by Fresh Start Tax | Apr 2, 2013 | Tax Help
Tax Tips for the Self Employed – Fresh Start Tax LLC
If you are self-employed here some excellent tax tips to help you navigate through the IRS.
Tax Tips for the Self-Employed
When you are self-employed, it typically means you work for yourself, as an independent contractor, or own your own business.
Here are your main points of interest.
1. Self-employment income can include pay that you receive for part-time work you do out of your home.
This could include income you earn in addition to your regular job.
2. Self-employed individuals file a Schedule C, Profit or Loss from Business, or Schedule C-EZ, Net Profit from Business, with their Form 1040.
3. If you are self-employed, you generally have to pay self-employment tax as well as income tax.
Self-employment tax includes Social Security and Medicare taxes.
You figure this tax using Schedule SE, Self-Employment Tax.
4. If you are self-employed you may have to make estimated tax payments.
People typically make estimated tax payments to pay taxes on income that is not subject to withholding.
If you do not make estimated tax payments, you may have to pay a penalty when you file your income tax return.
The underpayment of estimated tax penalty applies if you do not pay enough taxes during the year.
5. When you file your tax return, you can deduct some business expenses for the costs you paid to run your trade or business.
You can deduct most business expenses in full, but some costs must be ’capitalized.’ This means you can deduct a portion of the expense each year over a period of years.
6. You may deduct only the costs that are both ordinary and necessary.
An ordinary expense is one that is common and accepted in your industry.
A necessary expense is one that is helpful and appropriate for your trade or business.
7. Always make sure you keep copies of any and all information sent to the IRS.
Tax Tips for the Self Employed – Fresh Start Tax LLC
by Fresh Start Tax | Apr 2, 2013 | Tax Lawyer, Tax Levy and Wage Garnishments
IRS Levy – Back Tax Returns – IRS Tax Settlements – Tax Lawyers, Attorneys 866-700-1040
If you have been levied by the Internal Revenue Service call us today and we can start process of getting your money back TODAY.
IRS will require that you file all your back tax returns.
This process is a very simple one.
The IRS is required to send at least three notices to all taxpayers letting them know that money is owed to the Internal Revenue Service. If these bills or notices are not responded to, the IRS enforcement computer kicks in. This is the CADE 2 computer.
After the final notice is sent, the IRS then systemically sends out a tax levy to either a bank account and/or a wage garnishment to your employer.
IRS Bank Levies
Notes of interest.
On IRS bank levies. The bank must freeze the account for 21 days before any money is turned over to Internal Revenue Service. A taxpayer who has received an IRS bank levy thus has 21 days to call the IRS and get the bank levy released.
IRS wage garnishment levy’s
A IRS wage garnishment levy is much different than IRS bank levy. Upon the employer receiving the IRS garnishment, the employer must act on the wage garnishment immediately. There is no hold period.
There are special rules and conditions that exist on these wage garnishment levy’s and you should visit our website for more details on this.
Releases for IRS levies
To get these IRS bank or wage garnishment levies released, the IRS will require a current financial statement usually a form 433-F.
IRS will want that form completely documented along with the last three months bank statements and a copy of your last pay stub.
After IRS reviews your current financial statement the IRS will usually place your account in one of three categories.
IRS will either:
1. Place your account in an economic tax hardship,
2. ask for a payment or installment agreement,
3. or you will qualify for a offer in compromise or a tax settlement
Back Tax Returns
If you have not filed back tax returns for multiple years that is not a problem.
We can reconstruct your tax returns and prepare accurate returns to satisfy the Internal Revenue Service. We simply call and ask IRS for a current income transcript and review your bank statements and we can prepare any back tax returns that you have. We are experts in income tax reconstruction.
IRS tax settlements, the new Fresh Start Program
An offer in compromise/IRS Tax Settlement allows you to settle your tax debt for less than the full amount you owe.
It may be a legitimate option if you can’t pay your full tax liability, or doing so creates a financial hardship.
IRS will consider your unique set of facts and circumstances. IRS will consider your:
1. Ability to pay;
2. Income;
3. Expenses and
4.Asset with equity.
