4 Practical (and Freeing) Ways to Celebrate Tax Day
April 12, 2018
Tax Day isn’t anyone’s favorite holiday. Whether you own a corporation or started your first part-time job last year, the April deadline is stressful for the entire U.S. population. But if you’ve filed your taxes on time this spring (by April 17), it’s time to celebrate. Here’s how you can kick back and relax at the end of this tax season:
1) Put your tax documents in hibernation: Time for those W-2s and receipts to catch some Zzzs in a secure place. Don’t throw them away, though: you may need to reference them if the IRS alerts you of mistakes that need to be corrected on your tax return, or if the IRS audits you.
2) Thank your tax preparer: Give a shout-out to anyone who helped you file this tax season, including CPAs or even your spouse. This is their busiest season, after all. Tax professionals can help beyond the preparation by reviewing amended returns, protecting against audits, and addressing back taxes.
3) Look for your tax refund to hit your bank account: Expecting a federal tax refund? The average federal tax refund is $2,895, which could mean it’s time to get those new shoes you’ve been eyeing. Your bank statement will show the extra cash typically within 21 days of your filing date. You can check with the IRS “Where’s My Refund?” tool for more information on your expected refund.
4) Have a glass of wine: Sit back and relax – you’ve earned it. #Cheers
Not celebrating this Tax Day because of owed back taxes? Tax Defense Network can help find the best solution for your situation and negotiate with the IRS on your behalf. It’s easy and free to get started. Call to speak with a tax analyst for your no-cost, no-commitment consultation today at 877-588-1098.
6 Things to Get Done Before Tax Day
April 4, 2018
If you haven’t figured it out from every U.S. adult sweating profusely over their W-2s, receipts, and calculators, April 17 is Tax Day this year. But what does it take to get Tax Day right?
Here are six things to do before the April 17 deadline rolls around:
- File your taxes: Tax Day is all about – you guessed it – having your taxes filed to the IRS and your state. Ensure you’ve received all paperwork needed to complete tax returns, including W-2s from employers, social security information, and more. Enlist the help of a tax preparer to make sure you’re in compliance with IRS and state requirements.
- Fund your IRA or Roth IRA: You still have time to contribute to your retirement accounts for deduction write-offs – woohoo! After the April tax deadline, you won’t be able to take advantage of this benefit for the 2017 tax year.
- Businesses: File your Q1 estimated taxes for 2018: April’s Tax Day is a double whammy for business owners as Q1 estimated tax payments and individual tax returns are due. You don’t want to start off the year on the wrong foot with the IRS – they’ll remember your compliance if you ever need future tax debt resolution.
- File for an extension if you need it: No way you’re getting your tax forms submitted by Tax Day? You can apply for a filing extension that will give you two extra months to get things taken care of. If you don’t file for a needed extension, you’ll be on the hook for Failure to File penalty plus interest. And remember: There is no such thing as an extension on paying tax debt.
- Request an IRS payment plan if you can’t pay: Financial hardship may prevent you from affording tax payments this year. If this is the case, request an IRS payment plan to get the ball rolling and avoid things from getting worse. If no effort is made on your part to resolve the problem, the IRS will begin to charge penalties and interest on the amount owed, even if there are no collection actions like liens and levies.
- Get help from a tax professional: Make a sincere effort to get tax debt resolution and the IRS will cut you some slack. Get help from a tax relief company like Tax Defense Network who can work with the IRS on your behalf, helping you learn your options for getting taxes back on track.
So, are you ready for Tax Day?
Call Tax Defense Network for a free consultation on filing returns, resolving tax issues, or handling business taxes at 877-588-1098.
When Itemizing Tax Deductions, Hold the SALT
March 27, 2018
No matter where you live in the U.S., you have to pay taxes (sorry). But the type and amount you pay do depend on where you live. Now, taxpayers in high-cost areas who’ve enjoyed cushy itemized deductions for state and local taxes (SALT) may not catch a break anymore.
To itemize or not to itemize? It depends.
Taxpayers have two options for tax deductions: itemize or take the standard set by the IRS. This year’s tax season has no restriction on the total amount of SALT deductions you can have, but that will all change starting next year. The Tax Cuts and Jobs Act (TCJA) will cap taxpayer’s combined state property, income, and sales tax to the following deduction limits:
- Single filers: $10,000
- Married filing jointly: $10,000
- Married filing separately: $5,000
The high-income household shift to standardized deductions
A third of filers pick itemizing over standard deductions, according to the IRS. And of those itemizers, 95 percent choose to deduct their SALT. Most of the SALT-deducting taxpayers live in high-cost states such as New York, California, Oregon, and New Jersey, where property taxes alone can easily exceed the $10,000 threshold. So why the cap?
