tag:blogger.com,1999:blog-63530075748884616422024-03-21T22:39:16.820-04:00A Tax Consultant For All Seasonstaxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.comBlogger68125tag:blogger.com,1999:blog-6353007574888461642.post-33424780828518429422009-07-14T20:40:00.002-04:002009-07-14T20:42:39.347-04:007 Tips From the IRS For Business Owners<p>The IRS just released some important tips for business owners. Read the 7 tips below so you know all you need about business taxes.<br /></p> <p>Anyone starting a new business this summer should be aware of their federal tax responsibilities. Here are the top seven things the IRS wants you to know if you plan on opening a new business this year.</p> <ol><li> <div>First, you must decide what type of business entity you are going to establish. The type your business takes will determine which tax form you have to file. The most common types of business are the sole proprietorship, partnership, corporation and S corporation.<br /><br /></div> </li><li> <div>The type of business you operate determines what taxes you must pay and how you pay them. The four general types of business taxes are income tax, self-employment tax, employment tax and excise tax.<br /><br /></div> </li><li> <div>An Employer Identification Number is used to identify a business entity. Generally, businesses need an EIN. Visit IRS.gov for more information about whether you will need an EIN. You can also apply for an EIN online at IRS.gov.<br /><br /></div> </li><li> <div>Good records will help you ensure successful operation of your new business. You may choose any recordkeeping system suited to your business that clearly shows your income and expenses. Except in a few cases, the law does not require any special kind of records. However, the business you are in affects the type of records you need to keep for federal tax purposes.<br /><br /></div> </li><li> <div>Every business taxpayer must figure taxable income on an annual accounting period called a tax year. The calendar year and the fiscal year are the most common tax years used.<br /><br /></div> </li><li> <div>Each taxpayer must also use a consistent accounting method, which is a set of rules for determining when to report income and expenses. The most commonly used accounting methods are the cash method and an accrual method. Under the cash method, you generally report income in the tax year you receive it and deduct expenses in the tax year you pay them. Under an accrual method, you generally report income in the tax year you earn it and deduct expenses in the tax year you incur them.<br /><br /></div> </li><li> <div>Visit the Business section of IRS.gov for resources to assist entrepreneurs with starting and operating a new business.<br /></div> </li></ol> <p><strong>Links:</strong></p> <ul><li> <div><a href="http://www.irs.gov/businesses/small/article/0,,id=99336,00.html">Starting A Business</a></div> </li><li> <div><a href="http://www.irs.gov/businesses/small/article/0,,id=99930,00.html">Operating A Business</a></div> </li><li> <div><a href="http://www.irs.gov/businesses/small/article/0,,id=98761,00.html">Closing A Business</a></div> </li><li> <div>Publication 4591, Small Business Federal Tax Responsibilities (<a href="http://www.irs.gov/pub/irs-pdf/p4591.pdf">PDF 470.1K</a>)</div> </li><li> <div>Publication 334, Tax Guide for Small Business (<a href="http://www.irs.gov/pub/irs-pdf/p334.pdf">PDF 286.2K</a>)</div> </li><li> <div> <div><a href="http://www.irs.gov/businesses/small/page/0,,id=154342,00.html">Order Publication 1066C, A Virtual Small Business Tax Workshop DVD</a></div> </div> </li></ul>taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-65051447568971575742009-06-30T19:43:00.003-04:002009-06-30T20:23:41.015-04:00What Everyone Needs To Know About Filing S Corporation TaxesIf you are owner or part owner in a S corp, you need to file the Corporation's taxes on the Form 1120s. My best advice to you is, do not attempt to file this form yourself. You need a tax professional such as an <a href="http://taxconsultant4u.blogspot.com/2009/06/do-i-need-tax-attorney.html">Enrolled Agent</a> or CPA. The rules for filing an 1120s are complex and require knowledge as to what expenses can and cannot be taken by an S corp.<br /><br />When you incorporate your company, you must file for the S corp election by filing the IRS Form 2553. If you do not file this election timely, you will have to file the form 1120 and the company will pay taxes at the corporate tax rate. If you file the S corp election and it is approved by the IRS, you will be taxed at your individual tax rate.<br /><br />Your 1120s is due on March 15th if you are a calendar year company and 2 1/2 months after the end of your fiscal year, if you are a fiscal year corporation. You may file for an extension just as you can for your personal income tax.<br /><br />Once the 1120s is completed, each owner will receive a K-1 that they will file with their own 1040 return. Your percentage of the company's profit or loss depends on your percentage of ownership of the corporation.<br /><br />You may have received a salary during the year, so you may have both a W2 which reflects your salary paid throughout the year and the K-1 which shows your portion of the corporate income or loss.(regardless of whether or not you actually received this money, it is still your portion of the income earned or the loss incurred)<br /><br />S corps can take most reasonable business expenses, including the owners' reasonable salary. You will need your previous years tax return(if you have filed before) and your companies profit and loss statements as well as your balance sheet, for your tax preparer to be able to prepare your return. They will also need to know the date your company was incorporated.<br /><br />Hopefully you consulted with a tax professional when you set your corporation up. You have to make decisions about your accounting method and many other business decisions. Being sure you make good decisions up front and knowing about record keeping requirements will make tax time go much more smoothly for both you and your tax preparer.<br /><br />Do your homework and find a competent tax professional who can help you make good business decisions and help you file your tax returns correctly and on time.taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-65536581565787618142009-06-23T19:30:00.002-04:002009-06-23T19:49:32.810-04:00The Secrets To Running a Cash BusinessIf your business is primarily cash, you need to take several precautions. You need to be very scrupulous in keeping records in case you are ever audited by the IRS. Here are some hints:<br /><ul><li>Give each customer a receipt or invoice for payment.</li><li>Attach your receipt/invoice to your deposit slip receipt you get from the bank.</li><li>Keep your deposit slip with your receipt/invoice attached to your bank statement.</li><li>Keep your receipts for all cash purchases you make as well and keep them with the bank statement too so both income and expense records are together.