by Renee Lawson | May 6, 2024 | Tax Preparation, Tax Resolution
As the gig economy continues to thrive, more individuals are embracing freelance work as their primary source of income.
While freelancing offers plenty of flexibility and independence, it also comes with unique tax responsibilities and challenges. Freelancers are considered self-employed, which means they must navigate their tax obligations differently than traditional employees.
Those that are new to the world of freelancing may especially run into issues while working through figuring out their new tax predicament. Let’s explore 7 effective tax relief strategies that are specifically tailored for freelancers.
These strategies will be key in helping freelancers maximize their tax savings and minimize any potential tax-related hassles.
#1 Keep Detailed Records
For freelancers, maintaining accurate and organized records is crucial. It’s vital to keep track of all income earned, any business expenses incurred, and copies of relevant receipts and invoices. Keeping track of the records in real time is also helpful so that you’re not left scrambling during tax season trying to remember all of the different sources of income and expenses.
When expenses such as home office costs, equipment purchases, and professional development expenses are incurred, freelancers can maximize their deductions and hopefully reduce what they owe when it comes time to file their taxes.
#2 Separate Personal and Business Finances
To simplify tax preparation and ensure compliance, it’s helpful for freelancers to establish separate bank accounts and credit cards for their business expenses. Mixing personal and business finances can easily lead to confusion and complicate tax reporting.
By maintaining separate accounts, it’s much easier for freelancers to track all of their business-related transactions and easily prove their expenses to the IRS if ever necessary.
#3 Take Advantage of Deductions
Freelancers are entitled to numerous tax deductions that can help lower their taxable income. For example, common deductions include home office expenses, mileage for business-related travel, professional association memberships, health insurance premiums, and many more.
By leveraging these deductions, freelancers can reduce the amount that they owe to the IRS and, in turn, be able to keep more of their hard-earned income.
#4 Contribute to Retirement Accounts
Freelancers and self-employed individuals have several retirement savings options that offer tax benefits. Contributions to retirement accounts such as Simplified Employee Pension (SEP) IRAs, Solo 401(k) plans, and traditional or Roth IRAs may be tax-deductible and can also help freelancers build long-term financial security while reducing their current tax burden.
It’s helpful to do your research or speak with a professional to know which option is best fit for your needs and future plans.
#5 Estimate Quarterly Taxes
Unlike traditional employees who have their taxes withheld from their paychecks, freelancers are responsible for paying estimated quarterly taxes to the IRS. Failing to make these estimated payments can lead to penalties and interest charges.
Freelancers should do their best to accurately estimate their quarterly tax obligations based on what their projected income and expenses are and make timely payments to the IRS to avoid any unnecessary penalties.
#6 Consider Forming a Business Entity
Depending on the circumstances, freelancers may benefit from structuring their business as a separate legal entity, such as a limited liability company (LLC) or S corporation.
Doing so can offer liability protection, potential tax advantages, and even additional opportunities for deductions. As always, it’s important to consult with a tax professional or legal advisor to determine the most advantageous business structure for your specific situation.
#7 Seek Professional Guidance
Always know your options. When dealing with the complexities of self-employment taxes, it can be extremely overwhelming for freelancers. Consulting with a tax professional who specializes in working with self-employed individuals can provide invaluable guidance and support to help walk you through it.
Freelancers who find themselves in tax debt or anticipate they may struggle to meet their tax obligations, should seek immediate assistance from a tax relief professional like the ones at at Action Tax Relief. We specialize in helping individuals resolve their tax debts, navigate complex tax issues, and develop personalized strategies to achieve financial relief and peace of mind.
Don’t hesitate to reach out to our office today at 937-268-2737 for a free, no-obligation consultation to review your options. www.actiontaxrelief.com
by Renee Lawson | Apr 22, 2024 | Tax Preparation
Tax collection is one of the main ways in which the government can generate revenue. The Internal Revenue Service (IRS) serves as the primary agency responsible for collecting the taxes, enforcing tax laws, and ensuring taxpayers stay compliant.
Behind the scenes, the IRS operates through a complex framework of procedures and regulations, and it holds significant authority to go after taxes that are unpaid.
