Work from Home Tax Forms: How to Store Them, How to File Them and How to Reduce Your Liability
Working from home can be a dream come true, especially if you also work for yourself. Opportunities for freelancers, gig workers and other self-employed men and women have exploded in recent years, giving people the freedom they crave without sacrificing the income they need. This is far more evident with the current COVID situation where millions of Americans are now commuting from their bedroom to the dining room table for a Zoom call.
That freedom and flexibility can be intoxicating, but there is an unwelcome hangover as well. Tax issues can make working from home less attractive, and more expensive, leaving many gig workers, new freelancers, and small business owners frustrated. But if you plan carefully and know what to do, you can reduce the tax headache and enjoy the perks of working at home. Here are some key things to know before the tax man comes calling.
But before we jump into tax strategies, it’s important to note that the IRS is increasing enforcement in the coming months and even years after this pandemic. More small businesses and independent contractors are going to find themselves getting letters from the IRS requesting for more information or stating they owe money to the IRS. If you have any tax trouble or owe more than $10k to the IRS or state but can’t pay in full, contact our firm today. We help people find tax relief.
So, lets jump into some best practices for keeping your tax records clean in case the IRS comes knocking on your door.
Gather Contact Information from Your Clients
Whether you are preparing sales brochures for local businesses, designing websites for new startups or putting together dozens of individual side hustles, it is important to have contact information for every client.
The typical freelancer may have dozens of clients in a single year, and being able to contact them is an essential part of doing business. So go through your email lists, sort out your invoices and create a database of addresses and telephone numbers. Hopefully you will receive all your documents on time, but if not, that contact information will help you track down the missing paperwork.
Store Electronic and Paper Copies
The old saying that it is better to have it and not need it than need it and not have it is doubly true when you are self-employed. For gig workers, freelancers and other self-employed individuals, the loss of a single tax form could delay filing for months and even trigger an audit by the IRS.
That is why it is so important to build redundancy into your document storage. That means scanning each 1099 form as it is received, storing it on your hard drive, cloud account and offline storage device. It also means making paper copies of those critical documents and storing them in a safe place. These tax forms will be important when the tax filing deadline rolls around, so make sure you have them when you need them.
Keep Your Own Ledger
In a perfect world, every freelancer and at-home worker would receive all the tax forms they need, but that perfect world is the exception and not the norm. If you want to be ready for tax time and avoid unwanted entanglements with the IRS, you need to keep your own ledger.
Having your own records to back up your earnings estimates will help you in many ways, from qualifying for lower cost health insurance to getting a jump start on your tax return. It may be a little extra work, but keeping your own ledger will pay off in the long run.
Check Off Each Form As It Is Received
Now that you have your ledger in hand (or on your computer), you can cross reference your records and check off each 1099 form as it is received. When you have crossed the last form off your list, you can start filing your taxes and get the refund you deserve.
Be sure to scan each form as you receive it and make several backup copies. Having this documentation on hand will make your life easier should the IRS question part of your return or request additional information about the income you are claiming.
Reduce Your Tax Liability with a Solo 401(k) or SEP-IRA
Many new freelancers and gig workers are surprised at the high taxes they are required to pay, and the self-employment tax can be a particularly devastating blow. This extra tax is assessed to self-employed individuals, and it can have a big impact on members of the gig economy.
You may not be able to eliminate the self-employment tax, but there are steps you can take to keep your tax liability to a minimum. Retirement plans for the self-employed are among the most generous around, and opening a solo 401(k) or SEP-IRA could allow you to shelter tens of thousands of dollars in income.
These self-employed retirement plans do require some setup and a fair amount of paperwork, but once in place they can be used year after year to reduce your tax liability, so you can keep more money in your pocket and send less to the IRS.
Being self-employed and working from home can be wonderful, but it is important to be prepared for the realities. One of those unpleasant realities is taxes, and keeping track of your work at home tax forms will be critical as you make the transition. The tips listed above can help you keep proper records, stay on the right side of the IRS and even reduce your tax liability.
OWE BACK TAXES?
Our firm specializes in tax resolution. We serve clients virtually so don’t hesitate to reach out. 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.
