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8 Pieces of Advice from a Tax Professional

8 Pieces of Advice from a Tax Professional

Tax season is approaching, and it can be a daunting time for many individuals and businesses alike. Navigating the complex landscape of tax regulations and ensuring compliance can be overwhelming. Fortunately, tax professionals, like those at Optima Tax Relief, are here to provide expert guidance and assistance. We spoke to three of our long-standing tax professionals about actions taxpayers can take (or avoid) to improve their tax situations. Vice President of Resolution and Lead Tax Attorney, Philip Hwang, Director of Resolution, Carlos Maggi, and Audit Tax Professional, Rafael Garcia, draw on their wealth of experience and offer eight invaluable pieces of advice to help you navigate the intricacies of tax season.

If You Own a Business, Treat the IRS Like a Silent Partner

The IRS is your silent business partner. That said, always remember to save a percentage of your earnings in order to keep your business partner happy! In other words, set aside and pay your estimated tax payments. Also make sure you keep well organized income and expense records. The more organized you are with your expense records, the less you pay your silent partner, the IRS.

Make Sure You’re Withholding Enough Taxes

Make sure you are withholding the proper amount or making the correct amount of estimated tax payments for both federal and state. That is unless you live in a state with no income tax. If you owe taxes year after year, it is time to increase your withholdings or estimated tax payments. Set aside additional withholdings from retirement distributions. Most retirement plans withhold the bare minimum required by law. However, this amount is usually not enough to cover most taxpayers’ resultant tax liability. 

Pay Down Your Tax Balance ASAP

Interest will continue to compound and accrue on your tax debt until it is paid in full. As such, make every effort to pay your balance off. If you have the affordability, make voluntary payments even if you are on an installment agreement. Any amount above your installment agreement payment will help save you interest in the long run. The quicker you pay off your balance, the less interest you will pay. 

Always File Your Tax Return on Time

File your returns on time, regardless of whether you owe or will get a refund. If you owe, the IRS will charge you a failure to file penalty of 5% of the amount owed on the return for every month the return is late. The penalty caps out at 25% of your total balance. If you are due a refund, you have three years from the date the return was due to claim the refund. If you don’t claim it within this timeframe, you lose it. 

Don’t Be Tempted to Stretch Items on Your Tax Return

Be accurate when preparing returns. It may be tempting to stretch to claim additional credits as well as deductions, but it’s not worth the accuracy penalties or stress during an examination. Keep your tax returns and all supporting documentation for at least 3 years after filing. If you are audited, you will be prepared to provide all your information to your representative. 

Take Tax Planning Seriously

Tax planning is the best legal strategy to lower your tax liability. If you strategically plan your taxes, you can not only reduce your tax liability but also ensure you comply with tax laws and regulations. This will help you avoid penalties, fines and any future legal issues.  Working with a trusted tax professional is always highly recommended. 

Let Your Tax Professional Handle the IRS

If you hire a representative, refer any IRS agents to your representative when they contact you. Do not allow the agent to pressure you into making decisions or providing information without first consulting your representative. It is your right as a taxpayer to have representation. Additionally, do not contact the IRS without your representative’s knowledge as you may inadvertently cause delays to your account. 

Do Something

A lot of tax issues are time sensitive. The sooner you act or find help, the better off you will be in getting optimal outcomes. Don’t lose out on the key taxpayer’s right to appeal and more importantly, act today to mitigate those failure to pay penalties and compounding daily interest. Taxes can be a daunting topic, but action is the first key step in setting yourself up for success.

Tax Help from Optima Tax Relief

Tax season doesn’t have to be a source of stress and anxiety. By following the advice of Optima Tax Relief tax professionals, you can navigate the complexities of the tax landscape with confidence. From staying organized and honest to seeking professional advice from a tax professional and taking tax planning seriously, these tips can help ensure a smoother and more successful tax season for individuals and businesses alike. Remember, the key to financial success during tax season lies in preparation, knowledge, and proactive decision-making. Optima Tax Relief is the nation’s leading tax resolution firm with over a decade of experience helping taxpayers with tough tax situations.

