30 Mayıs 2012 Çarşamba

Proposed law would limit delinquent taxpayers' overseas travel

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International Tax Services - A proposed law would give the Internal Revenue Service more latitude in starting a process that would result in a U.S. citizen's passport being revoked or denied if he or she owes a substantial amount in back taxes. There are exceptions under the law, including if the taxpayer is repaying the debt under a payment plan. Forbes (4/24) To read more click here. Looking for an experienced and IRS licensed tax preparer? For no obligation free consultation contact us today!
ABA Tax Accounting
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Direct 612-282-3200
Toll free 866-936-0430
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Cost-Effective Employee Motivation

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Praise be to praise. It doesn't cost a dime and yet when you pat employees on the back for their good work, they feel like a million bucks.

A heartfelt thank you often motivates employees to perform better and work harder than any other kind of incentive, even very costly ones. It may well be the best business investment a small business operator can make, because the payback can be enormous.

In this climate of corporate layoffs, outsourcing, and steep disparities between executives' and frontline employees' salaries, it is no wonder rank-and-file workers increasingly question their loyalty to companies. Which means that retaining and motivating employees is a constant challenge. Fortunately for budget-minded small enterprises, there are still cost-effective ways to energize their work force.
Start with thanking them. It sounds impossibly obvious, but it's surprising how many managers neglect this simple action. In many cases, there's a discrepancy between what employees perceive as praise and managers' belief that they have dished out plaudits.

Praise can come in many forms, but it should always be genuine, clear, sincere, and offered for specific performances. A Wichita State University professor reported that employees prefer instant and personalized recognition from their immediate boss more than any other kind of workplace motivation. Ironically, the professor's studies showed that manager-initiated praise - whether delivered in person, a handwritten note, or electronically - was the least common form of recognition. Too often an employee's individual accomplishments are folded into or overshadowed by department or company tributes. Since singling out employees is so important, managers may find it fruitful to formalize programs whereby they regularly hand out commendations.

Public acknowledgement of exemplary work is also ranked as one of the top ways to honor employees, according to research done by Bob Nelson, Ph.D, author of 1,001 Ways to Reward Employees. Many employees are jazzed by the public recognition, whether it appears on a bulletin board or outdoor billboard, in company-wide emails, newsletters and meetings, or at awards banquets or other mediums. Some firms supplement this overt gratitude with inexpensive gift certificates, movie tickets, or other informal tokens of appreciation. An idea: give employees a say in how they would like to be publicly rewarded.

Employees are also more likely to become engaged in their work if they know their bosses are listening to them. In today's hurly-burly, get-it-done-yesterday business world, harried managers might be excused for not spending more time hearing the on- and off-the-job gripes, challenges, and successes of the rank and file. But workers notice and appreciate this personal connection. It demonstrates a caring and concern many require for a fulfilling job.

A bonus: workers whose bosses actively listen are more likely to produce suggestions benefiting the company. Unfortunately, according to Nelson, the average American employee offers only about one suggestion annually, one of the lowest rates among industrialized countries. It's ironic that many companies pride themselves on their sophisticated customer feedback systems but have flawed mechanisms for listening to their own employees.

Soliciting suggestions, including from brainstorming sessions, is an equalizer of sorts, underscoring to all workers their ideas are valued. And the more valued they feel, the more likely they will energetically plunge into projects and freely contribute their time and effort. A caveat: if you do invite employee suggestions, ensure they are all reviewed. Respond to recommendations quickly, try to use as many as possible, and personally thank or publicly recognize the employees.

Along with listening, small companies should frequently communicate with their employees. Regular correspondence helps workers better understand departmental and company actions, increasing efficiency and encouraging team building. When there's little or sporadic communication, employees tend to fill in the blanks and assume the worst. The result: damaged morale.

Ideally, managers should regularly escape from behind their desks and chat with employees. That personal interaction could be supplemented with other communications transmitted via emails, newsletters, small- and large-group meetings, videotapes and audiotapes, “snail mail,” bulletin boards, white boards, and so on. Whatever medium is chosen, the most effective messages are straightforward, sincere, and succinct.

Another cost-effective way to energize employees is offering them lots of autonomy and authority. This freedom fosters creativity, resourcefulness, and a sense of ownership, and it establishes a foundation of trust and respect that many workers treasure. Managers who offer this latitude must be very clear about job assignments and their expectations, while remaining open and flexible as to how workers achieve results.

For many employees, this independence extends to a flexible work schedule. If you can, consider offering staggered hours, work-at-home opportunities, compressed workweeks (for example, four 10-hour days), and other options. Of course, it's easier to make such accommodations for your high-performing employees.

Finally, small employers have learned that formalizing fun often enhances morale. Inexpensive fun activities - for instance, creating friendly competitions between employees and departments, joke breaks, Bring Your Pet to Work Day, and interactive, get-to-know-your-colleague exercises - enable workers to tap into their inner playfulness. The upshot: a more relaxed and comfortable workplace, which often translates into increased esprit de corps and productivity. We are available to help. For no obligation free consultation contact us today!
ABA Tax Accounting
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Direct 612-282-3200
Toll free 866-936-0430
http://abatax81.blogspot.com