Bankruptcy FAQ for Individuals
Filing for bankruptcy is a difficult and draining process. People often feel ashamed, scared, or confused. If you find yourself with no other options, bankruptcy can be a good way to clear out old debts, change financial patterns, and most importantly get a fresh start. Here is everything you need to know about filing for bankruptcy.
Note: Depending on what type of taxes you owe, you might not be able to wipe out your back taxes in bankruptcy proceedings. Our firm specializes in tax resolution and back tax debt settlements with the IRS. So if you’re considering bankruptcy in part because of your back tax burdens, reach out to us today for more information on how you can get tax relief.
Who Should File for Bankruptcy?
If you owe money to a creditor and cannot repay it, you can file for bankruptcy. Businesses and individuals are eligible; however there are caveats. If you have filed for bankruptcy once before, there is a waiting period before you may file again. After filing for Chapter 7 bankruptcy, you cannot claim bankruptcy again for eight years. After filing for Chapter 13 bankruptcy, you must delay a second claim for at least two years.
What Types of Debt Can I Discharge Through Bankruptcy?
You can discharge most types of debt through bankruptcy, including medical debt, credit card debt, payday loans, and mortgage debt.
Certain types of debt cannot be discharged through bankruptcy, meaning that you will still need to repay these debts even if everything else is forgiven. Debts that cannot be wiped out in bankruptcy include spousal support, child support, student loans, and back taxes in most cases.
Any debt you take on after you've filed for bankruptcy is ineligible to be discharged through the filing, since you did not have the debt when you asked for debt relief.
Why is Filing Bankruptcy Helpful?
When you can't keep up with the bills, you're under a high level of stress. Bankruptcy is never a first option for people; many have tried things like getting extra jobs, selling unwanted possessions, or asking family members for loans before arriving at bankruptcy as their best option for debt relief.
By wiping out debts, bankruptcy reduces stress immediately. Collectors are not allowed to come after individuals who are going through bankruptcy, so threatening phone calls and letters will end immediately.
A Chapter 13 bankruptcy can promote good financial habits, because in this form of bankruptcy, some amount of debt is repaid under a plan. By helping to increase financial literacy and instilling good financial habits, this partial repayment can keep people in the black once debts are discharged.
The biggest downside to filing for bankruptcy is that it impacts your credit, so you may find it difficult to take out loans for up to ten years after the bankruptcy. Your credit score also impacts things like the interest rate offered on loans and your ability to pass a tenant screening, so there are other ramifications to consider.
If you're not sure whether a certain debt will be forgiven or which type of bankruptcy is right for you, there are resources to help you explore your options, such as credit counselors. If you are thinking of filing for bankruptcy, it's helpful to get a counselor's opinion on your specific circumstances and what to expect after filing.
If you have back tax debt, we highly recommend readers to reach out to our firm first. Our clients never have to talk to the IRS, and tax resolution through our firm can save you money and time in the long run. You might also be eligible for other IRS relief programs or get your penalties reduced or removed. Reach out to our firm today for a consultation.
Considering Bankruptcy to Get Rid Of Your Back Taxes? 3 Alternatives to Explore Before You File
If you are drowning in debt and working harder and harder to make ends meet, you may think a bankruptcy filing is the only way out, but that is not necessarily the case. Filing for bankruptcy is one solution, but it is a drastic step that should only be taken as a last resort.
This is especially true if you owe back taxes to the IRS or state. Depending on what type of taxes you owe, you might not be able to wipe out your back taxes in bankruptcy proceedings.
It’s important to weigh all your options and get a clear picture of your financial situation, so in this article, we share with you 3 smart steps to take before declaring bankruptcy.
Depending on how much you owe, who your creditors are, and how the rest of your financial life looks, you may be able to dig yourself out of the hole and take back control without having to declare bankruptcy. Here are three smart alternatives to consider before calling a bankruptcy attorney.
3 Alternatives to Explore Before You File
1. Contact A Tax Relief Firm
Most bankruptcy attorneys aren’t familiar with the complex tax laws so they won’t accurately be able to assess your tax situation.
