Regular Post
Written by Scott Allen

Form 8546: Claim for Reimbursement of Bank Charges Incurred Due to Erroneous Services Levy or Misplaced Payment Check

IRS Form 8546

Yes, the IRS is known for making mistakes from time to time.  When the IRS, by known mistake, levies one of your accounts and you have proof or substantial documentation Form 8546 can be filed to get reimbursed for the expense.

Is it worth filing Form 8546?  Yes, depending on the circumstances and the amount that you are asking the IRS to refund.  However, usually charges are relatively small amounts and is only going to be worth it if that taxpayer prepares and files Form 8546 on his or her own as the fee a professional might have to charge would nearly equal the amount you are trying to get refunded.

What expenses will the IRS refund?  The IRS will refund bank charges that include a financial institution’s customary charge for complying with the levy instructions and charges for overdrafts that are a direct consequence of an erroneous levy.  In addition, there are times when a taxpayer’s check may be lost or misplaced in processing.  When the IRS asks for a replacement check, the taxpayer maybe reimbursed for bank charges incurred in stopping payment on the original check.  The charges must have been paid by the taxpayer and must not have been waived or reimbursed by the financial institution. All claims must be filed within one year after the expense.

Form 8546 is a one page form with a one page instruction.  Please read the entire form before submitting and be sure your claim meets all the requirements.  Include copies of required documents.

IRS Help from Tax Debt Advisors, Inc – Scott Allen, E.A.

3155 E Southern Ave  Ste 101  Mesa, AZ  85204  www.getirsoffmyback.com

 

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Regular Post
Written by Scott Allen

Mesa Tax Preparation: Capital Gains Tax & Losses explained simply

Mesa Tax Preparation

At times capital gains & losses can be very tricky on how to correctly report on your Mesa Tax Preparation.  Below I have explained it as simply as I can.  If you find it confusing or are still unsure its important to seek advise from  a professional.  I don’t charge for an initial consultation to discuss your particular case.

If you realize a profit when you sell an asset, such as a stock, you have a capital gain. In other words, if you sell an asset for more than you bought it for, you made a profit and will need to pay capital gains tax. The IRS differentiates between long-term capital gains (on assets held for over one year before selling) and short-term capital gains (sold within one year or less). The tax rate for long-term capital gains is lower than short-term. You may be required to make estimated payments if you have a large amount of capital gains.

If you have capital losses (the sale price is lower than what you paid originally), you can claim no more than $3,000 per year (married filing jointly). You may be able to carry the loss forward to later years if your total loss is over $3,000.

For a more detailed explanation of capital gains & losses for your Mesa Tax Preparation click on the following link (IRS Topic 409)

Tax Debt Advisors, Inc – Scott Allen, E.A.   www.TaxDebtAdvisors.com

 

Income Tax Preparation, IRS Tax Attorney, Tax Preparation
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Regular Post
Written by Scott Allen

Tax Preparation: Form 8839 – Qualified Adoption Expenses

Information to consider when claiming the Adoption Credit:

If you are considering adopting a child, you may qualify for the adoption tax credit, which is up to $14,890 per child.

In order to qualify, you must have adopted a child and paid out-of-pocket expenses relating to the adoption.  The amount of the tax credit is depended on the amount you spent on adoption-related expenses.  If you adopt a special needs child you are entitled to claim the full amount of the adoption credit even if you didn’t spend the full $14,890.

The adoption credit was scheduled to expire until health care legislation passed and extended it through tax year 2022.

For higher income earners, the phase out for the credit starts at $216,000.  To be eligible for the credit you must adopt a child 17 or younger.  Or a child of any age who is a US citizen or resident alien and who is physically or mentally unable to care for himself or herself.

Many argue the issues with the tax credit, is that you had to spend that money out of pocket before you can claim the credit.  If the credit is based off expenses you have already spent it is difficult for lower-income families to adopt.

Qualified adoption expenses include: adoption fees, attorney fees, court costs, travel expenses and re-adoption expenses related to the adoption of a foreign child.

Qualified adoption expenses that do not qualify include:

  • those for which you received funds under any state, local, or federal program
  • that violate state or federal law
  • for carrying out a surrogate parenting arrangement
  • for the adoption of your spouse’s child
  • paid or reimbursed by your employer or any other person or organization
  • or allowed as a credit or deduction under any other provision of federal income tax law.

For more information please contact Scott Allen, E.A. with Tax Debt Advisors, Inc  www.ScottAllenEA.com

 

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Regular Post
Written by Scott Allen

Independent Contractor or Employee?

Are you an Independent Contractor or Employee?

