The national tax firm was recognized for outstanding customer service, transparency, and industry leadership
Optima Tax Relief is proud to announce that it has been named to the 2024 Forbes Advisor ‘Best Of’ list for Tax Relief Services. This prestigious recognition highlights Optima’s unwavering commitment to providing exceptional tax relief services to individuals and businesses facing IRS challenges.
Forbes Advisor’s selection process for this accolade was thorough and rigorous. The methodology included an analysis of 11 high-profile tax relief companies. Forbes narrowed the list down to three top contenders by evaluating several key factors:
Product and Process: The effectiveness and efficiency of each company’s tax relief offerings.
Transparency: The clarity and honesty with which companies communicate with their customers.
Customer Service Satisfaction: Evaluated through third-party tools, this factor measured how well each company serves its clients.
Customer Service Tools: The availability and quality of resources provided to customers for support.
Longevity: How long each company has been in business, reflecting stability and experience.
Optima Tax Relief emerged as one of the top three tax relief companies, and the #1 pick for back taxes relief, distinguishing itself in each of these critical areas. Optima’s outstanding TrustPilot rating, with over 3,400 glowing reviews, was a defining element in Forbes’ decision-making process.
“We are honored to be recognized by Forbes Advisor as one of the best in the industry,” said David King, CEO of Optima Tax Relief. “This award is further proof of the dedication and hard work of our team, who strive every day to provide the highest level of service to our clients. It is especially gratifying to know that our positive client reviews played a significant role in Forbes’ decision—it truly stands as the pinnacle of our efforts. Our mission has always been to help people take control of their tax situations, and this recognition reinforces our commitment to that goal.”
As Optima Tax Relief continues to lead the industry in customer satisfaction and service excellence, this recognition by Forbes Advisor further solidifies its reputation as a trusted partner in navigating complex tax issues.
The IRS can seize your assets if you owe back taxes and fail to resolve your tax debt. This includes bank accounts, wages, and even physical property like cars or homes. Optima Tax Relief CEO, David King, and Lead Tax Attorney, Philip Hwang, provide helpful insight on how you can resolve your tax burden and get back on track with the IRS.
As the third quarter of 2024 comes to a close, taxpayers must remember a crucial deadline: Q3 estimated taxes are due. Whether you’re self-employed, an investor, or someone with substantial income not subject to withholding, making timely estimated tax payments is essential to avoid penalties and stay on the good side of the IRS. Here’s what you need to know to ensure you’re prepared for Q3 estimated tax payments.
What Are Estimated Taxes?
Estimated taxes are periodic advance payments made on income that is not subject to regular withholding. This includes income from self-employment, interest, dividends, rent, alimony, and gains from the sale of assets. If you expect to owe at least $1,000 in tax for the year after subtracting your withholding and refundable credits, you likely need to make estimated tax payments.
Estimated taxes function as a way for taxpayers to pay taxes on income that isn’t subject to automatic withholding, such as a traditional salary where taxes are deducted from each paycheck. The IRS requires these payments to ensure that taxes are collected throughout the year, rather than waiting until the annual tax filing deadline. This system helps both taxpayers and the IRS manage cash flow more effectively.
Who Needs to Pay Estimated Taxes?
Generally, you need to pay estimated taxes if:
You are self-employed, either full-time or part-time.
You have significant income from investments.
You earn income from rental properties.
You have a combination of income sources where not enough tax is withheld.
Self-employed individuals, freelancers, and independent contractors often have to pay estimated taxes because they do not have an employer withholding taxes from their paychecks. Similarly, if you receive substantial income from dividends, interest, rental income, or other sources not subject to withholding, you may need to make these payments. Additionally, retirees and others receiving distributions from IRAs or other retirement accounts might need to consider estimated taxes if these distributions do not have sufficient tax withheld.
Key Deadlines for 2024
The IRS has set four due dates for estimated tax payments in 2024:
Q1: April 15, 2024
Q2: June 17, 2024
Q3: September 16, 2024
Q4: January 15, 2025
It’s important to note that while the IRS provides these general deadlines, specific circumstances might warrant adjustments, such as holiday schedules or weekends pushing the due date to the next business day. Since the typical deadline for Q3 would be September 15th, which falls on a weekend this year, the deadline moves to the next business day, September 16th. These deadlines are crucial, as missing them can result in penalties and interest.
How to Calculate Your Estimated Taxes
To calculate your estimated taxes, use IRS Form 1040-ES, which provides worksheets and instructions to guide you through the process. Here’s a simplified approach:
Estimate Your Total Income: Consider all sources of income expected for the year.
Subtract Deductions and Exemptions: Account for standard or itemized deductions and personal exemptions.
Determine Taxable Income: Subtract deductions from your total income to get your taxable income.
Calculate Tax: Apply the appropriate tax rates to your taxable income.
