Tax planning and filing is an essential aspect of running a successful business. As a business owner, it is important to understand the various tax laws and regulations that apply to your industry in order to make informed financial decisions and avoid potential legal issues. With proper tax planning, businesses can maximize their deductions, minimize their taxable income, and ultimately save money.

This blog post will provide businesses with 5 effective tax tips to simplify the tax process, achieve tax law compliance, and boost business profitability.

Tip 1: Keep Complete and Accurate Records

Maintaining accurate financial records is not only important for the success of your business but also for tax filing purposes. Keeping organized records can help you determine your taxable income and identify business expenses that can be deducted from your taxes.

Here are some tips to help keep your records organized:

• Separate your business and personal expenses
• Keep all receipts and invoices in a separate folder or container
• Keep track of all your business expenses in a spreadsheet or accounting software
• Keep bank statements and any other financial documents in a secure file

By keeping complete and accurate records, you will be better prepared to file your taxes and have a clear understanding of your business finances. Additionally, in the event of an IRS audit, you will have the necessary documentation to support your tax returns.

Tip 2: Understand Deductible Expenses

Business expenses that can be deducted from taxes are defined as expenses that are necessary for the operation of your business. Here are some common deductible business expenses:

• Office expenses (such as rent, utilities, and supplies)
• Cost of goods sold (for businesses that sell products)
• Employee salaries and benefits
• Business travel expenses
• Marketing and advertising expenses
• Professional services (such as legal, accounting, and consulting fees)
• Insurance premiums
• Depreciation of business assets

It’s important to note that not all expenses are considered deductible. It’s recommended that businesses consult with a tax professional to ensure they are correctly identifying and tracking deductible expenses. By understanding what expenses can be deducted, businesses can help minimize their taxable income, ultimately leading to lower tax liability.

Tip 3: Take Advantage of Tax Credits

Tax credits are a dollar-for-dollar reduction in the amount of taxes owed. They are a powerful way for businesses to reduce their tax liability and increase their bottom line. Here are some examples of tax credits for businesses:

• Work Opportunity Tax Credit: This credit is available for businesses that hire individuals from certain groups, such as veterans, long-term unemployed, and those receiving government assistance.
• Research and Development Tax Credit: This credit is available for businesses that invest in research and development activities that improve their products or processes.
• Small Business Health Care Tax Credit: This credit is available for small businesses that offer health insurance coverage to employees.
• Energy-Efficient Commercial Building Tax Credit: This credit is available for businesses that invest in energy-efficient building upgrades.

Consulting with a tax professional is crucial as eligibility and requirements for each tax credit differ. This helps businesses determine which tax credits they qualify for and how to apply for them. By leveraging tax credits, businesses can minimize their tax liability, boost their cash flow, and invest in opportunities for expansion.

Tip 4: Plan for Estimated Tax Payments

As a business owner, you may need to make quarterly estimated tax payments to the IRS to avoid a big annual tax bill. Here’s what you need to know about estimated tax payments:

Who is required to make estimated tax payments?

If you work for yourself or earn income that does not have taxes automatically deducted (like earnings from renting out a property), you must make estimated tax payments. If you work for yourself or receive income that doesn’t have taxes automatically taken out (like money earned from renting the property), you must send in estimated tax payments.

How to plan and make estimated tax payments on time

To plan for and make estimated tax payments on time, here are some tips:

• Estimate your income and expenses for the year to determine your tax liability
• Use the IRS’s estimated tax payment worksheet to calculate your estimated tax payments
• Set up reminders for payment due dates or schedule payments in advance to ensure you don’t miss a payment
• Use the Electronic Federal Tax Payment System (EFTPS) to make your payments online or through a mobile device

By planning for and making estimated tax payments on time, businesses can avoid penalties and interest on underpayment of taxes, ultimately leading to a smoother tax process.

Tip 5: Seek Professional Help and Tax Relief Options

It is important to seek professional help from a tax advisor or accountant when filing taxes, as they can provide invaluable insight into the ever-changing tax laws and regulations. Here are some reasons why it’s beneficial to hire a professional:

• A professional can help maximize deductions and credits that may otherwise be overlooked.
• They have an in-depth understanding of tax laws and regulations, so they can ensure your business is compliant with all applicable tax laws.
• They can offer advice on planning for future changes in taxation laws and advise you on the best strategies for minimizing your taxes.

Additionally, many businesses have been affected by natural disasters, pandemics, or economic hardships and may be eligible for tax relief programs. Tax law advocates at Ideal Tax offer the power of attorney for taxpayers when it comes to relief programs. Tax relief programs offer deferments on certain taxes due or reduced interest rates for late payments. It is important to understand what options are available and speak with a tax advisor or accountant to find out if you qualify for any of these programs.

Final Thoughts

Filing taxes is an important responsibility for any business owner. It’s important to stay up-to-date on the latest changes in taxation laws and regulations and understand which tax credits, deductions, and relief programs are available. Seeking professional help from a tax advisor or accountant can ensure you maximize your deductions and credits while staying compliant with all applicable laws.

By following these tips, you can make sure your business is well-prepared to file taxes and maximize savings.

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You’d be wrong to limit tax preparation to the time leading up to the end of the fiscal year when payments and returns are due. You would be wise to include tax preparation in your plan to amass riches. Taxes are a source of stress and confusion for many people, but they may be used to your advantage if you take the time to plan. Yet, if you believe that tax planning is solely necessary for those with a high net worth or big salaries, you’d be wrong again. Here are the six most important things to remember when completing your tax return.

1. Tax Credits

Business owners typically regard increasing sales figures and a broadening customer base as major indicators that their company is progressing toward its financial goals. Despite this, a fundamental understanding of the tax code is essential. This understanding should not be limited to the taxes you are personally liable to pay.