</li><li>NEVER pay personal expenses out of your business bank account.</li><li>If you take cash out before you make a deposit, be sure you account with a receipt for what you spent it on. Better yet, make the deposit and then write a check for the expense.<br /></li></ul>Remember, if you cannot prove an expense, you may not be allowed to claim it on your tax return. There are some exceptions like taxi rides, tolls...etc. For those, just list them on a piece of paper and attach to the bank statement.<br /><br />If you are audited and have your records well organized and your income and expenses substantiated, you should sail through an audit with flying colors. If not, your expenses you cannot prove may be disallowed and than can make assumptions about your income from prior year that may not be close to what you are making now. Keeping good records protects your hard earned money and your business.<br /><br />If you have questions and need assistance contact a tax professional such as an <a href="http://taxconsultant4u.blogspot.com/2009/06/do-i-need-tax-attorney.html">Enrolled Agent</a> or a CPA.taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-75999297513778764172009-06-22T20:16:00.002-04:002009-06-22T20:47:07.999-04:00Top Ten Facts About DependentsMany taxpayers have questions about who qualifies as a dependent for tax purposes. Here are 10 facts to help you out. Your dependent:<br /><br />1. Can never be your spouse<br />2. Must be a U.S. citizen<br />3. Cannot claim the exemption on their tax return<br />4. Must meet relationship test<br />5. Must meet the age test if your child(under 19 or under 24 if full time student unless disabled)<br />6. Must meet the support test<br />7. Is not being claimed on another taxpayers tax return<br />8. Must meet the residency test( lived with you for more than half the year except for temporary absences--like away at college)<br />9. Meets special test if child can be claimed by more than one parent<br />10. Meets the income test<br />For more details and examples of situations see <a href="http://www.irs.gov/pub/irs-pdf/p501.pdf">IRS Publication 501</a>.taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-24103464903875108952009-06-19T21:30:00.003-04:002009-06-19T21:50:17.317-04:00The Secret To Penalty Abatement With the IRSOwe the IRS? Have penalties and interest accrued and seriously increased the amount you owe? You can never abate interest. You can, in some cases, have the penalties abated. Here are a couple of options.<br />1. If you only owe for one or two years you can ask for "first time penalty abatement" on the first year only.<br />2. If you owe for many years, you will need to write a letter to the IRS requesting that they abate the penalties due to reasonable cause and not willful neglect. You will need to provide documents that substantiate what went wrong and why you did not file and or pay your taxes. It will need to be a situation that affected your entire life, not just your taxes.<br /><br />I forgot or I was busy and didn't have time are not considered reasonable cause. Write up a compelling argument, provide documentation to show why your taxes and your entire life fell apart.<br /><br />If you need assistance preparing your letter contact a tax professional such as an <a href="http://taxconsultant4u.blogspot.com/2009/03/secret-to-resolving-your-tax-debt.html">Enrolled Agent</a>.taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-60405554315808351032009-06-16T19:01:00.003-04:002009-06-16T19:52:07.235-04:00Who Else Wants to Understand The IRS Form 940?If you are an small business owner with payroll, you are probably are familiar with the IRS form 941. That return you have to file quarterly. Many business owners are not as familiar with the Form 940. This is the form for reporting your Federal Unemployment Taxes. This form is filed annually, not quarterly, although you are required to make the 940 deposits quarterly if the balance for that quarter is over $500. Use the same 8109 form you use to deposit your 941 taxes just fill in the oval for 940.<br /><br />If the amount of your FUTA tax is under $500 you can wait until the next quarter's deposit is due and add the previous quarters balance to the current quarter. When computing your tax remember that only the first $7000 in wages per employee is subject to the FUTA tax.<br /><br />You compute the tax due by multiplying the rate times the total payroll for that quarter that is subject to the tax. The rate is normally 6.2% but is reduced by the State Unemployment Tax you pay. If you are eligible for the full credit, then your rate is only .8%.<br /><br />Example:<br />Payroll for 1st Quarter 2009<br />Employee A $5000<br />Employee B $8000<br />All $5000 of employee A's wages are subject to FUTA tax<br />only $7000 of employee B's wages are subject so the total amount subject to the tax is $12,000. If you qualify for the full state credit, multiply<br />12,000 x .008 = $96. Your balance is under $500, so no balance for the quarter is due. (Note: the 7,000 is the max for the year not the quarter, so for any employee with wages over 7,000 in the 1st quarter, none of their wages for the other 3 quarters will be subject to the tax)<br /><br />See the <a href="http://www.irs.gov/instructions/i940/index.html">Instructions</a> for form 940 to learn how to compute how much, if any of the state credit you are eligible for. You are required to have paid your state unemployment tax by the due date of the 940 to be eligible for the credit. This return is usually due the 2nd of Feb the following year. If your total balance for the year is $500 or less, you can send the payment in with your 940 return.<br /><br />If you need additional help in completing this form or computing your FUTA taxes, contact a tax professional.taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-37579542846520402042009-06-10T19:55:00.002-04:002009-06-10T20:17:29.512-04:00Help! What If I Can't Make My IRS Payment?<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6jcJL3Z5Ng8E_yYJUu4a_1XjwKxdKfM5duusn3T42LByRuooPpaJo4Vm3qd-j5SrVu-H7pBMJRBfPq9_hOjH8poMirvIHI3wQrsX_bzau03RrR3x_A3ECZjY4wUk679RjvLNZsa_C2NHM/s1600-h/Heavy+Taxes.jpeg"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 128px; height: 143px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6jcJL3Z5Ng8E_yYJUu4a_1XjwKxdKfM5duusn3T42LByRuooPpaJo4Vm3qd-j5SrVu-H7pBMJRBfPq9_hOjH8poMirvIHI3wQrsX_bzau03RrR3x_A3ECZjY4wUk679RjvLNZsa_C2NHM/s320/Heavy+Taxes.jpeg" alt="" id="BLOGGER_PHOTO_ID_5345857436954807218" border="0" /></a><br />If you are one of thousands of taxpayers who are in a payment plan with the IRS, but due to current economic conditions cannot make your payment, you have options. If you have lost your job and your entire financial situation has changed, you need to contact the IRS and be prepared to lay out your new situation. If you expenses have not changed and your income is all that has changed, you may just need proof (like a termination letter) you no longer have a job.