Start Planning Now for Next Year's Tax Return

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Thetax deadline may have just passed but planning for next year can start now. TheIRS reminds taxpayers that being organized and planning ahead can save time,money and headaches in 2013. Here are eight things you can do now to make nextApril 15 easier.
1.    Adjust your withholding -Why wait another year for a big refund? Now is a good time toreview your withholding and make adjustments for next year, especially if you'dprefer more money in each paycheck this year. If you owed at tax time, perhapsyou'd like next year's tax payment to be smaller. Use IRS's WithholdingCalculator at www.irs.gov orPublication 919, How Do I Adjust My Tax Withholding?2.    Store your return in a safeplace - Putyour 2011 tax return and supporting documents somewhere secure so you'll knowexactly where to find them if you receive an IRS notice and need to refer toyour return. If it is easy to find, you can also use it as a helpful guide fornext year's return.3.    Organize your recordkeeping - Establisha central location where everyone in your household can put tax-related recordsall year long. Anything from a shoebox to a file cabinet works. Just beconsistent to avoid a scramble for misplaced mileage logs or charity receiptscome tax time.4.    Review your paycheck -Make sure your employer is properly withholding and reportingretirement account contributions, health insurance payments, charitable payrolldeductions and other items. These payroll adjustments can make a big differenceon your bottom line. Fixing an error in your paycheck now gets you back ontrack before it becomes a huge hassle.5.    Shop for a tax professionalearly - If youuse a tax professional to help you strategize, plan and make financialdecisions throughout the year, then search now. You'll have more time whenyou're not up against a deadline or anxious for your refund. Choose a taxprofessional wisely. You are ultimately responsible for the accuracy of yourown return regardless of who prepares it. Find tips for choosing a preparer atwww.irs.gov.6.    Prepare to itemize deductions -If your expenses typically fall just below the amount to makeitemizing advantageous, a bit of planning to bundle deductions into 2012 maypay off. An early or extra mortgage payment, pre-deadline property taxpayments, planned donations or strategically paid medical bills could equalsome tax savings. See the Schedule A instructions for expenses you can deductif you're itemizing and then prepare an approach that works best for you.7.    Strategize tuition payments -The American Opportunity Tax Credit, which offsets highereducation expenses, is set to expire after 2012. It may be beneficial to pay2013 tuition in 2012 to take full advantage of this tax credit, up to $2,500,before it expires. For more information, see IRS Publication 970, Tax Benefitsfor Education.8.    Keep up with changes -Find out about tax law changes, helpful tips and IRSannouncements all year by reading ABA Tax Accounting blogs. The ABA Tax issuestips regularly throughout during the tax season and outside the tax season.
 The IRS emphasizes thateach household's financial circumstances are different so it's important tofully consider your specific situation and goals before making large financialdecisions. Looking for anexperienced and licensed by IRS tax preparer? As always we are available tohelp. For no obligation free consultation contact us today!ABA TaxAccountingAbatax81@gmail.comDirect612-282-3200Tollfree 866-936-0430http://abatax81.blogspot.com

Senators Intro Plan to Stop Facebook Co-founder from Avoiding Taxes

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SenatorsCharles Schumer, D-N.Y., and Bob Casey, D-Pa., have unveiled a plan to respond tothose like Facebook co-founder Eduardo Saverin, who recently moved to renouncehis U.S. citizenship, allegedly to avoid taxes on the profits he is expected tocollect from the social networking company’s initial public offering. Read More...Looking for an experienced and licensed by IRS tax preparer? As always we areavailable to help. For no obligation free consultation contact us today!
ABA TaxAccountingAbatax81@gmail.comDirect612-282-3200Tollfree 866-936-0430http://abatax81.blogspot.com

IRS Makes Offer in Compromise Program More Flexible

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The Internal Revenue Service today announced another expansion of its"Fresh Start" initiative by offering more flexible terms to its Offerin Compromise (OIC) program that will enable some of the most financiallydistressed taxpayers to clear up their tax problems and in many cases morequickly than in the past.
"Thisphase of Fresh Start will assist some taxpayers who have faced the mostfinancial hardship in recent years," said IRS Commissioner Doug Shulman."It is part of our multiyear effort to help taxpayers who are strugglingto make ends meet."

Today’s announcement focuses on the financial analysis used to determine whichtaxpayers qualify for an OIC. This announcement also enables some taxpayers toresolve their tax problems in as little as two years compared to four or fiveyears in the past.

Incertain circumstances, the changes announced today include:
· Revising the calculation for the taxpayer’s future income.· Allowing taxpayers to repay their student loans.· Allowing taxpayers to pay state and local delinquent taxes.· Expanding the Allowable Living Expense allowance category andamount.Ingeneral, an OIC is an agreement between a taxpayer and the IRS that settles thetaxpayer’s tax liabilities for less than the full amount owed. An OIC isgenerally not accepted if the IRS believes the liability can be paid in full asa lump sum or a through payment agreement. The IRS looks at the taxpayer’sincome and assets to make a determination of the taxpayer’s reasonablecollection potential. OICs are subject to acceptance on legal requirements.

The IRS recognizes that many taxpayers are still struggling to pay their billsso the agency has been working to put in place common-sense changes to the OICprogram to more closely reflect real-world situations.

When the IRS calculates a taxpayer’s reasonable collection potential, it willnow look at only one year of future income for offers paid in five or fewermonths, down from four years, and two years of future income for offers paid insix to 24 months, down from five years. All offers must be fully paid within 24months of the date the offer is accepted. The
 Form656-B,  Offer in Compromise Booklet, and Form656, Offer in Compromise, has been revised to reflect thechanges.

Other changes to the program include narrowed parameters and clarification ofwhen a dissipated asset will be included in the calculation of reasonablecollection potential. In addition, equity in income producing assets generallywill not be included in the calculation of reasonable collection potential foron-going businesses.