Whether an entrepreneur chooses to handle their bookkeeping or collaborates with a tax expert, it is prudent for them to be up to date on the many tax credits and adjustments offered and the procedures involved in using them. Some of these credits include research and development credit, disabled access credit, the Employee Retention Credit, and empowerment zone employment credit, just to mention a few. These vital procedures for claiming significant tax credits are something that every owner of a business should be aware of.

2. Records and Receipts

There was more pain in maintaining tax documents than today. Nowadays, many opt to keep their paperwork in electronic format, clearing up valuable desk space. Several institutions now issue digital copies of tax forms to reduce your tax paper trail further. If you’re looking to save time and cut down on paper, storing your tax records and receipts online or in the cloud may be the way to go. But be sure your cloud storage provider uses encryption on your data to prevent identity theft.

A password is an excellent way to secure your data and prevent unauthorized access. Scan documents and save them in a safe location with a backup if possible. Unless it’s an original deed, title, valuation, or investment document, you can throw away the paper duplicate. Be sure to protect these (digital) records.

3. Filing Status

The choice of filing status is one of the initial steps in completing a federal income tax return. Picking the correct one is vital since it determines your tax bracket if you don’t itemize, the types and amounts of additional tax credits and deductions you can claim, and the standard deduction if you don’t itemize. Some people have no trouble deciding what tax status they should use, while others have a more challenging time making that call.

You can only claim the “single” filing status if you’ve never been married and don’t have any dependents. Choosing the correct filing status affords you specific legal safeguards. Each person on a joint return is equally accountable for its accuracy.

4. An Extension

You have the option to obtain an extension if you are unable to fulfill the tax filing deadline. By sending a form, “Extension to File,” to a taxing agency on or before the deadline, you can ask for a delay. A legitimate tax extension alters your tax return due date. There are numerous ways to ask for an extension; you can do so at no cost by sending a form to the taxing agency via the agency’s free file program.

The period you have to pay your taxes is not extended by an extension, even though it provides you an extra six months to file your tax return. You must still make your payment by the deadline.

5. Free Filing Programs

The Free File Program eligibility requirements include a low income and a relatively simple tax filing situation. The IRS Free File Program is a collaboration between the Internal Revenue Service and private companies that produce tax preparation software. It is available to taxpayers with an adjusted gross income overall income minus specific deductions of less than $73,000. It’s possible you haven’t heard of this program even though it’s been around for a long.

The companies that offer free versions of tax preparation software online typically don’t promote themselves. If you qualify, free tax preparation help is available through the taxing agency’s Volunteer Income Tax Help Program.

6. Online Taxing Account

Setting up an online tax account is recommended to avoid the hassle of calling or writing to the taxing agency. Logging into an account lets you see tax returns and forms filed in previous years, check payment balances, and make payment arrangements. You may adjust your notification settings via the convenient web interface. If you want, the taxation authority can opt to send you notices through email. It also lets you delegate tax-related tasks to a trusted advisor.

To get your new Social Security card, inform the Social Security Administration of your name change as soon as possible.

No individual tax strategy can be created in solitude. As such, you should begin working on it as soon as possible throughout whatever phase of financial planning you undertake, whether that’s annual or long-term. To take a comprehensive view, it’s essential to consider all aspects of your financial situation, including your income and the tax bracket you fall into, the taxes you’re currently paying and those you may owe in the future, any investments you now have or plan to make, and your long-term financial goals.

The post 6 Things You Must Always Pay Attention to When Doing Taxes appeared first on MoneyMiniBlog.

Preparing your taxes can be an intimidating process. With the ever-changing Canadian tax laws and regulations, it is no wonder many Canadians are overwhelmed when they file their taxes. Having a good understanding of what is required from tax preparation services in Canada will make the process easier and less stressful.

Here are ten things you should know before you file your Canadian tax return.

1. Understand All Available Deductions

Canadians are able to claim deductions on their income tax which can save them a significant amount of money. These deductions vary based on personal circumstances, such as whether an individual is a student, whether they have children or dependents, or if they’re making charitable donations. 

2. Know Your Residency Status

Your residency status will determine what types of income you need to report on your tax return, as well as the type of credits and deductions you may be eligible for. It is important to understand whether you are a resident or non-resident of Canada for tax purposes before filing your returns.

3. Understand the Difference Between Income Earned Inside and Outside of Canada

If you have worked in multiple countries, then it’s important to understand how different income sources will affect your taxes in Canada. Different types of income from abroad may be subject to different rules than those earned within Canada itself, so it’s important to make sure that all income sources get declared accurately on your tax return.

4. Don’t Forget About Self-Employment

Self-employment means that any profits earned through freelance work, such as consulting or tutoring, must be reported on the appropriate tax forms and taxed as if they were regular employment income; failure to do so could result in fines or penalties down the line. Also, keep track of expenses related to self-employment activities, as these could potentially be deducted from taxable income on the return as well!

5. Take Advantage of Pension Splitting

Many couples find themselves in a situation where their combined incomes can place them in a higher marginal tax rate bracket. This can lead to greater overall financial deductions from their income, reducing the benefit of their hard-earned savings. 

Fortunately, an innovative solution exists for spouses receiving pension incomes. They can legally split these incomes between both spouses, thus allowing them to drop into a lower marginal tax rate bracket and potentially save significantly over time. 

6. Claim Family Benefits

Most people are unaware that there are numerous childcare benefits and credits available depending on if you have dependent children. For those parents that do, taking a few extra minutes when filing to submit the proper claims can mean tremendous cost savings throughout the entire tax year. 

