IRS makes it easier for taxpayers struggling with tax debts

On November 5, 2020   /   IRS  

Announced today the IRS has made numerous changes designed to help struggling taxpayers impacted by COVID-19. Taxpayers who owe always had options to seek help through payment plans and other tools from the IRS, but the new IRS Taypayer Relief Initiative is expanding on those tools even more.

The revised COVID-related collection procedure will be helpful to taxpayers, especially those who have a record of filing their returns and paying their taxes on time. Among the highlights of the Taxpayer Relief Initiative:

  • Taxpayers who qualify for a short-term payment plan option may now have up to 180 days to resolve their tax liabilities.
  • The IRS is offering flexibility for some taxpayers who are temporarily unable to meet the payment terms of an accepted Offer in Compromise.
  • To reduce burden, certain qualified individual taxpayers who owe less than $250,000 may set up Installment Agreements without providing a financial statement or substantiation if their monthly payment proposal is sufficient. 
  • Some individual taxpayers who only owe for the 2019 tax year and who owe less than $250,000 may qualify to set up an Installment Agreement without a notice of federal tax lien filed by the IRS.

Installment Agreement options are available for taxpayers who cannot full pay their balance but can pay their balance over time. The IRS expanded Installment Agreement options to remove the requirement for financial statements and substantiation in more circumstances for balances owed up to $250,000 if the monthly payment proposal is sufficient. The IRS also modified Installment Agreement procedures to further limit requirements for Federal Tax Lien determinations for some taxpayers who only owe for tax year 2019.

In addition to payment plans and Installment Agreements, the IRS offers additional tools to assist taxpayers who owe taxes:

Temporarily Delaying Collection — Taxpayers can contact the IRS to request a temporary delay of the collection process. If the IRS determines a taxpayer is unable to pay, it may delay collection until the taxpayer’s financial condition improves.

Offer in Compromise — Certain taxpayers qualify to settle their tax bill for less than the amount they owe by submitting an Offer in Compromise. To help determine eligibility, use the Offer in Compromise Pre-Qualifier tool. Now, the IRS is offering additional flexibility for some taxpayers who are temporarily unable to meet the payment terms of an accepted offer in compromise.

Relief from Penalties — The IRS is highlighting reasonable cause assistance available for taxpayers with failure to file, pay and deposit penalties. First-time penalty abatement relief is also available for the first time a taxpayer is subject to one or more of these tax penalties.

“If you’re having a tax issue, don’t go silent. Please don’t ignore the notice arriving in your mailbox. These problems don’t get better with time. We understand tax issues and know that dealing with the IRS can be intimidating, but our employees really are here to help.”

Darren Guillot, IRS Small Business/Self-Employed Deputy Commissioner for Collection and Operations Support

For clients and non clients alike we urge you to contact your local office or preparer so we may help you with any notices you receive. For more information or explanation of Taxpayer Relief Initiative please contact your local office or visit www.IRS.gov

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QR code technology on the rise

On November 2, 2020   /   IRS  

A QR code is shot for “quick response” and is a type of barcode. This barcode can be scanned by using a QR scanner or a smartphone with a built in camera. Once scanned the device uses the barcode to bring up a link. Have you seen the QR code at your favorite restaurant to access a menu recently?

Now try using the same technology to go directly to IRS.gov and securely access your account, set up a payment plan or contact the Taxpayer Advocate Service. These QR codes will start appearing in 2021 on all CP14 notices. These notices are used to inform taxpayers that they owe money on unpaid taxes.

These codes will give taxpayers immediate access to the most important information for them to pay their balances, set up payment agreements, and reach out for help… We understand there’s lots of information on the web, and we want to give taxpayers more secure tools that can more easily help them resolve their tax situations”

Darren Guillot, IRS Small Business/ Self-Employed Deputy Commissioner for Collection and Operations Support

This is an exciting development in technology use for the IRS. The IRS is assessing the possibility of adding other QR codes to other balance due notices in the future.

At ATS we still advise all taxpayers to provide a copy of the notice to their preparer before paying any fees.

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What you need to know about filing an amended tax return

On October 30, 2020   /   IRS  

What are common reasons people need to file and amended return:

  • Entering income incorrectly
  • Not claiming credits for which they’re eligible
  • Claiming deductions incorrectly

Most errors can be fixed by filing a Form 1040-X, Amended U.S. Individual Income Tax Return. If you find a error on your return or are notified by a notice, you should bring it to the attention of your preparer. For more information please check out the IRS’s FAQ’s.