Allowable Living Expenses
The Allowable Living Expense standards are used in cases requiring financialanalysis to determine a taxpayer’s ability to pay. The standard allowancesprovide consistency and fairness in collection determinations by incorporatingaverage expenditures for basic necessities for citizens in similar geographicareas. These standards are used when evaluating installment agreement and offerin compromise requests.

The National Standard miscellaneous allowance has been expanded to includeadditional items. Taxpayers can use the miscellaneous allowance for expensessuch as credit card payments and bank fees and charges.

Guidance has also been clarified to allow payments for loans guaranteed by thefederal government for the taxpayer's post-high school education. In addition,payments for delinquent state and local taxes may be allowed based onpercentage basis of tax owed to the state and IRS.

This is another in a series of steps to help struggling taxpayers under theFresh Start initiative.

In 2008, IRS announced lien relief for taxpayers trying to refinance or sell ahome. The IRS added new flexibility for taxpayers facing payment or collectionproblems in 2009. The IRS made changes to lien policies in 2011 and expanded thethreshold for small businesses to resolve tax issues through installmentagreements. And, earlier this year, the IRS increased the threshold for astreamlined installment agreement allowing individual taxpayers to set up aninstallment agreement without providing a significant amount of financialinformation.
Asalways we are available to help. For no obligation free consultation contact ustoday!ABA TaxAccountingAmare Berhie, Enrolled AgentCertified QuickBooks ProAdvisorAbatax81@gmail.comDirect612-282-3200Tollfree 866-936-0430http://abatax81.blogspot.comwww.abataxaccounting.com

26 Mayıs 2012 Cumartesi

Senate Panel OKs Bill to Ease Small Business Bankruptcies

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Small Businesses Accountant - The Senate Judiciary Committee has approved bipartisan legislation that would modify the Chapter 11 bankruptcy process to help small companies remain in business and preserve jobs. To read more click here. Looking for an experienced tax accountant? We are available to help. For no obligation free consultation contact us today!
ABA Tax Accounting
Abatax81@gmail.com
Direct 612-282-3200
Toll free 866-936-0430
http://abatax81.blogspot.com


Tax Penalties

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If you don't file and or pay your taxes by the 4/15 deadline, you will incur penalties and have to pay interest on the unpaid balances. You may not be aware just how expensive that can be.

The failure to file penalty is higher than the failure to pay penalty. The penalty for failure to file is 5% per month or part of a month for each month that the return is late.(not to exceed 25% of the unpaid taxes. If you file more than 60 days after the due date(or the extended due date), then the penalty is smaller of $135 or 100% of the tax due.

You may be eligible to have the penalties abated, if you can provide that you have reasonable cause(in the eyes of the IRS) for filing your return late. Usually this is for traumatic or tragic events that prevented you from being able to file on time. You must submit a letter to the IRS requesting this abatement and explaining and substantiating why you did not file on time.

The failure to pay penalty is 1/2 of 1% for each month or part of a month that the taxes remain unpaid. If you have both failure to file an failure to pay penalties, then the failure to file penalty is reduced by the amount of the failure to pay penalty. The minimum penalty stated above, still applies.

If you have an extension and did not full pay your taxes by the due date, as long as you paid at least 90% of the total tax due, you will not have a failure to pay penalty.

If you need help with your taxes, contact an Enrolled Agent or other tax professional.

Form 940

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If you have employees, then you are required to file an annual 940 form with the IRS. Some people confuse this form the the 941 form which you have to file by the end of the month following the end of each quarter.

From 940 is for your Federal Unemployment taxes. The amount you pay is usually reduced by the amount of State Unemployment taxes you pay each quarter to your state. You do not get to take this credit, however, if you have not paid those State Unemployment taxes by the time you file your 940.

Although Form 940 is only filed once a year (by Feb 28th), you do have to deposit the taxes quarterly. You must file them by the end of the month following then end of the quarter, if your balance do is $100 or more. If the balance is less than 100 you can wait until the next quarter in which the cumulative balance is 100.

Be sure when you do your calculations you only need to count the first 7,000 of wages for each person. You may have payroll software that does the calculations for you, but if you are a small business and do not, I always kept a worksheet showing my figures for each quarter.

Be sure when you complete your deposit Form 8109 to make your deposit, that you fill in the 940 oval so this amount will not go towards your 941 taxes. Also be sure you fill in the oval for the correct quarter.

If you do not make your payments or file your form timely, you will incur penalties and interest. If you need assistance in completing you payroll tax forms, contact an Enrolled Agent or other tax professional.

The Secret to Resolving Your Tax Debt Without a Tax Attorney

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If you have tax debt with the IRS, you only need a tax attorney if you have to go to US Tax Court. If you simply need representation before the IRS, you need an Enrolled Agent. An Enrolled Agent has been recognized, by the IRS after passing rigorous exams administered by the IRS, as qualified to represent tax payers.

Once you have signed a limited Power of Attorney form, the Enrolled Agent will be able to talk to the IRS on your behalf. Your tax situation may be very complicated and having someone in your corner who is familiar with the IRS' processes and procedures can insure you find the best option for your particular situation.

A thorough review of your current financial situation will help the Enrolled Agent understand what options will or will not work for you. Many people hear the ads for "pennies on the dollar" resolution. An Enrolled Agent can help you determine if you qualify for this option (few tax payers actually qualify). Even if you do not qualify for that resolution option, an Enrolled Agent will find the best option for you.

