swallick

Expert Tax Advice for Business Owners from Stephen Wallick & Associates

swallick@swallick.com (Stephen Wallick) — Wed, 01 Feb 2023 18:11:05 GMT

Expert Tax Advice for Business Owners from Stephen Wallick & Associates

Are you a business owner in Tennessee on the hunt for expert tax advice? With federal and state laws that can change yearly, it's easy to lose track of changes that can affect your business -- meaning any mistakes could cost your wallet.

Don't let this fear keep you from being successful with your business. Our tax experts are here to help guide you through what can often be a daunting process of understanding the complexities of taxes.

In this blog post, we will discuss some of the most important tax points for Tennessee business owners.

Tennessee Tax Laws

What taxes are business owners in Tennessee required to pay?

Business owners in Tennessee are required to pay several types of taxes depending on how business profits are assumed. Each business must set up a business income tax liability with the Internal Revenue Service (IRS).

In addition, business owners must pay payroll taxes, unemployment taxes, local business and occupation taxes, state business usage tax in certain situations, and gross receipts taxes in some counties. Business owners should always ensure they are paying the correct amount of taxes to avoid any potential penalties or consequences from the IRS.

Taking advantage of online resources such as e-filing and payment systems or consulting with a professional can help business owners in Tennessee understand their tax responsibilities.

Are all business owners in Tennessee required to pay the same taxes?

Business owners in Tennessee face a complex tax landscape. As with business owners in any other state, business owners in Tennessee must abide by the federal rules set forth by the Internal Revenue Service (IRS). Yet business owners in Tennessee also may be liable for additional taxes depending on their business structure, size of their business, location of the business, and type of income earned from their business.

For example, LLCs are subject to a franchise tax that is based on the amount of net worth of their business; large companies may be required to pay an excise tax; and businesses with employees may be responsible for payroll taxes. While many business taxes remain similar across the state, there is no guarantee that all business owners in Tennessee will pay the same exact taxes.

How can business owners in Tennessee ensure they are paying the correct amount of taxes?

Business owners in Tennessee need to ensure that they are paying the correct amount of taxes in order to stay in compliance with both state and federal laws. Business owners should consult a qualified professional accountant who is highly knowledgeable about filing business tax returns for full accuracy. Doing so will also provide business owners with peace of mind, by knowing their business is securely compliant with all local, state, and federal requirements.

Additionally, business owners should annually review their return calculations and compare them to previous years to ensure no mistakes have been made. With these important steps, business owners in Tennessee can avoid any potential errors or issues with their business tax payments.

Do you have any advice for business owners who are unsure about how to comply with Tennessee's tax laws?

The Internal Revenue Service (IRS) regularly updates its policies and business owners should ensure that their business is compliant with them. Professional advice from an experienced tax lawyer or accountant can help business owners stay abreast of their taxation responsibilities and avoid expensive IRS penalties. Additionally, having experts review invoices, costs, and other business records will also help business owners build an understanding of the applicable tax laws in Tennessee. Adopting these simple measures will make it easier for business owners to remain compliant and guarantee that their business operations are successful.

Deductions and Credits Available To Reduce Tax Liability

What types of deductions and credits are available to business owners?

Business owners in Tennessee can take advantage of a variety of deductions and credits to reduce their business tax burden. Among the business-related credits available are the business investment credit, job tax credit, franchise and excise taxes, business office income tax deduction, qualifying business structure investment credit and the small business program for renewable energy projects.

Business owners should research what type of deductions and credits they can potentially claim as well as understand how to calculate the benefits associated with each option. Since claiming business-related deductions and credits can lower an owner's business tax burden significantly they should take time to explore every possible option available.

Can you take a deduction for the cost of starting your business?

For aspiring business owners, the cost of getting a business up and running can be incredibly overwhelming. There is a silver lining, however, as business expenses incurred during the start-up phase can be tax deductible. This means business owners will have one less expense to worry about as they take their first steps into uncharted waters.

