Posted on

Everything You Need to Know About Form 941

business owners review taxes

business owners review taxesThe pandemic may have brought about hardship for many, but it also provided a space for some to realize their dreams. A record-setting 4.4 million new businesses opened their doors during the height of the crisis in 2020—if you were one of those amazing entrepreneurs, then congratulations on making your dreams come true!

Owning a business is no easy feat, though. Not only will you be the sole person responsible for your company, but you may also be responsible for multiple employees. What’s more, you’ll need to keep an eye on every financial transaction, payment, expense, and more to ensure that you report everything accurately to the IRS.

If you have employees, you must file Form 941 four times a year. Below, we’ll go over everything you need to know about filling out a 941 tax form to ensure that you remain compliant.

What Is Tax Form 941?

So, what is Form 941? This specific tax form is designed for businesses with employees. The form reports wages and taxes for all your employees each quarter. In other words, you’ll need to report this information and fill out this form four times a year.

You’ll report the amount of money you withheld from your employees. You’ll report the income taxes, Social Security taxes, and/or Medicare taxes that you withheld. Along with filling out the form, your quarterly tax payments will also be due. Your total tax liability will be determined based on the total amount of taxes due in the current quarter you’re reporting and the total deposits you made during the previous quarter.

How to Fill Out Form 941

You can fill out your Form 941 either electronically or on paper. You can download the appropriate forms directly on the IRS website; you can decide whether you want to print out the forms or fill them out on your computer and submit them directly to the IRS website.

Are you struggling to identify the right forms? Do you need a little extra help? Check out our tax help resources or contact one of our agents for more assistance.

Who Should Use Tax Form 941?

You need to file Form 941 each quarter if you own a business and pay wages to an employee. It’s your responsibility as an employer to provide the IRS with accurate information about the employee’s wages and withholdings. Failing to do so means you’ll face financial penalties and a possible tax audit.

When to Use Tax Form 941

You need to use this tax form when you’ve paid employees, withheld taxes, and need to make your employer contribution to those tax liabilities. 

If your total yearly withholding taxes will come to less than $1,000, then you might not need to file a Form 941—you might be able to file a Form 944 instead. Otherwise, you’ll need to use tax Form 941 each quarter.

Form 941 Deadlines

Form 941 is typically due on the last day of the month following the end of each quarter. In other words, the due dates for 2022 are as follows:

  • First quarter: April 30, 2022
  • Second quarter: July 31st, 2022
  • Third quarter: October 31st, 2022
  • Fourth quarter: January 31st, 2023

If the filing due date falls on a weekend or holiday, you should file the forms on the next possible business day.

One of the biggest tax problems faced by taxpayers is failing to meet IRS deadlines, especially for forms that are due quarterly. If you don’t file the right forms on time, then the IRS is authorized to levy financial penalties against you. In the beginning, you could face fines of up to 5%. If you continue to fail to file, then that rate could go up as high as 25% of your total tax liability.

If you file the right forms but fail to pay in time, then you’ll get fined about .05% each month—up to 25% of all the taxes you owe. On top of these fines, you’ll also face ever-increasing interest payments.

Form 941 Instructions

Your tax form will include information about your employees, the total wages you’ve paid out, the taxes you’ve withheld, payroll records, tips, and more. Since so much gets covered, Form 941 instructions can get complicated fast. 

Here’s a brief overview of how to fill out the form:

  • Put your EIN, name, and address in the first box
  • Check off the quarter you are reporting in the second box
  • In part 1, box 1, enter the wages you’re paying
  • Put the total amount of employee compensation in box 2
  • Put the total amount of taxes you withheld in box 3
  • Next, you’ll go through a series of questions where you’ll need to input the proper taxable amounts collected from employees
  • Complete the details about your business in part 3
  • Sign the form and print your name on part 5

Are you worried that you can’t meet your tax obligations? Don’t let that fact discourage you from filing your paperwork. There are many tax relief solutions that can help you work out an arrangement with the IRS.

Do You Need Help With IRS Form 941 or Other Tax Issues?

Now that you’ve read through this article, you should feel more confident when it comes to filling out Form 941 and ensuring you’re compliant. Despite that, Form 941 won’t be your only concern. There are several other tax codes, forms, and nuances you’ll need to remain compliant with to ensure your business runs smoothly.

Do you have more questions about tax Form 941? Do you have other questions about other tax requirements you might face in 2022? The good news is that you won’t have to go far to find the answers you seek. For more free resources, keep browsing our blog.

If you’d prefer to speak with a highly qualified and skilled tax expert, then we welcome you to reach out to our office. Our team is made up of tax attorneys, certified CPAs, enrolled agents, and CTEC certified tax consultants. Contact us directly at (800) 264-1869 to learn more about how we can help you solve all your tax problems in 2022 and beyond.

Posted on

What is IRS Form 8300?

The IRS has been under a lot of strain since the pandemic. Not only has the agency been tasked with keeping up with every citizen’s tax return situation, but they’ve handled each and every stimulus payment.

The IRS isn’t the only one suffering, though. 2021 has been labeled the most challenging year for taxpayers. That’s because they’ve had to keep up with stimulus payments, advanced tax credits, new streams of side income, self-employment taxes, unemployment benefits taxes, and even new rule changes.

If you have a business or received a lump sum payment, then you’ll also need to make sure you report that income accurately. That means you need to know about Form 8300 and what cash transactions are reported to the IRS. 

Keep reading to find out everything necessary about reporting big sums of money and filing a Form 8300.

What Is Form 8300?

