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How to Calculate Underpayment Penalty

How to Calculate Underpayment Penalty

By on Sep 6, 2018 in blog, Tax relief | 0 comments

If you underpaid your federal taxes in the past, then you might be looking at a penalty from the IRS. Taxes are generally withheld by your employer, but self-employed entrepreneurs don’t get income taken out of their payment. You may have accidentally underestimated how much money you were going to make over the next quarter and, therefore owe the IRS additional taxes plus a fee. Fortunately, calculating the underpayment penalty you owe shouldn’t be that difficult. You simply need to get your hands on the right IRS form to do it. That’s especially good news considering that you probably don’t want to have to spend any extra time doing something as unpleasant as calculating how much more money you owe the feds! In an overwhelming majority of cases, you’ll only need form 2210 to get the job done. Using IRS Form 2210 to Calculate An Underpayment Penalty IRS Form 2210 is known as the Underpayment of Estimated Tax by Individuals, Estates and Trusts form. You can easily acquire it from the federal agency. It features a flowchart designed to help you calculate the penalty, which should make it easy enough to follow. The flowchart is very general, so you shouldn’t run into a situation where you have to worry about whether or not a certain step applies to you. Part I of underpayment form 2210 will ask you to enter your total tax responsibility after the credits cited on your normal 1040. You’ll also need to add any other relevant taxes such as the self-employment tax as well as any refundable sums, like the premium tax credit. It should then ask you to add these values together and multiply them by 90 percent. Keep in mind that you don’t want to multiply them by the number 90 unless you feel like giving the IRS a whole bunch more of your money! They’re actually concerned with 90 percent, so if your calculator doesn’t have a “%” key you’ll want to multiply the sum of those two values by .9 instead. You’ll want to make sure there’s a decimal point in front of it if you don’t have that elusive percent sign. You’ll then need to subtract your withholding taxes from...

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Do You Have to Pay Your Dead Relative’s Back Taxes?

Do You Have to Pay Your Dead Relative’s Back Taxes?

By on Aug 21, 2018 in Tax relief | 0 comments

Taxes, change, and death are three certainties we have in life. The death of a relative can have a significant impact on an individual in terms of taking care of his or her estate. We are all are aware of this kind of scenario—of all the psychological consequences death represents. Back taxes, as it should be known, are partially or fully unpaid taxes from the year that they were due.   As the Internal Revenue Service (IRS) clearly states, the income tax return of a decedent is prepared in the same way as if the person were still alive. All income must be reported and all the deductions to which the deceased is entitled may be claimed. This also means that all debt must be paid. Debts can be paid by getting loans from Loanlingo co uk   Are We Responsible for our Relative’s Unpaid Debt?   To answer it simply: no. If a person dies leaving unpaid taxes, the relatives are not responsible for the debt. The only individual held responsible for a decedent’s debt is the estate executor under specific circumstances. The estate executor becomes responsible if he or she distributes the assets according to what is stated in the will before the taxes have been paid, or if he or she is aware of the existences of debt and stills transfers or sells the property of the deceased, ignoring the fact that a payment must be made.   More about Estate Taxes   Estate taxes are taxes that are imposed on the net value of a decedent’s property before it is distributed to the rightful heirs. If a person dies owing money to the IRS, his or her assets will be put under a legal claim known as a tax lien. This means that said assets cannot be neither sold nor transferred to another person until everything has been paid off. If the debt cannot be financed in its entirety, then the IRS has the right to seize the property. Exceptions to the Rule   Now, as with every rule, there are some exceptions. This means that in some cases, relatives are held responsible for unpaid taxes if:   They co-signed for a loan that remains...

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5 Common Questions about Tax Relief, Answered

5 Common Questions about Tax Relief, Answered

By on Jul 11, 2018 in blog, IRS, Tax relief | 0 comments

When it comes to taxes, we understand that you have a heap of questions to ask. That is why Success Tax Relief offers free consultations. Over the past 30 years that we have been helping Americans get out of tax debt, we’ve discovered there are some common questions asked. We want to answer them right here so that you can get the most out of your free consultation with us. We hope these answers will guide you on the right path to complete tax relief:     Do I need to claim a child in order to file Head of Household? In order to file Head of Household, you can claim a child or dependent. There are two types of dependents: Child – A child doesn’t necessarily have to be related to you. If the child in your household is a stepchild, foster child, sibling, stepsibling, niece or nephew, he or she can be claimed on your taxes. However, the child must also meet the age requirement. He or she must be at least 19 years old. If he or she is a full-time student, then you are able to claim that person up until the age of 24. Your dependent must also live with you, and he or she can also have a job, but if the income provides more than half of his or her support, then you cannot claim that child. Qualifying Relative- A qualifying relative is for aging parents. They must live with you and make less than $4,050. Of course, you must be financially supporting them. Here, only one child can claim a qualifying relative. Do I have to pay taxes on my social security payments? This will all depend on how much money you make. If you have a significant taxable income, then you might have to pay up to 85% of your social security benefits. To get a better understanding of where you stand in the social security tax tier, visit the Internal Revenue Services’ website. What should I do if I receive a letter from the IRS? The first thing you should do is call an IRS representative to verify that the letter is valid. Once you have done that, then...

