<![CDATA[A Joyous Tax Result - News and Blog]]>Mon, 13 May 2024 04:33:21 -0700Weebly<![CDATA[Tax Resolution and Your Finances- What is An Offer in Compromise]]>Sat, 26 Aug 2023 21:16:13 GMThttp://ajoyoustaxresult.com/news-and-blog/tax-resolution-and-your-finances-what-is-an-offer-in-compromise
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We don't call 911! We handle it ourselves!
Dealing with tax debt can be incredibly intimidating. It's natural to feel overwhelmed and powerless in such a situation, but it's important not to let fear and helplessness paralyze you.
 
Every day you delay taking action, interest and penalties continue to accumulate, potentially causing your liabilities to skyrocket and wreak havoc on your financial stability. In this article, we'll discuss one of the many available options for tax relief called an "Offer in Compromise." But before we delve into that, if you're facing a tax problem, get in touch with our firm to schedule a consultation. 
 
What Are Your Options?
Even if you believe it's impossible to repay what you owe, it's crucial to explore all available repayment options. While the IRS may be a formidable collection agency, they can be surprisingly reasonable when it comes to repaying back taxes and settling long-standing debts.
 
If you owe back taxes to the IRS or have unfiled tax returns from previous years, you may qualify for programs that make it easier and faster to pay what you owe. One such program is the offer in compromise, which allows eligible individuals to settle their IRS debt for significantly less than the full amount. However, qualifying for this program can be complicated, so the best way to determine your eligibility is by contacting our firm today.

An offer in compromise is a well-known but often misunderstood part of the tax code, and navigating its complexities can be challenging. Not all taxpayers will qualify for the offer in the compromise program, and even those who do may struggle with the intricacies of dealing with the IRS.
 
This is why it's crucial to work with a tax resolution expert when you have back taxes. Without an expert on your side, the IRS may reject your offer for a compromise, and the amount you owe could keep increasing due to additional penalties and interest.
 
If you've received a tax due notification from the IRS, you can't afford to wait. When the tax agency wants their money, they want it immediately, and without an offer in compromise, your options may become severely limited. The longer you wait, the more challenging your situation may become. However, hiring the right tax professional—one who specializes in dealing with the IRS—can turn things around.
 
An experienced tax resolution specialist possesses comprehensive knowledge of all IRS programs, including the offer in compromise option. Even if you don't qualify for an offer in compromise, a tax relief expert can help you explore alternative options, allowing you to settle your debt while still having enough money to sustain your life.

Few things in life are as daunting as owing money to the IRS. When that notice arrives in your mailbox, it's easy to panic and do nothing. However, this situation demands prompt action. The faster you act, the easier it will be to find a qualified professional who genuinely cares about your best interests. Once you've connected with a reputable tax resolution firm, you can work towards paying off your debt, achieving a fresh start with the IRS, and finally putting this unfortunate chapter of your financial life to rest.
 
If you're facing tax troubles, reach out to our tax resolution firm, and we'll schedule a free and confidential consultation to explain your options thoroughly and help you permanently resolve your tax problem.
Schedule A Consultation
]]><![CDATA[​1099-K and the GIG Economy- Does It Have Anything To Do With Me?]]>Sun, 02 Jan 2022 02:13:47 GMThttp://ajoyoustaxresult.com/news-and-blog/1099-k-and-the-gig-economy-does-it-have-anything-to-do-with-me
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Did you sell goods online? Did you rent out property or part of it? Did you provide creative or professional services? Did you drive your car for paid rides or deliveries? Then you did what the IRS calls “Gig Work”.

Gig Work is activity you do to earn income through an app or website or for cash. Another way to explain this: Do you use Digital/Freelancing Platforms (businesses) to match your services or goods with customers via apps or websites? Do you use technology to arrange transactions that generate revenue/income from assets you possess such as boats, homes, backyard pool or from services you provide such as rides, household chores, or technology services? These include ridesharing services (Uber, Lyft, Juno); delivery services (Instacart, Postmates, Dumpling); crafts and handmade items marketplaces (Amazon, Etsy, eBid, Facebook Marketplace, etc.); reselling (Poshmart, Offer-Up, StockX); on-demand labor and repairs services (Carecom, Closet Collective, Hello Tech, Spare 5, Fivrr, Your Mechanic); and property and space rentals (Home Away, VRBO, Air BnB). These are just examples of the countless Gig Economy income sources of which millions are taking advantage.

