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IRS Tax Help Blog

2015 Tax Law Changes You Need To Know About

Tax laws are constantly changing. It is important for you to take note of these changes when you are doing your taxes. Below is a list of some of the 2015 tax law changes that you will need to know about:

Health Insurance Penalty

The Affordable Care Act requires that every person in America have health insurance. People who do not have health insurance are required to pay a tax penalty. The penalty for not having health insurance in 2014 is one percent of your total household income or $95 per person, which ever one is greater.

However, the fees are even greater in 2015. The penalty for not having health insurance in 2015 will be two percent of your total household income or $235 per person. These fees can really add up, so you want to make sure that you have health insurance so you can avoid paying those fees.

401 (K) Limits

The limit on the amount of money employees are able to contribute to their 401K plan will increase to 18,000. This is a $500 increase from 2014. The catch-up allowance for people who are over the age of 50 has also increased. People are now allowed to make an additional $6,000 in contributions. The previous cap was $5,500. These contribution levels also apply to 403B accounts and the majority of 457 retirement plans.

Flexible Spending Accounts

The annual limit that employees can contribute to their flexible spending account for qualified healthcare expenses is now $2,550. This is a $50 increase from 2014. If you have a flexible spending account, then you want to make sure that you take advantage of this new maximum amount.

Standard Deduction

The basic tax break that is extended to everyone, which is also known as the standard deduction will increase in 2015. It will rise to $6,300 for single filers.... full post

Learn What Happens When You Do Not File Your Federal Taxes

What actually happens to Americans who either forget or flat out refuse to file their taxes?

Have you ever wondered what will happen if you forget or simply refuse to file your taxes? The answer to that question is quite simple. Nothing good comes from not filing your taxes.

To state it simply, there’s no hiding from the IRS. Any IRS worker will tell you to pick a payment option, and to honor your agreement terms. The last thing you need is to deal with the hefty fines, mountains of paperwork, and even jail time that can come with not filing your taxes.

Let’s Say You Haven’t Filed Your Taxes At All

If you’ve skipped filing your taxes all together, you’re guaranteed to have to pay a five percent monthly fee on whatever amount you owe. It will max out at 25 percent. Waiting more than 60 days to file can cause you to have to pay a $135 fine or 100 percent of the taxes you currently owe.

Understanding Filing Extensions

If you’ve managed to get an extension and haven’t paid your taxes, that doesn’t mean you have until October 15th to file your taxes. That’s right, you won’t have an extra six months to pay. The IRS will levy a 0,5 percent fee on these unpaid taxes every month until you pay off your balance. At least 3 percent of that interest will be compounded daily. If you file an extension to file and pay at least 90 percent by April 15th, the penalty will not apply to you. However, if the IRS issues you a letter demanding immediate payment it will double.

What Happens When You Haven’t Filed or Paid the Bill?

When this happens, you automatically have two strikes against you. The IRS calculates penalties for both and subtracts all your late payment fees... full post

posted by Mary E. King , in:
Tax Problems

When Should You Hire An Attorney For IRS Debt Settlement?

One of the last things anyone wants to go through is an extensive legal battle with the IRS, but unfortunately this is an all too common occurrence. The U.S. tax system is complex and can be difficult to navigate. Because of the complexity of the tax system, people often find themselves facing huge penalties, including fines or even jail time, for failing to hire the appropriate tax professionals for guidance. Once you find yourself in poor standing with the IRS, it is vital that you secure an experienced tax attorney to ensure that all of your rights are protected and all of your options are exhausted. A tax attorney deals with these matters all of the time, this is their area of expertise, so it is better that you hire one to assist you sooner rather than later.

There are many reasons to hire a tax attorney, with one of those reasons being the fact that your attorney is exempt from testifying against you, based on attorney-client privilege. The same cannot be said for a CPA or tax preparer that may and very likely will be called upon to testify against you in a court of law. You want a professional on your team that you can trust and count on, which is one benefit of hiring a tax attorney.

As mentioned, the U.S. tax system is a complicated one, full of technicalities and legal definitions that are likely unfamiliar to the average person. Hiring a tax attorney will help ensure that the correct decisions are being made in order to reach the most optimal outcome when dealing with the IRS. While tax laws may be like a foreign language to most, an experienced tax attorney will know them in and out and will know how to use them to your best... full post

How Will The Affordable Care Affect My Tax Filing?

The Patient Protection Act and Affordable Care Act of 2010, which is also known as Obamacare, has made a lot of changes to the American healthcare system. It may also affect your income. Even though the Affordable Care Act does have an effect on your taxes, a tax attorney can help you get a better understanding of how it affects you.

