Joseph Orabona's (vectortax) Blog

8 Common IRS Tactics You Need to Know

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Thu, 18 Jan 2024 07:00:04 -0800

The IRS is known for its formidable reputation when it comes to collecting taxes and pursuing non-compliant taxpayers. However, there are common misconceptions about the extent of their powers and the severity of the tactics they can pose. In this article, we'll shed light on some common IRS tactics and what the IRS can actually do, providing valuable insights from a tax relief professional's perspective.If you have dealt with any of the common tactics listed below, contact our office today at (860) 580-5183 for a free, no-obligation consultation to review your options. Tactic #1: Seizing Your Home or AssetsOne of the most feared IRS tactics is the potential seizure of your home or assets. Many taxpayers worry about losing their property if they owe back taxes.Reality: While the IRS does have the authority to place liens on your property, and they will, seizing your primary residence is rare and is a complex process, and the IRS often prefers alternative collection methods, such as wage garnishments, bank levies and taking your accounts receivable if you are self-employed or run a business. A second or vacation home, however, is fair game for the IRS. Tactic #2: Jail Time for Unpaid TaxesSome taxpayers fear that unpaid taxes will lead to imprisonment. The idea of going to jail due to tax debt is a pervasive myth. However, many Americans have been convicted and gone to jail for not filing legally due income tax returns. Reality: While the IRS can pursue criminal charges for non-filing and unpaid taxes, they rarely go this route. In most cases, the focus is on collecting what is owed, not criminal prosecution. However, it's crucial to address tax debt promptly to avoid escalating issues. Tactic #3: Garnishing Your Entire SalaryMany individuals worry that the IRS can take their entire paycheck through wage garnishments, leaving them with nothing to live on.Reality: The IRS follows specific guidelines for wage garnishments, which consider your income, deductions, and necessary living expenses. However, it is true that the IRS can take up to 80% of your net pay to satisfy your IRS obligations. Tactic #4: Freezing Your Bank AccountsThe idea of the IRS freezing your bank accounts can be terrifying, as it implies immediate financial turmoil.Reality: The IRS can levy your bank account to collect unpaid taxes, but they typically provide notice before taking such action. Additionally, you have rights to appeal and negotiate a release of the levy, allowing you to access your funds. The IRS allows you 21 days, from the date of the levy notice, to attempt to have the funds returned to your bank account. Tactic #5: Never-Ending Interest and PenaltiesTaxpayers often worry that interest and penalties on unpaid taxes will accumulate endlessly, leading to insurmountable debt.Reality: While interest and penalties can significantly increase your tax debt over time, there are options for reducing or eliminating them. Tax professionals can help negotiate penalty abatements and explore payment plans to manage the debt effectively. With IRS interest rates at 8% charged on unpaid taxes today, your debt can literally double in a short period of time when you take into account the daily compounding of interest and penalties that are left unresolved. Tactic #6: Losing Your PassportThe IRS has the authority to revoke or deny a passport if you owe a significant amount of unpaid taxes.Reality: This is a relatively recent enforcement tool used by the IRS, primarily targeting individuals with tax debt over $50,000 who are actively avoiding their obligations. Most taxpayers will not face passport revocation if they engage in resolving their tax issues. Tactic #7: Endless AuditsSome taxpayers believe that once audited, they'll be subjected to continuous audits, creating an ongoing burden. However, the IRS will want to audit the prior and subsequent periods all at the same time. For example, if the IRS is auditing your 2021 return, they will also be looking at 2020 and 2022 simultaneously. Reality: IRS audits are typically conducted to address specific issues within a tax return. While being audited can be stressful, it does not automatically lead to perpetual audits. Addressing any identified concerns can bring the audit to a close. Tactic #8: Imminent Seizure of Business AssetsBusiness owners often worry that the IRS will seize their business assets, leading to the collapse of their livelihood.Reality: The IRS does have the authority to padlock your business, but this is typically a last resort. They prefer to work with businesses to establish payment plans or negotiate settlements that allow the business to continue operating.However, owing payroll (941) taxes is a double whammy. Not only can the IRS go after your business, they can also go after you personally. nderstanding the reality behind common IRS tactics is essential for taxpayers facing tax issues. While the IRS has unbridled power to collect unpaid taxes, they prefer resolution over severe enforcement actions. Seeking assistance from a tax relief professional can help you navigate the IRS maze of complexities, negotiate manageable solutions, prevent them from enforcing collection against you, and protect your rights and options. Don't let fear of IRS tactics paralyze you—take proactive steps today to address your tax challenges and find a path toward resolution.Contact our office today at (860) 580-5183 for a free, no-obligation consultation to review your options.Joseph Orabona III, EAVector Tax & Accounting LLC576 Elm St.Windsor Locks, CT 06096 (860) 580-5183info@vectortax.com

Everything You Need To Know About Back Tax Relief...

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Thu, 25 Jan 2024 07:00:07 -0800

Back tax relief is a lifeline for individuals and businesses burdened by unpaid or delinquent taxes. As tax relief professionals, we understand that navigating the IRS maze of complexities of back taxes can be overwhelming. In this article, we'll provide an in-depth perspective on what back tax relief is, its significance, and how it can transform your financial outlook. Contact our office today at 860-580-5183 to understand how exactly back tax relief pertains to your situation. What Are Back Taxes?Back taxes, sometimes referred to as delinquent taxes or tax arrears, are taxes that have not been paid by the due date. They can result from various factors, including underreporting income, failure to file tax returns, audit assessments or disputes with the IRS over tax liabilities. Regardless of the cause, back taxes accumulate interest and penalties over time, making the debt grow substantially. The Importance of Back Tax ReliefBack tax relief is a crucial solution for individuals and businesses facing the burden of unpaid taxes. Here's why it matters:Financial Relief: Back tax relief programs aim to alleviate the financial strain caused by unpaid taxes. By negotiating with the IRS or state tax authorities, tax relief professionals can help reduce the overall tax debt or develop manageable payment plans.Preventing Penalties: Unpaid taxes often lead to the accrual of penalties and interest, significantly increasing the total amount owed. Back tax relief strategies can include penalty abatements, reducing the financial burden on taxpayers.Preventing Severe Enforcement Actions: The IRS has the unbridled authority to take actions such as wage garnishments, bank levies, and property seizures to collect unpaid taxes. Back tax relief professionals work to prevent or release these enforcement actions, safeguarding your assets and income.Resolution of Complex Issues: Tax disputes and issues related to back taxes can be intricate. Tax relief professionals possess the expertise to navigate these complexities, ensuring that you receive fair treatment and an optimal resolution.Key Components of Back Tax ReliefNow, let's delve into some of the key components and strategies involved in back tax relief:Offer in Compromise (OIC): OIC is a program that allows eligible taxpayers to settle their tax debt for less than the full amount owed. Tax relief professionals assess your financial situation and negotiate with the IRS to reach a mutually acceptable offer. However, there are strict eligibility requirements.Installment Agreements: An installment agreement enables taxpayers to pay their back taxes over time through manageable monthly payments. Tax relief professionals can negotiate favorable terms and ensure compliance with the agreement. In some cases, you can request a partial pay installment agreement which can reduce what you owe.Penalty Abatement: IRS penalties can significantly inflate your tax debt, and tax relief professionals can advocate for penalty abatement, reducing or eliminating these additional charges.Currently Not Collectible (CNC) Status: If you are experiencing financial hardship, tax relief professionals can help you obtain CNC status, temporarily suspending tax collection efforts until your financial situation improves.Audit Representation: If your back tax issues stem from an IRS audit, tax relief professionals can represent your interests, gather required documentation, and negotiate with auditors to reach a resolution.The Role of a Tax Relief ProfessionalTax relief professionals are your allies in the journey to resolve back tax issues by offering their expertise, negotiation skills, and in-depth knowledge surrounding the regulations and procedures that are necessary when dealing with the IRS.More than anything, tax relief professionals offer you peace of mind and help alleviate the stress and anxiety associated with back taxes. If you find yourself weighed down by back taxes, don't hesitate to contact our office today at 860-580-5183 for a free, no-obligation consultation to review your options and secure your financial future. Joseph Orabona III, EAVector Tax & Accounting LLC576 Elm St.Windsor Locks, CT 06096 (860) 580-5183info@vectortax.com

5 Reasons to Reach Out to a Tax Resolution Professional

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Fri, 15 Dec 2023 13:00:04 -0800

Tax issues can be complex and overwhelming, and when you find yourself facing IRS problems or unmanageable tax debt, it may be time to seek assistance from a tax resolution professional. Tax resolution professionals can help individuals and businesses navigate the intricacies of the tax system and find viable solutions to their tax challenges. In this article, we will explore the key indicators that signal when it's time to reach out to a tax resolution professional for assistance.Note: If any of the reasons below apply to you, contact our office today at 860-580-5183 for a free, no-obligation consultation to review your options. Overwhelming Tax DebtOne of the most significant indicators that you should contact a tax resolution professional is when you are burdened by substantial tax debt. Whether you owe back taxes, penalties, or interest charges, a tax resolution expert can assess your financial situation and help you develop a strategy to resolve your tax debt. IRS Audits and NoticesReceiving audit requests or notices from the IRS can be stressful and intimidating. If you are facing an IRS audit or have received a notice of unpaid taxes or discrepancies in your tax filings, it's advisable to consult with a tax resolution professional. A tax resolution professional can guide you through the audit process, represent your interests, and ensure that you provide the necessary documentation to address IRS inquiries. Wage Garnishments or Bank LeviesIf the IRS has initiated wage garnishments or bank levies to collect unpaid taxes, it's a clear sign that you need professional, and immediate, assistance. Tax resolution experts can negotiate with the IRS to release these levies and develop a plan to resolve your tax issues. Threats of Property SeizureThe IRS has the authority to seize your property, including homes, vehicles, and other assets, to satisfy tax debts. If you have received threats of property seizure, it's imperative to act quickly and seek the expertise of a tax resolution professional to protect your assets and negotiate a favorable resolution. Inability to Negotiate with the IRSNegotiating with the IRS can be a daunting task, especially if you lack the experience and knowledge to do so effectively. Tax resolution professionals specialize in negotiating with the IRS on behalf of their clients, ensuring that your interests are represented and that you receive fair treatment.When you encounter any of the above issues, it's a clear signal that it's time to reach out to a tax resolution professional. Firms like ours are equipped to assess your tax situation, develop tailored solutions, negotiate with tax authorities, and provide peace of mind during challenging times. Don't hesitate to seek professional assistance when facing tax problems, as timely action can lead to more favorable outcomes and financial relief.Contact our office today at 860-580-5183 for a free, no-obligation consultation to review your options.Joseph Orabona III, EAVector Tax & Accounting LLC576 Elm St.Windsor Locks, CT 06096 (860) 580-5183info@vectortax.com

