A Tax Consultant for All Seasons

No, I don’t mean the Olympics. As I indicated in a blog a few days ago, the company I work for - Effectur was in the running for the Best Place to Work in the Triad.  There are 35,000 companies in the Triad area and they were divided into 3 groups, Small, Mid-Size, Large. Effectur was running in the Mid-Size Group. We came in second. While needless to say, I was disappointed in not winning First, I am still proud of what we accomplished.

It is still quite an accomplishment to even come in second place amoung so many businesses. It attests to the commitment of our management team to provide not only excellent customer service, but excellent employee service. To give you an idea, one the items that they brought up in the presentation, was that the President of our company sent an employee to a Ritz Carlton hotel so she could see how the Ritz treated people. He wanted her to experience their level of service so she could come back and provide that level of service to her fellow employees.How many companies are willing to do that!!

We may have taken second place, but we are tops on my list of the best places to work! I am proud to be an employee of a company that strives to treat both its customers and it’s employees with integrity, professionalism, and compassion.

Yes,  you certainly can, but you may not want to.  If you only owe the IRS a small amount, it would make sense to call the IRS yourself and set up a payment plan. However, if you owe the IRS a sizable amount, you may need representation. Does that mean you need to hirer a lawyer? No, but you may need an Enrolled Agent.  An enrolled agent can talk to the IRS on your behalf.  Why would you pay someone to help?

Did you know if you call the IRA yourself, they will ask you to commit to a larger amount that you might be comfortable with? They may ask for a lot of financial information, which depending on the amount you owe, you may not be required to give them.  Unless you are very sure you know all your rights and otpions, you may need an Enrolled Agent to represent you.  A CPA can also represent you before the IRS.

There are several option that you may qualify for, but the IRS representative you are speaking with, may not make you aware of these option. Their job is to have you repay what you owe as quickly as possible.  At Effectur, we  have many clients who were in a payment plan that they got themselves, but the amount is more than they can pay. We help negotiate a lower rate in many cases. What you have to pay depends on what you owe and what your net income is (income less expenses (the ones the IRS allows).

If you need peace of mind in dealing with the IRS, Effectur is here to help.

Today rather than talk about taxes, I want to talk about where I work. My employer (Effectur) is in the running for Best Place To Work in the Triad. (the Triad being our local tri-city area)  I share this information with pride.

If you have ever Googled any of the other tax resolution companies on the internet, you will see a lot of negative comments. You will quickly surmise that none of these are in the running as Best Place to Work.  Our management team has created an environment that is both employee and customer service oriented.

I am proud to work for a company that strives to stand out above the crowd.  A company that has as it’s mission statement “Providing Our Clients With Peace of Mind”.  I hope I will be able to blog next week to tell you we won first place. But even if we don’t, we were nominated and have been recognized for our company’s efforts to provide a fantastic place to work.  They are well aware that a great work environment inspires employees to do their best for their clients.

If you need assistance with a tax resolution problem, check out our web link above.  Google Effectur. Google other tax resolution companies too. Check with the BBB. Pick the one with the least complaints and the most satisfied clients. I know who that will be.

If you are a small business owner and need information on setting up or running your business, two websites that provide assistance are the IRS and the Business.gov site.  Business.gov has available a new toolkit you can use to:

• Search for information, forms, and contacts from federal, state and local governments
• Find topics of current interest to the nation’s small business community
• Get a listing of licenses and permits that apply to your business
• Watch videos featuring expert advice from successful entrepreneurs and small business owners

The website is a great find and you will find a lot of useful information to help you start or run your small business. If you find you need additional help on tax matters, contact a tax professional such as an Enrolled Agent for more help.

The IRS just published a helpful calendar for small business owners. This calendar has important dates and information that will help you meet your tax deadlines.  Read the information below from the IRS that tells you how to get the calendar and has other helpful information.

Are you running a small business?  Would you like a calendar packed with valuable business tax information?  The IRS is offering a free calendar to help you keep track of tax deadlines and important dates throughout the year.

You might be surprised to learn that the IRS publishes a calendar, like our popular Web site, IRS.gov, the calendar is part of our many services to help owners and operators of small businesses.

The Tax Calendar for Small Businesses and Self-Employed Individuals from the Internal Revenue Service is a 12-month calendar filled with deadline reminders, important information such as changes in deductible mileage rates and business tips such as how to organize business and travel expenses.

This widely-used special business tax calendar provides the small business owner with a ready resource for meeting his or her tax obligations.

Each page of the calendar highlights different tax issues and tips such as business planning, accounting methods, tracking your records, and protecting your information that are especially relevant to small-business owners.  The calendar has room each month to add notes, state tax dates or business appointments.

Topics include information on general business taxes, IRS and Social Security Administration customer assistance, electronic filing and paying options, retirement plans, business publications and forms, common tax filing dates, federal holidays and much more.