<br /><br />If your expenses have changed as well, you may need to provide proof of those changes as well. When you talk to the IRS, only say what has happened and answer honestly and completely any questions they may ask. Do not volunteer information, except to briefly explain your situation. Don't get chatty, even if the person you talk is friendly and personable, remember, they work for the IRS. You could make one simple statement that could cause you problems.<br /><br />If your liability is substantial and you need assistance, contact an <a href="http://www.effectur.com/educationcenter/taxterms/taxterms2.aspx#terms2def2">Enrolled Agent</a>, who can represent you before the IRS. What ever you do, do not ignore your situation. If you default you payment plan, the IRS can levy your bank accounts, retirement accounts and file a lien even if your tax liability is low. Call either the IRS or an Enrolled Agent before the IRS makes a bad financial situation even worse.taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-27560003998813616912009-06-04T21:55:00.002-04:002009-06-04T22:03:34.681-04:00If You Ingore Them Will They Go Away?If you have tax debt and like many tax payers you have decided to ignore them and hope they will go away. You seriously needed to reconsider. If you have received Certified Mail from the IRS and have considered not signing for it, think again. If you ignore the IRS, you do so at your own peril.<br /><br />These notices from the IRS are sent to give you a chance to take care of your tax debt, before the IRS starting taking it from you.....on their terms. As long as you respond before the notice cycle ends, you have the options as to how you repay your liability. Once they start taking it out of your checking, savings and wages, you have lost that control.<br /><br />Sign for those notices and either contact the IRS yourself or contact an <a href="http://www.effectur.com/educationcenter/taxterms/taxterms2.aspx#terms2def2">Enrolled Agent</a> to represent you before the IRS. Act before the options are taken out of your hands and your financial situations worsens.taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-13870143177279389892009-06-01T19:41:00.002-04:002009-06-01T19:55:22.296-04:00Do I Need A Tax Attorney?<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhCPlQCk6AuYfArUTaA8oCb44QplzE8H-bCeyj8_sd9Al45eGLx9MKnpFiDB5U2P1kQXZ9sIVVkRUktUuZkW-DarrbssMh2cZdQKyUdKg3P3Y86vmFOkFz2bxH4806axlNS6Thb8yK_r1qJ/s1600-h/TAX.jpg"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 86px; height: 126px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhCPlQCk6AuYfArUTaA8oCb44QplzE8H-bCeyj8_sd9Al45eGLx9MKnpFiDB5U2P1kQXZ9sIVVkRUktUuZkW-DarrbssMh2cZdQKyUdKg3P3Y86vmFOkFz2bxH4806axlNS6Thb8yK_r1qJ/s320/TAX.jpg" alt="" id="BLOGGER_PHOTO_ID_5342511879796686818" border="0" /></a><br />If you have tax debt, you may be wondering if you need to hire a tax attorney. If you need to go to tax court to resolve you tax problems, then yes, only an attorney can represent you. However, if you like most taxpayers with tax debt, you just need help resolving your tax debt with the IRS, you need an <a href="http://www.effectur.com/educationcenter/taxterms/taxterms2.aspx#terms2def2">Enrolled Agent.</a> An Enrolled Agent is a tax professional who has passed a set of exams administered by the IRS. An Enrolled Agent can represent you before the IRS and help you obtain the best possible resolution of your tax debt.<br /><br />Enrolled Agents are familiar with the IRS policies and procedures and can assist those with tax debt in situations where a tax attorney or CPA is not required. Effectur is a company that employs Enrolled Agents (s0me of our EAs are former IRS employees). Use the link above to the Effectur site and get answers to your tax debt questions and see how to contact a tax consultant to help you on your way to resolving your tax debt.taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-18277095921812164592009-05-05T19:13:00.002-04:002009-05-05T19:30:11.070-04:00Do You Know Your Appeal Rights?<div style="text-align: left;">Did you know that the IRS makes a determination that you disagree with, you may have Appeal rights? If you disagree with the final determination from an audit, a levy or lien you received, you have Appeal rights. You usually have a specific amount of time, often 30 days to file for an Appeal. The notice you received should tell you how long you have to file and how you need to do so. Here are some important points you need to know:<br /><ul><li>Be prepared to show documentation to support your objection.</li><li>An Appeals conference is an informal meeting. You can represent your self or have a CPA or <a href="http://www.effectur.com/educationcenter/taxterms/taxterms2.aspx#terms2def2">Enrolled Agent</a> to represent you.</li><li>The conference can be held over the phone or in person.</li><li>If you still disagree with the findings of the Appeals Officer, you can contest this ruling in Tax Court--this will require an attorney to represent you.</li></ul><a href="http://www.irs.gov/pub/irs-pdf/p5.pdf">Publication 5</a> at irs.gov will give you more details. If you file and Appeal that is just based on your not liking the results, you Appeal will be denied. You need to have documentation to show you have reasonable cause to request a different determination. For instance, your audit showed you owe more taxes than you believe you owe. You found documentation for expenses that were not taken into consideration--that is a valid reason to Appeal.<br /><br />If you need either representation for an Appeal or just someone to help you resolve you tax problems, contact an Enrolled Agent.<br /></div>taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-11573356800650584772009-04-30T19:01:00.002-04:002009-04-30T19:18:10.491-04:00What You Need to Know About Choosing a Tax Preparer?If you haven't filed you taxes or have prior year returns you still have not filed, you may want a professional to help you prepare your returns. Before you choose, you need to consider the following:<br /><ul><li>Beware of anyone promising a refund before they have even reviewed your financial information.</li><li>Be sure you carefully review the return once it is prepared. Your preparer must sign it too.</li><li>Never sign a blank return and never sign it in pencil.</li><li>Find out how long they have been doing tax returns.</li><li>Are they an <a href="http://www.effectur.com/educationcenter/taxterms/taxterms2.aspx#terms2def2">Enrolled Agent</a> or CPA?</li></ul>If the person that you hire is an Enrolled Agent or CPA, they were required to pass an exam to demonstrate their knowledge of taxes. Most tax preparers have no requirements unless they are employed by a reputable company. Be sure yours is qualified.