Your Well Being And Taxes

Few things threaten your well-being like the harassment and anxiety of persistent tax problems. Most people make 3 mistakes that get them in trouble with the IRS. They procrastinate. They attempt to represent themselves. They hire sub-par representation and now are in MORE need of help than ever before.



These are the kind of services a Tax Attorney can provide: Offer in Compromise Cases, Penalty Abatement Petitions, Full Audit Representations Business Strategy Sessions. Preparation and Filing of Tax Returns. Settle taxes for Pennies on the Dollar owed, Stop IRS wage and bank levies (garnishments), Have property liens lifted, get affordable installment agreements, File bankruptcy against the IRS, Have penalties and interest forgiven, Reduce taxes by running out the IRS' time to collect. Offer in Compromise: Settle your taxes for Pennies on the Dollar owed Professional law offices can help get you a favorable settlement with an experienced IRS tax attorney. The IRS' Offer in Compromise program allows taxpayers to settle their tax debt.



What is an IRS offer in compromise?



It settles your tax liability for less than the full amount owed, providing you can prove you don't have the ability to pay. Depending on how much you can afford, you really can pay "Pennies on the Dollar Owed" in taxes. If it is done correctly - this option could save you an enormous amount of money, and is the best strategy for most taxpayers. You should take extreme caution. You should hire a professional with knowledge of the IRS' procedures. This professional should determine the least amount that the IRS will accept from you. If the Offer is not submitted correctly it will be rejected, or you may be required to pay more than is necessary.



An Offer in Compromise may save you a LARGE amount of money. Do you know that the IRS only has a limited time to collect your back taxes? Let a Professional Tax Attorney determine when the IRS' time limit to collect taxes runs out. In most cases the IRS has only a limited time to collect the unpaid taxes. You must CAREFULLY evaluate exactly when that time period will run out. Your troubles may be solved. and moreover: If the IRS' time has run out, or if it will run out soon, your troubles may be over.



Delaying tactics may be used to stall the IRS while their time runs out. Once the IRS is out of time, they MUST stop ALL collection action against you.



The IRS MUST release all property liens



TAX RETURNS - FAILURE TO FILE



Many people fail to file Individual Income Tax Returns for a variety of reasons. Some reasons are innocent, although the most common is the fact that people can't afford to pay the taxes.



When this happens it becomes difficult to get back into the system. "I filed for 1998. I couldn't pay for 2000, so I did not file. Then I was afraid to file for 2001. I haven't filed since then. What can I do now?"



If you do not file Income Tax Returns you commit a criminal offense. However, no one who has voluntarily filed back returns before being caught has ever been criminally prosecuted. That is the first key: filing BEFORE they catch you.



IRS Penalties

Some IRS penalties can be as high as 100% to 150% of the original taxes owed. Even if you could pay the taxes owed, the extra penalties will make it impossible to pay off the entire balance.



The IRS imposes penalties to punish taxpayers and keep them in line. The IRS does forgive penalties. Before you pay the IRS any penalty amounts, you may want to consider requesting the IRS to not punish you because it wasn't your fault.






Original pictures take http://www.ascentlawfirm.com/irs-audit/ site

Your Tip Earnings and Taxes

If you work in a service where you get tips, guess what? The IRS expects you to report them and pay taxes on them.



Your Tip Earnings and Taxes



The internal revenue service takes a very simple approach to tips. It views all tips you make in your job as taxable income that must be reported and for which taxes must be paid. Put another way, the IRS has a simple but brutal view towards taxes



Now tips come in different forms. Some are received directly from customers while others are automatically added to the customers bill. The IRS takes the position you must report and pay taxes on both amounts. This also includes taxes you earn through any group splitting where all tips are collected together and then split amongst the employees. On top of this, the IRS also takes the view that any non-cash tips such as tickets to something are also income that should be reported and taxes paid on. Put another way, the internal revenue services gets you coming and going.



To make things a little more brutal, the internal revenue service requires you to take some steps in reporting tips. If your tips total $20 or more in any calendar month from a single job, you are supposed to report the total to the employer by the 10th day of the next month. The employer is then supposed to withhold federal income tax, social security and Medicare taxes from your paycheck. Keep in mind that the failure to do so can lead to the placement of a 50 percent penalty on your taxes. Obviously, the IRS is fairly serious about getting its money.



