Helpful Tips & Tax Advice

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Can the IRS Keep Your Refund?

  It is tax refund time and most taxpayers already have a plan for their tax refund. They will save it, invest it, spend it or maybe do a little of each. However, some taxpayers will file their tax return and never receive a refund. This is due to the fact that the IRS can keep a taxpayer’s refund to cover certain types of debt, some of which are discussed below. A Back Tax Balance with the IRS: If a taxpayer has a back tax balance with the IRS (even if they are currently enrolled in a payment plan), the agency will keep either all or part of that individual’s tax refund and credit it toward payment of their back tax balance. Although the delinquent … Continue reading

The Tax Extension Option

The Tax Extension Option You are not alone if you do not file your tax return on or before April 15th. Although this is the official deadline for the filing of personal tax returns, each year more and more people apply for an automatic six-month tax extension. The number of taxpayers requesting an extension increased from 11 million in 2011 to over 13 million in 2013, an increase of almost 20% over the two-year period! Another interesting fact is that, in tax year 2014, 25% of those individuals who had requested and extension were still working on their tax returns in September, just one month before the October 15th extension deadline. Although procrastination is one reason for requesting a tax extension, there are other factors … Continue reading

Why You Should File Your Taxes

Why You Should File Your Taxes by April 15   April 15th is an important filing deadline for individual taxpayers. If the Internal Revenue Service does not receive either a completed tax return or an application for a six-month tax extension by this date, they will automatically assess a failure-to-file penalty. In addition, they will begin to assess a failure-to-pay penalty on any tax amounts owed. Although the failure-to-file penalty can be diverted by applying for a six month tax extension, late payment and interest assessments will automatically begin to accrue as of the April 15th tax deadline regardless of whether a tax extension has been filed. Because the penalties and interest described above are compounded over time, the financial consequences of failing to file tax … Continue reading

Choose Your Tax Preparer Wisely

Choose Your Tax Preparer Wisely Choose Your Tax Preparer Wisely: With over half of all taxpayers enlisting the services of a tax preparer, tax preparation has become a major industry. This being the case, the selection of a reputable tax preparer is a task at hand for many at this time of year. Although the services of a tax preparer can be an invaluable asset in saving tax dollars as well as meeting tax deadlines and compliance requirements, choosing one that is both competent and ethical and is often a difficult process. When choosing a tax preparer, it is important to select a firm or an individual that has an established licensing history and a verifiable physical address. The absence of either of these could … Continue reading

IRS Becoming Aggressive About Offshore Tax Evasion

IRS Becoming Aggressive About Offshore Tax Evasion One problem the IRS has to tackle is that of United States taxpayers who dodge paying taxes by placing their funds in offshore accounts and then failing to report them. In the last several years, the IRS has made it clear that this is breaking the law and that taxpayer’s who are caught hiding foreign assets may face penalties, fines and even criminal prosecution. “It’s a bad bet to hide money and income offshore,” said IRS Commissioner John Koskinen. “Taxpayers are best served by coming in voluntarily and getting their taxes and filing requirements in order.” The IRS has recently become more aggressive in finding taxpayers who are hiding their money in offshore accounts. In 2009, they started … Continue reading

Are You Prepared for Tax Season 2015?

Are You Prepared for Tax Season 2015? Are You Prepared for Tax Season 2015? While no one looks forward to tax season, there are a few simple ways get prepared and make the whole experience a little less painful. While it is best if some of these steps are taken before tax season starts, timing is not crucial. It is better to get organized now that Tax Season 2015 is underway rather than not get organized at all! The good thing is that each passing tax season presents a chance for the development of a new and better system of organization based on what has worked in the current year. We offer the following suggestions to get Tax season 2015 off to a good start: … Continue reading

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 … Continue reading

Tax Extenders Bill Passed

Tax Extenders Bill Passed – With time running out, Congress has passed the long awaited tax extenders bill. Although President Obama has not yet signed the legislation into effect, his signature is expected. The bill, officially identified as the Tax Increase Prevention Act of 2014 (HR 5771), extends some very significant tax breaks through the end of 2014 and makes them retroactive to January 1, 3013 when they originally expired. It important to note, however, that the new legislation only covers items that are put into effect before December 31, 2014. At his point, there are no plans to extend the bill’s tax benefits into 2015 and beyond. Some of the tax saving provisions of HR 5771 are summarized below: Mortgage Debt The tax extenders … Continue reading

Year End Tax Considerations

Important Year End Tax Considerations Important Year End Tax Considerations – Although tax planning is important all year long, it is especially important at the end of the year. End of the year tax moves such as accelerating or postponing income, balancing capital gains and losses and placing funds in tax deferred accounts have the potential to produce significant tax savings. On the other hand, failing to consider such tax planning options could very well result in paying taxes in excess of what would otherwise be owed. Consider deferring income into 2015. This tax planning strategy provides a tax advantage if you expect to have an equivalent or lower income in 2105 and the deferred amount will not push you into a higher tax bracket … Continue reading

IRS Notice of Deficiency As a Wake-up Call

Let IRS Notice of Deficiency be a Wake-Up Call Let IRS Notice of Deficiency be a Wake-Up Call – If you have received an IRS Notice of Deficiency, let it serve as an official wake-up call, informing you that you have a back tax issue that needs attention.  Although a Notice of Deficiency is usually sent went the tax balance shown on a tax return is less that the amount the IRS believes you owe, it can sometimes be sent when no tax return has been filed. Either way, the Notice of Deficiency is an official communication from the IRS informing a taxpayer that they have a back tax balance. It is always sent by certified United States mail to the last known address of … Continue reading

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