by Fresh Start Tax | Apr 14, 2014 | Tax Help
Additional Medicare Tax
Time to start learn something new.
Starting in 2013, you may be liable for an Additional Medicare Tax if your income exceeds certain limits.
Here are things that you should know about this tax:
1. The Additional Medicare Tax is 0.9 percent.
It applies to the amount of your wages, self-employment income and railroad retirement (RRTA) compensation that is more than a threshold amount. The threshold amount that applies to you is based on your filing status.
If you’re married and file a joint return, you must combine your spouse’s wages, compensation, or self-employment income with yours to determine if you exceed the “married filing jointly” threshold.
2. The threshold amounts are:
- Filing Status Threshold Amount
- Married filing jointly $250,000
- Married filing separately $125,000
- Head of household $200,000
- Qualifying widow(er) with dependent child $200,000
3. You must combine wages and self-employment income to determine if your income exceeds the threshold.
You do not consider a loss from self-employment when you figure this tax. You must compare RRTA compensation separately to the threshold.
4. Employers must withhold this tax from your wages or compensation when they pay you more than $200,000 in a calendar year, without regard to your filing status, wages paid to you by another employer, or income that you may have from other sources.
Your employer does not combine the wages for married couples to determine whether to withhold Additional Medicare Tax.
5. You may owe more tax than the amount withheld, depending on your filing status and other income.
In that case, you should make estimated tax payments /or request additional income tax withholding using Form W-4, Employee’s Withholding Allowance Certificate.
If you had too little tax withheld, or did not pay enough estimated tax, you may owe an estimated tax penalty.
6. If you owe this tax, file Form 8959, with your tax return.
You also report any Additional Medicare Tax withheld by your employer on Form 8959.
by Fresh Start Tax | Apr 13, 2014 | Tax Help
Need More Time to File Your Taxes
The April 15 tax deadline is approaching.
What happens if you can’t get your taxes done by the due date?
If you need more time, you can get an automatic six-month extension from the IRS. You don’t have to explain why you’re asking for more time.
Here are five important things to know about filing an extension:
1. File on time even if you can’t pay.
If you complete your tax return but can’t pay the taxes you owe, do not request an extension.
Instead, file your return on time and pay as much as you can. That way you will avoid the late filing penalty, which is higher than the penalty for not paying all of the taxes you owe on time. Plus, you do have payment options.
Apply for a payment plan using the Online Payment Agreement tool on IRS.gov. You can also file Form 9465, Installment Agreement Request, with your tax return.
If you are unable to make payments because of a financial hardship, the IRS will work with you.
2. Extra time to file is not extra time to pay.
An extension to file will give you six more months to file your taxes, until Oct. 15. It does not give you extra time to pay your taxes.
You still must estimate and pay what you owe by April 15. You will be charged interest on any amount not paid by the deadline.
You may also owe a penalty for not paying on time.
3. Use IRS Free File to request an extension.
You can use IRS Free File to e-file your extension request. Free File is only available through the IRS.gov website. You must e-file the request by midnight on April 15.
If you e-file your extension request, the IRS will acknowledge receipt. You also can return to Free File any time by Oct. 15 to prepare and e-file your tax return for free.
4. Use Form 4868.
You can also request an extension by mailing a Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return.
You must submit this form to the IRS by April 15. Form 4868 is available on IRS.gov.
You don’t need to submit a paper Form 4868 if you make a payment using an IRS electronic payment option.
The IRS will automatically process your extension when you pay electronically.
You can pay online or by phone.
5. Electronic funds withdrawal.
If you e-file an extension request, you can also pay any balance due by authorizing an electronic funds withdrawal from your checking or savings account.
To do this you will need your bank routing and account numbers.
by Fresh Start Tax | Apr 11, 2014 | Tax Help
Is Your Health Insurance Coverage Considered Minimum Essential Coverage Under the Affordable Care Act
The Affordable Care Act calls for individuals to have qualifying health insurance coverage for each month of the year, have an exemption, or make a shared responsibility payment when filing their federal income tax return next year.
Qualifying health insurance coverage, called minimum essential coverage, includes coverage under various, but not all, types of health care coverage plans.
The majority of coverage that people have today counts as minimum essential coverage.
Examples of minimum essential coverage include:
- Health insurance coverage provided by your employer,
- Health insurance purchased through the Health Insurance Marketplace in the area where you live, where you may qualify for financial assistance,
- Coverage provided under a government-sponsored program for which you are eligible (including Medicare, Medicaid, and health care programs for veterans),
- Health insurance purchased directly from an insurance company, and
- Other health insurance coverage that is recognized by the Department of Health & Human Services as minimum essential coverage.