Fortunately, there are multiple options available for business owners to recoup some of the cost of starting up their businesses through taxes. Depending on the specific business and situation, business expenses may include paying professional advisors like accountants or attorneys, office rent and utilities, travel expenses to attend meetings and more. For business owners looking to get started in their business journey with some financial assistance - this is great news!

Are there any credits available for hiring employees?

Business owners in Tennessee can take advantage of several tax credits available for hiring employees. The Reconnecting Communities Tax Credit provides businesses essentially a dollar-for-dollar match when they hire and employ residents from a federally designated redevelopment area.

Additionally, businesses located in eligible rural areas may qualify for the Rural Job Tax Credit, which provides an annual amount of up to $2,400 for each qualifying employee hired. Another valuable credit is the Apprenticeship Program Tax Credit, which allows businesses to receive up to 25 percent of their cost of hiring and training approved registered apprentices. For business considering expansion due to increased market demands or other opportunities, these tax credits offer invaluable incentives to do so in Tennessee.

Can you deduct the cost of doing business travel?

Doing business travel in Tennessee can be a great investment for companies. Not only does it offer an advantage to expand customer relationships and get your brand out there, but businesses can also deduct the cost of doing business travel in Tennessee when filing their taxes. It's important to keep track of all expenses incurred from such travel so that you can maximize your return - rental car fees, hotel cost, etc.

While these types of deductions are limited for individuals, businesses have much more latitude when it comes to this kind of deduction. You'll need to make sure you keep good records and use the right methods when reporting these expenses on your taxes, but you could see a significant benefit by adding them up at the end of the year.

How do I claim the home office deduction?

Claiming the home office tax deduction in Tennessee is an important step to ensure your business takes full advantage of all available tax benefits. For Tennesseans, this federal tax deduction can mean significant savings on their taxes. To be eligible for the home office deduction, you must use the space as an organized workspace for regular and exclusive business operations, such as meeting clients or using a computer.

Additionally, your business must pay rent or own the home being used and comply with other specific requirements set forth by the IRS. Taking the time to review these guidelines carefully will help maximize the tax savings that come with claiming the home office deduction in Tennessee.

Businesses should make sure they are keeping track of all their expenses, as these can also be deducted from taxes

Tennessee offers many potential deductions for business owners in order to reduce the amount of taxes they owe. Some common deductions include any fees related to the operation of the business such as start-up costs, advertising fees, labor or material expenses; employee expense reimbursement; supplies used in the course of running the business; and meals and entertainment associated with company activities like conferences or client meetings. Keeping track of these expenses throughout the year can go a long way towards reducing your tax burden at the end of it.

Consulting With an Accountant or Tax Specialist

It is wise to consult with a professional when preparing taxes - an accountant or tax specialist can truly save you money. Not only can they help ensure the accuracy of your returns, they also understand the often confusing details of current tax laws and credits available. With the right expert on your side, essential deductions won’t be overlooked and tax breaks utilized to the fullest extent. In addition, mistakes will be avoided, improving the likelihood of receiving any refunds quickly instead of being flagged for further examination. Consulting with a professional before filing is key in ensuring your maximum return.

About Stephen Wallick & Associates

Analyzing your business and your unique financial structure, we provide full-service accounting including Tax Preparation, IRS Issue resolution, Small Business Services, Payroll Services, and Tax Planning. We provide these services to businesses and individuals throughout the United States.

Stephen Wallick & Associates serves individuals and businesses in Middle Tennessee. Our tax specialists are Enrolled Agents with the IRS and can help you with even the most complex tax situation. We have offices in Dickson and Chattanooga, TN.

At Stephen Wallick and Associates we enjoy building personal relationships with our clients. We believe that we can better serve you and more effectively resolve your issues if we get to know you and your situation. Call today to discuss your accounting needs.

