If you owe the IRS you may have a Federal Tax Lien filed against you. If you do, you can not sell your home unless you pay off your tax liability. You can get a copy of your lien in the county courthouse where you live, but the amount due will be out of date. You have to call the IRS and find out how much is owed currently because interest and penalties have been added to your balance.
You can sell your home if the money you make from the sale of you home is enough to full pay your tax liability. In most cases the only thing to do is to issue checks to the IRS for the taxes and the IRS will automatically release the lien in 30 days from the date the taxes are paid.
In the case that a lien discharge is needed for the title insurance company, you need to apply for a lien discharge with the IRS. Instructions for doing that are here. The really good news is that the IRS is helping to facilitate these discharges in weeks instead of months to help tax payers settle their back taxes.
If you need help with this find a knowledgeable real estate agent and a good tax resolution firm to help with the discharge. The tax firm can research all of your back taxes and help facilitate the discharge by talking with the IRS for you.
Showing posts with label Back Taxes. Show all posts
Showing posts with label Back Taxes. Show all posts
Wednesday, January 21, 2009
Monday, January 12, 2009
Tax Refund, Will I get mine if I owe?
As a condition of your agreement, any refund due you in a future year will be applied against the amount you owe.
Continue making your installment agreement payments as scheduled because your refund is not considered as a substitute for your regular payment due.
You may not get all of your refund if you owe certain past-due amounts, such as federal tax, state tax, a student loan, or child support.
IRS will automatically apply the refund to the taxes owed.
If you owe taxes when you file and you can not pay the full amount, you can get help here.
Continue making your installment agreement payments as scheduled because your refund is not considered as a substitute for your regular payment due.
You may not get all of your refund if you owe certain past-due amounts, such as federal tax, state tax, a student loan, or child support.
IRS will automatically apply the refund to the taxes owed.
If you owe taxes when you file and you can not pay the full amount, you can get help here.
Thursday, November 20, 2008
Personal Exemptions and Standard Deductions to Rise in 2009
2009 Inflation Adjustments Widen Tax Brackets and Expand Tax Benefits
For 2009, personal exemptions and standard deductions will rise and tax brackets will widen because of inflation adjustments announced today by the Internal Revenue Service.
By law, the dollar amounts for a variety of tax provisions must be revised each year to keep pace with inflation. As a result, more than three dozen tax benefits, affecting virtually every taxpayer, are being adjusted for 2009. Key changes affecting 2009 returns, filed by most taxpayers in early 2010, include the following:
The value of each personal and dependency exemption, available to most taxpayers, is $3,650, up $150 from 2008.
The new standard deduction is $11,400 for married couples filing a joint return (up $500), $5,700 for singles and married individuals filing separately (up $250) and $8,350 for heads of household (up $350). Nearly two out of three taxpayers take the standard deduction, rather than itemizing deductions, such as mortgage interest, charitable contributions and state and local taxes.
Tax-bracket thresholds increase for each filing status. For a married couple filing a joint return, for example, the taxable-income threshold separating the 15-percent bracket from the 25-percent bracket is $67,900, up from $65,100 in 2008.
The maximum earned income tax credit for low and moderate income workers and working families with two or more children is $5,028, up from $4,824. The income limit for the credit for joint return filers with two or more children is $43,415, up from $41,646.
The annual gift exclusion rises to $13,000, up from $12,000 in 2008.
For 2009, personal exemptions and standard deductions will rise and tax brackets will widen because of inflation adjustments announced today by the Internal Revenue Service.
By law, the dollar amounts for a variety of tax provisions must be revised each year to keep pace with inflation. As a result, more than three dozen tax benefits, affecting virtually every taxpayer, are being adjusted for 2009. Key changes affecting 2009 returns, filed by most taxpayers in early 2010, include the following:
The value of each personal and dependency exemption, available to most taxpayers, is $3,650, up $150 from 2008.
The new standard deduction is $11,400 for married couples filing a joint return (up $500), $5,700 for singles and married individuals filing separately (up $250) and $8,350 for heads of household (up $350). Nearly two out of three taxpayers take the standard deduction, rather than itemizing deductions, such as mortgage interest, charitable contributions and state and local taxes.
