A Tax Consultant for All Seasons

A lot of clients ask us - Will filing bankruptcy eliminate the taxes I owe? The short answer is no. Very rarely does filing bankruptcy get rid of taxes you owe. If you file chapter 13 all that happens is that collection procedures stop while you are in bankruptcy. They start back 60 days after you come out of bankruptcy. Filing bankruptcy also increases the chance that you will be audited. Although there are times when filing bankruptcy may be appropriate, be sure you are not doing so to eliminate taxes. Call your tax consultant if you are unsure what is best for your situation.

Many people think that preparing their own tax returns will save them money. Each day on the job I see how much people doing their own tax returns can really cost them. As a tax consultant I see so many mistakes people make when completing their returns. They leave out items that are taxable like gambling winnings, interest, sales of stock or property. If they have a small business, they include items on their Schedule C that don’t belong there. I have seen people include their mortgage interest on the Schedule C instead of the Schedule A. So my advice for the day is, hire a tax professional to complete your returns and avoid paying penalties and interest for filing an incorrect return.

1. You need to Apply for Financial Aid for College

2. You Need to Apply for a Loan

3. You want to avoid penalties and interest from the IRS

4. You owe the IRS and want to get into an Installment Agreement

5. You have a wage levy and need resolution.

6. You don’t want to increase your chances of being audited.

7. You need to determine your social security benefits

8. You need to determine your unemployment compensation

9. You want a good credit score

10.. You want to apply for a job where good credit is crucial

Many taxpayers assume they will need a tax attorney if they need help with the IRS. Most of the time your problems can be solved by an Enrolled Agent. An Enrolled Agent is a tax professional who is admitted to practice before this IRS. This means that an Enrolled Agent calls the IRS on your behalf. They can prepare your tax returns to get you in compliance with the IRS and then negotiate the most favorable resolution within the bounds of the IRS regulations. Companies like Effectur employ Enrolled Agents on their staff to assist in the resolution process. So before you hire a tax attorney to help you with you IRS issues, call a tax consultant at Effectur.

I am constantly amazed at how many people overestimate how many exemptions to put on their W4. In case that doesn’t sound familiar, that is the form you sign with your employer to determine how may exemptions you can claim. This determines how much or how little tax is taken out of your paycheck. Keep in mind that while it may seem like a good idea to claim a lot of exemptions so you have more take home pay, this really creates problem when the taxes comes due on April 15. It is always easier to take it out a little at a time rather than owing it all on April 15. Plus, if you can not pay it all then, you will end up owing more in penalties and interest.

Also, the IRS is cracking down on taxpayers who habitually overstate their exemptions. If you continue to owe year after year the IRS can require your employer to lock in the number of exemptions it feels is appropriate. Unless you own your own home you should only claim an exemption for yourself and any other dependents you have. If you are married and your spouse works, each of you should claim one less than you would normally or you will still end up owing at tax time. As always, if you need help determining how to complete your W4, a tax consultant can assist you.

As a tax consultant I frequently have clients who have not filed or paid their taxes on time due to circumstances beyond their control. While there is no guarantee, the IRS does abate penalties if the reasons are sufficient. Natural disasters such as hurricanes, a long illness of yours or a family member you are caring for can be reasons the IRS may abate the penalty. A key factor is that you filed and paid your taxes as soon as the event which prevented you from doing so had ended. A tax consultant or Enrolled Agent can help you create a letter that contains the necessary information .

Many people find themselves in situations where their financial circumstances have drastically changed. If you are in such a situation, you made need help. A reliable tax resolution company can assist you in determining whether you qualify for the Currently Non Collectible status or CNC. If your financial situation is such that you monthly expenses exceed your income, and have done so over the last several months, you may qualify to put repaying the IRS on hold. This status doesn’t make your liability to them disappear, but does give you a chance to get back on you feet before you begin making payments to the IRS.

This week’s tip is a reminder that the end of 2007 is almost here. Now is the time to take stock of any tax saving moves you need to make before the end of the year. Charitable contribution have to be made by Dec 31. Be sure to keep cancelled checks and receipts. Some churches provide a contribution statement in early January. Make contribution to your IRA(though you have until 4/15 and do and still take the deduction0. Make a file now to put all your W2s, 1099s, mortgage interest statementS and other items you plan to deduct. If you need help planning, contact a tax consultant. If you still haven’t filed you 2006 returns and need IRS help contact Effectur.

Most small businesses would really benefit from a good bookkeeper, tax consultant, or if you are have several employees a payroll service. So many small businesses make problems for themselves in not keeping their books and payroll correctly. A lot of small businesses make a huge mistake in taking taxes out of employees checks, but not making the Federal Tax Deposits they should. Basically the IRS considers this stealing. If you take the money and spend it on other items for you business, you have used money that belongs to the government to do so. If you get in this boat and need IRS help use this link for information or to get help.

If you receive a notice that your return has been selected, don’t panic. As long as you can document the deductions and expenses you have taken you are ok. They want to see that you have proof of your expenses and that you don’t have income that you haven’t claimed. If you need help and can do a correspondence audit(you don’t have to show up in person), you can get help. For IRS Audit help contact Effectur.