by Fresh Start Tax | Jun 4, 2012 | Back Taxes, Income Tax Preparation, IRS Tax Debt, IRS Tax Problem, Tax Returns, Tax Settlements
Unfiled, Back Tax, Past Due Tax Returns – How to file and settle with the IRS – Former IRS Agents can save you money 1-866-700-1040
There are millions of taxpayers with unfiled, past due, and back tax returns. The figures of unfiled, past due or back tax returns are close to 20 million non filers and maybe more.
What is unusual about this number is the fact that many of these taxpayers actually want to get back in the system but are afraid to and do not know how to do that without the ire of the IRS and the fear associated with that.
Our firm, Fresh Start Tax LLC specializes in this process and want to explain the process. It is much easier than you think.
IRS is not always the beast they are made out to be.
The filing of the unfiled, back or past due tax returns.
The first part of the process is getting your tax records together. The majority of those taxpayers in this position of unfiled, past due, late, or back tax returns do not have their information to prepare their tax returns. They have been lost, they have moved and they are poor record keepers.
IRS keeps on file the last seven years worth of income information. A simple request can be made to the Internal Revenue Service to receive income information. That is a starting point and from there most taxpayers can simply reconstruct their expenses.
Most professional preparers can easily aid and assist the clients/taxpayers once they have received the income source information. Building the expenses part is relatively simple.After preparing thousands of tax returns a solid tax professional should have no problem in tax reconstruction.
A Key Point.
Being a former IRS agent it is very important to remember when you are preparing these unfiled, back or past due tax returns that the returns must make sense.
A good standard or bar that I used as a former agent was the fact that 4 things had to match up and make sense;
1. Tax Return
2. A financial statement
3. Bank Statements
4. Cost of living for the area the taxpayer was living.
In a nut shell, the taxpayers living expenses should be reflected in the bank deposits on a financial statement and the total income explain on the Adjust Gross Income on a tax return.
The Settlement with the IRS.
The IRS has a new program they are currently administering called the Fresh Start Initiative or Program.
To settle your tax debt case with the IRS, the Service will look at two primary factors. Income and assets.
IRS will conduct a thorough investigation after a form 433 OIC is filed with the IRS.
I do not recommend anyone file a offer in compromise without professional help. I have worked offers in compromise for over 38 years . It is an art and a professional talent to get an offer accepted.
However for those do it your selfers out there, IRS will want the value of roughly 90% of your assets and and excess income over the national standard. IRS uses a multiplier of either 12 or 24 depending in the settlement structure.
Call us today and learn more about IRS tax debt settlements.
We are compromised of Board Certified Tax Attorneys, CPA’s and Former IRS Agents.
Call us at 1-866-700-1040
Unfiled, Back Tax, Past Due Tax Returns – How to file and settle with the IRS – Former IRS Agents can save you money
by Fresh Start Tax | May 1, 2012 | Income Tax Preparation, Tax Help
Tax Tips for Future Tax Planning
You should always be checking with some of the top tax professionals in the industry to make sure your tax return is prepared accurately and that you have all the tax deductions so you can fully optimize all the tax resources available to you.
Call us at Fresh Start Tax LLC 1-866-700-1040 so former IRS Agents can audit proof your income or corporate tax return today.
With that said, these are the top tax tips to prepare to make tax time and tax season much easier.
1. Always important, adjust your withholding.
Right now is a good time to review your withholding and make adjustments for next year, especially if you prefer more money in each paycheck this year.
If you owed at tax time, perhaps you would like next year’s tax payment to be much smaller. This is a good time to change your withholding on your W-4.
You can use the very easy IRS’s Withholding Calculator at www.irs.gov or Publication 919,” How Do I Adjust My Tax Withholding? “
2. Store your return in a safe place. Have a safe back up on disc or in the clouds.
Put your 2011 tax return and supporting documents somewhere secure so you’ll know exactly where to find them and if you receive an IRS notice and need to refer to your return.
Remember, the IRS usually goes back 3 years for tax audits. Make sure you keep all receipts for a minimum of 3 years.
3. Organize your record keeping.
You should establish a central location where everyone in your household can put tax-related records all year long. Anything from a shoebox to a file cabinet works. Just be consistent to avoid a scramble for misplaced mileage logs or charity receipts come tax time. It is much easier to establish a system of filing at the beginning of the year. I know, this is like homework but it makes tax season much easier.
4. Review your paycheck.
Make sure your employer is properly withholding and reporting retirement account contributions, health insurance payments, charitable payroll deductions and other items. These payroll adjustments can make a big difference on your bottom line. Fixing an error in your paycheck now gets you back on track before it becomes a huge hassle. You should have a professional tax preparer review all your documents.
5. Shop for a tax professional early or contact Fresh Start Tax LLC 1-866-700-1040
If you use a tax professional to help you with a strategic plan and make financial decisions throughout the year. You will have more time when you are not up against a deadline or anxious for your refund. Beware of filing fraud.
Choose a tax professional wisely. You are ultimately responsible for the accuracy of your own return regardless of who prepares it.