Tax-bracket thresholds increase for each filing status. For a married couple filing a joint return, for example, the taxable-income threshold separating the 15-percent bracket from the 25-percent bracket is $67,900, up from $65,100 in 2008.
The maximum earned income tax credit for low and moderate income workers and working families with two or more children is $5,028, up from $4,824. The income limit for the credit for joint return filers with two or more children is $43,415, up from $41,646.
The annual gift exclusion rises to $13,000, up from $12,000 in 2008.
Thursday, October 23, 2008
Paying Your Fair Share
I work for a tax resolution firm. Every day I see the hard times people have that owe the IRS money. They owe for just a few reasons.
They fail to file their tax returns and the IRS prepares returns for them, called SFRs, and they end up with a liability with huge penalties and a lot of interest. This causes a lot of hardship for the taxpayer and puts them in a hole that is VERY hard to get out of.
They fail to withhold the correct amount of taxes from their paychecks. This makes them short on their withholdings at the end of the year. When they file their return , they have not had enough taxes withheld from their paychecks to pay their tax. Therefore they can not pay what they owe and end up in a deficit. You can figure how much you need to withhold from your checks by using this withholding calculator form the IRS website.
Another reason why people owe the IRS at the end of the year is self employed people fail to make their estimated tax payments each quarter during the year. A self employed person is paid by the job and is usually issued a 1099 misc. at the end of the year. No taxes are withheld during the year and the tax payer is not only resposible for the reagular tax amount he would owe for working but also the self employment tax. The self employment tax is what an employer would pay, matching FICA, if the taxpayer was employed earning a W-2. So as you can see, a self employed person will owe more tax that a regular employee.
A taxpayer really needs to set up a budget to live by and stick to it. Make your estimated tax payments if you are self employed and make sure your withholdings are correct if you are a W-2 employee. You do not want to owe the IRS. They can make life VERY miserable for a taxpayer.
If its to late for you and you owe the IRS now, please get in touch with a reputable tax resolution firm to resolve your tax debt issue.
They fail to file their tax returns and the IRS prepares returns for them, called SFRs, and they end up with a liability with huge penalties and a lot of interest. This causes a lot of hardship for the taxpayer and puts them in a hole that is VERY hard to get out of.
They fail to withhold the correct amount of taxes from their paychecks. This makes them short on their withholdings at the end of the year. When they file their return , they have not had enough taxes withheld from their paychecks to pay their tax. Therefore they can not pay what they owe and end up in a deficit. You can figure how much you need to withhold from your checks by using this withholding calculator form the IRS website.
Another reason why people owe the IRS at the end of the year is self employed people fail to make their estimated tax payments each quarter during the year. A self employed person is paid by the job and is usually issued a 1099 misc. at the end of the year. No taxes are withheld during the year and the tax payer is not only resposible for the reagular tax amount he would owe for working but also the self employment tax. The self employment tax is what an employer would pay, matching FICA, if the taxpayer was employed earning a W-2. So as you can see, a self employed person will owe more tax that a regular employee.
A taxpayer really needs to set up a budget to live by and stick to it. Make your estimated tax payments if you are self employed and make sure your withholdings are correct if you are a W-2 employee. You do not want to owe the IRS. They can make life VERY miserable for a taxpayer.
If its to late for you and you owe the IRS now, please get in touch with a reputable tax resolution firm to resolve your tax debt issue.
Wednesday, October 22, 2008
You're Getting Married and Your New Spose Owes the IRS
How do you keep your spouses liability separate from yourself. Well you are married, aren't you supposed to share everything?
In this case it is best to keep the liability with just the spouse who owes. There are two ways to do this.
First, you can file Married Filing Separate. This will keep your liabilities separate and the IRS will not be able to come after the innocent spouse for the liability. Doing it this way you will loose your married deduction on your tax return. To get that deduction you need to do the second item.
Second you can file Married Filing Joint BUT you have to file innocent spouse with your return. This is form 8857 with your return. This will protect the "innocent spouse" from the IRS but allow you to take the married deduction on your tax return.
If you have questions about resolving your tax debt or about filing taxes please call Effctur and check out their website.
In this case it is best to keep the liability with just the spouse who owes. There are two ways to do this.
