You received a notice from the IRS. Now what do you do?

Nine Tips for Taxpayers Who Receive an IRS Notice

Receiving a notice from the Internal Revenue Service is no cause for alarm. Every year the IRS sends millions of letters and notices to taxpayers. In the event one shows up in your mailbox, here are eight things you should know.

1. Don’t panic. Many of these letters can be dealt with very simply.

2. There are a number of reasons the IRS sends notices to taxpayers. The notice may request payment of taxes, notify you of a change to your account or request additional information. The notice you receive normally covers a very specific issue about your account or tax return.

3. Each letter and notice offers specific instructions on what you need to do to satisfy the inquiry.

4. If you receive a notice about a correction to your tax return, you should review the correspondence and compare it with the information on your return.

5. If you agree with the correction to your account, usually no reply is necessary unless a payment is due.

6. If you do not agree with the correction the IRS made, it is important that you respond as requested. Respond to the IRS in writing to explain why you disagree. Include any documents and information you wish the IRS to consider, along with the bottom tear-off portion of the notice. Mail the information to the IRS address shown in the lower left corner of the notice. Allow at least 30 days for a response from the IRS.

7. Most correspondence can be handled without calling or visiting an IRS office. However, if you have questions, call the telephone number in the upper right corner of the notice. When you call, have a copy of your tax return and the correspondence available.

8. Keep copies of any correspondence with your tax records.

9. And most importantly, consult an Enrolled Agent (EA), the highest designation awarded by the US Department of the Treasury and America’s Tax Expert ©

 

Florida Society of Enrolled Agents Installs Jeffrey Schneider, EA as President Elect

Miami Lakes– On June 21, 2012 the FSEA held their annual Convention at Shulas Hotel and Golf Club. The convention provided Enrolled Agents and other tax professionals with the opportunity to network with each other, enhance their various skills and expand their knowledge on all things tax.

On Friday evening, June 22 the FSEA installed the new slate of officers for the coming  year and Jeffrey Schneider, EA was installed as President Elect.

The Florida Society of Enrolled Agents (FSEA) is the professional society representing Enrolled Agents (EAs) in Florida. Members are licensed by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service (IRS), including examination, collection and appeals functions. For more information, please visit the website, http://www.FSEAonline.org. The Florida Society of Enrolled Agents is an affiliate of the National Association of Enrolled Agents (NAEA) and they encourage all tax practitioners to consider the benefits of joining.  The National Association of Enrolled Agents (NAEA) is a national association of independent, licensed tax professionals called Enrolled Agents (EA). The association is dedicated to helping its members maintain the highest level of knowledge, skills and professionalism in all areas of taxation, so that their members may most effectively represent the needs of their clients.

Jeffrey Schneider, EA heads the firm, SFS Tax, Accounting & College Planning Services and has offices in Royal Palm Beach and Port St Lucie, Florida. Jeffrey can be reached at info@sfstaxacct.com or 561 868-1868 in Palm Beach County or 772 337-1040 in St Lucie County. Please visit his website, http://www.sfstaxacct.com for more information about the company.

Failure to File or Pay Penalties: Eight Facts

The number of electronic filing and payment options increases every year, which helps reduce your burden and also improves the timeliness and accuracy of tax returns. When it comes to filing your tax return, however, the law provides that the IRS can assess a penalty if you fail to file, fail to pay or both.

Here are eight important points about the two different penalties you may face if you file or pay late.

1. If you do not file by the deadline, you might face a failure-to-file penalty. If you do not pay by the due date, you could face a failure-to-pay penalty.

2. The failure-to-file penalty is generally more than the failure-to-pay penalty. So if you cannot pay all the taxes you owe, you should still file your tax return on time and pay as much as you can, then explore other payment options. The IRS will work with you.

3. The penalty for filing late is usually 5 percent of the unpaid taxes for each month or part of a month that a return is late. This penalty will not exceed 25 percent of your unpaid taxes.

4. If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.

5. If you do not pay your taxes by the due date, you will generally have to pay a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid. This penalty can be as much as 25 percent of your unpaid taxes.