<br /><br />Be aware the IRS hold you accountable for the accuracy of your return, even if you have someone else prepare it. Be sure you at least look over your return to be sure the Social Security Numbers are all correct and all income number were accurately reported. Also be sure you were not given any deductions you were not entitled too.<br /><br />Unscrupulous prepares will give clients deductions they are not entitled to to get them bigger refunds and get a larger fee. It is not legal or ethical to do this. You are the one who will be penalized if you took deductions you should not have. You will pay not only additional tax, but accuracy penalties and failure to pay penalties.<br /><br />Choose your preparer carefully, like you would any other professional. Check their credentials and ask others who they would recommend. A good tax preparer may save you money, a poor one will likely cost you money.taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-8193479014858025602009-04-29T19:07:00.002-04:002009-04-29T19:56:57.833-04:00How Can I Pay the IRS Less Than I Owe?That questions would be number 1 on my top ten list of frequently asked questions. The short answer is that is possible in some cases. You may hear a lot about people being able to pay "pennies on the dollar". I am here to tell you that very rarely happens.<br /><br />If you are elderly, living on a modest fixed income and have basically no assets. Then you may qualify. If you are young make a decent amount of money and have any real estate or other valuable assets, you probably don't qualify.<br /><br />Here are several ways you may be able to pay the IRS less that the total you owe:<br /><ul><li>Offer In Compromise</li><li>Partial Pay Installment Agreement</li><li>Currently Not Collectible<br /></li><li>Penalty Abatement</li></ul>Each of the options only applies in very specific cases. As indicated above, the Offer is very hard to qualify for. A better and more likely option is one of the other choices. A Partial Pay Installment Agreement means after looking thoroughly into your financial situation the IRS determine the amount you are able to pay each month will not full pay your liability before the Statute to collect the taxes expires.<br /><br />Currently Not-Collectible is possible if you current expenses(as allowed by the IRS) exceed your income. Even if you own your home, if your credit or you income is such that you cannot borrow against the equity to repay your your taxes, you may qualify for this option. The IRS will monitor you income every year or two looking for increases in income. If your ability to pay does not change, or even if it changes to allow some payment, the statute to collect may expire before you have paid all you owe.<br /><br />The last option is for those who have a legitimate reason for not filing and or paying their taxes. They will not abate the tax itself nor the interest, but may abate the penalties if you can show that your lack of filing and or paying is not due to willful neglect, but is due to reasonable cause.<br /><br />If you need assistance in implementing any of these options, you may need an <a href="http://www.effectur.com/educationcenter/taxterms/taxterms2.aspx#terms2def2">Enrolled Agent</a> to assist you.taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-84534934374891491742009-04-23T19:44:00.002-04:002009-04-23T20:01:18.666-04:00What If I Forgot To File My Tax Return?If you did not file you tax return by the April 15th deadline you need to file it as soon as possible. Although you will pay a Failure to File Penalty, if you file less than 60 days after the due date, you will pay 5% of the unpaid taxes per month or part of a month the return is not filed. If you file it more than 60 days after it was due, you will pay a minimum of $135 or 100% of the unpaid tax, whichever is smaller.<br /><br />The Failure to File Penalty is more than the Failure to Pay Penalty. The Failure to Pay Penalty is 1/2 of 1% of the unpaid balance for each month the taxes are unpaid. So even if you cannot pay, you should file as soon as possible.<br /><br />If both penalties apply, the Failure to File Penalty is reduced by the amount of the Failure to Pay Penalty.<br /><br />If you have reasonable cause that you can substantiate is not due to willful neglect, then you may be able to get the Failure to File Penalty abated. You need to write a letter to the IRS explaining why you could not file by the deadline. I forgot or I didn't know they were due, are not acceptable reasons. A death in the family or a serious illness or other major life altering event, may be accepted.<br /><br />For more information on Penalties see the <a href="http://www.irs.gov/newsroom/article/0,,id=205326,00.html">IRS website</a>. If you need assistance in filing your returns or have prior year returns that have not been filed, you may need to contact an <a href="http://www.effectur.com/educationcenter/taxterms/taxterms2.aspx#terms2def2">Enrolled Agent</a> or other tax professional.taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-61322151314283985642009-04-21T18:39:00.002-04:002009-04-21T18:54:11.861-04:00If You Are Working, You Are Getting Your 2009 Stimulus PaymentThere have been a lot of questions about the 2009 stimulus payment. The good news is, if you are working, you are already getting it! Beginning April 1, all employer had to adjust the withholding tables down to the number based on the stimulus bill passed by Congress.<br /><br />You should be seeing around $8 per pay check for singles and around $15 for couples. The great part is, unlike the 2008 Stimulus plan, your teenager(over 17) or college student if working, will get the benefit of this plan. For 08, if you were over 17, your parents did not get the extra $300 and if you were claimed on their return, you did not get it either.<br /><br />For 2009, everyone who works gets the benefit. If you are on Social Security, you will be sent a check for $250.<br /><br />To read an article on all the aspects of the Obama Stimulus Plan visit the <a href="http://www.msnbc.msn.com/id/29231790/">MSN Website</a>.taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-78249838174561922052009-04-17T18:40:00.002-04:002009-04-17T18:51:25.886-04:00Things The IRS Will Not Tell You About Tax PenaltiesIf you owe back taxes, you have most certainly accrued penalties and interest. While the IRS never abates interest, unless they have made an error, they do on occasion abate penalties. When you call, they will not tell you this is even a possibility.<br /><br />If you just owe for one year and you have filed your prior years on time and the penalties are not too high (they wont give you the ceiling), you can ask to have the penalties abated and they may do so.<br /><br />Even if you owe for several years, if you can show reasonable cause, they may abate the penalties. Reasonable has to be something major like a death in the family, drug or alcohol addition, other other major life altering disaster.