A tax relief firm like ours can help you assess your back tax situation and often help you settle your back tax debt with the IRS. If you owe a substantial amount of back taxes, this may be a good way to reduce your overall debt burden. This can also be a good first step to getting back on track with your finances.
2. Request a Lower Interest Rate On Other Debts
When you are paying 18% or more in interest, it can be hard to keep up with the charges, let alone make any headway on the outstanding balance. Credit card interest rates are among the highest around, and those outrageous rates have trapped many consumers in a spiral of ever increasing debt.
How different would your finances look if your interest rate was cut in half? Would you finally be able to get ahead of the interest charges and start paying down your balance? If so, it is time to get your credit card issuer on the line.
Even if you do not think your credit card issuer will be receptive, it never hurts to ask. And when the credit card company finds out that you are thinking about filing bankruptcy, they may be more willing to negotiate than you think.
For tax debt, the IRS can sometimes remove penalties and interest from your tax debt, so it’s important to reach out to our firm to see what your options may be.
3. Refinance Your Debt
Even if your credit card issuers and lenders are not willing to budge on the interest rates, you could still save money and avoid bankruptcy. Refinancing your existing debt through a home equity line of credit, a personal loan or other means could lower your interest rate substantially and slash your monthly payments.
If you do decide on this strategy, it pays to shop around. The more you can lower your interest rate, the more money you can save - and the faster you will be able to pay off your debts.
But it’s incredibly hard to refinance your debts if you have an IRS tax lien or wage levy. Our firm can get these released and help you get on financial track.
A bankruptcy filing can provide a fresh start for those in dire financial circumstances, helping them recover and rebuild their shattered monetary lives.
Even so, bankruptcy is not the only way out, and it is important for those considering this solution to research the alternatives first. The three bankruptcy alternatives listed above can also give you the fresh start you need, without the stigma or long-lasting impacts of a bankruptcy filing.
IMPORTANT: We highly recommend readers to reach out to our firm first. Our clients never have to talk to the IRS, and tax resolution through our firm can save you money and time in the long run. You might also be eligible for other relief programs or get your penalties and interest forgiven. Reach out to our firm today for a consultation.
IRS Collections Is Starting Back Up. What To Do If You Owe Back Taxes
2020 threw a huge wrench into everything and the IRS collections proceedings are no exception. With the tax deadline pushed until July 15th and a lot of the IRS closed under shelter at home orders due to COVID19, to the IRS being tasked with sending millions of Americans their stimulus checks, the IRS collections proceedings took a backseat.
If you owe back taxes you might just assume you got some breathing room. However, things are starting to pick back up.
According to the Taxpayer Advocate, as of late June 2020, the IRS generated more than 20 million notices, yet these notices were not mailed to anyone. It seems now that the IRS is once again starting to send threatening notices to taxpayers who owe back taxes.
In this article, we share a few things you must do in order to get out of tax trouble and settle your back tax debt.
IMPORTANT: We highly recommend readers to reach out to our firm first. Our clients never have to talk to the IRS, and tax resolution through our firm can save you money and time in the long run. You might also be eligible for other relief programs or get your penalties and interest forgiven. Reach out to our firm today for a consultation.
FILE BEFORE JULY 15th
Before we talk about any tax relief options, you must first get into compliance. That means being current on all your tax return filings, including your 2019 tax return.
If you missed the deadline, you must still file as soon as possible before you begin exploring tax relief options. If you have multiple years of unfiled tax returns, reach out to our firm for help today.
PENALTIES AND INTEREST
Any time you don’t pay your taxes, the IRS first hits you with a club called penalties and interest. Under normal circumstances, these penalties start accruing from day 1 after the tax deadline. Because of COVID19, The IRS is providing additional time to respond before interest or penalties apply.
If your tax bill already has penalties, our firm might be able to help remove some of the penalties by negotiating with the IRS on your behalf.
OFFER IN COMPROMISE
You might have heard advertisements about settling with the IRS, or the IRS Fresh Start program. Not everyone qualifies for it, but if your income or business was drastically affected by COVID19, there’s a good chance you can qualify now. This means the IRS will reduce your tax debt to a fraction of what you owe.
