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Tax Settlement Services: How They Can Free You from Debt

Tax Settlement Services: How They Can Free You from Debt

By on Nov 5, 2019 in IRS | 0 comments

Going through the headache of trying to clear your debt without tax settlement services can be…well…taxing! Such a process will take up time that you don’t have. If you’re not in the tax profession, then you will most likely spend a great deal of your time going through a crash course on all things that are related to taxes. Debt often occurs when people cannot pay their taxes after filing a return. Many factors can play into this debt: changing laws for businesses, emergencies or natural disasters. Even so, the IRS keeps track of your tax liability. You would rather pay off your debt as soon as possible, but the amount can accumulate with interests and penalties. The more the amount accumulates, the more you have to pay in back taxes. In the worst-case scenario, the IRS will put a lien on your property or even press charges for imprisonment. With that said, the IRS offers debt settlement because the government understands extenuating circumstances. If you negotiate with them successfully, the IRS will agree for you to pay a smaller amount. That way you won’t have to worry about the original total. In some cases, you can even file for an offer in compromise which is another form of a settlement. You need to know the paperwork, however, and what factors can help or hinder your request. While the IRS does want to help you avoid jail time and with payment options, the language can become rather complicated. This process alone can be frustrating for the regular taxpayer. On top of trying to understand how tax settlements work, you owe the Internal Revenue Service (IRS) money! So, somehow, someway, you are supposed to first understand how tax settlement works. Then you need to convince the IRS all by yourself that they need to exonerate you from your debt. No pressure, right? Believe it or not, many taxpayers go through this learning curve. Some are successful, but the majority of them aren’t. Many taxpayers who have attempted to get the IRS to free them from their debt end up spending more money. They have to pay a tax relief service to undo what they did. They were trying to take...

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IRS 1031 Exchange Rules: A Simple Definition

IRS 1031 Exchange Rules: A Simple Definition

By on Oct 23, 2019 in IRS | 0 comments

When you have assets, you always want to make sensible business decisions. That means knowing when you should sell or buy certain properties in the United States, and when a gain or loss will happen. You want to ensure that property being sold provides more value.  United States Rules For Real Estate Normally on personal property, you have to pay a tax on selling the estate towards the government. This tax is called the capital gains levy because it takes a percentage of the profit of a property sale. Those profits are capital gains for the seller.  There are some exceptions to paying a tax on capital gains. Per the Taxpayer Relief Act of 1997, a single homeowner doesn’t have to pay taxes on the first $250,000 from the sale while married couples don’t have to pay up to $500,000. You qualify for this exemption by living on the property from two to five years and designating it as your primary residence.  What 1031 Means To Real Estate Investors A 1031 exchange means that you purchase a property after selling your original investment, and both are equivalent in value at a minimum. In some cases, the new property can even be worth a higher value. 1031 is a tax-deferred exchange, which means that you don’t have to pay capital gains on the sale.  To engage in a 1031 exchange, you need to choose a qualified intermediary to hold the funds from the initial sale, which will then be reinvested into purchasing another property. A qualified intermediary can either be a person or a business with no conflicts of interest or relationships with either the buyers or the sellers. They have to serve as a neutral party.   Investors have multiple incentives to invest in this exchange. The tax deferral is one such incentive, to avoid paying on capital gains. You can also consolidate all of your property assets and streamline management, so as not to juggle hats, and recapture deprecation on estates that lose value every year.  1031 Rules For Exchanged Property How do you qualify for a 1031 exchange? First, create a purchase and selling schedule. You have a time window to locate this replacement within 45 days, and...

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IRS Payment Options: Can You Pay The IRS With a Credit Card?

IRS Payment Options: Can You Pay The IRS With a Credit Card?

By on Oct 3, 2019 in IRS | 0 comments

Paying Your Tax Bill Regardless of who you are in the United States, you must file your taxes to see if you must pay them. For people who earn under a threshold, they may get a refund. Everyone else has to pay federal tax, and sometimes state tax depending on your local laws.   Not everyone wants to pay a check or sign up for a direct deposit, however, when doing the important filing. You may be researching to see if paying by credit card is an option. We can provide a simple answer: yes. You can use your credit card to pay the money owed on your tax return. Optimizing Tax Payments On the surface, paying by credit card has many benefits. The transactions will go through relatively faster, for one, and that will save the worry about if the IRS received your check. Some of the benefits would be earning reward points and travel miles or getting more time to make the payment and not get behind on taxes. Once you get behind, you will have to pay penalties.   Even so, you need to know the tradeoffs. E-filing has increased convenience a fair amount, and that may reduce the potential benefits of using a credit card.  Using Credit Card Payments All credit cards charge interest on payments if you don’t pay it before a certain date. If you are certain that you can meet the date, then interest is a lesser concern. The later the payment, the higher the interest can grow depending on your card terms. Always read the fine print so you know what you’re paying, literally.  To use a credit card, you must prepare to go through a service provider, also called a payment processor. Each one charges a fee; with debit cards that charge is flat and usually under two dollars. Credit cards are a different story, service providers often charge by percentage. These include ones that are digital, including PayPal Mastercard. In short, you may find yourself paying a larger amount by credit than you would by debit in the long run.  For rewards, you cannot just charge by credit card and hope that the large payment will accumulate points. Some travel and...