Let’s spend some time understanding the inner workings of the IRS and go over the steps to take if you need assistance navigating the complexities of tax collection.
The IRS’s Role in Tax Collection
At its core, the IRS is tasked with the collection of federal taxes. This typically includes federal income taxes, payroll taxes, and other levies imposed by the Internal Revenue Code.
The IRS is responsible for processing all of the tax returns, assessing tax liabilities, and enforcing tax laws to ensure compliance. It contains an extensive network of offices and personnel, and the IRS regularly conducts audits, investigations, and enforcement actions to address any tax delinquencies.
To make sure taxpayers fulfill their tax obligations, the IRS can use a variety of enforcement tools and procedures. When taxes are overdue, the IRS may issue tax liens, garnish wages, levy bank accounts, and potentially seize property and other assets.
- Tax liens are legal claims against a taxpayer’s property, serving as a form of collateral for unpaid taxes.
- Wage garnishments involve the deduction of unpaid taxes directly from an individual’s wages.
- Bank levies allow the IRS to seize funds from a taxpayer’s bank account.
- In extreme cases, the IRS may resort to seizing assets, such as real estate properties or vehicles.
Challenges Faced by Taxpayers
Navigating the IRS’s enforcement actions and resolving tax debts can be daunting tasks for taxpayers. Many individuals and businesses may find themselves overwhelmed by all of the different tax laws and nuances, plus dealing directly with the IRS can be a nightmare.
Taxpayers facing financial difficulties or unforeseen circumstances may struggle to meet their tax obligations, which leads to mounting tax debts and potential legal consequences. The stress and anxiety associated with IRS enforcement actions can also take a toll on taxpayers’ well-being and financial stability.
It’s vital to know your options when you have tax debt. Luckily, tax relief professionals like the ones at Action Tax Relief can help you navigate the overwhelming processes.
The Role of Tax Relief Professionals
Seeking assistance from tax relief professionals can provide much-needed support and guidance. Tax relief professionals are well-versed in tax laws and regulations, and they specialize in helping taxpayers resolve their tax issues. They can assess a taxpayer’s financial situation, negotiate with the IRS on their behalf, and develop customized strategies to address their tax debts.
How Tax Relief Can Help
Tax relief professionals offer a range of services designed to alleviate the burden of tax debts and provide relief to taxpayers. These services may include negotiating installment agreements, settling tax debts for less than the full amount owed through offers in compromise, and representing taxpayers in IRS audits and appeals.
Additionally, tax relief professionals can provide expert advice on tax compliance, tax planning, and strategies to prevent future tax issues so you can have peace of mind knowing you are prepared.
For taxpayers facing tax issues, understanding how the IRS operates and seeking assistance from tax relief professionals is essential to navigating the complexities of tax collection and finding viable solutions to resolve tax debts.
If you owe $10,000 or more in back taxes, contact our office today at 937-268-2737 for a free, no-obligation consultation so we can go over your options. By leveraging our expertise, you can regain control of your situation and financial future. Contact us today. www.ActionTaxRelief.com
by Renee Lawson | Apr 15, 2024 | Tax Preparation
Tax debt can be a daunting burden for individuals and businesses alike, with consequences that can spiral out of control if left unaddressed.
It’s common for individuals to wonder how they ended up in their current tax debt predicament, so let’s look into the tax debt timeline, starting from the initial accumulation of debt to the strategies individuals can employ to permanently resolve their tax challenges.
The Accumulation of Tax Debt
Tax debt can start innocently enough. Many times it’s due to financial challenges that individuals or businesses face. For individuals, it’s often caused by unexpected expenses, a loss of income, or other financial hardships. Businesses may deal with cash flow issues, economic downturns, or additional unexpected expenses that make it difficult to meet their tax obligations.
Additionally, an oversight or even lack of awareness when it comes to tax deadlines and requirements can contribute to the accumulation of tax debt. This can lead to inadvertently missing tax filing deadlines or failing to report all of their income, which can result in an underpayment of taxes owed.