It’s important to hire a tax relief firm like ours to walk you through this process and properly represent you before the IRS. Talking to the IRS before talking to us would be like going to court without a lawyer.
DON’T TALK TO THE IRS IF YOU OWE $10k OR MORE.
Even though things are tough right now, the IRS’s main job is still to collect the taxes it thinks you owe them. That by nature pits them against you. Often talking to the IRS can be a treacherous path and you risk the chance of saying something self-incriminating. Save yourself the headache, time, and money by reaching out to our tax relief firm today. You wouldn’t go to court without a lawyer and you definitely don’t want to approach the IRS without expert representation.
Reach out to our firm today for a consultation.
Why You Shouldn't Put Off Filing Your Taxes
With the filing deadline moving from the traditional date of April 15th to July 15th because of the coronavirus pandemic, it can be tempting to put off filing your taxes for as long as possible.
Most taxpayers dread the tedious task of compiling their financial records, tax documents and filing their taxes. Unfortunately, the longer you procrastinate doing your taxes, the greater the chances that something will go wrong.
And if you owe money to the IRS, the more penalties and interest you’ll have to pay. Often, it’s a better idea to file your taxes sooner rather than later.
Here’s why.
TAX IDENTITY THEFT
Tax return fraud is one of the most common and fastest growing forms of identity theft. Basically, an identity thief steals your employment information and Social Security number - and files a fraudulent tax return on your behalf. Then, they steal your refund, or worse, put you in a hole owing back taxes you might not actually owe.
Unfortunately once the IRS sends your tax refund out, it’s nearly impossible to get the money back without knowing the law and regulations. One way to avoid falling victim to tax fraud is to file your taxes as early as possible. That way, you reduce the chances of tax identity theft by filing before the identity thief gets a chance to file a fraudulent return.
FIND AND CORRECT MISTAKES SOONER
Filing your tax return earlier makes it easier to fix any mistakes on your tax documents. For example, your employer might record the wrong earnings on your W-2. If you discover a mistake on your tax documents right before the filing deadline, you aren't going to have enough time to get the mistake resolved. Your tax return will end up getting delayed and you will have to go through the process of requesting an extension from the IRS, tacking on penalties and interests, that are compounded daily, to your tax liability.
YOU MIGHT OWE THE IRS MONEY
Unfortunately, many taxpayers underestimate their tax liability during the year. That means they underpay and end up owing the government money. The IRS charges taxpayers a penalty for underpaying their taxes as well as interest on the amount of taxes that they owe.
Therefore, the sooner you file and pay any remaining taxes, the smaller your financial penalty and interest will be. If you can’t pay up front, you might have tax relief options.
IMPORTANT: We highly recommend readers to reach out to our firm first. Our clients never have to talk to the IRS, and tax resolution through our firm can save you money and time in the long run. You might also be eligible for other relief programs or get your penalties and interest forgiven. Reach out to our firm today for a consultation.
GET IT OVER WITH
There’s no better tax relief than just finally taking care of your taxes. If you are one of the many taxpayers that get stressed over taxes, you will actually feel better if you don't procrastinate filing your tax return.
Just get it over with so it's not hanging over your head! The peace of mind you get from not knowing where you stand with the IRS is worth it. It’s often not as bad as you think, even if you owe back taxes, having a firm like ours represent you can be worth it in the long run.
Our firm specializes in tax resolution. We serve clients virtually so don’t hesitate to reach out. 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.
How to Handle Your Taxes During an Economic Crisis
Whether it is a global pandemic shutting the economy down for months on end, a stock market crash that leaves formerly giddy investors frightened and nervous or a housing crisis that makes real estate a risky bet, living through tough economic times is never easy.
Even so, how you handle yourself and your money during the crisis could make all the difference in the world, and if you do it right, you could emerge stronger, wiser and richer on the other side.
Handling taxes can be especially difficult during times of crisis. With your income uncertain, it can be hard to predict how much you might owe the IRS or how you can make those payments. And if you are self-employed or a gig worker, this economic uncertainty can be even greater.
So what can you do about your taxes when the economy takes a downturn? Here are some tips to make tax time less taxing when crisis strikes.