6. Prepare to itemize deductions.
If your expenses typically fall just below the amount to make itemizing advantageous, a bit of planning to bundle deductions into 2012 may pay off. An early or extra mortgage payment, per-deadline property tax payments, planned donations or strategically paid medical bills could equal some tax savings.
See the Schedule A instructions for expenses you can deduct if you’re itemizing and then prepare an approach that works best for you.
7. Strategies about tuition payments or other tax credits if you qualify.
The American Opportunity Tax Credit, which offsets higher education expenses, is set to expire after 2012. It may be beneficial to pay 2013 tuition in 2012 to take full advantage of this tax credit, up to $2,500, before it expires.
8. Keep up with changes during the tax year, mostly tax credits.
Find out about tax law changes, helpful tips and IRS announcements all year by subscribing to IRS Tax Tips through www.irs.gov or IRS2Go, the mobile app from the IRS. The IRS issues tips regularly during summer and tax season.
The IRS emphasizes that each household’s financial circumstances are different so it’s important to fully consider your specific situation and goals before making large financial decisions.
If you have any questions call our tax professionals today and good luck.
by admin | Mar 28, 2012 | Back Taxes, Income Tax Preparation, IRS Tax Problem, Representation, Tax Help
This comes as a great surprise to many expecting their IRS tax refund. The IRS sends a notice telling you they have used their right to offset to pay old debts such as State Tax Debts, Child Support or even Student loans.
If this happens to you I would suggest calling us at Fresh Start Tax, 1-866-700-1040 to permanently resolve your IRS tax matter and get tax relief.
Most taxpayers in this situation may qualify for an offer in compromise or a tax debt settlement. By calling our office we can find out if you qualify.
Here are the rules and regs regarding tax refunds that may be applied to offset certain debts
The Department of Treasury’s Financial Management Service, which issues IRS tax refunds, can use part or all of your federal tax refund to satisfy certain unpaid debts.
Facts you what to know about tax refund offsets:
1. If you owe federal or state income taxes, your refund will be offset to pay those taxes first. If you had other debt such as child support or student loan debt that was submitted for offset, FMS will apply as much of your refund as is needed to pay off the debt and then issue any remaining refund to you if a tax refund is applicable.
2. You will receive a notice from the IRS if an offset occur. The offset will occur each and every year to the problem is resolved.
The tax notice will include the original refund amount, your offset amount, the agency receiving the payment and its contact information. If the information about the exist debt is incorrect, we suggest you contact them directly to resolve the problem.
3. If you believe you do not owe the debt or you are disputing the amount taken from your refund, you should contact the agency shown on the notice, not the IRS.
4. If you filed a joint return and you are not responsible for the debt, but you are entitled to a portion of the refund, you may request your portion of the refund by filing IRS Form 8379, Injured Spouse Allocation.
You should attach IRS tax form 8379 to your original Form 1040, Form 1040A, or Form 1040EZ or file it by itself after you are notified of an offset. Form 8379 can be downloaded from the IRS website at www.irs.gov.
5. You can file Form 8379 electronically. If you file a paper tax return you can include Form 8379 with your return, write “INJURED SPOUSE” at the top left of the Form 1040, 1040A or 1040EZ. IRS will process your allocation request before an offset occurs.
6. If you are filing Form 8379 by itself, it must show both spouses’ Social Security numbers in the same order as they appeared on your income tax return. You, the “injured” spouse, must sign the form.
You should not attach the previously filed Form 1040 to the Form 8379.
Send the Form 8379 to the IRS Service Center where you filed your original return only so the documentation may be matched.
7. The IRS will compute the injured spouse’s share of the joint return. Contact the IRS only if your original refund amount shown on the FMS offset notice differs from the refund amount shown on your tax return.
8. Follow the instructions on Form 8379 carefully and be sure to attach the required forms to avoid delays.
If you are looking for quality tax relief from a professional tax firm, call Fresh Start Tax LLC today.
by steve | Mar 4, 2012 | Income Tax Preparation, IRS Tax Problem
There is no hotter topic this tax season. The mortgage debt forgiveness issue is the bulk of our calls and tax questions this tax season. There is a lot on the line. With that said here are the top tax tips regarding mortgage debt forgiveness.
Internal Revenue Service and the Mortgage Debt Forgiveness
Canceled debt is normally taxable to you, but there are exceptions to the rules.
One of those exceptions is available to homeowners whose mortgage debt is partly or entirely forgiven during tax years 2007 through 2012.
1. Normally, debt forgiveness results in taxable income.
However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence.
2. The limit for mortgage forgiveness is $1 million for a married person filing a separate return.
3. You can also exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure.
4. For a taxpayers to qualify the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence.
5. Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion.
6. Proceeds of refinanced debt used for other purposes for example, to pay off credit card debt do not qualify for the exclusion. Check the list to make sure your debt qualifies or call us today.
7. If you can qualify, claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attach it to your federal income tax return for the tax year in which the qualified debt was forgiven.
8. Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the tax relief provision.
In some cases, however, other tax relief provisions such as insolvency may be applicable. IRS Form 982 provides more details about these provisions.