<br /><br />The key is, you have to be able to show that this event affected your entire life, not just whether or not you filed and/or paid your taxes. If you lost your job, your family or had a tragedy that prevented you from doing every day tasks, you need to write a letter to the IRS with a description of what occurred and submit documents to substantiate this.<br /><br />If you need assistance, contact an <a href="http://www.effectur.com/educationcenter/taxterms/taxterms2.aspx#terms2def2">Enrolled Agent</a> or other tax professional to help you write the letter.taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-50848950865488090682009-04-14T18:29:00.002-04:002009-04-14T18:47:06.106-04:00Things the IRS May Not Tell You About Installment AgreementsIf you have tax debt, how you resolve it with the IRS depends on how much you owe. When you call the IRS yourself, they may, or may not advise you as to your options in setting up an Installment Agreement. They will definitely ask you the following:<br /><ul><li>Can you full pay..now...in 30 or 60 days?<br /></li><li>Can you borrow from friends or family</li><li>Can you pay off your balance with a credit card?</li><li>Can defer payment on other bills to pay your taxes?</li></ul>What they may not tell you, is if you balance is under $10,000 you are guaranteed an Installment Agreement and do not have to provide financial information. They may require you to tell them you bank name and your employer, so they have levy sources should you not fulfill your agreement.<br /><br />If you owe $25,000 or less, you will probably qualify for what the IRS calls a Streamline Installment Agreement. Again you are not required to provide you financial information for this payment plan either. You have up to 5 years to pay off your balance. The kicker comes if your balances are old and the statutes are close to expiring. This will cause your payment amount to increase so that all balances are paid before the statutes expire.<br /><br />If you are unable to make the payment that they say it would take for a Streamline or you owe over 25,000, or are unable to make any payment at all, you will be required to provide a financial statement. You will have to list all your assets, income and expenses. If you have equity in your home they will require you to try to borrow against it. If you have a 401K or IRA they will most likely expect you to liquidate.<br /><br />You do have the right to have someone represent you before the IRS, if you find the rules to confusing and need some help. An <a href="http://www.effectur.com/educationcenter/taxterms/taxterms2.aspx#terms2def2">Enrolled Agent</a> can help you and is much less expensive than hiring a tax attorney. An Enrolled Agent can contact the IRS on your behalf and negotiate your Installment Agreement.taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-14267924812102916952009-04-11T10:23:00.002-04:002009-04-11T10:40:07.848-04:00What Everybody Ought To Know About IRS SeizuresIf you have tax debt, you may be concerned about which of you assets the IRS could potentially seize. The basic answer is most of them---up to the amount of your tax debt.<br /><br />Can they seize your Social Security? Up to 15% of it they can. If you have State tax debt as well, they can take a lot more---depending on the state.<br /><br />Can they seize your bank account and 401k/IRA? You bet they can. No matter what your 401K company may tell you, even if you cannot touch your retirement account, the IRS can.<br /><br />Can they seize you home? Yes, but that is unlikely unless your liability is very large, you have been totally non-cooperative and do not have a family. If you have a family, the IRS rarely seizes the families home. They can require that you borrow against the equity in you home, but it is bad PR to throw a family out of its house, so it is rarely done.<br /><br />How do your prevent these seizure from happening? Do not ignore the notices the IRS sends you! If you are unsure of how to negotiate with the IRS then you may need representation. You do not need a tax attorney, unless you are going to tax court. If you simply need representation before the IRS, you need an <a href="http://www.effectur.com/educationcenter/taxterms/taxterms2.aspx#terms2def2">Enrolled Agent</a> to represent you.<br /><br />Having someone in your corner who has experience in dealing with the IRS and knows the rules and your taxpayer rights, can save you a lot of worry and find the best possible resolution for you tax situation. Follow the link above to find more details on what an Enrolled Agent does and if you have questions, there is a link on the site for either a live chat or the ability to leave a message and someone will contact you with an answer.taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-38737289363269149252009-04-09T19:47:00.003-04:002009-04-20T19:19:53.990-04:00Little Known Options For Paying Your Taxes<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh0CKagLrZAlPPuDoEbhZgsiDwIkWyiUAihgR6N69L-vAKuZYKZvrY1PpWkjeQqyW4ILG-3jJIHwCb4JOHrb1LVC-A4FRiTCjKbJ37LPTBJyqpISv7UM1Eu-eCNmFjH-s0E8WBwgyosG7OF/s1600-h/Man+Doing+Taxes.jpeg"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 114px; height: 114px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh0CKagLrZAlPPuDoEbhZgsiDwIkWyiUAihgR6N69L-vAKuZYKZvrY1PpWkjeQqyW4ILG-3jJIHwCb4JOHrb1LVC-A4FRiTCjKbJ37LPTBJyqpISv7UM1Eu-eCNmFjH-s0E8WBwgyosG7OF/s320/Man+Doing+Taxes.jpeg" alt="" id="BLOGGER_PHOTO_ID_5322843373486818306" border="0" /></a><br /><p style="text-align: left;"><strong><span style="font-size:130%;"></span></strong>Read below important info from the IRS on the different ways you can pay your taxes.<br /></p> <p align="left">WASHINGTON — The Internal Revenue Service today reminded taxpayers to file their <span style="border-bottom: 1px dashed rgb(0, 102, 204); background: transparent none repeat scroll 0% 0%; cursor: pointer; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" class="yshortcuts" id="lw_1239320827_28">federal tax returns</span> and pay any taxes they owe by the April 15 deadline. </p> <p>Aware that the economic downturn has affected many people, the agency urged taxpayers in difficult financial situations to file a <span style="border-bottom: 1px dashed rgb(0, 102, 204); cursor: pointer;" class="yshortcuts" id="lw_1239320827_29">tax return</span>, pay what they can and work with the IRS to establish a payment plan that will keep them compliant. </p> <p><strong>Filing and Paying on Time Saves Money</strong> </p> <p>The IRS cautioned that there is a failure-to-file penalty for taxpayers who don’t file their tax returns by April 15 and who owe taxes. Filing by the deadline allows taxpayers to avoid this penalty, even if they can’t pay all or some of their taxes by the deadline. Taxpayers who can’t meet the filing deadline can request an <a rel="nofollow" target="_blank" href="http://www.irs.gov/taxtopics/tc304.html"><span class="yshortcuts" id="lw_1239320827_30">extension of time to file</span></a>. However, an