First, you can file Married Filing Separate. This will keep your liabilities separate and the IRS will not be able to come after the innocent spouse for the liability. Doing it this way you will loose your married deduction on your tax return. To get that deduction you need to do the second item.
Second you can file Married Filing Joint BUT you have to file innocent spouse with your return. This is form 8857 with your return. This will protect the "innocent spouse" from the IRS but allow you to take the married deduction on your tax return.
If you have questions about resolving your tax debt or about filing taxes please call Effctur and check out their website.
Thursday, October 16, 2008
Joe the Plumber Owes Back Taxes
The man mentioned in the debate between Obama and McCain the other night owes back taxes.
According to this report on FoxNews.com, Joe the plumber owes back taxes. He owes the state of Ohio $1182.98 in back taxes and has a lien placed on his property by the state until he pays what is owed.
This is not as unique as you might think. Millions of people owe back taxes to either the IRS or the state in which they live.
Getting out of debt with the IRS can be a very arduous task. What a tax payer needs is a resolution with the IRS or the state. Not knowing how to handle the situation can cost you time and money.
Hiring a tax resolution firm to resolve your issue can help you in many ways. Call a reputable firm and get some help today.
According to this report on FoxNews.com, Joe the plumber owes back taxes. He owes the state of Ohio $1182.98 in back taxes and has a lien placed on his property by the state until he pays what is owed.
This is not as unique as you might think. Millions of people owe back taxes to either the IRS or the state in which they live.
Getting out of debt with the IRS can be a very arduous task. What a tax payer needs is a resolution with the IRS or the state. Not knowing how to handle the situation can cost you time and money.
Hiring a tax resolution firm to resolve your issue can help you in many ways. Call a reputable firm and get some help today.
Wednesday, October 8, 2008
Foreign Earned Income Exclusion
Choosing the Exclusion
The foreign earned income exclusion is voluntary. You can choose the exclusion by completing the appropriate parts of Form 2555.
When You Can Choose the Exclusion
Your initial choice of the exclusion on Form 2555 or Form 2555-EZ generally must be made with one of the following returns.
A return filed by the due date (including any extensions).
A return amending a timely-filed return. Amended returns generally must be filed by the later of 3 years after the filing date of the original return or 2 years after the tax is paid.
A return filed within 1 year from the original due date of the return (determined without regard to any extensions).
You can choose the exclusion on a return filed after the periods described above if you owe no federal income tax after taking into account the exclusion.
If you owe federal income tax after taking into account the exclusion, you can choose the exclusion on a return filed after the periods described above if you file before IRS discovers that you failed to choose the exclusion. You must type or legibly print at the top of the first page of the Form 1040 "Filed pursuant to section 1.911-7(a)(2)(i)(D)."
If you owe federal income tax after taking into account the foreign earned income exclusion and the IRS discovered that you failed to choose the exclusion, you may still be able to choose the exclusion. You must request a private letter ruling under Income Tax Regulation 301.9100-3 and Revenue Procedure 2007-1.
Revenue procedures are published in the Internal Revenue Bulletin (I.R.B.) and in the Cumulative Bulletin (C.B.), which are volumes containing official matters of the Internal Revenue Service. The I.R.B. is available on the Internet at http://www.irs.gov/. You can buy the C.B. containing a particular revenue procedure from the Government Printing Office (online at http://www.blogger.com/app/scripts/exit.jsp?dest=http%3A%2F%2Fbookstore.gpo.gov%2Firs or call 1-866-512-1800).
Effect of Choosing the Exclusion
Once you choose to exclude your foreign earned income, that choice remains in effect for that year and all later years unless you revoke it.
Solving timely filed returns problems can be very confusing and can take a lot of know how to resolve. If you find yourself in this position, call someone who can help you out and resolve your IRS issues.
Friday, October 3, 2008
Busniess Income Defined
The challenges of business income
Internal Revenue Service research indicates that understated business income contributes significantly to the tax gap, with the majority understated by small businesses.
To assist small business and self-employed taxpayers better understand their reporting obligations, this blog entry addresses the issue of income and how to determine gross income.
Business Income, Gross Receipts or Sales
If there is a connection between any income received and a business, the income is business income. A connection exists if it is clear that the payment of income would not have been made if the business did not exist and operate.