9. If your debt is reduced or eliminated you normally will receive a year-end statement, Form 1099-C, Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.
10. Examine the Form 1099-C carefully.
Notify the lender immediately if any of the information shown is incorrect.
You should pay particular attention to the amount of debt forgiven in Box 2 as well as the value listed for your home in Box 7.
To make sure your debt qualifies for this tax relief, call us today.
by steve | Feb 27, 2012 | Income Tax Preparation, IRS Tax Advice
Fresh Start Tax LLC wants to keep all of our clients aware of different tax credits offered by the IRS. Here are some valuable tax tips regarding Education Credits.
Education Tax Credits can help pay higher education costs
Two Federal Tax Credits are available.
This may help you offset the costs of higher education for yourself or your dependents.
These are the American Opportunity Credit and the Lifetime Learning Credits.
To qualify for either tax credit, you must pay post secondary tuition and fees for yourself, your spouse or your dependent.
The tax credit may be claimed by either the parent or the student, but not both. If the student was claimed as a dependent, the student cannot file for the credit.
For each student, you may claim only one of the credits in a single tax year. You cannot claim the American Opportunity Credit to pay for part of your daughter’s tuition charges and then claim the Lifetime Learning Credit for $2,000 more of her school costs.
If you pay college expenses for two or more students in the same year, you can choose to take credits on a per-student, per-year basis.
You may claim the American Opportunity Credit, AOC, for your sophomore daughter and the Lifetime Learning Credit for your spouse’s graduate school tuition.
Here are some facts the IRS and Fresh Start Tax LLC wants you to know about these valuable education credits:
1. The American Opportunity Credit
a. The credit can be up to $2,500 per eligible student.
b. It is available for the first four years of post secondary education.
c. Forty percent of the credit is refundable, which means that you may be able to receive up to $1,000, even if you owe no taxes.
d. The student must be pursuing an undergraduate degree or other recognized educational credential.
e.The student must be enrolled at least half time for at least one academic period.
f. Qualified expenses include tuition and fees, coursed related books supplies and equipment.
The full credit is generally available to eligible taxpayers whose modified adjusted gross income is less than $80,000 or $160,000 for married couples filing a joint return.
2. Lifetime Learning Credit
a. The credit can be up to $2,000 per eligible student.
b. It is available for all years of post secondary education and for courses to acquire or improve job skills.
c. The maximum credited is limited to the amount of tax you must pay on your return.
d. The student does not need to be pursuing a degree or other recognized education credential.
e. Qualified expenses include tuition and fees, course related books, supplies and equipment.
f. The full credit is generally available to eligible taxpayers whose modified adjusted gross income is less than $60,000 or $120,000 for married couples filing a joint return.
g. If you don’t qualify for these education credits, you may qualify for the tuition and fees deduction, which can reduce the amount of your income subject to tax by up to $4,000. However, you cannot claim the tuition and fees tax deduction in the same year that you claim the American Opportunity Tax Credit or the Lifetime Learning Credit.
You must choose to either take the credit or the deduction and should consider which is more beneficial for you.
For professional tax help and to audit proof your tax return call Fresh Start Tax LLC today.
by steve | Feb 27, 2012 | Income Tax Preparation
There are different ways to find Free Tax Help to prepare your income tax return.
First go to the The IRS.
The IRS offers free assistance by computer, telephone and in person.
The easiest and fastest way to get free tax help is through the IRS website – www.irs.gov.
The Internal Revenue Service also can also help find free tax preparation sites for those who qualify.
Here are some easy ways to get the help you need to file your tax return.
1. IRS website .
The IRS website at www.irs.gov is a one-stop shop for a wide array of tax information. You can even prepare and file your federal tax return for free through Free File, a service offered by IRS and its partners who offer free tax preparation software and free electronic filing.
But you must go through www.irs.gov to use Free File.
Do you have some tax questions?
Check out 1040 Central on the individuals page for the latest news.
You can even check the status of your refund with Where’s My Refund?
2. Community resources.
Free income tax preparation is available through the Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs in many communities.
Volunteer tax return preparation programs are provided through partnerships between the IRS and community based organizations.
They offer free help in preparing simple tax returns for low-to-moderate-income taxpayers. To find a site near you, visit www.irs.gov, or call 800-906-9887. Qualified taxpayers (age 60 or older) can also find help at a local TCE site by visiting www.aarp.org or calling 888-227-7669.
3. Telephone Call.
The IRS Tax Help Line for Individuals, 800-829-1040, to get answers to your federal tax questions, To hear pre-recorded messages covering various tax topics or to check the status of your refund, call 800-829-4477.Prepare yourself for a long wait. If it is free you will wait.
4. Taxpayer Assistance Centers.
When you believe your tax issue cannot be handled online or by phone and you want face-to-face assistance, you can find help at a local IRS Taxpayer Assistance Center. Locations, business hours and an overview of services are available at www.irs.gov.
Just go to the Individuals tab and click on the Contact My Local Office link on the left under IRS Resources.
Remember, it is always best to hire a professional tax preparer. You will know you are going to pay the lowest amount of tax allowed by law because tax professional know all the tax loopholes.