Research Filing Extensions and Be Aware of New Deadlines
When economic turmoil strikes, tax filing deadlines may be extended or otherwise relaxed, so do your homework and see how much time you really have. If you are struggling to make your tax payment, you may have some breathing room after all.
In the wake of the COVID-19 pandemic, the IRS extended the normal tax filing deadline from April 15 to July 15, and many state and local governments followed suit. The same may happen in future crises, and it never hurts to find out for sure.
File Promptly if You Are Expecting a Refund
Getting extra time to file can be a welcome relief if you owe money to the IRS, but if the tax agency owes you, it makes sense to file as quickly as possible. The processing of tax refunds is often disrupted during a crisis, with short staffing and different procedures suddenly in place. The sooner you file, the sooner you will have your tax refund money, and that cash could make a world of difference to your financial situation.
How you handle that tax refund is important as well, so think about what you will be doing with the money while you are waiting for it to arrive. If you have the extra cash to do so, contributing to an IRA or other tax shelter could reduce the amount you owe going forward, giving you even more money to work with in the years to come.
File Promptly if You Are NOT Expecting a Refund or Might Owe Back Taxes
The IRS is starting to enforce collections again, but they’re also not oblivious to the financial crisis we’re in. With almost 40 million Americans unemployed we now have the highest unemployment rate since the Great Depression.
The outlook is still uncertain and the IRS knows Americans need to get back to work and buying things to stimulate the economy. It’s tougher to do that with a huge tax bill weighing you down.
So right now, the IRS will likely consider settlements and more favorable terms to taxpayers in trouble, especially if their income drastically decreased due to COVID-19. So it’s important to file your taxes and be current in order to explore tax relief options.
IMPORTANT: We highly recommend readers to reach out to our firm first. Our clients never have to talk to the IRS, and resolving your IRS and state tax problems through our firm can save you money and time in the long run. You might also be eligible for other relief programs or get your penalties and interest forgiven. Reach out to our firm today for a consultation.
Are Your Investments Down? Use It To Reduce The Amount You Owe
It is easy to feel depressed when the stock market is tumbling and reaching new lows every day, but there could be a silver lining to that financial cloud. Engaging in strategic tax loss harvesting now could reduce your tax bill substantially when filing season rolls around. Tax-loss harvesting is when you sell investments at a loss in order to reduce your tax liability.
If you have investments that have not worked out like you hoped, selling them now and locking in the loss can be a great way to offset capital gains and lower your taxable income. This strategy is not the right choice for everyone, but it can be effective in certain circumstances.
Whether the world is in the midst of a global pandemic, the stock market is in free fall or real estate is suddenly on sale, the economic crises that are triggered can make tax time even more difficult.
If you want to stay financially solvent and avoid penalties, interest and other serious consequences, the strategies listed above can help you do it.
Our firm specializes in tax resolution. We also serve clients virtually so don’t hesitate to reach out. 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.
Can I Pay Installments on Federal Income Taxes I Owe If I Can't Afford to Pay it All at Once?
Despite the IRS being slammed right now due to COVID-19, millions of Americans still owe money to the IRS in back taxes for previous years and they’ll increasingly find themselves unable to pay up all at once.
In this article, we walk you through IRS installment agreements and what to do if you can’t afford to pay your back taxes.
Though paying your taxes through an installment agreement is just one of many tax relief options, you likely have other options and might be able to settle with the IRS or lower your amount owed. We encourage you to reach out to our firm for a tax relief consultation to determine your options.
HOW THE IRS IS DEALING WITH COLLECTIONS DURING COVID-19
COVID-19 forced a lot of things to shut down or modify how they do business, including the IRS.
Not only are they busy dealing with processing their usual tax returns, the IRS was tasked with processing the stimulus payments for millions of Americans.
To top it all off, they’re scrambling trying to adjust to the new filing deadline, and a lot of their workforce is working from home, making things slower than usual.
Because of this, and due to the economic hardship millions of Americans are experiencing, the IRS announced it’s “People First Initiative”.
The IRS is pursuing unprecedented actions to ease the burden on people facing tax issues. These new changes include issues ranging from postponing certain payments related to Installment Agreements and Offers in Compromise to collection and limiting certain enforcement actions.
