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Archive for August, 2012

Taking Care Of Taxes In Disaster Relief

August 29th

So far this year, we haven’t had many weather related disasters. However, as Hurricane Isaac makes landfall today, the IRS wants to remind taxpayers of ways they can safeguard their financial information from the consequences of major storms.

Emergency Plan

Even though it isn’t tax time yet, the IRS advocates that people keep track of their financial information and documents all year long to prevent tax debt troubles. When weather-related or personal disaster strikes, many people have found themselves unprepared for the outcome. Therefore, the IRS encourages everyone to have an emergency plan in place to protect vital information.

First, make sure all you have a duplicate copy or backup of all your financial records. You can make hard copies of your information and store them in a lock box away from your home, or create an electronic back up of your data. Paychecks, bank records, investment or retirement account documents and any receipts for itemized claims should all be protected as part of your back up files.

Also, document what is valuable in your home. Take pictures of your assets and personal property and store these photos off-site along with your financial records. Any items that are damaged during the storm may be eligible to be claimed as casualty losses on your next tax return.  The more evidence you have that a particular item existed and was then damaged; the better your chances of getting a tax break for the cost of replacing such items.

The IRS does have special representatives that deal solely with disaster relief. Even if you aren’t in the path of Hurricane Isaac, take steps to protect your information and keep the IRS’ contact information on hand. Anyone needing more information about disaster relief from the IRS can call 1-866-562-5227.

 

 

 

 

 

Finding Professional Tax Debt Help

August 22nd

TV and radio ads offering tax debt relief services are a dime a dozen, which means that their services are too. Dealing with back taxes can be stressful, and finding the right agency to help you resolve these issues can be tricky. Before allowing a tax debt relief company manage your IRS debts, be sure they  meet some specific criteria.

The Right One

A high quality tax debt relief agency will staff professionals, specifically those who are highly trained in the area of finances, specially taxes. Certified Public Accountants or tax debt  lawyers are two great examples. Both of these professionals will have the knowledge needed to better manage your unpaid taxes.

A reputable company will also be rated highly by the Better Business Bureau or hold accreditations that are recognized by other business regulators. Find a company who can prove they are in good standing with such agencies.

Further, a good tax debt relief agency will offer an array of services and not be ‘sales’ oriented. In other words, find someone who can review your situation and discuss all of your options, even those that do not include their services.

Last, find a company that provides documentation of their services and keeps you in constant contact with the IRS. Never allow a company to represent you without allowing you to be in open communications about your debts.

 

 

 

Taxes On Winning An Olympic Gold Medal

August 15th

We are already aware that lottery and casino winnings are subject to taxation at the end of the year, but what about winning an Olympic gold medal? Even though medals are not considered income, there are taxable items that come with winning.

Winning A Tax Bill

Olympic medalists are now returning home and will be in high demand for interviews by big name media outlets. As many of our country’s winning team members begin sorting out their schedule to accommodate their new found popularity, they are also finding a new tax bill.

Medalists are required to pay taxes for their winning efforts. From their time standing on the platform, the costs to make the medal and the prize money for winning, our Olympic athletes will be required to file taxes on these items come next tax season.  A gold medal brings $25,000 in prize money, while athletes receive $15,000 for silver and $10,000 for bronze.  Of these amounts, the IRS charges $8,986 for winning a gold medal, $5,386 for silver and $3,500 for the bronze.

Unfortunately, many athletes are unaware of the tax implications of winning and many have been subject to tax debt problems after their awards.  Four time Olympic medalist, Missy Franklin, owes $14,000 in back taxes from previous wins and could be facing additional fines if she doesn’t resolve her unpaid tax bill soon.

 

 

 

Should You Hire a CPA?

August 8th

When it comes to hiring a CPA, there are many factors that should be a part of your decision-making process.  Hiring a CPA will cost you some money, of course, but the benefits of having a tax professional on your side might be well worth the fees you will pay.

What You Should Consider

A CPA can help you avoid getting into tax debt problems.  Hiring a CPA now may mean you don’t have to deal with tax debt negotiation later on down the road.  Think about these factors when considering if a CPA is right for you:

Are your taxes complicated?  Do you have multiple sources of income?  Do you have a lot of deductibles?  Maybe your marital status has changed during the tax year?  Sometimes you’ll find that there’s just one too many little hang-ups that make filing your taxes too difficult.  Hiring a CPA can ensure that you get the most out of filing your taxes.

Do you have a lot of assets?  If so, you want to protect your assets.  Filing improperly could leave you with some serious tax debt, and may even result in you losing some of your assets.  Avoid this with a CPA.

Have you had tax debt problems in the past?  If so, the IRS probably has a close watch on you.  Hiring a tax professional can ensure that this time everything goes smoothly.  Plus, it will help ensure that the IRS doesn’t catch you messing up twice!

While a CPA can help you handle your tax debt problems, remember that they may not always be the best person to handle your IRS issues. If the IRS has garnished your wages, placed a tax lien on your home or refuses to negotiate, a tax debt lawyer may be your best solution. They can help you resolve your debt problems while also fighting to have your consequences for non-payment reversed.

 

 

Tax Debt Is A Serious Matter

August 1st

Most of us are aware of the serious nature of paying taxes. While not everyone experiencing tax debt problems can help their situation, many people do avoid paying their taxes for various reasons. For those who think they can dodge the IRS or state taxes, they could face some serious consequences.

Troublesome Future

Unpaid taxes generally don’t warrant serious action right away. In most cases, the IRS sends a letter of delinquent or unpaid taxes to the taxpayer. Phone calls may be made in efforts to get in contact with the taxpayer, or an IRS representative may visit someone’s home. The IRS does make good faith efforts in collecting their money prior to implementing more serious consequences, but when these efforts go unanswered the taxpayer could find themselves in deeper trouble.

The IRS maintains the right to garnish wages in order to collect on unpaid taxes. This may be through one’s employer or even bank, whereby access to bank funds could be seized. The IRS may also place a lien on one’s property to stake claim on any profits of the home in order to satisfy debts. Tax liens can be costly and are often a lengthy process to reverse once implemented. Increased fines and penalties, along with the possibility of lawsuits also arise with continually unpaid taxes.

Anyone experiencing trouble paying their tax debts is advised to get in contact with a tax debt lawyer immediately to review their options for repayment. s

 
 
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