These missed payments may seem minor at first, but they can quickly escalate into an even larger debt. Some taxpayers may choose to ignore their tax obligations or delay addressing their tax debt due to fear, uncertainty, or a belief that the problem will resolve itself.
However, this approach usually makes the problem worse, as unpaid taxes continue to accumulate penalties and interest, leading to a cycle of increasing debt. The debt can quickly spiral out of control, and individuals and businesses may struggle to catch up on their tax payments, especially if they are already facing financial difficulties in their lives.
Trouble with the IRS
The consequences of unresolved tax debt can be severe and far-reaching, and as tax debt grows, individuals may find themselves in hot water with the Internal Revenue Service (IRS). Taxpayers may receive notices and demands for payment from the IRS, signaling the urgency of addressing their tax liabilities.
The IRS has the authority to pursue aggressive collection actions to recover unpaid taxes. This can possibly mean issuing tax liens, garnishing bank accounts or wages, and even seizing assets.
Tax liens can negatively impact credit scores and hinder individuals’ ability to get loans or credit. Wage garnishments can leave individuals struggling to make ends meet, while asset seizures can result in the loss of homes or other property.
Moreover, the ongoing stress and anxiety due to unpaid taxes can take a toll on individuals’ mental and emotional well-being, which can affect their overall quality of life.
Seek Assistance from a Tax Relief Professional
When faced with overwhelming tax debt and pressure from the IRS, it’s important to know your options. One of the best ways to seek assistance from a tax relief professional.
A tax relief professional can assess your financial situation, evaluate your tax liabilities, and develop a personalized plan to help resolve your tax debt. They are also well versed in negotiating with the IRS and can likely settle debts for less than the full amount owed.
At Action Tax Relief we pride ourselves on being an advocate for our clients, and we work tirelessly to achieve a favorable resolution and alleviate the burden of tax debt. With our guidance and support, our clients can take control of their finances again and finally achieve financial freedom.
If you find yourself bogged down by looming tax debt, don’t hesitate to contact our office today at 937268-2737for a free, no-obligation consultation to review your options. By taking proactive steps to address your tax debt, you can pave the way toward a brighter financial future free from the burden of unpaid taxes. Contact us today. www.ActionTaxRelief.com
by Renee Lawson | Mar 13, 2024 | Tax Preparation, Tax Resolution
Back tax relief is a lifeline for individuals and businesses burdened by unpaid or delinquent taxes.
As tax relief professionals, we understand that navigating the IRS maze of complexities of back taxes can be overwhelming.
In this article, we’ll provide an in-depth perspective on what back tax relief is, its significance, and how it can transform your financial outlook. Contact our office today at 937-268-2737 to understand how exactly back tax relief pertains to your situation.
What Are Back Taxes?
Back taxes, sometimes referred to as delinquent taxes or tax arrears, are taxes that have not been paid by the due date.
They can result from various factors, including underreporting income, failure to file tax returns, audit assessments or disputes with the IRS over tax liabilities.
Regardless of the cause, back taxes accumulate interest and penalties over time, making the debt grow substantially.
The Importance of Back Tax Relief
Back tax relief is a crucial solution for individuals and businesses facing the burden of unpaid taxes. Here’s why it matters:
- Financial Relief: Back tax relief programs aim to alleviate the financial strain caused by unpaid taxes. By negotiating with the IRS or state tax authorities, tax relief professionals can help reduce the overall tax debt or develop manageable payment plans.
- Preventing Penalties: Unpaid taxes often lead to the accrual of penalties and interest, significantly increasing the total amount owed. Back tax relief strategies can include penalty abatements, reducing the financial burden on taxpayers.
- Preventing Severe Enforcement Actions: The IRS has the unbridled authority to take actions such as wage garnishments, bank levies, and property seizures to collect unpaid taxes. Back tax relief professionals work to prevent or release these enforcement actions, safeguarding your assets and income.
- Resolution of Complex Issues: Tax disputes and issues related to back taxes can be intricate. Tax relief professionals possess the expertise to navigate these complexities, ensuring that you receive fair treatment and an optimal resolution.