New Office Opening in Chattanooga: Jonah Wallick to Lead Tax Services for Local Businesses

swallick@swallick.com (Stephen Wallick) — Fri, 20 Jan 2023 19:02:34 GMT

New Branch of Stephen Wallick & Associates in Chattanooga, TN

This article originally appeared on Washington Guardian here >>

Chattanooga, TN – Local tax expert Jonah Wallick, is excited to announce the opening of his new office at 651 E 4th Street, Suite 100, in Chattanooga.

With years of experience helping small and medium-sized businesses file taxes annually, Jonah now also helps companies collect funds they didn’t know they were owed by the IRS.

As a Certified Enrolled Agent with the IRS, Jonah is dedicated to providing top-notch tax expertise to local business owners in Chattanooga and surrounding areas.

We caught up with Jonah for a Q&A about the opening of his new office and his vision for serving the Chattanooga community.

Q: Why did you decide to open a new office in Chattanooga?

A: “I’ve been helping businesses in the Chattanooga area for a number of years and I’ve seen a real need for high-quality, local tax services. I’m excited to open this new branch of Stephen Wallick & Associates and be able to serve the community in a more direct and comprehensive way. I’ve always been passionate about helping businesses thrive and I believe this new office will allow me to do that even better.”

Wallick adds, “My goal is to bring a new level of tax service to the Chattanooga area. I hope to provide quality work and expertise that businesses can rely on for years to come.”

Q: What can local businesses expect from your new office?

A: “First and foremost, they can expect accurate and timely tax filing services. But we also offer additional services that many businesses may not be aware of, such as finding and collecting funds they didn’t know the IRS owed them.

Our goal is to be a one-stop shop for all a business’s tax needs. Additionally, we will be providing tax expertise to local business owners in Chattanooga and surrounding areas. We will be providing customized services to meet the needs of individual clients.”

According to Wallick, “Throughout the US, it seems that there is a serious lack of quality tax service provided in areas outside of larger metropolitan centers. We are here to change that and bring the expertise that small businesses deserve.”

A recent ibisworld.com study has revealed that the US Tax Preparation Services industry is steadily increasing at an annual average rate of 3.9% between 2018 and 2023, indicative of its growing market size.

“Unfortunately, of that 3.9% increase, the majority of tax preparation services are concentrated in and around bigger cities,” Wallick said. “But that’s changing. We’re continuing to see more business owners and entrepreneurs in smaller markets take an interest in their own taxes, and the Chattanooga area is no exception.”

Q: What sets your new office apart from others in the area?

A: “I’m a Certified Enrolled Agent with the IRS, which means I have the highest level of credentials for representing taxpayers. But more than that, I’m committed to building personal relationships with my clients and understanding their unique needs and goals. I believe that approach sets us apart and allows us to provide truly customized and effective services.”

Q: What exactly is an IRS Enrolled Agent?

“Enrolled agents are individuals who have been granted the privilege to represent taxpayers before the Internal Revenue Service (IRS) by passing a comprehensive three-part test covering individual and business tax returns or through experience as a former IRS employee.

This is the highest credential awarded by the IRS. We are required to adhere to ethical standards and complete 72 hours of continuing education every three years. Like attorneys and CPAs, we have unlimited practice rights, meaning I can represent any taxpayer, handle any tax matter, and represent clients before any IRS office.”

According to the IRS’ website, as of September 2022, 63,014 enrolled agents nationwide were registered, of which 34 are located in Chattanooga. Wallick is proud to be one of them and looks forward to utilizing his knowledge and experience to provide quality tax services in the Chattanooga area.

Stephen Wallick & Associates provides comprehensive tax services to businesses in the Chattanooga Area. From filing taxes, finding lost funds due from the IRS, providing customized tax advice, and more – they strive to provide their clients with the highest level of service.

About Jonah Wallick

Jonah Wallick is the driving force behind the expansion of Stephen Wallick & Associates. As the son of the company’s founder, Jonah has been instrumental in the growth and success of the business. Recently, he opened a second office in Chattanooga, Tennessee, where he and his family reside.

