Unifled Taxes?

Ten Forty + Quality Tax Preparation & Financial Services 281-397-7777 Fax 281-397-7443 Tax Tips We all know the annual ritual: once January rolls around, you gather your tax documents to file your tax returns by the deadline. Sometimes (or maybe all the time!) you need an extension. And maybe you don’t meet the extended deadline, and now your return is late and unfiled. Then the next tax season rolls around, and you still haven’t filed last year’s return—so you don’t want to do the current one either, out of fear of the IRS or because you need last year’s data. Now your problem is snowballing—and if you let fear grip you, it can continue for years . . . before the IRS decides to do you in. Don’t let this problem get ahead of you. Let us give you a road map for achieving peace of mind by getting right with the IRS. If you have late, unfiled tax returns, you have an urgent problem that you should start to fix ASAP. The possible consequences include: You are at risk of the IRS preparing your returns for you giving you no dependents and no deductions and there is a possibility of criminal prosecution. The best way to avoid criminal prosecution is to come forward and voluntarily file any delinquent returns. The IRS has a time­honored policy that, in general, it will not criminally prosecute for failure­to­file those taxpayers who come forward and file their past­due tax returns. Don’t forget you may have had a refund all those years. Sad to say you can’t get anything beyond three years back from April 15th the current year (i.e you can still get a refund for 2012, 2013, and 2014, but not 2011 going back). If you owe, you always owe. If you have a long­standing problem, in most cases the IRS usually shows you some mercy. In general, the IRS requires you to file the most recent six years of tax returns to be in current compliance with your tax return filings. However, if they filed your seven year and older returns for you, they may not have given you all your dependents and deductions and you owe for the old ones. In that case you may want to file all your returns. Once you file a tax return, the general three­year statute of limitations on assessment of tax starts to run.7 If you never file a tax return, you give the IRS open season with no time limits to assess tax for that unfiled tax year. If your business has unfiled payroll tax returns but made all of its required tax deposits, and the returns show no tax owed, go ahead and file those delinquent returns. But if you made only some or none of the required tax deposits, and your payroll tax returns show that you owe the IRS money, you need to take special care before you file them. If you run your business as a limited liability company or corporation, you are not personally liable for the payroll tax balances; only your entity is. However, the IRS can potentially transfer liability for the “trust fund” portion of payroll taxes to you as the person responsible for allowing the business entity to fail to pay the IRS. What are “trust fund” taxes? They are the taxes that you collect on behalf of your employees and send to the IRS—namely, the employees’ federal income tax withholdings and their half of FICA taxes. If you have unpaid trust fund taxes, it is in your best interest to pay off the trust fund portions first. To do this, you send a designated payment to cover the trust fund taxes. The IRS honors such designations.12 If you don’t designate the payment, the IRS applies the payment to the non­trust fund taxes first! If you have not filed older tax returns whether one or ten, we are here to help. Just give us a call, the consultation is free. Please call us if you have any questions. Tax season is here. Go to www.tenfortyplus.com and complete your online organizer (under forms and documents). Make your appointment using our online appointment system. Call 281-397-7777 and get a user id with password set up so you can send us all your information through our online secure portal and do your taxes from the comfort of your home or office or come see us at our office. 1040 + Quality Tax Preparation & Financial Services Joseph C Becker www.tenfortyplus.com 281-397-7777, Fax 281-397-7443 joeb@tenfortyplus.com Contact Us There are many events that occur during the year that can affect your tax situation. Preparation of your tax return involves summarizing transactions and events that occurred during the prior year. In most situations, treatment is firmly established at the time the transaction occurs. However, negative tax effects can be avoided by proper planning. Please contact us in advance if you have questions about the tax effects of a transaction or event, including the following: • Pension or IRA distributions. • Retirement. • Significant change in income or • Notice from IRS or other deductions. Revenue department. • Job change. • Divorce or separation. • Marriage. • Self-employment. • Attainment of age 59½ or 70½. • Charitable contributions • Sale or purchase of a business property in excess of $5,000. • Sale or purchase of a residence or other real estate.