Tips paid to waitresses, bartenders, barbacks and so on are a hot spot with the IRS and always have. Since tips tend to be given in cash form, the potential for forgetting to report them is particularly high. The IRS seems to think so and has shown a generally aggressive attitude on the subject. If you indicate you are a waitress or bartender on your tax return, but fail to report any tip income, it could be audit time.






Original pictures take http://doomcycle.com/tag/frazetta-friday/page/2/ site

Your Kids Can Reduce Your Taxes And Get Rich

One often-overlooked tax benefit for business owners is putting their kids to work in their business.



If you are self-employed you can take advantage of this by paying your kids $4,000 each for performing services in your business. The business gets a tax deduction for the compensation and that saves taxes on the parent's tax return. Also, there is no Social Security or Medicare Taxes due on the wages you pay to your child.



The next step is to open a Roth IRA for the child and contribute the $4000 to the IRA. The child may not withdraw this money until age 59 . The earnings and the amounts contributed grow tax-free and are generally never subject to tax when withdrawn. On the child's tax return, the child gets no tax deduction for the IRA but the child may not pay tax on the $4000if he or she is at a low enough level of income.



If you do this for 10 years, from age 8 to 18, and the IRA earns an 8% return each year, your child should have around $1.5 million at age 60 and that should grow to over $2 million by age 64.



If you plan to do this, consult with a professional tax advisor first and be sure your children are actually performing services for your business. Also, check that the work is not violating any child labor laws.



The information contained herein is not intended as tax advice. To comply with requirements imposed by the IRS, any information contained in this communication cannot be used for the purpose of avoiding penalties under the Internal Revenue Code.






Original pictures take http://www.carefulcents.com/prepare-taxes-for-filing/ site

Your IRS Tax Appeal Rights

Are you in the middle of a disagreement with the IRS? One of the guaranteed rights for all taxpayers is the right to appeal. If you disagree with the IRS about the amount of your tax liability or about proposed collection actions, you have the right to ask the IRS Appeals Office to review your case.



During their contact with taxpayers, IRS employees are required to explain and protect these taxpayer rights, including the right to appeal. The IRS appeals system is for people who do not agree with the results of an examination of their tax returns or other adjustments to their tax liability. In addition to examinations, you can appeal many other things, including:



1. Collection actions such as liens, levies, seizures, installment agreement terminations and rejected offers-in-compromise,



2. Penalties and interest, and



3. Employment tax adjustments and the trust fund recovery penalty.



Internal IRS Appeal conferences are informal meetings. The local Appeals Office, which is independent of the IRS office, can sometimes resolve an appeal by telephone or through correspondence.



The IRS also offers an option called Fast Track Mediation, during which an appeals or settlement officer attempts to help you and the IRS reach a mutually satisfactory solution. Most cases not docketed in court qualify for Fast Track Mediation. You may request Fast Track Mediation at the conclusion of an audit or collection determination, but prior to your request for a normal appeals hearing. Fast Track Mediation is meant to promote the early resolution of a dispute. It doesnt eliminate or replace existing dispute resolution options, including your opportunity to request a conference with a manager or a hearing before Appeals. You may withdraw from the mediation process at any time.



When attending an informal meeting or pursuing mediation, you may represent yourself or you can be represented by an attorney, certified public accountant or individual enrolled to practice before the IRS.



If you and the IRS appeals officer cannot reach agreement, or if you prefer not to appeal within the IRS, in most cases you may take your disagreement to federal court. Usually, it is worth having a go at mediation before committing to an expensive and time-consuming court process.






Original pictures take http://www.carefulcents.com/prepare-taxes-for-filing/ site

Your Auction Business Taxes

Taxes is an issue when running an Auction Business. But is there a grey line when it comes to declaring it?



It's really within reason if you're going to do a huge amount of it, a small amount is negligible.



Some people want to have a small business for write-offs, you might want to consider taking it to the next level and be able to write off some of your expenses like your computer, office space, supplies, etc.



Each state and each province has their own amount of sales you can do without declaring, & charging taxes. Check with your state to see what amount you have to do before you start taking taxes.