If you have already filed an amended tax return you can check the status three weeks after filing using the Where’s My Amended Return? tool. Processing can take up to sixteen weeks.

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It’s time to check your withholding for 2019 taxes.

On June 13, 2019   /   IRS  
It’s time to check your withholding for 2019 taxes.

Taxpayers who haven’t done a Paycheck Checkup to check their withholding in 2019 should do one as soon as possible. The best and easiest way to do a checkup is to use the Withholding Calculator on IRS.gov. However, some taxpayers may need to use Publication 505 to check their withholding.

Here are some things taxpayers should know about these two methods for checking withholding:

Withholding Calculator

  • The Withholding Calculator works for most employees by helping them determine whether they need to give their employer a new Form W-4.
  • Taxpayers can use their results from the calculator to help fill out the form and adjust their income tax withholding.
  • If a taxpayer receives pension income, they can use the results from the calculator to complete a Form W-4P, Withholding Certificate for Pension and Annuity Payments, and give it to their payer.
  • Taxpayers who don’t pay taxes through withholding, or don’t pay enough tax that way, may still use the Withholding Calculator to determine if they have to pay estimated tax quarterly during the year to the IRS. Those who are self-employed generally pay tax this way.

Instructions in Publication 505, Tax Withholding and Estimated Tax

  • Taxpayers with more complex situations may need to use the instructions in Publication 505, Tax Withholding and Estimated Tax instead of the Withholding Calculator.
  • This includes employees who owe self-employment tax, the alternative minimum tax, or tax on unearned income by dependents.
    • Publication 505 can also help those who receive non-wage income such as dividends, capital gains, rents and royalties.
    • The publication includes worksheets and examples to guide taxpayers through these special situations.

For help planning for your 2019 taxes call one of our offices:

Plymouth 734.454.4100, Allen Park 313.388.7180,
Grayling 989.348.4055, Royal Oak 248.399.7331, or St. Clair Shores 313.371.6600

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IRS reminds extension filers of October 15 deadline

On August 28, 2018   /   IRS  

The IRS reminds taxpayers who requested an extra six months to file their 2017 tax return that Monday, October 15, 2018, is the extension deadline for most taxpayers.
For taxpayers who have not yet filed, here are a few tips to keep in mind about the extension deadline and taxes:

• Try IRS Free File or e-file. Taxpayers can still e-file returns for free using IRS Free File. The program is available only on IRS.gov. Filing electronically is the easiest, safest and most accurate way to file taxes.

• Use Direct Deposit. For taxpayers getting a refund, the fastest way to get it is to combine direct deposit and e-file.

• Use IRS online payment options. Taxpayers who owe taxes should consider using IRS Direct Pay. It’s a simple, quick and free way to pay from a checking or savings account. There are other online payment options.

• Don’t overlook tax benefits. Taxpayers should be sure to claim all entitled tax credits and deductions. These may include income and savings credits and education credits.

• Keep a copy of return. Taxpayers should keep copies of tax returns and all supporting documents for at least three years. This will help when adjusting withholding, making estimated tax payments and filing next year’s return.

• File by October 15. File on time to avoid a potential late filing penalty.

• More time for the military. Military members and those serving in a combat zone generally get more time to file. Military members typically have until at least 180 days after leaving a combat zone to both file returns and pay any tax due.

For help with your income tax call one of our offices:
Plymouth 734.454.4100, Allen Park 313.388.7180,
Grayling 989.348.4055, Livonia 734-462-6161,
Royal Oak 248.399.7331, or St. Clair Shores 313.371.6600

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Key Tax Tips on the Tax Effects of Divorce or Separation

On August 25, 2015   /   IRS  

Income tax may be the last thing on your mind after a divorce or separation. However, these events can have a big impact on your taxes. Alimony and a name change are just a few items you may need to consider. Here are some key tax tips to keep in mind if you get divorced or separated.

