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By Todd Whalen - June 15, 2020
Those who are self-employed enjoy far more freedom than most, but they are also forced to endure more stress when it comes to taxes. As if things weren’t complicated enough for the self-employed, COVID-19 has thrown a wrench into the normal tax payment routine for 2020.
Between shifting deadlines and new credits, self-employed Americans have quite a few updates to keep track of this year; this quick guide may make it easier to manage these amendments, but working with a qualified professional is the surest way to know nothing has been overlooked.
By Todd Whalen - May 1, 2020
The first thing on everyone’s mind at the moment is the $1200 stimulus check they’re expecting from the government—perhaps you’ve already received yours, or perhaps you’re still eagerly waiting. In any case, you likely have some pressing questions about the 2020 stimulus checks, and we’re here to offer simplified answers.
How Are The 2020 Stimulus Checks Distributed?
If you filed taxes in 2018 and/or 2019 and your income qualifies you for a stimulus check, then the IRS has your information on file, and you’ll receive the check automatically.
Assuming that your most recent tax return included your correct direct deposit information, then you can expect an infusion of funds to arrive in your account seamlessly. If your banking information (or address) has changed since your most recent tax return, use the IRS portal to update it.
The good news is, if the IRS cannot locate any banking data for you, they’ll simply mail you a check. This means you’ll have to wait longer to receive stimulus funds, but you can rest assured that they will reach you.
Who Qualifies For Payment?
Any single person whose most recent AGI (Annual Taxable Income listed in your tax return) is $75,000 or less will receive a payment of $1,200. For single individuals who make more than $75,000, the payment is reduced by 5% incrementally until reaching the $99,000 mark. Anyone who makes more than $99,000 a year will not receive a stimulus check.
Married couples making less than a combined $150,000 AGI will receive $2,400; payments follow the same incremental phasing out in 5% blocks until being eliminated once a couple’s combined AGI reaches $198,000.
Each qualifying child adds up to $500 to the payment, but that amount is subject to the same 5% reduction.
It’s worth noting that if your AGI has gone up considerably since 2018 and you have yet to file your 2019 taxes, you could obtain some extra money by holding off on filing. Although stimulus checks are technically meant to be based on the 2020 tax year, the government is forced to rely upon the most recent information they have on record; if you made $70,000 in 2018, but now make $80,000, you could enjoy the full benefits of the stimulus check by simply waiting to file your taxes, and you won’t have to pay that money back.
What About Special Circumstances?
If you don’t have a filing requirement (such as people who receive social security), then the IRS will still send you a payment so long as you update your banking information through their portal.
If you owe the IRS, money, you can still receive your stimulus check without fear that the IRS will come after you. The same is true if you haven’t filed taxes for many years. In fact, this is an excellent opportunity to get back in the good graces of the IRS since most of their collections division is currently shut down, giving you time to figure out a payment plan.
If we can help you establish a plan for turning your 2020 stimulus check into an opportunity for rectifying financial issues, please call 303-753-6040.
By Todd Whalen - March 12, 2020
What to Do if You Haven’t Filed Taxes in Years?
Why Is It Important to File an Annual Tax Return?
Do you have unfiled tax returns? Many people receive a tax refund but end up owing the Internal Revenue Service for unpaid taxes because of not filing a tax return. If this is you, don’t wait to file your return or you could risk being charged with a crime. The IRS does not forget about or overlook unfiled taxes and they will eventually catch up to you. If it’s been one year or several years since you filed a tax return, or if you’ve never filed, you need a tax return professional with the training, experience, and skills to handle your tax filing situation.
We only have three years to file a tax return and claim any refund that is due to us, but the Internal Revenue Service has 10 years to request an unfiled tax return. If you owe the government unpaid taxes, the IRS will assess a 5% penalty to your unpaid tax liability each month that it is not paid after the filing deadline and after 5 months (25%) the penalties continue at ½ of a percent. Any penalties that are being assessed for unfiled tax returns could be causing your tax debt to continue to grow larger every day.
What Can the IRS Do to Collect Back Taxes?
In many cases, the IRS can file a Substitute for Return (SFR) if you have not filed a tax return on your own for several years. They usually use the worst filing status possible for unfiled tax returns and do not allow exemptions for dependents, or apply for any available child credits. They can use an estimate of your gross business income, disallow any business expenses, and send you a huge bill that eventually becomes a legal debt. This can easily lead to enforcement of collection actions such as levies and liens that you are not prepared for or expecting.
When this action is taken the SFR does not take into account any deductions you may have been entitled to, so your best option would be to go back and protest these old returns that the IRS has filed so that your tax bill is accurate and you can take advantage of any deductions for which you qualify. The IRS takes filing annual tax returns very seriously, and usually, the penalty for failure to file is even higher than the penalty for failure to pay back taxes.
Are There Any Tax Payment Options Should You Consider?
Although the thought of being charged with a crime and having the IRS attach your wages and/ or drain your bank account is scary, there are ways to handle this scenario. When someone needs help with unfiled tax returns, many times there are large balances due. In cases like these, an Offer in Compromise can be the ideal resolution for many people. An Offer in Compromise means that the IRS will accept less money than is owed to settle the entire tax burden. There are specific rules you must follow to qualify for this solution. You are required to provide very detailed financial and personal information which is used to determine your ability to pay now and what they believe you can pay with an installment plan. There are many variables that factor into what the IRS will accept.
The Denver based tax professionals at Advanced Tax Solutions are here to help you work out this situation in your best interests. We understand the processes involved, how the IRS operates, and how they value income and assets. We offer professional Offer in Compromise tax services in Denver to help assure you get the best possible outcome.
Get the Help You Need Today
We understand that finding a solution to your tax problems caused by not filing a tax return can be an intricate process. Don’t try to negotiate your tax issues alone! Advanced Tax Solutions has years of experience in the area of helping people with unfiled tax returns. We will walk you through the process of filing old returns when you need someone you can trust. If you’re facing the daunting prospect of filing old tax returns, reach out to our team of tax professionals today.
Call us at our Denver office at (303) 753-6040 to schedule a free consultation for the help you need. Our goal is to help you put your tax problems far behind you. We keep our prices reasonable, so you can have one less financial burden to think about. Contact us today, and let’s get started.
By Todd Whalen - September 17, 2019
The following video contains important information about filing unfiled tax returns that you will want to consider BEFORE trying to get back into the tax system. In the video, Todd Whalen, the founder of Advanced Tax Solutions, CPA, PC, addresses everything from what the IRS wants you to file (not necessarily all the old years), if you can get in trouble or go to jail for not filing, considerations about the tax protester movement, and more. If you owe back tax returns to the IRS this information may save you a lot of headaches, ease your fears, and may even save you some money. If you are ready to file unfiled tax returns, our 20-year veteran shares all the information you need to get started. Knowledge is power when dealing with the IRS.
Questions about filing unfiled tax returns? Contact the experienced tax resolution professionals at Advanced Tax Solutions.
By Todd Whalen - August 22, 2019