Small business owners and self-employed taxpayers must report on their tax returns all income received from their businesses unless specifically excluded by law. In most cases, business income will be in the form of cash, checks and credit card charges.
But business income can be in other forms, such as property or services. There are many forms, including: bartering, real estate rents, personal property rents, interest and dividend income, canceled debt, promissory notes, lost income payments, damages, economic injury payments, as well as kickbacks.
All income earned is taxable. Directing payment of income to a third party does not remove the reporting and payment requirements for small businesses and self-employed taxpayers.
Cost of Goods Sold
Some businesses may make or buy goods to sell. If so, these businesses may deduct the cost of goods sold (COGS) from their gross receipts. To determine these costs, the value of inventory at the beginning and end of the year must be calculated.
There are several factors that go into determining COGS, including: inventory at the beginning of the year; purchases less cost of items withdrawn for personal use; labor costs (generally applies to manufacturing and mining operations); materials and supplies (generally a manufacturing cost); other costs (generally applies to manufacturing and mining operations); and inventory at the end of the year.
Inventory, net purchases, cost of labor, materials and supplies, and other costs are added together. Inventory at the end of the year is subtracted from this total to determine COGS.
Gross Income
To calculate gross income, first determine net receipts (gross receipts minus returns and allowances) and minus the cost of goods sold. Returns and allowances include cash or credit refunds made to customers, rebates and other allowances off the actual sales price. Then add any other income, including fuel tax credits. Gross income must be determined first before deducting business expenses.
Tools to Use
There are tools available to assist small business owners and the self-employed track and report income such as the use of: a formal set of books and records with strong; accounting/financial computer software; and separate bank accounts for business and personal income and expenses.
Small businesses and self-employed taxpayers greatly benefit by accurately recording and reporting all income. Insufficient recordkeeping could cause income to be over-reported and too much tax paid or too little income reported and too little tax paid.
If your a small business and have a back tax issues with income tax or payroll tax there is help available to you.
Internal Revenue Service research indicates that understated business income contributes significantly to the tax gap, with the majority understated by small businesses.
To assist small business and self-employed taxpayers better understand their reporting obligations, this blog entry addresses the issue of income and how to determine gross income.
Business Income, Gross Receipts or Sales
If there is a connection between any income received and a business, the income is business income. A connection exists if it is clear that the payment of income would not have been made if the business did not exist and operate.
Small business owners and self-employed taxpayers must report on their tax returns all income received from their businesses unless specifically excluded by law. In most cases, business income will be in the form of cash, checks and credit card charges.
But business income can be in other forms, such as property or services. There are many forms, including: bartering, real estate rents, personal property rents, interest and dividend income, canceled debt, promissory notes, lost income payments, damages, economic injury payments, as well as kickbacks.
All income earned is taxable. Directing payment of income to a third party does not remove the reporting and payment requirements for small businesses and self-employed taxpayers.
Cost of Goods Sold
Some businesses may make or buy goods to sell. If so, these businesses may deduct the cost of goods sold (COGS) from their gross receipts. To determine these costs, the value of inventory at the beginning and end of the year must be calculated.
There are several factors that go into determining COGS, including: inventory at the beginning of the year; purchases less cost of items withdrawn for personal use; labor costs (generally applies to manufacturing and mining operations); materials and supplies (generally a manufacturing cost); other costs (generally applies to manufacturing and mining operations); and inventory at the end of the year.
Inventory, net purchases, cost of labor, materials and supplies, and other costs are added together. Inventory at the end of the year is subtracted from this total to determine COGS.
Gross Income
To calculate gross income, first determine net receipts (gross receipts minus returns and allowances) and minus the cost of goods sold. Returns and allowances include cash or credit refunds made to customers, rebates and other allowances off the actual sales price. Then add any other income, including fuel tax credits. Gross income must be determined first before deducting business expenses.
Tools to Use
There are tools available to assist small business owners and the self-employed track and report income such as the use of: a formal set of books and records with strong; accounting/financial computer software; and separate bank accounts for business and personal income and expenses.