Key Components of Back Tax Relief
Now, let’s delve into some of the key components and strategies involved in back tax relief:
- Offer in Compromise (OIC): OIC is a program that allows eligible taxpayers to settle their tax debt for less than the full amount owed. Tax relief professionals assess your financial situation and negotiate with the IRS to reach a mutually acceptable offer. However, there are strict eligibility requirements.
- Installment Agreements: An installment agreement enables taxpayers to pay their back taxes over time through manageable monthly payments. Tax relief professionals can negotiate favorable terms and ensure compliance with the agreement. In some cases, you can request a partial pay installment agreement which can reduce what you owe.
- Penalty Abatement: IRS penalties can significantly inflate your tax debt, and tax relief professionals can advocate for penalty abatement, reducing or eliminating these additional charges.
- Currently Not Collectible (CNC) Status: If you are experiencing financial hardship, tax relief professionals can help you obtain CNC status, temporarily suspending tax collection efforts until your financial situation improves.
- Audit Representation: If your back tax issues stem from an IRS audit, tax relief professionals can represent your interests, gather required documentation, and negotiate with auditors to reach a resolution.
The Role of a Tax Relief Professional
Tax relief professionals are your allies in the journey to resolve back tax issues by offering their expertise, negotiation skills, and in-depth knowledge surrounding the regulations and procedures that are necessary when dealing with the IRS.
More than anything, tax relief professionals offer you peace of mind and help alleviate the stress and anxiety associated with back taxes.
If you find yourself weighed down by back taxes, don’t hesitate to contact our office today at 937-268-2737 for a free, no-obligation consultation to review your options and secure your financial future www.ACTIONTAXRELIEF.COM.
by Renee Lawson | Dec 19, 2023 | Tax Preparation, Tax Resolution
Tax issues can be complex and overwhelming, and when you find yourself facing IRS problems or unmanageable tax debt, it may be time to seek assistance from a tax resolution professional.
Tax resolution professionals can help individuals and businesses navigate the intricacies of the tax system and find viable solutions to their tax challenges.
In this article, we will explore the key indicators that signal when it’s time to reach out to a tax resolution professional for assistance.
Note: If any of the reasons below apply to you, contact our office today at 937-268-2737 for a free, no-obligation consultation to review your options www.actiontaxrelief.com
1. Overwhelming Tax Debt
One of the most significant indicators that you should contact a tax resolution professional is when you are burdened by substantial tax debt. Whether you owe back taxes, penalties, or interest charges, a tax resolution expert can assess your financial situation and help you develop a strategy to resolve your tax debt.
2. IRS Audits and Notices
Receiving audit requests or notices from the IRS can be stressful and intimidating. If you are facing an IRS audit or have received a notice of unpaid taxes or discrepancies in your tax filings, it’s advisable to consult with a tax resolution professional.
A tax resolution professional can guide you through the audit process, represent your interests, and ensure that you provide the necessary documentation to address IRS inquiries.
3. Wage Garnishments or Bank Levies
If the IRS has initiated wage garnishments or bank levies to collect unpaid taxes, it’s a clear sign that you need professional, and immediate, assistance.
Tax resolution experts can negotiate with the IRS to release these levies and develop a plan to resolve your tax issues.
4. Threats of Property Seizure
The IRS has the authority to seize your property, including homes, vehicles, and other assets, to satisfy tax debts. If you have received threats of property seizure, it’s imperative to act quickly and seek the expertise of a tax resolution professional to protect your assets and negotiate a favorable resolution.
5. Inability to Negotiate with the IRS
Negotiating with the IRS can be a daunting task, especially if you lack the experience and knowledge to do so effectively. Tax resolution professionals specialize in negotiating with the IRS on behalf of their clients, ensuring that your interests are represented and that you receive fair treatment.
When you encounter any of the above issues, it’s a clear signal that it’s time to reach out to a tax resolution professional. Firms like ours are equipped to assess your tax situation, develop tailored solutions, negotiate with tax authorities, and provide peace of mind during challenging times.
Don’t hesitate to seek professional assistance when facing tax problems, as timely action can lead to more favorable outcomes and financial relief.
Contact our office today at 937-268-2737 for a free, no-obligation consultation to review your options www.actiontaxrelief.com
