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Settling Tax Debt With an IRS Offer in Compromise

Settling Tax Debt With an IRS Offer in Compromise

by | Jun 13, 2022 |

An offer in compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service that settles a taxpayer's tax liabilities for less than the full amount owed. That's the good news. The bad news is that not everyone can use this option to settle tax debt; the IRS rejected nearly 60 percent of taxpayer-requested offers in compromise. If you owe money to the IRS and wonder if an IRS offer in compromise is the answer, here's what you need to know. Who is Eligible? If you can't pay your full tax liability or doing so creates a financial hardship, an offer in compromise may be a legitimate option. However, it is not for everyone, and taxpayers should explore all other payment options before submitting an offer in compromise to the IRS. Taxpayers who can fully pay the...

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Common Small Business Budgeting Errors to Avoid

Common Small Business Budgeting Errors to Avoid

by | Jun 6, 2022 |

When creating a budget, it's essential to estimate your spending as realistically as possible. Here are five budget-related errors commonly made by small businesses and some tips for avoiding them. Not Setting Goals It's almost impossible to set spending priorities without clear goals for the coming year. It's important to identify, in detail, your business and financial goals and what you want or need to achieve in your business. Underestimating Costs Every business has ancillary or incidental costs that don't always make it into the budget - for whatever reason. A good example is buying a new piece of equipment or software. While you probably accounted for the cost of the equipment in your budget, you might not have remembered to budget the time and money needed to train staff or for...

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What To Know About Tax-Related Identity Theft

What To Know About Tax-Related Identity Theft

by | May 30, 2022 |

Tax-related identity theft occurs when someone uses a taxpayer's stolen SSN to file a tax return claiming a fraudulent refund. In the vast majority of tax-related identity theft cases, the IRS identifies a suspicious tax return and pulls the suspicious return for review. The IRS then sends a letter to the taxpayer and won't process the tax return until the taxpayer responds. Depending on the situation, the taxpayer will receive one of three letters asking them to verify their identity: Letter 5071C, Potential Identity Theft during Original Processing with Online Option. This letter asks the taxpayer to use an online tool to verify their identity and tell the IRS if they filed that return. Letter 4883C, Potential Identity Theft during Original Processing. This letter asks the taxpayer to...

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Special Tax Benefits for Members of the Military

Special Tax Benefits for Members of the Military

by | May 23, 2022 |

Military personnel and their families face unique life challenges with their duties, expenses, and transitions. As such, military members may qualify for tax benefits not available to civilians. For example, they don’t have to pay taxes on some types of income. Special rules may lower the tax they owe or allow them more time to file and pay their federal taxes.

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Choosing the Correct Business Entity

Choosing the Correct Business Entity

by | May 16, 2022 |

One of the most important decisions you'll make when starting a business is choosing the right business entity. It's a decision that impacts many things--from the amount of taxes you pay to how much paperwork you have to deal with and what type of personal liability you face. Forms of Business The most common forms of business are Sole Proprietorships, Partnerships, Limited Liability Companies (LLC), and Corporations. Federal tax law also recognizes another business form called the S-Corporation. While state law controls the formation of your business, federal tax law controls how your business is taxed. What To Consider Businesses fall under one of two federal tax systems, and the first major consideration in choosing the form of doing business is whether to choose an entity that has...

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Estimated Tax Payments: The Facts

Estimated Tax Payments: The Facts

by | May 9, 2022 |

Estimated tax is the method used to pay tax on income that is not subject to withholding, including income from self-employment, interest, dividends, alimony, rent, and gains from the sale of assets, prizes, and awards. You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough. Filing and Paying Estimated Taxes Both individuals and business owners may need to file and pay estimated taxes, which are paid quarterly. The first estimated tax payment of the year is normally due on the same day as your federal tax return is due. This year, that date was April 18, 2022. For estimated tax purposes, the year is divided into four payment periods, and each period has a specific payment due date. For the 2022 tax year,...

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What To Do if You Missed the April Tax Deadline

What To Do if You Missed the April Tax Deadline

by | May 2, 2022 |

Monday, April 18, 2022, was the tax deadline for most taxpayers to file their tax returns, but if you haven’t filed a 2021 tax return yet, it’s not too late. Here’s what you need to do: First, gather any information related to income and deductions for the tax years for which a return must be filed, then call the office to set up an in-person or virtual appointment.

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Tax Tips for April 2022

Tax Tips for April 2022

by | Apr 29, 2022 |

Click on the links below to jump to each section in this article: File on Time Even if You Can't Pay What To Do if You're Missing Important Tax Documents Tax Credits To Help Cover Costs of Higher Education Small Business: Rent Expenses May Be Tax-deductible Taxpayer Rights: Pay No More Than the Correct Amount File on Time Even if You Can't Pay Generally, taxpayers should file their tax returns by the deadline even if they cannot pay the total amount due, but if you can't, there are several options. Let's take a look at a few scenarios: 1. An individual taxpayer owes taxes but can't pay in full by the deadline. If this is the case, file a tax return or request an extension of time to file by the April 18 deadline. If tax is owed and a return is not filed on time - or an extension is not...

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Cash Management Tips for Your Small Business

Cash Management Tips for Your Small Business

by | Apr 25, 2022 |

Cash flow is the lifeblood of every small business but many business owners underestimate just how vital managing cash flow is to their business's success. In fact, a healthy cash flow is more important than your business's ability to deliver its goods and services. While that might seem counterintuitive, consider this: if you fail to satisfy a customer and lose that customer's business, you can always work harder to please the next customer. If you fail to have enough cash to pay your suppliers, creditors, or employees, you are out of business. What is Cash Flow? Cash flow, simply defined, is the movement of money in and out of your business; these movements are called inflow and outflow. Inflows for your business primarily come from the sale of goods or services to your customers but...

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