The IRS Offers Options for Getting Right with Uncle Sam

A good CPA can help you find
solutions to your tax problems.

Do you owe the IRS right now? The first thing to do is open all mail from the agency so you're on top of the matter. Next, stay calm. Well, it's understandable if you panic a little, because the IRS wields power that can make your life miserable. Depending on your situation, the agency can take your paycheck and your bank and retirement accounts, and more. They'll seize land, business assets, cars — anything they can auction and turn into cash quickly.

But all is not lost if you act now.  

Consider the following strategies to get back in good graces with Uncle Sam:

1. Ask for more time. Depending on your circumstances, you may be granted a short extension period to pay your tax in full. You can request this by filling out an application for an online payment agreement or by calling 800-829-1040.

2. Try for an installment plan. If you owe $50,000 or less in combined taxes, penalties and interest, you can fill out the application for an online payment agreement. Fees for setting up payment plans can range from $43 to $105.

3. Make an offer. That is, file for what's known formally as an "offer in compromise." You basically tell the IRS that you're prepared to pay a certain amount to settle your debt. Getting agreement will depend on whether the agency believes that this is the maximum you can manage. You must meet certain standards to be considered. If you're going through a bankruptcy, for example, you're not eligible. And if you haven't filed all of your tax returns, don't apply.

READ MORE >> AARP: Can't Pay Your Taxes?

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•     GBC Audit Services Website
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Should I Use the IRS Withholding Calculator This Tax Season?

Avoid having too much or too little
income tax withheld from your pay.

If you are an employee, the Withholding Calculator can help you determine whether you need to give your employer a new  Form W-4, Employee's Withholding Allowance Certificate to avoid having too much or too little Federal income tax withheld from your pay. You can use your results from the calculator to help fill out the form.

Who Can Benefit From The Withholding Calculator?

• Employees who would like to change their withholding to reduce their tax refund or their balance due;
• Employees whose situations are only approximated by the worksheets on the paper W-4 (e.g., anyone with concurrent jobs, or couples in which both are employed; those entitled to file as Head of Household; and those with several children eligible for the Child Tax Credit);
• Employees with non-wage income in excess of their adjustments and deductions, who would prefer to have tax on that income withheld from their paychecks rather than make periodic separate payments through the estimated tax procedures.

READ MORE >> IRS.GOV: IRS Withholding Calculator

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The Basics of Hiring an Accountant

It is essential to procure services
from a quality preparer to ensure a
successful tax plan for your future.

Finding an accountant to prepare your taxes is a relatively straightforward process.

The task is of average difficulty and should require one to two hours of your time. Creating a tax plan for your future is important; consider seeking out the advice of a licensed tax professional, such as a Certified Public Accountant or an Enrolled Agent.

Here are some basic tips for hiring an accountant:

1. A CPA is a professional accountant licensed by the state. Best for corporate accounting, tax audits, and business consulting.
2. An Enrolled Agent is a tax professional licensed by the IRS. Best for complex tax issues, tax audits, and responding to tax collectors.
3. A Tax Preparer may be registered by the state. Best for straightforward tax returns.
4. The national Tax Franchises are H&R Block, Jackson Hewitt, and Liberty Tax. Offices nationwide. Often fast, courteous, and convenient.
5. Expect to pay from $150 to $450, depending on how complicated your tax return is.

READ MORE >> TAXES.ABOUT.COM: How to Find an Accountant
 
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New IRS Tax Brackets, Standard Deduction Amounts, And More

Let an accountant help you
simplify the process
this year at tax time.

The Internal Revenue Service has announced the annual inflation adjustments for a number of provisions for the year 2014, including tax rate schedules, tax tables and cost-of-living adjustments for certain tax items.

These are the applicable numbers for the tax year 2014. That means the year that we are in now. 

They are NOT the numbers and rates that you’ll use to prepare your 2013 tax returns in 2014 (the season is starting late this year).  These numbers and rates are those you’ll use to prepare your 2014 tax returns in 2015. Got it? Good.

All together, the IRS posted more than 40 updates.

READ THEM HERE >> FORBES.COM: IRS Announces 2014 Tax Brackets, Standard Deduction Amounts And More

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Paying Tax Later Usually Better Than Paying Now

Your accountant or CPA
can help you with your tax planning.

Deciding whether you are better off with 2013 v. 2014 income can itself be imprecise.

How can you figure what to buy, receive, pay, settle or deduct before the end of the year?

Conventional wisdom says you should accelerate tax deductions and defer income. Thus, paying tax later is usually better than paying now. That means you should delay income into January when you can, but get ready to crunch some numbers. Even if the tax system were static, the changes between 2013 and 2014 rates and rules—let alone the economy—make it tough. Add to that the many expiring tax provisions and you’ll find that calculators or software are all but essential.

READ MORE >> FORBES.COM: Compare 2014 v. 2013 IRS Tax Rates Before It's Too Late

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Seven States With No Income Taxes

How much is your state income tax?

The IRS isn't the only one who wants a piece of your paycheck - 41 states have a broad-based individual income tax, but it is interesting that there are a few states who have none.

That doesn't mean, however, that you will pay less tax overall by living in one of these states.

States need revenue to function, and these states will have to make up for the lack of income tax somehow. New Hampshire and Texas, for example, make up for it in property taxes. Both states have some of the highest property taxes in the nation. The cost of higher property taxes, sales taxes, fuel taxes, and other taxes could amount to higher overall taxes in some of these states. Only seven states lack an income tax altogether. They are:

• Alaska
• Florida
• Nevada
• South Dakota
• Texas
• Washington
• Wyoming

 READ MORE >> taxes.about.com: States Without an Income Tax

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