Gig Workers on the Radar: How on Demand Workers Can Reduce Their IRS Audit Risk

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Wed, 13 Sep 2023 05:00:02 -0700

The gig economy has been around a lot longer than the term, which was coined in 1915, according to some sources. While the gig economy has been growing for decades, the pandemic saw a boom in the number of traditional 9-5ers shifting to self-employment and business ownership. The IRS has noticed the shift to gig work, freelancing and self-employment, and their auditors and agents are increasingly focusing on those brand-new small business owners. Taxpayers, holding a traditional job that issues a W-2, have less than a 1% chance of getting a notice from the IRS; the audit rate is on the rise for small business owners. And if you work in the gig economy that means you too.The rising audit rate for small business owners is certainly cause for concern. If you’re being audited by the IRS or if the IRS is claiming you owe $10,000 or more, contact our firm immediately for a consultation. The following strategies may help you stay on the good side of the IRS could greatly reduce your risk of an audit. Track Earnings on the App or Platform One of the biggest red flags for IRS auditors is unreported or misreported income. It is critical for all gig workers, freelancers, and other self-employed individuals to track their earnings carefully and report them correctly.Tracking those earnings does not have to be cumbersome, and many participants in the gig economy already make it easy. If you are working for an app-based service, you may be able to find your total earnings on the platform - no calculator or spreadsheet required.If you’re not, it’s important to track all your income on something like QuickBooks. That way, when the IRS asks you for more information, you have it ready. Check with Payment Processors for Accurate FiguresAnother easy way to keep track of your earnings is through the payment processor you rely on. Services like PayPal, Stripe and Payoneer allow clients to pay freelancers and gig workers quickly, but they also tally up the individual earnings and provide handy reports for those small business owners.If you are unsure about what to report to the IRS, you can simply go into the payment processor app or website and tally it up. Some payment processors make it easy, with detailed reports, while others require a bit of sleuthing. Either way, you can probably get the information you need this way. Ask Small Volume Clients for 1099 FormsA single gig worker can have dozens of individual clients, and that can make accurate accounting and tax reporting difficult. One of the best ways to close this gap is by asking every client to issue a 1099-MISC form showing how much was earned throughout the year.Major clients may already issue these 1099-MISC forms, but smaller ones may not realize they have this kind of reporting responsibility. Asking them nicely and explaining the importance of accurate reporting could convince them that the form really is required. Keep Your Deductions to a Reasonable, Legally Allowed LevelAs a gig worker you are essentially a small business owner, and that entitles you to a host of new tax deductions. From the car you drive to the electricity powering your home office, lots of things you use every day can be deducted to lower your final tax bill.The problem arises when gig workers and freelancers get greedy, writing off personal items and services as business expenses and invoking the ire of the IRS in the process. If you want to stay off the tax collection radar, make sure the deductions you claim fall within reasonable limits. Outsized deductions are a huge red flag for auditors, and writing off too much could put you at the top of the list.Of course, not all deduction errors are malicious. Trying to figure out what expenses are, and are not, deductible can be confusing, especially to those new to self-employment. Do your research and consult experts to avoid honest mistakes. Make Your Estimated Payments on TimeIf you only do a few gigs here and there, you may not have to worry about making estimated payments to the IRS. But as your business grows, chances are you will be required to make those estimated payments - or face additional penalties down the line.For those who are required to make quarterly payments, writing those checks promptly is important, so mark your calendar and make sure you set aside enough money to pay the IRS. These quarterly payments are a way of life for the self-employed, and that includes a growing number of gig workers.Again, if you are unsure if you are required to make these payments, consider working with a tax expert who can guide you. The gig economy is growing fast, and that is good news for those who long to be their own bosses. As more and more employees leave their jobs for lives of self-employment, the IRS is already taking notice, and that could be bad news for unwary and incautious taxpayers. The tips listed above can help you reduce your risk of trouble, so you can focus on building your business instead of worrying about the IRS.If you're facing IRS problems and owe $10,000 or more in back taxes or are being audited, reach out to our tax resolution firm, and we'll schedule a free and confidential consultation to explain your options thoroughly and help you permanently resolve your tax problem. Joseph Orabona III, EAVector Tax & Accounting LLC576 Elm St.Windsor Locks, CT 06096 (860) 580-5183info@vectortax.com

Understanding a Notice of Federal Tax Lien and What to Do About It

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Mon, 28 Aug 2023 08:00:05 -0700

Neglecting to pay your taxes can lead to serious consequences, and one of the most severe repercussions is the federal government filing a legal claim against all your current and future property through a federal tax lien. In this article, we'll break down what a federal tax lien is and provide guidance on what steps you should take if you receive a certified letter indicating that you have one. Please note that it's always advisable to seek the assistance of a specialized Tax Resolution Professional who can negotiate with the IRS on your behalf. If you'd like to schedule a free and confidential tax relief consultation.What is a Federal Tax Lien? A federal tax lien is a document filed with a county government (usually where you reside or conduct business) to notify the general public that you have an outstanding federal tax debt.How Does It Affect Your Assets? A tax lien attachesto all your assets, including property, securities, and vehicles. It also extends to any assets you acquire in the future during the duration of the lien. If you sell any property whilea federal tax lien is in place,the IRS will be paid before you receive your share. How Does ItAffect Your Credit? Once the IRS files a Notice of Federal Tax Lien, it becomes public record. Credit reporting bureaus often pick up this information, which means that the federal tax lien will eventually appear on your credit report and could hinder your ability to obtain credit.How Does It Affect Your Business? A tax lien attaches to all your business property and rights to business property, including accounts receivable. This can significantly impact your ability to run your business normally and put you further behind.What About Bankruptcy? Filing for bankruptcy does not automatically eliminate your tax debt or the Notice of Federal Tax Lien. These obligations may persist even after the bankruptcy process.Is a Lien the Same as a Levy? The terms"lien" and "levy" are often used interchangeably, but they have distinct differences. A federal tax lien represents the government's legal claim or interest in all your property. However, the IRS does not sell off or forcefully confiscate your assets.Nonetheless, having the IRS place a chain on everything you own can certainly make your life significantly more challenging. A levy, on the other hand, refers to the enforcement of the lien through the collection of taxes. This can include actions such as seizing funds directly from your bank account or garnishing up to 75% of your net paycheck. What Should You Do Next? According to the IRS website, "Paying your tax debt in full is the best way to get rid of a federal tax lien. The IRS releases your lien within 30 days after you have paid your tax debt." However, for most people, writinga check for the full amount is not feasible. This is where a tax resolution specialist can be of assistance. Contrary to the IRS's advice, your initial step should be to contact a qualified tax resolution professional, such as us. Dealing with the IRS on your own is like going to court without a lawyer—it's possible, but your chances of achieving a favorable outcome are slim. A qualified tax resolution expert can create a resolution plan, immediately communicate with the IRS on your behalf, and initiate negotiations to alleviate your tax problem.Feel free to reachout to our firm, and we'll be happy to schedule a confidential consultation without any obligation. During this session, we'll explain the options available to you for permanently resolving your tax problem.

Tax Resolution and Your Finances: What is an Offer in Compromise?

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Tue, 15 Aug 2023 10:00:00 -0700

Few things in life are as daunting as owing money to the IRS. When that notice arrives in your mailbox, it's easy to panic and do nothing. But every day you delay acting, interest and penalties continue to accumulate, potentially causing your liabilities to skyrocket and wreak havoc on your financial stability. In this article, we'll discuss one of the many available options for tax relief called an "Offer in Compromise." But before we delve into that, if you're facing a tax problem, get in touch with our firm to schedule a consultation. If you owe back taxes to the IRS or have unfiled tax returns from previous years, you may qualify for programs that make it easier and faster to pay what you owe. One such program is the offer in compromise, which allows eligible individuals to settle their IRS debt for significantly less than the full amount. However, qualifying for this program can be complicated, so the best way to determine your eligibility is by contacting our firm today. An offer in compromise is a well-known but often misunderstood part of the tax code, and navigating its complexities can be challenging. Not all taxpayers will qualify for the offer in the compromise program, and even those who do may struggle with the intricacies of dealing with the IRS. This is why it's crucial to work with a tax resolution expert when you have back taxes. Without an expert on your side, the IRS may reject your offer for a compromise, and the amount you owe could keep increasing due to additional penalties and interest. If you've received a tax due notification from the IRS, you can't afford to wait. When the tax agency wants their money, they want it immediately, and without an offer in compromise, your options may become severely limited. The longer you wait, the more challenging your situation may become. However, hiring the right tax professional—one who specializes in dealing with the IRS—can turn things around. An experienced tax resolution specialist possesses comprehensive knowledge of all IRS programs, including the offer in compromise option. Even if you don't qualify for an offer in compromise, a tax relief expert can help you explore alternative options, allowing you to settle your debt while still having enough money to sustain your life. Even if you believe it's impossible to repay what you owe, it's crucial to explore all available repayment options. While the IRS may be a formidable collection agency, they can be surprisingly reasonable when it comes to repaying back taxes and settling long-standing debts, IF you know how to work with them. Dealing with tax debt can be incredibly intimidating. It's natural to feel overwhelmed and powerless in such a situation, but it's important not to let fear and helplessness paralyze you.This situation demands prompt action. The faster you act, the easier it will be to find a qualified professional who genuinely cares about your best interests. Once you've connected with a reputable tax resolution firm, you can work towards paying off your debt, achieving a fresh start with the IRS, and finally putting this unfortunate chapter of your financial life to rest. If you're facing tax troubles, reach out to our tax resolution firm, and we'll schedule a free and confidential consultation to explain your options thoroughly and help you permanently resolve your tax problem. Joseph Orabona III, EAVector Tax & Accounting LLC576 Elm St.Windsor Locks, CT 06096 (860) 580-5183info@vectortax.com

Unexpected Tax Increases: Factors to Consider for Year-Round Tax Planning

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Tue, 25 Jul 2023 08:00:01 -0700