Subtract Credits and Withholding: Deduct any tax credits and tax already withheld.
Divide the Remaining Tax: Split this amount by four to get your quarterly estimated tax payment.
How to Make Your Payment
The IRS offers multiple payment options to accommodate different preferences and ensure timely payments. Online payments through IRS Direct Pay and EFTPS are generally the fastest and most secure. They allow you to pay directly from your bank account or by using a credit or debit card. Mailing a check or money order, along with a Form 1040-ES voucher is another option. However, it’s slower and subject to potential postal delays. For those who prefer hands-off management, many tax professionals provide services to make estimated tax payments on your behalf. This can help ensure accuracy and timeliness.
Penalties for Underpayment
Underpayment penalties can add a significant financial burden, making it crucial to pay the correct amount of estimated taxes. The IRS provides safe harbor rules to help taxpayers avoid these penalties. If you pay at least 90% of your current year’s tax liability or 100% of the previous year’s liability (110% if your adjusted gross income is over $150,000), you generally will not face penalties. These thresholds are designed to provide flexibility and protect taxpayers from penalties due to minor underpayments.
Tax Help for Those Who Make Quarterly Estimated Tax Payments
With the Q3 2024 estimated tax payment deadline approaching on September 16th, now is the time to ensure you’re prepared. Understanding your tax obligations, accurately estimating your payments, and using the appropriate payment methods can help you stay on track. Proactive management and professional advice can help keep your financial affairs in order. Optima Tax Relief is the nation’s leading tax resolution firm with over $3 billion in resolved tax liabilities.
The IRS, as the federal tax collection agency, has broad powers to collect unpaid taxes. While it can garnish wages, seize assets, and levy bank accounts to satisfy federal tax debts, the question arises: Can the IRS seize your state tax refund to pay off federal tax liabilities? The answer is yes — under the State Income Tax Levy Program (SITLP), the IRS can seize state tax refunds to satisfy federal tax debts.
What Is the State Income Tax Levy Program (SITLP)?
The State Income Tax Levy Program allows the IRS to collect unpaid federal tax debts by intercepting state tax refunds. Through agreements with state tax agencies, the IRS can issue a levy on your state tax refund to cover outstanding federal tax liabilities. This program is a collaborative effort between the IRS and participating state tax agencies. Currently, there are 42 states that participate in the SITLP: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Utah, Vermont, Virginia, West Virginia, and Wisconsin.
The states that do not participate are the ones that do not tax state income: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Once you have an unpaid federal tax debt, the IRS may notify the state, and your state tax refund could be redirected to satisfy part or all of your federal tax obligation.
How Does the Process Work?
If the IRS intends to seize your state tax refund through the SITLP, it must follow a specific process.
IRS Sends Notices
Before seizing any funds, the IRS will send you multiple notices regarding your unpaid tax debt. These notices typically escalate from reminder notices to final demands for payment. You should receive a Notice of Intent to Levy and a Notice of Your Right to a Hearing before any levy action takes place.
State Cooperation
If you still do not pay your federal tax debt after receiving notices, the IRS will notify the state where you filed a tax return and are expecting a refund. The state, under the SITLP, will then intercept your state tax refund and send it to the IRS.
Refund Seizure
Once the state agency processes your refund, the IRS collects the funds to offset your tax debt. If the state tax refund does not cover the entire amount owed, the IRS can continue to pursue other collection methods for the remaining balance.
Notification
After your state refund is seized, the IRS will send you IRS Notice CP92 informing you of the levy action, detailing how much of your refund was applied to your tax debt.
How Can You Avoid a State Tax Refund Seizure?
There are several steps you can take to avoid having your state tax refund seized by the IRS:
Pay the Debt in Full
The simplest way to prevent a levy is to pay your federal tax debt in full before the IRS takes action. If you can’t pay the entire amount, look into other payment options.
Set Up a Payment Plan
You may be able to avoid a levy by setting up a payment plan or Installment Agreement with the IRS. This allows you to pay off your tax debt in smaller, more manageable payments over time. Once an agreement is in place, the IRS typically halts any levy actions.
Request an Offer in Compromise
If you are experiencing financial hardship and cannot pay the full amount owed, you may qualify for an Offer in Compromise, which allows you to settle your tax debt for less than what you owe. While this process can be lengthy and difficult, it may provide relief and prevent future levy actions.
File for a Collection Due Process (CDP) Hearing
If you receive a Notice of Intent to Levy, you have the right to request a Collection Due Process hearing. During this hearing, you can negotiate with the IRS or dispute the levy. Filing for a CDP hearing may temporarily stop the levy process while your case is under review.
Address Delinquent Tax Returns
If you have unfiled tax returns, the IRS may escalate collection efforts. Filing all overdue returns and paying any amounts owed may help prevent state refund seizures.
