by steve | Feb 24, 2012 | IRS Tax Advice, Tax News
Early Distributions from Retirement Plans can have a tax impact so you should plan carefully because it can significantly impact your available income.
Many taxpayers may sometimes find themselves in situations when they need to withdraw money from their retirement plan early. What they may not realize is that that transaction may mean a tax impact when they file their return. This will hurt.
Therefore Tax Planning is important.
Here are some facts from the IRS about the tax implications of an early distribution from your retirement plan or pension plan.
1. Payments you receive from your Individual Retirement Arrangement before you reach age 59 ½ are generally considered early or premature distributions.
2. Early distributions are usually subject to an additional 10 percent tax. This is a killer!
3. Early distributions must also be reported to the IRS. The benefit provider will report this to the IRS.
4. Income distributions that roll over to another IRA or qualified retirement plan are not subject to the additional 10 percent tax. You have to complete the rollover within 60 days after the day you received the distribution.
5. The amount you roll over is generally taxed when your new plan makes a distribution to you or your beneficiary.
6. If you made nondeductible contributions to an IRA and later take early distributions from your IRA, the portion of the distribution attributable to those nondeductible contributions is not taxed.
7. If you received an early distribution from a Roth IRA, the distribution attributable to your prior contributions is not taxed.
8. If you received a distribution from any other qualified retirement plan, generally the entire distribution is taxable unless you made after-tax employee contributions to the plan.
9. There are many exceptions to the additional 10 percent early distribution tax, such as when the distributions are used for the purchase of a first home (up to $10,000), for certain medical or educational expenses, or if you are totally and permanently disabled.
Call us should you have any questions.
by steve | Feb 23, 2012 | Income Tax Preparation, IRS Tax Advice
Questions about Capital Gains come up every year at tax time.
Here are the top tax tips regarding Capital Gains for 2011.
This presentation is to aid and assist all our clients of Fresh Start Tax LLC.
Capital Gains and Losses from Tax Experts:
Capital Assets
Capital assets include a home, household furnishings and stocks and bonds held in a personal account. When you sell a capital asset, the difference between the amount you paid for the asset and its sales price is a capital gain or capital loss.It is the net equity or profit IRS is concerned about.
Facts from the IRS about how gains and losses can affect your Federal Income Tax Return or 1040.
1. Almost everything you own and use for personal purposes, pleasure or investment is a capital asset. Bet you did not know that!
2. When you sell a capital asset, the difference between the amount you sell it for and your basis is usually what you paid for it. That is called a capital gain or a capital loss for income tax purposes.
3. You the taxpayer must report all capital gains.
4. You may only deduct capital losses on investment property, not on personal-use property.
5. Capital gains and losses are classified as long-term or short-term. If you hold the property more than one year, your capital gain or loss is long-term. If you hold it one year or less, the gain or loss is short-term.
6. If you have long-term gains in excess of your long-term losses, the difference is normally a net capital gain. Subtract any short-term losses from the net capital gain to calculate the net capital gain you must report.
7. The tax rates that apply to net capital gain are generally lower than the tax rates that apply to other income. For 2011, the maximum capital gains rate for most taxpayers is 15 percent.
For lower-income individuals, the rate may be 0 percent on some or all of the net capital gain. Rates of 25 or 28 percent may apply to special types of net capital gain.
8. If your capital losses exceed your capital gains, you can deduct the excess on your tax return to reduce other income, such as wages, up to an annual limit of $3,000, or $1,500 if you are married filing separately.
9. If your total net capital loss is more than the yearly limit on capital loss deductions, you can carry over the unused part to the next year and treat it as if you incurred it in that next year. A Break!
10. This year 2012, a new form, Form 8949, Sales and Other Dispositions of Capital Assets, will be used to calculate capital gains and losses.
You should use IRS Form 8949 to list all capital gain and loss transactions. The subtotals from this form will then be carried over to Schedule D (Form 1040), where gain or loss will be calculated.
