Tax Planning

The IRS Urges Taxpayers to File Their Taxes in Order to Receive a Stimulus Check

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

  • The IRS is urging taxpayers to file as soon as possible in order to reap the benefits of this package.
  • If you have yet to file for your 2018 tax year, this could potentially affect your ability to receive a stimulus check. 
  • The IRS recommends that taxpayers file their tax returns as quickly as possible and that non-filers consider contacting a tax professional to assist them with their unfiled tax years.

The new stimulus package is meant to assist both taxpayers and businesses that have been affected by the Coronavirus pandemic. The package is meant to provide relief and aid to those that have been left without a paycheck, become unemployed, or are a business that has experienced a loss of customers.

In order to qualify for any compensation received from the stimulus package, you must have filed your taxes within the last two years.

The IRS is urging taxpayers to file as soon as possible in order to reap the benefits of this package. The IRS has notified taxpayers that in order to receive any potential credits or rebates, your 2018 and/or 2019 tax returns will need to be filed. If you have yet to file for your 2018 tax year, this could potentially affect your ability to receive a stimulus check. 

Once delinquent returns have been filed and a taxpayer is fully compliant, they are able to resolve any outstanding tax liabilities by either negotiating an installment agreement or inquiring with a tax professional to see if they qualify for an Offer in Compromise with the IRS in order to obtain a “Fresh Start.”

The IRS recommends that taxpayers file their tax returns as quickly as possible and that non-filers consider contacting a tax professional to assist them with their unfiled tax years.

If you need tax help, contact us for a free consultation.

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How to Avoid Getting Scammed by a Tax Preparer

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

  • Be wary of scammers pretending to be tax preparers.
  • Look for a tax preparer that is available year-round to assist you with all your tax questions.
  • Make sure that your tax preparer has a PTIN.
  • Don’t give any personal information away to a tax preparer if you’re still shopping around.

Tax season is hard enough to get through with all the documents you have to provide and the constant worry if you’re going to owe a tax debt. For most, it never crosses their mind that their tax preparer could be the one that is committing fraud by stealing their client’s personal information, refunds, or identity. 

Here are a few things to lookout for when choosing a tax preparer:

  • Do your research. When searching for a tax preparer make sure to verify that they have a history of working with clients and have successfully filed their taxes.
  • Check their availability. It is recommended that you find a tax preparer that works year-round to answer any questions that may arise about your tax return. 
  • Ask for their PTIN. Ask your tax preparer for their Preparation Tax Identification Number (PTIN). Paid tax preparers are required to register with the IRS and must include their PTIN on tax returns they have filed. 
  • Ask about their fees. Look out for tax preparers who charge fees based on the percentage of your refund or boast that they can give you a larger refund compared to other tax preparers. 
  • Don’t be quick to give your information away. Avoid giving personal information away like your social security number to tax preparers when you are just requesting a quote. 

If you need tax help, contact us for a free consultation.

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The IRS will Move Their Tax Filing Deadline to Assist Taxpayers Affected by Covid-19

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

  • Treasury Secretary Steven Mnuchin announced emergency measures to assist those affected by Covid-19
  • The IRS announced that it will be moving its national income tax filing day from April 15 to July 15.
  • Mnuchin encourages those who will have a tax refund to file now in order to get their money as quickly as possible. 
  • Taxpayers will have more time to file their taxes and pay their tax debt without interest or penalties. 

On March 17, 2020, Treasury Secretary Steven Mnuchin announced emergency measures that the government would take to assist those affected by Covid-19. Mnuchin announced that President Trump ordered taxpayers to be given additional time to file their taxes and make tax payments without interest or penalties.

The IRS announced that it will be moving its national income tax filing day from April 15 to July 15 as part of an effort to provide taxpayers with financial relief during such difficult times given businesses are temporarily closing their doors to prevent further spread of the virus. 

Mnuchin encourages those who will have a tax refund to file now in order to get their money as quickly as possible. For those who will most likely owe a tax balance, the IRS has provided this extension to help deal with the financial fallout of the coronavirus pandemic. For the taxpayers that are currently suffering financially, they will have more time to file their taxes and pay their tax debt without interest or penalties. 

The Treasury Department also announced earlier this week that the 90-day postponement on tax payments applies to 2019 income taxes that are owed and first-quarter tax payments that would have originally been due by April 15.

Although a tax extension has been implemented, it is still encouraged that all taxpayers file their tax returns and pay their tax debt before the new deadline. For those who wait to file their taxes until after the deadline, penalties and interest will be added to any balance owed and, should you receive a refund, penalties will be added for filing late. It is important for all taxpayers to keep themselves updated on current IRS events in order to understand how they may be affected by the new tax extension.

