5 IRS Filing Season Myths: Tax Help from True Tax Resolutions Inc.

Myth 1: All Refunds Are Delayed

The IRS issues more than nine out of 10 refunds in less than 21 days. Eight in 10 taxpayers get their refunds faster by using e-file and direct deposit. It’s the safest, fastest way to receive a refund and is also easy to use.

While more than nine out of 10 federal tax refunds are issued in less than 21 days, some refunds may be delayed, but not all of them. By law, the IRS cannot issue refunds for tax returns claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) before mid-February. The IRS began processing tax returns on Jan. 29.

Other returns may require additional review for a variety of reasons and take longer. For example, the IRS, along with its partners in the state’s and the nation’s tax industry, continue to strengthen security reviews to help protect against identity theft and refund fraud.

Myth 2: Delayed Refunds, those Claiming EITC and/or ACTC, will be Delivered on Feb. 15

By law, the IRS cannot issue EITC and ACTC refunds before mid-February. The IRS expects the earliest EITC/ACTC related refunds to be available in taxpayer bank accounts or debit cards starting Feb. 27, 2018, if these taxpayers chose direct deposit and there are no other issues with their tax return. The IRS must hold the entire refund, not just the part related to these credits.

Myth 3: Ordering a Tax Transcript a “Secret Way” to Get a Refund Date

Ordering a tax transcript will not help taxpayers find out when they will get their refund. The IRS notes that the information on a transcript does not necessarily reflect the amount or timing of a refund. While taxpayers can use a transcript to validate past income and tax filing status for mortgage, student and small business loan applications, they should use “Where’s My Refund?” to check the status of their refund.

Myth 4: Calling the IRS or a Tax Professional Will Provide a Better Refund Date

Many people mistakenly think that talking to the IRS or calling their tax professional is the best way to find out when they will get their refund. In reality, the best way to check the status of a refund is online through the “Where’s My Refund?” tool at IRS.gov or via the IRS2Go mobile app.

The IRS updates the status of refunds once a day, usually overnight, so checking more than once a day will not produce new information. “Where’s My Refund?” has the same information available as IRS telephone assistors so there is no need to call unless requested to do so by the refund tool.

Myth 5: The IRS will Call or Email Taxpayers about Their Refund.

The IRS doesn’t initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. Recognize the telltale signs of a scam.

The IRS will NEVER:

  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail a bill if taxes are owed.
  • Threaten to immediately bring in local police or other law enforcement groups to have people arrested for not paying.
  • Demand that taxes be paid without giving the taxpayer opportunity to question or appeal the amount owed.
  • Ask for credit or debit card numbers over the phone.

Harold Pena-Hayes, E.A.
President of True Tax Resolutions Inc.

True Tax Resolutions is tax service dedicated to providing the highest caliber of tax help to the business and individual taxpayers of America. Whether you owe Federal Tax or the State Tax we can help you. We help businesses and Individuals with tax filing, including delinquent tax returns. Additionally, we help clients with tax refunds, tax extension, tax debt settlement, payment plans, wage garnishment removal, levy lifts, and obtaining hardship status. Call 773–609–4TAX or visit www.truetaxresolutions.com for a free no obligation consultation with licensed tax professional.

Advertisements

TOP 3 REASONS TAXPAYERS OWE THE IRS: TAX HELP FROM TRUE TAX RESOLUTIONS INC.

1. W-2 Employees under withholding from their paycheck.

When a employee starts a new job. The Human Resources department of the company usually gives the new hire an IRS form W-4 to fill out. This form basically lets the employer know how many exemptions the employee will be claiming on their federal tax return. Which in turn lets the the payroll department determine of much of your paycheck to send to the IRS and or state to cover your income taxes. So if you claim more exemptions than you are entitled to, you will in turn not be sending enough money to the IRS to cover the amount of taxes you will owe causing a Tax Debt.

