Category: tax payment plan

Tax Payment Plans

Check Tax Return Online

Check Tax Return Online

Since the 2008 Economic debacle, the U.S. has looked for ways to maximize income while minimizing expenses. As a government’s chief method of income is the taxation of its citizens, the Federal government has looked to allowing the lapse of Bush era tax breaks, raising taxes where appropriate, and stricter guidelines for tax professionals.

This ethos is trickling down to the state level. In some of the harder hit states, new and tighter regulations concerning the taxpayer and his/her tax bill are coming into existence and the taxpayer is facing new and more intense scrutiny. This effectively translates into greater responsibility and headache for the professional tax preparer.

Already living in one of America’s most highly taxed states, the average citizen in the state of New York may not be aware of the ordinances in place that dictate nearly every phase of the tax preparer’s profession and his/her relationship with corporate and individual clients. Tax preparers have to pay a fee and register with the New York Department of Taxation and Finance if they make a least ten tax returns in a calendar year (deeming them professionals). As the Internal Revenue Service already has tax preparer registration in place, this is a double whammy for tax preparers who reside in the state of New York. Twice represented and twice accessed for the privilege of practicing within New York.

Of course, state and federal governments maintain that this regulation is good for the state and good for the country. Regulating tax preparers provides additional assurance that more citizens are in compliance with tax regulations (regulating at every level will ensure more scrupulous compliance). This regulation may persuade people to seek internet services in order to check tax return online and streamline the entire process.

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Choosing A Tax Attorney

English: Ewa Łętowska, Polish lawyer
English: Ewa Łętowska, Polish lawyer (Photo credit: Wikipedia)

Its tax time and that means you need a good Phoenix tax lawyer. A tax attorney can help you by managing your taxes, maximizing your taxes by finding exemptions and tax benefits and even ensuring that any IRS tax problems are managed quickly and effectively.  However, for this, you do need to find a talented professional tax lawyer and we have created a short guide just for this reason.

Step no 1 – Ask around with friends and family to find a reliable lawyer. People who are happy with their lawyers are always happy to recommend them.

Step no 2 — Check qualifications by accessing the American Bar Association website. You can also check whit the BBB and the State Financial Authorities.

Step no 3 — Set up an appointment with the lawyer and discuss your finances. Select an attorney with experience and knowledge in your area of taxation.

Step no 4 — Sign a contract with the lawyer. You may have to pay a small fee upfront to retain the lawyer. Hand over all the paperwork that is necessary for the lawyer but always check back with them to ensure that your tax application is complete.

Avoid hiring a tax lawyer who is your relative. You need a impersonal opinion of your taxes and relatives cannot provide that.

5 Tips For Self-Employed Taxpayers

When an individual works for themselves, he or she is considered self-employed for taxes, which means the individual is responsible for paying and filing taxes on a scheduled basis. These individuals will have some advantages and disadvantages at tax time.

Five Tips For Self-Employed Taxpayers

  1. A self-employed individual will have to pay income and self-employment tax. The self-employment tax includes Social Security and Medicare taxes. Normally these taxes are withheld from an individual’s wages, but a self-employed individual will have to pay these taxes by filing a Form 1040 Schedule SE. However, the individual does get to deduct half of this tax from his or her income on Form 1040.
  2. The earnings will need to be reported on a Schedule C or C-EZ Tax Form. This form will show whether an individual made money from a business or had a loss from the business. It will be used in addition to the Form 1040 and Schedule SE.
  3. Sometimes, a self-employed person will have to make estimated tax payments during the year. Even though some people work as an employee on other jobs with taxes withheld, it is still important to make these estimated taxes if an individual has any self-employed income. An underpayment of taxes at the end of the year could result in a penalty. Therefore, making quarterly estimated tax payments will save the individual from being penalized for underpaying.
  4. If an individual had business expenses, these will be listed and deducted from the Schedule C earnings. The expenses must have concurred during the current tax year to claim as a deduction. A business expense is one that is common and necessary for the operation of that business.
  5. Many common deductions can be overlooked, such as printing business cards and postage. Forgetting about a deduction can cause an individual to pay more taxes.

An independent contractor or sole proprietor of a business will have different tax obligations than an employee. For instance, the self-employed individual will pay more Social Security and Medicare taxes than an individual who is not self-employed. An employer will pay part of these two taxes for their employees, but a self-employed individual will be responsible for all of the taxes.

How to Estimate Self-Employment Payments

  • An individual can use the income tax return from the previous year to get an estimate for payments.
  • Look at the income and the self-employment taxes to figure the payments.
  • If this is the first year for self-employment, the taxes can be estimated based on the income that an individual plans to earn that year.
  • Adjustments can be made to the estimated payments after the first quarter if the estimate appears to be too low or too high.

Self-employed individuals need to file accurate tax returns with the proper deductions. Keeping good records throughout the year will ensure that no deduction is overlooked. At the end of the year, the taxes will be easier to file when the information is accessible along with estimated payments.

Having a difficult time coming up with the cash to pay your taxes? Visit Check Depot to get the cash you need right now.