The 2008 IRS Tax Calendar for Small Businesses and Self-Employed, Publication 1518, is now available in both English and Spanish versions.  For an online version of the calendar, visit the Small Business Self-Employed pages on the IRS Web site at IRS.gov. On IRS.gov you can download the tax calendar due dates and actions, and import them into Outlook or iCal. Printed copies of the tax calendar can also be ordered online or by calling 800-TAX-FORM (800-829-3676).

Remember that for the genuine IRS Web site be sure to use .gov.  Don’t be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.
Links:

• Small Business and Self-Employed One-Stop Resource
• Small Business Products Online Ordering

Is your business venture truly a business, or is it a hobby. The IRS has very specific rules about what constitutes a business, and what determines if it is a hobby. Listed below is important information from the IRS on how you can determine which applies to you. If you need more information, contact an Enrolled Agent or other tax professional.

Fishing, Gardening, Golf, Sewing, Woodworking, Horsemanship, Scrap Booking, Stamp and Coin Collecting. Millions of Americans participate in activities for pleasure that can also result in a profit.

The IRS isn’t trying to spoil your fun but if your favorite activity makes a profit every year or so, there may be tax implications that surprise you. For one thing, you must report and pay tax on income from almost all sources, including hobbies.

What is a hobby? Hobbies, also called not-for-profit activities, are those activities that are not pursued for profit. What is a business? Generally, your activity is considered a business if it is carried on with the reasonable expectation of earning a profit.

If you are not sure whether you are running a business or simply enjoying a hobby, here are some of the factors you should consider:

• Do you run the activity in a businesslike manner?
• Does the time and effort you put into the activity indicate an intention to make a profit?
• Do you depend on income from the activity?
• If there are losses, are they due to circumstances beyond your control or did they occur in the start-up phase of the business?
• Have you changed methods of operation to improve profitability?
• Do you or your advisors have the knowledge needed to carry on the activity as a successful business?
• Have you made a profit in similar activities in the past?
• Does the activity make a profit in some years?
• Can you expect to make a profit in the future from the appreciation of assets used in the activity?

An activity is usually considered a business if it makes a profit during at least three of the last five tax years, including the current year.

An exception is breeding, showing, training or racing horses. Such activity is presumed to be a business if it makes a profit during at least two of the last seven years.

If you are conducting a trade or business you may deduct your ordinary and necessary expenses. An ordinary expense is an expense that is common and accepted in your trade or business. A necessary expense is one that is appropriate for your business.
Losses from a not-for-profit activity (hobby) may not be used to offset other income. It is possible to claim some deductions for hobby activities as itemized deductions on your Form 1040 income tax return. However, there are special rules and limits to the deductions you can claim, and those deductions may not exceed the gross income from your hobby.

More information is available on the IRS Web site at IRS.gov. A good resource is Publication 535, Business Expenses, found on the web site or by calling 800-TAX-FORM (800-829-3676).

Remember that for the genuine IRS Web site be sure to use .gov. Don’t be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.

Link:

• IRS Publication 535, Business Expenses

Yes, I know it is only July, but now is the time to prepare for filing your 2008 W2 forms. If you are tired of filing in those forms by hand, there is help.  The Social Security Administration has an online option for filing your W2s. Follow the link above for instructions on how to sign up. You can file up to 20 W2s online. The program will even fill in your W3.  You can log in and out and when you are ready you can finalize your W3.

It will even file your W2/W3 online and allow you to print out copies to keep for your records and copies to give your employees.  Even if you only have a few to complete this is so much easier than doing them by hand. There is no fee for this service, but you should go ahead and sign up now. Avoid the winter rush to sign up.

You will have to sign up and wait for a pin number to come in the mail. Once the pin number comes in the mail you will be able to go online and complete and file your W2s.

If you are a CPA/Accountant or Enrolled Agent,  you can get one sign in for all your clients and do each of your clients online. Visit this link for more information on the options for tax professionals.

If you have a small business that you run out of your home, or use a portion of your home for your business, the IRS has published important information you need to read. Understanding what you need to do now, before you sit down to do your taxes will make actually doing them so much easier.  Read the information below published by the IRS and keep good records.

If you plan to run your small business out of your home you may be temped to “write-off” many of your household expenses. But how do you know what is deductible and what is not? The IRS has some advice that may help answer the question: “Can I take a Home Office Deduction?”

Generally, expenses related to the rent, purchase, maintenance and repair of a personal residence are not deductible.

However, if you use part of your home for business purposes you may be able to take a home office deduction. Expenses that can be deducted include the business portion of real estate taxes, mortgage interest, rent, utilities, insurance, painting, repairs and depreciation.

In order to claim a business deduction, you must use part of your home:

• Exclusively and regularly as your principal place of business, as a place to meet or deal with patients, clients or customers in the normal course of your business, or in connection with your trade or business where there is a separate structure not attached to the home; or
• On a regular basis for certain storage use such as inventory or product samples, as rental property, or as a home daycare facility.

In addition, if you work as an employee you can claim this deduction only if the regular and exclusive business use of the home is for the convenience of your employer and the portion of the home is not rented by the employer.