The BC goverment (where I live) gives you an allowance of $30,000 before you have to charge for sales tax, that's for someone who legally has a business.



There's definate advantages of having a business license, declaring your income and being able to have write-offs. That being said, legally you have to declare taxes if you're profiting from it.



Are You Holding Onto Too Much Product?



We all love to make money but after a while when you get too much product built up, you can start losing money. Why would we do that?



What happens is we get in a mindset on the value we feel our items are worth verses, what we can get for them. That's why when purchasing items it's important to keep in mind that you make money when you buy, Not - When you Sell.



But we also get into the territory where you feel you should get a certain price for something. And that's what we need to shake.... immediately.



You need to be watching your products and if something isn't pulling in the money anymore, you need to blow it out. Product on the shelves is not money in your pocket.... it's out of your pocket.



When we relate this to your eBay business, the same goes for what you have in your eBay store. Keep it fresh and alive. Have special offers, only for those who are buying an auction AND a store item.



Make it something that they want and give them a deal. Blowout product that you've had for too long. This will give you money up right away and gets you product you can actually do well with.



So, get out of the mind frame that to you need to make "X" amount from certain products, if they're not pulling it in, then "X" them out and move onto newer hotter products!






Original pictures take http://www.carefulcents.com/prepare-taxes-for-filing/ site

Your Appeal Rights When Fighting The IRS

Are you in the middle of a disagreement with the IRS? One of the guaranteed rights for all taxpayers is the right to appeal. If you disagree with the IRS about the amount of your tax liability or about proposed collection actions, you have the right to ask the IRS Appeals Office to review your case.



During their contact with taxpayers, IRS employees are required to explain and protect these taxpayer rights, including the right to appeal. The IRS appeals system is for people who do not agree with the results of an examination of their tax returns or other adjustments to their tax liability. In addition to examinations, you can appeal many other things, including:



1. Collection actions such as liens, levies, seizures, installment agreement terminations and rejected offers-in-compromise,



2. Penalties and interest, and



3. Employment tax adjustments and the trust fund recovery penalty.



Internal IRS Appeal conferences are informal meetings. The local Appeals Office, which is independent of the IRS office, can sometimes resolve an appeal by telephone or through correspondence.



The IRS also offers an option called Fast Track Mediation, during which an appeals or settlement officer attempts to help you and the IRS reach a mutually satisfactory solution. Most cases not docketed in court qualify for Fast Track Mediation. You may request Fast Track Mediation at the conclusion of an audit or collection determination, but prior to your request for a normal appeals hearing. Fast Track Mediation is meant to promote the early resolution of a dispute. It doesnt eliminate or replace existing dispute resolution options, including your opportunity to request a conference with a manager or a hearing before Appeals. You may withdraw from the mediation process at any time.



When attending an informal meeting or pursuing mediation, you may represent yourself or you can be represented by an attorney, certified public accountant or individual enrolled to practice before the IRS.



If you and the IRS appeals officer cannot reach agreement, or if you prefer not to appeal within the IRS, in most cases you may take your disagreement to federal court. Usually, it is worth having a go at mediation before committing to an expensive and time-consuming court process.






Original pictures take http://doomcycle.com/tag/frazetta-friday/page/2/ site

Year End Investment Ideas and Tax Strategies

First thing Monday morning I'm going to march into my boss's office and demand a pay cut so that I'll be in a lower tax bracket next year.



Of course that's ridiculous, but isn't it about the same as the financial community's "Conventional Wisdom" (CW) for year-end tax planning? What about the long-term nature of investing, or the merits of that investment they felt so strongly about in July? What are their motivations, and what discipline thought up these strategies in the first place?



Clearly there are many questions that require answers, but as investors, it should be crystal clear that the object of the investment exercise is to make money... just as much as possible, quickly, legally, and within a low risk environment. The faster it comes in, the more effectively it can be compounded. Otherwise, wouldn't the "CW" be to find as many downers as uppers so that there are no tax consequences? Wouldn't Zero Taxable Gain Investing be the only "smart" investment strategy? A December, 2004 New York Times Money Section article actually suggested that Investment Professionals had an obligation to lose money for clients in order to reduce the tax burden.