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What Should You Do When the IRS Files a Notice of a Federal Tax Lien Against You?

What Should You Do When the IRS Files a Notice of a Federal Tax Lien Against You?

By on Sep 9, 2019 in IRS | 0 comments

Getting a notice of a federal tax lien filed against you could mean that you won’t receive the proceeds from any property sales you make. When a lien is in effect against your house or another piece of property, the IRS gets paid out of the sales proceeds before you receive any money. If there’s nothing left when the IRS is done taking its chunk, then you literally get nothing. Worst of all, liens are always a matter of public record when they’re filed. The lien records the full amount owed to the IRS, which means you won’t be able to hide from it. These documents are designed to protect the government’s ability to collect a tax when it seems doubtful that they otherwise would be able to. While this is a scary situation, you shouldn’t get all worked up about it. Take a deep breath and consider the following tips from the experts at Success Tax Relief. Getting Rid of a Lien Once Its Filed Each time the IRS files a lien, they put a taxpayer’s balance due flat down on the books by assessing their liability. They then respond by sending out a bill called a Notice & Demand for Payment document. Those who fail to pay this debt have a lien officially levied against them. As long as you make sure to pay these bills or work with the IRS on an alternative, then you shouldn’t have too much difficulty avoiding a lien. This isn’t too much help if you’re already in the hole, however. Paying your tax debt in full will force the IRS to release the lien within 30 days of when you finish paying it off. If you can afford to do it, then paying the bill outright can completely eliminate the problem. IRS agents are never allowed to keep a lien against those who have demonstrated that they’ve done so. Unfortunately, this may not be an option depending on your specific financial situation and how much tax you owe. Other options do exist for reducing or eliminating a lien, and you may want to explore them if you find yourself in this trap. Discharge of Property Some taxpayers are eligible to receive...

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How Do I File a Financial Hardship With the IRS?

How Do I File a Financial Hardship With the IRS?

By on Aug 29, 2019 in IRS | 0 comments

Did you know that there’s an IRS program that could get those collection agents off your back for as long as you need to get back on your feet? Would you believe us if we said that there wasn’t even a charge involved? At Success Tax Relief, we’re often asked whether there’s any program that would apply to people across the board like this. Fortunately, there is. Taxpayers who are truly in need can file a financial hardship with the IRS and have a temporary forbearance placed on your account. As with everything related to federal taxes, however, you’ll need to prove a few things before the IRS will be willing to flat out grant you the kind of relief you’re looking for. Who Qualifies for a Hardship? Only people who genuinely cannot afford to pay their tax bill could ever truly qualify for hardship status. An overwhelming majority of those who apply for this coveted status get rejected rather easily because they didn’t meet a certain standard. The IRS has a tendency to have very specific requirements when it comes to granting an individual taxpayer the right to file as currently not collectible (CNC), which is also known as status 53. Keep in mind that this is essentially more of a stay on collection than a complete absolution. You’ll probably have to pay the bill at some point in the future. However, the IRS doesn’t come after you even if they do require certain interest payments and penalties to continue to accumulate somewhere in the background. Those who are already working with a representative from the IRS can request that the organization mark the status 53 block on their form. This means that a collector has filed Form 53 (Report of Currently Not Collectible Taxes) and given at least a cursory level of approval so far. Unfortunately, this form is always filed internally. Earning the Status 53 Filing Status That means you’ll be on the hook to file a few documents yourself in most cases. IRS agents could ask that you fill out Form 433-A, 433-B or 433-F to show that you really do have a legitimate hardship. In general, this requires the following to be true: Your...

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What are Quarterly Estimated Tax Payments?

What are Quarterly Estimated Tax Payments?

By on Jul 2, 2019 in IRS | 0 comments

How would you feel if you got stuck paying a fee to the IRS even though you paid your taxes every single year? This happens to many people who failed to make estimated payments. Regardless of how you earn income, you have to pay your taxes during the whole year and not just in the first quarter of the next calendar period. If you don’t have some of your money withheld by your employer, then you’re going to get stuck with a lump sum when you file your income tax return. When that happens, the IRS will stick you with a penalty that will ruin your day. Making regular quarterly estimated tax payments is a good way to avoid this problem. Estimated tax can cover all income that isn’t subject to withholding. It’s a solid payment method for the money you make in any of the following ways: Self-employmentInterestDividendsRent you collectAlimony checks In some cases, you might be subject to a voluntary withholding program. If you’d don’t elect to take advantage of this opportunity, then you’ll want to make estimated tax payments on any other money you have coming in. Calculating what you should be handing over to the IRS isn’t all that complicated. Figuring Out Quarterly Payments To find out how much your federal quarterly estimated tax payments should be, you’ll have to estimate your adjusted gross income. Once you do, you’ll be in a good position to at least have a good guess as to the taxable income you’re liable for and how much tax you’ll end up owing for the whole calendar year. As soon as you know these values, take a moment to estimate your credits and deductions. In most cases, you should have a fairly good idea as to how much you can take off your total burden. Don’t go too wild and add in deductions that you’re unsure apply to you. However, you don’t need to feel like you have to be too cautious. If you end up missing a deduction you were eligible for, then you can generally claim it later on when you file your income tax return next year. Many taxpayers find that by making these quarterly payments they end...

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