6. If you request an extension of time to file by the tax deadline and you paid at least 90 percent of your actual tax liability by the original due date, you will not face a failure-to-pay penalty if the remaining balance is paid by the extended due date.

7. If both the failure-to-file penalty and the failure-to-pay penalty apply in any month, the 5 percent failure-to-file penalty is reduced by the failure-to-pay penalty. However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.

8. You will not have to pay a failure-to-file or failure-to-pay penalty if you can show that you failed to file or pay on time because of reasonable cause and not because of willful neglect. 

Florida Society of Enrolled Agents Install New Board of Directors

July 6, 2011

Kissimmee, FL- The 2011 Florida Society of Enrolled Agents Annual Conference was just held at the Gaylord Palm Hotel & Convention Center. The conference provided the members with the opportunity to network with other Tax Professionals, enhance their various skills and expand their knowledge on current tax legislation, emerging issues and changes in their profession. On Friday, July 1, 2011 the FSEA installed the new slate for the coming year.

From left to right: Immediate Past President, William Weidenbach, EA, Treasurer, Sue Anne Curd, EA, Secretary, Twila Midwood, EA, President- Elect, Ana Magda Guillen, EA, President, Anita Manuel, EA, and Vice-President, Jeffrey Schneider, EA,

The Florida Society of Enrolled Agents (FSEA) is the professional society representing Enrolled Agents (EAs) in Florida. Members are licensed by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service (IRS), including examination, collection and appeals functions. For more information, please visit the website, http://www.FSEAonline.org. The FSEA is an affiliate of the National Association of Enrolled Agents (NAEA) and they urge all tax practitioners to consider the benefits of joining.

The National Association of Enrolled Agents (NAEA) is a national association of independent, licensed tax professionals called Enrolled Agents (EA). The association is dedicated to helping its members keep up the highest level of knowledge, skills and professionalism in all areas of taxation, so that their members may most effectively represent the needs of their clients.

Have you ever considered how history shifts on small decisions?

Image via Wikipedia

What we celebrated on the 4th was the bravery of men who said [I paraphrased] : “If you’re going to tax me, I need a representative. And, since you won’t give me THAT … well, we’re free anyway. Government doesn’t give us our rights; our Creator does. So, we declare that we are, in fact, independent.”

Imagine if, before this point, the King of England had said: “Alright, I’ll allow a representative from each colony a seat in the Parliament.” I mean really — it’s not like we wouldn’t have been taxed up the wazoo with representation … the votes would have been something like 250-13 to tax the colonies to high hell!

But at least there would have been representation! [Historians point out that Washington, Adams, Franklin and others, at first, wanted only the same rights as other British subjects. Only until the British remained stubborn did they opt for full independence.] Instead, the British lack of imagination helped birth the greatest experiment in freedom the world has seen over the last two+ centuries (IMHO).  It may just be that you need to have your own little declaration of independence. Here’s what I mean…

True Freedom … From The IRS
Well, the dream of freedom, birthed on the 4th , does still live. But let’s face it–our government (especially the IRS) is ready to become a deeper, larger influence in our lives. And it’s ironic, this month of Independence, to see how much power the IRS now has as probably one of the most powerful organizations in the USA. Solely responsible for collecting Federal taxes and imposing related penalties, the IRS poses one of the biggest financial threats to individuals and business owners. They have unique information resources, legal standing, and roles as a law enforcement agency.  On top of all this, the IRS has the authority to issue legislation and the freedom to make mistakes without consequences (they’re protected from penalties for false tax accusations)!

So what can we do to protect ourselves from the IRS’ power and potential for financial wrath???  … Well, if there were a concrete answer for that, the IRS wouldn’t be the intimidating and widely feared agency it is today.  But there is one thing each of us can do  to keep them off our back: Keep Records! (I know, a bit lame … but it’s true!)
Our best defense against audits and false accusations is keeping accurate, detailed records of the flow of all money into and out of our lives.  Now, depending on your situation, this could be complicated and time-consuming!  Where do you begin?
A great place to start is by calling our office; we can help you decide where to focus your record-keeping efforts, and help you develop a strong wall of defense around the “castle” of your finances.  Generally, the better and more accurate your records, the better your chances are for surviving an All-Out IRS Battle! 