7. Consider Hiring a Professional

For those trying to take charge of their taxes, hiring professional tax preparation services can be a smart solution. Not only will they be able to check the accuracy of work and paperwork, but they may also uncover helpful deductions that might have otherwise gone unnoticed. 

8. Make Sure All Dates Are Correct

Ensure that all dates listed on documents match up with what has been filed, failure to do so could delay processing time and result in additional fees being owed later down the line.

9. Remember Deadlines

The deadline for filing taxes in Canada is April 30 each year; failing to meet this date can result in hefty fines or penalties being assessed against taxpayers who fail to submit their returns by this time.

10. Double-Check Everything

Before submitting any forms or documents, double-check them for accuracy. One small mistake could mean big headaches later down the line if errors aren’t caught early enough.

The post 10 Crucial Tax Preparation Tips for Canadians appeared first on MoneyMiniBlog.

As an ex-pat, it’s important to stay up-to-date on your tax obligations. While taxes may not be the first thing on your mind when you move abroad, they can have a big impact on your finances. The laws related to taxes are also constantly changing, so it is crucial to stay informed about the latest developments in order to ensure that you comply with all applicable regulations. Here’s what you need to know about taxes as an ex-pat.

1. Consulting With a Qualified Tax Professional is a Smart Move

While there is a lot to learn while filing taxes as an ex-pat, always remember to consult professionals if you have any questions or aren’t sure how to proceed. In the words of the experienced tax specialists from 1040Abroad, experts in the field can help you navigate any complications and make sure you’re tax compliant and familiar with any applicable deductions or credits that may apply in your situation. It’s important to understand how the countries you pay taxes in interrelate, so it’s worth taking the time to find a qualified professional who can provide guidance for your specific circumstances. While it will likely come at a cost, investing in someone who knows the ins and outs of international taxation could save you from getting yourself into trouble later on.

2. You May Be Eligible For a Foreign Tax Credit

The foreign tax credit allows you to offset the amount of taxes owed in your home country by reducing the amount of taxes that are due on income earned abroad. It’s important to remember that this credit is only available if you have paid taxes in both countries and that it must be applied for before filing your returns. Taking advantage of this opportunity can be a major financial relief for ex-pats as it can help to significantly reduce their overall tax burden. Be sure to explore all available options before filing your return and talk with a qualified professional if necessary.

3. You Should File Your Taxes As Soon As Possible

Tax season can be confusing enough even when you’re staying in one place, so as an ex-pat it’s important that you understand the tax implications of living abroad. Filing taxes is one area where you don’t want to procrastinate–penalties can be steep for late arrivals! It is always better to stay ahead of the game and file your taxes promptly so that you don’t have to worry about additional fees or interest charges. With careful planning and smart strategies, you can make sure that tax season goes off without a hitch!

4. You May Still Be Required To Pay Taxes In Your Home Country

It’s important to remember if you’re an ex-pat living and working abroad, you may still be liable to pay taxes in your home country. This is because some countries require citizens to pay taxes based on their citizenship status, regardless of where income is earned. To avoid potentially paying double taxes, research the taxation laws in both your current host country and your home country so that you understand what is expected from you. It’s also important to keep accurate records throughout the year so as your income changes, you’re able to quickly file any necessary paperwork. Being proactive when it comes to filing taxes will save a lot of time and stress down the road.

5. Be Sure To Keep Good Records Of All Your Expenses

You can often deduct expenses like housing costs, travel insurance, business expenses, and even part of your overseas relocation costs on your tax return. That’s why it’s so important to keep detailed and accurate records of your expenses: they are the basis for deductions. Gather canceled checks, credit card statements that correspond with foreign purchases, and all other relevant documents throughout the year. This will save you a lot of hassle come tax time! Be sure to contact a tax specialist if you have questions; they know the ins and outs of filing taxes abroad much better than you do.

6. You Should Stay Abreast Of Any Changes To Tax Laws

Tax laws are constantly changing, so it’s important to stay up-to-date with the rules in both your current host country and your home country. Each year, be sure to check for any modifications or updates that might affect you before filing your returns. This includes evaluating whether or not you’re eligible for any tax credits or deductions that weren’t available the year before. It also helps to know the dates for filing taxes in both countries so that you can be sure to submit everything on time. All of this information is easily accessible online, or if you prefer, a qualified tax specialist can also provide guidance.

Filing your taxes as an ex-pat doesn’t have to be a stressful experience. By understanding the rules applicable to you and being proactive about staying organized and up-to-date with any changes to taxation laws, you can ensure that your return is filed accurately and on time. Be sure to budget enough time when preparing your returns, and don’t forget to research all available deductions before submitting them! With careful planning, filing taxes abroad will become much simpler and less intimidating over time.

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Small business owners frequently look for ways to reduce their company’s tax liability. Consider whether the six strategies listed below can assist you as you work with your tax advisor. First, let’s look at how taxes affect your business.

How Taxes Impact Your Business

Every person that owns a small business in the United States is obligated to pay taxes. While the exact amount differs by state and business structure, tax payments are one of the most expensive aspects of running a small business.

A typical small business pays a tax rate of 19.8% on its earnings; therefore, taxes are the most significant business expense. Small business owners who file their taxes late, incorrectly, or not at all risk fines or even criminal prosecution.

However, small-business taxes aren’t as complicated as you think, and you can easily understand the world of taxes. You can legally reduce your tax liability with the help of a certified public accountant (CPA) so that you are not left with a large tax bill at year’s end.

Tax Management Tips for Small Businesses

Here are six tax-saving tips to help you tackle your small business taxes.

1. Create a plan for paying taxes

The sooner you know your company’s general outlook for the tax year, the better prepared you will be to avoid cash flow disruptions — either by setting aside money or securing a line of credit in order to pay the IRS.