There were several tax law changes made in 2013 that affected tax returns that were due by April 15, 2014. Below are some of the tax law changes:

*Employees will report all of the cost that they paid for their flexible spending beyond the payroll deductions, health insurance premiums and all of the other premiums on their returns. Keep in mind that this does not have an effect on your taxable income. All you have to do is enter the total amount inside of Box 12 with the Code DD on your W-2 form.

* If you choose to itemize deductions, then the threshold for deducting your medical expenses will increase to 10 percent of your AGI, or adjusted gross income. There is 7.5 percent threshold for people who are over the age of 65, and that will remain the same. There is software you can use to calculate the deduction after you enter the medical expenses.

* Higher-income taxpayers will be required to pay a 3.8 percent tax on net investment income. Heads of household and individuals who have an adjusted gross income of $200,000 per year will be required to pay the 3.8 percent tax on their net investment income. Married couples who file separately will have to pay this 3.8 percent tax on their net investment income if they have an adjusted gross income of $125,000. Additionally, couples who file jointly and make more than $250,000 will be required to... full post

IRS Filing Tax Scams And How To Report Them

These days, it is very easy to get scammed. There are even people who scam others by claiming to work for the Internal Revenue Service. Below are some examples of common IRS scams:

Internal Revenue Service Impersonation Telephone Call

Many people have been targeted by scammers who make sophisticated and aggressive phone calls. These people say that they are employed by the IRS, but they do not work for the company. They use fake IRS identification numbers and names. These people can even change their telephone number in order to make it look like the call is coming from the Internal Revenue Service.

The victims are told that they owe the IRS money, and they have to pay it right away using a wire transfer or debit card. The scammers threaten to arrest or deport people who refuse to cooperate. They also try to get people to give away their private information by promising them a refund.

If someone does not answer the phone, then they will be told that they have to call back urgently. Keep in mind that the Internal Revenue Service will never call you and demand that you immediately make a payment. They will not require you to make a payment without appealing or questing the amount you owe. The Internal Revenue Service will not require you to use a specific method to pay your taxes or ask for your credit or debit card information over the phone. Additionally, the Internal Revenue Service will not call you and threaten to have you arrested.

If you receive a phone call from someone who claims to work for the IRS, then you will need to get the employee's badge number, name and call back number if possible. Call 1-800-366-4484 to determine whether the person is a legitimate IRS employee. Report the incident to... full post

posted by Mary E. King , in:
Tax Solutions

What Are The Tax Penalties If I Do Not Have Health Insurance?

It is technically titled the Patient Protection and Affordable Care Act, but it is more widely known as Obamacare. As President Barack Obama said when it became law in 2010,"Everybody should have some basic security when it comes to their health care." Since that time, the Act has undergone many changes and much in-house and between-party squabbling. In 2012, the Supreme Court gave its approval for most of the Act's provisions, but 26 states and the National Federation of Independent Business challenged the concept that a person should be required to carry insurance or pay a penalty. According to House leader and Republican John Boehner, the Act would force millions of Americans to leave their private health insurance and into a government-run plan. The House of Representatives approved the Act in late 2009, followed by the Senate in December. The Senate bill was amended and passed by the House in early 2010, with Republicans giving it zero votes.

With the passage of the Act and its assurance of becoming reality, many Americans have many questions about Obamacare, such as: How will the Affordable Health Care Act affect my tax filing and what happens if I don't have insurance?

If you are not covered by health insurance in 2015, meaning that at tax time you don't have minimum essential coverage, you will be charged in one of two ways. In plan one, you will be required to pay 2 percent of your yearly household income, about $10,000 per person. For plan two, you will pay $325 per person ($162.50 per child under age 18) for the year.

The maximum penalty for a family using this plan is $975. If you lacked health care coverage for 2014 when you filed your 2015 tax, you will be required to pay the higher of the two amounts.... full post

When You Have Tax Troubles You Need Full Service Representation

Facing the Internal Revenue Service (IRS) over a tax issue can be very upsetting. Tax problems can quickly escalate into large debts and result in tax levies against bank accounts, property or wages. The IRS can be very intimidating and most individuals and businesses that face tax issues often feel that they have no options but to pay the large debts.

Full Service Legal Representation

Hiring a legal representative to help with a tax issue is an option that more people in this position should take. Legal representation can help with the problems and possibly reduce the debt or correct the issue that is in question. However, not all legal representation is the same.

People who are facing a showdown with the IRS need to find legal representation that can do more than push papers around and make unrealistic promises about the issue at hand. They need a law firm that can aggressively represent them and has the ability to represent them in U.S. Tax Court.