Effectur is a company that employs Enrolled Agents to represent their clients before the IRS. While resolving your tax debt is not inexpensive, hiring an Enrolled Agent is certainly a less expensive alternative to a tax attorney and will ensure you have the inside track on what options are available for your situation.

Click on the Effectur icon to the left of this blog to get answers to your questions and find out how we can help provide you with peace of mind.

Help! What If I Can't Make My IRS Payment?

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If you are one of thousands of taxpayers who are in a payment plan with the IRS, but due to current economic conditions cannot make your payment, you have options. If you have lost your job and your entire financial situation has changed, you need to contact the IRS and be prepared to lay out your new situation. If you expenses have not changed and your income is all that has changed, you may just need proof (like a termination letter) you no longer have a job.

If your expenses have changed as well, you may need to provide proof of those changes as well. When you talk to the IRS, only say what has happened and answer honestly and completely any questions they may ask. Do not volunteer information, except to briefly explain your situation. Don't get chatty, even if the person you talk is friendly and personable, remember, they work for the IRS. You could make one simple statement that could cause you problems.

If your liability is substantial and you need assistance, contact an Enrolled Agent, who can represent you before the IRS. What ever you do, do not ignore your situation. If you default you payment plan, the IRS can levy your bank accounts, retirement accounts and file a lien even if your tax liability is low. Call either the IRS or an Enrolled Agent before the IRS makes a bad financial situation even worse.

23 Mayıs 2012 Çarşamba

Who Else Wants To Avoid A Tax Levy?

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If you are one of thousands of tax payers who owe back taxes, you may be concerned about how to avoid a tax levy. The answer is simple, but few heed are willing to heed this advice.
  • Do Not Ignore Notices You Receive From The IRS!
Many tax payers tend to ignore these if they feel they cannot pay the taxes due and hope the IRS will stop sending the letters. They even refuse to sign for letters that are sent certified mail, thinking that what they don't know won't hurt them. Wrong.

Yes, the letters may stop coming, but what will start coming instead are wage levies, bank levies and if you are self employed, levies to your clients or those who rent properties you own.

The simple way to prevent this from happening is to either call the IRS yourself or contact an Enrolled Agent. If you decide to call yourself, you need to be sure you are aware of all your rights so read up on the collection process and tax payer rights on the IRS website.

If you decide to call an Enrolled Agent, your representative will help you understand what you need to do and how much time you have to respond to prevent a levy from being issued. They will need to know what letters you have received and when those letters are dated.

It really is easy to stop the levies from happening, by being willing to work on taking care of your tax liability now. You may want to set up an Installment Agreement and pay over time, or you may find you can borrow to repay the liability in full. You may even find you cannot afford to make a payment at all and submit your financial information to be considered Currently Non Collectible. An Enrolled Agent can help you wade through the process and find the best option for you.

What Everybody Ought To Know About Payroll Taxes

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One of the most common errors small business owners make is neglecting to pay their payroll taxes. It is important the you as the business owner know when you payroll taxes need to be deposited and verify that they are being made. Even if you have a bookkeeper or accountant that you trust, the responsibility is ultimately yours.

The IRS website or your accountant can help you determine how often your payroll taxes must be deposited. Whether they are monthly or biweekly depends on the amount of your payroll. Many business owners make the mistake of paying other bills instead of paying payroll taxes. This is always a mistake, as basically, this is stealing. You are taking money from your employees (that should go to the IRS) and using it to pay your bills.

The IRS vigorously pursues employers who do not pay their payroll taxes. They will even close down your business if you cannot meet your payroll tax requirements.

Save your business money (in penalties and interest you would have to pay) and save yourself the hassles of the IRS potentially assessing a portion of that payroll liability to you personally. Be sure your payroll taxes are paid on time and your Form 941 and 940s are filed on time.

If you are behind in paying your payroll taxes and need someone to help you on the road to compliance, contact an Enrolled Agent.

What Everybody Ought to Know About Death and Taxes

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If you are executor of the estate of someone who has died, you may wonder what happens to their unpaid tax debt. Many think the tax debt dies with the person. This is not true. If the decedent has assets, then the IRS will require that the estate pay out the surviving equity in the taxpayer’s assets as defined by local property laws.

The executor of the estate must apply to the IRS for a Employer ID Number and set up estate checking account in the decedent's name. Follow this link to apply for an EIN for the estate. Don't be confused by the name Employer Identification Number. This is the correct ID number.

You will have to deposit the proceeds from the sale of all assets the decedent owned into the checking account set up for the estate which is tied to the EIN you received. Should the sale of all assets from the decedent not be sufficient to cover the tax liability, the remainder of the liability is written off.

This is often a complicated matter and you may need the services of an attorney and a tax professional to assist you with handling the estate. If you have additional questions about your responsibilities for the estate you should review IRS Publication 559.

Who Else Wants to Avoid Estimated Tax Penalties?

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You probably know April 15 is the date your tax return is due, but did you also know it is the date your first 2009 Estimated Tax Payment (ETP) is due. If you are self employed, then you need to pay 4 equal estimated tax payments based on your taxes for 2008. Here are 3 ways to be sure you do not get hit with the ETP penalty.
  • Your total payments are less than $1000
  • If you have paid at least 90% of the taxes due or
  • 100% of your prior year taxes (whichever is smaller)
Although normally you need to make 4 equal payments, but if you make unequal payments because your earnings are unequal. you can annualize your income and file Form 2210 to see if you owe a penalty. This may avoid or reduce the penalties.