If you qualify, consider the following options: Estimated taxes are frequently based on the previous year, so if you had a bad year, you could pay a low estimated tax this year to sustain cash flow. You can collaborate with your accountant to estimate the amount of tax due so you can be better prepared for the inevitable payment.

2. Set up a limited company

Setting up a limited company is one of the best ways to receive tax-efficient payments. With a limited company setup, you get to

• Define your brand;
• Own everything you do;
• Run your business in the most tax-efficient way;
• Pitch for work you couldn’t get as a sole trader.

3. Look into small business tax deductions

Reap the benefits of a long list of deductions that can reduce your tax bill. This strategy represents one of the most crucial small business tax tips. Tax deductions reduce the total income subject to federal and state taxation. There are plenty of tax deductions for which you may be eligible; the real difficulty is deciding which ones.

Marketing costs, rent, travel expenses, and many other charges can all be written off or deducted when filing taxes. However, each deduction has its own set of eligibility requirements. List the specific deductions on your tax return to maximize your tax deductions.

4. Search into small business tax credits

Tax credits are the closest thing to free money you’ll find. Tax credits aid you in reducing your small business tax bill because they provide dollar-for-dollar reductions in your tax liability.

You may be eligible to receive a tax credit when you provide subsidized health coverage or a retirement plan to your employees. Pass-through entity owners (sole proprietorships, partnerships, limited liability companies, and S corporations) can use personal tax credits to reduce their business income tax liability.

5. Maintain your quarterly tax payments

Anyone who files a federal income tax return and expects to owe more than $1,000 must make quarterly estimated tax payments. You’ve probably been paying quarterly taxes for a long time but didn’t realize it.

If your employer submitted Form W-4, they automatically estimated your quarterly taxable income for you and deducted them from your paychecks. You must evaluate and make those payments now that you have your own small business.

6. Learn about money transfers and taxes

Understanding the fundamentals of international money-transfer laws is critical if you are transferring money abroad as a small business. If the transaction exceeds $10,000, you must report your transaction to the Internal Revenue Service (IRS). Failure to do so may result in fines as well as other legal consequences.

Wrapping Up

In addition to considering our small-business tax tips, keep in mind that you should seek advice from an accounting professional. Regular meetings with an accountant will help you improve your bookkeeping practices. Those regular meetings will also improve your understanding of the financial workings of your small business, in addition to managing the nuts and bolts of tax preparation.

The post Tax Management for Small Businesses: Tips & Tricks You Didn’t Know appeared first on MoneyMiniBlog.

If you’re someone who was born outside of Portugal and now lives there or someone who is considering moving to Portugal, there are some pretty big tax breaks available to foreign residents of Portugal. The following will explore everything you need to know about these tax breaks and qualifying for them. Of course, everyone’s financial standing and needs are going to be different. It’s a good idea to take this information to your preferred accountant or immigration lawyer to receive a breakdown that’s specific to you and your current situation.

Why Portugal?

You might be wondering why a person would want to live in Portugal. It’s a country that has laid low in the news as of late, so it might be a nation you’re unfamiliar with outside of your grade ten history class.

Portugal is a country on the smaller side that sits on the Liberian Peninsula, in southwestern Europe, just to the west of Spain. It’s one of Europe’s oldest countries, having been continuously inhabited since prehistoric times. Portugal has a long history, from its Celtic peoples to the Roman empire, followed by invasions from Germanic peoples and then Islamic rule under the Moors, who were expelled as a result of the Reconquista. It became a maritime and commercial empire during the 15th and 16th centuries, at which time massive colonializing efforts spread the Portuguese language around the world.

Known for its brilliant Mediterranean climate, fantastic food, stellar music, and rich culture, Portugal is a favorite tourist destination for countless people. Gorgeous turquoise beaches and colorful medieval villages built into cliffs make Portugal one of the most charming places you can spend your time.

The country also has some outstanding social services, including its Health Service, which is available to all full-time residents and taxpayers in the country. Public hospitals and inexpensive private clinics, as well as well-stocked pharmacies, is a given in Portugal.

As well, compared to many other European countries, Portugal is fairly affordable. Typically expenses can be expected to be somewhere around $2800 per month. Additional people often cost much less than this per month, as the initial estimate contains $1300 for a furnished two-bedroom apartment. Please note: these prices are anticipating living in one of the major metropolitan areas; this can cost a lot less in smaller cities and villages.

Simple Visa Applications

Portugal is eager for new residents and has made their visa application process smooth. You’re able to spend up to 90 days in the country without a visa, but if you want to stay longer, you’ll be applying for a D-7 Residence Visa. You’ll need to meet a few standards, including:

• proving that you can provide for yourself (generally $1000 per month per person),
• having an international health insurance policy that will provide for you between arrival, and
• qualification for Portugual’s Health Service, and providing a clean criminal background check.

The process usually takes about eight weeks and should be started no less than three weeks before you plan to depart and no more than 90 days before you plan to depart. The cost itself is under $150 plus any courier fees needed.

Why Do Taxes Matter?

Understanding the world of taxes can dramatically alter your take-home pay at the end of each tax season. Every country in the world has its own taxation system, and within those systems, many provinces, territories, and states have additional tax systems. While it might be tempting to simply ignore taxes until the week before tax season, as there’s nothing you can do about them, standard financial wisdom suggests otherwise.

Learning about the tax system you work within can allow you to make minor changes to your work and earnings in order to reap major savings later on. People can save hundreds, thousands, and even tens of thousands of dollars if they understand their tax system.

Beyond this, you have another reason to pay attention to your local taxation system. If you make a mistake, you could end up being fined a fair amount. You could even face jail time if it’s believed you were evading some or all of your taxes. It’s in your best interest to understand what’s expected of you from a legal standpoint so you, your family, and any businesses you run can be properly managed and cared for.

