Why Was My Tax Return Rejected
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If My Tax Return Was Rejected Can I Start Over?

Depending on how you file, the IRS will usually notify you of a rejected tax return via email or standard mail. In the rejection notice, you will find a rejection code and an explanation of why the rejection occurred.

However, you should always be wary of scammers that try to steal your information posing as the IRS. The IRS will typically not call you about a rejection unless they have repeatedly tried contacting you by other means first.

Thankfully, when the IRS rejects your tax return, it’s usually nothing to be overly concerned about. Let’s take a look at a few reasons why your tax return was rejected and how you can start the process over.

Why Was My Tax Return Rejected?

The IRS will reject a tax return for a variety of reasons, including the following:

The Return Was Already Accepted

The IRS will reject your tax return if they previously accepted a return with your Social Security number (SSN) or taxpayer identification number (TIN). If this occurs, if could be a sign of identity theft or fraud.

Missing Or Incorrect Information

The IRS can also reject your return if a name or number fails to match what they have on file for you. For instance, if you changed your name after marriage or need to update your name with the Social Security office, the IRS needs to know about this. A simple issue like a typo when e-filing your return could end up in a rejection.

Your Signature Does Not Match

When you e-file, the IRS will ask you to provide your adjusted gross income (AGI) from the previous tax year or an Identity Protection PIN to ultimately verify your identity. If the numbers you provide do not match the IRS’ records, your return will likely be rejected.

You Claimed A Dependent Claim On Another Return

If you try to claim a dependent, such as a child, already claimed on another tax return, the return will be rejected. An example of this could be a divorced parent trying to claim their child when their ex-spouse has already claimed the child on their return. The same thing can happen if a dependent files their own return and claims themselves.

What To Do If A Tax Return Is Rejected

If your return has been rejected, you will need to correct any errors and resubmit the return as soon as you can. You may be able to e-file the return for small mistakes like a typo, or the IRS could instruct you to mail in a paper return for more serious errors.

Once you know exactly what caused the return to be rejected, you are required to correct the mistake and resubmit the original return.

Correcting An E-File Rejection

Whenever an e-filed return is rejected, the IRS generally sends a rejection code that includes an explanation of why it was ultimately rejected. This will usually happen within a few hours of submitting the return.

You may be able to resubmit through e-file or filing a paper return depending on the reason why the return was not accepted. If, for example, you made a mistake in entering the EIN or SSN or other errors, you can make corrections and e-file the return once again. Ensure that you submit before the filing deadline or within five days of getting the rejection notice if this occurs after the deadline passed.

Refiling By Paper Return

When the return is rejected because of possible identity theft or tax fraud, the IRS requires individuals to resubmit the return by mail. You also need to refile by mail if your dependent was claimed on another individual’s tax return.

You will need to include all required tax forms, W-2s and/or 1099s, as well as any additional supporting documentation. The IRS Form 14039, Identity Theft Affidavit should also be included.

Once the IRS has received your return and Form 14039, you will get an acknowledgement letter. The IRS will then investigate the returns in questioned and make a decision on which one is valid. Sometimes, this entire process can take up to six months to complete.

How Long Do I Have To File A Corrected Return?

You will need to correct any mistakes prior to the year’s tax deadline. If the IRS rejects your return on or after Tax Day, you will have five days to correct and resubmit the return.

Some states will have different grace periods for rejected returns, so always check to see how much time you have to resubmit your return.

Tax Settlement in Mesa, Arizona

If you need IRS Debt Help, Tax Debt Settlements or Tax Debt Advising in Phoenix, Mesa or anywhere else, Tax Debt Advisors can help! Give us a call at 480-926-9300 or fill out our contact form for a free consultation.

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Why Do I Owe Taxes
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Why Do I Owe Taxes This Year?

There are many reasons why you might owe the Internal Revenue Service this year. It’s certainly possible to owe taxes even when you have withheld money from your paycheck all year.

Why Do I Owe Taxes?

Because everyone’s situation is unique, there are several different reasons why you may owe money on your taxes. A few common reasons are outlined below.

1. Failing To File

Failure to file on time is a common reason why you’ll end up owing taxes. State tax dues will vary. Whenever you file late and don’t apply for an extension on time, you can incur late fees and interests that will increase your tax bill. If you are wondering why you still owe taxes this year, it’s certainly possible that you submitted a tax return after the due date.