2. Business Owner and other Self-Employed people not making the proper Estimated Quarterly Tax Payments.

When you are self-employed, unless you set a corporation and pay yourself a salary. Chances are there are no taxes being withheld from your income. That means that the IRS expects you to send in the appropriate amount of money to pay your income tax every 3 months or on a quarterly basis. If you do not make these Estimated Quarterly Tax Payments it will lead to a tax debt. You will have a balance with the IRS for what is owed along with any appropriate penalties and interest.

3. IRA and 401k Distributions

Another common way tax payers end up needing help fixing a tax problem is due to withdrawing money from retirement accounts before actually retiring or being the proper age. There are times when unexpected expenses pop up, and it is natural for a taxpayer to think about all the accounts they can access to pay off bills. The problem is if the money comes from a IRA or 401k or other type of retirement account it can cause a tax debt. The is an issue because since the money goes into the retirement account tax free, it is taxed when it is withdrawn from the account.

In addition to owing a tax balance due to withdrawing the funds, if you are under the age of 59 and a half you will receive an additional 10% penalty on top tax debt. The IRS imposes this penalty to discourage abuse of retirement accounts.

Authored by: Harold Pena-Hayes, E.A.President of True Tax Resolutions Inc. True Tax Resolutions is tax service dedicated to providing the highest caliber of tax help to the business and individual taxpayers of America. Whether you owe Federal Tax or the State Tax we can help you. We help businesses and Individuals with tax filing, including delinquent tax returns. Additionally, we help clients with tax refunds, tax extension, tax debt settlement, payment plans, wage garnishment removal, levy lifts, and obtaining hardship status. Call 773-609-4TAX or visit http://truetaxresolutions.com for a free no obligation consultation with a licensed professional.

TRUE TAX RESOLUTIONS INC.

TRUE TAX RESOLUTIONS INC.
truetaxresolutions.com

Who Can You Claim as a Dependent?

You won’t go very far into doing your own taxes without confronting this question. It’s central to your tax return, because for each dependent you can claim, you can get an exemption — a valuable chunk taken right off the top of taxable income. (Each taxpayer also gets their own exemption, of course.) But who can you rightfully claim as a dependent? Let’s break down the IRS requirements.

First and foremost, a dependent is someone you support. And support is the key requirement: You must have provided at least half of the person’s total support for the year — food, shelter, clothing, etc. If your adult daughter, for example, lived with you but provided at least half of her own support, you probably can’t claim her as a dependent.

Rules for All Dependents

Dependents are usually, but not always, a child or other relative. Qualifying children and qualifying relatives have their own additional requirements, but all dependents must meet these requirements:

  • Dependents can have their own tax returns, and even be married, but they must not have filed a joint tax return for the year unless it’s just to claim a refund.
  • They must be a U.S. citizen, U.S. national, or a resident alien.
  • They must have a taxpayer identification number. That’s usually a Social Security Number, but if the child doesn’t qualify for one, it can be an Individual Taxpayer Identification Number (ITIN) or an Adoption Taxpayer Identification Number (ATIN).

Rules for Claiming Children

When you’re claiming a dependent who is a child, there are further requirements:

  • The child has to have lived with you for at least half of the year.
  • The child has to be related to you as a son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of those.
  • The child must be 18 or younger at the end of the year, or under 24 if a student. To be a student, the child must have attended school full-time during at least five months of the year. The five months don’t have to be in a row.
  • The child must be younger than you (or your spouse, if married filing jointly), unless the child is disabled.

Rules for Claiming Other Relatives and Unrelated Persons

For a parent or other relative, there are different additional requirements:

  • The person cannot have a gross yearly income over $4,050. (That’s the amount for 2017 returns — it usually changes each year.)
  • The person can’t be a qualifying child dependent of you or another person. That means you can’t claim the person if someone else could.
  • The person must be either related to you or must have lived with you all year as a member of your household.