The Portugal NHR Regime

The NHR Regime in Portugal is the non-habitual tax regime. The goal of Portugal’s NHR tax regime is the attraction of foreign residents to the country. Benefits include:

• 0% tax on foreign income (capital gains tax and rental income not included),
• 0% tax on crypto (provided you’re not using crypto as your main source of income and you’re not a trader),
• 0% tax on dividends for foreign companies, and
• 0% tax on wealth.

You can expect a 10% tax on your foreign pension (which in and of itself might be a stellar deal depending on where your pension is from) and a 20% tax on freelancing (note: this is a cap, meaning you can’t be taxed more than 20% on freelancing, but could be taxed less). Basically, on almost all sources of foreign income, you have a tax exception for an entire decade.

Are There Minimum Stay Requirements?

One of the most wonderful parts of this regime is that there’s no minimum stay required. You can live in Portugal as long or as short as you’d like, and you still qualify, provided you meet the other criteria.

Value-Added Jobs

Visa sponsorship in Portugal is particularly straightforward for anyone who has what’s deemed a high-added-value job. While some of these jobs are standard for easy visas, like general practitioners, computer programmers, and biotechnology researchers, many of their most sought-after jobs are not what you’d expect. Singers, sculptors, musicians, painters, architects, archaeologists, designers, and performing and television artists are all on Portugal’s desirable jobs lists.

The above information should have clarified the basic structure of Portugal’s NHR tax regime, why it’s important, and who it might interest. Again, it’s always a good idea to speak to an immigration lawyer and an accountant when making major decisions regarding international residency and foreign taxation options. With a little planning and some wonderful visa and tax regimes, you could find your money going a lot further, all the while surrounding yourself with a beautiful new culture and country to explore.

The post The What, Why & How of Portugal’s Non-Habitual Resident (NHR) Regime appeared first on MoneyMiniBlog.

Tax time rolling around can become a very stressful time for many Americans. Not only can they be complicated to file in some cases, but many people may also find them behind on their taxes, owing money to the IRS due to an inability to pay in the past.

While struggling with taxes can feel like a difficult problem that you need to take on alone, that isn’t actually the case. Things like the IRS fresh start program helps taxpayers be able to manage and reduce their debts.

However, not everyone will immediately qualify and be eligible for the program. While this isn’t a completely exhaustive list, let’s go through four of the biggest eligibility requirements for qualifying for the IRS Fresh Start Program.

1. You Have Kept Up With Filing Tax Returns

The first requirement is that you are filing your taxes regularly, even if you are not making tax-related payments. Specifically, you need to have properly filed all tax returns in the previous three years in order to be eligible.

If you don’t file taxes for years, the IRS may not have a lot of interest in helping you get out of debt. If you struggle with filing your own taxes for one reason or another, consider reaching out to an expert who can help you out. They are generally quite affordable and can help ensure that all of your paperwork is organized and filed correctly.

2. You Must Not Owe More Than $50,000

The amount you owe also comes into play when determining your eligibility for this program. To qualify, your total amount owing to the IRS needs to be less than $50,000.

The IRS considers any tax debt over $50,000 to be serious, and they will take their collection efforts to the next level to ensure they can get their money. While having more than $50,000 in tax debt may eliminate you from being able to enroll in this program, there are other resolution options you can still consider like an installment agreement, so don’t feel like this program is your only option.

3. You Must Agree to Pay Back What You Owe in 6 Years

In order to be eligible for this program, you also need to show a willingness to pay back what you owe. The IRS wants to see effort and progress on your end, so you need to agree to pay back the total amount you owe (or whatever you and the IRS settle on) in six years.

4. You Must Have Never Been Involved With Tax Evasion or Fraudulent Activities

Of course, the IRS also requires that you haven’t been involved with tax evasion or fraudulent activities like filing a false return, failing to report all income received or flashing claiming deductions or credits.

If you have been involved with these sorts of things in the past, you likely aren’t in the best graces with the IRS to begin with, and they may not be as willing to help you.

We hope that this article has been able to help you see whether or not you are eligible for the IRS fresh start program. Keep in mind that being eligible doesn’t mean you instantly join the program, as you still need to apply.

The post 4 Ways to Be Eligible for the IRS Fresh Start Program appeared first on MoneyMiniBlog.

Many small business owners are stressing about missed deadlines and filing mistakes. The Canada Revenue Agency (CRA) can impose fines on entrepreneurs who do not pay their taxes on time.

Fortunately, you can reduce stress by getting some of the crucial work done early. Read on and learn three easy tips to avoid fines when filing taxes.

Know the Taxes You Need to Pay

In Canada, businesses need to file an annual business income tax return. There are different tax returns to file depending on the legal structure of your business.

You must report your business income on Form T2125 or a T1 personal tax return form if you are:

• Self-employed
• Owner of a sole proprietorship business
• Owner of a partnership business

If you own an incorporated business, you must use a T2 corporate income tax return form to report your business income.

If you made a mistake in your tax filing, you must complete a CRA voluntary disclosure form. CRA’s Voluntary Disclosures Program (VDP) allows Canadians to come forward to address errors in their tax filings.

Get Organized

One way to avoid fines from CRA is to get documents organized well before tax season. Remember that the earlier you start preparing, the easier the process will be.

You will need to have a filing system in place for all your relevant tax information. Keep receipts, income statements, and tax slips somewhere safe so you know where to find everything come tax time.

If you want to take your filing system to the next level, use a digital filing system. However, you will need to upload your documents to bookkeeping software.

The organization process might be stressful, but having a filing system can prevent last-minute document hunts.