2. Not Withholding Enough From Your Paycheck

The amount that’s taken out of your paycheck each year is an estimate of what you will owe when it comes time to file taxes. You will receive a tax refund if you overpay. If you do not pay enough throughout the year, though, you will end up with a bill come tax season.

3. Tax Code Changes

Recent tax code changes will undoubtedly impact how much you’ll owe in taxes. If you expect to receive a refund each season, it may not be the case with new tax laws put in place. When the IRS updated its tax brackets, it’s possible you were put into a new category, altogether.

4. Changes In Deductions

If you didn’t qualify for typical deductions and credits you expected, then you may owe taxes this year. For instance, the earned income tax credit comes with annual limits. If you have made more money this year than in previous tax years, you may not qualify. Many parents will take advantage of the child tax credit, which comes with income limits and age restrictions.

5. Higher Income

Receiving higher pay this year will mean you are going to pay more in taxes. If you worked more hours while getting paid hourly or a salary gets raised, you could have been bumped into a higher tax bracket.

6. Significant Life Changes

All sorts of life changes can factor into your tax situation. One big change that can raise your tax burden is when your children start to get older. For instance, once your children are 17 years or older, you cannot claim the child tax credit.

While you’re no longer able to claim the child tax credit, you can still claim your children as dependents and claim a few other tax credits on your tax return.

7. You Owe Capital Gains Taxes

If you bought and sold investments for either a profit or loss, which includes anything from single stocks to cryptocurrency, you must report those gains or losses on your tax return.

With a capital gains tax, short-term capital gains are taxed at the normal income tax rate. Long-term gains, however, are taxed at a lower rate.

What To Do If You Owe Taxes

Thankfully, there are numerous options if you cannot pay your entire tax bill when it’s due. Here are a few payment options for you to consider:

  • Sign up for an IRS installment plan.
  • Apply for a full-time agreement if you are able to pay taxes within 120 days.
  • Make an offer in compromise.
  • Consider a loan or other financing options to make tax payments.

It’s crucial to stay informed about your tax obligations and ensure accurate and timely filing and payment of taxes. If you find yourself owing taxes, it’s advisable to address the issue promptly by filing your return or payment, seeking professional tax assistance, or exploring options such as installment agreements, Offer in Compromise, or penalty abatement if you’re unable to pay the full amount owed.

Tax Settlement in Mesa, Arizona

If you need IRS Debt Help, Tax Debt Settlements or Tax Debt Advising in Phoenix, Mesa or anywhere else, Tax Debt Advisors can help! Give us a call at 480-926-9300 or fill out our contact form for a free consultation.

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Why Was My Tax Return Rejected
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Why Was My Tax Return Rejected?

Thankfully, when the IRS rejects your tax return, it’s usually nothing to be overly concerned about. Let’s take a look at a few reasons why your tax return was rejected and what you can do moving forward.

What Is An IRS Rejected Tax Return?

If you receive a notice from the IRS that your federal income tax return was rejected, it means they noticed and error. The IRS is sending the return back to you for correction.

Why Did The IRS Reject My Tax Return?

The IRS will reject a tax return for a variety of reasons, including the following:

The Return Was Already Accepted

The IRS will reject your tax return if they previously accepted a return with your Social Security number (SSN) or taxpayer identification number (TIN). If this occurs, if could be a sign of identity theft or fraud.

Missing Or Incorrect Information

The IRS can also reject your return if a name or number fails to match what they have on file for you. For instance, if you changed your name after marriage or need to update your name with the Social Security office, the IRS needs to know about this. A simple issue like a typo when e-filing your return could end up in a rejection.

Your Signature Does Not Match

When you e-file, the IRS will ask you to provide your adjusted gross income (AGI) from the previous tax year or an Identity Protection PIN to ultimately verify your identity. If the numbers you provide do not match the IRS’ records, your return will likely be rejected.

You Claimed A Dependent Claim On Another Return

If you try to claim a dependent, such as a child, already claimed on another tax return, the return will be rejected. An example of this could be a divorced parent trying to claim their child when their ex-spouse has already claimed the child on their return. The same thing can happen if a dependent files their own return and claims themselves.

How Will I Be Notified If My Return Has Been Rejected?