First, you have always been required to report all income on your tax return, even if you don’t receive Forms 1099 from the businesses that pay you, even if you get paid in cash. Did you earn money from a hobby, making things and selling them but it’s not really a business? Yes, you have always been required to report all the income on your tax return.
Did you have to pay taxes on that income? It all depended on the amounts you earned, your expenses, the type of income, and many variables. There is also a difference between income taxes and self-employment taxes. No matter the circumstances or amounts, you have always been required to report all income on your tax return, even if it turned out you did not owe any taxes on that income after making the appropriate adjustments on the various forms.

So, what is all the hoopla surrounding the new 1099-K reporting? First, it is not new. In 2008, the IRS introduced Form 1099-K, Payment Card and Third-Party Network Transactions to encourage compliance and to ensure online retailers were reporting the appropriate amount of sales for tax purposes.  This effects both GIG Economy workers AND those who own a business that accepts payments via credit or debit cards.
Form 1099-K tracks payments you’ve received through a payment settlement entity, or PSE. That includes tracking payments made through credit cards, online payment services like Venmo or PayPal, and the Digital/Freelancing platforms mentioned earlier that manage client payments for you.

The IRS changed the 1099-K reporting with the 2021 American Rescue Plan. It does not take effect until January 2022 transactions!

Before 2022, you received the 1099-K from payment card transactions (e.g., debit, credit or stored-value cards), and/or in settlement of third-party payment network transactions above the minimum reporting thresholds of more than $20,000 worth of payments, and the service processed more than 200 individual payments. Now, the minimum reporting thresholds is if the service processed more than $600 worth of payments regardless of the number of individual payments or transactions.

The biggest problem is going to be non-taxable transactions that are run through the third-party payment networks. For example, you and your friends regularly go out to eat and you split the bill by everyone sending the money to you through their bank accounts and then you pay for it with your own card. The credit card processor will not be able to differentiate the payment and may issue a Form 1099-K that includes the personal payment. That is not where the problem will occur. It will be the notice you get if you receive a Form 1099-K, Payment Card and Third-Party Network Transactions and the amount listed does not appear on your tax return.

Number one suggestion? If you have a business or even a hobby, have a separate bank account from your personal bank account! It will make tracking taxable versus non-taxable transactions easier.

Number two suggestion? Stay up to date on the reporting requirements and how to put the income on your tax return. Remember, ALL INCOME, whether cash or credit card, IS reportable income on your tax return. Will you have to pay taxes on all that income? The answer to that is “it depends”. The IRS has lots of resources on its website for deciding what is an expense and what can be claimed against your income. It is possible that this may just be the year you want a professional to help you.

Number three suggestion? Check with your state and local taxing authorities to see what filing requirements they have. They can be dramatically different than the Federal IRS requirements. The income from sales IS going to be reported to the taxing authorities. For example: you live in California. You resell items through a couple different online platforms and apps. You will be responsible for filing your Federal Income Tax return, your California Income Tax return, AND the California Department of Tax and Fee Administration (CDTFA) tax return. 
​#ajoyoustaxresult #1099k #gigworker

]]><![CDATA[Student Loan Repayment Gift]]>Sun, 26 Dec 2021 19:21:10 GMThttp://ajoyoustaxresult.com/news-and-blog/student-loan-repayment-giftPicture
Student Loan Holiday-Gift!
President Joe Biden’s administration announced Wednesday, Dec. 22, that it is extending the pause on federal student loan payments until May 1, 2022. Payments will not resume until mid-2022 and interest rates will remain at 0%. President Biden cited ongoing pandemic-related challenges faced by student loan borrowers as reasoning for the new extension in a White House press release. 
#studentloanrepayment #ajoyoustaxresult #taxes2022
]]><![CDATA[Investment Income Change for Earned Income Tax Credit]]>Fri, 24 Dec 2021 08:00:00 GMThttp://ajoyoustaxresult.com/news-and-blog/investment-income-change-for-earned-income-tax-creditBeginning with 2021, the investment income amount limit for Earned Income Tax Credit (EITC) increases from $3,650 to $10,000. This means that taxpayers who in prior years were disqualified from the EITC due to investment income may now be eligible. Investment income includes (but not an all-inclusive list):

Interest
Dividends
Capital gains
Royalties
Rental income
Passive activity income

If you receive a K-1 there may investment income on it that would disqualify you for the Earned Income Credit. I have had this happen to many clients over the years that received some inheritance or received a K-1 for other reasons. Too bad they did not make the law retroactive. We would have gone back and amended a few returns and helped a few people get extra money during these trying times.