Proper tax planning is a crucial aspect of financial management that you should be addressing throughout the year. Waiting until April to assess your tax liability is a risky move. To ensure you keep more money in your pocket, it's essential to be aware of factors that can unexpectedly raise your taxes. Today we will explore five key factors that could potentially increase your tax owed at the end of the year. By being proactive and considering these factors, you can better plan your finances and mitigate tax surprises. Factor #1 - Cashing in Your Retirement Plan:Early withdrawal from your retirement plan, such as a 401(k), can lead to significant tax penalties. If you opt to receive the proceeds in cash instead of rolling them over into an Individual Retirement Account (IRA), you will be required to pay taxes on the withdrawn amount. Additionally, a 10 percent penalty may apply. By avoiding these pitfalls, you can safeguard a substantial portion of your hard-earned retirement savings. Factor #2 - Working as a Freelancer:While freelancing offers independence and flexibility, it can also introduce complex tax implications. Freelancers and self-employed individuals are subject to the self-employment tax, which includes both the employer and employee shares of Medicare and Social Security taxes. Failing to account for this tax burden and set aside funds accordingly can lead to unpleasant surprises come tax season. Factor #3 - Failing to Take Your Required Minimum Distribution (RMD):Retirement accounts, such as IRAs and workplace plans, require individuals to begin withdrawing minimum distributions once they turn 70. Failing to meet this requirement can result in substantial tax penalties. It is crucial to stay informed about RMD rules and ensure compliance to avoid unnecessary financial setbacks. Factor #4 - Skipping Your IRA Contribution:Opting to skip your annual IRA contribution can have unforeseen consequences for your tax bill. Before deciding to forgo contributing to your IRA, it is prudent to evaluate the potential impact on your overall tax liability. Running the numbers and seeking professional advice can help you make an informed decision. Factor #5 - Paying Off Your Mortgage:While paying off your mortgage may provide a sense of financial freedom, it can affect your tax situation. Mortgage interest is typically tax-deductible if you itemize your deductions. Losing this deduction could potentially increase your tax liability. While this shouldn't be the sole reason to keep a mortgage, it's an important consideration to keep in mind. Seek Professional Assistance for Tax Debt Cases:If you find yourself owing back taxes, it is crucial to seek professional assistance to navigate the complexities of tax debt resolution. Our firm specializes in helping individuals negotiate with the IRS and we can potentially settle tax debts for a fraction of the amount owed. Contact us today and let our experienced tax resolution specialists guide you through the IRS maze, providing you with peace of mind. Year-round tax planning is essential to minimize surprises and optimize your financial well-being. By being aware of factors that can unexpectedly raise your taxes, such as early retirement plan withdrawals, self-employment tax obligations, missed required minimum distributions, skipped IRA contributions, and the impact of mortgage payoff, you can take proactive steps to manage your tax liability effectively. Remember, hiring a tax resolution specialist for IRS problems is crucial for protecting your hard-earned income and assets. Let us help you take back control of your financial lfe by reaching out to our firm today.Joseph Orabona III, EAVector Tax & Accounting LLC576 Elm St.Windsor Locks, CT 06096 (860) 580-5183info@vectortax.com

Avoid Tax Troubles: How Amended Tax Returns Can Save Your Day

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Fri, 14 Jul 2023 08:00:02 -0700

Filing your tax return accurately is crucial to avoid unnecessary tax troubles. However, it's not uncommon to discover errors or overlooked information after you've already filed. Fortunately, the Internal Revenue Service (IRS) allows taxpayers to amend their returns using Form 1040X.In this blog post, we'll explore how amended tax returns work, the importance of seeking professional assistance, and how our firm can help you navigate the complex world of tax resolution. Uncovering Missed Income and Deductions:Sometimes, taxpayers file their returns only to realize later that they omitted certain sources of income, such as earnings from temporary jobs or side gigs. This oversight becomes apparent when they receive a 1099 or a late W2 form indicating the income earned. Similarly, others may discover they were entitled to additional deductions or exemptions. For such cases, amending your tax return is the appropriate course of action. Understanding the Timeframe:The IRS allows individual income tax returns to be amended up to three years after the original return's due date. Form 1040X is the official document used for amending returns. While you can file an amended return on your own, it's strongly recommended to consult a tax resolution professional. They possess the expertise to handle multiple years of unfiled tax returns, potentially negotiate reduced payments, and save you from unnecessary headaches. The Amended Tax Return Process:Not all errors require filing an amended return. The IRS automatically corrects simple math mistakes. However, when there's a need to change filing status, income, allowable deductions, or credits, filing an amended return is essential. To initiate this process, you'll need to complete Form 1040X, which cannot be electronically filed. This is where the expertise of a tax professional becomes invaluable, as they can guide you through the intricacies of the form. Proper Documentation and Explanation:When completing Form 1040X, each amended tax year requires its own separate form, each of which must be mailed in its own envelope. The form provides space to explain the changes made, and it's important to clearly state the line numbers and reasons for the amendments. While you don't need to attach a copy of the original return, any additional IRS forms or supporting documents must be included to substantiate the changes. Processing Time and State Returns:After mailing your amended return, it may take several weeks for the IRS to process it. It's worth noting that amending your federal return may also necessitate changes to your state tax return, especially if the amendment involves reporting increased income. Consulting a tax resolution professional will ensure that all necessary steps are taken to address both federal and state tax matters. Seeking Expert Assistance for Tax Debt Cases:If you anticipate owing money to the IRS after filing your return, it's crucial to engage the services of experienced tax resolution firms like ours. Our tax resolution specialists posess specialized skills that go beyond what traditional accounting or tax law firms can offer. Our firm specializes in tax problem resolution and boasts a team of CPAs, EAs, and attorneys who can represent you before the IRS. Contact us today for a no-obligation confidential consultation and let us help you explore permanent solutions to your tax problems. In conclusion, amending your tax return can rectify errors, report missed income, or claim additional deductions. The process involves completing Form 1040X and mailing it to the IRS. While it may take time for the IRS to process your amended return, seeking professional assistance from a tax resolution expert ensures that the procedure is managed accurately and efficiently. Don't let tax troubles overwhelm you—reach out to our firm today and take the first step towards resolving your tax issues for good. Joseph Orabona III, EAVector Tax & Accounting LLC576 Elm St.Windsor Locks, CT 06096 (860) 580-5183info@vectortax.com

Important Factors to Consider When Choosing a Tax Resolution Firm

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Tue, 20 Jun 2023 12:00:02 -0700

Nobody wants to find themselves at odds with the IRS, yet countless taxpayers face this situation every year. With increasing enforcement efforts by the IRS, more individuals are receiving notices and communications from the agency, and you could be one of them.If you receive a notice from the IRS stating an amount you cannot afford to pay, it is crucial to take swift action. While the temptation to do nothing or ignore the situation may arise, each passing day only worsens an already challenging predicament. The good news is that you may not have to pay the full amount claimed by the IRS. There are several programs available to provide taxpayers with relief, often allowing them to settle their tax debts for considerably less. However, to benefit from this financial relief, it is essential to find the right partner, and here are key factors to consider. Tax Relief and IRS Negotiation Experience When engaging a tax relief firm, you are essentially hiring a team of experts. It is vital to ensure that the professionals handling your case are fully equipped for the task at hand. Look for specific areas of expertise, such as former IRS agents, attorneys, and Enrolled Agents (EA) who are experienced in negotiating with the IRS on behalf of taxpayers. Size does not necessarily determine the qualityof a tax relief agency. Some of the most reputable firms are smaller entities with extensive experience. Regardless of the firm's size, the crucial aspect lies in the tax resolution expertise possessed by the individuals working on your case. Compassion and Understanding Dealing with the IRS is not just a financial challenge; it can also be an emotionally taxing experience. Receiving a letter from the IRS, demanding immediate payment or notifying you that you are being audited, is bound to cause distress and unease. Working with a compassionate and caring tax relief firm can greatly alleviate the emotional burden. While expertise and capability should not be compromised, there is no reason why you cannot have both. During the selection process, seek someone who genuinely cares about your well-being and situation. Opt for the firm that you feel most comfortable working with. Recent IRS Negotiation Success Stories The IRS is an immense agency, and the tax code is constantly evolving, leading to increasing complexity. Consequently, past experience may not always be relevant. When assessing tax relief firms, look for recent testimonials and case studies showcasing their successful negotiations with the IRS. Having a track record of positive outcomes demonstrates their proficiency and indicates that they understand the intricacies of dealing with the IRS. Working with such experts can provide peace of mind and facilitate the resolution of your tax problem. Receiving a notice from the IRS can be a daunting experience, but it does not have to spell financial devastation. You do not have to live in fear of each visit to your mailbox. By knowing how to find an excellent tax relief partner, you can take control of your situation. Reach out to our tax resolution firm, and we will schedule a free, confidential consultation without any obligation. During this meeting,we will explain your options comprehensively and guide you towards a permanent resolution for your tax problem. Joseph Orabona III, EAVector Tax & Accounting LLC576 Elm St.Windsor Locks, CT 06096 (860) 580-5183info@vectortax.com

IRS Offers Several Ways to Pay Off Delinquent Tax Debt

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Thu, 23 Feb 2023 07:00:05 -0800

