What is a Federal Tax Lien?


I’m tax attorney Steve Klitzner. It’s my job to protect folks with IRS
problems and to exercise their rights. Now a question that is often asked
of me is, “What is a federal tax lien?” Part two to the question is, “How
do I get rid of it?”

Well, first of all, a federal tax lien is what the IRS files in the county
where you live that’ll protect their interest. If you have any assets or
any property, it’ll attach to that property. It’ll also mess up your credit
pretty good. Sometimes it can lower it by 75 to 100 points.

Now there are some ways to get rid of a federal tax lien. In certain
hardship circumstances we can do it. But other than that, if we can get
your balance down to a certain amount of money, or if we get the tax paid,
I can get than lien withdrawn. Not just released, but withdrawn as if it
never existed. So we can restore your credit.

Give us a call. The consultation with me, personally, is always free. Till
next time, I’m tax attorney Steve Klitzner.

Click Here to contact Steve Klitzner of the Florida Tax Solvers or call at
(305) 834-4160

10 Tax Tips: Don’t Make Same Mistakes as Last Year

As tax season quickly approaches, many households across the country are beginning to gather up their relevant documents and plan their deductions. Filing taxes each year can be stressful. Errors can result in hefty penalties from the IRS and failing to properly document all deductions can cause people to have a much higher tax bill than they should. Here are the top ten tips to help people avoid making errors this year on their tax returns.

1. Consider Delaying or Accelerating Income to Achieve Desirable Tax Brackets

Those who know that they are going to be in the same or a lower tax bracket next year should consider delaying income, such as bonuses, until January to avoid extra taxes at least for this year.

2. Double and Triple check the Direct Deposit Account Numbers

Entering the wrong direct deposit number is depressingly common. Make sure that all numbers are entered correctly to avoid accidentally donating a refund or having it get completely lost.

3. Get the Most out of Deduction Benefits

While most people know that charitable donations are tax deductible, many do not realize that the type of donation makes a difference. For example, a donation of land can help people get the standard donation based upon the value of the land and help them avoid taxes on the profit.

4. Enter all 1099s

Those who do work as a contractor need to be sure that they accurately tally all 1099 forms that they have received. The IRS also has a copy of these forms, and failure to properly declare income can result in a higher tax bill or even interest on the owed tax if the error is not discovered right away.

5. Analyze Benefits to Selling Loser Investments to Offset Gains

Those who have invested a considerable amount of money should consider speaking with a financial adviser or tax professional about selling the loser investments to offset investment gains. This can help lower the tax bill.

6. Maximize the use of Retirement Accounts

Everyone should be contributing the maximum amount to their retirement accounts, such as the 401(k) and Roth IRA.

7. Don’t Forget to put the Correct Social Security Number

This is another surprisingly common error. A social security number is vital for connecting all the records the IRS has on a person, so accidentally writing in the wrong number, or forgetting to write it all together, can drastically slow down a refund or even cause problems with the IRS.

8. Watch Child Investments

Some people try to save money on their taxes while saving for a child’s education by placing investments in a child’s name, since these are not taxed at the same rate. Be careful, though, because once the child’s investments earn more than $2000, they are taxed the same as adults.

9. Always Recheck the Math

It might sound basic, but it is the most common mistake on a tax return. The problems it can cause range from not getting a full refund to having the IRS charge interest on unpaid taxes because of an incorrect income declaration.

10. Do Not Forget any ‘Green’ Home Investments

The federal government offers a range of deductions for various ‘green’ investments, such as a new washer or windows. These appliances and fixtures not only upgrade the home, they also can count towards tax deductions.

Filing a tax return involves avoiding errors while also finding ways to maximize the potential refund. Taking the time to review these ten tips should help anyone avoid potential mistakes from years past and keep any difficulties with the IRS at bay.

Click Here to contact Steve Klitzner of the Florida Tax Solvers or call at
(305) 834-4160

How to Prepare for Tax Season

Tax season is fast approaching, and so is the dread that goes along with it. While the tax code may seem like an endless collection of complicated regulations, lengthy forms, and confusing deadline, getting through tax season can actually be quite easy. All you need to do is carefully and methodically tackle each step of the process before moving on to the next step.

Gather Your Documents

While you can start planning for tax season in December or January, you won’t be able to come up with more than a rough estimate until February. This is because employers have until January 31st to issue the forms that state your final income — W-2s for salaried employees and 1099s for independent contractors. Until then, you may want to start gathering your receipts for charitable donations, business expenses, and any other deductions you plan to claim.

Sign up for Health Coverage

Whether you like the Affordable Care Act or not, 2014 is the year it starts affecting your taxes. If you don’t have health coverage in 2014, you will be faced with a tax penalty. While this doesn’t affect your 2013 taxes, eligibility for subsidies is based on your 2013 income, and the enrollment period occurs during tax season. If you aren’t already on your employer’s plan, you have until March 31st to sign up for health coverage.

Make Sure You’re Paying Enough

The IRS generally imposes a penalty if you owe more than $1,000 in taxes when you file your return. This usually isn’t a problem for salaried employees, who generally have their withholding set to high. If you are self-employed, have a small business, or have some other source of side income, you may need to pay estimated taxes to avoid a penalty. It’s too late for 2013, but find out if you’re paying enough now because the first estimated tax deadline for 2014 is April 15th.