Due to COVID-19, the IRS isn’t processing paper returns right now as they deal with distributing coronavirus stimulus checks.
They also extended the filing deadline for your 2019 taxes another 3 months from the usual filing deadline, making the official deadline to file your taxes July 15th, 2020.
THE BILL COMES DUE
Despite their immediate actions, the IRS will soon flip the enforcement switch back on, and come July 15th, a lot of people who made higher income in 2019 will likely owe back taxes.
At the time you file, you need to send in payment for any taxes due. Failure to pay your tax bill immediately often results in penalties and interest on the balance due after July 15th.
If you find yourself unable to pay in full, the IRS offers installment agreements to taxpayers who owe a balance to allow them to pay their tax burden over a period of time.
HOW INSTALLMENT AGREEMENTS WORK
The IRS divides their installment plans by taxpayers who owe more than $50,000 and less than $50,000.
IMPORTANT: We highly recommend readers to reach out to our firm first. Our clients never have to talk to the IRS, and a properly structured installment agreement made by us can save you money and time in the long run. You might also be eligible for other relief programs or get your penalties and interest forgiven. Reach out to our firm today for a consultation.
Balance Less Than $50,000
Taxpayers owing less than $50,000 may request an installment agreement via the IRS website, by mailing Form 9465-FS Installment Agreement Request or by phone at 1-800-829-1040. You need to provide your Social Security number, date of birth, caller ID from your recent IRS notice, PIN number or AGI, bank address, employer address and the proposed monthly payment amount.
Balance Greater Than $50,000
Taxpayers owing more than $50,000 may request an installment agreement by filling out form 433-F Collection Information Statement. Filling out the form requires information regarding your bank accounts, lines of credit, real estate, total number of dependents, assets, credit cards, wages, non-wage household income, monthly living expenses, down payment amount and proposed monthly payment.
IRS Installment Agreement Details
Installment agreements require a minimum monthly payment of $25. The IRS requests that you include your name, address, Social Security number, phone, tax year and return number on each payment issued. Installment lengths vary from 120 days to 60 months depending on your ability to repay.
IRS Installment Agreement Fees
Installment agreements that take more than 120 days require a setup fee. The IRS charges a setup fee for direct debit agreement or for a standard agreement. You may get a decreased fee if you meet their low income guidelines. The IRS charges a reinstatement fee if you don't pay your bill and your installment agreement goes into default.
Our firm specializes in tax resolution. We also serve clients virtually so don’t hesitate to reach out. 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.
Part 2: Tax Relief and COVID-19
COVID-19 is affecting millions of Americans in all aspects of their life. As of the beginning of May, 1 million Americans tested positive for the disease.
A much more striking number is the number of people whose finances have been shred to pieces with the prolonged shut down and “stay-at-home” orders.
In just the first 6 weeks of the pandemic, 30 million people filed for unemployment, with that number continuing to climb. We’re now almost certainly in the midst of the most difficult financial crisis we’ve seen in the last 100 years.
As an expert tax resolution firm, our job is to help restore the taxpayers financial life when they find themselves in tax trouble, often because of a difficult financial situation.
In this article, we follow up with a quick update on the current state of affairs in regards to your taxes. We’ll walk you through what you need to know about taxes and the COVID-19 pandemic, including tax relief options you can take advantage of.
Note; If you were negatively affected financially by the COVID-19 pandemic and you find yourself behind on your taxes, contact us for a free, no-obligation, confidential consultation.
STIMULUS PAYMENTS
The Treasury Department and the Internal Revenue Service released state-by-state figures for Economic Impact Payments, with 89.5 million individuals receiving payments worth nearly $160 billion in the program's first three weeks.
As of April 17, the IRS issued 89.5 million payments to taxpayers across the nation. More payments are continuing to be delivered each week.
More than 150 million payments will be sent out, and millions of people who do not typically file a tax return are eligible to receive these payments. Payments are automatic for people who filed a tax return in 2018 or 2019, receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits, as well as Supplemental Security Income (SSI) and Veterans Affairs beneficiaries who didn't file a tax return in the last two years.
