Stephen Wallick July 3, 2019 No Comments

Are You Overpaying Business Taxes?

If you’re in business, you already know a portion of your annual earnings is going to the IRS. But if you’re like one-third of the country’s small businesses, you fear you’re paying more than required. No matter how many deductions and credits you dig up, you know, deep down, you’re missing at least one or two.

That insecurity only worsens when tax laws change. Even if your business uses professional tax preparation services, there are things you need to do throughout the year to keep your tax bill at a minimum. 

Structure Your Business Correctly

The way your business is structured plays a huge role in how much taxes you’ll pay for that year. This is especially important with the new tax laws, which change taxes for partnerships, S Corporations, and sole proprietors. It’s essential to make sure your business has the right structure as soon as possible. A business structure assessment is a quick and easy way to make sure you have things set up to maximize your tax savings.

Track All Expenses

Many businesses realize they might have missed a deduction or two sometime during tax season, usually when they’re pulling everything together. It can be all too easy to misplace a receipt or lose track of your mileage during a business trip. Make sure you’re set up to capture as many deductions as possible throughout the tax year by choosing apps that make it easy to snap a receipt. Some apps even automatically update your bookkeeping software with the information from the receipts you scan.

Defer Money

If you haven’t already, you should set up a retirement plan. This will not only protect you in your golden years, but it can also provide tax savings. You can contribute up to $6,000 before taxes to a traditional IRA if you’re under the age of 50, and that amount increases to $7,000 for those age 50 and up. You may also be able to tax deduct those contributions, as long as you or your spouse aren’t provided a retirement plan through work. It’s important to look into your retirement savings options and start putting money in there before the tax year is over.

A 15-minute free business structure assessment can help you get a head start on your savings for this tax year. Only ten of these assessments are available, provided on a first come, first served basis. Contact us today to make sure you’re enjoying all the tax savings available to you.

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Stephen Wallick June 26, 2019 No Comments

Protecting Yourself From Tax Collection Scammers

There’s no shortage of frauds and scams out there, especially those designed to steal your payment information or passwords. Taxes are a prime target, with criminals well aware that the IRS collects information that could be used to steal your identity. With just a Social Security number and your contact information, a criminal could apply for a credit card on your behalf.

Realizing the dangers these threats pose, the IRS has taken measures to protect taxpayers, but there are still things you, the consumer, need to do to keep yourself safe from scammers. Here are a few tips to help you get started.

Know How to the IRS Communicates

The IRS makes clear that it will not call, text, email, or use social media to communicate with taxpayers. If you get any correspondence from the IRS, it will come in the mail, on IRS letterhead. And even then, you should contact the IRS at 800-829-1040 between 7 a.m. and 7 p.m. if you have questions about the mailing you’ve received. There are rare instances where the IRS may call or show up at your home, but at that point you’ll have received multiple notices in the mail about the issue.

Be Careful How You File

With e-filing having overtaken paper-based filing, more taxpayers than ever are using online sites to submit their taxes. You probably have heard some of the most popular online tax preparation services, but scammers can easily set up a website, copying the design of the original site, and trick taxpayers into providing their information. If you do use an online service, make sure you go directly to the site itself rather than clicking on a link in an email.

Avoid Tax Resolution Fees

If you’re in hot water with the IRS, it can be tempting to consider those services that promise to resolve all your problems. Unfortunately, these services also often charge exorbitant fees. Many of the services they offer are things you can do yourself, such as setting up installments or making an Offer in Compromise. The IRS provides information on all of this on its website, but you can also ask your own tax preparer to explain your options and help you navigate the process.

Tax collectors don’t limit their scams to tax season, so be sure to be on alert year-round. If you do suspect someone has tried to scam you, report it to the IRS as soon as possible so they can keep an eye on your account and take measures to protect others.

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Stephen Wallick June 19, 2019 No Comments

Enrolled Agent vs. CPA for IRS Tax Issues

When you get one of those pesky IRS notices in the mail, your first response may be to panic. One quick call to your tax preparer, though, and you’ll likely get the peace of mind you need. A large part of that peace of mind comes from knowing you’re in good hands with your tax preparer, particularly if you see either CPA or EA after that professional’s name.

But while you may be familiar with Certified Professional Accountant, EA may be new to you. An IRS Enrolled Agent is licensed by the federal government to represent taxpayers in front of the IRS. A CPA, on the other hand, is licensed at the state level. Both types of professionals can stand in front of the IRS on a taxpayer’s behalf, but the requirements and type of licensing set them apart.