  • Child Support.  If you pay child support, you can’t deduct it on your tax return. If you receive child support, the amount you receive is not taxable.
  • Alimony Paid.  If you make payments under a divorce or separate maintenance decree or written separation agreement you may be able to deduct them as alimony. This applies only if the payments qualify as alimony for federal tax purposes. If the decree or agreement does not require the payments, they do not qualify as alimony.
  • Alimony Received.  If you get alimony from your spouse or former spouse, it is taxable in the year you get it. Alimony is not subject to tax withholding so you may need to increase the tax you pay during the year to avoid a penalty. To do this, you can make estimated tax payments or increase the amount of tax withheld from your wages.
  • Spousal IRA.  If you get a final decree of divorce or separate maintenance by the end of your tax year, you can’t deduct contributions you make to your former spouse’s traditional IRA. You may be able to deduct contributions you make to your own traditional IRA.
  • Name Changes.  If you change your name after your divorce, notify the Social Security Administration of the change. File Form SS-5, Application for a Social Security Card. You can get the form on SSA.gov or call 800-772-1213 to order it. The name on your tax return must match SSA records. A name mismatch can delay your refund.

Health Care Law Considerations

  • Special Marketplace Enrollment Period.  If you lose your health insurance coverage due to divorce, you are still required to have coverage for every month of the year for yourself and the dependents you can claim on your tax return. Losing coverage through a divorce is considered a qualifying life event that allows you to enroll in health coverage through the Health Insurance Marketplace during a Special Enrollment Period.
  • Changes in Circumstances.  If you purchase health insurance coverage through the Health Insurance Marketplace you may get advance payments of the premium tax credit in 2015. If you do, you should report changes in circumstances to your Marketplace throughout the year. Changes to report include a change in marital status, a name change and a change in your income or family size. By reporting changes, you will help make sure that you get the proper type and amount of financial assistance. This will also help you avoid getting too much or too little credit in advance.
  • Shared Policy Allocation. If you divorced or are legally separated during the tax year and are enrolled in the same qualified health plan, you and your former spouse must allocate policy amounts on your separate tax returns to figure your premium tax credit and reconcile any advance payments made on your behalf. Publication 974, Premium Tax Credit, has more information about the Shared Policy Allocation.

For help with any income tax question call one of our offices:

Plymouth 734.454.4100,    Allen Park 313.388.7180,    Grayling 989.348.4055,                           Royal Oak 248.399.7331,    Saginaw 989.782.1985,    St. Clair Shores 313.371.6600

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If You Get an IRS Notice, Here’s What to Do

On July 17, 2015   /   IRS  

Each year the IRS mails millions of notices and letters to taxpayers. If you receive a notice from the IRS, here is what you should do:

  • Don’t Ignore It. You can respond to most IRS notices quickly and easily. It is important that you reply right away. 
  • Focus on the Issue. IRS notices usually deal with a specific issue about your tax return or tax account. Understanding the reason for your notice is important before you can comply.
  • Follow Instructions. Read the notice carefully. It will tell you if you need to take any action to resolve the matter. You should follow the instructions.
  • Correction Notice. If it says that the IRS corrected your tax return, you should review the information provided and compare it to your tax return. If you agree, you don’t need to reply unless a payment is due. If you don’t agree, it’s important that you respond to the IRS. Write a letter that explains why you don’t agree. Make sure to include information and any documents you want the IRS to consider. Include the bottom tear-off portion of the notice with your letter. Mail your reply to the IRS at the address shown in the lower left part of the notice. Allow at least 30 days for a response from the IRS.
  • Premium Tax Credit. The IRS may send you a letter asking you to clarify or verify your premium tax credit information. The letter may ask for a copy of your Form 1095-A, Health Insurance Marketplace Statement. You should follow the instructions on the letter that you receive. This will help the IRS verify information and issue the appropriate refund.
  • No Need to Visit IRS. You can handle most notices without calling or visiting the IRS. If you do have questions, call the phone number in the upper right corner of the notice. You should have a copy of your tax return and the notice with you when you call.
  • Keep the Notice. Keep a copy of the notice you get from the IRS with your tax records.
  • Watch Out for Scams. Don’t fall for phone and phishing email scams that use the IRS as a lure. The IRS first contacts people about unpaid taxes by mail – not by phone. The IRS does not initiate contact with taxpayers by email, text or social media.

For help with any income tax question call one of our offices:                                               Plymouth 734.454.4100,    Allen Park 313.388.7180,    Grayling 989.348.4055,                           Royal Oak 248.399.7331,    Saginaw 989.782.1985,    St. Clair Shores 313.371.6600

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IRS Withholding Calculator

On March 31, 2015   /   IRS  

The Withholding Calculator can help you determine whether you need to give your employer a new  Form W-4, Employee’s Withholding Allowance Certificate to avoid having too much or too little Federal income tax withheld from your pay. You can use your results from the calculator to help fill out the form.