IRS approves an offer in compromise when the amount offered represents the most we can expect to collect within a reasonable period of time.
The Offer in Compromise program or Tax Debt Settlement Program is not for everyone.
If you hire a tax professional to help you file an offer, be sure to check his or her qualifications. Also check the BBB rating of the tax firm.
You should make sure you are eligible
Before the Internal Revenue Service can consider your offer, you must be current with all filing and payment requirements.
If you are in a bankruptcy
You are not eligible if you are in an open bankruptcy proceeding.
Pre-qualifier tool
Use the Offer in Compromise Pre-Qualifier to confirm your eligibility and prepare a preliminary proposal. You can find that on our website.
Submit your offer
You’ll find step-by-step instructions and all the forms for submitting an offer in the Offer in Compromise Booklet, Form 656-B (PDF).
Your completed offer package will include:
a. Form 433-A (OIC) (individuals) or 433-B (OIC) (businesses) and all required documentation as specified on the forms;
b. Form 656(s) – individual and business tax debt (Corporation/ LLC/ Partnership) must be submitted on separate Form 656;
c. $150 application fee (non-refundable); and
Initial payment (non-refundable) for each Form 656.
Selecting a payment option
Your initial payment will vary based on your offer and the payment option you choose:
Lump Sum Cash:
Submit an initial payment of 20 percent of the total offer amount with your application. Wait for written acceptance, then pay the remaining balance of the offer in five or fewer payments.
Periodic Payment:
Submit your initial payment with your application.
You should continue to pay the remaining balance in monthly installments while the IRS considers your offer. If accepted, continue to pay monthly until it is paid in full.
Call us today for a free initial tax consultation and see how easy it is to settle your IRS tax case.
IRS Levy – Back Tax Returns – IRS Tax Settlement – Tax Lawyers, Attorneys
by Fresh Start Tax | Apr 1, 2013 | FBAR
FBAR Filing Assistance – Tax Attorneys, Lawyers, Former IRS – FBAR Confidential Filing 1-866-700-1040
FBAR Filing Help is here in the way of Tax Attorneys, Tax Lawyers, CPA’s and Former IRS Agents.
If you have a sensitive FBAR Filing call us today and speak directly to Attorneys and Lawyers who can keep your conversation covered by privilege.
For simple FBAR filings go directly to IRS.gov and download the forms directly.
If you have issues that could arouse the interest of the IRS always be represented by Counsel.
Assistance Filing Criteria for FBAR
Taxpayer FBAR filers report on their accounts to the IRS.
Filers report their foreign accounts by:
1.completing boxes 7a and 7b on Form 1040 Schedule B, box 3 on the Form 1041 “Other Information” section, box 10 on Form 1065 Schedule B, or boxes 6a and 6b on Form 1120 Schedule N and.
2. completing Form TD F 90-22.1 (PDF).
Due Date for FBAR Filing ?
The FBAR is due by June 30 of the year following the year that the account holder meets the $10,000 threshold.
The granting by IRS, of an extension to file Federal income tax returns does not extend the due date for filing an FBAR.
FBAR Filers cannot request an extension of the FBAR due date. There is no provision in the code to do so.
Best Advice
If a filer does not have all the available information to file the return by June 30, they should file as complete a return as they can and amend the document when the additional or new information becomes available.
Where are FBAR Filing forms?
FBAR forms are available:
Online via IRS.gov in PDF.
Online via Department of the Treasury’s Financial Crimes Enforcement Network Web site in PDF
OR
By calling the IRS at 800-829-3676.
IRS has an Email address to ask questions, but be very careful!
You can send questions concerning the FBAR to FBARquestions@irs.gov. The email system does not accept actual FBAR reports.
Where can I file the FBAR?
You can send completed forms to:
U.S. Department of the Treasury
P.O. Box 32621
Detroit, MI 48232-0621
If an express delivery service is used, send completed forms to:
IRS Enterprise Computing Center
ATTN: CTR Operations Mail room, 4th Floor
985 Michigan Avenue
Detroit, MI 48226
The contact phone number for the delivery messenger service is 313-234-1062.
The number cannot be used to confirm that your FBAR was received.