It's no secret that millions of taxpayers struggle to pay their taxes. The IRS is unyielding when it comes to collecting money, they think is theirs, so if you're facing back taxes owed the federal government highly advises seeking assistance as soon as possible before they resort to aggressive measures like taking money out of your bank accounts and seizing wages or property.The IRS offers several different payment plans to help taxpayers pay off their tax debt. These plans include: Guaranteed Installment Agreement: This plan is available to taxpayers who owe $10,000 or less in taxes. The taxpayer must agree to pay the debt in full within three years and must have filed all required tax returns. No financials are required. Streamlined Installment Agreement: This plan is available to taxpayers who owe $50,000 or less in taxes. The taxpayer must agree to pay the debt in full within 72 months and must have filed all required tax returns. Generally, you do not need to provide financial information to the IRS. Partial Payment Installment Agreement: This plan is available to taxpayers who owe more than $50,000 in taxes. The taxpayer must agree to pay a portion of the debt over the statutory period which remains on the account, generally within 10 years of date of assessment and must have filed all required tax returns. Full financial disclosure is required and most likely a lien will be filed.Extended or Flexible Payment Plan: This plan is available to taxpayers who owe up to $250,000 in taxes and are unable to pay the debt within 72 months. The taxpayer must agree to pay 100% of the debt over a longer period of time, up to 120 months. No financial information is required, however, a lien may be filed. Currently Not Collectible: This plan is available to taxpayers who are unable to pay their taxes due to financial hardship. The taxpayer's account will be placed on hold for a period of time, during which the IRS will not take any collection action. Interest and penalties continue to accrue. Financials are required and a lien may be filed. Offer in Compromise: This program is available to taxpayers who are unable to pay the full amount of taxes owed and are unable to pay through an installment agreement. The taxpayer may be able to settle their debt for less than the full amount owed. Many times, for a fraction of what’s owed. There are strict eligibility requirements and full financial disclosure is required.Taxpayers should consult with a tax professional to determine the best payment plan for their specific situation.Before you enter the daunting maze of IRS regulations, consult a Tax Relief Expert at our office. Schedule your complimentary consultation to assess your situation and compare your options for tax relief today!Failing to address IRS tax debt can be a costly mistake. Interest compounds daily, like credit card debts, and the amount owed often doubles every several years due in part to penalties and interest. Now is the time to take charge of your finances by addressing this head-on before it spirals out of control. The IRS Installment Agreement can be a great option for taxpayers who can’t pay the IRS off lump sum.Our firm has the expertise and skill to navigate the IRS and help you resolve your tax issues, even if you have unfiled returns from multiple years. Through an Offer in Compromise which is IRS's debt settlement program, we may be able to settle your entire tax debt- including penalties and interest for up to 85% off, if you qualify! Our team can guide you through this process and we invite anyone who wants professional advice on dealing with their taxes to contact us so that they can find a permanent solution for their problem.Joseph Orabona III, EAVector Tax & Accounting LLC576 Elm St.Windsor Locks, CT 06096 (860) 580-5183info@vectortax.com

How to Avoid an Expensive Tax Bill… & What to Do If You Receive One

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Mon, 23 Jan 2023 08:00:05 -0800

Tax season can be a time of great anticipation for millions of Americans with dreams of a nice, big, refund check coming soon. Yet this year, many Americans may find themselves surprised and coming up short on their refunds.Many taxpayers have been shocked to find that this year, instead of a big tax refund check arriving in the mail, they are being saddled with an unexpected bill from Uncle Sam. The combination of recent tax law changes and updated employer withholding tables has left individuals scrambling to figure out how to pay for their new IRS obligations due at filing time.If you're worried about a looming tax bill, never fear. There are measures you can take to ensure that your taxes don't unexpectedly balloon. From budgeting tips to what do when the worst happens, these strategies will have your wallet breathing easy throughout the year! The Earlier the Better!Ignoring an IRS debt could ultimately result in serious consequences. It is in your best interest to be aware of any outstanding amount as soon as possible, providing time for tax planning and sourcing the necessary funds.Don't let late payments rack up and cause costly penalties and interest. Be proactive about filing your taxes so you'll have a good idea of what will be owed, if anything, that is needed to be paid on time. Pay Attention to Your PaychecksWith the recent changes in tax law, your paychecks may have grown more generous - but don't get too excited! They could mean less of a refund or an unexpected bill when you file. Make sure to stay informed and plan ahead so unpleasant surprises won't come back to haunt you this filing season.To prepare for tax season, it's important to monitor your paychecks and ensure that the right amount is withheld. If you see a decrease in federal taxes being taken out of each paycheck, adjust this with your employer immediately - even though it may mean taking home less every month. Doing so can help protect you from federal and state tax debts and penalties later! Run Your NumbersWith just your final paycheck from last year and a few additional details, you can gain insight into what kind of tax refund or balance due to expect come filing season. It pays to take the time for preparation now so there are no unpleasant surprises later! However, please note that you should never use your 2022 final paycheck to prepare your return. You’ll need the actual W-2 from your employer to file a complete and accurate return.To be prepared for tax season, compile all necessary records of your income, credits, and deductions to estimate what you owe. Leverage the power of a reliable tax preparation software or use an everyday calculator with those numbers in hand to better understand your financial situation. Know You Have Back Taxes or Will Owe a Lot?Ignoring a tax bill isn't an option; the IRS will always come knocking. Settling it quickly can save you from further financial trouble, so don't delay. Your taxes may burden your wallet now, but they'll take hefty chunks out of your future if left unresolved!Dealing with the IRS can be a daunting experience for many taxpayers. Even getting the IRS on the phone these days is nearly impossible. Without proper guidance, and expert help, attempting to negotiate your own tax problem is like going to court without a lawyer - not a wise move! Struggling with tax burdens from the IRS or State? Our experienced team knows the IRS’s “ins and outs”, knows how to navigate the IRS maze and is here to assist you in finding a resolution that works best for your unique situation. Take advantage of our knowledge and expertise by booking an appointment with us today - take control of your taxes, and your life, before they become unmanageable!Joseph Orabona III, EAVector Tax & Accounting LLC576 Elm St.Windsor Locks, CT 06096 (860) 580-5183info@vectortax.com

What is a Federal Tax Lien Notice & What Should You Do

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Mon, 09 Jan 2023 07:00:04 -0800

Ignoring your obligation to pay taxes can lead the federal government to conduct severe legal action against all your existing assets, current and future income, and assets you acquire in the future; this form of punishment is called a federal tax lien.If you have received a certified letter indicating that the federal government has placed an unwelcome Federal 'tax lien' on your assets, this article can provide insights into what it means and how to remedy the issue. What is a Federal Tax Lien?When a taxpayer falls behind on their federal taxes, they are at risk of having an official public notification filed against them. This document is known as a Notice of Federal Tax Lien and can cause grave consequences for the individual's ability to enjoy any financial security.A federal tax lien is an official document filed with the county recorder’s office (usually where the taxpayer lives or conducts business) and the secretary of state's office (if it is a corporation or partnership) notifying the general public that a taxpayer has an unpaid federal tax debt. Lien vs. LevyFor the unaware taxpayer, it is important to understand the difference between liens and levies. People will use them interchangeably, but they are quite different. A lien grants the government legal rights over all your property. This does not mean they are going to sell your property, but it does make it difficult for you when the government has an ownership stake in your assets. Especially if you are looking to sell them, like real estate. Anything you sell, the IRS will receive its cut before you receive anything.A levy, on the other hand, is the physical seizure of income and assets. The IRS is the only creditor on the planet that can garnish your income and remove money from your bank account without a court order.This may affect your credit.The consequences of an IRS filing a Notice of Federal Tax Lien are significant. This lien is public record, and eventually may show up on one's credit report which can severely impact their ability to secure further credit in the future as well as lower their credit score.The effects on your assets. A federal tax lien restricts your ability to utilize and monetize any existing or future assets - from real-estate, stock investments, automobiles, etc. This means that the IRS is first in line for proceeds if you were to sell any of your assets, before you receive any cash.The effects on your business.Protecting your business from financial troubles is important, and a lien can be especially damaging. It attaches to all your property — including accounts receivable –which could seriously impact the normal day to day operations of your business, leaving you further in debt than before. Thinking about filing for bankruptcy?Although filing for bankruptcy may offer relief from debt, it is important to note that your tax obligations and Notice of Federal Tax Lien still remain in effect. To ensure financial freedom, take steps to address any existing unpaid taxes before planning a successful future.When a levy is enforced, it can result in the government seizing funds from your bank account or drastically reducing up to 75% of your net pay.Next StepsPaying off your tax debt in full is the most effective way to erase a federal lien. Typically, the IRS will release the lien within one month of payment. But if you are unable to pay such a considerable sum, as most people are, at once don't lose hope - this is where a tax resolution specialist can help.When it comes to the IRS, navigating legal channels on one's own is a risky endeavor. The best course of action for those facing tax issues is to seek out expert, professional help by calling an experienced and qualified tax resolution provider like us. With our expertise right by your side, your chances of achieving a positive outcome improve significantly!Reach out to our firm and we will schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem. Joseph Orabona III, EAVector Tax & Accounting LLC576 Elm St.Windsor Locks, CT 06096 (860) 580-5183info@vectortax.com

What to Do if You Owe Back Taxes

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Mon, 12 Dec 2022 07:00:02 -0800

Paying taxes is a fact of life, but when the amount is excessive, you may not have the funds to pay in full. Making a mistake on your taxes can be costly as well, and if you plug in the wrong numbers, the IRS will surely come calling.Whether you owe money to the IRS due to an innocent oversight, a lack of funds, or something else, ignoring the problem will not make it go away.Once you owe money to the IRS, the clock is ticking, and all the while penalties and compounded interest will be piling up. So, what should you do if you owe back taxes? Here are some critical steps to take. Assess the SituationUntil you know how deep the hole is, you will not be able to start digging your way out. Before you do anything else, you should assess the situation, going through your old tax returns, reviewing communications from the IRS, and adding up what you owe the tax agency.Once you have assessed the situation, you will be in a better position to make concrete plans. If you owe a lot of money, you may not be able to pay it off all at once, but with the help of a tax relief professional, you may be able to come up with a suitable repayment plan or you may be able to settle for less than you owe. Review Your BudgetOwing money to the IRS is no fun, but you will have to resolve this one way or another. Hopefully, you can work out a more favorable payment plan with the IRS, one that might allow you to pay a reduced amount, but that will depend on your income, your allowable expenses, and your assets, if any.It is important to review your monthly household budget carefully if you owe back taxes to the IRS. Every dollar you can pay back is one less dollar you will owe interest on, so think about where you can cut back and how you might be able to free up some cash. Talk to a Tax-Relief ExpertThe bad news is that you owe back taxes to the IRS. The good news is you may be able to settle the entire amount, including penalties and interest, for a fraction of what’s owed through the IRS’s offer in compromise program. If you qualify for one of those programs, you may be able to settle your debt for less than you owe, but this is not something to tackle on your own. Work with a tax-relief expert, both to identify the proper programs and to make negotiating with the tax agency easier and more effective. You can use the budget you reviewed earlier to identify sources of income and resources you have access to. Once that information is presented, the tax-relief expert can help you find a suitable tax compromise plan that just might save you a lot of money. Take Care of the Problem Sooner Rather than LaterTime is of the essence when you owe money to the IRS. Once those back taxes are assessed, the clock is ticking, and every day that passes will mean higher penalties, and compounding interest.If you want to put your tax debt behind you once and for all, you will want to act fast. The sooner you start working on your tax resolution plan, the sooner you can take your financial life back. To help ease the stress from your situation, we offer a free, no-obligation consultation with one of our tax resolution experts. You don't have to worry about confidentiality or cost because the consultation is free with zero gimmicks or commitments. Schedule an appointment with one of our tax resolution specialists today.Joseph Orabona III, EAVector Tax & Accounting LLC576 Elm St.Windsor Locks, CT 06096 (860) 580-5183info@vectortax.com