Many firms advertise that they can help you solve your tax problems, but they are not qualified to represent you in tax court. And while many issues can be resolved without ever reaching a court room, there are instances where it is necessary to take the case to court. Under these circumstances, you want to make sure that the firm you are currently using has the ability to represent you in court. If they do not, you will have to start the entire process over again with a new firm that can, causing unnecessary delays and costs to you.

Reasonable Solutions To Tax Problems

Working with an experienced tax relief... full post

posted by Mary E. King , in:
Tax Problems

IRS Levy Help - Stop The IRS From Raiding Your Accounts

If you do not file or pay your taxes, then the Internal Revenue Service has the right to seize your property, including your house, car or boat. They could also play a levy on your bank account and wages. If you have a state tax refund, then the Internal Revenue Service can place a levy on it also. Additionally, if you have a retirement account or rental income, then a levy could be placed on those things.

However, it is important to note that the Internal Revenue Service may release a levy if you are having financial difficulty. You must be able to prove that seizing your property and/or garnishing your wages will make it difficult for you to pay for your basic living expenses.

There are steps that the Internal Revenue Service must take before they place a levy on your property.

They are required by law to send you a notice demanding your payment. They are also required to send you a notice of intent to levy. Additionally, the Internal Revenue Service is required to send you a notice of your right to a hearing.

The final notice has to be sent at least 30 days before the Internal Revenue Service issues the levy. You may receive this notice at your place of business or home. You may also get a letter sent to your last known address.

The good news is that you do not have to deal with an IRS levy on your own. Our attorney can help you manage or reduce your tax debt. The attorney can also help remove IRS levies from your property, wages and bank account. Our attorney is a very honest person and does not make promises that are not realistic or legal. The lawyer is also very experienced and committed to helping... full post

Offer In Compromise - A Process To Settle Back Taxes With The IRS

If you owe money to the Internal Revenue Service (IRS), you know how stressful of a situation it can be. However, you do have options that can help you erase your debt and enjoy a clear conscience, free from the burdens of financial obligation. The IRS may consider working with you to formulate an offer in compromise (OIC), which can reduce your tax bill to a mere percentage of the original amount owed. Although there is no legal obligation for the IRS to accept an OIC to settle a tax bill, they are required to seriously review any properly submitted request. Additionally, if your OIC is not approved, you have the recourse of requesting a hearing with the IRS Appeals Office.

How to Qualify for an OIC

Everyone would like to settle their tax bill for a fraction of what they owe. The IRS does not grant an OIC to anyone wishing to shirk their financial responsibility to Uncle Sam. There are certain circumstances that must be met in order for the IRS to consider granting an OIC.

Doubt of liability is one such condition that may qualify you for an OIC. Essentially, this means that there are genuine factors in existence which cast suspicion upon the validity of the debt in question. If the debt has already been deemed valid in a court of law, or is valid under current tax code, there is no credible doubt of liability to pursue. To reasonably support a claim of doubt, you must submit supporting paperwork and evidence, as well as a written statement providing a concise explanation as to why the debt is invalid.

Another legitimate reason to request an OIC is to prove the existence of extenuating circumstances. If you are able to substantiate the fact that repayment of the debt would create an... full post

IRS Tax Liens And Your Credit Score

Tax Lien Overview

People who are not current with their taxes will often encounter the problem of a tax lien. This process allows the Internal Revenue Service to have access to reclaiming property as the financial obligation is not taken care of promptly and efficiently. All three of the main credit reporting agencies will eventually have access to this information. Once they have access to the information they can place the information on the credit score of the individual who the sanctions has been filed against. This situation can negatively impact a person's ability to apply for loans and in some cases can have a negative impact of employment status of the individual. Settling this issue is as simple as making payments through an arrangement or paying the debt completely.

Impacts Of A Tax Lien

Once a sanction has been brought against a credit report it can be difficult to get is removed. The freighter 14 agencies can hold this problem over the head as an individual who has been affected by this type of legal action. If an individual is not able to handle the situation promptly, the record which affects the credit can be active for seven years. This can negatively impacts the ability of person who has gotten over the financial difficulties in terms of buying future property and getting loans in order to improve the quality of their life. Seeing the removal of this derogatory mark removed will often be difficult however it can be accomplished if a person is persistent. The removal process requires a great amount of legwork in order to be completed.

Settlement Agreement

Making a settlement agreement it's usually the easiest way to take care of this type of legal issue. Often working with a legal representative will to improve the speed with which the process is... full post

posted by Mary E. King , in:
Tax Lien

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