Requirements for EAs vs. CPAs

To become licensed as a CPA, an accountant gets a college education, then passes the four-part Uniform Certified Public Accountant Examination, administered by the state. Although there are plenty of CPAs who practice tax law, landing that credential doesn’t necessarily mean they will. CPAs often focus on business auditing and bookkeeping.

An IRS Enrolled Agent passes a three-part test called the Special Enrollment Examination, which focuses on tax laws and issues. An EA doesn’t necessarily have an accounting background and may simply focus on tax preparation. Some IRS EAs will also develop a legal specialty, which comes in handy when navigating complicated tax laws.

Tax Problems and Representation

If you’re ever subjected to an audit, it’s important to make sure you have either a CPA or EA to represent you. In many cases, your representative will merely need to help you gather the documentation necessary to answer the IRS’s questions. However, if it comes down to an audit, either a CPA or EA will have the expertise necessary to stand in front of the IRS.

One benefit of working with an EA, though, is that your professional can represent you in a court of law in any state. This is because this tax person is licensed by the federal government. A tax attorney, on the other hand, is licensed only to practice law in that state. A CPA is a great help when it comes to accounting and bookkeeping, but an EA is better once a person’s taxes get to the auditing phase.

When it comes to filing your taxes, it’s important to know you’re working with the right person. While a CPA is great for bookkeeping and business auditing, the best person to represent you if you find yourself in an auditing situation is an enrolled agent, at which point the tax specialty comes in handy.

For a free consultation, please visit my online calendar.

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Stephen Wallick May 20, 2019 No Comments

How Can I Get Rid of a Federal Tax Lien?

If you owe money to the IRS, the agency can eventually levy a federal tax lien on your home or personal property. When you try to sell the asset, the IRS will collect its money before you get your share. In many cases, though, you’ll have trouble making that sale as long as the lien exists on it, forcing you to try to get the lien removed beforehand. Getting a lien removed isn’t always easy, but it can be done, provided you have the money to clear things up.

Resolving Your Tax Issue

The first step toward having a federal tax lien removed is to pay the IRS what you owe. If you believe that the finding was in error, you can go through the appeals process, but this can take time. If you owe the debt, you may be able to work out a payment arrangement, but you’ll still have to pay off the entire amount before the lien is released. The good news is, you can possibly resolve this by filing Form 12277 to request withdrawal of the lien, which will allow you to have it pulled while you’re making payments on it.

Removing a Lien on Your Home

Once your debt is paid in full, the IRS should file a Certificate of Release of Federal Tax Lien with the authority that holds the lien. After a short time has passed, you should follow up with the appropriate authorities to make sure the lien is no longer on your property. If you’re selling your house, the title company will perform this search before the sale can go through, so it’s important to make sure it’s been cleared before putting your property on the market.

Clean Up Your Credit

Unfortunately, your property isn’t the only thing you have to worry about. A tax lien can damage your credit score. Paying it off doesn’t always clear that up, either. It’s important to pull a copy of your credit report at least 30 days after you’ve paid off your tax debt to make sure it’s been removed. If not, you should be able to contact the credit bureau in question and dispute the listing.

A tax lien can be a temporary setback, but as long as you know the steps to take, you can have it resolved. If you believe the lien is in error, it may help to work with a tax professional to discuss what options you have. You may be able to work with the IRS to resolve any misunderstanding that might have led to the lien.

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Stephen Wallick September 19, 2018 No Comments

Credit Myths and Misconceptions

There’s a ton of information out there and most of it is wrong. There’s information about how your credit score is calculated and even worse… how it is impacted by you simply being a consumer.