Give us a call today (spending a little today, could save a lot later)! 
Email info@sfstaxacct.com  or call us (561-868-1868 or 772-337-1040) now!

If you  are NOT a subscriber to our weekly “Real World” Personal Strategy Email series, you may go HERE to  subscribe: http://jeffreyschneider.mylocaltaxpro.com/

Have You Thought About Capitalizing on Low Capital Gains Rates?

Investors should note that the historically low capital gains tax rates have been extended through 2012. With that in mind, it might be time to 

"harvest" some of your unrealized gains in case tax rates rise again in the future. Also a tax-savvy way to completely eliminate your capital 

gains tax might be to donate appreciated stock to charity and receive a deduction equal to the security's current market value. Special rules 

apply to noncash donations, so check with us before you move forward on this strategy.

Need great tax or accounting help? SFS Tax, Accounting & College Planning Services is a year round, full service firm offering; bookkeeping, 

accounting, tax, payroll and college funding and planning services. 

IRS problems? Our Enrolled Agent, Jeffrey Schneider specializes in; offer in compromise, IRS levies and garnishments, filing late taxes, penalty 

and interest abatement, and innocent spouse.

With our online, "Real Time" accounting, we can work with businesses and individuals outside the Port St Lucie and Royal Palm Beach area, 

throughout Florida, and the other 50 states.

Visit our website: http://www.sfstaxacct.com and sign up for your FREE report and get your Free Tax Tip every week. Or call for more 

information. 561 868-1868 or  772 337-1040.Located in Royal Palm Beach and Port St Lucie, FL to better serve you.

CHECK YOUR WITHHOLDING TAXES

Tax Tip of the Week:

Check your withholding early in 2011, and again whenever your circumstances change during the year (marriage, divorce, new baby, etc.) to be sure you are having the right amount withheld from your paycheck. You must meet minimum tax payment requirements, but don’t overwithhold, or you’ll be giving the IRS interest-free use of your money. If you need to adjust your withholding, file a new Form W-4 with your employer.

Need expert tax or accounting help? SFS Tax, Accounting & College Planning Services is a year round, full service firm offering; bookkeeping, accounting, tax, payroll and college funding and planning services.

IRS problems? Our Enrolled Agent, Jeffrey Schneider specializes in; offer in compromise, IRS levies and garnishments, filing late taxes, penalty and interest abatement, and innocent spouse.

With our online, “Real Time” accounting, we can work with businesses and individuals outside the Port St Lucie and Royal Palm Beach area, throughout Florida, and the other 50 states.

Visit our website: http://www.sfstaxacct.com and sign up for your FREE report and check the site weekly to get your Free Tax Tip.

Located in Royal Palm Beach and Port St Lucie, FL to better serve you.

Can you take the tax deduction?

Do you have a closet full of stuff that you would love to get rid of? Is your garage full to the point of exploding with your now married children’s toys and clothing? What do you do with all this “junk”. You can donate to the various charities (Goodwill, The Salvation Army or Am Vets to name a few), receive a tax deduction (if you itemize) and save about $20-$30 in real taxes or sell it.

Many people conduct periodic garage sales. You sell your stuff and pocket the change. If you have enough stuff, you can pocket a couple of hundred dollars and most of it is tax-free as the cost of the items sold are much more than what you sold it for. The other side is that you can not take the loss (sales price minus cost) as these transactions are considered personal, not business and personal losses are not deductible.

Other people take selling their unwanted toys and clothing to the internet using Ebay and Craigs List, amoung others. If you sell items on an occassional basis, you have tax free income via the new age “internet garage sale”. But what happens if you conduct hundreds of these transactions in any given year? In a recent court case, the IRS prevailed when they wanted to tax the seller on the gross income received from activity on EBay. Their case stemmed on the fact that the individual conducted hundreds of sales transactions in each of two years. They argued and the court agreed that this was a business and that the gross revenue received from each and every sale was income. The court did not put a number as to how many transactions constitute a business. In reading the case, it has more to do with a continuous and ongoing activity that was the deciding factor.