Should you have any question or need professional tax representation call us today.
by steve | Feb 22, 2012 | Owe Payroll Taxes, Representation
Owe Back IRS Payroll Tax – You can do jail time – Hire former IRS Agents – Payroll Tax Settlements – Miami, Ft.Lauderdale, Palm Beaches 1-866-700-1040, 954-492-0088
Tax attorneys, CPAs and former IRS agents can help resolve any back IRS payroll tax that you owe. With over 206 years of professional tax experience and 60 years of working directly for the Internal Revenue Service we can go over all the tax options to go ahead and settle your back IRS payroll tax case.
Stop the worry and stress today free consultations are available.
Owe Back Payroll Taxes, better listen up!
Many people are unaware that owing IRS back payroll taxes can land you in prison. As a former IRS Agent I recommended certain business owners to Criminal Division because of back payroll taxes.
Payroll Taxes are taxes held in trust to be paid over to the IRS at prescribed periods of time. Osvaldo Martinez apparently do not know that.
A Hollywood man was sentenced Wednesday to two years in prison for failing to pay more than $1.78 million in federal income taxes that he withheld from his former employees, prosecutors said.
Osvaldo Martinez, 51, had pleaded guilty to one count of willfully failing to pay income taxes, court records show.
Prosecutors said that he withheld employee payroll taxes from employees at Clinicas Finlay, Inc., a medical services company he operated in Miami-Dade County until 2007.
U.S. District Judge Marcia Cooke ordered Martinez to turn himself in to begin serving his federal prison sentence on April 11.
If you owe back payroll taxes it is very easy to avoid this situation of prison time.
It is of utmost importance you become current immediately and make sure all your payroll tax returns are current. If you fail to file and deposit you will get the attention of the IRS.
IRS has special programs called the FTD Alerts or Federal Tax Deposits Alerts System that triggers out to the local offices when 941 filers fail to file and pay back payroll taxes.
Should you be in this situation call us today so we can intervene, stop the IRS and work out a tax payroll settlement.
Owing back taxes, payroll taxes is the highest priority of local Collection offices simply because it is not a tax but a trust. You can expect in the future many more arrests.
We are Former IRS agents that can immediate help with these tax payroll tax situations on back taxes.
We have over 205 years of professional tax experience and over 60 years in the local offices.
by steve | Feb 21, 2012 | IRS Tax Problem, Representation
IRS – Tax Attorney / Tax Lawyer
At Fresh Start Tax L.L.C. we have on staff Board Certified Tax Attorneys, Certified Public Accountants, Enrolled Agents, Former IRS Agents, Managers and Instructors including a Former IRS Appeals Agent of 35 years with the IRS.
We have 205 years of total IRS tax experience and over 60 years of direct work experience at the local, district and regional offices of the Internal Revenue Service.
We also taught Tax Law at the Internal Revenue Service.
IRS tax problems and issues can mean a very stressful time for any taxpayer. An IRS Tax Attorney IRS Tax Lawyer, CPA or Enrolled Agent (EA) Agent can help you through any tax problem,help lower your tax debt and help settle any IRS tax debt you may currently have. The IRS is the largest and most powerful collection agency in the world and it takes an experienced and knowledgeable tax representative to help you in choosing the correct tax options. At Fresh Start tax LLC we have many years of experience in dealing with IRS issues and all other IRS tax problems in the audit and the collection area.
Fresh Start Tax LLC offers a team approach and each case worked by Fresh Start Tax has two assigned tax professionals working your case.
Getting the most out of your money – Choosing the right tax representative
There are three general levels of representation before the Internal Revenue Service.
1. Tax Attorney / Tax Lawyer
2 .Certified Public Accountants and
3. Enrolled Agents.
Each can represent you before the IRS and all are licensed to represent your very best interest. It is important to find out how the same result can be done for the lower cost. All can be good choices.
As a Former IRS Agent of 10 years, many tax representatives came into the IRS office I was assigned to. There were huge differences among the types of tax representatives. The ones that charged the most did not necessarily know what they were doing. IRS experience is the key.
As a general rule, pick the representative who worked at the IRS. A person who worked at the IRS know all the tricks, techniques, and procedures to make your case go easily through the system.
Each particular representative brings different aspects of a tax specialty to the table and before a taxpayer goes to hire a tax professional it is best to know how to get the most bang for your buck.