At the most basic level, Form 8300 is an official report to the IRS stating that you received $10,000 in cash or more as a payment. While this amount may seem excessive at first glance, there are a lot of reasons why you might get such a high cash payment. Those reasons might be:

  • The sale of real property
  • Pre-existing debt payments
  • Rental of real or personal property
  • Making or repaying a loan
  • Reimbursement of expenses
  • Sale of goods or services

Form 8300 rules dictate that you must also report multiple payments within a single year that amount to more than $10,000. While the Form 8300 instructions mention cash payments, it’s important to understand that “cash” also includes bank drafts, traveler’s checks, money orders, and cashier’s checks.

IRS Form 8300 Requirements

Per federal law, your business is required to file Form 8300 within 15 days of receiving any cash payment over $10,000. Filing this information with the IRS helps the agency track cash transactions. 

If you’re wondering what cash transactions are reported to the IRS, then it’s important to understand a new law that went into effect on January 1, 2022. Now, bank transactions reported to the IRS will include everything over $600!

With that in mind, it’s more vital than ever to keep a cash transaction report that monitors every cent of your business’s cash flow. That way, any questions that come up from the IRS can get answered quickly and accurately.

What Happens If a Form 8300 is Filed on You?

One of the most common tax problems happens when a taxpayer is uninformed or misinformed about how to file or report certain types of income. If you’ve paid a substantial amount of cash and didn’t report it, then you might be wondering—what happens if a Form 8300 is filed on you?

First, don’t panic! You should be notified about the filing—the business is required by law to notify you. Plus, you’ll likely know about the situation in advance because you’ll need to provide your TIN to the other party when they file a Form 8300. The other business will be penalized if they don’t attempt to get your TIN when they report the transaction.

How to File Tax Form 8300

A proper IRS Form 8300 reference guide wouldn’t be complete without explaining how to file a Form 8300. Since many Americans do their taxes online, it is possible for businesses to file a Form 3800 completely electronically. Doing so is free; all you have to do is visit the BSA E-Filing system and complete the proper forms. If you’d prefer, then you can print it out and mail it directly to the IRS.

Do you need more detailed information about how to fill out Form 8300 or another tax form? Check out our tax help resources section for more information. If you still can’t find what you’re looking for, then it might be best to reach out directly to a tax expert who can take a look at your personal tax situation and help.

Consequences of Failing to File a Form 8300

If you fail to file a Form 8300 within a timely manner, then you’ll face specific consequences. First, you’ll get fined $100 for each occurrence of failing to file a Form 8300. You could also face additional financial penalties if an investigation reveals that you deliberately attempted not to file a Form 8300 in order to defraud, mislead, or omit information from the IRS. Intentional disregard can lead to fines of up to $250 per violation.

Further, if the IRS determines that you are intentionally being noncompliant and willfully refusing to file a Form 8300 or committing fraud, then they have the legal authority to levy criminal consequences against you, too. You could get charged with a felony offense! Not only does that likely mean you’ll spend time imprisoned, but you could also get fined upwards of $25,000!

Tips to Help You File an IRS Form 8300 Like a Pro

So, how can you remain compliant with the IRS’s many tax laws? One of the best tips we can give is to keep detailed records of all your business transactions. Flag any ones that exceed $10,000, and be sure to note that you filed a Form 8300, too.

If you’ve been slammed with penalty after penalty, then don’t feel like your situation is hopeless. There are plenty of tax relief solutions to explore that could help you reduce or potentially eliminate some of your tax debt. Speak with an expert if you’re interested in learning more about these potential solutions.

Do You Have More Tax Questions?

Do you believe you’ll need to fill out a Form 8300 this year? Are you still unclear on the process, or do you have additional tax questions that weren’t addressed in this article? If so, then it’s important to reach out to a tax expert that can answer your questions one on one.

Leave your tax worries behind with expert guidance from a team that has 30 years of experience working with the IRS. Contact us today to get more information about how we can help you face any tax challenge like a boss!

Posted on

What is IRS Form 4506-T?

Each year, auto dealerships sell about 17 million new cars, and homeowners sell about 6-7 million homes. Are you currently hoping to join those statistics by making a big-ticket purchase? If so, then you’ll need to verify your income, especially if you’re hoping to secure a good loan or mortgage rate. 

One of the best ways to prove your income is to fill out and file IRS Form 4506-T to request an official tax return transcript. Once you have this important document, you can prove to potential lenders that you’ll be able to afford your payments.

Are you wondering what a 4506-T Form is and how to fill it out? You can learn everything you need to know below.

What Is a 4506-T Form?

According to the IRS, a Form 4506-T is used by taxpayers to request an official IRS tax transcript. You can receive a tax transcript online or have it delivered to your address. 

This official transcript has undergone a few changes over the past few years to protect a taxpayer’s privacy. Now, certain personally identifiable information will be partially masked so it can’t fall into the hands of cybercriminals and other individuals. 

Here is what will be visible on your official returns:

  • The last four digits of your SSN or EIN
  • The last four digits of the account phone number
  • First four characters of the first name and first four characters of the last name
  • First four characters of any name on the business name line
  • First 6 characters of the street address
  • All money amounts (wages, income, interest, balance due, penalties)

Only individual taxpayers can request their own transcripts.

Why You Might Need to Fill Out a 4506-T Form

What is the 4506 T Form used for, exactly? You likely need it to prove your income. 

To get more specific, the top two reasons taxpayers seek out official tax transcripts are to apply for an auto loan or a mortgage for their homes. Taxpayers might also want to use their transcripts for other reasons, too, though, like seeking out financial aid for college.

You might also want to get these transcripts if you’re struggling to resolve tax problems with the IRS. Requesting a transcript of a tax return for past years will help you get clarity on your tax situation. It can also help you explain your tax history to a tax expert if you’re seeking help.

How to Fill Out Form 4506-T

Are you looking for Form 4506 T instructions? The good news is that your request for a transcript of your tax return will be fairly straightforward to fill out. In the first section, you’ll fill out your name, Social Security number, and address.