Pay your ETP by each of the following dates:
  • April 15
  • June 15
  • September 15
  • January 15 (of the following year)
Some people make the mistake of thinking they are due after the end of the quarter like payroll taxes, but that is not true, they are due as listed above. Be sure your payments are marked as an ETP and what year you are paying for. You can print coupons to mail in with your checks on www.irs.gov.

You may be able to get the penalties waived if your failure to pay was due to natural disater or other casualty or if you retired (after turning 62) or became disable during the year and your lack of paying was not due to wilful neglect.

If you have additional questions see IRS Publication 505 or contact a tax professional.

Help! What If I Can't Make My IRS Payment?

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If you are one of thousands of taxpayers who are in a payment plan with the IRS, but due to current economic conditions cannot make your payment, you have options. If you have lost your job and your entire financial situation has changed, you need to contact the IRS and be prepared to lay out your new situation. If you expenses have not changed and your income is all that has changed, you may just need proof (like a termination letter) you no longer have a job.

If your expenses have changed as well, you may need to provide proof of those changes as well. When you talk to the IRS, only say what has happened and answer honestly and completely any questions they may ask. Do not volunteer information, except to briefly explain your situation. Don't get chatty, even if the person you talk is friendly and personable, remember, they work for the IRS. You could make one simple statement that could cause you problems.

If your liability is substantial and you need assistance, contact an Enrolled Agent, who can represent you before the IRS. What ever you do, do not ignore your situation. If you default you payment plan, the IRS can levy your bank accounts, retirement accounts and file a lien even if your tax liability is low. Call either the IRS or an Enrolled Agent before the IRS makes a bad financial situation even worse.

17 Mayıs 2012 Perşembe

Amended Tax Returns Offer a Second Chance

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In case you missed a pivotal tax deduction that could have saved you some serious cash, oryou need to fix something on an old return to make sure your clients are incompliance with the IRS, filling out the Amended U.S. Individual Income Tax Return(Form 1040X) gives taxpayers and preparers another opportunity for anadditional refund and potentially avoid headaches triggered by omissions andmistakes. Clickthe link to read more. Looking for an experienced and licensed by IRS taxpreparer? As always we are available to help. For no obligation freeconsultation contact us today!
ABATax AccountingAbatax81@gmail.comDirect612-282-3200Tollfree 866-936-0430http://abatax81.blogspot.com

Small Businesses Not Fully Utilizing Accountants

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A majority of small businesses only look to their accountant for specific services and support in areas such as bookkeeping and taxes, instead of engaging the accountant as a full partner, according to a new survey. Click the link to read more. Looking for an IRS licensed and experienced tax accountant? We are available to help. For no obligation free consultation contact us today!
ABA Tax Accounting
Abatax81@gmail.com
Direct 612-282-3200
Toll free 866-936-0430
http://abatax81.blogspot.com

Start Planning Now for Next Year's Tax Return

To contact us Click HERE
Thetax deadline may have just passed but planning for next year can start now. TheIRS reminds taxpayers that being organized and planning ahead can save time,money and headaches in 2013. Here are eight things you can do now to make nextApril 15 easier.
1.    Adjust your withholding -Why wait another year for a big refund? Now is a good time toreview your withholding and make adjustments for next year, especially if you'dprefer more money in each paycheck this year. If you owed at tax time, perhapsyou'd like next year's tax payment to be smaller. Use IRS's WithholdingCalculator at www.irs.gov orPublication 919, How Do I Adjust My Tax Withholding?2.    Store your return in a safeplace - Putyour 2011 tax return and supporting documents somewhere secure so you'll knowexactly where to find them if you receive an IRS notice and need to refer toyour return. If it is easy to find, you can also use it as a helpful guide fornext year's return.3.    Organize your recordkeeping - Establisha central location where everyone in your household can put tax-related recordsall year long. Anything from a shoebox to a file cabinet works. Just beconsistent to avoid a scramble for misplaced mileage logs or charity receiptscome tax time.4.    Review your paycheck -Make sure your employer is properly withholding and reportingretirement account contributions, health insurance payments, charitable payrolldeductions and other items. These payroll adjustments can make a big differenceon your bottom line. Fixing an error in your paycheck now gets you back ontrack before it becomes a huge hassle.5.    Shop for a tax professionalearly - If youuse a tax professional to help you strategize, plan and make financialdecisions throughout the year, then search now. You'll have more time whenyou're not up against a deadline or anxious for your refund. Choose a taxprofessional wisely. You are ultimately responsible for the accuracy of yourown return regardless of who prepares it. Find tips for choosing a preparer atwww.irs.gov.6.    Prepare to itemize deductions -If your expenses typically fall just below the amount to makeitemizing advantageous, a bit of planning to bundle deductions into 2012 maypay off. An early or extra mortgage payment, pre-deadline property taxpayments, planned donations or strategically paid medical bills could equalsome tax savings. See the Schedule A instructions for expenses you can deductif you're itemizing and then prepare an approach that works best for you.7.    Strategize tuition payments -The American Opportunity Tax Credit, which offsets highereducation expenses, is set to expire after 2012. It may be beneficial to pay2013 tuition in 2012 to take full advantage of this tax credit, up to $2,500,before it expires. For more information, see IRS Publication 970, Tax Benefitsfor Education.8.    Keep up with changes -Find out about tax law changes, helpful tips and IRSannouncements all year by reading ABA Tax Accounting blogs. The ABA Tax issuestips regularly throughout during the tax season and outside the tax season.
 The IRS emphasizes thateach household's financial circumstances are different so it's important tofully consider your specific situation and goals before making large financialdecisions. Looking for anexperienced and licensed by IRS tax preparer? As always we are available tohelp. For no obligation free consultation contact us today!ABA TaxAccountingAbatax81@gmail.comDirect612-282-3200Tollfree 866-936-0430http://abatax81.blogspot.com