Filing Taxes When You Owe Money: What to Do and What You Need to Know

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Mon, 26 Dec 2022 07:00:04 -0800

The tax-filing deadline will be here before you know it and pretty soon, you’ll be gathering up your receipts and plugging in numbers. I know you’re hoping for good news, and praying for a big refund in the process.If all goes well you won’t owe anything and you might even be getting back a nice refund. But, what should you do if you owe money? If you know you owe money to the IRS, you might be tempted to not file a return, but that is the worst thing you can do!If you fail to file on time, the IRS will come after you until you do. Worse yet, the tax agency can assess up to 25% just in late filing penalties. Plus, interest will start piling up right away. Instead of not filing, here are the steps you should take if you owe money to the IRS. Seek Out Tax Deductions You Can Still ClaimIf you find that you owe taxes, all might not be lost. As long as the April 15th tax-filing deadline has not yet passed, you can still add money to an IRA, lowering your taxable income in the process. If you meet the income guidelines for a deductible IRA, this step alone could lower the amount you owe or even entitle you to a refund. Pay as Much as You Can as Soon as You CanSpeaking of paying up, it is important to pay as much as you can as soon as you can. Even if you file for an extension, the clock will still be ticking on any required payments, and the penalties and interest can add up quickly.If you know you owe money to the IRS, paying it off should be your number one priority. That might mean squeezing your dollars extra hard or trimming your budget to the bone, but it beats paying penalties and high interest to the IRS. Seek Professional Tax Help and GuidanceOwing money to the IRS is no joke and dealing with the situation is not something you should try to tackle on your own. If you know you owe money to the IRS and cannot pay the bill in full, it is important to seek professional help and guidance.A tax resolution expert can guide you through the process, helping you prepare, submit, and negotiate a payment plan that works for you and the IRS doesn’t get to manage your monthly cash flow. You also may qualify for an offer in compromise, which settles your case for less than the amount owed, but it’s important to act as quickly as possible - you do not want your tax situation to get worse.Hopefully, you will find a reason to smile when you file your taxes this year.Hopefully, you will find that you are due a refund, and you can begin making plans for the money that will soon arrive in your bank account.If not, it is important to know what to do and which steps to take. If you owe money to the IRS, you need professional help and guidance, so call a tax relief expert right away to preserve your rights and your money.Before you decide, let our firm see if we can help. We negotiate with the IRS day-in and day-out. We can potentially settle your tax debt for a lot less than you owe. Call us today to find out. Our tax resolution specialists navigate the IRS maze, so you don’t have to.Joseph Orabona III, EAVector Tax & Accounting LLC576 Elm St.Windsor Locks, CT 06096 (860) 580-5183info@vectortax.com

The 2022 Inflation Reduction Act: How Will It Impact You If You Owe Money to the IRS

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Tue, 25 Oct 2022 10:46:11 -0700

Working with the IRS has never been easy, and tax settlement agreements are always complicated affairs. If you are currently working to pay off your tax debt, you may wonder what the recently passed 'Inflation Reduction Act of 2022' has in store for you. There has been a lot of back and forth about the Inflation Reduction Act and what it means to you. While the details of the agreement are still up in the air, there are a few concrete details you need to know about how this act could impact you as an American citizen. Here are some essential things to consider moving forward. The "Army" of IRS Agents Are Not All SoldiersA lot has been said of the supposed army of IRS agents who will soon be walking throughout the streets of America. There are some pundits and politicians who say, "the IRS will be hiring 87,000 armed agents to hunt down innocent taxpayers, relieving them of their hard-earned money in escalating waves of harassment." The reality behind the army of IRS agents is much different and far less troubling than what you may be hearing. Most of the new hires will be administrative personnel, IT workers bent on upgrading old hardware, customer service representatives to answer the endlessly ringing phones, and so on. That does not mean there will not be new agents on the job, but the scope of the new hires is not a reason to panic, even if you currently owe money to the IRS. Enforcement Efforts Will Ramp UpEven though only a portion of those new IRS hires will be "on-the-ground agents," the overall goal of this bill for the IRS is to increase the amount of revenue they are collecting from taxpayers. There is reason to believe that the IRS will be more aggressive with its collection efforts because of the Inflation Reduction Act. The nature of this bill has raised concerns that the IRS will have an increase in audits for small business owners and regular taxpaying citizens across the United States. Our government claims the IRS's efforts are geared more toward citizens in higher tax brackets; however, you can never be too sure since it does not clearly state that they will not target the "everyday" taxpayer. If you think you owe money to the IRS, this is the time to take it seriously to avoid any extra fees or, worst-case scenario, the IRS freezing any of your bank accounts and garnishing your wages. If You Have an Agreement in Place Nothing Should ChangeThe IRS has been increasing its efforts against taxpayers even before passing the 'Inflation Reduction Act of 2022'. If you have been targeted by one of these actions, they are still looking for a suitable settlement with you and will not stop until the settlement is resolved. Hopefully, you are working with a professional as you work with the IRS since the settlement process can get complicated and working with a tax relief specialist ensures you can get the lowest settlement possible for your specific situation under the law. If you are still working through the details of a settlement, you could find the IRS will try to drive a harder bargain. This could be especially true if the amount owed is over $10,000. Either way, working with a tax resolution professional is crucial since ignoring the situation will only worsen it. The longer you wait, the more expensive your situation will become. Professional Tax Relief Guidance is More Important Than EverThe recent passage of the Inflation Reduction Act has introduced a great deal of uncertainty among taxpayers, especially those who owe money to the IRS. If you are not currently working with a professional and relying on their guidance, seeking outside help will become even more critical. That is why it is vital to work with a professional, so do yourself and your wallet a favor by connecting with a tax resolution specialist like me. At Vector Tax we specialize in helping people get their IRS and State tax problems settled and behind them once and for all! Joseph Orabona III, EAVector Tax & Accounting LLC576 Elm St.Windsor Locks, CT 06096 (860) 580-5183info@vectortax.com

What to Do If You Receive a Collection Letter from the IRS

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Mon, 10 Oct 2022 08:00:01 -0700

You open your mailbox, expecting the usual mix of bills and catalogs, but what you find is a collection letter from the IRS. It’s a living nightmare that you can’t wake up from. Even worse, that letter includes a demand for payment, which is the last thing you need to deal with. So, what do you do now? The steps you take could make all the difference, and here are some key things to do next. Take a Deep Breathe It is easy to panic when you get a notice from the IRS but getting scared will not get you anywhere. So, slow your racing heart (if you can), take a deep breath, and try to calm your nerves. You will need to think clearly to take on the IRS, and letting your emotions guide you is the last thing you want to do. You will want to have all your brain cells firing, so stop panicking and carefully think through the following steps. Read the Notice Carefully Not every notice from the IRS is terrible news, and some are merely a matter of mismatched paperwork or transposed numbers. Those relatively simple matters should not take much to resolve, and they may not even require you to pay any extra money.Before you do anything else, take the time to read the notice carefully. Find out precisely what the letter says and what the IRS is proposing. Is the IRS claiming you underreported your income for the past year? Are they saying that you took a deduction you were not entitled to? Is the tax agency challenging your interpretation of a statute? The more you know about what the IRS claims, the easier it will be to defend yourself and, ultimately, save you money and headaches. Pull Out Your Tax Return and Supporting Documents As previously stated, some tax notices are merely the result of minor disagreements or inconsequential math errors, but others are more serious. Now that you understand what the IRS is stating, you will want to look at what you claimed when filing your tax return. You can start by pulling out a copy of the tax return in question, making sure to get the right one based on the contents of the collection letter. Hopefully, you have a copy of the return saved on your computer or in your filing cabinet. If not, you can request one from the IRS or have a professional request it for you. Now that you have your tax return, you can look it over in comparison to the collection letter, looking for any mismatches or erroneous entries. If the return seems good to you, the next step is to get out all the supporting documents. Those supporting documents may include 1099 forms from your bank and brokerage accounts, W-2 forms from employers, and anything else you included on your tax return. If you took deductions against your income, you would also want to gather those documents and keep them handy. Take Prompt Action One thing is certain when it comes to fighting with the IRS - wasted time is wasted money. The interest and penalty clock starts ticking the moment the supposedly erroneous tax return is filed, and every minute you wait could be more money out of your pocket. If you wait too long the IRS can, without a court order, garnish 90% of your net pay AND clean out your bank account. They can also seize your home and other assets. The number one thing to do is act fast, which means finding and reviewing the applicable documents immediately. Once you have everything together, you can take the next and arguably the most critical step. Find a Suitable Professional Taking on the IRS is not something you want to do alone. You wouldn’t go to court without a lawyer, and you certainly don’t want to go up against the IRS without expert representation. Even if you are confident filing your taxes and handling your finances, arguing with the IRS is not a DIY activity. If you hope to limit the damage and reduce the amount, or the proposed amount they are demanding, you will want a professional in your corner. Working with a tax relief specialist could save you a lot of money in the end, along with countless hours of grief and stress. The sooner you seek professional help with your tax problem, the better, so do yourself a favor and do not wait. IRS problems can affect all aspects of your life. The stress of not filing or paying your taxes could make you lose sleep. If you are looking for tax relief, we can help!To help ease the stress from your situation, we offer a free, no-obligation consultation with one of our tax resolution experts. You don't have to worry about confidentiality or cost because the consultation is free with zero gimmicks or commitments. Schedule an appointment with one of our tax resolution specialists today by following this link.