Take Advantage of Tax Credits and Deductions

Knowing what tax credits, you can claim can help lower your balance owing come tax season. In Canada, several tax incentives are available to businesses of all sizes in various sectors. Check and see if your business is eligible for tax credits.

Aside from claiming these incentives, you should also identify tax deductions that apply to your business. Claiming all qualified company expenses as deductions can help lower your total taxable income.

If you have a home-based business, consider the following when calculating tax deductions:

• Car expenses
• Mortgage interest
• Internet service
• Maintenance, repairs, and utilities

You can deduct your vehicle gas, insurance, and repair expenses from your taxable income if you drive to work. However, you will need to keep a mileage log if you choose to do so.

If you want to maximize your savings, you can hire a tax accountant. With their help, you can take advantage of additional deductions. For example, they can calculate capital cost allowance, which accounts for the depreciation of business-related assets like computers and machinery.

You can also maximize your Registered Retirement Savings Plan (RRSP) contributions. Doing so can help reduce your total taxable income.

Giving to charity and presents to your employee can also help lower your taxes. If your business donates to a registered charity during the year, you can deduct these expenses from your taxable income.

Tax season can be overwhelming if you are not ready to file your return on time. One way to avoid fines is to organize your documents early. You will reap the benefits of reduced taxable income if you have more time on your hands.

The post A Quick Guide to a Stress-Free Tax Season for Businesses in Canada appeared first on MoneyMiniBlog.

Filing your business taxes provides the IRS with important information regarding your company’s total costs, income, and any tax deductions you’re claiming from the previous year. If you give the IRS reason to believe that you cheated in filing your business returns, they might decide to commit resources just to ensure that you reported accurately. Receiving an IRS tax audit request can be an absolute nightmare without adequate preparation.

A tax audit can be incredibly hectic, especially for you as a small business owner, considering that you don’t have the resources necessary to hire a qualified accountant. With all the numerous deductions and forms involved in filing tax returns, you can easily miss the small details or miscalculate your cash flow. While there is no straightforward way to be completely insulated from possible tax audits, working with expert tax accountants from Pherrus Financial can help streamline your accounting tasks and minimize your tax burden. To reduce your chances of having to face the IRS, follow the best practices outlined here:

1. Double-Check Your Numbers

Any income tax form you receive is also reported to the IRS. The IRS expects the numbers you submit in your tax return statement to correspond with information obtained from third parties. If there are any conflicting details, the IRS could issue you a notice to correct the errors, or they could choose to audit your returns.

If your tax return numbers don’t add up, it will attract a lot of unwanted attention from the regulators. Since some mistakes easily go unnoticed, remember to double-check any math and information put forward as part of your tax returns. Consider hiring an accountant to prepare your returns or use tax preparation software to help ease the process.

2. Report Income and Expenses Accurately

You’ll significantly increase your chances of being audited if you maintain all your business expenses and income in a corporate bank account while retaining all your business expense receipts. This would go a long way in simplifying your tax return preparation and will be solid support for your returns if you were to be audited. In contrast, you’ll significantly increase your chances of being audited if you try overstating your expenses or hiding your income. While it’s okay to round off numbers, rounding to tens or maybe hundreds of dollars can indicate to the IRS that you’re cooking things up.

3. Don’t Mix Personal And Business Deductions

The IRS is often keen to spot small business owners trying to include non-business-related deductions such as entertainment, travel, merchandise, cell phones, or other costs. Always remember that only business expenses are allowed to be deducted. Ensure you understand what percentage of business entertainment expenses is valid as deductibles. For instance, taking your personal vehicle mileage as deductions is a common cause of IRS audits for small business owners.

Endnote

The bottom line is that if your operations are honest and your records are beyond reasonably accurate, you have nothing to worry about. However, it’s always wise to remain prepared for an audit since you don’t want to waste precious time talking to the taxman when you don’t need to. Maintain business records for at least three years, including expenses and income. If you are unsure about anything, don’t hesitate to seek the assistance of a professional accountant.

The post 3 Tips to Avoid a Small Business Tax Audit appeared first on MoneyMiniBlog.

No one likes owing money to the government, and tax debt is no exception. If you find yourself in this situation, it’s important to know that you’re not alone and there are steps you can take to minimize the impact on your life. Here are some useful pieces of advice on how to properly deal with your tax debt.

Don’t Ignore The Problem

We’ve all been there before. We get a tax bill that’s higher than we expected, and our first instinct is to just ignore it. After all, what’s the worst that could happen, right? Wrong.

The truth is, ignoring your tax debt can lead to some very serious consequences. The IRS can take legal action against you, including garnishing your wages or seizing your assets. And even if they don’t take those extreme measures, the interest and penalties on your tax debt will continue to grow, making it even harder to pay off.

So if you’re facing a tax bill you can’t afford, don’t just ignore it. There are options available to help you deal with your tax debt, and the sooner you take action, the better.

Hire a Tax Relief Company

If you’re struggling to pay your taxes, one option is to hire a tax relief company. This is one of the most important pieces of advice when it comes to dealing with tax debt. These companies specialize in helping people negotiate with the IRS and can often get you a reduced payment plan or even a complete waiver of your taxes owed. They can also help you reduce the amount of interest and penalties that you owe. While there is no guarantee that hiring a tax relief company will work, it’s definitely worth considering if you’re struggling to pay your taxes.

There are many reputable companies out there that can offer you tax relief, so make sure to do your research before choosing one. An excellent Mercury news article reviews the best tax relief companies you can select according to your needs. Whether you need tax relief assistance for your company, a mobile app for easy monitoring, or assistance with criminal tax issues, getting useful insights from reviews and forums can help you make informed decisions. Be sure to read reviews and compare pricing before making a final decision. It can give you peace of mind and help you get your finances back on track.

