April 2018

Part III – What to do if you owe money to the IRS

 

     Part III – What to do if you owe money to the IRS

What do you get when you put the words “THE” and “IRS” together?   THEIRS.

They will get THEIRS one way or another, but you do have a say in the matter, even when you owe them. Here is a primer.

Whatever you do, file your return on time

Even if you can’t pay what you owe. The failure-to-file penalty is the most onerous of all: 5% of the tax due for any month, or fraction of a month it is late, up to 25%.

Make a partial payment

Even if you can’t pay the whole tax bill, pay as much as you can. As long as you owe, the interest and penalties keep adding up. But, it also depends on the length of time, amount and where the money is coming from. Consider IRS does not report what you owe to credit bureaus as long as no liens are filed.

Request a payment extension

If you haven't applied for a payment extension before, this could be another option. After you file your tax forms without payment, the IRS will contact you to ask whether you would be able to pay within 120 days. If you choose this option, the agency will charge you a monthly fee of 0.5 percent of the amount owed. 

Tax Series Part II: Demystifying the Tax Benefits of IRA's and ROTH IRA's

    Tax Series Part II:    Demystifying the Tax Benefits of IRA's and ROTH IRA's

What is an IRA?

Credit Where Credit is Due in Three Parts

Introduction to the Tax Series: Part I: What do Plumbing and Taxes have in common?

 “The hardest thing in the world to understand is the Income Tax”

Albert Einstein

   

Introduction to the Tax Series

It’s tax time and everyone’s thoughts seem to be on taxes. We decided to help by providing a perspective of a financial advisor who happens to be a CPA as well. It will be intended to inform and educate. This theme will appear in the coming weeks leading up to tax filing deadlines in the middle of April and beyond. The lineup will be as follows:

Part I -  What do Plumbing and Taxes have in common?

Part II - Demystifying the Tax Benefits of IRA’s and ROTH IRA’s

Part III - What to do if You Owe Money to the IRS

Part IV - Preparing for the New Tax Law

 

Part I: What do Plumbing and Taxes have in common?

We have all heard the phrase on TV crime dramas: “He who represents himself in court has a fool for a client”. We believe this concept applies equally to your taxes. Which leads to my plumbing project. If you think there is no connection between my plumbing and your taxes, think again.

When my kids were younger, we wanted to modernize their bathroom without a complete remodel. The first priority was to swap out old faucets made of the kind of plastic that turns yellow. When my wife and I agreed, we then disagreed (married readers will understand). She expected me to call a plumber and I was expecting to do it myself. How difficult could it be? Initially, I prevailed and was committed to proving her wrong. We picked out the replacement faucets. I went back home and, armed with my tool chest, proceeded to scope out the project. It should be noted that I seldom used my own tools, and trepidations aside, it was too late to turn back. “I got this!” was my valiant refrain, that is, if I could find a wrench that would fit underneath the sink. After 30 minutes of futility and frustration, I tried disconnecting the faucets from the top, only to see, to my horror, the plastic break and water start gushing everywhere. Only then did I suffer the indignity of asking my wife to shut off the water main, after which I called a plumber. I was happy to pay to get it done right.

Introduction to the Tax Series: Part I: What do Plumbing and Taxes have in common?

 “The hardest thing in the world to understand is the Income Tax”

Albert Einstein

   

Introduction to the Tax Series

It’s tax time and everyone’s thoughts seem to be on taxes. We decided to help by providing a perspective of a financial advisor who happens to be a CPA as well. It will be intended to inform and educate. This theme will appear in the coming weeks leading up to tax filing deadlines in the middle of April and beyond. The lineup will be as follows:

Part I -  What do Plumbing and Taxes have in common?

Part II - Demystifying the Tax Benefits of IRA’s and ROTH IRA’s

Part III - What to do if You Owe Money to the IRS

Part IV - Preparing for the New Tax Law

 

Part I: What do Plumbing and Taxes have in common?

We have all heard the phrase on TV crime dramas: “He who represents himself in court has a fool for a client”. We believe this concept applies equally to your taxes. Which leads to my plumbing project. If you think there is no connection between my plumbing and your taxes, think again.

When my kids were younger, we wanted to modernize their bathroom without a complete remodel. The first priority was to swap out old faucets made of the kind of plastic that turns yellow. When my wife and I agreed, we then disagreed (married readers will understand). She expected me to call a plumber and I was expecting to do it myself. How difficult could it be? Initially, I prevailed and was committed to proving her wrong. We picked out the replacement faucets. I went back home and, armed with my tool chest, proceeded to scope out the project. It should be noted that I seldom used my own tools, and trepidations aside, it was too late to turn back. “I got this!” was my valiant refrain, that is, if I could find a wrench that would fit underneath the sink. After 30 minutes of futility and frustration, I tried disconnecting the faucets from the top, only to see, to my horror, the plastic break and water start gushing everywhere. Only then did I suffer the indignity of asking my wife to shut off the water main, after which I called a plumber. I was happy to pay to get it done right.