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Showing posts from 2015

Top 10 Tips to Know if You Get a Letter from the IRS

Top 10 Tips to Know if You Get a Letter from the IRS
The IRS mails millions of notices and letters to taxpayers each year. There are a variety of reasons why we might send you a notice. Here are the top 10 tips to know in case you get one.

1.    Don’t panic. You often can take care of a notice simply by responding to it.

2.    An IRS notice typically will be about your federal tax return or tax account. It will be about a specific issue, such as changes to your account. It may ask you for more information. It could also explain that you owe tax and that you need to pay the amount that is due.

3.    Each notice has specific instructions, so read it carefully. It will tell you what you need to do.

4.    You may get a notice that states the IRS has made a change or correction to your tax return. If you do, review the information and compare it with your original return.

5.    If you agree with the notice, you usually don’t need to reply unless it gives you other instructions or you need to mak…

Tips for Filing an Amended Return

Tips for Filing an Amended Return
Have you found that you made an error on your federal tax return? If so, you may need to file an amended return. Here are ten tips that can help you file.

1.    Tax form to amend your return.  Use Form 1040X, Amended U.S. Individual Income Tax Return, to correct your tax return. You must file a paper Form 1040X; it can’t be e-filed. You can get the form on at any time. See the Form 1040X instructions for the address where you should mail your form.

2.    Amend to correct errors.  You should file an amended tax return to correct errors or make changes to your original tax return. For example, you should amend to change your filing status, or to correct your income, deductions or credits.

3.    Don’t amend for math errors, missing forms.  You normally don’t need to file an amended return to correct math errors. The IRS will automatically correct those for you. Also, do not file an amended return if you forgot to attach tax forms, such as a…

Obamacare Overview and How it Affects Your Taxes For Those of You Who Filed Extensions

Health Care Law and Taxes – More Time to File
Most taxpayers will simply check a box on their return to indicate that everyone listed on the front of the return has qualifying health care coverage for the entire year and may not need more time to file. 

However, people who haven’t finished filling out their return can get an automatic six-month extension. The fastest and easiest way to get the extra time is through theFree File link on In a matter of minutes, anyone, regardless of income, can use this free service to electronically request an automatic tax-filing extension onForm 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return.

If you received your coverage through a Marketplace, you may have received an incorrect Form 1095-A, Health Insurance Marketplace Statement, or your form may have been delayed. If you have not yet filed your income tax return, you should file by April 15 using either the Form 1095-A that you have received or the…

What to Know about Late Filing and Late Paying Penalties

What to Know about Late Filing and Late Paying Penalties
April 15 was the tax day deadline for most people. If you are due a refund there is no penalty if you file a late tax return. But if you owe tax, and you failed to file and pay on time, you will usually owe interest and penalties on the tax you pay late. You should file your tax return and pay the tax as soon as possible to stop them. Here are eight facts that you should know about these penalties.

1.    Two penalties may apply.  If you file your federal tax return late and owe tax with the return, two penalties may apply. The first is a failure-to-file penalty for late filing. The second is a failure-to-pay penalty for paying late.

2.    Penalty for late filing.  The failure-to-file penalty is normally 5 percent of the unpaid taxes for each month or part of a month that a tax return is late. It will not exceed 25 percent of your unpaid taxes.

3.    Minimum late filing penalty.  If you file your return more than 60 days after t…

Why Gamble With Your Tax Debt? Contact Nicholas Hartney, EA Today to Fix Your Tax Problems | 7 Things to Consider Before Placing Your Bet

Hiring a Tax Resolution Firm is a Gamble | 7 Things to Consider Before Placing Your Bet on a Tax Firm 
1.  Did the tax resolution firm contact you without being solicited to do so (i.e. Ambulance Chaser)? I have wrote extensively about these firms .   If after reading these posts you are still unsure....
..2. Can you speak to the person who will be working your case? If no, then you probably want to avoid this tax resolution firm.  If you can then you want to ask them...
..3. Will they be handling your case or should you expect to be working more with their paralegals (who 99.99% of the time are not true paralegals, really just anyone they can find willing to work for $10-$12 an hour).  This should be an interesting conversation.  
4. Ask them about their billing.  How will they bill you?  Can you see an example of a retainer billing statement? Will they charge you $50 per fax?  Hundreds of dollars for a template letter?  Again, this should be an interesting conversation.
5. How long…

Nicholas Hartney, EA | If You Missed the IRS Tax Deadline these 5 Steps Can Help

If You Missed the Tax Deadline These Tips Can Help
April 15 has come and gone. If you didn’t file a tax return or an extension but should have, you need to take action now. Here are some tips for taxpayers who missed the tax filing deadline:
File as soon as you can.  If you owe taxes, you should file and pay as soon as you can. This will stop the interest and penalties that you will owe.IRS Direct Payoffers you a free, secure and easy way to pay your tax directly from your checking or savings account. There is no penalty for filing a late return if you are due a refund. The sooner you file, the sooner you’ll get it.IRS Free File is your best choice.  Nearly everyone can useIRS Free Fileto e-file their federal taxes for free. If your income was $60,000 or less, you can use free brand-name tax software. If you made more than $60,000, use Free File Fillable Formsto e-file. This program uses electronic versions of IRS paper forms. It does some of the math and it works best for those who ar…