The FBAR is not to be filed with the filer’s Federal tax return
.
Can I verify that my FBAR was filed?
Ninety days (90 ) after the date of filing, the filer can request verification that the FBAR was received.
An FBAR filing verification request may be made by calling 866-270-0733 and selecting option 1. Up to five documents may be verified over the phone.
There is no fee for this verification.
Alternatively, an FBAR filing verification request may be made in writing and must include the filer’s name, taxpayer identification number and the filing period.
There is a $5 fee for verifying five or fewer FBARs and a $1 fee for each additional FBAR. A copy of the filed FBAR can be obtained at a cost of $0.15 per page.
Check or money order should be made payable to the United States Treasury.
The request and payment should be mailed to:
IRS Enterprise Computing Center/Detroit
ATTN: Verification
P.O. Box 32063
Detroit, MI 48232
FBAR Filing Assistance – Tax Attorneys, Lawyers, Former IRS – Confidential FBAR Filing
by Fresh Start Tax | Apr 1, 2013 | FBAR
FBAR- Common questions and answers – Tax Attorneys, Lawyers – FBAR experts 1-866-700-1040
When it comes to FBAR reporting there is a common list of questions and answers that will help relieve the concerns of many taxpayers who have questions that need to be resolved.
Here is a common list of questions and answers that are frequently asked to the Internal Revenue Service.
If you are in any need of FBAR help call us today and speak directly to tax attorneys, tax lawyers who are truly FBAR tax are experts.
What is an FBAR?
An FBAR is a Report of Foreign Bank and Financial Accounts. The form number is TD F 90-22.1 (PDF).
Who must file an FBAR?
Any United States person who has a financial interest in or signature authority or other authority over any financial account in a foreign country, if the aggregate value of these accounts exceeds $10,000 at any time during the calendar year.
What is a foreign country?
A “foreign country” includes all geographical areas outside the United States, the commonwealth of Puerto Rico, the commonwealth of the Northern Mariana Islands, and the territories and possessions of the United States (including Guam, American Samoa, and the United States Virgin Islands).
What is a United States person?
“United States person” includes a citizen or resident of the United States, a domestic partnership, a domestic corporation, and a domestic estate or trust. See Announcement 2010-16.
Is a single-member LLC, which is a disregarded entity for U.S. tax purposes, a United States person for FBAR purposes?
Yes, the tax rules concerning disregarded entities do not apply with respect to the FBAR reporting requirement. FBARs are required under Title 31, not under any provisions of the Internal Revenue Code.
What constitutes signature or other authority over an account?
A person has signature authority over an account if such person can control the disposition of money or other property in it by delivery of a document containing his or her signature (or his or her signature and that of one or more other persons) to the bank or other person with whom the account is maintained.
Other authority exists in a person who can exercise power that is comparable to signature authority over an account by direct communication to the bank or other person with whom the account is maintained, either orally or by some other means.
Is a U.S. resident with power of attorney on his elderly parents’ accounts in Canada required to file an FBAR, even if the resident never exercised the power of attorney?
Yes, if the power of attorney gives the U.S. resident signature authority, or other authority comparable to signature authority, over the financial accounts.
Whether or not such authority is ever exercised is irrelevant to the FBAR filing requirement.
See IRS Notice 2010-23 for information regarding an extended due date to report signature authority over a foreign financial account.
How do filers report their accounts to the IRS?
Filers report their foreign accounts by (1) completing boxes 7a and 7b on Form 1040 Schedule B, box 3 on the Form 1041 “Other Information” section, box 10 on Form 1065 Schedule B, or boxes 6a and 6b on Form 1120 Schedule N and (2) completing Form TD F 90-22.1 (PDF).
When is the FBAR due?
The FBAR is due by June 30 of the year following the year that the account holder meets the $10,000 threshold. The granting, by IRS, of an extension to file Federal income tax returns does not extend the due date for filing an FBAR.
Filers cannot request an extension of the FBAR due date. See also Notice 2010-23.
If a filer does not have all the available information to file the return by June 30, they should file as complete a return as they can and amend the document when the additional or new information becomes available.