Let’s look a few of these and try to dispel them

  • Your score drops if you check your own credit.  This widespread credit misconception fools a lot of people, but viewing your own report and score is counted as a “soft inquiry” and doesn’t change the score one way or another. “Hard inquiries” by a lender or creditor, such as those resulting from your applying for credit, can slightly lower your credit score. If you’re shopping for a loan and concerned about harm to your score, know that multiple loan inquiries within a period of a few weeks are usually treated as a single inquiry to minimize impact.
  • It helps to close old accounts.  This credit myth advocates closing old and inactive accounts to hike up your score. However, this might inadvertently have the opposite affect and lower your credit score because now the credit history appears shorter. If you don’t trust yourself to put a card away in a safe place and not use it, then consider canceling newer accounts.
  • Paying off a negative record means it’s taken off your credit report.  Generally, negative records, such as collection accounts and late payments, will remain on your credit reports for up to seven years from the date of first delinquency. Paying off the account sooner doesn’t mean it’s deleted from your credit report; instead it’s listed as “paid.” Of course, it’s smart to pay your debts, both to reduce the total amount of debt you owe and to show your willingness to repay your obligations but expect the negative record to have some effect until it is purged from your report.
  • Co-signing doesn’t mean you’re responsible for the account.  Regardless of this credit myth, if you open an account jointly or co-sign a loan, you will be held legally responsible for the account. Activity on the joint account is displayed on the credit reports of both account holders. If you co-sign for a friend’s auto loan and that person doesn’t make the payments, your credit profile will be hurt and vice versa. The only way to end the dual liability is to have one party refinance the loan or persuade the creditor to formally take you off the account.
  • Paying off a debt boosts your score by 50 points.  Contrary to this credit myth, credit reporting agencies companies determine your credit score via a complex algorithm that uses hundreds of factors and values to calculate it. It’s almost impossible to calculate the difference in points changing one factor might make. It’s wise to pay your bills on time, work to lower your debts and ask that any inaccuracies be corrected. A proven record of sound financial behavior and time will have the most significant impact on your score.

No matter what your score is, the smartest thing you can do with respect to your credit is simple, keep a strong record of on-time payments, keep your credit card balances below 40% of your credit limit, and make sure that the items on your credit score are correct.  Anything and everything else is too hard to manage.

Consult an experienced Enrolled Agent for more tips on how to repair your credit score.

Stephen Wallick September 12, 2018 No Comments

Why You Should Never, Ever Pay Early (With One Exception)

Much has been written about the struggles business owners face to get paid on time, and how to get clients who are dragging their feet to pay up. Clients stalling on payments, combined with unexpected expenses, can put your business in a cash flow crunch.

As the owner of a small business, you probably have experienced watching the mailbox each day for a payment that’s overdue, even as you pay your own bills and invoices upon receipt.

If so, what I’m about to tell you may seem stingy, scrimpy, or downright tight:

Never pay early.

You won’t always have control over when you get paid, but you do have some leeway when it comes to when you pay your own bills.

Apart from the fact that you are a nice person and may feel a need to make people happy, why would you pay early? What benefits are being derived?

The harsh reality is that unless there is a clear, compelling reason for making early payments to anyone (cash discounts, pricing discounts, special delivery arrangements), DO NOT do it. Hold on to your cash as long as you possible can by closely managing accounts payable.

Hold on to your cash.

Take as long as you possibly can to pay your company’s bills without incurring late fees or impacting your ability to operate. Having said that, carefully manage your communications and relationships with your vendors.

Normally, your vendors will have terms established for the payment of their invoices presented for the delivery of their respective products or services. In order to maximize cash flow, you should attempt to extend the payment a minimum of a week or two beyond those established terms.

So here’s the ONE Exception…

Certainly, if sufficient cash is available to meet the other obligations of your company, you should take full advantage of any and all cash discount opportunities. The relative returns from cash discounts are usually quite significant and are well worth the extra effort required to manage shorter payment timeframes.

  • For example, assume a vendor offers a 2% cash discount for payments received within 10 days as opposed to the normal 30-day terms, and your company’s standard payment cycle would dictate that payment be made in 40 to 45 days. By making the payment within the discount terms you are losing the use of the funds at least 30 days sooner than would otherwise be the case. However, your company realizes a 2% return for the use of those funds over the one-month period, the equivalent of a 24% annual return (2% x 12 months).

There are very few investment opportunities that offer such attractive returns with the certainty of a cash discount. This is obviously one of the clear and compelling reasons for paying early.

Consult an experienced Enrolled Agent for more advice regarding your small business expenses.

Stephen Wallick September 5, 2018 No Comments

How Do Unpaid Taxes Affect Your Credit Score?

Your credit score after unpaid taxes

Even after you have paid the IRS, your credit record is still damaged to the point that everything except cash purchases costs you more. Believe it or not, Federal Tax Liens show on your credit record even after they are released.

This means they still hurt your credit score

It’s true that they will issue a release that you can have posted to the credit record that shows the tax has been paid, but because you have had a lien in the past your credit score is much lower than it should be.

There is another procedure that can even remove all references to the lien from your credit report once we have satisfied the outstanding tax liability.

Credit scores usually improve dramatically.

Many taxpayers have been able to have IRS reduce the penalties.

For taxpayers who don’t file an Offer In Compromise – We can help with a request to the IRS to Abate the IRS penalties for “Reasonable Cause.” This can be as simple as explaining to the IRS that your basement flooded.