This is a big issue that can have a drastic impact on how you are taxed.  If you are getting a 1099-Misc you are an independent contractor—you are considered self employed the same as if you had your own business.  You will have to file a Schedule C and pay Self-Employment taxes of 15.3% of your net income in addition to income taxes.

If you really are an employee, there is no Self-Employment tax, but you will have Social Security and Medicare taxes taken out which amount to 7.65% of your gross income.  In most cases you are better off being treated as an employee.  Employers reduce their taxes by paying you as an independent contractor as well as avoid paying benefits such as health insurance.

If you are being classified incorrectly as an independent contractor, you can correct the problem by filing a relatively new form with the IRS—Form 8919, Uncollected Social Security and Medicare Taxes on Wages.  By filing Form 8919, so you avoid paying Self-Employment taxes.  This form can be filed when you file your individual tax return.  In addition you will need to send in a Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding separately.  You will be required to pay your share of Social Security and Medicare taxes.

Many clients do not do this out of fear that their employer will terminate their employment.  By filing a Form 8919, your employer will have to pay their share of payroll taxes and will be fined for filing and paying late.  Employers will also be fined and pay a late fee on Unemployment taxes.

If you are terminated as an employee because of this, you do qualify for unemployment compensation based on the rules of your state that you reside.  Ultimately the IRS will make a determination of your employment or independent contractor status.  Your employer has the right to contest your status.  If your employer appeals and you are considered an independent contractor, you will have to amend your return and pay the additional taxes associated with being self employed.

Tax Debt Advisors, Inc

Scott Allen, EA

 

 

IRS Problems, Tax Preparation, Unfiled Tax Returns
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Regular Post
Written by Scott Allen

Are You Losing Your IRS Refunds Every Year?

Losing IRS Refunds

Are you getting tired of having refunds every year applied towards your unpaid taxes?  The solution is rather simple.  If you are an employee, change your withholdings so that you are having less withheld.  I always tell clients in this situation that the best you can do is own $1 on future tax returns.  When you have refunds you are in essence making an interest free loan on the money to the government.

Secondly, if you are married and filing jointly, you can protect your refund by filing an Injured Spouse Allocation—form 8379.  This will allow you to calculate how much of the refund was generated by you and you can have it paid to you rather than have it applied to a debt that is not yours.  Too many taxpayers are filing married filing separate to protect the injured spouse’s refund.  This is a very expensive way to protect a refund.  Many deductions and credits are lost by filing married filing separately and the taxpayer would get more of a refund filing a joint return with the Injured Spouse Allocation.

Scott Allen E. A.

Tax Debt Advisors, Inc

www.taxdebtadvisors.com

 

IRS Appeals, IRS Problems, Tax Debt, Unfiled Tax Returns
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Regular Post
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IRS PROBLEMS “I CANT PAY MY BACK TAXES”

What if you have an IRS Problem in Mesa AZ

Owing the IRS money sometimes cannot be avoided but avoiding a crisis because you owe the IRS is always possible.  Just making the decision to face the IRS problem and take the first step is literally half the battle.  I have heard many times, “If I knew it was going to be this easy, I could have avoided a lot of stress and sleepless nights.”

Even the IRS knows that they may never collect all the back taxes you owe, and are willing to agree to a settlement that acknowledges that fact, conditioned upon your commitment and willingness to stay current on taxes in the future.  Keep in mind though that if you have the ability to pay your back taxes in full, the IRS will not let you off the “hook.”

The psychological challenge with paying back taxes is that we trick ourselves into thinking that we are paying for something without getting something in return.  In a very real sense that is true.  When you finish paying your car loan or mortgage you have a car or home to show for your efforts.  Paying taxes is the price we pay for living in a relatively benevolent democracy.  It is easy to take for granted the roads and military benefits we receive but still we have nothing tangible in our hands.  We all have disagreements politically with how our tax dollars are spent and that can sometimes be the mental block we all have to overcome—even those who are current and pay their fair share of taxes each year.

The simple fact remains that death and taxes are something we just can’t escape.  The financial, emotional, physical costs of having an IRS debt always hanging over our heads is simply just not worth it.  Carrying this burden around with us 24/7 is like having a 50 or a 100 pound weight always on our back.  The true benefits of having your tax matter behind you cannot be fully appreciated until it is gone.  Food will taste better, your ability to move forward financially is greatly improved, family relationships become more meaningful, your ability to enjoy activities that use to be fun returns, and best of all you can think more clearly.

Take a moment to consider the psychological benefits of getting your IRS problems behind you.  Make the decision today to call for a consultation to see exactly what you need to do to make this a reality in your life.

Scott Allen E. A.

Tax Debt Advisors, Inc.

www.arizonairsproblems.com

 

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