by Optima Financial Group | Dec 20, 2012 | Tax Relief Solutions
Earlier this year, the Internal Revenue Service (IRS) rolled out its Fresh Start Initiative, aimed at helping struggling taxpayers. The initiative allows qualified taxpayers to avoid the IRS Failure to File penalty. This penalty is usually placed on unpaid tax balances, with accrued interest. Qualified individuals can request a six-month payment extension in which no penalties will accrue. Late payment penalties will be charged if the balance is not paid by October 15. Secondly, Fresh Start provides a different installment structure, allowing taxpayers to avoid financial reviews and Federal liens.
Recognizing the need for tax relief, IRS Commissioner Doug Shulman said, “This new approach makes sense for taxpayers and for the nation’s tax system, and it’s part of a wider effort we have underway to help struggling taxpayers.” Do I Qualify for the IRS Fresh Start Initiative? is the logical question being asked by many taxpayers. Consider the qualifications below.
- You must have been unemployed for a minimum of 30 consecutive days during 2011 or before April 15 2012.
- Married couples filing jointly need to have only one spouse that meets the qualifications.
- Individuals who are self-employed need to be able to show at least a 25 percent drop in their net income.
- Taxpayers must not earn more than $200,000 per year for married couples or $100,000 per year for individuals.
- Fresh Start is also limited to taxpayers whose tax balance was not more than $50,000 at the end of 2011.
- Taxpayers must file Form 1127A, which is not available electronically.
by Optima Financial Group | Dec 11, 2012 | Tax Planning
How do you know if you need a tax attorney?
Tax attorneys are lawyers who specialize in the complex and technical field of tax law. According to this article from about.com, you definitely need a tax attorney if:
- You have a taxable estate, need to make complex estate planning strategies, or need to file an estate tax return.
- You are starting a business and need legal counsel about the structure and tax treatment of your company.
- You are engaging in international business and need help with contracts, tax treatment, and other legal matters.
- You plan to bring a suit against the IRS.
- You plan to seek independent review of your case before the US Tax Court.
- You are under criminal investigation by the IRS.
- You have committed tax fraud (such as claiming false deductions and credits) and need the protection of privilege.
But what if you’re already mired in tax debt and can’t afford to hire an attorney? Low Income Taxpayer Clinics (LITCs) represent low income taxpayers before the IRS and assist taxpayers in audits, appeals and collection disputes. These clinics, which are operated by nonprofit organizations or academic institutions, can also help taxpayers respond to IRS notices and correct account problems.
Another option is to seek assistance from a referral system operated by a state bar association, a state or local society of accountants or enrolled agents, or another nonprofit tax professional organization.
Debt settlement companies are not law firms and cannot provide legal advice. However, debt settlement can be a part of your solution to tax debt. Debt settlement means that your debt is negotiated down to a reduced amount and paid off in a lump sum. Settlement is a good choice if you have more debt than you can pay off within two to three years or are experiencing a financial hardship that has you falling behind on your monthly payments.
by Optima Financial Group | Dec 11, 2012 | Tax Relief Solutions
Annually, the Internal Revenue Service (IRS) reaches out to taxpayers across America who earned $49,078 or less to offer a little tax relief by way of the Earned Income Tax Credit (EITC).
The EITC varies according to your income, family size and filing status. Basically, it is a federal refund for taxpayers with low to moderate incomes. And eligible taxpayers may still get a refund even if they don’t owe taxes.
Eligible workers often miss out on it because they either don’t claim it or don’t file a tax return. This is especially true if their financial situation has changed; something that has happened to a lot of Americans over the last few years.
You can easily find out if you qualify just by visiting IRS.gov and answering a few questions using the EITC Assistant.
To get your EITC refund, you have to:
- Have had earned income through employment, self-employment or farming
- Have a valid social security number
- Be a U.S. citizen or resident alien, or a non-resident alien married to a citizen or resident alien
- Be 25 years or older
- Have investment income of less than $3,150
- Not be claimed on someone else’s tax return
- File a tax return
There are additional stipulations with regard to how you file (single or married) and whether you have filed Form 2555 (foreign income). However, in this climate of continuing financial struggle, taking the time to determine if you are eligible for some tax relief from the IRS is well worth the time investment.
And if taxes aren’t the only financial obligation that has you struggling right now; if other unsecured debt like credit cards, student loans or a car note have you wondering how you will make ends meet, take the time to ask us about debt settlement. It’s our specialty.