“Exclusive use” means a specific area of the home is used only for trade or business. “Regular use” means the area is used regularly for trade or business. Incidental or occasional business use is not regular use.

Non-business profit-seeking endeavors such as investment activities do not qualify for a home office deduction, nor do not-for-profit activities such as hobbies.

Example: An attorney uses the den in his home to write legal briefs or prepare clients’ tax returns. The family also uses the den for recreation. The den is not used exclusively in the attorney’s profession, so a business deduction cannot be claimed for its use.

These requirements are discussed in greater detail in Publication 587, Business Use of Your Home available at IRS.gov or ordered by calling 800-TAX-FORM (800-829-3676).

Link:  Publication 587, Business Use of Your Home

Most taxpayers who end up in trouble with the IRS do not realize they do have certain rights as prescribed  by law. Included below is information published by the  IRS that explains what those rights are and has links to several resources concerning those rights.

Whether you file a Form 1040EZ or a complicated corporate return, you will benefit from knowing your rights as a taxpayer and being familiar with the IRS’ obligations to protect them. The goal of the Taxpayer Rights Corner is to be your one-stop shop for taxpayer rights information during every step of your interaction with the IRS.

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Know Your RightsYou have rights as a taxpayer when dealing with the IRS.

• Publication 1, Your Rights as a Taxpayer
• Protecting Taxpayer Rights, Fact Sheet
• The Taxpayer Bill of Rights 2, as passed by Congress
• Taxpayer Bill of Rights II, IRS Training Publication
• Low Income Taxpayer Clinics , Access to Representation

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Your Civil Rights Are ProtectedUnder no circumstances will the Internal Revenue Service tolerate discrimination by its employees, grantees, contractors, and/or subcontractors. NO ONE shall be excluded from participating in, be denied the benefits of, or be subject to discrimination because of: race, color, sex, national origin, disability, reprisal, or age in programs or activities funded by the Department of Treasury - Internal Revenue Service.

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Taxpayer Advocate ServiceThe Taxpayer Advocate Service (TAS) is an IRS program that provides an independent system to assure that tax problems, which have not been resolved through normal channels, are promptly and fairly handled.

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NoticesWhat should you do if you receive a notice from the IRS?

• Understanding your notice
• Topic - IRS notices

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Your Rights to RepresentationLearn more about granting power of attorney.

You are entitled to similar protection of confidentiality with respect to tax advice given by a federally authorized tax practitioner as with an attorney.

Every taxpayer is entitled to have access to representation. The Low Income Tax Clinic grant program is designed to help accredited academic institutions and non-profit organizations provide low to no-cost tax assistance (such as representing the taxpayer during an audit or tax collection effort) and/or tax outreach to taxpayers for whom English is a second language. Click here for IRS Grant Program Information.

• Frequently Asked Questions

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ExaminationWe accept most taxpayer’s returns as filed. If we inquire about your return or select it for examination, it does not suggest that you are dishonest. The inquiry or examination may or may not result in more tax. To learn about your rights during the examination process, and for information about how audits are conducted;

• Examination of Returns, Appeal Rights, and Claims for Refunds - Publication 556
• Market Segment and Specialization Program (MSSP)

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Appeal RightsIt is your right to appeal any action taken by the IRS to change your account.

• Topic - Your Appeal Rights
• Appeals Division

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Collection ProcessLearn about the process IRS may follow to collect overdue taxes, including a summary of your rights and other important information about the collection process.

• Pub 594, The IRS Collection Process
• Topic: Tax Collection
• Frequently Asked Questions
• Collection Financial Standards
• Form 9465 - Installment Agreement Request

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Innocent SpouseThe Reform Act of 1998, broadened the relief from joint liability available to spouses who file joint returns.

• Innocent spouse relief

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Refund OffsetIf you are due a refund but have not paid certain amounts you owe, all or part of your refund may be used to pay all or part of the past-due amount. This includes past-due federal income tax, other federal debts (such as student loans), state income tax, and child and spousal support payments.

• Treasury Offset Program
• Frequently Asked Questions

Form 944 was created by the IRS to reduce the paper work for small business owners. If your business has less than $1000 due from Federal Withholding, Social Security and Medicare, you can file an annual Form 944. You would file this annual return rather than the quarterly 941 forms you previously had to file. The IRS website has additional information on filing this form as well as the 941. If you think your taxes are likely to be over that, you are better off filing your quarterly 941s, and paying your payroll taxes as required.

You can now file both your 944 and 941s electronically. For details on who can file electronically and how you file, visit the Small Business section of the IRS website.

Most importantly, be sure you file them and pay them on time. Save yourself money and headaches by being sure your payroll taxes are paid on time. Don’t make the mistake many small business owners make and put off paying those taxes in favor of paying other bills. Believe me a persistent creditor is nothing compared to the problems you will have if you don’t pay your payroll taxes.  See my last blog or read my most recent article on ezine for more information(see the link on the right side of the blog).