Your Financial Professional's perspective may produce smart tax advice but only professional investors (not accountants, attorneys, stockbrokers, financial planners, advisors in general) should be called upon for acceptable investment advice. CPAs may look smarter if you have a lower tax liability, but many of them go too far with a calendar year focus that ignores the realities of an emotional and cyclical investment environment. Take last year's Merck for example. It has nearly doubled in Market Value since you were told to sell it last November... who'da thunk it! Why didn't you buy more (of this and many other high quality losers) instead of selling? Fortunately, not all professionals are into losing money. In fact, in nearly thirty years of dealing with hundreds of Accountants and other advisors, not even a handful have suggested that clients should take losses on fundamentally sound securities, Equity or Fixed Income. Just think if you had taken your dot.com profits in '99, purchased the downtrodden profit making companies of the time, and paid the ugly taxes. The value companies didn't crash. They've rallied for nearly seven years!



The key issue in considering a capital loss is the economic viability of the investment... not your tax situation! A key element of The Working Capital Model (for investment portfolio management) is to eliminate the weakest security in a portfolio every time the Market Value of the portfolio establishes a significantly new "All Time High" profit level (an ATH). My definitions may be different than those you are used to: (1) Profit = Total Market Value - Net Portfolio Investment, (2) A "weak" security is a stock that is no longer rated Investment Grade by S & P, or no longer traded on the NYSE, or no longer dividend paying, or no longer profitable. Income securities whose payout has fallen to way below average (or risen to an unsustainable level) could also be culled at an ATH. Securities that have fallen considerably in Market Value for no apparent reason (other than recent news or changing interest rate expectations) are referred to lovingly as "Investment Opportunities". This is what you look for while trying to reinvest your profits... like last year's MRK. By the way, switching from the strong asset class to the weaker one as a "hedging strategy" or vice versa (as a greed motivated speculation) is simply an attempt at "market timing", not a "sophisticated" or "savvy" adjustment to your asset allocation. Asset Allocation is always a function of personal factors and never a function of asset class (Equities and Income Generators) directional speculation.



So what happens if a new portfolio ATH is achieved in February or August instead of in November or December? (Note that the financial community only preaches tax loss strategies during the last calendar quarter.) Should you unload all the weak issues at the same time, even those purchased just a few months ago? Management of your portfolio requires the disciplined application of consistent rules and guidelines, and every manager will develop his or her own style. But in a high quality, properly diversified, income generating portfolio, (1) the number of weak issues will generally be small and (2) the probability of escaping with only a minimal loss very real. Keep in mind two basic investment axioms: There is no such thing as a bad profit, regardless of the tax implications; and no matter how you may rationalize, there's no such thing as a good loss. So, sure, if a loss should be taken due to an ATH in February, bite the bullet on the one security (only one) with the declining fundamentals (A Merrill Lynch/CNN/CFP opinion is not a fundamental.) If there are none, good job!



Profits are the holy grail of investing. Few people will admit just how infrequently they have experienced them or, conversely, just how frequently they have watched them disappear beneath the waves of a correction. (Like gamblers retuning from Vegas... no one ever seems to lose!) Similarly, most financial professionals will counsel their charges to let their profits run, particularly around year-end. Surely, speaketh the CW prophets, these profits will hang around until next year, thus deferring those terrible taxes! (Worked real well at year-end '99, you'll recall.) Don't think for a moment that anyone knows what will happen this time around the rally pole, particularly in those ridiculously priced ETFs, which are put together with the same kind of spit and duct tape used for the dot.coms. Always take your profits too soon, because you can't get poor that way!



First thing Monday morning I'm going to: (1) Call my accountant to tell him that I'm going to help him reduce his tax burden by not paying him, (2) continue to view the Investment process in cyclical rather than calendar terms, (3) limit my tax liability by how I invest, not by taking unnecessary losses, (4) continue to make as much money as possible, as quickly and safely as possible, and (5) contact the media, my political representatives, and anyone else I can think of that will help in the fight to abolish the taxation of all investment and retirement income.






Original pictures take http://www.carefulcents.com/prepare-taxes-for-filing/ site