Depending on how you file, the IRS will usually notify you of a rejected tax return via email or standard mail. In the rejection notice, you will find a rejection code and an explanation of why the rejection occurred.

However, you should always be wary of scammers that try to steal your information posing as the IRS. The IRS will typically not call you about a rejection unless they have repeatedly tried contacting you by other means first.

What To Do If A Tax Return Is Rejected

If your return has been rejected, you will need to correct any errors and resubmit the return as soon as you can. You may be able to e-file the return for small mistakes like a typo, or the IRS could instruct you to mail in a paper return for more serious errors.

How To Fix A Rejected IRS Tax Return

Once you know exactly what caused the return to be rejected, you are required to correct the mistake and resubmit the original return.

How Long Do I Have To File A Corrected Return?

You will need to correct any mistakes prior to the year’s tax deadline. If the IRS rejects your return on or after Tax Day, you will have five days to correct and resubmit the return.

Some states will have different grace periods for rejected returns, so always check to see how much time you have to resubmit your return.

What To Do If A Return Was Rejected Due To Identity Theft

It’s recommended to act as soon as possible if you believe you are a victim of identity theft. Respond promptly to any IRS correspondence by calling them with the number provided. You should also print and mail in Form 14039 with your submitted return.

Tax Settlement in Mesa, Arizona

If you need IRS Debt Help, Tax Debt Settlements or Tax Debt Advising in Phoenix, Mesa or anywhere else, Tax Debt Advisors can help! Give us a call at 480-926-9300 or fill out our contact form for a free consultation.

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Can You Add Money To A Certificate Of Deposit Regularly
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How To Open A CD

A CD account is a savings instrument issued and administered by banks, brokers, and credit unions. It is widely considered one of the safest investments you can make. A CD will pay a little more interest in return for committing to keep your money in the bank for a specific amount of time. Use this step-by-step guide to open a CD account.

How To Open A CD Account

These accounts are much safer than stocks, but they will not offer high returns. CDs are insured by the FDIC if they are ultimately issued by an FDIC-insured bank.

Typically, CD’s do not allow individuals to add to their balance. Once you make the initial deposit, the balance will be locked in to keep earning interest until the maturity date. This is part of the reason that CDs do usually offer higher interest rates than other deposit account types.

When you invest in a CD, you commit to locking your money away for a specified period of time. You cannot add to the balance and there will often be steep penalties to pay when choosing to withdraw your money early. You will get a greater return on your deposit in exchange for less liquidity.

Follow the steps below to open your account.

Step 1. Choose The Right CD Account

A good first move is to compare CD interest rates across several banks and credit unions before opening an account. It’s important to also keep the following factors in mind:

  • CD terms can range all the way from three months to five years.
  • CD types can vary, but regular CDs are undoubtedly the most common. Add-on CDs will differ from traditional CDs since they allow the depositor to contribute more funds to the account during its term.
  • You can open single or joint accounts. Check with your local bank for more information on what they provide.
  • With a CD laddering strategy, you can purchase multiple CDs, each featuring a different term.

Step 2. Apply

Depending on the bank, it may be possible to open the CD account online. Of course, you can always open this account in-person at the branch or over the phone. If you do so online, the application process will typically take 5-20 minutes to complete.

If you miss any required information or are not yet an existing customer, you may need help completing this step.

Step 3. Have The Proper Documentation Ready

When opening a CD, you will be expected to provide one to two forms of ID, plus your residential address. Other contact information like a phone number and email address should be provided at this time.

Step 4. Choose How You Want The Interest Disbursed

Most financial institutions will offer you two options: Receive all the interest following the end of the CD term or disburse the interest as regular payments. Collecting all the interest at the end of the term is more common. However, you can set this up as regular payments, such as monthly or annually.

Step 5. Make Your Deposit

Unlike with a savings account, you typically aren’t able to add money to the CD more than one time. You’ll put down a set amount and leave it untouched until the term of CD has concluded. You can link this account to another bank and transfer the money by mailing or depositing a check when opening the account.

Tax Settlement in Mesa, Arizona

If you need IRS Debt Help, Tax Debt Settlements or Tax Debt Advising in Phoenix, Mesa or anywhere else, Tax Debt Advisors can help! Give us a call at 480-926-9300 or fill out our contact form for a free consultation.