Source: IRS News Release Here
OWE BACK TAXES? IRS PUTS HOLD ON CERTAIN COLLECTION PROCESSES DURING COVID-19 TAX RELIEF
People who were already in debt and behind on their taxes are finding it really difficult to keep up with the day to day expenses, let alone cover past bills.
Late March, the IRS announced it’s People First Initiative.
"The new IRS People First Initiative provides immediate relief to help people facing uncertainty over taxes," Rettig added "We are temporarily adjusting our processes to help people and businesses during these uncertain times. We are facing this together, and we want to be part of the solution to improve the lives of all people in our country."
These new changes include issues ranging from postponing certain payments related to Installment Agreements and Offers in Compromise to collection and limiting certain enforcement actions. The IRS will be temporarily modifying many of its collection activities and the effort will initially run through July 15. During this period, to the maximum extent possible, the IRS will avoid in-person contacts. However, the IRS will continue to take steps where necessary to protect all applicable statutes of limitations.
Questions? Call Us Today!
IMPORTANT: It’s highly recommended that you are proactive about resolving your tax problems. The IRS is likely to be more lenient and understanding of taxpayers during this time so you might have options and access to programs you might not have had before. Please reach out to our firm for a consultation.
FILING AND PAYING YOUR TAXES
The IRS announced they’d be extending the filing deadline for the 2019 tax year. The new deadline is now July 15th and the IRS won’t be tacking on penalties or interest, regardless of how much taxes you owe.
This gives you a bit more time to gather your documents, search for new deductions, and file and pay your taxes.
YOUR CHANCES ARE GOING UP TO SETTLE WITH THE IRS
The IRS has a program that allows you to settle your tax debt for less than you owe IF you meet certain criteria. This program has existed before and is called Offers in Compromise (OIC).
Though it’s not a new program, if your financial situation changed due to COVID-19, you might now qualify to settle with the IRS. Our firm can help guide you and see if you would qualify.
The IRS reminds people facing a liability exceeding their net worth that the OIC process is designed to resolve outstanding tax liabilities by providing a "Fresh Start."
What To Do Next?
There are other tax relief options that the IRS has under normal circumstances, and with coronavirus news changing literally every day during the pandemic, it’s important to have the best tax resolution firm in your corner so you can get through these challenging times.
Remember, you’re not alone and you have options. More than 13 million Americans had already found themselves in tax trouble before the pandemic started, and many millions more will find themselves behind on their taxes.
Our firm specializes in tax resolution and our experts help during this COVID-19 pandemic. We also serve clients virtually so don’t hesitate to reach out. 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.
Tax Relief and COVID-19
Much like a natural disaster, the coronavirus took the world by storm and forced everyone to seek “shelter at home” and to change their daily habits in an effort to “flatten the curve”. This meant shutting down businesses and within a week, millions of Americans found themselves out of a job.
Businesses who had record sales at the beginning of March found themselves near insolvency by end of March. Despite a $2 trillion stimulus bill, the economy will undoubtedly take a bit hit and take time to recover.
People who were already in debt and behind on their taxes are finding it really difficult to keep up with the day to day expenses, let alone cover past bills.
As an expert tax resolution firm we help people who find themselves behind on their taxes, often through no fault of their own. In this article, we’ll walk you through what you need to know about taxes and the COVID-19 pandemic, including tax relief options you can take advantage of.
Note; If you were negatively affected financially by the COVID-19 Pandemic and you find yourself behind on your taxes, contact us for a free, no-obligation, confidential consultation.
Here’s What You Need To Know About Tax Relief And Coronavirus
New Filing Deadline: July 15th 2020
The IRS announced late March 2020 that they’d be extending the filing deadline for the 2019 tax year. The new deadline is now July 15th and the IRS won’t be tacking on penalties or interest, regardless of how much taxes you owe.
This gives you a bit more time to gather your documents, search for new deductions, and file and pay your taxes. It might not be true tax relief but it’s a good opportunity to seek expert advice and a better tax resolution option. As of this writing, this is the only major new tax relief option for the average taxpayer.
Settle Your Tax Debt For Less Than You Owe
The IRS has a program that allows you to settle your tax debt for less than you owe IF you meet certain criteria. They take a look at the following:
- Ability to pay;
- Income;
- Expenses; and
- Asset equity.