You do not want to overpay fees if you do not need to. Many times it is not necessary to hire tax attorneys or tax lawyers. Generally bills from tax attorneys, tax lawyers are between $2-400 dollars an hour and their fees are overkill. Many have little of no IRS experience. If you have an IRS problem it is always best to hire a Former IRS employee because they have the knowledge of tax procedures, settlement guidelines and audit techniques. In most cases CPA’s and Enrolled Agents are your best bet an all IRS administrative matters.
IRS Tax Attorney /Tax Lawyer
Generally taxpayers want to hire tax attorneys / tax lawyers if there are criminal or court actions that will be taking place. Tax Attorneys / Tax Lawyers are trained to interpret the law and codes and become your advocate in tax court or district court.Tax Attorneys /Tax Lawyers also keep up with the ever changing rules, regulations and codes that govern our tax system. Tax Attorneys also give you the advantage of having an attorney client privilege in all matters. It really becomes helpful in all criminal tax matters. If you receive a letter from criminal investigation your only option should be a tax attorney or tax lawyer. You want to make sure that Tax Attorney or Tax Lawyer has IRS experience and has worked several hundred cases before IRS and D.O.J. Tax Attorneys are the only place to go on any Offshore Account situations.
Certified Public Accountants
Hiring a Certified Public Accountant is extremely important when dealing with complicated tax issues on individual, partnership or corporate tax issues. With the tax codes changing every year it is always best to hiring true tax professionals in dealing with the accounting and tax filing of tax returns. Certified Public Accountants are generally used in tax return preparation and tax defense of a tax return under tax audit. it is always best to make sure they have years of tax experience under their belt in tax preparation. You can retained Accountant/client privilege on all civil matters.
Enrolled Agents
An enrolled agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service by either passing a three-part comprehensive IRS test covering individual and business tax returns, or through experience as a former IRS employee. They must adhere to ethical standards and complete 72 hours of continuing education courses every three years.
Enrolled agents, like attorneys and certified public accountants (CPAs), have unlimited practice rights. This means they are unrestricted as to which taxpayers they can represent, what types of tax matters they can handle, and which IRS offices they can represent clients.
by steve | Feb 16, 2012 | Income Tax Preparation, Tax Help
Tips on Unemployment Benefits from Former IRS Agents. Call us should you have further questions.
Taxable or Non-Taxable, find out up front from the payer.
Unemployment compensation.
Generally unemployment compensation includes among other forms, state unemployment compensation benefits, but the tax implications depend on the type of program paying the benefits. you should check and find out whether the benefit is taxable from the start so you do not have a tax problem at a later time.
You must report unemployment compensation on line 19 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040EZ.
Here are some great tips from the IRS about Unemployment Benefits.
1. You must include all unemployment compensation you receive in your total income for the year. You should receive a Form 1099-G, with the total unemployment compensation paid to you shown in box 1.
2. Other types of unemployment benefits include:
a. Benefits paid by a state or the District of Columbia from the Federal Unemployment Trust Fund
b. Railroad unemployment compensation benefits
c. Disability payments from a government program paid as a substitute for unemployment compensation
d. Trade readjustment allowances under the Trade Act of 1974
e. Unemployment assistance under the Disaster Relief and Emergency Assistance Act
f. For complete information on each of the benefits listed, see chapter 12 in IRS Publication 17, Your Federal Income Tax, or Publication 525, Taxable and Nontaxable Income.
3. You must report the unemployment compensation benefits paid to you as an unemployed member of a union from regular union dues.
However, if you contribute to a special union fund and your payments to the fund are not deductible, you only need to include in your income the unemployment benefits that exceed the amount of your contributions.
4. You may choose to have federal income tax withheld from your unemployment compensation. We would highly recommend this.
To make this choice, complete Form W-4V, Voluntary Withholding Request, and give it to the paying office. Taxes will be withheld at 10 percent of your payment. If you choose not to have tax withheld, you may have to make estimated tax payments throughout the year.
5. Should need you need a professional tax preparer call us today, we can audit proof your tax return.