When you get to section 6, you’ll want to specify “1040” in the box, and you’ll want to check the box at the end of line 6a. On Line 9, you’ll need to write out the last calendar day of the tax year you’re requesting. Check the box above the signature line, and place your phone number in the proper box.

Finally, you’ll want to sign and date the form.

Tax Return Transcript

Once you’ve completed your form, you’ll either want to submit it directly online on the IRS platform or drop it in the mail. If you mail your form,remember that it will take at least an additional week or two to process your request and get your tax return transcript back to you.

Do you need additional help filling out your form? Are you requesting more than one year of transcripts? Have you fallen further and further behind with your tax obligations and responsibilities? If you’re looking into your tax return transcripts to identify how much you owe the IRS overall, then it might be in your best interests to start researching tax relief solutions that can help you manage your debt.

How Long Does it Take to Receive a Tax Transcript?

On average, it will take the IRS about two to four weeks to process your request and make your transcript available online. If you requested that your tax transcript get mailed to your address, then expect your 4506 T processing time to increase by at least two weeks.

Keep in mind that all of these time estimates could take longer in 2022. Over the past few years, the IRS has struggled under the weight of increased burdens—they’ve had to take on their normal tax responsibilities on top of sending out stimulus checks and advanced tax credits, too.

If you think the IRS is taking too long to process your return or you need more help than you’re getting, then our tax help resources might be able to help.

Do You Need Help With Your IRS Form 4506-T?

An IRS Form 4506-T will help you secure a copy of your official tax transcripts. Once you have this document in hand, you can use it to your advantage to secure a loan, establish a mortgage, or prove your income to other potential lenders. Now, you should have a good idea of where to find this form, how to fill it out, and how long it will take to get your IRS tax return transcript from the IRS.

Do you need additional help with your tax forms? Are you unsure if you’ve even filed your taxes for the years you need transcripts for? If you’ve neglected your taxes for some time, then you might want the help of a tax expert. Contact us to get the help you need.

Posted on

How Many Tax Allowances Should I Claim?

Most of us don’t want to pay taxes—the good news is that most of us don’t have to on Tax Day. Recent statistics show that only about 39% of Americans owed federal income taxes in 2020 during the height of the pandemic. That means the majority (61%) owed nothing.

How come? The answer is the W-4 and tax withholding. Most of us don’t pay taxes on Tax Day because we’ve already paid them throughout the year via tax withholding. 

So, how much money is withheld from your paycheck? The answer depends on your specific tax situation, but we hope to clear up some confusion by outlining the basics. Learn more about tax withholding and how it applies to you below.

How Does Tax Withholding Work?

Before you get into the details, it’s crucial to understand how withholding works.

As an employee, you are paid by your employer. Your employer doesn’t just hand over all your earnings, though. A percentage of your income is withheld and given to the IRS. Consider this an advanced payment on your income taxes—if your employer did not withhold this amount, then you’d be expected to pay it all in one big lump sum come tax time. For most Americans, it’s far easier to bear the brunt of their tax burdens by paying them with each paycheck rather than all at once.

If you’re self-employed, or your employer doesn’t withhold your taxes, then you’ll be expected to pay them on your own.

Who decides how much is withheld? That’s where the W-4 comes in. 

How Does a W-4 Work?

Prior to 2020, you’d fill out a personal allowances worksheet on your W-4 to determine the amount your employer withheld from your paycheck. Now, however, you’ll find a five-step process on your W-4 form: 

 

  1. Fill out your personal information
  2. Account for your and your spouse’s job, if filing jointly
  3. Claim your dependents
  4. Take the standard deduction or list your deductions manually
  5. Sign and date the form

 

The amount ultimately withheld from your paycheck is a factor of your combined income (if filing jointly), how many dependents you have, and your deductions. 

 

If you underpay, you might end up owing the IRS when you’d typically get that money refunded. If you end up owing way more than you can pay off, then you’ll be researching tax relief solutions to help get you out of debt!

 

To avoid that situation, consider using a W-4 withholding calculator to determine how much you’ll owe if you opt not to have your taxes withheld by your employer. This type of calculator is available directly on the IRS website. You’ll want to input all your information to receive the best possible estimate.

How Many Allowances Should I Claim?

Since 2020, filing a W-4 has become much easier. You won’t have to decide how many allowances to claim because there aren’t allowances on the form anymore. Instead, if you want to impact your withholding, then you’ll need to fill out the multiple jobs or spouse works sections. You’ll also want to fill out Step 3, which goes over your dependents. If you have extra withholding you want or if you have other income, you’ll fill out Step 4.

Do You Have More Tax Questions?

Are you still unclear about your tax situation? If so, then it’s advised that you speak with a tax expert about your situation. Getting professional help with your taxes could be the difference between getting penalized by the IRS and getting a chunk of money back through a refund!

 

Leave your tax worries behind by getting expert guidance from a team with over 30 years of experience working with the IRS. Contact us now to learn more about how we can help you!

Posted on

What Is a 1040-EZ?

Are you a notoriously late tax filer? Have you fallen behind on your taxes for more than a few years? If so, then you’re in good company. Experts suggest that about 7 million American taxpayers fail to file their income tax returns every year.

If it’s been a while since you filed, then you might be wondering what IRS forms you need to file. So, what is a 1040-EZ form? Do you need to file one?

On top of knowing what forms to fill out, you also need to understand how tax laws have changed in recent years. Learn everything you need to know about the 1040-EZ form, whether you need to file one, and how to go about doing your taxes this year below.

What Is a 1040-EZ Form?