Where are FBAR forms available?
FBAR forms are available:
Online via IRS.gov in PDF.
Online via Department of the Treasury’s Financial Crimes Enforcement Network Web site in PDF.
By calling the IRS at 800-829-3676.
Where do I file the FBAR?
Send completed forms to:
U.S. Department of the Treasury
P.O. Box 32621
Detroit, MI 48232-0621
If an express delivery service is used, send completed forms to:
IRS Enterprise Computing Center
ATTN: CTR Operations Mail room, 4th Floor
985 Michigan Avenue
Detroit, MI 48226
The contact phone number for the delivery messenger service is 313-234-1062. The number cannot be used to confirm that your FBAR was received.
The FBAR is not to be filed with the filer’s Federal tax return.
How do I verify that my FBAR was filed?
Ninety days after the date of filing, the filer can request verification that the FBAR was received.
An FBAR filing verification request may be made by calling 866-270-0733 and selecting option 1. Up to five documents may be verified over the phone.
There is no fee for this verification.
Alternatively, an FBAR filing verification request may be made in writing and must include the filer’s name, taxpayer identification number and the filing period. There is a $5 fee for verifying five or fewer FBARs and a $1 fee for each additional FBAR. A copy of the filed FBAR can be obtained at a cost of $0.15 per page.
A Check or money order should be made payable to the United States Treasury.
The request and payment should be mailed to:
IRS Enterprise Computing Center/Detroit
ATTN: Verification
P.O. Box 32063
Detroit, MI 48232
Q. How does an FBAR filer amend a previously filed FBAR?
FBAR filers can amend a previously filed FBAR by:
Checking the Amended box in the upper right-hand corner of the first page of the form;
Making the needed additions or corrections;
Stapling it to a copy of the original FBAR;
and
Attaching a statement explaining the additions or corrections.
What happens if an account holder is required to file an FBAR and fails to do so?
Failure to file an FBAR when required to do so may potentially result in civil penalties, criminal penalties or both. If you learn you were required to file FBARs for earlier years, you should file the delinquent FBAR reports and attach a statement explaining why the reports are filed late.
No penalty will be asserted if the IRS determines that the late filings were due to reasonable cause. Keep copies of what you send for your records.
Can cumulative FBAR penalties exceed the amount in a taxpayer’s foreign accounts?
Yes, under the penalty provisions found in 31 U.S.C. 5314(a)(5), it is possible to assert civil penalties for FBAR violations in amounts that exceed the balance in the foreign financial account.
How long should account holders retain records of the foreign accounts?
Records of accounts required to be reported on an FBAR must be retained for a period of five years. Failure to maintain required records may result in civil penalties, criminal penalties or both.
For filing FBARs for prior years, should the current FBAR form be used or should the previous version of the form be used?
The current FBAR form (revised in October 2008) may be used to report a financial interest in, or signature or other authority over, financial accounts that were maintained in years prior to 2008.
However, since the changes to the current FBAR form reflect a change in the reporting requirements, the instructions for the prior version of the FBAR form (revised in July 2000) may be relied upon for the purpose of determining the filing requirements for properly reporting financial accounts maintained in calendar years prior to 2008.
Does more than one form need to be filed for a husband and wife owning a joint account?
No, provided that the names and Social Security numbers of the joint owners are fully disclosed on the filed FBAR. A spouse having a joint financial interest in an account with the filing spouse should be included as a joint account owner in Part III of the FBAR.
The filer should write “(spouse)” on line 26 after the last name of the joint spousal owner. If the only reportable accounts of the filer’s spouse are those reported as joint owners, the filer’s spouse need not file a separate report.
If the accounts are owned jointly by both spouses, the filer’s spouse should also sign the report. It should be noted that if the filer’s spouse has a financial interest in other accounts that are not jointly owned with the filer or has signature or other authority over other accounts, the filer’s spouse should file a separate report for all accounts including those owned jointly with the other spouse.
Are UBS account holders still eligible for the Voluntary Disclosure Practice?
The income earned on my client’s foreign account has not been reported on his Form 1040, nor have FBARs been filed.