If you need tax help, contact us for a free consultation.

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How to make a payment to the IRS

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

  • Taxpayers can pay the IRS directly via their savings or checking account.
  • The IRS allows taxpayers to use their debit or credit cards to make online payments. 
  • If a taxpayer is unable to pay back their tax debt, they can negotiate a payment plan with the IRS. 

If you owe the IRS, or know that you will owe after filing your taxes, you need to be aware of the options for paying back the IRS to avoid falling into collections. The IRS provides several payment options where a taxpayer can either pay the IRS right away or make arrangements to be on a monthly payment plan. 

Here are a few ways you can make payment to the IRS:

  • Pay in full from checking or savings accounts. Taxpayers have the ability to pay their tax bills in full by directly using their checking or savings account and paying online on the IRS website. You can schedule up to 30 days in advance and can cancel your payment or switch your method of payment up to two business days before your payment is taken out. 
  • Use credit or debit cards. The IRS allows taxpayers to use their debit or credit cards to make payments either online or over the phone. The IRS does not charge any hidden fees, although the convenience fees may vary depending on the type of credit card that is used. 
  • Setting up an installment agreement. If a taxpayer is unable to pay back their tax liability to the IRS, the IRS will provide the option of a monthly payment plan so they can make controlled, manageable payments until their tax debt has been satisfied. Taxpayers are required to file all required tax returns before negotiating an agreement. 

If you need tax help, contact us for a free consultation.

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Will Covid-19 Affect the Tax Deadline this Year?

Updated on March 17, 2020

  • The IRS announced that it will be moving its national income tax filing day from April 15 to July 15 as part of an effort to provide taxpayers with financial relief during such difficult times given businesses are temporarily closing their doors to prevent further spread of the virus
  • Although a tax extension has been implemented, it is still encouraged that all taxpayers file their tax returns and pay their tax debt before the new deadline. 
  • Taxpayers will not be charged interest and penalties should they file the extension. 

Click here to learn more about how Covid-19 is affecting the tax deadline.

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

  • President Trump has recently announced he would be extending the April 15 filing deadline for those that have contracted the virus
  • President Trump did not specify who specifically would qualify for a filing extension and for how long the extension would be for.
  • It is recommended that all healthy taxpayers file their taxes before the tax deadline.

Everyone is getting ready for tax season with the impending tax deadline right around the corner. However, with the new developments of Covid-19 affecting the general U.S. population and a potential quarantine looming around the corner, taxpayers are wondering how they will be able to get their taxes done. 

How Covid-19 may affect filing your taxes. President Trump has recently announced that because of the new developments and severity of the Covid-19 virus, he would be extending the April 15 filing deadline for those that have contracted the virus. Trump also stated that for those affected by the virus they would be able to defer paying their taxes by next month’s deadline.

What to be aware of when filing an extension. The IRS will most likely require proof for those that have contracted the virus should you choose to file a tax extension. In addition to this, President Trump did not specify who specifically would qualify for a filing extension and for how long the extension would be for. Several states have also extended their state tax filing for those affected by Covid-19.  You can click here to see which states have extended their tax deadlines.  

So what does this mean for those individuals who have not contracted the virus? It means that business is as usual for everyone else as of now. It is recommended that all healthy taxpayers file their taxes before the tax deadline and pay off any tax balance they may have in order to avoid accruing any additional penalties and interest. 

Tax season is almost at an end and it is vital to file your tax returns if you have yet to. It is also recommended to be on the lookout for further tax information regarding the Covid-19 virus and when you are able to file your tax extension should you qualify. 

If you need tax help, contact us for a free consultation.

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How to Avoid Tax Fraud During Tax Season

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

  • Tax Season leaves many taxpayers vulnerable to identity theft and scammers.
  • Scammers can pose as tax preparers and steal your personal information. 
  • Protect your social security and bank information to ensure it does not end up in the wrong hands. 
  • Ask your tax preparer how you can avoid your personal information getting leaked if there is a data breach. 

Most people don’t realize how vulnerable they are to fraud during tax season.  The scary truth is that during this time of year, many identities are stolen and fraudulent tax returns are unwittingly filed on behalf of a taxpayer. In order to protect yourself, it is vital to exercise caution and provide only the documents and information that are absolutely necessary. Below are a few scams to be aware of during tax time to help avoid becoming a fraudster’s next victim.

Phone and Email Scams

The most obvious way to protect yourself against scammers is to never give out your personal information to someone you don’t know, especially over the phone. If someone from the “IRS” is attempting to contact you over the phone or by email and asks for your social security or card information, don’t give it to them. The IRS almost never contacts via phone, instead preferring to send notices via mail.  Even if you do receive a call from the IRS, they won’t ask for your social security number – they already have that information.  If you feel uncomfortable about the validity of a call, hang up and call the IRS yourself – that way you know if what they’re telling you is true.