Who Can Benefit From The Withholding Calculator?

  • Employees who would like to change their withholding to reduce their tax refund or their balance due;
  • Employees whose situations are only approximated by the worksheets on the paper W-4 (e.g., anyone with concurrent jobs, or couples in which both are employed; those entitled to file as Head of Household; and those with several children eligible for the Child Tax Credit);
  • Employees with non-wage income in excess of their adjustments and deductions, who would prefer to have tax on that income withheld from their paychecks rather than make periodic separate payments through the estimated tax procedures.

CAUTION:    If you will be subject to alternative minimum tax, self-employment tax, or other taxes; you will probably achieve more accurate withholding by following the instructions in Pub 505: Tax Withholding and Estimated Tax.

Ready to start? Make sure scripting is enabled before using this application. Continue to the Withholding Calculator

Tips For Using This Program

  • Have your most recent pay stubs handy.
  • Have your most recent income tax return handy.
  • Estimate values if necessary, remembering that the results can only be as accurate as the input you provide.
  • To Change Your Withholding:
  1. Use your results from this calculator to help you complete a new Form W-4, Employee’s Withholding Allowance Certificate.
  2. Submit the completed Form to your employer.

For tax help or more information contact one of our offices:
   Plymouth 734.454.4100,    Allen Park 313.388.7180,    Grayling 989.348.4055,
Royal Oak 248.399.7331,    Saginaw 989.782.1985,    St. Clair Shores 313.371.6600

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The Health Care Law and Taxes: Reporting Coverage, Exemptions and Payments

On March 27, 2015   /   IRS  

Under the Affordable Care Act, you will need to report minimum essential coverage, report or claim a coverage exemption, or make an individual shared responsibility payment when you file your 2014 federal income tax return. If you are not required to file a tax return and don’t want to, you do not need to file a return solely to report your coverage or to claim an exemption.

If you and your dependents all had minimum essential coverage for each month of the tax year, you will indicate this on your 2014 tax return by simply checking a box on Form 1040, 1040A or 1040EZ; no further action is required.

If you obtained a coverage exemption from the Marketplace or you qualify for an exemption that you can claim on your return, you will file Form 8965 with your tax return.

For any month you or your dependents did not have coverage or a coverage exemption, you will have to make a shared responsibility payment. The payment will be reported on Form 1040, line 61 in the Other Taxes section and on the corresponding lines on Form 1040A and 1040EZ.

See the Claiming and Reporting an Exemption and Individual Shared Responsibility Provision – Reporting and Calculating the Payment pages on IRS.gov for more information about figuring and reporting the payment. 

For tax help or more information contact one of our offices:
   Plymouth 734.454.4100,    Allen Park 313.388.7180,    Grayling 989.348.4055,
Royal Oak 248.399.7331,    Saginaw 989.782.1985,    St. Clair Shores 313.371.6600

 

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Still Time to Contribute to an IRA for 2014

On March 18, 2015   /   IRS  

Available in one form or another since the mid-1970s, individual retirement arrangements (IRAs) are designed to enable employees and self-employed people to save for retirement. Contributions to traditional IRAs are often deductible, but distributions, usually after age 59½, are generally taxable. Though contributions to Roth IRAs are not deductible, qualified distributions, usually after age 59½, are tax-free. Those with traditional IRAs must begin receiving distributions by April 1 of the year following the year they turn 70½, but there is no similar requirement for Roth IRAs. Most taxpayers with qualifying income are either eligible to set up a traditional or Roth IRA or add money to an existing account. To count for 2014, contributions must be made by April 15, 2015. In addition, low- and moderate-income taxpayers making these contributions may also qualify for the saver’s credit when they fill out their 2014 returns. Eligible taxpayers can contribute up to $5,500 to an IRA. For someone who was at least age 50 at the end of 2014, the limit is increased to $6,500. There’s no age limit for those contributing to a Roth IRA, but anyone who was at least age 70½ at the end of 2014 is barred from making contributions to a traditional IRA for 2014 and subsequent years.
For tax help or more information contact one of our offices:                           
  Plymouth 734.454.4100,    Allen Park 313.388.7180,    Grayling 989.348.4055, 
  Royal Oak 248.399.7331,    Saginaw 989.782.1985,    St. Clair Shores 313.371.6600

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