Contact The IRS

If you’re struggling to pay your taxes, don’t hesitate to reach out to the IRS. The agency has a number of programs in place that can help you get back on track.

First, consider submitting an offer in compromise. This is an agreement between you and the IRS that allows you to settle your tax debt for less than what you owe. To qualify, you’ll need to prove that paying your full tax bill would create a financial hardship.

If an offer in compromise isn’t right for you, the IRS also offers payment plans. These plans allow you to spread out your payments over time, making them more manageable.

Know Your Options

The process of dealing with your tax debt can be a daunting and stressful task, but it is important to remember that you have options. Many people are unaware of the different relief programs that are available to help them get out of debt, and as a result, they end up making decisions that are not in their best interests.

If you are struggling with tax debt, the first step is to educate yourself on your options. There are several different programs that can help you reduce or eliminate your debt, and it is important to choose the one that is right for your unique situation. The IRS offers a variety of payment plans and settlements that can help you get back on track, and there are also private companies that specialize in resolving tax debt.

Once you have a better understanding of your options, you can start to make some decisions about how to best resolve your debt. If you are not able to pay off your debt in full, you may be able to negotiate a payment plan with the IRS that will allow you to make smaller monthly payments. There are also settlement programs that can reduce the amount of money you owe, and in some cases, eliminate it entirely.

If you are facing a large tax bill, it is important to remember that you have options. By knowing your choices and exploring all of the different relief programs that are available, you can make the best decision for your unique situation and get on the path to financial freedom.

Talk to a Tax Attorney

It’s always a good idea to consult with a tax attorney when you’re dealing with your tax debt. A tax attorney can help you understand your options and figure out the best way to deal with your debt. You should also know that there are ways to discharge your tax debt in bankruptcy. However, this should be a last resort option, and you should speak with a tax attorney before considering this option.

Stay Organized

This is a useful piece of advice on how to properly deal with your tax debt. This means keeping track of all correspondence from the IRS, as well as any payments you make. Keeping everything in one place will make it easier to keep track of and will help you avoid any mistakes. By staying organized, you will also be able to keep track of your payments and deadlines, which can help you avoid any penalties or interest charges.

Be Proactive

The best way to deal with your tax debt is to be proactive about it. This means that you should start looking for ways to reduce your tax bill as soon as possible. There are a number of things you can do to reduce your tax bill, and the sooner you start, the better off you’ll be.

Some of the things you can do to reduce your tax bill include:

• Review your deductions and make sure you’re taking advantage of all the deductions available to you.
• Check your withholding allowances and make sure you’re having the right amount of taxes withheld from your paychecks.
• Stay on top of your estimated tax payments. If you think you’re going to owe taxes at the end of the year, make estimated tax payments throughout the year to avoid a big tax bill at once.
• Keep good records. This will help you if you’re ever audited by the IRS.

If you’re proactive about your taxes, you’ll be in a much better position to deal with your tax debt and avoid problems down the road.

These are just a few useful pieces of advice on how to properly deal with your tax debt. If you’re struggling to pay your taxes, don’t hesitate to reach out to a tax professional for help.

The post Useful Pieces of Advice on How to Properly Deal With Your Tax Debt appeared first on MoneyMiniBlog.

People’s tax returns from the IRS may be a nightmare. If you do not pay your taxes on time, the IRS may levy fines or take your property or other assets. If you owe the IRS a lot of money, you are not alone in this game. According to federal research, almost 21% of netizens do not have enough money to properly pay their taxes.

If you stand among such citizens then worry not. Though the IRS charges penalties, they also provide relief to needy citizens. If you owe large taxes then you can get a relief of paying your taxes in installments, rather than paying all at once. This relief makes you free from the burden of taxes and lets you manage your business easily.

In addition, if you think that there are reliefs that wipe out the taxes completely then you are mistaken. You can contact Coast One Tax Group for valid or legal advice on your back taxes. Moreover, we have explained here briefly as well about the possible tax relief and how you can avail them.

What is Tax Relief For Taxpayers?

Tax relief is a relief in the amount of money you owe to the IRS in the form of taxes. This relief does not always imply that you have no monetary responsibility to the IRS. Conversely, this relief involves getting payment plans for your heft taxes or cutting a little bit of the tax from the whole amount. This relief lets you carry the burden of taxes easily.

In order to get the relief, you need to provide evidence that you are eligible for certain relief. Then you can negotiate with IRS officials in order to get the relief.

How Does Tax Relief Work?

Tax relief can be granted to legally eligible individuals who are not in the situation to pay off all of their taxes. They can negotiate with the IRS and get the following reliefs.

1. Payment Plans

Making installments of your existing overdue payments is the best and simplest option to seek relief from your tax issues. Typically, the IRS will not authorize these installments unless you negotiate with IRS authorities and demonstrate that you fulfill their specific requirements. To grant you installment approvals, the IRS has the following general words.

• You must be able to show that you have already filed your taxes.
• You’ve always been on time with your tax payments.
• You can choose to pay a certain amount each month.
• If you wish to apply for a short-term payment plan, your debts cannot exceed $50,000 USD (i.e. You can pay your debts within 180 days)
• If you wish to apply for a long-term payment plan, your debts cannot exceed $100,000 USD. Business owners can also qualify for a long-term payment plan provided their debts are less than $25,000 USD.

2. Offer in Compromise

This strategy entails paying less than your entire debts. You must persuade the IRS that you are not in a position to pay that much tax.

As a result, you must be offered some relief in return for a reduced sum. If you agree to the following terms, the IRS may accept your offer in a compromise request.

• Your sources of income are insufficient to cover your tax obligations.
• Your expenditure does not surpass your revenue sources.
• You have no assets or equity.