Accountant fraud

Be wary of scammers who will pose as a tax preparer and then rip off customers through refund fraud or identity theft. These phony accountants will tell you that they can get you a large tax refund and typically prey on low-income and non-English speaking taxpayers. 

Even if you go to a legitimate tax preparer, your information can still be exposed if there is a data breach. To avoid this happening – and being left vulnerable – ask your tax preparer what more you can do to protect your information in case of a breach.

Identity theft

Make sure to protect your social security number at all costs. Identity thieves will attempt to steal this information in order to steal not only your identity but your tax refund too. As long as you notify the IRS that your information has been compromised and your refund has been stolen, the IRS will work with you to provide your refund. However, it will take extensive time and paperwork to prove that your information was stolen.

Tax Season is now upon us, and it’s important to protect your personal information and ensure that it can’t be compromised. Always be wary of phone calls or emails that you receive claiming to be from the IRS, especially when they’re asking for your bank information or social security number. Also, do your research when looking for a tax preparer to file your taxes for you, and make sure they have their license, as well as positive reviews from previous clients. Lastly, make sure to monitor your social security number to ensure that your data has not been breached and your identity hasn’t been stolen. 

If you need tax help, contact us for a free consultation.

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Do You Qualify for the Child Care Credit?

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

Raising children can lead to unexpected expenses that seem to come out of nowhere. As a parent, you may be wondering what tax benefits are available when you file your tax return. You may just find you qualify for the Child Tax Credit.  This tax credit was put into place not just to help taxpayers get the most out of their tax refund, but to also supply some relief for amongst all the expenses that pile up from having children. 

Since the passing of the Tax Cuts and Jobs Act of 2017 (TCJA), parents can now take advantage of the perks that come with the TCJA for child care expenses – this also includes adult kids that are still living under your household. 

If you’re not expecting a refund this year, the Child Tax Credit can help reduce a possible tax liability that you may owe, with a savings of up to $2,000 per child.  Even if you’re expecting a refund, you could still receive up to $1,400 back on your return. The Child Tax Credit is considered one of the most valuable credits to apply when filing your taxes. 

Some of the criteria you would need to meet in order to qualify for the Child Care Credit is:

  • Your child needs to be a U.S. citizen or legal resident
  • Children must be 16 years or younger 
  • The taxpayer’s child must be claimed on their tax return.
  • The child should have lived with you for more than half the year

Make sure that you take advantage of the Child Tax Credit this tax season in order to get the most out of your refund or help reduce your tax bill. Remember that there are a few qualifying factors to consider before utilizing the Child Tax Credit: age, relationship, support, dependent status, citizenship, length of residency as well as family income. 

If you need tax help, contact us for a free consultation.

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Should Taxpayers Consider Using Direct Deposit for Tax Refunds?

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

  • If you’re looking to receive a tax refund this season and want it expedited, consider direct deposit.
  • It’s completely free to request direct deposit on your tax return
  • You’ll receive your refund through your bank instead of via check
  • It costs the IRS more to cut a check compared to transferring the money directly to your bank account. 

It’s tax time and everyone is scrambling to get their last-minute tax appointments scheduled before the deadline. If you’re expecting a refund this year, choosing the direct deposit option may be the more viable choice. Let’s explore the benefits:

It doesn’t cost you anything 

Whether you have a tax preparer file for you or you’re filing your tax return yourself, adding your bank information is free to include on your tax return. 

Get your refund faster

When you e-file with your direct debit information on your tax return, you’ll receive your refund much quicker compared to mailing off the return and having the IRS process it.

It’s secure

Using direct deposit information prevents the risk of having a paper check lost or stolen since the funds will be transferred directly to your bank.

You don’t have to e-file

If you prefer to mail out your tax return instead of e-filing, don’t worry, you’re still able to include your direct deposit information and receive your refund through your requested bank of choice.

It will save you money

It costs the IRS more than $1 for every paper refund check issued, but only a dime for each direct deposit made.

Tax season is a busy enough time to get through without having to worry about how you’re going to receive your refund or when it’s going to come. Having your refund deposited directly into your bank account is the ideal way to receive your money because it’s secure, quick, free, and saves taxpayers money. 

If you need tax help, contact us for a free consultation.

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What to Do If You Work Abroad and Owe the IRS

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

  • Working abroad doesn’t excuse citizens from paying their taxes, in fact, they are still held to the same standard as those working within the U.S. too.
  • For those working abroad, tax filing will begin on January 27th and are provided a two month extension-until June 15th-to file their tax return.
  • U.S. citizens have the choice to either mail their tax return or e-file as long as it is before the tax deadline. 