​#ajoyoustaxresult #TS22 #EITC22 #EITCInvestmentIncome
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]]><![CDATA[Earned Income Tax Credit (EITC) Lookback to 2019]]>Wed, 22 Dec 2021 08:00:00 GMThttp://ajoyoustaxresult.com/news-and-blog/earned-income-tax-credit-eitc-lookback-to-2019For 2021 tax returns, wage earners who had their income drop will be pleased that the retroactive provision of the Earned Income Tax Credit which allowed taxpayers to use their 2019 earned income to calculate the credit for Tax Year 2020 is allowing taxpayers to use it again for 2021.

Taxpayers will be allowed to calculate their Earned Income Tax Credit for 2021 using their 2019 earned income if 2021 earned income is less than it was in 2019. Even more reason for everyone to research the new tax laws or make sure their tax preparer/CPA is CURRENT with all the tax law changes.

If self-prepared, make sure you look at your 2019 return for the information to be used. It will be EXTRA important that you take their 2019 tax return to your tax preparer/CPA (or include it in documents sent virtually). If the tax preparer/CPA says they do not need the copy (unless they actually prepared your 2019 and already have a copy) then you need to ask them why they are not following the latest tax laws. Even if they did prepare your 2019, ask if they are following the new tax law regarding the Lookback to 2019.

Don’t miss out on credits!
#ajoyoustaxresult #TS22 #earnedincomecreditlookback
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]]><![CDATA[2021 Dependent Care Credit- Expanded and Refundable]]>Mon, 20 Dec 2021 08:00:00 GMThttp://ajoyoustaxresult.com/news-and-blog/2021-dependent-care-credit-expanded-and-refundableFor Tax Year 2021, the Child and Dependent Care Credit has been improved and expanded.
The maximum expenses on which the credit is based has been increased from $3,000 for one qualifying child to $8000 and from $6,000 for two or more qualifying children $16,000.

The credit is now FULLY REFUNDABLE for all taxpayers who have a principal place of abode in the U.S. for more than one-half the year. What this means is for 2021, that even if the credit exceeds the amount of Federal income tax that is owed, the full amount of the refund is still claimed and any credit in excess of the tax liability is refunded. Yes, it can increase your refund.

The maximum credit rate has also been increased from 35% to 50%. Because of this, the maximum credit is now $8,000. Irs.gov has Child and Dependent Care Credit Thresholds chart for the 2021 AGI thresholds and credit rates.
Taxpayers must identify all persons or organizations that provided care for their child, dependent, or spouse. This identification must include the provider’s name, address, and taxpayer identification number (TIN- EIN or Social Security Number).
​ 
#ajoyoustaxresult #2021childcarecredit #2021dependentcarecredit
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]]><![CDATA[Childless Earned Income Credit for 2021]]>Fri, 10 Dec 2021 23:54:10 GMThttp://ajoyoustaxresult.com/news-and-blog/childless-earned-income-credit-for-2021Did you know you do not have to have a qualifying child for EIC/EITC (Earned Income Credit/Earned income Tax Credit) on your Federal Tax Return? And starting with your 2021 filing, there is no maximum age any longer! Prior years the cut off was age 65! They have also changed the minimum age to qualify. It is now NINETEEN- yes, 19 years old. Before it was a minimum age of 25. Also- it if you are a qualified former foster youth or qualified homeless youth, you can qualify, WITHOUT A QUALIFYING CHILD, as young as age 18.

The other requirements for EIC/EITC remain the same such as: you must show proof of earned income; you must not qualify to be treated as the dependent of another person (even if that person does not claim the taxpayer as a dependent); you must have lived in the United States more than half the year (Military personnel stationed outside the U.S. are considered to live in the U.S.); you must have a valid Social Security number (ITIN or ATIN does not work, nor does one marked “Not Valid For Employment”); you may not file as Married Filing Separate.