extension of time to file is not an extension of time to pay. </p> <p>Taxpayers who can’t pay the full amount would still benefit from filing their return and paying as much as they can by April 15. Interest and failure-to-pay penalties are due on any unpaid balance and increase the amount that the taxpayer owes. </p> <p>Members of the military and some others serving in combat zones, or in support, can wait until after April 15 to file and pay. As a general rule, <a rel="nofollow" target="_blank" href="http://www.irs.gov/newsroom/article/0,,id=101265,00.html"><span class="yshortcuts" id="lw_1239320827_31">those eligible</span></a> get the extra time penalty-free and interest-free without having to ask for it. Normally, the filing and payment deadline is postponed until 180 days after the service member leaves the combat zone. </p> <p><strong>Electronic Options</strong> </p> <p>IRS offers various electronic payment options to taxpayers to make it as easy as possible to make a full or <span style="border-bottom: 1px dashed rgb(0, 102, 204); cursor: pointer;" class="yshortcuts" id="lw_1239320827_32">partial payment</span> with their return. </p> <p>Taxpayers can make payments online, by phone using a credit or <span class="yshortcuts" id="lw_1239320827_33">debit card</span>, or through the Electronic Federal Tax <span style="border-bottom: 1px dashed rgb(0, 102, 204); cursor: pointer;" class="yshortcuts" id="lw_1239320827_34">Payment System</span>. Taxpayers who e-file their return may use the electronic funds withdrawal option for submitting an electronic payment. They can e-file before April 15 but schedule their payment for withdrawal on April 15. </p> <p>Information on these options, including any fees involved, may be found on this Web site, on the <a rel="nofollow" target="_blank" href="http://www.irs.gov/efile/article/0,,id=97400,00.html"><span class="yshortcuts" id="lw_1239320827_35">Electronic Payment Options Home Page</span></a>. </p> <p>Some taxpayers who itemize may now deduct the convenience fee charged for paying <span class="yshortcuts" id="lw_1239320827_36">individual income taxes</span> with a credit or <span style="background: transparent none repeat scroll 0% 0%; cursor: pointer; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" class="yshortcuts" id="lw_1239320827_37">debit card</span> as a miscellaneous <span style="border-bottom: 1px dashed rgb(0, 102, 204); cursor: pointer;" class="yshortcuts" id="lw_1239320827_38">itemized deduction</span>. The deduction is subject to the 2 percent limit on <a rel="nofollow" target="_blank" href="http://www.irs.gov/pub/irs-pdf/f1040sab.pdf"><span class="yshortcuts" id="lw_1239320827_39">Form 1040, Schedule A</span></a>. </p> <p>Taxpayers may also pay any taxes owed by check made out to the “United States Treasury” using Form 1040-V, Payment Voucher, which must be included along with the payment and tax return. Taxpayers who have already submitted their tax return, but still need to pay all or some of their taxes, may mail the check to the IRS with <a rel="nofollow" target="_blank" href="http://www.irs.gov/pub/irs-pdf/f1040v.pdf"><span class="yshortcuts" id="lw_1239320827_40">Form 1040-V</span></a>. </p> <p><strong>Installment Agreements and Online Applications</strong> </p> <p>Taxpayers who find they can’t make a full payment by the April 15 deadline may consider applying for an <a rel="nofollow" target="_blank" href="http://www.irs.gov/businesses/small/article/0,,id=108347,00.html"><span class="yshortcuts" id="lw_1239320827_41">installment agreement</span></a>. </p> <p>An installment agreement allows taxpayers to pay any remaining balance in monthly installments. Taxpayers who owe $25,000 or less may apply for a payment plan electronically, using the <a rel="nofollow" target="_blank" href="http://www.irs.gov/individuals/article/0,,id=149373,00.html"><span class="yshortcuts" id="lw_1239320827_42">Online Payment Agreement application</span></a>. Or they may attach <a rel="nofollow" target="_blank" href="http://www.irs.gov/pub/irs-pdf/f9465.pdf"><span class="yshortcuts" id="lw_1239320827_43">Form 9465</span></a>, Installment Agreement Request, to the front of their tax return. Taxpayers must show the amount of their proposed monthly payment and the date they wish to make their payment each month. The IRS charges $105 for setting up the agreement or $52 if the payments are deducted directly from the taxpayer’s bank account ($43 for qualified lower-income taxpayers). </p> <p>The IRS will automatically give taxpayers the low income installment agreement fee if they qualify. The taxpayer does not have to request it. Taxpayers are required to pay interest plus a late payment penalty on the unpaid taxes for each month or part of a month after the due date that the tax is not paid. A taxpayer who does not file the return by the due date — including extensions — may have to pay a failure-to-file penalty. </p> <p>For more information about filing and paying taxes, visit <a target="_blank" href="http://irs.gov/"><span class="yshortcuts" id="lw_1239320827_44">IRS.gov</span></a> and choose <a rel="nofollow" target="_blank" href="http://www.irs.gov/individuals/article/0,,id=118506,00.html"><span class="yshortcuts" id="lw_1239320827_45">1040 Central</span></a> or refer to the <a rel="nofollow" target="_blank" href="http://www.irs.gov/pub/irs-pdf/i1040.pdf"><span class="yshortcuts" id="lw_1239320827_46">Form 1040 Instructions</span></a> or IRS <a rel="nofollow" target="_blank" href="http://www.irs.gov/pub/irs-pdf/p17.pdf"><span class="yshortcuts" id="lw_1239320827_47">Publication 17</span></a>, Your <span style="border-bottom: 1px dashed rgb(0, 102, 204); cursor: pointer;" class="yshortcuts" id="lw_1239320827_48">Federal Income Tax</span>. Taxpayers can download forms and publications from IRS.gov or request a free copy by calling toll free 800-TAX-FORM (<span style="border-bottom: 1px dashed rgb(0, 102, 204); cursor: pointer;" class="yshortcuts" id="lw_1239320827_49">800-829-3676</span>). </p> <p><strong>Related Items:</strong> </p> <ul><li><a rel="nofollow" target="_blank" href="http://www.irs.gov/newsroom/article/0,,id=206235,00.html"><span class="yshortcuts" id="lw_1239320827_50">IR-2009-37</span></a>, Credit and <span class="yshortcuts" id="lw_1239320827_51">Debit Card Fees</span> Related to Tax Payment Are Deductible </li><li><a rel="nofollow" target="_blank" href="http://www.irs.gov/irs/article/0,,id=206233,00.html"><span class="yshortcuts" id="lw_1239320827_52">IR-2009-36</span></a>, IRS Urges Taxpayers To e-file Extension Requests by April 15 Filing Deadline<br /></li></ul>taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-60132643686456680912009-04-06T19:32:00.002-04:002009-04-06T19:55:46.782-04:00Who Else Wants to Avoid Estimated Tax Penalties?You probably know April 15 is the date your tax return is due, but did you also know it is the date your first 2009 Estimated Tax Payment (ETP) is due. If you are self employed, then you need to pay 4 equal estimated tax payments based on your taxes for 2008. Here are 3 ways to be sure you do not get hit with the ETP penalty. <br /><ul><li>Your total payments are less than $1000</li><li>If you have paid at least 90% of the taxes due or<br /></li><li>100% of your prior year taxes (whichever is smaller)</li></ul>Although normally you need to make 4 equal payments, but if you make unequal payments because your earnings are unequal. you can annualize your income and file Form 2210 to see if you owe a penalty. This may avoid or reduce the penalties.