Small businesses and self-employed taxpayers greatly benefit by accurately recording and reporting all income. Insufficient recordkeeping could cause income to be over-reported and too much tax paid or too little income reported and too little tax paid.
If your a small business and have a back tax issues with income tax or payroll tax there is help available to you.
Thursday, September 25, 2008
Federal Workers Owe Billions in Back Taxes
If you owe back taxes you are not alone. Federal employees from the U.S. Postal Service to the Executive Office of the President have not paid their 2007 federal income taxes.
The Internal Revenue Service is trying to collect billions of dollars in unpaid taxes from nearly half a million federal employees. According to IRS records, 171,549 current federal workers did not voluntarily pay their federal income taxes in 2007. The same is true for 37,752 active duty military and nearly 200,000 retired civilian and military personnel.
Almost 450,000 federal employees and retirees did not pay their taxes for a total of $3,586,784,725 in taxes owed last year.
Each year the IRS tracks the voluntary compliance rate of all federal workers and retirees. The percentage of employees and retirees who are delinquent has gone up and down over the past five years, but the amount unpaid has increased each year topping $3.5 billion for the first time in 2007.
The agency with the most delinquent employees is the U.S. Postal Service. With more than 747,000 employees, the postal service is the largest employer in the federal government, but with a 4.16 percent delinquency rate, it is a full 1 percent above the average compliance rate this year.
The IRS would not provide comparable data for the general population. But a spokesperson for the IRS did supply the delinquency rate for IRS employees -- less than 1 percent. The IRS is the only federal agency where an employee can be fired for not paying his taxes.
The Executive Office of the President, which includes the White House, has 58 employees who did not pay $319,978.
The Federal Housing Finance Board comes in as the agency with the best compliance rate of all agencies with 100 or more employees. The FHFB had four of its 134 employees on the list of delinquents, three of them have now entered into voluntary payment plans with the IRS.
In fact, 152,554 of the delinquent feds have entered into payment plans. Nevertheless, $2.7 billion remains uncollected.
Other notable agencies with high delinquency rates include the Smithsonian Institution, where nearly 5.5 percent of the employees didn't pay their taxes. On Capitol Hill, more than 1,000 workers are on the list. The Government Printing Office has the highest percentage of delinquent employees with 7.23 percent.
If you owe back taxes you are not alone. Don't feel overwhelmed, like there is no where to turn. Call someone who can help with your situation.
The Internal Revenue Service is trying to collect billions of dollars in unpaid taxes from nearly half a million federal employees. According to IRS records, 171,549 current federal workers did not voluntarily pay their federal income taxes in 2007. The same is true for 37,752 active duty military and nearly 200,000 retired civilian and military personnel.
Almost 450,000 federal employees and retirees did not pay their taxes for a total of $3,586,784,725 in taxes owed last year.
Each year the IRS tracks the voluntary compliance rate of all federal workers and retirees. The percentage of employees and retirees who are delinquent has gone up and down over the past five years, but the amount unpaid has increased each year topping $3.5 billion for the first time in 2007.
The agency with the most delinquent employees is the U.S. Postal Service. With more than 747,000 employees, the postal service is the largest employer in the federal government, but with a 4.16 percent delinquency rate, it is a full 1 percent above the average compliance rate this year.
The IRS would not provide comparable data for the general population. But a spokesperson for the IRS did supply the delinquency rate for IRS employees -- less than 1 percent. The IRS is the only federal agency where an employee can be fired for not paying his taxes.
The Executive Office of the President, which includes the White House, has 58 employees who did not pay $319,978.
The Federal Housing Finance Board comes in as the agency with the best compliance rate of all agencies with 100 or more employees. The FHFB had four of its 134 employees on the list of delinquents, three of them have now entered into voluntary payment plans with the IRS.
In fact, 152,554 of the delinquent feds have entered into payment plans. Nevertheless, $2.7 billion remains uncollected.
Other notable agencies with high delinquency rates include the Smithsonian Institution, where nearly 5.5 percent of the employees didn't pay their taxes. On Capitol Hill, more than 1,000 workers are on the list. The Government Printing Office has the highest percentage of delinquent employees with 7.23 percent.
If you owe back taxes you are not alone. Don't feel overwhelmed, like there is no where to turn. Call someone who can help with your situation.
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