Authored by:
Harold Pena-Hayes, E.A.
President of True Tax Resolutions Inc.

True Tax Resolutions is tax service dedicated to providing the highest caliber of tax help to the business and individual taxpayers of America. Whether you owe Federal Tax or the State Tax we can help you. We help businesses and Individuals with tax filing, including delinquent tax returns. Additionally, we help clients with tax refunds, tax extension, tax debt settlement, payment plans, wage garnishment removal, levy lifts, and obtaining hardship status. Call 773–609–4TAX or visit www.truetaxresolutions.com for a free no obligation consultation with licensed tax professional.

5 Reasons to File Delinquent Tax Returns: Tax Help from True Tax Resolutions inc.

5 Reasons to File Delinquent Tax Returns

1. If you have income, you should be filing a tax return.

Not filing your tax returns is not just bad financial planning, it can be deemed a criminal act by the IRS. It is punishable by a year in jail and a $10,000 fine for each tax return that is not filed. Sure, you may think you’re getting away with not reporting your income, but think about. Chances are whoever you work for, or are doing business with is most likely reporting the money they give you as a business expense to the IRS. In fact, they usually let you of the amount they reported to the IRS in the form of a 1099 or W-2. Sometimes taxpayers don’t file because they no longer have income records for the delinquent tax years. If this is case, the feel free to call 773-609-4TAX or visit http://www.truetaxresolutions.com for a free no obligation consultation with licensed tax professional and we can go over your options for obtaining the financial records necessary to file your tax returns up to date.

2. Avoid extra penalties

When you do not file a tax return on time, you automatically open yourself up to additional penalties. A few of the penalties I most commonly see with clients who have not filed tax returns tax returns are late filing penalties, late payment penalties, and penalties for not pre-paying taxes. Bear in mind the penalty for not filing your tax return is 25%, and when you start tacking on additional penalties and interest you have the makings of a sizable tax debt. If you work or are in business for yourself I recommend you always file a tax return on time, even if you don’t have the cash on hand to pay the tax debt in full. When you file on time you will at least avoid the late filing penalty.

3. Do not let the IRS file your taxes for you

You may not be aware of this but if you do not file a tax return the IRS will sometimes file one on your behalf. This process is known as Substitute for Return. Although it may seem nice of them to file your tax return for you, please be advised they usually only do it to start the collections process. The reasoning behind this is since you did not file a tax return, there is technically no balance yet and therefore nothing for the IRS to collect on. So, by them filing the tax return for you, they create and balance that they can then collect on. There are several disadvantages to having the IRS file your taxes for you namely is that they do not consider such credits as the earned income credit, business expenses, marital status, and dependents among others. This often results in a higher amount owed in taxes.

4. You may be owed tax refunds

If you are a W-2 employee who has taxes withheld from your paycheck or a self-employed person who makes quarterly estimated tax payments, there is a chance you paid more taxes than you owe. If this is the case and you don’t file a tax return you are just leaving money on the table. Even if you have not filed a tax return in years you can recover tax refunds for up to three years back. If you are due tax refunds I recommend you visit http://www.truetaxresolutions.com or call 773-609-4TAX to get them filed as soon as possible.

5. Compliance is key

Filing any missing tax returns is usually the first step in fixing a tax problem The IRS and most states require all missing tax returns before they will consider entering an installment agreement or a tax debt settlement. Therefore, unless you a very low income, or only receive social security income you need to be filed up to date to enter any tax debt relief programs. If you need to file delinquent tax returns I recommend you don’t put it off any longer, in most cases ignoring a tax problem just leads to more penalties and interest.

Authored by:
Harold Pena-Hayes, E.A.
President of True Tax Resolutions Inc.