HP Loses in Tax Court to IRS

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Hewlett-Packard lost out to the Internal Revenue Service in a case involving over $190 million in tax refunds that HP has claimed from a foreign tax credit generator. Read more click here... You're Never Alone with ABA Tax Accounting Solutions. Taxes are a fact of personal and business life. The question you face is, how will you minimize the impact of taxes? What kind of expertise do you need to help you achieve your goals? ABA Tax Accounting has answers to both questions, delivered by tax specialists who work proactively in a personal, one-on-one relationship. Whether you need to structure an international transaction, reorganize your business, transfer family property or defer tax on the sale of assets, ABA Tax Accounting provides a wide array of services that cover every aspect of your business and personal finances. For a Free Consultation call or email:
ABA Tax Accounting
Amare Berhie, Senior Tax Advisor
amare@abataxaccounting.com
Direct 612-282-3200
Toll free 866-936-0430
www.abataxaccounting.com


13 Mayıs 2012 Pazar

Little Known Options For Paying Your Taxes

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Read below important info from the IRS on the different ways you can pay your taxes.

WASHINGTON — The Internal Revenue Service today reminded taxpayers to file their federal tax returns and pay any taxes they owe by the April 15 deadline.

Aware that the economic downturn has affected many people, the agency urged taxpayers in difficult financial situations to file a tax return, pay what they can and work with the IRS to establish a payment plan that will keep them compliant.

Filing and Paying on Time Saves Money

The IRS cautioned that there is a failure-to-file penalty for taxpayers who don’t file their tax returns by April 15 and who owe taxes. Filing by the deadline allows taxpayers to avoid this penalty, even if they can’t pay all or some of their taxes by the deadline. Taxpayers who can’t meet the filing deadline can request an extension of time to file. However, an extension of time to file is not an extension of time to pay.

Taxpayers who can’t pay the full amount would still benefit from filing their return and paying as much as they can by April 15. Interest and failure-to-pay penalties are due on any unpaid balance and increase the amount that the taxpayer owes.

Members of the military and some others serving in combat zones, or in support, can wait until after April 15 to file and pay. As a general rule, those eligible get the extra time penalty-free and interest-free without having to ask for it. Normally, the filing and payment deadline is postponed until 180 days after the service member leaves the combat zone.

Electronic Options

IRS offers various electronic payment options to taxpayers to make it as easy as possible to make a full or partial payment with their return.

Taxpayers can make payments online, by phone using a credit or debit card, or through the Electronic Federal Tax Payment System. Taxpayers who e-file their return may use the electronic funds withdrawal option for submitting an electronic payment. They can e-file before April 15 but schedule their payment for withdrawal on April 15.

Information on these options, including any fees involved, may be found on this Web site, on the Electronic Payment Options Home Page.

Some taxpayers who itemize may now deduct the convenience fee charged for paying individual income taxes with a credit or debit card as a miscellaneous itemized deduction. The deduction is subject to the 2 percent limit on Form 1040, Schedule A.

Taxpayers may also pay any taxes owed by check made out to the “United States Treasury” using Form 1040-V, Payment Voucher, which must be included along with the payment and tax return. Taxpayers who have already submitted their tax return, but still need to pay all or some of their taxes, may mail the check to the IRS with Form 1040-V.

Installment Agreements and Online Applications

Taxpayers who find they can’t make a full payment by the April 15 deadline may consider applying for an installment agreement.

An installment agreement allows taxpayers to pay any remaining balance in monthly installments. Taxpayers who owe $25,000 or less may apply for a payment plan electronically, using the Online Payment Agreement application. Or they may attach Form 9465, Installment Agreement Request, to the front of their tax return. Taxpayers must show the amount of their proposed monthly payment and the date they wish to make their payment each month. The IRS charges $105 for setting up the agreement or $52 if the payments are deducted directly from the taxpayer’s bank account ($43 for qualified lower-income taxpayers).

The IRS will automatically give taxpayers the low income installment agreement fee if they qualify. The taxpayer does not have to request it. Taxpayers are required to pay interest plus a late payment penalty on the unpaid taxes for each month or part of a month after the due date that the tax is not paid. A taxpayer who does not file the return by the due date — including extensions — may have to pay a failure-to-file penalty.

For more information about filing and paying taxes, visit IRS.gov and choose 1040 Central or refer to the Form 1040 Instructions or IRS Publication 17, Your Federal Income Tax. Taxpayers can download forms and publications from IRS.gov or request a free copy by calling toll free 800-TAX-FORM (800-829-3676).

Related Items:

  • IR-2009-37, Credit and Debit Card Fees Related to Tax Payment Are Deductible
  • IR-2009-36, IRS Urges Taxpayers To e-file Extension Requests by April 15 Filing Deadline

What Everybody Ought To Know About IRS Seizures

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If you have tax debt, you may be concerned about which of you assets the IRS could potentially seize. The basic answer is most of them---up to the amount of your tax debt.

Can they seize your Social Security? Up to 15% of it they can. If you have State tax debt as well, they can take a lot more---depending on the state.

Can they seize your bank account and 401k/IRA? You bet they can. No matter what your 401K company may tell you, even if you cannot touch your retirement account, the IRS can.