So, what exactly is a 1040-EZ tax form? The best form 1040-EZ definition describes the document as a simple and short version of a 1040. The form is streamlined, which makes both tax preparation and filling out a 1040-EZ online form quick and seamless.

A 1040-EZ form is used to complete your annual taxes. On it, you’ll provide all your personal identification information and describe your tax situation.

Who Can File a 1040-EZ Form?

 

This tax form is the easiest to fill out, but you won’t want to use it if you have a complicated tax situation. This tax form is reserved for individuals who have very basic tax situations and only need to provide minimal information to the IRS. These taxpayers also fall into the following categories:

  • They’re single or married filing jointly
  • They’re under 65 years old
  • They don’t have dependents
  • No visual impairments
  • Not going through bankruptcy
  • Their income comes from wages, salaries, unemployment, or tips
  • Their taxable income is less than $1,500
  • They don’t owe money as a result of hiring a household employee

In general, first-time taxpayers fill out federal tax forms 1040-EZ since they often don’t claim deductions or many credits at all. That makes a 1040-EZ a good option for younger individuals, students, or people who only work part-time jobs.

This type of tax form isn’t good for you if you have important credits and deductions that you need to file. The 1040-EZ form is dubbed easy for a reason: it doesn’t contain the appropriate sections for you to file those deductions and credits, which are important to reduce your overall tax burden. If you have real estate assets, foreign income, tax shelters, or receive retirement contributions, then it’s not a good idea to use this simplified form.

How Do I File a 1040-EZ?

Do you believe you fall into the categories outlined above? If so, then we know what you’re thinking—how do I file a 1040-EZ? If you’re hoping to use this form, then follow the following 1040-EZ instructions:

  • Confirm that you meet the eligibility requirements listed above
  • Wait to receive your W-2 from your employer
  • Get a blank 1040EZ form for the year you’re filing for
  • Input your personal information
  • Send the form to the IRS or file the form electronically

Keep in mind that the IRS no longer uses 1040-EZ forms now that it’s 2022. If you’re filling out a 1040-EZ, then you’re likely doing so for a year that you failed to file. If you have more questions about how to file the appropriate forms, then consider consulting with tax attorneys who can help.

Form 1040 or Form 1040-SR?

If 1040-EZ forms are no longer applicable in 2022, what forms do you fill out instead? Rather than using a simplified 1040-EZ, you’ll need to fill out either a regular 1040 or a 1040-SR. Let’s break down the differences below.

A 1040-SR form is appropriate for taxpayers who receive Social Security benefits or are older than 65. This form has a color scheme with greater contrast, which could help seniors file their paperwork with ease. The form also has a larger font. This form allows space to document distributions from retirement plans, income you receive from annuities, your Social Security benefits, other deferred-payment arrangements and more. While you don’t have to be retired to use this form, it’s a great option for taxpayers who have retired.

A standard 1040 form is what you’ll want to use if you’re reporting a significant amount of income, plan to use deductions, or want to claim tax credits. This standard form gets used by the IRS to determine how much of your income is subject to tax. It also alerts the IRS to any refunds they may owe to you. Here are the schedules you’ll want to fill out:

  • Schedule 1: Additional income and deductions
  • Schedule 2: Owe additional taxes (self-employment, household employment, etc.).
  • Schedule 3: Claiming certain credits

Answering Your Tax Questions

While you may understand which forms to fill out now, the process is still pretty complicated. You may have more questions. If that’s the case, then there are tax help resources you can use to continue learning more. You could also consult with a tax professional to ensure you fill out all your returns correctly.

Getting Tax Help For a Brighter Future

Have you found yourself asking questions like, What is a 1040-EZ? What tax forms do I need to fill out this year? If so, then we hope this article has helped inform you about the proper tax forms you need to fill out going forward.

Of course, tax laws do change from time to time, so you may need to check back on our website each year to remain compliant. If you have questions or concerns about past, present, or future taxes, then it’s far better to consult with a tax expert about your situation.

Leave your tax worries behind with expert guidance from a team that has 30 years of experience working with the IRS. Contact us today to get started on your brighter future.

Posted on

Did You Receive IRS Form 668-W? What Are the Next Steps?

Over 11 million Americans currently owe a collective $125 billion in taxes to the IRS. That’s not good news, considering that the IRS has the legal authority to levy consequences against those individuals.

 

One of those consequences is an IRS wage garnishment, which means the IRS can seize a portion of your paycheck before it even reaches your hands. If you’re subject to wage garnishment, then you’ll receive IRS form 668-W before the garnishment starts—but you still have time to seek out tax debt help. Below, learn more about this important IRS form and what steps you should take after getting one.

What Is IRS Form 668-W?

Receiving an IRS form 668-W is intimidating, but it’s one of the most common tax problems we see. It’s a notice of an IRS wage garnishment. It’s often sent to your employer to alert them about the garnishment plans.

 

Once the garnishment goes into play, an employee’s wages, commissions, bonuses, and salary are up for garnishments. Retirement income and other benefits aren’t safe, either; these can still get garnished, too. It’s important to also understand that these garnishments are continuous—your employer is expected to comply until the IRS releases the levy.

How Employers Should Deal With a Wage Levy

If you’re an employer and you receive a 668-W, then there are some specific steps you must take. You have at least a full pay period between receiving a 668-W and complying with the garnishment order, though. The IRS advises employers to encourage the employee that owes the tax liability to contact the IRS. In some cases, that employee can deal with the garnishment and get it removed. If those attempts are unsuccessful, though, then you’ll need to start complying with the order.

 

To do so, you need to give your employee parts 2, 3, 4, and 5 of the form and have them sign a statement. Then, you’ll need to calculate what that employee’s net pay minus exemptions will be. You’ll need to send over all this information to the IRS.

 

From there, you’ll need to start complying with the levy and sending over the required amount.