<br /><br />Pay your ETP by each of the following dates:<br /><ul><li>April 15</li><li>June 15</li><li>September 15</li><li>January 15 (of the following year)</li></ul>Some people make the mistake of thinking they are due after the end of the quarter like payroll taxes, but that is not true, they are due as listed above. Be sure your payments are marked as an ETP and what year you are paying for. You can print coupons to mail in with your checks on www.irs.gov.<br /><br />You may be able to get the penalties waived if your failure to pay was due to natural disater or other casualty or if you retired (after turning 62) or became disable during the year and your lack of paying was not due to wilful neglect.<br /><br />If you have additional questions see IRS <a href="http://www.irs.gov/publications/p505/index.html">Publication 505</a> or contact a tax professional.taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-8090320287210963332009-04-02T20:13:00.002-04:002009-04-02T20:43:42.516-04:00What Everybody Ought to Know About Death and TaxesIf you are executor of the estate of someone who has died, you may wonder what happens to their unpaid tax debt. Many think the tax debt dies with the person. This is not true. If the decedent has assets, then the IRS will require that the estate pay out the surviving equity in the taxpayer’s assets as defined by local property laws.<br /><br />The executor of the estate must apply to the IRS for a Employer ID Number and set up estate checking account in the decedent's name. Follow this link to apply for an <a href="http://www.irs.gov/businesses/small/article/0,,id=97860,00.html">EIN</a> for the estate. Don't be confused by the name Employer Identification Number. This is the correct ID number.<br /><br />You will have to deposit the proceeds from the sale of all assets the decedent owned into the checking account set up for the estate which is tied to the EIN you received. Should the sale of all assets from the decedent not be sufficient to cover the tax liability, the remainder of the liability is written off.<br /><br />This is often a complicated matter and you may need the services of an attorney and a tax professional to assist you with handling the estate. If you have additional questions about your responsibilities for the estate you should review IRS <a href="http://www.irs.gov/publications/p559/ar02.html#d0e189">Publication 559</a>.taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-54782476393753529612009-03-30T21:15:00.002-04:002009-03-30T21:37:58.343-04:00What Everybody Ought To Know About Payroll TaxesOne of the most common errors small business owners make is neglecting to pay their payroll taxes. It is important the you as the business owner know when you payroll taxes need to be deposited and verify that they are being made. Even if you have a bookkeeper or accountant that you trust, the responsibility is ultimately yours.<br /><br />The IRS website or your accountant can help you determine how often your payroll taxes must be deposited. Whether they are monthly or biweekly depends on the amount of your payroll. Many business owners make the mistake of paying other bills instead of paying payroll taxes. This is always a mistake, as basically, this is stealing. You are taking money from your employees (that should go to the IRS) and using it to pay your bills.<br /><br />The IRS vigorously pursues employers who do not pay their payroll taxes. They will even close down your business if you cannot meet your payroll tax requirements.<br /><br />Save your business money (in penalties and interest you would have to pay) and save yourself the hassles of the IRS potentially assessing a portion of that payroll liability to you personally. Be sure your payroll taxes are paid on time and your Form 941 and 940s are filed on time.<br /><br />If you are behind in paying your payroll taxes and need someone to help you on the road to compliance, contact an <a href="http://www.effectur.com/educationcenter/taxterms/taxterms2.aspx#terms2def2">Enrolled Agent</a>.taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-7385822939427693332009-03-27T18:47:00.003-04:002009-03-27T19:05:41.291-04:00Who Else Wants To Avoid A Tax Levy?<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhipvelBmIkCSUds-xnC8O0SrvuC0KKI5TStYVt-DJSJv1WABXV_CKaweDNLgPke8DYvrL9JCgz_6IRbXa5WYqYfEC86DYBmqWsZV6I98vyvLYh_52YYbpW5ihznGDWWG-75Jf9KisK0RpW/s1600-h/Heavy+Taxes.jpeg"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 128px; height: 143px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhipvelBmIkCSUds-xnC8O0SrvuC0KKI5TStYVt-DJSJv1WABXV_CKaweDNLgPke8DYvrL9JCgz_6IRbXa5WYqYfEC86DYBmqWsZV6I98vyvLYh_52YYbpW5ihznGDWWG-75Jf9KisK0RpW/s320/Heavy+Taxes.jpeg" alt="" id="BLOGGER_PHOTO_ID_5318007092712634402" border="0" /></a><br />If you are one of thousands of tax payers who owe back taxes, you may be concerned about how to avoid a tax levy. The answer is simple, but few heed are willing to heed this advice.<br /><ul><li>Do Not Ignore Notices You Receive From The IRS!</li></ul>Many tax payers tend to ignore these if they feel they cannot pay the taxes due and hope the IRS will stop sending the letters. They even refuse to sign for letters that are sent certified mail, thinking that what they don't know won't hurt them. Wrong.<br /><br />Yes, the letters may stop coming, but what will start coming instead are wage levies, bank levies and if you are self employed, levies to your clients or those who rent properties you own.<br /><br />The simple way to prevent this from happening is to either call the IRS yourself or contact an <a href="http://answers.yahoo.com/question/index?qid=20090325151712AAiBsFz">Enrolled Agent</a>. If you decide to call yourself, you need to be sure you are aware of all your rights so read up on the collection process and tax payer rights on the <a href="http://www.irs.gov/">IRS website</a>.<br /><br />If you decide to call an Enrolled Agent, your representative will help you understand what you need to do and how much time you have to respond to prevent a levy from being issued. They will need to know what letters you have received and when those letters are dated.