5 Critical Reasons to Hire a Tax Resolution Professional

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Mon, 26 Sep 2022 11:00:01 -0700

Dealing with tax issues can often be a challenging, and even overwhelming for many people. Choosing to work with a tax resolution professional is often a great choice if you are dealing with the IRS. Tax relief specialists can guide you throughout the entire process to help you avoid making costly mistakes. You will also have much less stress knowing that an experienced professional is working hard on your behalf. The IRS is no stranger to audits, and it can be a stressful process. If you've received a notice from them, don't panic! There are many things that could help relieve the stress - like working with one of our top-rated tax resolution professionals who will fight hard on your behalf so there's less risk for penalties or interest charges along with preserving any possible defenses against accusations from this difficult situation. Here are 5 critical reasons why you need to partner with a tax resolution expert.1) Relief from the IRS & Your State of MindWhen you receive the first letter from the IRS, it can make your stomach drop and your heartbeat a little faster but working with a tax resolution expert can set your mind at ease because you have a professional working on your case to help you through this gut-wrenching experience. As an added bonus more often than not, once you hire a tax resolution expert you won’t have to meet or speak with the IRS. 2) Guidance from a ProfessionalOne of the benefits of hiring a tax resolution professional is that it gives you access to professionals that do this type of work daily. Working with a tax resolution expert is especially important if you are dealing with any back taxes. They understand the latest laws impacting your case and can help you make the best decision for your situation. 3) Saves You MoneyAn added benefit of hiring a tax resolution professional is that it can save you a lot of money. Yes, it will cost money to hire them, but it's a lot less expensive compared to having no representation at all. A tax resolution professional also has more experience with handling different issues compared to an accountant, which is why it's recommended to hire a tax resolution professional if you are dealing with the IRS. 4) Get Your Time BackTrying to research all the regulations involving the tax code is nearly impossible for most people. However, working with a tax resolution professional is a great way to resolve your tax issue as they must keep up to date with the latest laws. These professionals understand all of the ins and outs of the IRS maze and can help you negotiate the lowest possible settlement amount or the lowest possible monthly payment amount, allowed by law. 5) Avoid Costly MistakesMistakes can easily happen while you are dealing with the IRS without you even knowing it. Unfortunately, even small mistakes can lead to significant penalties and cause plenty of headaches. Hiring a tax resolution professional is a great option for avoiding these mistakes. They deal with these situations on a daily basis and understand how to work with the IRS to ensure you can save the most money. Closing ThoughtsWorking with a tax resolution professional is something that many people find to be both beneficial and necessary. They can help you avoid costly mistakes when filing taxes or during an IRS audit, as well offer much needed guidance throughout the process of doing so! By partnering up for this kind of work, you'll have saved yourself tons of time by working together instead of spending hours trying to figure out what's wrong on your own - while avoiding stress altogether.— OWE BACK TAXES?If you owe the IRS or state $10,000+ and are feeling blindsided every year by a huge tax bill - don't wait. We can help! Contact us today for more information about how we'll work to settle your debt so that it doesn’t become impossible tomorrow. It's always difficult when faced with major financial problems such as unpaid taxes; however, there is relief available through reputable organizations like Vector Tax, which specializes in settling debts without going into collections agencies.Joseph Orabona III, EAVector Tax & Accounting LLC576 Elm St.Windsor Locks, CT 06096 (860) 580-5183info@vectortax.com

Do You Have Unfiled Tax Returns? Here’s What To Do.

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Mon, 12 Sep 2022 11:42:00 -0700

Filing your taxes is never a fun thing to do, but if you don't file them at all then the IRS will come calling. They have unbridled power to file a return on your behalf in their, not your, best interest.They have powerful collection tools and an unforgiving nature that makes this one of the worst mistakes anyone could make. Getting on their bad side isn’t easy; having years’ worth of unfiled returns only adds fuel to the fire!The IRS is always on the lookout for taxpayer’s who haven’t filed legally required income or payroll tax returns. If you have unfiled tax returns, it’s only a matter of time before they find out and demand the return and their money with penalties and interest! When it gets to a point where the IRS contacts you, the amount they claim you owe will be far greater than the amount you actually owe if you haven’t filed. You don’t want this situation and unfortunately in these circumstances the amount they claim you owe is what you will have to pay unless you prove otherwise.Before we jump into it, if you have back tax debt or years of unfiled tax returns, contact our firm for a free consultation. You won’t have to talk to, or meet with, the IRS and our firm can provide the peace of mind you need to resolve your tax issue.The longer you wait, the worse the situation will become. Here are some important steps you can take if you have unfiled returns with the IRS. Get Your DocumentationIf you’ve been neglecting your taxes for too long, it's time to take care of things. An experienced tax resolution firm can help get things back on track and oftentimes, even if the records are missing or destroyed, there are alternative methods to reconstruct your tax return. However, only a tax resolution professional will be able to accomplish this.If you are missing W2 and 1099 forms from past years an experienced tax resolution pro has the ability to retrieve these as well. Go Through the NumbersThe fear of not having the money to pay has caused many people to avoid filing their returns altogether, but those worries are often misplaced.According to the IRS statistics approximately one-third (34%) of all unfiled federal tax forms may actually be due a refund! Now that you have all the documentation you need, it is time to run the numbers. And while you may not be able to get exact figures without filing the returns, you can get an idea of how much you might owe. Hire a ProfessionalWhether you are an individual, partnership or corporation there is a strong temptation to let your past mistakes go. But doing so would put both financial security and freedom at risk - which makes filing those old tax returns seem like tempting fate instead of bravely taking on the challenge ahead! It is a misdemeanor and possible jail time for failing to file legally required income tax returns. Don’t let this happen to you.The IRS will assess a 25% failure to file penalty as well as up to a 25% failure to pay penalty, plus interest. Just filing your return, even if you can’t pay, will save you big time!When you're dealing with back taxes, it's important to have someone on your side who knows what they are doing. A tax resolution professional can give invaluable advice and guidance about how to lower the amount that the IRS claims you owe and the best steps moving forward for your situation.You're not alone in the battle against the IRS. The IRS is ready and waiting for you, so it's best to have an expert on your side who knows how to get the help you need and deserve.A tax resolution professional can give advice about what needs to be done; from gathering documents like W-2s or 1099’s right down to making sure everything looks perfect when filing those unfiled returns.Contacting the IRS on your own is not only a scary thought, it’s an action I highly discourage, but avoiding them will make your situation worse. When you don't file your taxes and lose track of what's owed to the government it can have devastating consequences for both yourself personally as well as financially. The IRS stores detailed records of everyone in their database and chances are, you are already on their radar due to your lack of compliance.Filing those returns ASAP will go miles in helping you get back on track before any more damage becomes irreversible. Filing your taxes might seem like a daunting task, but there is help for you. The right professional can make things right with the IRS and relieve the stress from this difficult situation.The stress of not filing taxes can be enough to make you lose sleep. What's worse, IRS problems usually affect all aspects of one's life. Do yourself and your sanity a favor by filing your returns now; it isn't nearly as scary or daunting as receiving the final collection letter from the IRS or getting your bank accounts levied.If you are looking for tax relief, we can help! To help ease the stress from your situation, we offer a free consultation with one of our tax resolution experts. You don't have to worry about confidentiality or cost because the consultation is completely free. Schedule an appointment with one of our experts.Joseph Orabona III, EAVector Tax & Accounting LLC576 Elm St.Windsor Locks, CT 06096 (860) 580-5183info@vectortax.com

Small Business Owners: Owe Payroll Taxes? Here’s What to Do.

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Mon, 25 Jul 2022 08:00:02 -0700

Unpaid payroll taxes are a serious matter to the IRS and are some of the worst kinds of back taxes you can owe. If you’re a small business owner with a payroll tax problem, read on to learn what you can do to avoid the IRS crippling your business or worse, shut your business down completely. Already in payroll tax trouble? Contact us to schedule a free, no-obligation consultation and let’s get your payroll tax issue resolved. Why Small Business Owners Get into Payroll Tax Trouble in The First PlaceIt’s hard being a small business owner today, trying to pay your employees their paychecks every week, and pay the IRS all those payroll taxes! A lot of times when money is short, you pay the employees first. It’s a natural thing to do—you need to take care of your employees, even if you have to skip paying yourself! Besides, if you don’t pay them, they’ll quit, and you will have to hire new people all the time. It can seem easy to “just pay the 941 taxes next pay period” and give yourself a little cash flow cushion but skipping paying your employees payroll tax deposits is never a good idea. What happens too often is 1 pay period turns into 2, and 3, and 4, and eventually you’re so deep in payroll tax debt that the only thing you want to do is completely ignore your problem.Except the IRS doesn’t care about your financial problems. They just want you to pay your payroll taxes!The IRS doesn’t care if you can’t pay your employees. They don’t care if they put your employees out on the street. They don’t care if you can’t collect your receivables. They don’t care if one of your largest and best customers just went “belly-up”. All they care about is you have money that belongs to them, and they will do whatever they have to, even put you out of business, to collect it. They don’t care who you are, or even what business you are in. Penalties are The Kiss of Death When It Comes to Back Payroll TaxesPenalties for failing to file and pay your payroll taxes are the “kiss of death” for any small business owner. They tack on penalties totaling 33% in just the first 16 days! And it doesn’t stop there. The IRS adds interest on top of the penalties too. It is not uncommon that a payroll tax liability doubles in short order. And if you don’t pay them or work something out, they will shut you down! It’s much less work for the Revenue Officer, as most are lazy, to simply close you down than work out an arrangement with you. They IRS Will Collect, or They Will Shut You DownIt’s as simple as that. The IRS is the most brutal collection agency on the planet. They have more authority than the President of the United States! And they have all the ways and means to do whatever it takes to collect what’s owed to them. You didn’t wake up in the morning, go to work, and say to yourself, I’m not paying my payroll taxes because you didn’t want to. The money simply wasn’t there. It’s not your fault. One week you’re short of cash. It was a slow week, a customer’s check bounced, or any number of legitimate reasons that just prevent you from paying the IRS. You’re a good person. You figure you will make it up the next week. But then next week comes and goes, and you realize you still don’t have enough money to make that payroll tax deposit. And then the entire situation starts “snow-balling” into an avalanche. Should You Call the IRS To Get Your Payroll Issue Fixed?If you were to call the IRS and were able to get through after waiting on “hold” for an hour or two and try to explain your situation—you might as well have a conversation with the wall—because they don’t care. The IRS representative that you’re talking to probably makes less than $20 an hour and is poorly trained. Do you think they ever had to make a payroll in their life? Do you think they know what it’s like running a small business? Do you really think they will have any sympathy for you? Not only is the answer “NO” but they can also dictate the fate of your case. What they will try to get, while you’re on the phone, is all your personal and financial information. They want to know where you bank; they’ll want to know all about your customers who owe you money, they’ll want to know about the value of all your assets, like your home, cars, motorcycles, etc. Why? Because now they have all the information, they need to levy your bank accounts, take your receivables, and seize your property.Now that you know you shouldn’t be talking to the IRS because they are not going to help you, you might be wondering what you should do? Where should you turn for help? They smartest thing you can do to protect your business and family is to have someone represent you—someone who deals with the IRS for a living. You need to get help—but not just from anyone—you need help from someone who is an experienced competent professional, and deals with the IRS every day, helping small business owners keep their businesses and settle IRS payroll tax problems. If you were charged with a serious misdemeanor or felony, would you go to court without a lawyer? You don’t want to represent yourself before the IRS either. You need professional, expert representation. Reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem. Our expert tax resolution professionals know how to navigate the IRS maze.Once you decide to retain us, we step into your shoes and protect you from the IRS’s abusive tactics. We take over all communications from the IRS on your behalf. You don’t have to speak with the IRS anymore. We do. Not only that—they are not allowed to talk to you once you’ve signed our Power of Attorney! Once they realize you have someone on your side protecting you, who knows their tricks as well as they do, they must step back and follow the law. Not only can we protect you from the IRS harassing you, calling you, and showing up at your front door, we can get those penalties reduced and, in some cases, completely removed! Contact us now and let’s get your payroll tax issue resolved!