If You Need Tax Help, Contact Us Today for a Free Consultation

This content is made available for informational and educational purposes only. Nothing included in the content should be taken as a guarantee, warranty, prediction, or representation about your specific situation. This content is not intended to be a substitute for professional advice and services. We encourage you to consult with a tax professional to discuss your specific tax matters. Individual results may vary. We do not provide tax, financial, bankruptcy, accounting, or legal advice and nothing contained in this content is intended nor shall be construed as such.

Optima Tax Relief is a tax resolution firm independent from the IRS.

How to Choose a Tax Professional

how to choose a tax professional

Tax season can be a stressful time for many individuals and businesses. Navigating the complex world of tax regulations, deductions, and credits can be overwhelming, and the consequences of making mistakes can be costly. That’s why many people turn to tax professionals for assistance. Choosing the right tax professional is crucial to ensure your financial affairs are in order and that you maximize your tax benefits. In this article, we will discuss the key factors to consider when selecting a tax professional. 

Credentials and Qualifications 

The first and most crucial step in choosing a tax professional is to check their credentials and qualifications. Look for individuals who have the necessary licenses and certifications to provide tax services. Common certifications include Certified Public Accountant (CPA), Enrolled Agent (EA), and tax attorney. These designations signify that the tax attorney has undergone extensive training and education, passed rigorous exams, and is up to date on tax laws and regulations. 

Experience and Specialization 

Every taxpayer’s situation is unique, and tax laws can vary significantly depending on your personal circumstances or business type. When choosing a tax professional, consider their experience and specialization. An expert who has dealt with similar situations is more likely to provide accurate and tailored advice. For instance, if you’re a small business owner, look for a tax professional with expertise in small business taxation. 

Reputation and Reviews 

Word of mouth is a powerful tool when it comes to selecting a tax professional. Ask friends, family members, or colleagues for recommendations. Additionally, you can read online reviews and check the Better Business Bureau for any complaints or disputes. A positive reputation is a strong indicator of a trustworthy and capable tax attorney

Fees and Transparency 

Tax professionals charge fees for their services, so it’s essential to understand their fee structure upfront. Some charge an hourly rate, while others offer a flat fee for specific services. Be wary of professionals who promise exceptionally large refunds or charge exorbitant fees based on a percentage of your refund, as this could be a red flag. A transparent and reasonable fee structure is a sign of a reputable tax professional. 

Accessibility and Communication 

Effective communication is key to a successful working relationship with your tax attorney. Ensure that the professional you choose is accessible and responsive to your inquiries and concerns. Discuss their preferred communication methods and availability during tax season. A tax professional who can explain complex tax concepts in a clear and understandable manner is a valuable asset

Ethics and Integrity 

Integrity and ethics should be non-negotiable when selecting a tax professional. Avoid anyone who encourages unethical or illegal tax practices, such as inflating deductions or hiding income. Ethical tax professionals adhere to the tax code’s rules and regulations and prioritize their clients’ financial well-being. 

Technology and Tools 

In the digital age, technology plays a significant role in tax preparation and filing. Consider whether your tax professional uses up-to-date tax software and tools to streamline the process and enhance accuracy. Electronic filing and secure document sharing should be part of their service offerings. 

Long-Term Relationship 

Building a long-term relationship with a tax attorney can be highly beneficial. A professional who understands your financial history and goals can provide more personalized advice and help you plan for the future. When choosing a tax professional, think about whether you envision working with them for years to come. 

Tax Help for Those Looking for a Tax Professional 

Selecting the right tax professional is a critical decision that can impact your financial well-being. By considering credentials, experience, reputation, fees, communication, ethics, technology, and the potential for a long-term relationship, you can make an informed choice. Remember that the right tax professional can provide peace of mind during tax season and help you navigate the complex world of taxes with confidence. Optima Tax Relief is the nation’s leading tax resolution firm with over $1 billion in resolved tax liabilities. 

If You Need Tax Help, Contact Us Today for a Free Consultation 

Assigned an IRS Revenue Officer? Hire a Tax Professional!

Owing a tax liability means that individuals are at a higher risk of falling into collections with the IRS. Optima CEO David King and Lead Tax Attorney Philip Hwang explain the risks taxpayers face when handling a tax liability on their own, as well as the benefits of hiring a tax professional to help you when dealing with a revenue officer. 

Contact Us Today for a No-Obligation Free Consultation