Do you have IRS tax problems? Do you owe the IRS more than you can afford to pay? Are you facing IRS liens and levies? Do you know that realtors are often audit targets of the IRS? Hopefully we can help you create a workable plan to avoid owing the IRS and being an IRS audit target.
We specialize in helping taxpayers solve their IRS tax debt problems. Numerous articles and books have been written explaining how taxpayers can resolve their tax problems with the IRS, including our book “How to Resolve Your IRS Tax Debt Problems”.
Rather than explaining how to resolve your tax problems, let's address how some taxpayers get themselves into this situation and how one can avoid IRS tax debts.
When assisting taxpayers who have IRS tax problems, the initial meeting includes understanding the person’s current situation, how they arrived at this point, what their experience has taught them, and what their objectives and expectations are. Although the stories are always told differently and the emotional turmoil experienced by the taxpayer varies greatly, there are often common missteps shared by these taxpayers, whether they are individuals or business owners.
During the process of resolving a taxpayer’s IRS tax problems, we believe it is equally important that they understand how they arrived at their current situation and what changes they need to make to prevent them from again becoming delinquent with their tax obligations.
To be blunt, many taxpayers find themselves owing taxes to the IRS because they are procrastinators, are not well-organized, and although they readily admit that they do not understand the tax laws, are reluctant to pay for expert advice and are looking for a low-cost solution or self-prepare their returns.
By following the steps outlined below, taxpayers can avoid owing the IRS significant taxes:
- Find an experienced tax professional by interviewing them and reviewing their credentials. While there are many CPAs, enrolled agents, accountants and attorneys who prepare tax returns, many lack tax expertise and rely upon their tax software to prepare tax returns. You should be looking for a tax professional who understands the tax laws and can recommend tax planning strategies to reduce your tax liabilities.
- Place all of the tax documents (W-2s, 1099s, 1098s, broker statements, etc.) you receive in January (and throughout the year) in a manila folder. If your tax advisor has a tax questionnaire or organizer, be sure to complete it.
- Deliver your tax documents to your tax advisor by March 1.
- If you changed your residence during the year, file Form 8822 with the IRS (this form can be found at www.irs.gov).
- If you are self-employed, you likely need to pay estimated taxes during the year. Work with your tax advisor to determine the amount to pay each quarter or when the income is earned. Be sure to read our post Secret Revealed – Realtors can void IRS 1040-ES Penalties which is good advice for all self-employed persons to follow.
- If you own your own business and are having cash flow problems, do not make the mistake of using the sales tax and payroll tax withholdings to pay your bills until the business improves. Immediately meet with a qualified CPA to analyze how cash flows from the business can be improved.
- Create a personal spending budget that includes your tax obligations and live within your budget.
- If you receive a notice from the IRS or any tax authority, do not ignore it. Immediately send it to your tax advisor for guidance. Ignoring tax notices does not make the problem go away, but usually compounds your problems.
- If you have insufficient funds to pay your taxes, don’t let that be a deterrent to filing your tax returns by their due dates. File your tax returns by the due date and address the payment of taxes at a later date. In addition to assessing penalties for late payment of taxes, the IRS also imposes penalties for failure to file tax returns by their due dates. Discuss IRS payment options available to you with your tax advisor. Perhaps an installment plan arrangement with the IRS may be a suitable solution.
- Married couples have the option of filing a joint return or filing separately. Remember that when you file a joint return, both spouses have joint and several liability, in other words, both spouses are liable individually and mutually. When filing a joint return, both spouses should review and agree with the information reported on the return before signing.
If you are a realtor, real estate investor, broker, or any self-employed person with a source of income other than wages, you need to act as a prudent business person and work with an experienced tax professional.
For real estate professionals with IRS tax debt issues or tax planning issues, feel free to contact me at (610) 594-2601 or by email at info@keysolutions.us.
Bryan Haarlander, an Enrolled Agent and a Certified Tax Resolution Specialist, is a member of the American Society of Tax Problem Solvers (ASTPS), PA Society of Tax & Accounting Professionals (PSTAP), the National Society of Accountants (NSA) and the National Association of Tax Professionals (NATP). He is the co-author of “How to Resolve Your IRS Tax Debt Problems” as well as a book on how to start your own business. He has been practicing in Exton for 18 years. His blogs http://www.taxexpertblog.com and http://www.stopmytaxproblems.com discuss pertinent tax and business issues.
By visiting our website you can learn about the 5 Secrets the IRS Doesn’t Share and order a FREE SPECIAL REPORT: Should You Represent Yourself or Hire a Tax Professional.
Keystone Financial Solutions, Inc. specializes in providing innovative tax planning, tax preparation, and solving IRS tax problems. The company’s web site is https://www.keysolutions.us and its telephone number is (610) 594-2601.
If you have any IRS tax debt issues or tax planning issues, feel free to contact me at (610) 594-2601 or by email at info@keysolutions.us.
Disclaimer: Content in this blog is for educational purposes only and should not be considered as the rendering of tax, legal or investment advice. The publisher of this blog makes no representations as to the accuracy or completeness of any information herein, will not be liable for any errors or omissions, and shall not assume liability for any losses, injuries, or damages from the display or use of this information.
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