Do You Owe Money to the IRS? Possible Tax Resolution Strategies to Set Your Mind at Ease

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Mon, 11 Jul 2022 08:00:03 -0700

Even for honest taxpayers, the IRS can be extremely frightening. Unlike most other government agencies, the IRS has unbridled power to attack your wages, freeze your bank account and even confiscate your property, and that is enough to send a chill up the spine of any taxpayer.If you receive a letter from the IRS saying that you owe additional taxes, it is important not to panic. It may be a frightening situation, but there are things you can do to settle your tax debt and get back on the good side of the IRS. Taxpayers do have options when resolving tax disputes and paying additional taxes due, and simply knowing what those options are can set your mind at ease. As an expert Tax Resolution Firm, we encourage all readers facing a tax problem, whether it's the feds or the state, to contact us for a free consultation.Here are three strategies you can use to resolve your tax debt and get on with the rest of your life. Not all these options will be right for everyone, but it is important to be an informed taxpayer. Review the Amount Owed and Your Tax Return in Question If the IRS says you owe money, you should not simply assume they are right. The tax agency does make mistakes (a lot), as do tax preparers and ordinary taxpayers.Whether you filed your taxes on your own or hired someone else to do it for you, it is important to examine your return and compare what you find with what the IRS is claiming. It pays to seek professional help for this tax review, even if you originally filed your own taxes. A professional with IRS experience may be able to uncover errors and inconsistencies you would have missed on your own, and that could end up saving you money.There is no guarantee this review will eliminate the extra taxes the IRS says you owe, but it never hurts to be sure. There have been many cases in which taxpayers who thought they owed money to the IRS ended up owing nothing - or even being due a refund from the IRS. Set Up a Payment PlanGetting a notice of additional tax due from the IRS is frightening, especially if you cannot afford to pay what the agency says you owe. Keep in mind, however, that you do not necessarily have to pay the bill all at once.The IRS is often willing to set up payment plans with taxpayers, and those payment plans could make paying what you owe easier and less stressful. Once again, it is a good idea to seek professional help and guidance here - the IRS can drive a hard bargain, and you do not want to end up with a payment plan you cannot afford and wind-up defaulting on it.If you fall behind on the payment plan you agreed to, you could be subject to additional enforcement action, including the tax agency garnering your paycheck or seizing funds from your bank accounts. Getting the help of a tax resolution professional up front can help you avoid these grave consequences. Explore an Offer in Compromise SettlementIf you are truly unable to pay the money the IRS claims you owe, you may be able to work out a (much) smaller lump sum payment. The IRS may not advertise this program, but they are often willing to work with taxpayers by accepting lesser amounts, especially if those taxpayers have little in the way of equity in assets and a limited income. Sometimes these settlements can be for a fraction of what’s owed, if you qualify. We offer a free no obligation consultation to find out if you qualify.If you plan to explore this last option, it is critical that you work with a tax resolution expert. An offer in compromise can be extremely complicated, with legalese and language that can be difficult to understand. You do not want to make a misstep here, and you want to ensure that you are only paying the lowest amount, allowed by law, in settlement of your tax bill.Few things are as frightening as getting a letter from the IRS. That official-looking letterhead is bad enough, but what the letter says is even worse. If you receive such a letter, you need to take positive steps right away. Ignoring the situation will make it worse and it will not go away, and the sooner you start exploring your tax resolution options the better off you will be.If you want the help of an expert tax resolution professional who knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain all your options to permanently resolve your tax problem. Joseph Orabona III, EAVector Tax & Accounting LLC576 Elm St.Windsor Locks, CT 06096 (860) 580-5183info@vectortax.com

Don't Have the money to pay your taxes? You have options.

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Mon, 27 Jun 2022 08:00:04 -0700

If you don't have money to pay what you owe the IRS, you have a few options to work with. Whatever you do, don’t ignore the letters from the IRS and don’t let your back tax problem go unattended. The IRS has a great deal of power when it comes to recovering money, they think is theirs. When you owe the IRS money, they can garnish your wages, levy your bank accounts, put a lien on your home and seize other assets.Here's what you can do if you find yourself not being able to pay your taxes. Note, we always recommend getting in touch with a tax resolution professional to help avoid the harsh penalties and interest that accrued on your back taxes. It’s far easier to navigate towards tax resolution if you have a professional working on your behalf. If you’d like to schedule a no-cost confidential tax relief consultation, contact us here. First, make sure that you file your returns Even if you have no hope of being able to pay your taxes, you must at least file your income tax returns. Whatever the penalties are for not paying your taxes, the penalties for not filing are much larger and non-filers can be subject to a criminal investigation. The IRS will remove penalties for not filing and not paying but you must have a good reason. We can request to have your penalties removed or reduced. It's also important to remember that when you file for an extension, it only gives you more time to file. Your payment date remains unchanged. Revisit your W-4 withholdings If your employer withholds money from your salary to pay your taxes with, you shouldn't have to worry about paying anything extra from that income source. If you do owe more, it's a sign that your withholding exemptions are incorrectly reported on your W-4 form. To make sure that you don't get into tax trouble repeatedly, you should make sure your W-4 form is correct and get advice from a tax professional about the kind of withholdings necessary for exemptions. Make a partial payment If you can't afford to pay all that you owe, you should pay whatever you can. While you will still be hit with interest and penalty charges, they will be smaller than they would be if you paid nothing. These charges are proportional to what you owe the IRS. Try to work with the IRS If you can't pay, there are resolution options available to you if you qualify for them. They include a payment plan or an offer in compromise to name a few. You need to first step up and admit to your inability to pay, though. An offer in compromise is an agreement between the IRS and the taxpayer that allows the taxpayer to settle their debt for less than the amount owed. Sometimes, for a fraction of the amount owed. There are strict eligibility requirements, and you should consult with a tax resolution specialist first. An installment agreement, aka payment plan, is an agreement between the IRS and the taxpayer that permits the taxpayer to pay back their debt over time, generally in 60-72 months. Depending upon the amount owed, and ability to make monthly payments, determines the type of installment agreement the IRS will allow, as there are several variations of these payment plans. An experienced tax resolution specialist will guide you through the maze and myriad of these different options.If you need an expert tax resolution provider who knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem. Joseph Orabona III, EA Vector Tax & Accounting LLC 576 Elm St. Windsor Locks, CT 06096 (860) 580-5183 info@vectortax.com

7 Reasons to Work with a Tax Resolution Professional to Resolve Your Back Taxes

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Fri, 20 May 2022 07:00:02 -0700

When you owe money to the IRS, it is hard to think about anything else. While being in debt is never fun, no matter who the creditor is, the IRS enjoys almost unlimited power to collect the money they are due.Unlike your mortgage lender or credit card company, the Internal Revenue Service has the power to attach your wages, raid your bank account and even take your freedom. No other creditor even comes close in terms of its power and influence and taking on the agency on your own could be asking for trouble. If you have received a notice from the IRS, you need to act fast, and you need the right assistance in your corner. Taking on the IRS requires specific expertise, and that is why it is so important to work with a quality tax resolution company. Here are seven reasons why working with a tax resolution specialist could save your good name - and your bank account. You gain specific expertise. The IRS is a specialized agency, and you need expert advice and guidance to get the most positive resolution.It will give you peace of mind. Just being contacted by the IRS can make your heart beat a bit faster but working with a tax resolution expert can set your mind at ease once you hire a tax resolution specialist. Generally, once you hire a tax resolution expert you won’t have to meet or speak with the IRS. They will handle all communications and correspondence with the IRS.The tax resolution process could save you a lot of money. Tax resolution professionals are experts at settlements and working with one could save you a ton of money.Timely action could save your home and property. If you wait too long, you could put your home, business, bank accounts and personal property at risk. Time is of the essence when it comes to resolving tax issues, and timely assistance could make a world of difference.You will feel less alone. Few things feel as lonely as fighting the IRS on your own. When you work with a tax resolution expert, not only do you not have to go it alone but they actually step into your shoes to represent your best interests.You will have a chance to file missing returns. When faced with a big tax bill, it is easy to do nothing, but failing to file legally required tax returns could have serious consequences down the line. If you have years of unfiled returns, a tax resolution expert can help you catch up.You could save your credit score. Unresolved issues with the IRS will reflect badly on your credit report, lowering your credit score and making it harder to borrow money or qualify for a mortgage. Timely tax resolution could preserve your stellar credit score and help you avoid those serious consequences. Owing money to the IRS can be frightening. There is a reason those three letters strike so much fear into the hearts of ordinary citizens, even those who have done nothing wrong.If you are in trouble with the IRS, you cannot afford to ignore the issue, so act fast and get the help you need today. Working with a tax resolution expert carries a host of benefits, starting with the seven outlined above.Most likely, you wouldn’t go to court without a lawyer. Similarly, it’s best not to deal with the IRS without expert representation which can be provided by a tax resolution expert, who by training, is also a CPA, attorney or enrolled agent.Reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options in full to permanently resolve your tax problem.