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Quotes About Taxes
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25 Quotes About Taxes

Here are some quotes about taxes:

  1. “The hardest thing in the world to understand is the income tax.” – Albert Einstein
  2. “Taxes are what we pay for civilized society.” – Oliver Wendell Holmes Jr.
  3. “The power of taxing people and their property is essential to the very existence of government.” – James Madison
  4. “The tax code is so complex and the forms are so complicated, that I think taxpayers often make mistakes.” – Chris Chocola
  5. “The best measure of a man’s honesty isn’t his income tax return. It’s the zero adjust on his bathroom scale.” – Arthur C. Clarke
  6. “To tax and to please, no more than to love and to be wise, is not given to men.” – Edmund Burke
  7. “The nation should have a tax system that looks like someone designed it on purpose.” – William Simon
  8. “Taxes grow without rain.” – Jewish Proverb
  9. “The difference between tax avoidance and tax evasion is the thickness of a prison wall.” – Denis Healey
  10. “I’m proud to be paying taxes in the United States. The only thing is, I could be just as proud for half the money.” – Arthur Godfrey
  11. “You don’t pay taxes – they take taxes.” – Chris Rock
  12. “In this world nothing can be said to be certain, except death and taxes.” – Benjamin Franklin
  13. “The only difference between death and taxes is that death doesn’t get worse every time Congress meets.” – Will Rogers
  14. “The reward of energy, enterprise and thrift is taxes.” – William Feather
  15. “The politician’s promises of yesterday are the taxes of today.” – William Lyon Mackenzie King
  16. “You can’t tax business. Business doesn’t pay taxes. It collects taxes.” – Ronald Reagan
  17. “Any tax is a discouragement and therefore a regulation so far as it goes.” – Oliver Wendell Holmes
  18. “I am thankful for the taxes I pay because it means that I’m employed.” – Nancie J. Carmody
  19. “You must pay taxes. But there’s no law that says you gotta leave a tip.” – Morgan Stanley
  20. “A penny saved is worth two pennies earned… after taxes.” – Ragnar Tornquist
  21. “When I wake up in the morning, I feel like a billionaire without paying taxes.” – Ernie Banks
  22. “Instead of raising taxes as some would insist, we need to reduce waste and inefficiency in government.” – Tim Murphy
  23. “Even taxpayers have rights!” – Beric J. Croome
  24. “Tax is not a four-letter word; rather, it’s the price we pay for the country we want.” – Alex Himelfarb
  25. “Reliable tax revenue is vital to the fiscal wellbeing of municipalities.” – Hendrith Vanlon Smith Jr.

These quotes reflect various perspectives on taxes, from their necessity for society to their complexities and challenges.

Taxes

Tax Settlement in Mesa, Arizona

If you need IRS Debt Help, Tax Debt Settlements or Tax Debt Advising in Phoenix, Mesa or anywhere else, Tax Debt Advisors can help! Give us a call at 480-926-9300 or fill out our contact form for a free consultation.

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How To Avoid Paying Taxes As An Independent Contractor
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How To Avoid Paying Taxes As An Independent Contractor

According to the IRS, independent contractors are individuals hired to do work for someone else but are not considered employees. Let’s take a look at a few ways of reducing tax liabilities as independent contractors.

What Is The Difference Between Tax Evasion And Tax Avoidance?

It is very important to distinguish between tax avoidance and tax evasion. Tax evasion is the use of illegal practices in order to avoid paying taxes. These practices include overstating expenses, concealing assets, or underreporting income. Every taxpayer must know that tax evasion is unlawful and can result in either fines or imprisonment.

Tax avoidance, meanwhile, refers to the lawful use of strategies and provisions written within the tax code to minimize tax liability. This involves organizing your finances in ways that reduce your tax obligations while still following the tax laws.

How Independent Contractors Avoid Paying Taxes

Use these five tips below to minimize your tax deductions while working as an independent contractor.

Take Business Expense Deductions

As a self-employed worker, you have the opportunity to lower your tax liability by deducting various business-related costs. These expenses can include equipment costs, vehicle usage for business, and advertising/marketing expenses.

It’s crucial to keep track of all receipts to accurately report the deductions on your tax return. Typically, this will be done on your Schedule C or appropriate section based on your filing method. By taking advantage of the deduction possibilities, you can reduce your taxable income as a self-employed individual.