Jonah balances his professional and personal life seamlessly as a father of one, (soon-to-be two). He is dedicated to providing expert tax services to small and medium-sized businesses in Chattanooga and Middle Tennessee. With years of experience in tax filing and collection, Jonah is a certified enrolled agent with the IRS and can assist with tax filings , disputes with the IRS, settlement negotiations, and future tax planning.

Jonah is excited to continue serving the Chattanooga community and helping businesses thrive. With his expertise and passion for helping others, he is sure to make a positive impact in the region.

The new office can be reached at 423-777-TAX7 (8297), and more information can be found on their website . Don’t hesitate to email Jonah Wallick for all of your tax needs.

Contact:

Jonah Wallick

651 E 4th Street, Suite 100

Chattanooga, TN 37403

TEL: 423-777-TAX7 (8297)

New Paragraph

Getting Ready To File Your Taxes in 2023

swallick@swallick.com (Stephen Wallick) — Wed, 18 Jan 2023 16:30:29 GMT

Preparing for filing your 2022 Tax Return

Soon businesses and individuals everywhere will be turning their attention to filing 2022 taxes. As an individual or business owner in Tennessee, it's important that you get organized early in order to ensure your filings are in order and on time. Preparing ahead of time can help you minimize stress surrounding tax season, as well as make sure that no deadlines are missed – or worse, that penalties for late payments or incomplete documents aren’t incurred.

Benefits of Filing Taxes Early

Filing your taxes early can be beneficial for many reasons but most importantly it gives you more time to review your return and double-check everything before submitting it. Additionally, filing sooner rather than later may provide an opportunity for faster refunds if applicable or could give you access to other incentives or benefits depending on the type of deductions or credits taken during the year. Ultimately though, no matter when you decide to file just be sure that it is done by a professional so that there are no issues down the road!

Here we’ll look at nine ways to start preparing for 2022 taxes now so you can relax come April 15th!

1. Gather Your Paperwork.

The first step in preparing your tax documents for 2023 is to gather all of the necessary paperwork. This includes any tax documents from the past five years, such as W-2s and 1099s, as well as mortgage information, investment statements, bank statements, etc. It’s a good idea to compile these documents into one folder so they’re easily accessible when needed. You should also be sure to keep track of any new or changed deductions you plan on taking in the upcoming year as well.

Gather all of your necessary financial documents, such as W-2 forms, 1099s, and other income details like capital gains or dividends.

Know whether or not you need to file a state return in addition to a federal one. For a comprehensive list of what you need, visit Yahoo Finance here.

2. Consider investing in a good tax software

Filing early is only possible if you have complete bookkeeping reports available at the start of the new year. When it comes to filing taxes, there are many great software options out there that make it easier than ever before. With these programs, you can upload all of your necessary paperwork and quickly navigate through your taxes with minimal effort required from you. Plus, many of these programs offer additional features such as free credit score tracking and automated budgeting capabilities which can help simplify your life even more! Be sure to do some research into the different types of software available so that you find one that best suits your needs. If you want to outsource bookkeeping to a professional tax service, contact us today about your options .

3. Understanding Changes to Local and Federal Tax Codes

Understand the changes to the tax code for the 2022 tax year and how it will impact the information you need to share with the IRS. Familiarize yourself with any new deductions, exemptions, or credits that may be available to you. Visit these links to learn more about the changes to tax cuts in Tennessee or the biggest federal changes to know before you file .

4. Know Your Deductions

Determine if you are eligible for any deductions such as the Employee Retention Tax Credit (ERTC) which can credit you up to $26k per employee, earned income credit, child tax credit, or other potential refunds or credits based on your personal circumstances. Consider what filing status best suits your personal situation (such as single, married filing jointly/separately). Knowing what deductions are available can help reduce your taxable income and save you money during tax season. As a business owner, there may be more deductions available than those for individuals; so make sure to research what deductions can benefit your business before filing your taxes. Common business deductions include home office expenses, advertising costs, travel expenses, insurance premiums, and equipment purchases.