<br /><br />It really is easy to stop the levies from happening, by being willing to work on taking care of your tax liability now. You may want to set up an Installment Agreement and pay over time, or you may find you can borrow to repay the liability in full. You may even find you cannot afford to make a payment at all and submit your financial information to be considered Currently Non Collectible. An Enrolled Agent can help you wade through the process and find the best option for you.taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-63867895669057597352009-03-25T19:29:00.002-04:002009-03-25T19:57:00.140-04:00The Secret to Resolving Your Tax Debt Without a Tax AttorneyIf you have tax debt with the IRS, you only need a tax attorney if you have to go to US Tax Court. If you simply need representation before the IRS, you need an <a href="http://www.effectur.com/educationcenter/taxterms/taxterms2.aspx#terms2def2">Enrolled Agent</a>. An Enrolled Agent has been recognized, by the IRS after passing rigorous exams administered by the IRS, as qualified to represent tax payers.<br /><br />Once you have signed a limited Power of Attorney form, the Enrolled Agent will be able to talk to the IRS on your behalf. Your tax situation may be very complicated and having someone in your corner who is familiar with the IRS' processes and procedures can insure you find the best option for your particular situation.<br /><br />A thorough review of your current financial situation will help the Enrolled Agent understand what options will or will not work for you. Many people hear the ads for "pennies on the dollar" resolution. An Enrolled Agent can help you determine if you qualify for this option (few tax payers actually qualify). Even if you do not qualify for that resolution option, an Enrolled Agent will find the best option for you.<br /><br />Effectur is a company that employs Enrolled Agents to represent their clients before the IRS. While resolving your tax debt is not inexpensive, hiring an Enrolled Agent is certainly a less expensive alternative to a tax attorney and will ensure you have the inside track on what options are available for your situation.<br /><br />Click on the Effectur icon to the left of this blog to get answers to your questions and find out how we can help provide you with peace of mind.taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-26220444709625620612009-03-22T13:12:00.002-04:002009-03-22T13:25:11.803-04:00Form 940<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhP5uejLDng1HMEeRVhEABX_LUi4LZOBF-8Q1pg_KTBZ_v4ENYctQTDulXiY5G8EQF5mg4AfNwYFWOSltl_287gvM4IzBNgS89HTqg5tW1rZng0YenaLNF_QoGLiE8aizTWkTo83QmQJz35/s1600-h/Doing+Taxes.jpg"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 320px; height: 240px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhP5uejLDng1HMEeRVhEABX_LUi4LZOBF-8Q1pg_KTBZ_v4ENYctQTDulXiY5G8EQF5mg4AfNwYFWOSltl_287gvM4IzBNgS89HTqg5tW1rZng0YenaLNF_QoGLiE8aizTWkTo83QmQJz35/s320/Doing+Taxes.jpg" alt="" id="BLOGGER_PHOTO_ID_5316064399039188098" border="0" /></a><br />If you have employees, then you are required to file an annual 940 form with the IRS. Some people confuse this form the the 941 form which you have to file by the end of the month following the end of each quarter.<br /><br />From 940 is for your Federal Unemployment taxes. The amount you pay is usually reduced by the amount of State Unemployment taxes you pay each quarter to your state. You do not get to take this credit, however, if you have not paid those State Unemployment taxes by the time you file your 940.<br /><br />Although Form 940 is only filed once a year (by Feb 28th), you do have to deposit the taxes quarterly. You must file them by the end of the month following then end of the quarter, if your balance do is $100 or more. If the balance is less than 100 you can wait until the next quarter in which the cumulative balance is 100.<br /><br />Be sure when you do your calculations you only need to count the first 7,000 of wages for each person. You may have payroll software that does the calculations for you, but if you are a small business and do not, I always kept a worksheet showing my figures for each quarter.<br /><br />Be sure when you complete your deposit Form 8109 to make your deposit, that you fill in the 940 oval so this amount will not go towards your 941 taxes. Also be sure you fill in the oval for the correct quarter.<br /><br />If you do not make your payments or file your form timely, you will incur penalties and interest. If you need assistance in completing you payroll tax forms, contact an <a href="http://www.effectur.com/educationcenter/taxterms/taxterms2.aspx#terms2def2">Enrolled Agent</a> or other tax professional.taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0tag:blogger.com,1999:blog-6353007574888461642.post-26056625238682026102009-03-16T20:01:00.002-04:002009-03-16T20:22:45.889-04:00Tax Penalties<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvhr3Cpv5m3QwqqaRBArGzl7nnkyQtT-VWtwjnext1Sn53QJuynZIP9cxaSZ3NCVRNyTE63oqz3-HMGzrAGg8AM9TtOiwoo4z18re3rVS416wsEC7NrfDM7d3wGhlZJUJ2o9s8IU_wqMRD/s1600-h/April+15-tax+due.jpg"><img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 240px; height: 174px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvhr3Cpv5m3QwqqaRBArGzl7nnkyQtT-VWtwjnext1Sn53QJuynZIP9cxaSZ3NCVRNyTE63oqz3-HMGzrAGg8AM9TtOiwoo4z18re3rVS416wsEC7NrfDM7d3wGhlZJUJ2o9s8IU_wqMRD/s320/April+15-tax+due.jpg" alt="" id="BLOGGER_PHOTO_ID_5313945531865989314" border="0" /></a><br />If you don't file and or pay your taxes by the 4/15 deadline, you will incur penalties and have to pay interest on the unpaid balances. You may not be aware just how expensive that can be.<br /><br />The failure to file penalty is higher than the failure to pay penalty. The penalty for failure to file is 5% per month or part of a month for each month that the return is late.(not to exceed 25% of the unpaid taxes. If you file more than 60 days after the due date(or the extended due date), then the penalty is smaller of $135 or 100% of the tax due.<br /><br />You may be eligible to have the penalties abated, if you can provide that you have reasonable cause(in the eyes of the IRS) for filing your return late. Usually this is for traumatic or tragic events that prevented you from being able to file on time. You must submit a letter to the IRS requesting this abatement and explaining and substantiating why you did not file on time.<br /><br />The failure to pay penalty is 1/2 of 1% for each month or part of a month that the taxes remain unpaid. If you have both failure to file an failure to pay penalties, then the failure to file penalty is reduced by the amount of the failure to pay penalty. The minimum penalty stated above, still applies.<br /><br />If you have an extension and did not full pay your taxes by the due date, as long as you paid at least 90% of the total tax due, you will not have a failure to pay penalty.<br /><br />If you need help with your taxes, contact an <a href="http://www.effectur.com/educationcenter/taxterms/taxterms2.aspx#terms2def2">Enrolled Agent</a> or other tax professional.taxconsultant4uhttp://www.blogger.com/profile/07215035441879407030noreply@blogger.com0