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Learn About Tax Liability

Tax liability can have you make wrong choices. However, the IRS has been helpful to some people in difficulties such as these. For example, the unemployed and people running small business will benefit from the ‘fresh start’ initiative. In fact, their installment agreement will ensure that there is easier and rational payments made.

Doug Shulman, the IRS commissioner stated that the agency has a duty to work with troubled taxpayers to meet their tax liabilities. Taxpayers have to understand the penalties against defaults arising out of failure to pay taxes on time. For example, 5% of unpaid taxes will be imposed against returns filed late on a monthly basis.

» The analysis for such failures is done at a lower limit of 0.5% and upper limit of 25% each month.

Therefore, if you are unemployed or self-employed, you will have about six months delay for you to pay your taxes. This will only apply to taxes due in 2011 and only if you had requested for an extension through IRS form 4868.

This form however does not excuse you from paying due taxes.

The initiative permits the delay to run up to 15th of October. You will need to show that you have been unemployed for more than 30 days continuously in 2011 or before the 17th of April 2012. Incase of self employment, show that your business earnings has dropped for more than 25% because of the economy.

Form 1127-A can be found at the IRS website: IRS.gov, should help you apply for the program and is due in April 17th.

You should be aware of a couple of things. For example, the earning and time limits that will accrue penalties.

Another thing to be aware about is the compounding interest payable on unpaid taxes.

If you do not have a financial statement then you should know that the threshold for the part payment has been increased by the agency. The fines are lowered, the interest will still be compounding.

In such cases, the IRS will increase the time for your part payment when you owe $50,000. The time can be increased to 72 months. This extended time can only be permitted if you consent to a monthly direct–debit payment.

This agreement can be set up online. To get an approval, you will need to have filed your returns and avail your personal details.

It is necessary that you file your tax returns even if you may accrue tax liability. Try not to make decisions that are irrational. Consult with the IRS through their websites and understand their conditions to qualify for the initiative.

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The IRS is Making Immense High-Tech Strides

Electronic Filing Services Are Taxpayers’ First Choice!

This tax season, the IRS has devised a plethora of useful virtual features to facilitate the taxpaying process greatly.  Tara Lynn Wagner of NY1 reports as follows:

“Once again, it’s that time of year when people’s thoughts turn toward taxes. The good news is that help has arrived for all those persistent procrastinators, however.

In 2012, taxes will not be officially overdue until after April 17 – two days later than the traditional filing deadline. This is per IRS spokeswoman Dianne Besunder.

Ms. Besunder further advised that prompt filing yields correspondingly faster refund receipt – especially for electronic filers.  According to Besunder, a whopping 79 percent of US taxpayers filed via electronic means last tax season.

Using electronic filing services also offers taxpayers the advantage of enhanced accuracy in addition to much speedier returns. Besunder stated that overall error incidence of e-filed returns is only one percent – as opposed to traditional paper-based filings’ cumulative inaccuracies of 20 percent.

The best news is that  taxpayers whose gross annual income falls below $57,000 may utilize IRS electronic filing software for free. Registration via the official IRS website at IRS.gov is the only requirement.

Virtual Service (“VS”) is an innovative IRS pilot program that is currently in the beta testing phase. VS permits taxpayers to talk with IRS reps via video conferencing from 10 major IRS locations throughout the US.

For further details about VS, various IRS YouTube videos, and social media networking resources, call 1-800-829-1040 or visit IRS.gov.

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How long should you keep your tax documents?

Your tax documents are very important documents that you may need to refer to way after the time you actually file your return. More importantly, the IRS may need to refer to these documents at some point in the future and you therefore need to make sure that you do not dispose of your tax documentation once you have filed your returns thinking that you will never need the documents again.

Whilst most people are aware that they need to keep their tax documents for a certain amount of time many are not sure how long they should keep them for. Of course, it is impractical to hoard your tax documents forever, as otherwise you may find that you can no longer move in your office of home due to the amount of folders, paperwork and documentation that you have!

However, it is important to keep your documents for at least a set minimum number of years and if at all possible for as long as you can – something you could do if you have some sort of storage facility available to you such as an unused garage where you could store old tax folders (although you must ensure that the facility you use is secure due to the personal information that your tax documentation can contain).

One thing to bear in mind when deciding how long to hang on to tax documents is that tax offices in different states will hang on to your documents for varying amounts of time. For example, in some states the IRS is able to carry out an audit within three years of your tax returns being filed, which means that after that period they will most likely get rid of the documents. In other states they may have four years from the date of the return to carry out an audit should they decide to do so. You should make sure that you find out what the timescales are in your state and hang on to your records for at least the same amount of time as the IRS so that you have something to refer to in the event of an audit.

However, another thing to consider is that if you get rid of your tax documentation once the IRS also gets rid of it there will be nothing to refer to in the event that you need the information for other purposes in the future, which is why some people like to hang on to their tax documents for as long as they are able to.

Andrew writes frequently about personal finance as well as issues effecting both consumers and small businesses, covering everything from credit cards to mortgages to how to setup an umbrella company .

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