Can they seize you home? Yes, but that is unlikely unless your liability is very large, you have been totally non-cooperative and do not have a family. If you have a family, the IRS rarely seizes the families home. They can require that you borrow against the equity in you home, but it is bad PR to throw a family out of its house, so it is rarely done.

How do your prevent these seizure from happening? Do not ignore the notices the IRS sends you! If you are unsure of how to negotiate with the IRS then you may need representation. You do not need a tax attorney, unless you are going to tax court. If you simply need representation before the IRS, you need an Enrolled Agent to represent you.

Having someone in your corner who has experience in dealing with the IRS and knows the rules and your taxpayer rights, can save you a lot of worry and find the best possible resolution for you tax situation. Follow the link above to find more details on what an Enrolled Agent does and if you have questions, there is a link on the site for either a live chat or the ability to leave a message and someone will contact you with an answer.

Things the IRS May Not Tell You About Installment Agreements

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If you have tax debt, how you resolve it with the IRS depends on how much you owe. When you call the IRS yourself, they may, or may not advise you as to your options in setting up an Installment Agreement. They will definitely ask you the following:
  • Can you full pay..now...in 30 or 60 days?
  • Can you borrow from friends or family
  • Can you pay off your balance with a credit card?
  • Can defer payment on other bills to pay your taxes?
What they may not tell you, is if you balance is under $10,000 you are guaranteed an Installment Agreement and do not have to provide financial information. They may require you to tell them you bank name and your employer, so they have levy sources should you not fulfill your agreement.

If you owe $25,000 or less, you will probably qualify for what the IRS calls a Streamline Installment Agreement. Again you are not required to provide you financial information for this payment plan either. You have up to 5 years to pay off your balance. The kicker comes if your balances are old and the statutes are close to expiring. This will cause your payment amount to increase so that all balances are paid before the statutes expire.

If you are unable to make the payment that they say it would take for a Streamline or you owe over 25,000, or are unable to make any payment at all, you will be required to provide a financial statement. You will have to list all your assets, income and expenses. If you have equity in your home they will require you to try to borrow against it. If you have a 401K or IRA they will most likely expect you to liquidate.

You do have the right to have someone represent you before the IRS, if you find the rules to confusing and need some help. An Enrolled Agent can help you and is much less expensive than hiring a tax attorney. An Enrolled Agent can contact the IRS on your behalf and negotiate your Installment Agreement.

Things The IRS Will Not Tell You About Tax Penalties

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If you owe back taxes, you have most certainly accrued penalties and interest. While the IRS never abates interest, unless they have made an error, they do on occasion abate penalties. When you call, they will not tell you this is even a possibility.

If you just owe for one year and you have filed your prior years on time and the penalties are not too high (they wont give you the ceiling), you can ask to have the penalties abated and they may do so.

Even if you owe for several years, if you can show reasonable cause, they may abate the penalties. Reasonable has to be something major like a death in the family, drug or alcohol addition, other other major life altering disaster.

The key is, you have to be able to show that this event affected your entire life, not just whether or not you filed and/or paid your taxes. If you lost your job, your family or had a tragedy that prevented you from doing every day tasks, you need to write a letter to the IRS with a description of what occurred and submit documents to substantiate this.

If you need assistance, contact an Enrolled Agent or other tax professional to help you write the letter.

If You Are Working, You Are Getting Your 2009 Stimulus Payment

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There have been a lot of questions about the 2009 stimulus payment. The good news is, if you are working, you are already getting it! Beginning April 1, all employer had to adjust the withholding tables down to the number based on the stimulus bill passed by Congress.

You should be seeing around $8 per pay check for singles and around $15 for couples. The great part is, unlike the 2008 Stimulus plan, your teenager(over 17) or college student if working, will get the benefit of this plan. For 08, if you were over 17, your parents did not get the extra $300 and if you were claimed on their return, you did not get it either.

For 2009, everyone who works gets the benefit. If you are on Social Security, you will be sent a check for $250.

To read an article on all the aspects of the Obama Stimulus Plan visit the MSN Website.

What If I Forgot To File My Tax Return?

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If you did not file you tax return by the April 15th deadline you need to file it as soon as possible. Although you will pay a Failure to File Penalty, if you file less than 60 days after the due date, you will pay 5% of the unpaid taxes per month or part of a month the return is not filed. If you file it more than 60 days after it was due, you will pay a minimum of $135 or 100% of the unpaid tax, whichever is smaller.

The Failure to File Penalty is more than the Failure to Pay Penalty. The Failure to Pay Penalty is 1/2 of 1% of the unpaid balance for each month the taxes are unpaid. So even if you cannot pay, you should file as soon as possible.

If both penalties apply, the Failure to File Penalty is reduced by the amount of the Failure to Pay Penalty.

If you have reasonable cause that you can substantiate is not due to willful neglect, then you may be able to get the Failure to File Penalty abated. You need to write a letter to the IRS explaining why you could not file by the deadline. I forgot or I didn't know they were due, are not acceptable reasons. A death in the family or a serious illness or other major life altering event, may be accepted.

For more information on Penalties see the IRS website. If you need assistance in filing your returns or have prior year returns that have not been filed, you may need to contact an Enrolled Agent or other tax professional.

How Can I Pay the IRS Less Than I Owe?

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That questions would be number 1 on my top ten list of frequently asked questions. The short answer is that is possible in some cases. You may hear a lot about people being able to pay "pennies on the dollar". I am here to tell you that very rarely happens.

If you are elderly, living on a modest fixed income and have basically no assets. Then you may qualify. If you are young make a decent amount of money and have any real estate or other valuable assets, you probably don't qualify.