How Employees Should Handle Form 668-W

If you’re currently an employee who was informed about a 668-W (or you received one), then a wage garnishment is imminent. If you haven’t done so already, attempt to contact either the IRS or a tax debt expert who can help with IRS debt. If you can work out an arrangement with the IRS, then the agency will consider releasing the levy and garnishment.

 

If you don’t act, then your employer will ask you to fill out a few forms. You need to complete those forms within three days. If you don’t, then calculations will get made for you, which could end up causing you to get garnished more than you should.

 

Once you’ve filled out the papers and returned them to your employer, you’ll start to notice a smaller paycheck each week or month. You won’t have to take further action, as that money will go straight to the IRS.

 

Are you worried that the IRS levy will cause significant financial hardship for your family? If so, then it’s possible to contact the IRS and file for an extreme hardship.

Self-Employment and Tax Levy Garnishment

Are you currently self-employed? If so, then your tax levy garnishment situation will be much more complex. A 668-W form isn’t ideal. Why? As a self-employed individual, you are not considered an “employee.” In other words, your independent contractor status means you don’t actually have an employer who can garnish your wages.

 

It’s more appropriate to get a form 668-A form, which is a levy of third parties. Often, this type of levy goes to your bank. That way, your bank can levy your income stream. This type of form is often called a “1099 levy.” If you received a 668-W form but you’re self-employed, then it may be a good idea to consult with a tax professional or IRS agent who can set you up with a 668-A instead.

Can the IRS Garnish Wages Without Notice?

Do you currently owe a serious tax debt? If so, then it’s normal to worry that your wages or bank account could be garnished unexpectedly. So, can the IRS garnish wages without notice? The good news is that the short answer is “no.”

 

IRS wage garnishment cannot happen without ample notice. First, you should receive a notice by direct mail. You will have the right and opportunity to speak with the IRS directly in an attempt to arrange a payment schedule. You’ll also need to fill out forms when your employer gets the levy notice.

Tax Debt Help

Wage garnishment is not an ideal situation for anyone. You won’t have control of your full paycheck, and you’re putting undue stress on your employer, too. If you’re facing this type of situation, then it’s in your best interests to research tax relief solutions like installment plans. If you need help learning more about your options, then speak with a tax professional who can help.

Understanding Your IRS Form 668-W

Have you recently received IRS form 668-W? If so, then your wages, salary, or income are about to get garnished. The good news is that you are allotted a period of time between getting notified and the time when the garnishment will begin.

 

During this time, it’s advised that you seek out tax debt help from an expert. In many cases, you can work out a payment plan with the IRS.

 

Leave your tax worries behind with expert guidance from a team that has 30 years of experience working with the IRS. Contact us today to get started!

Posted on

Amended Return Status: Where’s My Amended Tax Return?

Almost half (47%) of Americans are bothered by the complexity of our nation’s tax system. While it remains challenging, things have improved since IRS tax returns went digital. Electronic filing helps taxpayers feel more confident about understanding confusing forms, and it can help reduce errors, too.

Despite that, tax return mistakes still happen, and when they do, you’ll need to file an amended return.

Are you currently attempting to learn more about your amended tax return status? Have you been wondering, Where’s my amended return? Don’t panic! We’re here to put your mind at ease. You can learn everything you need to know about an amended tax return below.

What To Do If You Find an Error On Your Taxes

While electronically filing your taxes can reduce the likelihood of making an error, accidents still happen. If you realize that you made a mistake, don’t panic or attempt to call the IRS to rectify the error. Instead, figure out exactly what went wrong.

Did you make a mistake with the math? If so, then fixing the error might not be necessary at all. Most math mistakes get automatically corrected when your return is processed.

Did you make an error when it comes to your filing status, though? Did you leave out certain income streams or forget to make a crucial deduction? If so, then these errors call for filing an amended return.

How To File an Amended Tax Return

When it comes to common tax problems, figuring out how to fill out forms correctly is one of the most prevalent. The good news is that an amended tax return is straightforward to fill out.

A 1040x will help you correct any errors. It’s broken down into three sections, including:

  • Section A: Input the amount you put on your original return
  • Section B: The total difference between the inaccurate and amended returns
  • Section C: The accurate figures

Did your error result in you owing the IRS more? If so, then it’s advised that you go ahead and include a check or money order with your return. If you’re filing electronically, then feel free to pay electronically, too. You can make a payment directly on the IRS website.

Amended Tax Return Refund Timeline

Have you already filled out the appropriate forms and returned them? Are you constantly wondering, Where’s my 1040x? If so, then it’s important to understand the likely timeline you’re looking at when it comes to getting your return.

Once you finish filing your amended return, it can take up to three weeks for the return to even reach the IRS, depending on whether you file via snail mail or electronically. Once they have it, you may be looking at up to 16 weeks to process the return.

How Do I Check My Amended Tax Return Status?

How can you learn more about your IRS amended return status, or get a better idea of when to expect your return? Rather than searching “check my amended return” on Google, it’s far better to contact the IRS directly to learn more about the status of your return. 

To do so, you’ll need to know your Social Security number (or tax ID), date of birth, and zip code. Once you have that information, you’ll want to navigate to the IRS’s “Where’s My Amended Return” page. Once you do, you’ll get a status like:

  • Return received
  • Return adjusted
  • Return completed

 

Once received, that’s when your 16 weeks starts. Once an adjustment has been made, your return is in progress. Once the return is completed, that means your return is on its way. The IRS updates this system at least once a day, usually at night. So, feel free to check your status on a daily basis to see how far along in the process your return is so far.