It’s a great way to drastically reduce the total amount you owe the IRS.

Many taxpayers use our firm to keep the IRS away from them and their families. Most of our clients never meet or speak with the IRS. We make the IRS call us, so our clients can go to work and carry on a normal life.

If you are looking for a solution to your tax problems and want to get your life back, contact your Middle Tennessee tax resolution experts. We specializes in ending the misery that comes along with your IRS problems.

Stephen Wallick August 29, 2018 No Comments

End IRS Problems Now

I’m sure you have heard of IRS programs where you pay less than you owe.

How much less?

Well, if you qualify, A LOT LESS!

The IRS looks at these old tax liabilities and knows they will not collect most of them. So, they have set up this great program called Offer In Compromise. This program allows taxpayers to pay what they can afford regardless of the amount the IRS says they owe.

The Offer Program requires the total amount owed to be included in the settlement. Therefore, once you qualify and have an accepted Offer, you are completely paid up and your tax problems are finally over. And, even payroll taxes can be settled this way.

When I say Settle Up, I mean completely, 100%!

Once the IRS has accepted the amount you offer and you pay the reduced amount, then the IRS releases all Federal Tax Liens.

Your IRS nightmare is over and you get your life back.

Your IRS problem will not go away by itself. You only have three choices to end your IRS Nightmare.

You can do one of the following:

1. Pay the IRS 100% of What They Think You Owe Today.

2. Set up a Monthly Payment Which Never Goes Away Due to the Additional Penalties and Interest That Continue to Add Up.

3. Reduce the Total amount Owed to an Affordable Number and Get on with Your Life!

If you are looking for a solution to your tax problems to get your life back, contact your Middle Tennessee tax resolution experts. We specializes in ending the nightmare of your IRS problems.

Stephen Wallick August 22, 2018 No Comments

A Way Out of IRS Problems

Are there ways out of IRS problems?

Yes, there are ways to end IRS Problems, but you must decide to end them, no one else can decide for you. When you decide that enough is enough and you want to have the things that everyone else has and you’re really ready to do something about your IRS Problems, there are options available to you!

Our firm specializes in ending the misery of IRS Problems

There are many possible ways to end these problems, but they all require you to take the first step. No one can help you until you decide to help yourself. We are very successful in ending IRS Problems, but the taxpayer must be ready to follow our advice. We can walk you through the IRS maze. We do all the talking to the IRS. We also handle all meetings and correspondence with the IRS..

Our clients NEVER meet with the IRS!

Solutions to IRS Problems often include filing old tax returns to get you in current compliance with the IRS. IRS will not negotiate with anyone unless they are current with all required filings. This means all income tax returns and payroll tax returns, if you have employees. The IRS assumes that if you will not at least get your required tax returns filed, then why waste the time trying to negotiate with you.

It’s a rather simple request and we have easy ways to complete old tax returns. We realize that many taxpayers have lost old records or just can’t find them! We can help you file old tax returns without any records, but you have to take the first step. Once we have filed all your old tax returns, then the IRS will at least listen.

If you are looking for a solution to your tax problems, take that first step and contact your Middle Tennessee tax resolution experts. We specializes in ending the misery of your IRS problems.

 

Stephen Wallick August 15, 2018 No Comments

Can the IRS Take Your Pension, Retirement, or Social Security Check?

Imagine having the IRS attack your pension, retirement or Social Security check..

The IRS leaves no stone unturned in the never-ending quest to collect taxes, penalties and interest. Sure, people think the IRS can’t or won’t levy retirement funds.

They hope that when they get old, the IRS will forget about them and how much they owe the IRS. Don’t believe it, the IRS never forgets. They just keep adding penalties to what you owe each day until they find you, or your money, or your income source. Then it’s Pay Day for the IRS. Taxpayers with IRS problems never can build up retirement funds or assets! You’ll always be looking over your shoulder for the IRS.

This usually means you have to work until you die. You’ll have no opportunity to save up for the days when you can’t or don’t want to work anymore. Most of the time is seems like there is no end in sight. You get up every day with this incredibly large problem on your back. You wonder, “Is today the day when the IRS shows up at work or at home? Or, will they decide to levy my bank account or paycheck?”

It’s a heavy load to bear day-in and day-out. Most people around you don’t know what you’re going through. You just keep going, but you know in your heart that doing nothing about your IRS Problems are not going to make them go away.

Don’t spend your life looking over your shoulder. Contact your Middle Tennessee tax resolution experts and let’s find a solution together so you don’t have to worry about your pension, retirement or Social Security check being taken away from you.