Write Off Self-Employment Tax

You may deduct your self-employment tax from your income tax. This deduction allows an individual to write off the employer’s portion of FICA taxes when filing the return.

The IRS actually has a provision that automatically includes said deduction in your Schedule SE. Even if you forget to include it, the IRS will notify you of the error and provide a refund accordingly.

Tax-Advantaged Investment Accounts

It goes without saying that contributing to a retirement account can help reduce your taxable income. Retirement accounts, such as IRAs and SEP IRAs, are typically tax-deductible.

This means that the amount of money you choose to contribute ultimately reduces your taxable income for the year. The money you contribute can grow tax-deferred until you withdraw them in retirement, potentially leading to larger growth over time.

Consider The Structure Of The Business

The structure of the business organization can have an impact on your tax burden. For instance, you may be able to lower your liability by choosing to organize the business as an S-Corp.

Opting for an S-Corp will allow you to pay yourself a salary and potentially avoid some self-employment taxes.

Use Self-Employment Health Insurance

As a self-employed worker, you can benefit from tax savings by using your self-employment health insurance. You do have the option to deduct the premiums you pay for medical, dental, and other qualifying long-term care insurance coverage for yourself, spouse, and dependents.

In order to claim this health insurance write-off, you can enter it on Part II of Schedule 1 as an adjustment to your income. The deduction is then transferred to page 1 of Form 1040. This allows you to enjoy the benefits, regardless of whether you wish to itemize your deductions.

How Do Independent Contractors Report Their Income?

Independent contractors have the flexibility to negotiate payment terms with their clients and/or employers. Depending on the type of agreement, payments can be made through various channels, including checks, ACH deposits, or wire transfers. These payments are not considered salary or wages for tax purposes since taxes are withheld.

During tax season, the payer must provide the contractor with a Form 1099-MISC, reporting the income paid in the previous year. If you are working with multiple clients, you can receive several copies of this form. Any earnings below $600 from a client throughout the year will not require a 1099-MISC form. However, you still must report that income on your Schedule C.

Tax Settlement in Mesa, Arizona

If you need IRS Debt Help, Tax Debt Settlements or Tax Debt Advising in Phoenix, Mesa or anywhere else, Tax Debt Advisors can help! Give us a call at 480-926-9300 or fill out our contact form for a free consultation.

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CD Vs IRA
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Written by webtechs

CD Vs IRA

Let’s take a look at the differences between a Certificate of Deposit (CD) and an Individual Retirement Account (IRA).

Individual Retirement Account (IRA) Vs. Certificate Of Deposit (CD)

An IRA and a CD are two savings account types that can be obtained at financial institutions, such as banks. While both accounts are designed to help individuals save money, they are inherently different overall. A CD is considered a short-term savings account, while an IRA is best for long-term retirement investing.

IRAs have tax advantages to the saver and restrictions on how it can be used before retirement age is reached. The account holder can contribute to this account every year, up to the limits set by the IRS. Essentially, a CD is equivalent to a savings account. The account holder will get a little more interest in return for keeping the money in this account for a set amount of time, typically from six months to five years.

Anyone with an IRA account can choose to invest the money in any of a large variety of stocks, mutual funds, bonds, and exchange-traded funds (ETFs). Account holders can even choose to invest some of it in CDs.

CD Details

A CD is a savings instrument issued and administered by banks, brokers, and credit unions. It is widely considered one of the safest investments you can make. A CD will pay a little more interest in return for committing to keep your money in the bank for a specific amount of time.

These accounts are much safer than stocks, but they will not offer high returns. CDs are insured by the FDIC if they are ultimately issued by an FDIC-insured bank.

Typically, CD’s do not allow individuals to add to their balance. Once you make the initial deposit, the balance will be locked in to keep earning interest until the maturity date. This is part of the reason that CDs do usually offer higher interest rates than other deposit account types.

When you invest in a CD, you commit to locking your money away for a specified period of time. You cannot add to the balance and there will often be steep penalties to pay when choosing to withdraw your money early. You will get a greater return on your deposit in exchange for less liquidity.

IRA Details

The IRA was developed by the federal government to encourage Americans to save money towards their retirement. The account holder can make annual contributions for decades as the balance increases. The IRS does set eligibility requirements, limits on how and when you are allowed to make contributions.