True Tax Resolutions is tax service dedicated to providing the highest caliber of tax help to the business and individual taxpayers of America. Whether you owe Federal Tax or the State Tax we can help you. We help businesses and Individuals with tax filing, including delinquent tax returns. Additionally, we help clients with tax refunds, tax extension, tax debt settlement, payment plans, wage garnishment removal, levy lifts, and obtaining hardship status. Call 773-609-4TAX or visit truetaxrestruetaxresolutions.com for a free no obligation consultation with Harold Pena-Hayes, E.A.

How does the IRS Calculate Interest? : Tax Help from True Tax Resolutions

Late payment of employment taxes will trigger penalties and interest charges to the taxpayer. These notices, particularly from the IRS, are next to impossible to decipher. Here is a quick primer on how the IRS calculates penalties and interest.

Statute of Limitations

There is NO statute of limitations on the failure to file and report payroll taxes (Social Security, Medicare, Unemployment, withheld income taxes). There also is no statue of limitations on assessment of tax, penalties and interest when a false tax return is filed. Household employment taxes are remitted with the employer’s personal 1040 income tax return. Any household employer who did not pay these taxes has de jure submitted a false tax return.

Types of IRS Penalty Charges

Late Filing Penalties

If you owe tax and don’t file on time, according to IRS regulations, penalties are assessed and added to your bill. Penalties are in addition to BOTH the tax due and the interest on the past due tax. The total late–filing penalty is usually 5% of the tax owed for each month, or part of a month, that your return is late up to five months (25%). If your return is over 60 days late, the minimum penalty for late filing is the smaller of $100 or 100 percent of the tax owed.

Late Payment Penalties

If you file on time but don’t pay all amounts due on time, you’ll generally have to pay a late payment penalty of one–half of one percent (0.5%) of the actual tax owed for each month, or part of a month, that the tax remains unpaid from the due date, until the tax is paid in full. There is no maximum limit to the failure-to-pay penalty.

Authored by: Harold Pena-Hayes, E.A.
President of True Tax Resolutions Inc.

True Tax Resolutions is a company dedicated to providing the highest caliber of tax help services to the business and individual taxpayers of America. Whether your issue is with the IRS or the State we can help you. We help businesses and Individuals file current and past due tax returns. Additionally, we help clients with tax debt settlement, tax debt payment plans, wage garnishment removal, levy lifts, and obtaining hardship status. Go to http://truetaxresolutions.com Call 773–609–4TAX or email truetaxresolutions@gmail.com for a free no obligation consultation with a tax professional.

Top 5 Ways to Fix a Tax Problem: Tax Debt Relief

Top 5 Ways to Fix a Tax Problem: Tax Debt Relief

1. File Missing Tax Returns The truth of the matter is the IRS and most states require all missing tax returns to be filed before a taxpayer can be put into a tax resolution. So the first step in fixing many tax problems is to start with fulfilling any outstanding filing requirements. Once you are compliant with filing requirements you will know if you owe taxes, how much you owe in taxes, or if you are due a tax refund. If you need to file missing tax returns, or have questions about obtaining old income information to fix a tax problem you can call True Tax Resolutions Inc at 773-609-4TAX for help.
2. Tax Debt Settlement or Offer in Compromise In some cases, when a taxpayer cannot pay off a tax debt in full. The IRS and some states will allow a tax payer to pay less than what they owe, sometimes significantly less. The bulk of these programs are based on income and assets, and require extensive paperwork so if you need professional help go to http://truetaxresolutions.com for a free consultation.
3. Payment Plans or Installment Agreements If a tax payer does not have all the money on hand to pay off a tax debt in full. The IRS and most states allow for an agreement to be negotiated which allows for repayment of the tax debt in monthly installments.
4. Partial Payment Plans or Partial Payment Installment Agreements There are some instances where a taxpayer has the ability to pay back part of a tax debt, however not all of it. In these cases, the IRS and some states allow agreement to be negotiated where the taxpayer can make smaller payments on the tax debt in order to avoid things like wage garnishments, and bank levies. These payments will not pay off the balance in full, and that is the upside of these agreements.
5. Hardships The IRS and some states have programs available for taxpayers that have tax debts, but do not have the ability to pay off the tax debt. These programs are based on using a taxpayer’s low income and/or lack of assets to demonstrate an inability to pay. Once an inability to pay the tax debt has been established the IRS or state will cease most collection activities.

