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IRS Payment Plans: 4 Must-Know Options for Covid Tax Relief

By Todd Whalen - August 25, 2020

This year, the Internal Revenue Service (IRS) tax deadline was extended from April 15 to July 15 to help those who are financially affected by the coronavirus. And, despite requests from taxpayer unions, small businesses and taxpayers to further stretch the deadline again to September 15, the IRS announced they will not extend the July 15 tax deadline.

Naturally, this is bad news for the millions of Americans facing financial strain in the wake of the coronavirus pandemic. A recent TaxAudit survey reports that 37% of taxpayers are unable to pay their 2019 taxes owed, even with the July 15 deadline, and a whopping 61% of Americans fear they will be forced into tax debt due to the financial ramifications of COVID-19.

If you don’t have the financial resources to pay your tax debts right now, it’s important to know you do have options.

1. File for an Extension

Postponing your payment may be a viable option. Of course, the IRS will charge you for penalties and also for interest accrued after the deadline. Still, it can be an effective option to keep the IRS at bay while you financially recover.

2. Enroll in an IRS Installment Agreement

You can also address your tax liability through an installment agreement which could draw out payments for up to six years. You may be able to extend payments beyond six years if your debt is more than $50,000.

Be aware, however, that the rules and regulations can be confusing. We strongly advise that you contact one of our skilled tax specialists who understands the rules and regulations and can help you set up a tax installment agreement with the IRS.

3. Consider an IRS Offer in Compromise

In many instances, taxpayers can pay less than the amount they owe the IRS through an Offer in Compromise. Consult our tax professionals now to see if you qualify to reduce your tax obligation.

4. Look into Currently Not Collectible (CNC) Status

You may be able to avoid any tax payments right now if you qualify as “Currently Not Collectible.” You may qualify for this status if you can show the IRS that your monthly expenses exceed the amount of your monthly income. Of course, you must provide the IRS with supporting documents in this case.

The IRS Is Back at Work

During the early weeks of the coronavirus pandemic, the IRS was forced to close its doors. That is no longer the case. 

Currently, the IRS is open, and they are actively processing taxes every day. Further, they are accepting applications for installment plans and reduced payments to help those who need it.

Not surprisingly, the department is also contacting taxpayers about their tax burden. If you owe taxes to the IRS, now is the time to get your tax situation in order.

The Bottom Line

According to the TaxAudit survey, nearly half of all taxpayers (49%) are fearful of the IRS contacting them about their tax debt. 

That’s understandable, but it doesn’t have to be that way.

Rather than waiting for the IRS to contact you, you can be proactive and take matters into your own hands. After all, you could receive immediate relief through an installment plan or lower payments. You may even qualify to avoid making any payments at this time if you are designated as “Currently Not Collectible.”

Best of all, you may not even have to contact the IRS. Reach out to Advanced Tax Solutions now, and let us help you deal with the IRS and get you the tax relief you deserve. Our goal is to reduce your tax burden as much as legally possible so you can get back to your life.


How COVID-19 Will Affect Self-Employment Taxes in 2020

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.

Updated Filing Deadlines

Ordinarily, self-employed Americans are required to pay their first quarter taxes on Tax Day—April 15. Because the IRS extended the federal tax filing deadline, they also essentially waived those first-quarter payments for the time being. The new deadline to file federal taxes is July 15; those who have yet to file their 2019 taxes, and who are expecting a refund, are encouraged to do so now since refunds will still be processed as normal.
It’s possible that some self-employed people have still not filed their 2019 taxes at this point. While that’s fine from a legal standpoint considering the extended deadline, it may prove complicated (or at least less than ideal) down the road once you see how the updated quarterly deadlines are scheduled to play out.

Since July 15 is the new deadline for filing 2019 taxes, it comes as no surprise that it’s also the new deadline for self-employed Americans to file their quarterly estimated taxes for the first quarter of 2020 considering the two deadlines usually coincide. Unfortunately, because this initial deadline is delayed by several months, it is also the deadline for self-employed individuals to file their quarterly estimated taxes for the second quarter, meaning the estimated tax payments for the entire first half of the year are due on July 15.

Though this might seem lofty, it’s worth noting that the first and second quarter payments would ordinarily be due on April 15 and June 15 respectively, so the July 15 deadline echoes the interest and penalty-free deferment of tax payments that the IRS announced for the 2019 tax year in some measure, but also speaks to the fact that the country is attempting to make up for lost time in the second half of the year.

Following the first and second quarters, deadlines for filing quarterly estimated tax payments will remain unchanged. In summation, all 2020 deadlines are as follows:
  • First quarter — July 15
  • Second quarter — July 15
  • Third quarter — September 15
  • Fourth quarter — January 15, 2021
This means that, although self-employed Americans got a reprieve from paying estimated quarterly taxes in the first half of the year, they must be prepared to make up that ground come July.

With these deadlines in mind, it’s also important to remember that there are some other factors that may affect your taxes for 2020 as a result of COVID-19 if you are self-employed.

Impact of The Families First Coronavirus Response and CARES Acts

On March 18, the Families First Coronavirus Response Act was passed with the expressed intention of providing those who are self-employed (or who own their own business) some financial relief through refundable tax credits.

This means that, as a self-employed person, you could be eligible for a tax credit equivalent to a qualified sick leave amount which is determined by your average daily income. Similarly, you may also be eligible for a family leave equivalent amount in the form of a tax credit.

Naturally, because this act was passed in response to the coronavirus pandemic, these credits are only provided to individuals who have proper documentation available showing that they were unable to work as a result of COVID-19, either because they were exhibiting symptoms themselves, or because they had to care for a child who was out of school due to the virus without any option for alternative child care. That is to say, you cannot receive a tax credit because you missed work due to falling ill with influenza under this new act as a self-employed individual.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act may also impact how self-employed individuals are taxed for 2020, since it broadened unemployment eligibility and many self-employed people are drawing unemployment benefits for the first time.

Your tax situation for 2020 may be further affected depending upon whether you chose to partake in other features of the CARES Act, like the Paycheck Protection Program or
Economic Injury Disaster Loans.

It’s clear that COVID-19 has not only altered the timeline when it comes to self-employment taxes in 2020, but it has also added a number of potential complications and extra considerations.

What Does This Mean for You?

Though it’s true that your 2019 taxes are not technically due yet, and the first two quarters of 2020’s quarterly estimated tax payments are not past due either, waiting could prove more of a headache than simply getting them all out of the way now.
If you wait until everything is technically due, your 2019 taxes and the first two quarters of 2020 will all be due on the same day, and you’ll be left scrambling at the last minute to gather all of the necessary documents and file them on time.

Rather than waiting until the eleventh hour, contact Advanced Tax Solutions and be proactive about your taxes. We can set up a payment plan for you so that the IRS doesn’t institute one; this is far preferable to allowing the IRS to choose your payment amounts.

Plus, when you work with professionals like the Advanced Tax Solutions team, you can rest assured that even a complicated tax year like 2020 will be handled deftly.

Don’t wait until the last minute and let your taxes pile up to cause undue stress—get in touch with us today to minimize that effect that COVID-19 has on your self-employment taxes this year. 

2020 Stimulus Checks — What You Need to Know

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.

What to Do If You Haven’t Filed Taxes in Years?

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.


Filing Unfiled Tax Returns

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.