I Have Not Received my Amended Tax Refund: Next Steps

Are you still finding yourself asking, Where’s my amended refund? Have you already checked your 1040x status and confirmed that a refund is on the way? It’s normal to feel anxious about getting the money you deserve, but it’s also important to understand the constraints faced by the IRS. You’ll need to give the agency at least 16 weeks before inquiring further about your return. That’s because the IRS is very busy during tax time.

Will My Amended Return Trigger an IRS Audit?

The answer is complicated. The IRS won’t initiate an audit based on the fact that you amended it, but it can make an audit more likely. If you do end up getting audited, then be prepared to provide proof of your amended estimates.

If you’re concerned that an audit could cause problems for you or you have more questions about filling out your taxes, then consider looking around at our tax help resources.

Do You Need More Tax Help?

If you’ve been waiting patiently to learn more about your amended tax return status, then you’re not alone. It’s important to understand that the IRS will likely look at your returns much more closely, and your chances of getting audited increase, too. For all these reasons, your return will likely take longer to process.

If you have more questions about your taxes, then we invite you to leave your tax worries behind with expert guidance from a team that has over 30 years of experience working with the IRS.  Contact us today to learn more about how our team of tax experts can help you get through even the most complex tax situations.[/vc_column_text][/vc_column][/vc_row]

Posted on

Updates to Offer in Compromise Policy in 2021 (that will affect 2022)

Are you struggling to pay off your tax debt? If so, then you may have heard about the IRS offer in compromise (OIC) program. You’re likely considering applying for the program, but will you get approved for tax debt relief?

Less than half (41%) of IRS offer in compromise applications are approved. One of the main reasons why an IRS OIC application gets denied is because the taxpayer didn’t qualify and applied without understanding the complicated program’s rules.

In 2022, things have gotten even more complex.

Starting in November of 2021, the IRS changed its IRS compromise policy. You’ll need to understand both the way the program works and the new changes before you attempt to apply in 2022. 

Learn everything you need to know to get started on your application below.

Current IRS OIC Policy

First things first: How can the current IRS OIC policy help you if you’re a taxpayer with tax debt? To understand the answer, you have to know the basics of what an offer in compromise is. 

An offer in compromise is a formal term for an agreement you make with the IRS. If you owe the agency a significant chunk of tax debt and you can’t pay it back, then it’s possible to come to an OIC with the tax agency.

In most circumstances, this agreement forgives some of the taxpayer’s tax debt while requiring some of that money be paid as soon as possible. In this way, an OIC is beneficial for both the IRS and taxpayers who honestly cannot pay back the entirety of what they owe.

There are three main types of OICs: 

  • An OIC for Doubt as to Collectibility happens when you can’t pay off the balance, even with your potential future income and assets. 
  • An OIC for Doubt as to Liability happens when you’re unsure if you really owe as much as the IRS says. 
  • An OIC for Effective Tax Administration happens when the taxpayer is going through an economic hardship that would warrant a reduction in the full amount of tax debt owed. In this last type of OIC, both the IRS and the taxpayer agree on the amount of tax owed and that it could get paid off in full if it wasn’t for the recent hardship situation. The hardship can’t be a temporary thing, either.

Most taxpayers that want to seek out an OIC apply for an OIC for Doubt as to Collectibility. Keep in mind that this type of OIC has the highest denial rate, too.

So, how do you know if your financial situation meets the standards required by the IRS to get accepted for an OIC? 

When you apply for this type of relief, the IRS will immediately evaluate your entire financial situation and history. For the most part, the IRS won’t accept an OIC unless you offer to pay back more than the agency’s calculated “reasonable collection potential.”

Your reasonable collection potential is how much money the IRS thinks it could get from you if they levied their authority against you. In other words, if they seized your assets and could get more than what you’re offering to pay back, then they won’t accept an OIC.

If you offer to pay back more than the agency could collect through other methods, however, then they’ll be more willing to work with you and approve your application. The agency does consider your living expenses and living situation when calculating your personal reasonable collection potential. The agency will also take into account whether you have dependents or become disabled. 

If you and the IRS come to an agreement, then you’ll need to keep up with your payments to the agency. You could pay back your debt in either one major lump sum or with periodic payments. If you want to make periodic payments, then it’s important to include your first proposed payment with your initial application.

New OIC Policy

Are you seeking out an offer and compromise with the IRS in 2022? You’ll need to know about two specific changes that went into effect in late 2021. These changes mainly impact the refund recoupment process and the ability for taxpayers to use a separate OBR remedy while their OIC situation is under review by the IRS. We’ll go over each of these changes in detail below.

Returns

Prior to these new changes, the IRS included a caveat when an OIC agreement was reached: The agency would keep any tax refund owed to the taxpayer through the calendar year in which the OIC gets accepted. Starting in late 2021, though, the IRS won’t offset, recoup, or keep the refunds during the year that the OIC gets accepted.

That’s great news for taxpayers!

In other words, if you apply for an offer in compromise with the IRS for the years 2015 and 2016, then your 2021 tax return is safe from getting withheld from you. 

Many taxpayers avoid even applying for an OIC because they’re afraid that they won’t get their return for the current year. That’s because taxpayers who are facing economic hardship are often reliant on that yearly tax return. Offsetting the current year’s return, then, could cause further financial harm to the taxpayer seeking relief. For that reason, the IRS made the right decision in changing these rules.

OBR Remedy

An offset bypass refund (OBR) is another type of tax debt relief offered by the IRS. The IRS has the legal authority to offset or keep an overpayment or tax refund when the taxpayer owes a prior tax liability. When taxpayers are going through a financial hardship, sometimes the IRS will offer an OBR, which allows that overpayment to go directly to the taxpayer rather than the agency.

Prior to the recent changes, taxpayers that had pending OIC offers on the table couldn’t also apply for the OBR remedy. These changes reverse that, though, so now taxpayers can apply for the OBR remedy even if they have an OIC pending.