Five Things to Know if You Need More Time to File Your Taxes

Nicholas Hartney, EA | 5 Items You Need To Know If You Need More Time To File The April 15 tax deadline is coming up. If you need more time to file your taxes, you can get an automatic six month extension from the IRS. Here are five things to know about filing an extension:

1.    Use IRS Free File to file an extension. You can use IRS Free File to e-file your extension request for free. Free File is only available through You must e-file the request by midnight on April 15. Don’t forget to come back to Free File to e-file your taxes for free. You can access the program at any time through Oct. 15.

2.    Use Form 4868. You can also request an extension by filling out Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. You must mail this form to the IRS by April 15. Form 4868 is available on at any time.

3.    More time to file is not more time to pay. An extension to file will give you until Oct. 15 to file your taxe…

Tax Resoultion Companies Who Employ Shady Unlicensed Salespeople

Need help? Contact Nick to get you on the right path for a fraction of the cost that others will charge you.

Tax Resolution Scams Still Going Strong

It amazes me that the old school boiler tax resolution firms are still out there.

A taxpayer who is called or calls the tax resolution firm is connected with a high-pressure salesperson, and maybe with two or three of them (often times a "manager" comes on for good measure). The taxpayer is assured that the firm will settle and resolve the taxpayer’s tax obligations. The salespeople earn commissions and large bonuses. Tax resolution firms take large retainers, anywhere from $2,500-$10,000+.

The taxpayer somehow is able to come up with the retainer money and that money is burned through with over and double billing in a month or two with very little progress. To bill down the clients retainers employees of the tax resolution firm send the taxpayer boilerplate letters requesting information by artificial deadlines. When there is no response to the letters, the associate heading the case will write what is called "a money letter" followed by several "money cal…

Nicholas Hartney, EA | History of the IRS and What a 1040 Looked Like in 1913

Like - Click this link to Add this page to your bookmarksPrint - Click this link to Print this page Brief History of IRSOrigin
The roots of IRS go back to the Civil War when President Lincoln and Congress, in 1862, created the position of commissioner of Internal Revenue and enacted an income tax to pay war expenses. The income tax was repealed 10 years later. Congress revived the income tax in 1894, but the Supreme Court ruled it unconstitutional the following year. 16th AmendmentIn 1913, Wyoming ratified the 16thAmendment, providing the three-quarter majority of states necessary to amend the Constitution. The 16thAmendment gave Congress the authority to enact an income tax. That same year, the first Form 1040 appeared after Congress levied a 1 percent tax on net personal incomes above $3,000 with a 6 percent surtax on incomes of more than $500,000. In 1918, during World War I, the top rate of the income tax rose …

Nicholas Hartney, EA | Instructions for Filing an Extention of Time to File Income Tax Returns with the IRS

Form 4868 for those of us who need some extra time to file their   Automatic 6-month extension by filing.

Purpose of Form Use Form 4868 to apply for 6 more months (4 if “out of the country” (defined on page 2) and a U.S. citizen or resident) to file Form 1040, 1040A, 1040EZ, 1040NR, 1040NR-EZ, 1040-PR, or 1040-SS

Qualifying for the Extension

To get the extra time you must:

1. Properly estimate your 2014 tax liability using the information available to you,

2. Enter your total tax liability on line 4 of Form 4868, and

3. File Form 4868 by the regular due date of your return.

If you do not pay the amount due by the regular due date, you will owe interest. You may also be charged penalties. For more details, see Interest and Late Payment Penalty on page 2. Any remittance you make with your application for extension will be treated as a payment of tax. You do not have to explain why you are asking for the extension. We will contact yo…

Nicholas Hartney, EA | IRS Attempting to Block Passports For People Who Owe Back Taxes

You can send your thank you cards to Harry for this one. The IRS and Justice Department are working together to catch ex-pats behind on their income taxes. Even though there are no longer debt prisons they can still arrest people behind on their taxes when they land on U.S. soil. Sen. Harry Reid (D-Nev.) and a handful of others in Congress think the government could do more to apprehend people on the move and even prevent them from obtaining or leaving the States in the first place. In 2012, the Government Accountability Office reported on the potential for using the issuance of passports to collect taxes. The thought is to restrict passports and travel until you pay the IRS what they say you owe (includingpenaltiesand interest). Several successive proposals have been defeated for now. Some say the right to travel is fundamental, practically constitutional. According to an introduced Senate Bill 1813, an idea to punish tax debtors, the State Department would be allowed to revoke, den…