Minimum essential coverage does not include coverage providing only limited benefits, such as:
- Coverage consisting solely of excepted benefits, such as:
- Stand-alone vision and dental insurance
- Accident or disability income insurance
- Medicaid plans that provide limited coverage such as only family planning services or only treatment of emergency medical conditions.
by Fresh Start Tax | Apr 10, 2014 | Tax Help
If you have an IRS tax problem, it only makes sense to hire former IRS agents, managers and tax instructors that have a combined 60 years of direct work experience in the local, district, and regional tax offices of the Internal Revenue Service.
Our team is comprised of tax attorneys, tax lawyers, certified public accountants, enrolled agents, and former IRS agents.
We have over 206 years of professional tax experience and have been in practice since 1982 and are A+ rated by the Better Business Bureau.
How to Stop a IRS Tax Levy
Believe it or not IRS files close to 2 million bank and wage levy garnishments each and every year.
You can stop a levy with one telephone call to the Internal Revenue Service.
But before you make that call to the IRS, you will have to have to provide a completely documented 433F financial statement. You can find that form on our website.
Upon calling the Internal Revenue Service, you will be asked to fax the 433F with all supporting documentation. Once IRS reviews the financial statement and receives the documentation the Internal Revenue Service will issue you an immediate release of the bank or wage levy and close your case off the IRS collection enforcement computer using one of three closing options.
As a side note: please be aware that any time you have a problem with Internal Revenue Service they will conduct a full compliance check on your Social Security number meaning they will want to make sure all your all tax returns are currently filed.
If your returns are not currently filed and up-to-date and need back tax filings, we can complete your tax preparation.
If you have little or few records we can still prepare your turn based on tax audit reconstructive methods.
Being former IRS agents we know exactly how to prepare those returns and make sure you’re paying the lowest amount of tax allowed by law.
After the computer check the IRS will move on to your financial statement.
Based on your current financial statement the IRS will either;
- place you into an economic tax hardship,
- IRS will insist on a monthly payment and/or
- the IRS may let you know your suitable candidate to file for an offer in compromise.
Owing back taxes the IRS
If you will back tax to the Internal Revenue Service, IRS will require a documented financial statement. Based on your current income and expenses IRS will determine how they will deal with your case based on your existing financial circumstances.
Be prepared to have a financial statement ready to go when IRS contacts you. If your case is in the field office and you are contacted by a revenue officer you will have to provide financial statement form number 433A.
IRS Tax Settlements
IRS tax settlements are called offer in compromise.
IRS accepts 38% of all offers in compromise filed and they generally receive around $.16 on a dollar for each case. You should understand that’s an average base completely on the individual circumstances of everyone’s financial statement.
HOWEVER – Before you go off filing for an offer in compromise and paying thousands of dollars to some tax resolution company make sure you are a qualified and suitable candidate for an offer in compromise.
You can find an IRS pre-qualifier tool for the offer in compromise on our site. You can walk through the pre-qualifier tool and call us if you have questions.
IRS tax audits
Being former IRS agents we recommend nobody walk in for an IRS tax audit unless they have a perfectly clean tax return.
If you have no skeletons in your closet there’s nothing wrong with walking in yourself but if you have any hints of problems or skeletons you should always have a professional person with years of experience defend your tax return.
Remember the Internal Revenue Service has an option of going back for4 years if they find more than 25% of omission of income
If you have any questions feel free to call us today you can speak directly to one of our tax professionals.
by Fresh Start Tax | Apr 10, 2014 | Tax Help
Our firm generally post all the IRS policy statements on our blogs and this particular policy statement deals with the IRS enforcement action.
Enforcement is a key part of the Department of treasury and the Internal Revenue Service. Without enforcement would probably collect no tax.
You should know that IRS is the largest collection agency in the world and has seizure levy power that can be applied to almost everything you own including your home.
If you need any help because of IRS collection enforcement call us today.
IRS Policy Statement 5-1
Enforcement is a necessary component of a voluntary assessment system
A tax system based on voluntary assessment would not be viable without enforcement programs to ensure compliance.
Accordingly, the Service is responsible for taking all appropriate actions provided by law to compel non-compliant taxpayers to file their returns and pay their taxes.
The Service is committed to educating and assisting taxpayers who make a good faith effort to comply. However, enforcement action should be taken promptly, in accordance with Internal Revenue Manual guidelines, against taxpayers who have not shown a good faith effort to comply.
These actions include enforcement necessary to move the taxpayer toward compliance.
In determining the appropriate enforcement action to take, factors such as the taxpayer’s delinquency history should be considered.
Promotion of long-term voluntary compliance is a basic goal of the Service, and in reaching this goal, the Service will be cognizant not only of taxpayers’ obligations under our system of taxation but also of their rights.
However, when a decision to enforce has been made, the Service will have no hesitancy in pursuing the matter to conclusion.
That it folks, the IRS enforcement collection policy in whole.
If you need help because to stop the IRS because of any collection policy call us today.
