultation.

Expansion of the Tax Settlement Provisions of the Fresh Start Program

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The Federal Government recently announced a major expansion of its Fresh Start Program which was initiated last year to help taxpayers stuggling with tax debt. The recent changes supplement efforts that were already in place under the original Fresh Start Program to help individuals and businesses meet their tax obligations and reach tax settlements. Three major areas targeted by the recent Fresh Start expansion are penalty relief, Installment Agreements, and Offers in Compromise. The changes to these areas of tax relief are outlined below.

Penalty Relief

  • What is the failure-to-pay penalty? The failure-to-pay penalty is an amount assessed by the IRS on any tax amount owed that is not paid by the filing deadline. It is usually assessed at the rate of one half of one percent per month with a maximum assessment of 25%. The failure-to-pay penalty is charged in addition to interest on the tax amount owed, which is usually three percent per year.
  • What are the provisions of the expanded penalty relief initiative? The expanded penalty relief initiative grants a six month grace period on failure-to-file penalties for two specific categories of taxpayers provided all tax amounts, penalties, and interest are paid in full by October 15, 2012. The groups of taxpayers covered by this provision are workers who were unemployed for 30 consecutive days at any time during 2011 up until the April 17th filing deadline and self-employed individuals who experienced a decrease in income of 25% or more due to the downturn in the economy.
  • What are the restrictions on the expanded penalty relief initiative? In order to be eligible for expanded penalty relief, a taxpayer who is married filing jointly must not have an income in excess of $200,000 and must not have a tax debt greater than $50,000. The income of a taxpayer who is filing as single or head of household must not exceed $100,000.

Installment Agreements

  • What is an Installment Agreement? An Installment Agreement allows a taxpayer to pay the balance of a tax amount due in installments rather than paying the entire balance of the tax debt by the due date. While interest continues to accrue until the balance of the tax debt is paid in full, penalties are generally reduced during the payment period.
  • What are the provisions of the expanded Installment Agreement initiative? The expanded Installment Agreement initiative reduces taxpayer burden by easing the restrictions placed on qualifying for a streamlined Installment Agreement. The streamlined Installment Agreement has the taxpayer advantage of not requiring a financial statement. Under the provisions of the expanded Fresh Start tax settlement initiative, the maximum tax debt allowable for a streamlined Installment Agreement is raised from $25,000 to $50,000, and the maximum term of the payment period is extended from 60 months to 72 months.

Offers in Compromise

  • What is an Offer in Compromise? An Offer in Compromise is a tax settlement option that allows a taxpayer to settle a tax debt for less than the full amount owed.
  • What are the provisions of the expanded Offer in Compromise initiative? The guidelines outlined by the expanded Offer in Compromise initiative make this tax settlement option available to a much larger group of taxpayers. Taxpayers with an annual income of up to $100,000 can now qualify for an Offer in Compromise. In addition, the maximum tax debt ceiling allowed for qualification has been raised from $25,000 to $50,000.
  • What are the restrictions on the expanded Offer in Compromise initiative? While the recent expansion of the Fresh Start Program makes the Offer in Compromise tax settlement option available to a larger group of taxpayers, the IRS will generally not accept an Offer in Compromise if they believe the entire amount of the tax debt can be collected.

If you have an outstanding tax debt, we can help you determine whether you qualify for tax relief under the provisions of the Fresh Start Program. Following that determination, our experienced tax settlement professionals can help you submit your tax settlement request according to established IRS guidelines. 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.

 

Professional Tax Resolution – A Good Choice for Your Tax Settlement Needs

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The tax specialists at Professional Tax Resolution are a good choice for resolving your tax settlement issues. They are:

  • Licensed  The tax resolution professionals at Professional Tax Resolution are Certified Public Accountants and Enrolled Agents. These are the only tax specialists who can represent you before the IRS on all tax issues, not just returns they have personally prepared.
  • Experienced  The tax specialists at Professional Tax Resolution resolve tax debt issues for both individuals and businesses all day, every day. Because tax settlement is their only focus, they know how to successfully negotiate with the IRS to achieve the best tax resolution outcome for each client.
  • Knowledgeable  The tax specialists at Professional Tax Resolution are familiar with all of the available tax settlement options and are well equipped to select the one that best fits each client’s specific situation to help with tax resolution. They have a thorough understanding of tax law and the experience to use this knowledge to successfully resolve any tax debt issue.
  • Honest and Ethical  The tax specialists at Professional Tax Resolution are honest and ethical. They thoroughly analyze each client’s tax debt situation and provide a realistic evaluation of what type of tax settlement the client can expect. They never make extravagant promises they know they cannot keep.
  • Proven with a Great Track Record  The tax specialists at Professional Tax Resolution have an established record of past accomplishments. Stories of past successes can be read on their website at professionaltaxresolution.com. Reviews can be found on numerous rating sites including Yelp and Merchant Circle.

If you have an outstanding tax liability, visit us today at professionaltaxresolution.com. With over 16 years of experience, our licensed tax professionals have the knowledge and experience necessary to provide you with the best tax settlement help available. Contact us today at (877) 889-6527 or info@protaxres.com to receive a free, no obligation consultation.