You should consider opening a traditional or Roth IRA alongside your 401(k). A Roth IRA is funded with your after-tax dollars, while the traditional version is funded via pre-tax income. Both of these IRAs allow you to withdraw money without penalty after the age of 59.

If you have any extra money left in your budget at the end of the month, funding IRAs can put you on a fast track to a comfortable retirement. The more time your funds have to grow, the larger they will be come time for retirement.

CD Vs IRA Differences

Let’s take a look at the main differences between these two savings accounts to determine which type is best for your situation.

Account Types

Investors will have many different CD and IRA options to choose from. There are typically four different IRAs that one can invest in, including the following:

  • Traditional IRA: This allows investors to make tax-deductible contributions.
  • Roth IRA: These accounts give investors tax-free income.
  • SEP IRA: Employers can make contributions to a traditional IRA for employees.
  • SIMPLE IRA: Small business employers and employees will have the opportunity to make matching contributions as long as they have no other active retirement savings plan.

Here are a few things you can do with a CD:

  • Add-On CD: Add-on CDs will differ from traditional CDs since they allow the depositor to contribute more funds to the account during its term.
  • CD Laddering Strategy: With a CD laddering strategy, you will purchase multiple CDs, each featuring a different term.

Financial Liquidity

Every financial vehicle will have its own set of objectives and goals. Each type of financial instrument is designed for a specific purpose and therefore comes with its own constraints. Usually, CDs cannot be withdrawn once the account is created. Account holders must wait until the CD term is finished before they get access to their money.

IRAs have an entirely different set up. IRA contributors are allowed to withdraw Roth IRA contributions at any time. However, any earnings cannot be withdrawn until the saver is over 59 years old.

Tax Implications

A big difference between the accounts is how they are treated for tax purposes. IRAs provide a few certain tax breaks to investors. Contributions made to a traditional IRA are tax-deductible, as long as you meet the income and tax-filing status requirements.

CDs, however, do not come with any tax breaks. Your financial institution will send you a Form 1099-INT for any interest earned on your investment. The IRS requires that you report any interest income that comes in over $10.

Conclusion

It’s no secret that an IRA is a better financial vehicle for retirement savings. It will allow savers to have their earnings grow tax-free when utilizing a Roth IRA. If you are not saving for retirement, then a CD is a terrific and safe option.

Tax Settlement in Mesa, Arizona

If you need IRS Debt Help, Tax Debt Settlements or Tax Debt Advising in Phoenix, Mesa or anywhere else, Tax Debt Advisors can help! Give us a call at 480-926-9300 or fill out our contact form for a free consultation.

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How To Stop IRS Wage Garnishment
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How To Stop IRS Wage Garnishment

Wage garnishment is just one of several ways the IRS can collect your tax debt. If you owe the IRS, it’s crucial to understand how the wage garnishment process works and the steps you can take to stop it.

What Is Wage Garnishment?

Under federal law, the IRS can seize your income in an effort to retrieve any federal tax debt you may owe. This can include wages, bonuses, salary, and commissions. The IRS is able to garnish your wages without ever taking you to court.

The IRS is also able to take a higher amount of your wages than a private creditor can. Typically, the IRS will garnish more than 70% of your income. They have to leave just $375 from each of your paychecks so you can support yourself and household. If you are self-employed, however, the IRS can take all of your income.

Wage Garnishment Process

The IRS must follow a three-step process prior to taking any wages. Let’s take a look at this process below.

Written Notice

The first step of the process is sending a written notice ahead of any garnishment action. This notice will detail the amount you owe to the IRS.

It will include penalties and interest on top of the principal tax debt. The written notice will also give you a due date to pay off your balance. Essentially, this gives any individual the chance to stop wage garnishment before it begins.

Second Notice

The IRS will then send a second notice if you have not paid your full balance after the specified deadline. This “Final Notice of Intent to Levy” must be sent via registered or certified mail 30 days prior to wage garnishment.

Final Notice

The final notice includes a letter that informs an individual of their right to an appeal. You must file your appeal request within 30 days after the date of the Final Notice in order to hold onto certain other legal rights. You can also put a hold on any further IRS collection action pending the resolution of the appeal.

The IRS can begin garnishing your wages if you fail to take action by the end of the 30-day window. The IRS will require that your employer send a specified amount of your paycheck directly to their organization. Your employer must start within one pay period of receiving notice and continue doing so until your debt is completely paid back.