Authored by: Harold Pena-Hayes, E.A.
President of True Tax Resolutions Inc.

True Tax Resolutions is a company dedicated to providing the highest caliber of tax help services to the business and individual taxpayers of America. Whether your issue is with the IRS or the State we can help you. We help businesses and Individuals file current and past due tax returns. Additionally, we help clients with tax debt settlement, tax debt payment plans, wage garnishment removal, levy lifts, and obtaining hardship status. Go to http://truetaxresolutions.com Call 773-609-4TAX or email truetaxresolutions@gmail.com for a free no obligation consultation with a tax professional.

5 Reasons to File Delinquent Tax Returns

  1. If you have income, you should be filing a tax return

Not filing your tax returns is not just bad financial planning, it can be deemed a criminal act by the IRS. It is punishable by a year in jail and a $10,000 fine for each tax return that is not filed. Sure, you may think you’re getting away with not reporting your income, but think about. Chances are whoever you work for, or are doing business with is most likely reporting the money they give you as a business expense to the IRS. In fact, they usually let you of the amount they reported to the IRS in the form of a 1099 or W-2. Sometimes taxpayers don’t file because they no longer have income records for the delinquent tax years. If this is case, the feel free to call 773-609-4TAX or visit http://www.truetaxresolutions.com for a free no obligation consultation with licensed tax professional and we can go over your options for obtaining the financial records necessary to file your tax returns up to date.

  1. Avoid extra penalties

When you do not file a tax return on time, you automatically open yourself up to additional penalties. A few of the penalties I most commonly see with clients who have not filed tax returns tax returns are late filing penalties, late payment penalties, and penalties for not pre-paying taxes. Bear in mind the penalty for not filing your tax return is 25%, and when you start tacking on additional penalties and interest you have the makings of a sizable tax debt. If you work or are in business for yourself I recommend you always file a tax return on time, even if you don’t have the cash on hand to pay the tax debt in full. When you file on time you will at least avoid the late filing penalty.

  1. Do not let the IRS file your taxes for you

You may not be aware of this but if you do not file a tax return the IRS will sometimes file one on your behalf. This process is known as Substitute for Return. Although it may seem nice of them to file your tax return for you, please be advised they usually only do it to start the collections process. The reasoning behind this is since you did not file a tax return, there is technically no balance yet and therefore nothing for the IRS to collect on. So, by them filing the tax return for you, they create and balance that they can then collect on. There are several disadvantages to having the IRS file your taxes for you namely is that they do not consider such credits as the earned income credit, business expenses, marital status, and dependents among others. This often results in a higher amount owed in taxes.

  1. You may be owed tax refunds

If you are a W-2 employee who has taxes withheld from your paycheck or a self-employed person who makes quarterly estimated tax payments, there is a chance you paid more taxes than you owe. If this is the case and you don’t file a tax return you are just leaving money on the table. Even if you have not filed a tax return in years you can recover tax refunds for up to three years back. If you are due tax refunds I recommend you visit http://www.truetaxresolutions.com or call 773-609-4TAX to get them filed as soon as possible.

  1. Compliance is key 

Filing any missing tax returns is usually the first step in fixing a tax problem The IRS and most states require all missing tax returns before they will consider entering an installment agreement or a tax debt settlement. Therefore, unless you a very low income, or only receive social security income you need to be filed up to date to enter any tax debt relief programs. If you need to file delinquent tax returns I recommend you don’t put it off any longer, in most cases ignoring a tax problem just leads to more penalties and interest.

                                                                                                                       Authored by:

                                                                                                           Harold Pena-Hayes, E.A.

                                                                                        President of True Tax Resolution Inc.