Here are several ways you may be able to pay the IRS less that the total you owe:
  • Offer In Compromise
  • Partial Pay Installment Agreement
  • Currently Not Collectible
  • Penalty Abatement
Each of the options only applies in very specific cases. As indicated above, the Offer is very hard to qualify for. A better and more likely option is one of the other choices. A Partial Pay Installment Agreement means after looking thoroughly into your financial situation the IRS determine the amount you are able to pay each month will not full pay your liability before the Statute to collect the taxes expires.

Currently Not-Collectible is possible if you current expenses(as allowed by the IRS) exceed your income. Even if you own your home, if your credit or you income is such that you cannot borrow against the equity to repay your your taxes, you may qualify for this option. The IRS will monitor you income every year or two looking for increases in income. If your ability to pay does not change, or even if it changes to allow some payment, the statute to collect may expire before you have paid all you owe.

The last option is for those who have a legitimate reason for not filing and or paying their taxes. They will not abate the tax itself nor the interest, but may abate the penalties if you can show that your lack of filing and or paying is not due to willful neglect, but is due to reasonable cause.

If you need assistance in implementing any of these options, you may need an Enrolled Agent to assist you.

What You Need to Know About Choosing a Tax Preparer?

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If you haven't filed you taxes or have prior year returns you still have not filed, you may want a professional to help you prepare your returns. Before you choose, you need to consider the following:
  • Beware of anyone promising a refund before they have even reviewed your financial information.
  • Be sure you carefully review the return once it is prepared. Your preparer must sign it too.
  • Never sign a blank return and never sign it in pencil.
  • Find out how long they have been doing tax returns.
  • Are they an Enrolled Agent or CPA?
If the person that you hire is an Enrolled Agent or CPA, they were required to pass an exam to demonstrate their knowledge of taxes. Most tax preparers have no requirements unless they are employed by a reputable company. Be sure yours is qualified.

Be aware the IRS hold you accountable for the accuracy of your return, even if you have someone else prepare it. Be sure you at least look over your return to be sure the Social Security Numbers are all correct and all income number were accurately reported. Also be sure you were not given any deductions you were not entitled too.

Unscrupulous prepares will give clients deductions they are not entitled to to get them bigger refunds and get a larger fee. It is not legal or ethical to do this. You are the one who will be penalized if you took deductions you should not have. You will pay not only additional tax, but accuracy penalties and failure to pay penalties.

Choose your preparer carefully, like you would any other professional. Check their credentials and ask others who they would recommend. A good tax preparer may save you money, a poor one will likely cost you money.

Do You Know Your Appeal Rights?

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Did you know that the IRS makes a determination that you disagree with, you may have Appeal rights? If you disagree with the final determination from an audit, a levy or lien you received, you have Appeal rights. You usually have a specific amount of time, often 30 days to file for an Appeal. The notice you received should tell you how long you have to file and how you need to do so. Here are some important points you need to know:
  • Be prepared to show documentation to support your objection.
  • An Appeals conference is an informal meeting. You can represent your self or have a CPA or Enrolled Agent to represent you.
  • The conference can be held over the phone or in person.
  • If you still disagree with the findings of the Appeals Officer, you can contest this ruling in Tax Court--this will require an attorney to represent you.
Publication 5 at irs.gov will give you more details. If you file and Appeal that is just based on your not liking the results, you Appeal will be denied. You need to have documentation to show you have reasonable cause to request a different determination. For instance, your audit showed you owe more taxes than you believe you owe. You found documentation for expenses that were not taken into consideration--that is a valid reason to Appeal.

If you need either representation for an Appeal or just someone to help you resolve you tax problems, contact an Enrolled Agent.

Help! What If I Can't Make My IRS Payment?

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If you are one of thousands of taxpayers who are in a payment plan with the IRS, but due to current economic conditions cannot make your payment, you have options. If you have lost your job and your entire financial situation has changed, you need to contact the IRS and be prepared to lay out your new situation. If you expenses have not changed and your income is all that has changed, you may just need proof (like a termination letter) you no longer have a job.

If your expenses have changed as well, you may need to provide proof of those changes as well. When you talk to the IRS, only say what has happened and answer honestly and completely any questions they may ask. Do not volunteer information, except to briefly explain your situation. Don't get chatty, even if the person you talk is friendly and personable, remember, they work for the IRS. You could make one simple statement that could cause you problems.

If your liability is substantial and you need assistance, contact an Enrolled Agent, who can represent you before the IRS. What ever you do, do not ignore your situation. If you default you payment plan, the IRS can levy your bank accounts, retirement accounts and file a lien even if your tax liability is low. Call either the IRS or an Enrolled Agent before the IRS makes a bad financial situation even worse.

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Do I Need A Tax Attorney?

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If you have tax debt, you may be wondering if you need to hire a tax attorney. If you need to go to tax court to resolve you tax problems, then yes, only an attorney can represent you. However, if you like most taxpayers with tax debt, you just need help resolving your tax debt with the IRS, you need an Enrolled Agent. An Enrolled Agent is a tax professional who has passed a set of exams administered by the IRS. An Enrolled Agent can represent you before the IRS and help you obtain the best possible resolution of your tax debt.

Enrolled Agents are familiar with the IRS policies and procedures and can assist those with tax debt in situations where a tax attorney or CPA is not required. Effectur is a company that employs Enrolled Agents (s0me of our EAs are former IRS employees). Use the link above to the Effectur site and get answers to your tax debt questions and see how to contact a tax consultant to help you on your way to resolving your tax debt.