Do You Owe Back Taxes? Why You Should Stop Panicking & Start Planning

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Wed, 11 May 2022 07:00:04 -0700

If you owe back taxes to the IRS, some amount of panic is understandable. After all, the Internal Revenue Service has the power of the federal government in its corner, something no other debt collector can claim. They are considered the most brutal collection agency on the planet. It is easy to freeze up and just do nothing when you owe back taxes to the IRS, but hiding from, or doing nothing about your tax debt will not make it go away. In fact, ignoring the taxes you owe will only make the situation worse, since interest and penalties can really add up. You also risk having your paycheck garnished (the IRS does not need a court order to do this) or your bank account levied. The IRS can also file a Notice of Federal Tax Lien making it all but impossible to obtain financing for a car or home. So instead of panicking about your tax debt and hoping the problem will go away, you need to take some proactive steps. Now is not the time to panic and hide - now is the time to start acting. Some of these steps you can do on your own if you’d like, while others will likely require the intervention of an experienced tax resolution expert. Here are some proactive steps you can take to get a handle on your tax debt. If you need help resolving your IRS tax problem, contact us here. We help people with IRS problems every day. Confirm the Amount Owed When you owe back taxes, one of the first things you should do is make sure you really owe the money. The IRS has been known to make mistakes, a lot of mistakes, and the agency is far from foolproof. Contact the IRS or have us do an IRS transcript analysis to determine the amount the IRS claims you owe. Seek Out Deductions You May Have Missed At the very least, you may not owe as much as you think you do, and every dollar you can remove from the bill is one more dollar in your favor. Now is the time to scour your past and current tax returns, looking for deductions and tax credits you might have missed. Unless you are a seasoned tax expert, you will probably need some professional assistance to make this happen. If you are already working with a CPA or tax expert, you can ask them to look at your past tax returns but only a tax resolution expert, who helps people like you for a living, can protect your income and assets as you go through the process. If you missed a few deductions and tax credits along the way, your tax professional can file amended returns on your behalf, lowering the amount of tax debt you owe - and possibly eliminating it altogether. However, you usually can’t go back more than 3 years to amend returns. Look for Special Programs You May Qualify For The bad news is the IRS wants its money and has the power to collect it. The good news is the tax agency also offers several programs tax filers can use to make the repayment process easier. In some cases, the IRS may even be willing to settle for less, possibly much less, than the total amount of back taxes you owe. These programs are not available to everyone, and if you have the resources needed to pay your back taxes, the IRS is unlikely to give you much of a break. But if your resources are limited, the tax agency may decide that a small amount of tax repayment is better than none at all. The first step in the process is finding the programs for which you might qualify, and that will probably require the help of an experienced tax resolution expert. Most CPAs do not have this experience. Negotiating with the IRS is not an easy thing to do, and you may need help to drive the best bargain and reduce your back taxes. In the end, it may be well worth paying a tax relief expert to negotiate on your behalf, especially if you end up with a much lower tax bill. It is easy to panic when you owe back taxes, but you should not let fear get in your way. The longer you ignore the problem, the worse it is likely to get, and the sooner you act, the better off you, and your finances, will be. There is a solution to every IRS problem. Let us see what IRS tax debt settlement programs you qualify for today.

Made a Mistake on Your Tax Return? Here’s What to Do.

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Tue, 03 May 2022 07:00:04 -0700

Tax returns can be complicated and tricky to understand. Even for a professional, it can be surprisingly difficult to get every number and detail right. Often, you only notice the mistakes when you take a casual look at your return days after you submit it online or drop it in the mailbox. Or worse, the IRS sends you a letter telling you something is off.So, is there anything that you can do after your return is in?Actually, there's a lot that you can do. But if you don’t know where to start, it’s best to leave it to a professional. Our tax resolution specialists can navigate the IRS maze so that you have nothing to worry about. We help people who owe back taxes or have back tax debt. Call us today for a free consultation. 3 Major Types Of MistakesThere are many red flags the IRS looks for on each tax return, but here are 3 common mistakes taxpayers make.1: Not reporting all your income. No matter how much or little you make, report everything. In some way or another, unless you run a strictly cash business (another red flag), all of your income is reported to the IRS. W2, 1099 and other forms you receive are duplicated and sent in to the IRS. If your reported income doesn't match theirs, that's a red flag.2: Overstating business expenses. Depending on the type of job you have, there can be many legitimate expenses that your employer doesn't reimburse you for. If you’re a business, you might be tempted to write off just a little extra. These might be genuine deductions. But don't try to deduct something that's not on the approved list and don't claim deductions way outside the norm. Check with your tax professional and stay up to date with tax laws so you’re not padding your tax return with write offs.3: Math errors. Whether you file electronically or still file paper forms, your information gets entered into a computer. And one thing computers are very good at is doing math. If things don’t add up, or there was an honest mistake in inputting the information, it can raise a red flag. A math error won't necessarily get you an audit, but it will get attention you may not want. Make sure to double check your returns and have a qualified tax professional assist you and keep you out of tax trouble. Filing an Amended Return - The 1040X Individual income tax returns filed with the IRS can be amended up to three years after the due date of the original return by filing IRS Form 1040X. On a 1040X form, the IRS only asks to be shown what was originally filed, what the corrected details are and the reason why you need to make changes. The form also includes a section where you get to change the personal exemptions that you've claimed on your tax return -- just in case you make a mistake listing your dependents. A few tips on filing your 1040X formFor each year that you need to make corrections for, you need to use a separate 1040X form and mail it in, in its own envelope.Each form should have the return year mentioned at the top.On the back of the form, you need to explain the changes you've made and your reasons for them.Any schedules, forms, or anything else that are affected by your change need to be sent in with the form.If the corrections made to your federal form affect your state taxes, you need to send in a corrected return for that as well.However, we strongly suggest consulting a tax resolution professional to help with your amended return. They can often file multiple years of unfiled tax returns, help you settle for a fraction of what you owe, and at the very least save you a headache. You Have 3 YearsMany tax filers only notice a mistake on a tax return only when they look at it, preparing their taxes the following year. Mistakes may come to their attention in one of several ways. They may share something with their tax preparer that they may have neglected to mention in a previous year. The tax preparer, then, may notice the need for amendments to a previous year's return, as well. There is no set time period within which you must correct your return. You can do it any time you notice it. A general rule that the IRS follows, though, is to entertain corrections for 3 years after an original return is filed. The 1040X is a paper-only formEven if you always e-file your tax returns, you'll need to file the 1040X form as a physical, paper form. The IRS still isn't equipped to handle the 1040X form electronically. You also need to pay attention to where you mail it in - 1040X forms do not go to the same IRS service center address as regular returns. If Correcting Your Mistake Results in More Taxes Owed, You Should Still Amend Your ReturnIf your tax return contains a mistake that shortchanges the IRS in a more serious way, chances are good that the IRS will discover it. For instance, if you made money off a freelancing job that you didn't file a 1099 form for, the IRS could find out and you could end up paying interest for a few years for the tax owed. If you catch it yourself, you'll save on interest, at least.If you know you’ll have outstanding tax debt and owe more than $10k to the IRS or state but can’t pay in full, contact our firm today. We help people find tax relief and sometimes settle their tax debt for a fraction of what’s owed.

Tips for Making Self Employment Less Taxing

Joseph Orabona, Your defense against the IRS (Vector Tax & Accounting LLC) — Mon, 14 Mar 2022 07:00:04 -0700

A growing number of people are leaving the world of traditional employment behind. These are the folks who are opening their own small businesses. The people who are embracing freelancing. And the men and women who are using gig work to make a good income.As this trend continues, many of those newly self-employed individuals are finding themselves at a loss, especially when tax season rolls around. One of the worst feelings is working so hard throughout the year, only to get blindsided by a huge tax bill you weren’t ready for.While traditional employees can rely on the companies they work for to withhold taxes and report their earnings to the IRS, the self-employed are expected to complete these actions on their own.To make matters worse, the self-employed often pay higher taxes than their traditionally employed counterparts, leaving them short of the cash they need when April 15 rolls around. Blindsided by a tax bill of more than $10k to the IRS or state but can’t pay in full? Contact our firm today. We help people find tax relief. If you are newly self-employed and want to avoid this fate, here are some timely tips for making your self-employment activities less taxing. Set up a business bank account. It is important for you to keep your personal and business activities separate, and the best way to do that is with a business bank account. A basic business checking or savings account will make it easier to track your income and expenses, making tax season easier and less costly. Open a business credit card account. Having a separate credit card in the name of your business will give you an easy way to pay expenses applicable to your self-employment income. This can make expense tracking, reporting and tax filing a lot easier. Avoid underpayment penalties by making quarterly payments. When you work a traditional job, your employer is responsible for accurate tax withholding, but the self-employed are not so lucky. As a self-employed individual you are responsible for paying your taxes on a timely basis, and failing to do so could trigger costly penalties and interest. Making quarterly payments to the IRS and state is the best way to avoid those expensive repercussions. Track expenses throughout the year, not just at tax time. If you wait until April to add up your expenses, you could miss deductions that would have otherwise reduced the amount you owe. Tracking expenses when they are incurred will help you avoid this underreporting, so you get credit for every penny. Research retirement plans for the self-employed. You have access to some exceptionally generous retirement plans, including solo 401(k) plans and SEP-IRAs. These accounts can sharply reduce the amount of taxes you pay, so do your homework and choose the one that is right for you. Have your taxes reviewed by a qualified tax professional. When your taxes are simple, doing them yourself is easy. Tax software makes tax filing simple, but that simplicity could be costly when you are self-employed. Even if you are confident in your abilities, having your work reviewed by a CPA or Enrolled Agent could save you a lot of money. There is a lot to love about self-employment, from the chance to work at home to the opportunity to live life on your own terms. Even so, being self-employed can be taxing, quite literally, and it is important to plan carefully from the start. The tips listed above can help you reduce your taxes, so you can keep more of the money you worked hard for.OWE BACK TAXES?Our firm specializes in tax resolution and helping people who owe the IRS or state $10,000 or more. We’ve seen taxpayers get blindsided every year by a huge tax bill and often falling behind on their taxes for years on end. If that’s you, we can help. Contact our firm today to discuss your tax debt settlement options. Joseph Orabona III, EAVector Tax & Accounting LLC576 Elm St.Windsor Locks, CT 06096 (860) 580-5183info@vectortax.com