The Voluntary Disclosure Practice is a longstanding practice of IRS Criminal Investigation of taking timely, accurate, and complete voluntary disclosures into account in deciding whether to recommend to the Department of Justice that a taxpayer be criminally prosecuted.
It enables non compliant taxpayers to resolve their tax liabilities and minimize their chances of criminal prosecution. When a taxpayer truthfully, timely and completely complies with all provisions of the Voluntary Disclosure Practice, the IRS will not recommend criminal prosecution to the Department of Justice.
Although the use of special voluntary disclosures by taxpayers with unreported income from offshore accounts expired on Oct. 15, 2009, non compliant taxpayers can still use the VDP to resolve their tax liabilities.
Voluntary disclosure – Never Make without an Attorney
by Fresh Start Tax | Apr 1, 2013 | FBAR
When is the FBAR Due Date – Tax Attorneys, Tax Lawyers – FBAR Experts 1-866-700-1040
Call us and speak directly to Tax Attorneys and Tax Lawyers that are FBAR experts.
When is the FBAR due?
The FBAR is due by June 30 of the year following the year that the account holder meets the $10,000 threshold.
The granting by IRS, of an extension to file Federal income tax returns does not extend the due date for filing an FBAR.
Filers cannot request an extension of the FBAR due date.
If a filer does not have all the available information to file the return by June 30, they should file as complete a return as they can and amend the document when the additional or new information becomes available.
Where are FBAR forms available?
FBAR forms are available:
1. Online via IRS.gov in PDF.
2. Online via Department of the Treasury’s Financial Crimes Enforcement Network Web site in PDF.
3. By calling the IRS at 800-829-3676.
Who is responsible to File for FBAR
United States persons are required to file an FBAR if:
a. The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
b. The aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year to be reported.
United States person means:
United States citizens; United States residents; entities, including but not limited to, corporations, partnerships, or limited liability companies created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States.
Exceptions to the Reporting Requirement
Exceptions to the FBAR reporting requirements can be found in the FBAR instructions. There are filing exceptions for the following United States persons or foreign financial accounts:
a. Certain foreign financial accounts jointly owned by spouses;
b. United States persons included in a consolidated FBAR;
c. Correspondent/nostro accounts;
d. Foreign financial accounts owned by a governmental entity;
e. Foreign financial accounts owned by an international financial institution;
f. IRA owners and beneficiaries;
g. Participants in and beneficiaries of tax-qualified retirement plans;
h. Certain individuals with signature authority over but no financial interest in a foreign financial account;
i. Trust beneficiaries; and
j. Foreign financial accounts maintained on a United States military banking facility.
Look to the form’s instructions to determine eligibility for an exception and to review exception requirements.
FBAR Reporting and Filing Information
A person who holds a foreign financial account may have a reporting obligation even though the account produces no taxable income.
Checking the appropriate block on FBAR-related federal tax return or information return questions (for example, on Schedule B of Form 1040, the “Other Information” section of Form 1041, Schedule B of Form 1065, and Schedule N of Form 1120) and filing the FBAR, satisfies the account holder’s reporting obligation.
The FBAR is not filed with the filer’s federal income tax return.
The granting, by the IRS, of an extension to file federal income tax returns does not extend the due date for filing an FBAR.
You may not request an extension for filing the FBAR. The FBAR is an annual report and must be received by the Department of the Treasury in Detroit, MI, on or before June 30th of the year following the calendar year being reported.
While FinCEN strongly encourages individuals to electronically file FBARs, the form can be mailed to one of the two addresses below, provided that the mailing is received by June 30, 2013:
File by mailing the FBAR to:
United States Department of the Treasury
P.O. Box 32621
Detroit, MI 48232-0621
If an express delivery service is required for a timely filed FBAR, address the parcel to:
IRS Enterprise Computing Center
ATTN: CTR Operations Mailroom, 4th Floor
985 Michigan Avenue
Detroit, MI 48226
Delivery messenger service contact telephone number: (313) 234-1062.
Account holders who do not comply with the FBAR reporting requirements may be subject to civil penalties, criminal penalties, or both.
Call us today for more details on FBAR reporting.