Ways To Stop IRS Wage Garnishment

Here are a few ways you can stop the IRS from seizing your income.

Installment Plan

The IRS will let you pay your balance over time if you work out an installment ahead of time. You will need to engage the IRS and demonstrate that you cannot repay your entire debt all at once. As part of this plan, you must make monthly payments until the debt is completely paid back.

Employment Change

The easiest thing for any individual to do is change their employer. However, this is a temporary solution, since the IRS will inevitably find you and the new employer. Once the IRS does so, they will reissue the wage garnishment.

Offer In Compromise

If you are unable to pay your debt due to financial hardship, the IRS may make an offer in compromise. This will ultimately reduce the amount you owe. Qualifying for this program will require filling out an application. The wage garnishment will be put on hold while your application is under review.

Appeal Process

Under the law, every individual has the right to an appeal of the wage garnishment if you dispute the amount you owe. You must request the appeal within 30 days of receiving the “Final Notice of Intent to Levy”.

Financial Hardship Exemption

It is possible that the IRS forgives your debt if you demonstrate that paying it back will cause you extreme financial hardship. This option requires proof that wage garnishment will prevent you from caring for the basic needs of your family.

Declare Bankruptcy

The tax debt you owe could be discharged through bankruptcy. However, declaring bankruptcy should always be seen as a last resort. Individuals can hope the IRS will stop wage garnishment during the period of bankruptcy.

Tax Settlement in Mesa, Arizona

If you need IRS Debt Help, Tax Debt Settlements or Tax Debt Advising in Phoenix, Mesa or anywhere else, Tax Debt Advisors can help! Give us a call at 480-926-9300 or fill out our contact form for a free consultation.

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Can You Add Money To A Certificate Of Deposit Regularly
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Can You Add Money To A Certificate Of Deposit Regularly?

Most CDs (certificate of deposit) do not allow regular additions to the balance following the initial deposit. However, it is possible to opt for an add-on CD, which allows additional deposits. Let’s take a detailed look at CDs and other great savings options.

Can You Add Money To Your Certificate Of Deposit?

Typically, CD’s do not allow individuals to add to their balance. Once you make the initial deposit, the balance will be locked in to keep earning interest until the maturity date. This is part of the reason that CDs do usually offer higher interest rates than other deposit account types.

When you invest in a CD, you commit to locking your money away for a specified period of time. You cannot add to the balance and there will often be steep penalties to pay when choosing to withdraw your money early. You will get a greater return on your deposit in exchange for less liquidity.

Other CD Options For Savings

If you’re looking for the low risk and great returns of a CD but want a bit more flexibility there are a few choices. There are two ways to contribute more money as time goes on: using the CD laddering strategy or buying an add-on CD.

CD Laddering Strategy

With a CD laddering strategy, you will purchase multiple CDs, each featuring a different term. For instance, you can invest in a CD with a six-month term and another with a one-year term. By diversifying your deposits, you can take advantage of the smaller commitments associated with short-term CDs. At the same time, you can enjoy the higher interest rates of long-term CDs.

As the CDs in your ladder mature, you may liquidate the accounts and bank both the principle and interest. Or, you can keep adding rungs to the ladder by renewing the CDs for another term, enabling you to earn more interest.

Add-On CD

Add-on CDs will differ from traditional CDs since they allow the depositor to contribute more funds to the account during its term. The terms of this type of CD can differ depending on where you purchase it from. Some institutions may have a maximum value the CD can have, while others could allow you to make a certain number of deposits during the term.

To maximize your add-on CD, it’s suggested to choose one with a longer maturity date – at least two to three years. As is the case with any CD offering, always shop around to find the best interest rates.

Alternative Savings Options

There are a few alternative ways to build your savings. These options offer greater flexibility than CDs. Depositing money directly into a savings account or opening an IRA can help you save and build your wealth over time.

Savings Accounts

Savings accounts generally offer higher interest rates than checking accounts. However, they are still usually lower than CD rates. You won’t earn as much money off your savings accounts, but you are free to withdraw your money at any time.

The FDIC insures savings accounts, so these are great options for individuals seeking the security of a CD without sacrificing liquidity.