5. Understand Deadlines and Penalties

Review the IRS publications and IRS website for guidance on how to complete and submit your taxes accurately and timely with no errors or omissions in order to avoid penalties and interest charges that may be associated with late filings or incorrect information provided.

6. Gather purchase and donation receipts

Make sure to keep all of your receipts from purchases made throughout the year that can be used as evidence when filing taxes; this includes medical expenses and charitable donations made throughout the year which may qualify for deductions when filing taxes in 2023.

7. Pay estimated quarterly taxes

If you are not already paying estimated quarterly taxes, speak to a tax professional to discuss how this can benefit you. Calculate your estimated quarterly payment if you are self-employed or running a business so that you don't end up owing a large amount of taxes at filing time due to inadequate payments during the year prior to your return date in 2023.

8. Understand local taxes and fees

Factor in any additional taxes and fees such as local municipality taxes and business license fees applicable where applicable depending on where you live and work presently. This information will help ensure you have paid off any costs incurred during the current tax year prior to filing in April 2023 so that there are no surprises after filing day arrives. Our offices can help you understand local Tennessee taxes and fees and are based in Dickson, Tennessee and Chattanooga, Tennessee.

9 Hire a Professional

Finally, explore all available options including tax filing services offered by Stephen Wallick & Associates so that you can take advantage of accurate electronic submissions with ease for both individual and business returns. Contact us by phone or email today to receive a free consultation.

You May Qualify for a Filing Extension

When it comes to filing taxes, being aware of IRS deadlines is essential. Filing a tax extension can be a viable option if you're unable to meet the deadline. Generally speaking, the deadline for individuals to file their tax returns or request an extension is April 15th. For businesses, the deadline tends to be March 16th. In some cases, such as with fiscal-year taxpayers, different deadlines may apply and should be discussed with a qualified tax professional.

If you need more time to complete your return, you can request an extension using Form 4868 by the original due date of your return. The form is available online and in most tax preparation services software packages. Once approved, this will give you an additional 6 months beyond the original filing deadline, which means that individuals must file their returns no later than October 15th, and businesses by September 15th. Please note that requesting a tax extension does not give you extra time to pay any taxes due; payment is still due on the original due date of April 15th for individuals, or March 16th for businesses.

It’s important to keep in mind that filing an extension only gives additional time to file your return – any owed taxes must still be paid on or before the original due date in order to avoid any penalties or interest charges from accruing. Stephen Wallick & Associates can help ensure that all required documents are filed properly and on time so that taxpayers don’t have to worry about missing any important deadlines or having any issues with the IRS. Contact us today to speak about filing extensions and preparing to file your 2022 tax return.

How Do Unpaid Taxes Affect Your Credit Score?

Wed, 20 Oct 2021 13:38:58 GMT

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.

End IRS Problems Now

Tue, 19 Oct 2021 20:23:42 GMT

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:

Pay the IRS 100% of What They Think You Owe Today.
Set up a Monthly Payment Which Never Goes Away Due to the Additional Penalties and Interest That Continue to Add Up.
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.

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

Tue, 19 Oct 2021 20:11:14 GMT

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.

Credit Myths and Misconceptions

Tue, 19 Oct 2021 19:56:36 GMT

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.

4 Steps to Take When You Get an IRS Notice

Tue, 19 Oct 2021 19:48:10 GMT

Few things can be as intimidating as that letter from the IRS. In many cases, though, those notices are just meant to clear up some missing information. Although there’s no need to panic, it is important to respond as quickly as possible to avoid accruing costly penalties . How you respond to the letter depends on the type of letter you received. You may be notified that you have a balance due, or you may simply need to answer a couple of questions. Here are a few steps to take after that IRS notice appears in your mailbox.