To make a request for an offer in compromise, you must also deposit a $256 charge and some initial payment, which is non-refundable regardless of whether your application is granted or not.

3. Relief For Innocent Spouse

This programme is designed for those who previously filed joint tax returns as a couple but are now legally divorced. If, for example, your spouse performed the following, you will not be required to pay any communal taxes.

• He or she does not report his or her wages or reports improperly.
• Falsely misrepresented his or her income to the IRS and claimed unallowable credits

If you can substantiate these facts and show your separation paperwork, you will not be required to pay collective taxes.

4. Currently Non-Collectible Status

If you are currently unemployed or in financial distress, the IRS can simply exempt you from paying your taxes. All you have to do is provide the IRS with your current financial situation. Once authorized, you will be assigned the status of presently non-collectible (CNC). Your status will be altered once you have recovered from your financial problem. The IRS comes to your house every two years, but they may visit at any time to check your current status.

5. Penalty Relief

Penalty relief or interest abatement is the relief on your penalties. In the event that you are late with your taxes for the first time, or if you have been paying on time for the prior three years but are suddenly unable to do so due to a valid cause, the IRS may be able to forgive your back taxes. You must demonstrate that you were unable to pay your taxes on time due to a natural disaster or sickness. The IRS will investigate your circumstances, and once it is determined that you are not guilty, your past taxes will be eliminated.

How to Get Back Tax Help?

If you want back tax help then you can contact the tax relief companies. These relief firms are private organizations that assist you in settling your bills with the IRS. These firms typically employ tax attorneys or seasoned tax lawyers who are well-versed in all legal jargon.

Moreover, these firms provide you with a complimentary consultation on what to do and how to approach the IRS for debt relief. These groups can also assist you in negotiating with the IRS. Their attorneys can advocate for you and negotiate with IRS authorities using credible arguments and proof on your behalf.

The post How Does Tax Relief Work? appeared first on MoneyMiniBlog.

We all know that taxes are unavoidable, and even the thought of doing your own income taxes sends chills down your spine. However, just like with anything in life, you don’t need to do them on your own if you feel like you are not ready for the occasion, and sometimes it’s worth it to get help from someone who knows what they’re doing and can do it better.

For that reason, if you ever find yourself in a troublesome tax situation, perhaps it’s time to get some help from a tax attorney. However, finding a trustworthy tax attorney can be difficult. So, if you don’t know anything about tax law and the potential unpleasantries you may face in the legal process that’s above your head, you should always go with a highly educated and skilled tax attorney from your area that comes from a reputable law firm such as Mockensturm Limited to get the best advice and legal protection. After all, nobody wants to go into high-stakes legal proceedings unprepared.

With no further ado, let’s take a look at all of the ways a good tax attorney can help you with your income taxes and all the benefits of hiring one.

Planning Your Business

Starting, buying, or selling a business is a significant financial investment, and tax concerns can occur at any time along the process. While business lawyers may be familiar with the subject, using the professional services of tax law offices such as Ken R. Ashworth & Associates can help you guarantee that you are fully compliant with federal and state tax regulations in order to avoid penalties.

Many hats are worn by business owners, and knowing the ins and outs of business tax law can take a long time. As a result, hiring a tax attorney is the best approach to protect yourself and your company from a costly mistake.

Taxes Disputes

If you are alerted that you are being audited, immediately seeking a tax attorney is essential to your financial health. The majority of disputes involve one or more tax returns, but there’s a risk you’ll say or do anything that will cause the investigation to go sour. An attorney can help you:

• Be present during the audit;
• Communicate with the tax department;
• Help in reaching an agreement;
• Ensure that you are not overpaying.

You could be charged with tax evasion or other criminal penalties if you ignore tax agency notifications. A lawyer can either assist you to avoid charges or defend you if they are brought against you.

Preparing a Will

You may face complicated tax ramifications if you want to leave money to your heirs in your will because estate taxes might eat up a significant portion of the fortune you intend to leave.

A tax attorney can assist you in minimizing the tax burden on your estate. Some tax attorneys focus on estate planning, ensuring that their clients have the most effective method for transferring assets to their heirs.

Relief From Taxes

If you owe the IRS more money than you can afford to pay all at once, you may be able to work out a payment plan to pay your taxes over time. As a result, a tax attorney can help you in negotiating with the IRS to obtain a lower monthly payment while repaying your debt in a timely manner.

Some taxpayers are concerned that their tax debt is so large that they will never be able to pay it off. So, if you are unable to repay your tax debt, a tax attorney can help you in negotiating an offer in compromise with the IRS.

Furthermore, an offer in compromise is when your attorney proposes to the IRS that you pay a portion of your tax bill rather than the full amount. However, you must demonstrate that you are unable to pay your debt in order to make this offer. A tax attorney can assist you in gathering the evidence you’ll need to prove your case.

With that said, the IRS may take further action if tax issues are not addressed, and they can confiscate your salary, deducting a percentage of your pay to cover the debt. In addition, liens on your property can be placed by state and federal tax authorities, indicating that they have a valid entitlement to the property, making it impossible to sell.

Tax collectors can seize your property or bank accounts in extreme cases, which is known as a tax levy. Thereby, it’s a good idea to hire a tax attorney to defend you if any of these actions are done against you.

Final Thoughts

You might have been wondering what a tax attorney does for you and whether it would be worth the hassle to hire one. The answer is yes. In fact, if you’re concerned about how to report on your income taxes, clearing up any outstanding issues with the IRS, or even if you are just trying to make sense of some complex tax laws that might apply to your situation, you would most certainly benefit from the services of a professional tax attorney.

The post How Hiring a Tax Attorney Can Help With Your Income Taxes appeared first on MoneyMiniBlog.