The SALT itemization cap is meant to encourage taxpayers to use the standard deduction, which sits at:
- Single filers: $12,000
- Head of household: $18,000
- Married filing jointly: $24,000
This is meant to simplify tax preparation as people opt to take the standard. But residents of costly states knew this would be bad for their wallets, and some tried to pre-pay 2018 property taxes before 2017 came to a close. Unfortunately, it doesn’t work that way, and the IRS already added a rule against prepayment.
When it comes down to it, it won’t be worth itemizing your SALT deductions next year unless you’re able to diversify them. Ask your tax preparer if taking the standard is in your best interest and how you can prepare to handle additional tax reform changes.
Need more tax help? Call us for a free, confidential consultation today at 877-588-1098.
Top 5 Reasons Not to Procrastinate Filing Your Taxes (Part II)
March 16, 2018
Tax season is (quickly) coming to a close – have you filed yet?
Taxpayers have until April 17, 2018 to file their tax return, but waiting until the last minute can make post-deadline season a nightmare. Even when complying with tax laws, having less time to prepare and file the return can create serious beef with the IRS. Here are five reasons to file your taxes sooner than later this season:
- Prevent ID theft: Identity theft is real, and the IRS can’t shield every taxpayer from falling prey. Once a fraudulent tax return in your name reaches the IRS, they may accept it. To minimize the risk of a criminal taking your identity and money, file your return as early in the season as possible. The IRS won’t accept any other return filed in your name by scammers.
- Get an early tax refund: The IRS issued more than $426 billion in refunds for the 2016 fiscal year – and in this case, the early bird gets the worm. The sooner you file, the sooner you get your refund money and can spend it. Hello, new shoes.
- Avoid IRS penalties: If you file your tax return a few days before the April deadline, your yearly tax duty isn’t necessarily over. The IRS may send you a notice that you owe more than you paid, usually due to mistakes on your tax forms. If you have to file an amended return and miss the filing deadline, the IRS begins to charge penalties and interest on the taxes due. And learning you owe more – and then even more – is no fun.
- Make fewer mistakes: With adequate time to prepare and review your tax return, you minimize the chance of errors (and penalties). If you’re filing in a rush, you could miss a credit or deduction that could save you hundreds in taxes. Simple errors can also lead to an audit.
- Have more time for expert help: The longer you wait, the narrower your filing options become. Many of the CPAs in your area may be already booked, leaving you with fewer choices. And doing it alone can sometimes seem impossible.
Avoid the stress of late filing by working with a tax professional you trust, as soon as you can. The team at Tax Defense Network can file even the most complicated of returns, getting you the help you need in a timely manner.
Top 5 Reasons Not to Procrastinate Filing Your Taxes
February 25, 2016
Taxpayers have until April 18, 2016 to file their tax return, but delaying the process can create problems. Even when complying with tax laws, having less time to prepare and file the return can create issues with the IRS. Here are five reasons why you should not procrastinate in filing your return:
1. Tax Identity Theft
According to a report by the Government Accountability Office, the IRS estimated that it prevented $24.2 billion in fraudulent identity theft refunds in 2013. However, the tax agency paid out $5.8 billion in what was later determined to be fraudulent refunds.
Identity theft is real and the IRS cannot shield every taxpayer from falling prey. Once a fraudulent tax return reaches the IRS, there is a chance that it will be accepted. Therefore, to minimize the risk, taxpayers should file their returns as early in the season as possible. After your return has reached the IRS, they will not accept any other return filed in your name by scammers.
2. Early Tax Refund
Almost 75% of Americans receive a tax refund each year. By filing your return early, you can receive your refund sooner. The sooner you receive it, the earlier you can invest or spend your money.
3. Owing More Than You Paid
If you file your tax return a few days before April 18, you may believe that your yearly tax duty is over. There is always a chance, though, that you will receive an IRS notice informing you that you owe more than you paid.
Filing in haste can cause mistakes that can only be corrected by filing an amended return. If you miss the filing deadline, the IRS begins to charge penalties and interest on the taxes due.
4. Sufficient Time, Less Mistakes
With adequate time to prepare and review your tax return, you minimize the chance for errors. If you’re filing in a rush, you could miss a credit or deduction that could save you hundreds in taxes. Simple errors can also lead to an audit.
5. Availability of Return Preparers
The longer you wait, the narrower your filing options become. Many of the CPAs in your area may be already booked, leaving you with fewer choices. There may be long lines forming the closer the filing deadline gets.
To help avoid refund fraud, mistakes on your return, and unnecessary stress, it is preferable to file weeks before the filing deadline. Procrastination where taxes are concerned can cause both stress and loss of money.