Make Sure It’s Legitimate

Fraud has become an increasing problem for the IRS. If you’re being asked to remit payment, check out the IRS’s instructions on remitting payment . Your check will be made out to the United States Treasury, and the IRS won’t demand payment immediately without allowing you the option to appeal. If you have any doubts about a notice you’ve received, call the IRS at 800-829-1040 to verify its legitimacy.

Comply with the Request

The best thing about an IRS notice is that it usually tells you exactly what you need to do next. If you agree with what they’re requesting, you’ll merely need to comply. This means if you owe money, you’ll remit a check to the address on the notice. Make sure you keep a copy of the notice with your tax records.

Work Out a Payment Plan

The IRS is aware that not everyone can afford to pay an unexpected tax bill. There are a variety of payment options available, including short-term and long term plans that let you pay in a series of installments. You’ll have to qualify for the plan and pay a setup fee, but you can get the process started by applying online.

Dispute the Request

Don’t assume that the information you’re getting from the IRS is correct. Check your own files and, if you find a discrepancy, file an appeal. Information on your right to appeal should be on the notice you receive, but you’ll send your request in writing to the address on your notice.

A written notice from the IRS is nothing to fear. The agency occasionally needs to communicate with taxpayers to clear up questions or resolve underpayments. As long as you follow the instructions on the letter and check your own records to make sure the notice is correct, you should be able to resolve the matter to everyone’s satisfaction.

How Can I Get Rid of a Federal Tax Lien?

Tue, 19 Oct 2021 19:33:06 GMT

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.

Enrolled Agent vs. CPA for IRS Tax Issues

Tue, 19 Oct 2021 19:24:13 GMT

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 .

Protecting Yourself From Tax Collection Scammers

Tue, 19 Oct 2021 18:38:21 GMT

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.

Are You Overpaying Business Taxes?

Mon, 11 Oct 2021 19:36:18 GMT

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.

swallick

Expert Tax Advice for Business Owners from Stephen Wallick & Associates

Expert Tax Advice for Business Owners from Stephen Wallick & Associates

Tennessee Tax Laws

What taxes are business owners in Tennessee required to pay?

Are all business owners in Tennessee required to pay the same taxes?

How can business owners in Tennessee ensure they are paying the correct amount of taxes?

Do you have any advice for business owners who are unsure about how to comply with Tennessee's tax laws?

Deductions and Credits Available To Reduce Tax Liability

What types of deductions and credits are available to business owners?

Can you take a deduction for the cost of starting your business?

Are there any credits available for hiring employees?

Can you deduct the cost of doing business travel?

How do I claim the home office deduction?

Businesses should make sure they are keeping track of all their expenses, as these can also be deducted from taxes

Consulting With an Accountant or Tax Specialist

About Stephen Wallick & Associates

New Office Opening in Chattanooga: Jonah Wallick to Lead Tax Services for Local Businesses

New Branch of Stephen Wallick & Associates in Chattanooga, TN

This article originally appeared on Washington Guardian here >>

Q: Why did you decide to open a new office in Chattanooga?

Q: What can local businesses expect from your new office?

Q: What sets your new office apart from others in the area?

Q: What exactly is an IRS Enrolled Agent?

About Jonah Wallick

Getting Ready To File Your Taxes in 2023

Preparing for filing your 2022 Tax Return

Benefits of Filing Taxes Early

Here we’ll look at nine ways to start preparing for 2022 taxes now so you can relax come April 15th!

1. Gather Your Paperwork.

2. Consider investing in a good tax software

3. Understanding Changes to Local and Federal Tax Codes

4. Know Your Deductions

5. Understand Deadlines and Penalties

6. Gather purchase and donation receipts

7. Pay estimated quarterly taxes

8. Understand local taxes and fees

9 Hire a Professional

You May Qualify for a Filing Extension

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.

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:

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.

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…

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.

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.

﻿