The good news is that the cost of every item sold is a deduction against that income and any fees incurred in the selling of these items are deductions.

The bad news: Who keeps receipts of a childs toy or article of clothing from a few years ago, not to mention 10 or more years. So if you want to conduct numerous transactions on any of these sites, make sure that you have documentation as to the cost of the items sold or the IRS may, not only attempt to subject the revenue to the income tax, but as a business, the self-employment tax.

Please contact SFS Tax, Accounting and College Planning Services before you begin anything that may be construed as a business so you can plan accordingly and limit your potential tax expoure. Our website is http://www.sfstaxacct.com or call us at 561 868-1868 or 772 337-1040.

Is This College Too Expensive?

Sarah Lawrence College just earned the top spot on the list of most expensive colleges in the country.
Sarah Lawrence will charge $58,716 for tuition, fees, room and board for the 2011-2012 school year.
In a recent piece, Karen Lawrence, the school’s president, defended that price tag by citing the school’s commitment to small class size, low staff-to-student ratios and the ability to handcraft your own education.
How do you feel about the cost? Is this school worth it? Let us know what you think

At SFS Tax, Accounting & College Planning we help remove the frustration and confusion experienced when planning and paying for college. We help you make sound financial decisions designed to achieve your families academic goals. There are many strategies that can make college affordable and we will work to find the right one for you.

Please visit our website http://www.sfscollegeplanningspecialists.com or call us 772 337-1040 or 561 868-1868 to find out how we can help you.

Do You Know the Seven Things about Getting More Time to File your Tax Return

Procrastinators can’t make the April 18 tax filing deadline? Need more time to file your tax return?
You can get an automatic six month extension of time to file from the IRS but, SFS Tax, Accounting & College Planning Services in Royal Palm Beach and Port St Lucie, Fl would love to help you out. However, if you prefer to file on you’re your own, keep reading……

Here are seven important things you need to know about filing an extension:

1. File on time even if you can’t pay:  If your return is completed but you are unable to pay the full amount of tax due, do not ask for an extension. File your return on time and pay as much as you can. The IRS will send you a bill or notice for the balance due. To apply online for a payment agreement, go to the IRS website at http://www.irs.gov and click “Apply for an Online Payment Agreement (OPA)” at the left side of the home page under Online Services. If you are unable to make payments, call the IRS at 800-829-1040 to discuss your options.
2. Extra time to file:  An extension will give you extra time to get your paperwork to the IRS, but it does not extend the time you have to pay any tax due. You will owe interest on any amount not paid by the April 18 deadline, plus you may owe penalties.
3. Form to file:  Request an extension to file by submitting Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, to the IRS by April 18, 2011, or make an extension-related electronic credit card payment. For more information about extension-related credit card payments, see Form 4868.
4. E-file extension:  You can e-file an extension request using tax preparation software with your own computer or by going to an professional tax preparer, an Enrolled Agent, who has the software. The IRS will acknowledge receipt of the extension request if you file by computer.
5. Traditional Free File and Free File Fillable Forms:  You can use both Free File options to file an extension. Access the Free File page at http://www.irs.gov.
6. Electronic funds withdrawal:  If you ask for an extension via computer, you can also choose to pay any expected balance due by authorizing an electronic funds withdrawal from a checking or savings account. You will need the correct bank routing and account numbers. For information about these and other methods of payment, visit the IRS website at http://www.irs.gov or call 800-TAX-1040 (800-829-1040).
7. How to get forms:  Form 4868 is available for download from the IRS website or ordered by calling 800-TAX-FORM (800-829-3676).You can also obtain the form at your local IRS office. Telephone requests normally take 7 – 15 days to process and ship.

SFS Tax, Accounting & College Planning Services is here to help you all year round. Tax professional, Jeffrey Schneider, Enrolled Agent is here to make certain you get all tax breaks legally allowed by the IRS. Call us now 561 868-1868 or 772 337-1040. Serving the Royal Palm Beach, Wellington, W Palm Beach, Port St Lucie, Ft Pierce, and Stuart and all surrounding areas as well as the rest of the 50 states.