Again, this is great news for taxpayers who are hoping to seek an OIC in 2022 or beyond. With the ongoing Covid-19 situation, getting fast financial relief has never been more important. Getting an OBR is a real challenge, though, and there aren’t any specific forms to request this type of relief. Instead, it’s advised that you either contact the IRS directly or speak with a tax professional for help in getting an OBR.

Apply for an OIC

Clearly, it’s complicated and confusing to determine if you qualify for an OIC program. If you know you owe a tax debt, though, then you should definitely consider this option. If you have questions about your eligibility, then we advise speaking to a tax professional about potentially applying for an OIC.

If you’re sure you want to move forward with applying, then the first step you should take is to get all your finances in order. Next, you’ll need to fill out all the appropriate IRS forms. This step can get a little tricky, and you need to be very sure that you provide accurate information to the agency. Otherwise, you could risk having your application denied.

The forms you’ll need to fill out might include: 

  • Form 656 (Offer in Compromise)
  • Form 433-A (OIC) 
  • Form 433-B (OIC)
  • Form 656-L
  • Form 656

The forms you’ll need to complete depend on the type of OIC you’re hoping to get approved for. Ask a tax professional if you need help figuring out which forms are appropriate in your situation. Finally, you’ll want to include an application fee and any first proposed payment.

Updates to the IRS Offer in Compromise Policy for 2022 and Beyond

Previous IRS offer in compromise rules may have discouraged some taxpayers from seeking out an OIC. Hopefully, the new changes implemented by the IRS in 2021 will help reverse that trend. After all, delinquent taxpayers who do end up paying off some of their tax debts are better than ones who never attempt to pay back anything towards what they owe.

If you currently owe the IRS a significant amount of money, then it’s normal to feel anxious. It makes sense to feel overwhelmed, too, especially if your tax debt goes back several years. Further inaction on your part isn’t recommended as we head into 2022. Rather than continuing to feel anxious and stressed, act now by reaching out to an expert tax representative who can help you get back on track.

At Tax Group Center, we’ve helped countless individuals and businesses successfully gain acceptance into the IRS OIC program. Our tax attorneys and licensed CPAs can help you with the Offer in Compromise process, too. Contact us to get started!

Posted on

2021 Tax Dates & Deadlines Calendar [Infographic]

Statistics show that one out of three Americans waits until the last minute to file their taxes. If you make this common mistake, then you’re more likely to make a mistake somewhere.

Rather than repeating a common habit, learn more about the tax deadlines this year and make an effort to file your taxes early.

Share this Image On Your Site

When Are Estimated Tax Payments Due In 2022?

The pandemic caused a big shakeup in the American workforce. Believe it or not, statistics show that an estimated 42% of Americans freelanced throughout 2021. If you’re one of them, then you may not realize that freelancing, being an independent contractor, or running your own business comes with different tax rules.

Due Dates for Quarterly Taxes In 2022

You’ll need to pay your estimated taxes four times a year. For your 2022 taxes, those deadlines fall on:

  • 1st Quarter: April 18, 2022
  • 2nd Quarter: June 15, 2022
  • 3rd Quarter: September 15, 2022
  • 4th Quarter: January 15, 2023

What Happens If You Don’t Pay Your Quarterly Taxes?

If you don’t pay your quarterly taxes, you could end up paying penalties and interest. If everything isn’t paid in full by Tax Day, then you could end up paying up to 9% more than you originally owed.

When Are Business Taxes Due?

Sole proprietorship business taxes are on the same schedule as individuals, so their taxes are due on April 18, 2022.

When Are Corporate Taxes Due?

S-Corporations and Partnerships have until March 15, 2022, to file their taxes. C-Corporations must file their taxes on the traditional Tax Day (April 18, 2022).

When Are Personal Taxes Due?

Personal taxes, or individual tax returns, must be filed by April 18, 2022. If you think you’ll need an extension because you can’t file your individual taxes by that date, then you must file an extension by April 18.

What Happens If You Miss Your Tax Deadline?

If you don’t file your taxes or file for an extension by April 18, then you’ll face significant penalties, including late fees of up to 25%.

Do You Need Help With Your 2022 Taxes?

These important tax deadlines for 2022 aren’t flexible, and the IRS does have the legal authority to penalize you if you fail to meet them. The government already knows how much you made and how much you owe; they want you to do the legwork of compiling the documents and making necessary payments.

If you’re struggling, then don’t hesitate to reach out. Your best bet is to connect with a tax professional if you think you’ll need a filing extension this year, or if you’ll need extra help getting all your tax information filed. Leave your contact information on our contact form now to hear back from one of our experts as soon as possible.

Posted on

Understanding the IRS Hardship Program

Woman figuring out how much she owes to the IRS

Woman figuring out how much she owes to the IRSFor every 35 cents the IRS spends, the department collects $100 in revenue. One reason why the IRS has such a high collection rate is they don’t waste resources going after individuals who simply cannot pay the debt they owe.

Individuals who can’t afford basic living expenses and their tax debt often apply for the IRS hardship program. Once their case gets evaluated, individuals who qualify might get approved for more time to pay off their debt or other types of relief. If you currently owe the IRS a significant chunk of money but live paycheck to paycheck, then you should investigate IRS hardship rules to see if you’re eligible for this type of financial relief.

Learn everything you need to know about IRS hardship and how to apply below.

What Is IRS Hardship?

Did you know that the majority of Americans (61%) didn’t pay any federal income taxes in 2020? While that statistic might initially seem surprising, it makes sense when you consider that an overwhelming number of Americans simply can’t afford to pay their taxes. After all, the 2020 pandemic caused widespread unemployment, financial hardship, and an ever-increasing cost of living. 