Working abroad can be an exciting adventure.  For starters, you get to experience different cultures, meet new people, and eat foods you’ve never even heard of before. It can be easy to immerse yourself in a new country and forget all the responsibilities that you had back at home. While this can be a welcome development for many, one responsibility you should try not to skirt is your taxes.  Even when you’re working abroad, you are still bound to the same tax laws, and you will need to report your income and file your tax return when you’re living in another country. If you’re an American citizen that is working abroad or are even just considering doing so, it is important to know when you should file, where you can file, and if you are able to file online.

When you should file

If you’re a U.S. citizen, resident alien, or you are in the military on duty outside of the U.S. that is working abroad, you are still obligated to file your tax return by April 15th. The only difference between someone working abroad versus someone that resides in the U.S. is that the person working abroad is provided an automatic two-month extension. This means those working outside of the U.S. are given until June 15th to prepare and file their tax return. It should also be noted that taxpayers are still required to pay any tax balance they have by April 15th or they will be charged interest.

Where to file

Working abroad can cause some confusion about how and where you are able to file your tax return. If you’re a U.S. citizen or resident alien; this includes a green card holder, you can mail your U.S. tax return to:

Department of the Treasury

Internal Revenue Service Center

Austin, TX 73301-0215 USA

Can you e-file?

Taxpayers that have their adjusted gross income of $69,000 or less have the ability to electronically file their tax returns for free. If taxpayers have a greater adjusted gross income greater than the specified threshold, they can use the Free File Fillable Forms, the e-file by purchasing commercial software, or the Authorized IRS e-file Provider Locator Service.

If you’re a U.S. citizen looking to work abroad, it is important to know your tax duties and obligations you will still have, regardless of whether you’re working and residing elsewhere. Make sure to mark your calendar for tax filing season every year so you remember to file your tax return. It is also critical to know what your options are when it comes to filing your tax returns and what software you are able to utilize. 

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

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Will Interest rates remain the same for the first quarter of 2020?

With tax season creeping upon us, some people may start to panic because they haven’t yet filed their tax return; some may even wait until the very last second before filing.  One of the reasons many Americans put off filing their taxes is because they know that they’re going to owe a tax liability and simply don’t want to deal with it. For those that have a balance with the IRS, they may have questions about whether or not they will accrue interest, how much interest they could accrue, how to avoid owing a balance, or how to prepare for next tax season. If you know that you’re going to owe the IRS at the end of the year, keep reading to find out how you’ll be affected and what you can do to prepare for the next tax season.

Interest rates

According to the IRS, if you end up owing a balance this tax season, interest rates will remain the same as last year for the first calendar quarter beginning January 1, 2020. Here are the interest rates that taxpayers can expect:

  • 5% for overpayments (4% in the case of a corporation).
  • 2.5% for the portion of a corporate overpayment exceeding $10,000.
  • 5% for underpayments.
  • 7% for large corporate underpayments. 

The Internal Revenue Codes determine their interest rates on a quarterly rate. These rates that have been announced this year are computed using the federal short-term rate and will be based on daily compounding.

How to avoid interest

If you have a tax liability, you can count on the IRS to notify
you of your balance due and what tax solutions they may have for you. In addition to what you owe, the IRS will tack on interest until your balance is paid in full. Some of the main reasons taxpayers
end up owing the IRS are:

  • Incorrect withholding amounts.
  • Failure to make estimated tax payments.
  • Underreporting income on their tax return.

So how can you avoid making the same mistakes listed above? The IRS provides tax relief help and encourages taxpayers that are W2 employees to do a paycheck checkup at least one time throughout the year to ensure they are withholding the correct amount to avoid any surprises like owing money come tax time. The IRS provides a withholding calculator for taxpayers to utilize when checking to ensure they’re on the right track. 

If you are a 1099 earner or even a W2 earner and you typically owe during tax time, it may be in your best interest to start making estimated tax payments quarterly. This will make it more likely that
when it’s time to file your taxes you won’t owe a liability, and will help you avoid any interest that would have been tacked onto your balance. IRS tax help for making your estimated tax payment can be found on their website

Another way to stop interest rates is by ensuring that you include all income on your tax return. Attempting to leave any income off your return could potentially lead to an audit, and if it’s found that income has been excluded, it could possibly lead to you owing a balance in addition to interest and penalties.

You can count on the IRS to continue adding interest to any tax balance that you owe. It is the taxpayer’s responsibility to ensure they don’t owe at the end of the year in order to avoid accruing any interest; this means making regular checks that your withholdings are accurate, making estimated tax payments if you know you will owe a balance when you file, and ensuring that you are reporting all income to the IRS to avoid having both penalties and interest. 

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

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