IRAs

You should consider opening a traditional or Roth IRA alongside your 401(k). A Roth IRA is funded with your after-tax dollars, while the traditional version is funded via pre-tax income. Both of these IRAs allow you to withdraw money without penalty after the age of 59.

If you have any extra money left in your budget at the end of the month, funding IRAs can put you on a fast track to a comfortable retirement. The more time your funds have to grow, the larger they will be come time for retirement.

Tax Settlement in Mesa, Arizona

If you need IRS Debt Help, Tax Debt Settlements or Tax Debt Advising in Phoenix, Mesa or anywhere else, Tax Debt Advisors can help! Give us a call at 480-926-9300 or fill out our contact form for a free consultation.

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How Long Does An IRS Audit Take
Regular Post
Written by webtechs

How Long Does An IRS Audit Take?

The majority of tax audits will wrap up within a year. Let’s look at some factors that can either increase or decrease the amount of time a tax audit takes.

What Are IRS Audits?

A tax audit is when the IRS chooses to look into your tax return a little more comprehensive and verify that your income and deductions are true. Usually, your tax return is selected for audit when something you entered on your return is not common.

How Long Do IRS Audits Take?

As mentioned above, most of these audits will be completed within a year. There is a time limit for how long the IRS has to charge you or assess any additional taxes on the return being audited. This statute will expire three years from the due date of the return or the date when it was filed, whichever is later. For example, the statute would expire on April 15, 2026 for a taxpayer filing on April 13, 2023.

The IRS audit should be completed within a year, in most cases. Even though the IRS has three years to audit a return, the IRS likes to close audits well before the statute of limitations comes into play. The IRS does not have a statute of limitations if tax fraud is involved. When there is a large amount of unreported income, the statute is six years. However, the IRS rarely goes into an audit assuming an extended statute.

Types Of IRS Audits

There are three different kinds of IRS audits. These audits can take anywhere from just a few months to a year.

Mail Audits

No matter what kind of audit the IRS chooses to carry out, you will get notification of it through mail. A mail audit is the most straightforward kind of IRS review and doesn’t require you to meet with an auditor personally.

Usually, the IRS petitions for additional documentation to prove different items you reported on your return. For instance, if you claim $5,000 in philanthropic deductions, the IRS might send you a letter calling for evidence of your donations. Typically, submitting adequate evidence will complete the audit in your favor if the IRS is content.

Average time to complete a mail audit: 3-6 months. 

Office Audits

An office audit is a face-to-face audit carried in a local IRS office. This type of audit is usually more detailed than a mail audit and typically comprise of questioning by an audit officer about details on your return.

You will be requested to bring particular information to an office audit, like the books and records for your company or your personal financial institutional statements and receipts. You additionally have the right to bring a CPA or attorney to represent you during the audit.

Average time complete an office audit: 3-6 months.

Field Audits

A field audit is the most comprehensive kind of review that the IRS carries out. In such a situation, an IRS agent will carry out the audit at your home or business. Usually, field audits are done when the IRS is double checking more than one deduction. A field audit is typically very detailed and will cover a lot, if not all, issues on the return.

Average time complete a field audit: less than 1 year.

IRS Audit Time Factors

Here are a few factors below that will help you estimate how long your audit may take.

Adjustments Found

If the IRS auditor makes a lot of adjustments to your return, he or she will often look for more. This means the auditor may even look into other tax years, resulting in a longer process overall.

Pursuing Penalties

Oftentimes, the IRS will pursue penalties if they have to make lots of adjustments. This, of course, will extend the timeline of the process. If the IRS pursues fraud, the audit could last several years. The IRS pursues this action in only about 2,000 or 155 million cases each year, on average.

Small Business Ownership

It is undoubtedly harder for the IRS to track small business income. Auditors will have to review bank records, websites, accounts, and client accounting records. This extensive review can take several more months to complete.

Taxpayer Disagrees With Adjustments

You can take your case to IRS appeals if you disagree with the auditor’s findings. Going this route will usually tack on an extra six months to the case.

Why Do I Owe Taxes

Tax Settlement in Mesa, Arizona

If you need IRS Debt Help, Tax Debt Settlements or Tax Debt Advising in Phoenix, Mesa or anywhere else, Tax Debt Advisors can help! Give us a call at 480-926-9300 or fill out our contact form for a free consultation.

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