Tax Help for Those Who Owe
The IRS can seize your state tax refund through the State Income Tax Levy Program if you owe unpaid federal taxes. The process involves notifying you of your tax debt, coordinating with your state tax agency, and levying your state tax refund to satisfy your federal liabilities. To avoid this, it’s essential to stay on top of your tax obligations. Be sure to seek payment arrangements, and respond to IRS notices promptly. Whether through payment arrangements, appealing the levy, or seeking professional assistance, there are ways to resolve your tax debt and minimize the impact on your income. Optima Tax Relief is the nation’s leading tax resolution firm with over $3 billion in resolved tax liabilities.
Renting out your car on Turo can be a great way to earn extra income, but it also comes with tax responsibilities. If you’re a Turo car sharer, understanding your tax obligations is essential to avoid surprises come tax season. Here are some important tax tips for Turo car sharers to keep in mind.
What is Turo?
Turo is a peer-to-peer car-sharing platform that allows individuals to rent out their personal vehicles to others. Often referred to as the “Airbnb for cars,” Turo enables car owners (hosts) to earn money by listing their vehicles on the platform and renting them out to other users (guests) who need a vehicle for a short period, such as for a day, a weekend, or longer.
Know What Income is Taxable
Any income you earn from renting your car on Turo is taxable and must be reported on your tax return. This includes the rental payments you receive from guests, as well as any additional fees, such as delivery charges or cleaning fees. You’ll need to report this income on your Schedule C if you’re operating as a sole proprietor, which is the most common structure for Turo hosts.
Understand the Turo Tax Forms
Turo will issue you a Form 1099-K, Payment Card and Third-Party Network Transactions, if your rental income exceeds certain thresholds. In tax year 2024, the threshold for IRS Form 1099-K is $5,000. However, beginning in 2025, this threshold will be just $600. Remember, even if you don’t receive a 1099 form, you’re still required to report all your income. You can access your 1099-K in your Turo account.
Keep Detailed Records
Good record-keeping is crucial for Turo car sharers. You should track all income and expenses related to your Turo activity. This includes maintenance costs, repairs, insurance, cleaning, and any other expenses incurred to keep your car rental-ready. Keeping detailed records will help you accurately report your income and claim all the deductions you’re entitled to.
Deduct Business Expenses
One of the benefits of renting your car on Turo is the ability to deduct business expenses. These can include:
Depreciation: You can deduct the depreciation of your car’s value over time.
Repairs and Maintenance: Any costs for repairs, oil changes, tire rotations, and other maintenance related to the rental use of your car are deductible.
Insurance: If you purchase additional insurance for your Turo activity, those premiums can be deducted as a business expense.
Cleaning Costs: The expenses you incur to clean your car between rentals are also deductible.
Mileage: If you drive your car to meet a guest or for any business-related purpose, you can deduct the mileage at the IRS standard mileage rate. In 2024, this rate is 67 cents per mile.
Lease Payments: If you lease the car you rent out on Turo, you can deduct the portion of your lease payments that corresponds to the business use of the vehicle.
Registration Fees: The cost of registering your vehicle, if it’s related to your Turo activity, can also be deducted as a business expense.
Turo Marketplace Fees: Turo charges hosts a fee for using their platform. These fees are considered business expenses and are fully deductible.
Marketing Costs: Any expenses you incur to promote your Turo listing, such as online ads or social media promotions, are deductible as business expenses.
Allocate Personal vs. Business Use
If you use your car for both personal and business purposes, you’ll need to allocate expenses accordingly. Only the portion of expenses related to your Turo activity is deductible. For example, if you use your car 50% of the time for Turo and 50% for personal use, you can only deduct 50% of the related expenses. Keeping a detailed log of your car’s usage can help you accurately calculate the business use percentage.
Understand Self-Employment Tax
As a Turo car sharer, you may be considered self-employed, which means you’re responsible for paying self-employment tax in addition to income tax. Self-employment tax covers Social Security and Medicare taxes that would otherwise be withheld by an employer. The current self-employment tax rate is 15.3%, and you’ll need to pay it on your net earnings from Turo.
Pay Estimated Taxes
If you expect to owe more than $1,000 in taxes from your Turo income, you may need to make quarterly estimated tax payments to the IRS. This helps you avoid penalties for underpayment of taxes. Estimated taxes are due on April 15, June 15, September 15, and January 15 of the following year.
Consult a Tax Professional
Taxes can be complicated, especially when running a side business like Turo. Consulting with a tax professional can help you navigate your tax obligations, maximize your deductions, and ensure you’re in compliance with all IRS regulations. They can also help you plan for estimated taxes and understand how your Turo income impacts your overall tax situation.
Tax Help for Turo Sharers
By keeping these tax tips in mind, you can confidently manage your tax responsibilities and make the most of your Turo car-sharing experience. Optima Tax Relief is the nation’s leading tax resolution firm with over $3 billion in resolved tax liabilities.