A good place to start looking at requirements is the IRS website!
https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/who-qualifies-for-the-earned-income-tax-credit-eitc#basic

​#ajoyoustaxresult #taxseason22 #enrolledagent
]]><![CDATA[Tax Identity Theft]]>Sun, 29 Aug 2021 19:59:18 GMThttp://ajoyoustaxresult.com/news-and-blog/tax-identity-theftWhat is Identity Theft?
According to the IRS, "Individual identity (ID) theft is 'a fraud that is committed or attempted, using a person’s identifying information without authority.'"

Individual ID theft may involve stealing someone’s Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN), name, bank account, or credit card numbers, and using that information without permission. Some ID theft starts with something as simple as someone stealing a wallet or accessing your mail.

The IRS Website says Tax-related ID theft can affect you in two main ways
  1. Someone uses your (stolen) identification information to file a fraudulent tax return to obtain a refund.
  2. Someone uses your (stolen) information to obtain employment, which can make it seem like you had more income than you earned.
I would add a third since it is rampant: Unemployment Identity Theft.

​How do you know if you are a victim of Tax Identity Theft?

Oftentimes you first discover it when you try to file your tax return and it gets rejected. The IRS or State rejects the return because it has already received a return using your SSN or ITIN or even one of your dependent's SSN.

The next biggest way is you start getting letters from the IRS or from your state (or even another state). The letter may say you did not claim all your income on your return. It may show wages from somewhere you never worked or unemployment for which you never applied.

Sometimes you will get a letter from the IRS or the state saying more than one tax return was filed using your SSN or ITIN.

Another way you may be notified by the IRS or a state is a letter saying an online account has been created in your name or your existing online account has been accessed (and you know it was not you) or completely disabled.

Another indicator? You receive a letter stating balance due, refund offset notice, or have collection actions taken against you for a tax year when you didn't file a return or receive a refund.

Finally, a notice from the Social Security Administration (SSA) stating benefits will be reduced or stopped because IRS records indicate you received wages or other income from an employer for whom you did not work.

There are some uncommon indicators as well. You or your child does not receive financial aid for college or a lessor amount because of the amount of income that the IRS reported.

​What To Do If You Are A Victim of Tax Identity Theft

The processes for fixing the theft can be overwhelming and long, but they are not impossible. First know there is a lot of help available to you. The IRS and each State has links on their website for what to do. You need to know that each state has their own individual process you need to follow.

The IRS provides help not only through their website but through a Specialized Unit.
Identity Protection Specialized Unit
Toll-free phone number: 800 908-4490
Hours: Monday through Friday 7:00 a.m. to 7:00 p.m. local time (Alaska and Hawaii use Pacific Time)

The list the IRS provides shows what to do if this happens to you. You can search Identity Theft Guide or here is a direct link:
Identity Theft - Taxpayer Advocate Service (irs.gov)

Their suggestions include:
​Make a police report;
In every situation, fill out a Form 14039, Identity Theft Affidavit with the IRS;
Mail in your return (with the Form 14039) if it was rejected for efile;
If you didn't file a return, call the IRS the toll-free Identity Verification line at 800-830-5084; 
​If a letter comes from Social Security, contact the SSA to find out how to correct your Social Security account;

Other actions you can take to protect yourself if your identity may have been stolen?
The IRS has these suggestions:
One last word. Many Tax Resolution Specialists offer services to help you with these processes. If your wages get garnished for something to do with Identity Theft, they can help.
]]><![CDATA[Please Forgive Me...]]>Sat, 28 Aug 2021 22:00:34 GMThttp://ajoyoustaxresult.com/news-and-blog/please-forgive-meWow, I have a tendency to be rude when speaking to folk in that I interrupt them while they are talking. I think I know where they are headed and jump the gun to answer them or comment. I forget to stay in the moment and truly listen to what they are saying. Some of it is being from the east coast where you need to be fast to get a word in edgewise. Part of it was competing with siblings for parents' attention. Part of it is just a character flaw I am desperately trying to fix. Dr. Patty Ann Tublin has a perfect article about 4 Communication Mistakes that Piss People Off. I promise to work on this. If I do it to you while we are speaking, please, oh, please point it out to me. My husband and I have developed a signal that I'm not letting the person I'm communicating with finish their sentences. I am trying ever so hard to keep eye contact and breathe before I speak. So, if you stop what you are saying and look at me and say, "Let me finish, please," I promise not to take offense. www.linkedin.com/posts/joyous-spicer-ea-a6a1862_4-communication-mistakes-that-piss-people-activity-6837056352876138496-SjrL 
~ Joyous Spicer
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