With the coronavirus affecting taxpayers income and asset values dropping, it creates a favorable case for an Offer in Compromise. It’s important to structure it properly in order to have a good chance of settling for less than you owe. A qualified tax resolution firm like ours can help
You Can Get A Break From Paying Your Back Taxes
If the IRS agrees you can’t both pay your back taxes and cover your reasonable living expenses, it may be able to place your account in Currently Not Collectible status.
You can request currently not collectible status by submitting the proper form and proof to the IRS of your income and expenses, as well as whether you can sell any assets you may have or get a loan. As you’ll need to be able to document your inability to pay, be sure to gather copies of all your bills, your most recent paycheck stubs, and statements detailing other sources of income such as alimony, pensions or investments.
Keep in mind that currently not collectible status applies only to your back taxes. You will still have to file tax returns, and you will not be exempted from paying current and future taxes. You will also continue to accumulate penalties and interest on your unpaid taxes. After a year or two, the IRS may review your status, and if you’re able to begin paying your back taxes, then you must do so. If you’re still not able to pay, then your status will be renewed.
What To Do Next?
There are other tax relief options that the IRS has under normal circumstances, and with coronavirus news changing literally every hour during the pandemic, it’s important to have the best tax resolution firm in your corner so you can get through these challenging times.
Remember, you’re not alone and you have options. More than 13 million Americans had already found themselves before the pandemic started, and many millions more will find themselves behind on their taxes.
Our firm specializes in tax resolution and our experts help during this COVID-19 pandemic. We also serve clients virtually so don’t hesitate to reach out. 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.
Tax Day Is Now July 15, Here’s What You Need To Know.
COVID-19 turned the world upside down. With most of the country shut down, businesses closed, and people forced to “stay-at-home” in order to keep everyone safe, it was just a matter of time before the IRS postponed tax day.
On March 21, 2020, the IRS announced that they’d be delaying the tax filing deadline that was normally April 15th. The new tax filing due date is now extended to July 15th.
Simply put, this means you have until July 15th to file your taxes without having to pay penalties and interest, regardless of the amount owed.
Note; if you have prior years of unfiled tax returns, you should file as soon as possible to avoid penalties and interest on those years. The IRS will base the $1200 ($2400 for joint filers) COVID-19 stimulus payments on your 2019 return. If 2019 has not been filed they will base it off of your 2018 income tax return. Contact us for a free, no-obligation, confidential consultation. If you think you might owe back taxes for other years or haven’t filed your 2018 or 2019 income tax return you’re still going to find yourself in tax trouble, so contact us today.
WHAT YOU NEED TO KNOW
#1 - It’s Automatic
Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief. The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds are still being issued within 21 days.
#2 - Your Taxes Are Still Due
Despite having more time to file and pay your taxes, if you’re going to owe taxes they will still be due by July 15th. You just have a bit more time to pay your tax bill but if you don’t pay by July 15th, you will start accruing penalties and interest.
#3 - You Should Still File Correctly and On Time
Waiting until after July 15 to file is also a poor plan, because you will only accrue more penalties and interest if you miss the deadline. Individual taxpayers who need additional time to file beyond the July 15 deadline, can request a filing extension by filing Form 4868. Filing an extension does not mean you have more time to pay. It simply means you’ll end up paying more with penalties and interest, sinking you deeper into a hole.
So make sure you file on time!
#4 - Check Your State Filing Deadline
Though the IRS is offering tax payers some relief by delaying the federal tax deadline to July 15th, you still need to double check when your state taxes are due. Though most states are following the July 15th filing deadline, some states still might require taxpayers to file by different dates.
#5 - It’s still a good idea to file early, especially if you’ll owe taxes
The sooner you file your tax return, the sooner you’ll know if you owe money or you’ll get a refund. Filing before July 15th can give you a heads up and give you time to prepare for the financial burden you might face, especially during these uncertain times.
Our firm specializes in tax resolution and our experts can provide additonal help with COVID-19 SBA Loan programs. We also serve clients virtually so don’t hesitate to reach out. 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.