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What a Tax Relief Company Can Do for You

What a Tax Relief Company Can Do for You

By on Jul 1, 2018 in Tax relief | 0 comments

Let’s be honest. It’s hard trying to resolve tax matters on your own. Even for the most routine annual filings, they can get complicated pretty quick just from fact checking alone. Tax matters are just a time-consuming process that no one really wants to do, but because neglecting such responsibilities could lead to dire consequences, it makes it all the more frustrating. Mix that in with the responsibilities of everyday life and you have an interesting recipe of some new kind of stress that an aspirin can’t even remedy. Don’t Let it Get Out of Control! Verify First!   Tax issues go beyond the annual filing. Depending on how that annual filing goes, it can turn into a full-blown Internal Revenue Service (IRS) case that can go on for months and even years. It really depends on how much you owe, and how much of it you can pay back. Within these two dependents, there will be some questions. For instance, the amount that the IRS claims you owe—verify that before you start making any kind of payment arrangements. Let a Tax Relief Firm Help You   Not sure how to go about verifying what you owe? Don’t worry. Not too many people do. That’s what a tax relief company is for. Tax relief agencies like Success Tax Relief, located in LaPorte, Texas are staffed with a complete team of tax professionals ranging from lawyers, CPAs, accountants, tax preparers and more. Unlike the IRS, tax relief services work for specifically for you. What About Success Tax Relief?   Success Tax Relief is in the business of resolving any type of tax matter you may have no matter how big or small. Many clients come to us when they have a massive balance to pay and they need help contesting that amount. We can help with that. We’ve had great success with challenging the IRS about the amount of debt they claim our clients owe. On several occasions, we’ve been able to reduce the debt amount. However, to get results like this requires a long and tedious commitment. With the IRS, everything is a process, and you’ll need to be able to follow through when it comes to filing for...

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What to Do If You Have a “Currently Not Collectible” IRS Status

What to Do If You Have a “Currently Not Collectible” IRS Status

By on Jun 27, 2018 in Credit Score, IRS, Tax relief | 0 comments

When taxpayers start looking into the process of resolving an Internal Revenue Service (IRS) tax debt situation, they may find themselves confused by the often complex and sometimes confusing array of codes and options that are involved. One of the most confusing options is perhaps the most powerful tool that you and your tax debt relief advocate have at your disposal, the Currently Not Collectable status. Let’s take a few minutes to quickly talk about what CNC is, who qualifies, and what you can do if you are able to get assessed as currently not collectible. What is Currently Collectable Status? To put it in the simplest terms, Currently Not Collectable Status or CNCS, is a form of deferment that is offered by the IRS for some taxpayers who currently are not in the financial position to make payments toward their tax debt without having such payments placed upon them, their families, or their business undue and extreme hardship. CNC status is often applied to a taxpayer for a period of one year and can be extended several times if necessary. It is often used as a way to reduce or eliminate a back tax debt, or at the very least to help the taxpayer prepare for the process of making payments. While the taxpayer is in CNC status, the IRS cannot garnish wages, levy a lien against property or bank accounts, seize assets, or undertake many other types of aggressive collection actions. They may still pursue several other types of action, however, and you are required to stay in compliance with a wide range of rules or your CNC status could be revoked. These rules generally involved not establishing large lines of credit, not purchasing new assets, and not investing in many ways. Who Can Qualify for CNC Status? Most people who have a substantial tax debt situation may qualify for CNC status. The process is fairly straightforward and involves a simple declaration of your financial and property assets that will be confirmed and examined by the IRS. There are many rules that apply to what assets can and cannot be counted toward your financial position. For example, retirement savings, children’s college funds, the value of your primary...

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How to Handle Partial Payment Installment Agreements

How to Handle Partial Payment Installment Agreements

By on Jun 20, 2018 in IRS, Tax Debt, Tax relief | 0 comments

Dealing with the Internal Revenue Service (IRS) for a tax debt issue is never an easy thing to manage. From the moment that you get that first letter informing you that you are under IRS investigation and facing an audit, your life is, to say the least, in a state of upheaval. Being presented with a tax bill of any amount can feel like a deathblow to your family’s dreams and financial health. The good news is that the IRS really isn’t all that bad. The IRS includes several measures that can help people just like you deal with a large and unexpected tax debt amount. One of those measures is the option of a partial payment installment agreement. How a Partial Payment Installment Agreement Can Help Your Tax Debt Situation   The Partial Payment Installment Agreement, or PPIA, is a method by which you can settle your tax debt to the IRS without the heavy burden of writing a check for the entire amount all at once. Just like a regular installment agreement, you are making payments to your tax debt over time in regular monthly payments, but with the PPIA you are only paying back a portion of your tax debt.   These types of installment agreements are much harder to get and there are very high criteria for those who can qualify. The PPIA is generally a second line option that is pursued after a rejected Offer in Compromise. Once your OIC has been turned down then you are eligible to apply for a PPIA. You must also meet the following criteria:   You owe at least $10,000 in total when taking into account debt, penalties, and interest. You can pay some of what you owe, but you cannot pay the full amount by the end of the term of the statue of limitations due to the fact that you do not have enough disposable monthly income available to you. Completed both Form 433 and Form 9465 or have applied for an installment agreement online. You have filed all of your past tax returns and are not in a state of bankruptcy. Have not had your OIC accepted by the IRS. You have no assets or you...

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