When you run into unexpected financial hardship, you don’t have to struggle. There are options for you, and the IRS hardship program is one of those options. 

“IRS hardship” is a term the IRS uses to define Americans who are in “Currently Non-Collectible” status (CNC) or have agreed to a partial pay installment agreement. These individuals have applied for IRS hardship because they couldn’t afford both their basic living expenses and their tax burden.

Not everyone who is struggling financially meets the IRS hardship requirements, though. Plus, getting filed under CNC does not mean that your tax debt is permanently eliminated. That’s why it’s crucial to understand exactly what the IRS hardship program is and how it can help you.

What Is the IRS Hardship Program?

Getting a tax bill that you can’t pay off is one of the most common tax problems Americans face. If you know you honestly cannot pay off your IRS tax bill right away, then it’s important to recognize the tax burden and respond to the IRS. A failure to act could lead to further collection efforts.

First, you need to reasonably consider whether you can pay any of your tax bill. If you’re currently struggling with financial hardship, then the IRS will take that into account. If the IRS determines you can pay the full amount, then you won’t be eligible for the program. Rather than wasting time and effort going through these motions, take the time to really analyze your finances before considering this program.

Next, you need to learn what the IRS hardship program is about. It’s designed for individuals struggling to meet their reasonable, basic living expenses. You’ll need to prove this fact to the IRS, and they’ll evaluate your situation and the proof you provide. If you qualify for the program, then you’ll get offered relief in the form of either CNC status or a partial payment plan. You may get offered additional time to pay off your debt without further penalties and fees.

Who Qualifies for the IRS Hardship Program?

When you fill out an IRS hardship form, you’ll need to provide detailed information about your financial status, assets, income, spending, and average expenses. All these details are important because they’ll help the IRS determine if you qualify for the hardship program or other types of tax debt relief.

To be eligible for CNC status, taxpayers must prove that paying off their taxes would prevent them from meeting their reasonable living expenses. These “reasonable” expenses include:

• Food

• Clothing

• Housing

• Utilities

• Out-of-pocket healthcare expenses

• Transportation

If you have little to no funds left after meeting these needs, then you could qualify for the IRS hardship program. In most situations, you must also earn less than $84,000 a year.

Hardship Rules

As if qualifying for IRS hardship wasn’t hard enough, you need to understand how hardship rules work. In most cases, you’ll only qualify for this type of relief on a yearly or bi-yearly basis. Often, the IRS will completely review your financial information every two years to determine if you’re still eligible for the program. In cases where a taxpayer’s situation has changed, the IRS may revoke financial hardship status.

Your hardship status will not automatically roll over into a new year when you file taxes. If you need your financial hardship status to roll over, then you’ll need to fill out another IRS hardship form for the year you can’t pay. If possible, the best thing to do is to pay off your new taxes as soon as possible to prevent getting further into debt. Paying off your new taxes will not impact your previous hardship standing.

It’s also crucial to stay current with your tax returns while you’re in hardship status. You still need to file your returns on time. Otherwise, you could face a penalty of 5% of your unpaid taxes. This penalty could get levied every month for up to five months.

Will IRS Collection Efforts Continue?

A common thread on tax FAQs is how to stop IRS collection efforts. When you’re facing a tax levy, a seizure of your assets, or wage garnishment, your situation can feel pretty dire. The good news is that applying for the IRS hardship program and achieving CNC status can stop collection efforts for that tax liability. It is important to understand, though, that you’ll need to get hardship status for all your tax debt in order to stop all IRS collection efforts.

If you’ve been notified about IRS collection efforts, then it’s in your best interests to consider reaching out to tax attorneys who can help you navigate your situation.

How to Apply to the IRS Hardship Program

Filing an IRS hardship application is something that you can do on your own, but it’s advised that you consider speaking with a tax consultant before you do. A tax consultant will ensure that you fill out your application correctly and thoroughly. They’ll also help you collect any documentation and proof to back up your financial claims.

To apply, you’ll first need to fill out IRS form 433-F. This will explain your monthly income, expenses, assets, and liabilities. You’ll need to be as accurate and thorough as possible on this form. If necessary, the IRS may also request a 433-A form, which is a longer and more detailed version of form 433-F. Gather up any documentation that supports what you list in the form.

Once this information is submitted, the IRS will analyze your case. You should get a response from the IRS within a few weeks.

Alternative Payment Plans

If the IRS hardship program determines you can pay back a portion of your tax debt, then they may suggest putting you onto a partial payment plan. This type of alternative payment plan allows you to pay back a portion of your tax debt while also relieving you of the full burden. Depending on your situation, the IRS might also say that you qualify for an extension on your payment time due to the undue hardship you’re facing. If you’re hoping to seek out an extension, then you’ll want to use IRS form 1127.

Another common type of alternative payment plan is an IRS settlement or Offer in Compromise. This type of relief is available for taxpayers who don’t think they’ll be able to pay off their tax debt in the immediate future. Rather than accepting their full tax debt liability, the taxpayer can come to an agreement with the IRS for a reduced amount.

Are You Interested in Applying for the IRS Hardship Program?

The IRS hardship program was designed to help provide financial relief to Americans who genuinely can’t afford to pay off their debt without sacrificing their basic necessities. While the agency’s hardship rules might seem strict, these qualifications are put into place to ensure that no one abuses this financial relief option.

Now that you’re empowered with the knowledge about what the IRS hardship program is, who qualifies, and what it can do for you, are you interested in applying? While you could always try to navigate IRS rules and regulations by yourself, it’s reassuring to have a tax expert by your side. Here at Tax Group Center, our tax attorneys, certified tax consultants, and CPAs have helped countless Americans find tax debt relief through the IRS hardship program and other programs.

Contact us today to learn more about your eligibility and options.