File on Time

Filing your taxes late can bring substantial penalties and interest charges. No matter how busy you are, make sure your tax return is in the mail by April 15th (March 17th for corporations) or you request the automatic six month extension. The deadline to pay your taxes is the same. If you’re unable to pay them in full, don’t delay filing — you’ll still be charged interest, but the late filing penalty won’t apply. Note: The six month filing extension does not extend the time you have to pay and any payments made after April 15th may be subject to interest even if you had a filing extension.

Click Here to contact Steve Klitzner of the Florida Tax Solvers or call at
(305) 834-4160

What to Expect with Taxes in 2014

With tax season upon us and the government shut down looming in the rear view mirror, it may seem that tax payers are in for another surprise. With the 2014 tax season  it is now more important than ever that tax payers be ready to face the changes and understand how they affect their own taxes.

Small Business

Those small business owners are going to be hardest hit when taxes come around. One change that has the most buzz is of course the increase in tax rate for the top federal wage. The top rate has made a drastic jump from 35% all the way up to nearly 40% hovering around 39.6%. This could be a huge increase for some business owners. Those that make $400,000 as an individual and those that make $450,000 as a married couple will be taxed at the highest rate possible while those in the lower bracket may still be affected by the change. On top of the rate increase, small business owners will also have to contend with an upturn on the capital gains rate as well if they fall into the highest of the tax brackets. The rate has increased from 15% to 20%. Even more, some business owners may also have to contend with a new Medicare tax that could leave them reeling.

Standard Deductions

Another change that has popped up is the increase in standard deductions. Deductions were once $12,200 to $12,400 for married couples and $6,100 to $6,200 for single filers. This means that while it may seem easier to take the standard deduction, it may save more money and garner a larger return if deductions are itemized. These changes to standard deductions may affect your personal taxes and then again they may not. Taking the time to learn about the changes is the best way to determine if they are going to affect you.

Exemptions

Those that claim the earned income tax credit will be happy to know that the maximum credit has gone from $6,044 to $6,143. This means that those that are using the credit to help increase their tax return and to help make up for earning deficits during the year can now claim more on their taxes. A few other changes include an increase in personal exemptions ($3,900 to $3,950) and there will be various limits on itemized deductions that can be claimed.

All these changes are unique to each person filing. It is important that before filing, tax payers take the time to really look at what they are planning on putting on their return. It may be beneficial for those filing to take a moment to review all the new tax laws in an effort to familiarize themselves with the changes and to truly begin to understand how these changes affect them. It may even be beneficial to talk to a tax professional to learn a bit more about these changes.

Click Here to contact Steve Klitzner of the Florida Tax Solvers or call at
(305) 834-4160

Lawmakers Can Now Decide to Pass Online Sales Tax Laws

The United States Supreme Court refused to hear a case brought by Amazon and Overstock.com challenging a 2008 New York law requiring online retailers to collect sales tax on purchases by New York State residents. The online retailers had argued that given the number of local jurisdictions with different sales tax rates, the law was overly complicated, unduly burdensome, and restricted the growth of online commerce. The law was upheld by New York’s highest court before the challenge was brought to the Supreme Court.

The Scope of the Decision

New York’s ruling went beyond a 1992 U.S. Supreme Court ruling requiring online retailers to collect sales tax in states where they have a physical presence. Under that rule, a retailer needed to have a physical store or office in a state to be required to collect sales tax. New York’s law included marketing efforts directed at a state and used affiliate marketing as a basis for establishing the company’s presence in a state.

In affiliate marketing, marketers are paid a commission on purchases made after a customer clicks a link from the affiliate’s site. Affiliates often consist of small websites with little oversight by the online retailer.

New York said the goal of its law was to restore a competitive balance between online and brick-and-mortar retailers. Many states have similar laws, and although the states that collect sales tax require residents to pay tax on online purchases, the reality is that if the sales tax is not collected at purchase, the residents do not later pay it.

By declining the case, the Supreme Court allowed all states to continue making their own laws regarding the collection of sales tax online. Congress could use its powers to regulate interstate commerce to enact changes, but appears inclined to allow states to pass their own laws. Earlier this year, the Senate passed legislation making it easier for states to collect sales tax on online purchases.

The Ruling’s Nationwide Effect on Retailers and Consumers

The court’s ruling leaves online retailers across the country faced with processing sales tax for every jurisdiction that collect sales tax. With tax rates differing by county or municipality, this is no easy task. Zip codes often span multiple sales tax rate zones, and there is no easy way for online retailers to determine the proper tax rate. Even if the location could be accurately determined, online retailers would still be required to pay each entity as well as keep up with any rate changes or tax holidays.

Consumers can expect to pay sales tax on all online purchases in the near future. With the largest retailers, such as Amazon and Overstock, already charging sales tax, “tax-free” options are fast disappearing. New laws making the collection of sales tax easier would eliminate any argument against requiring smaller retailers to also charge sales tax. The only good news may be that if the laws become widespread, consumers won’t have to fear that retailers might refuse to service their state because its laws are too strict.

Click Here to contact Steve Klitzner of the Florida Tax Solvers or call at
(305) 834-4160

IRS Tax Audit Myths & Misconceptions

If you’ve never been through an IRS tax audit, you probably have some common misconceptions about what actually triggers an audit. Ask ten people what they think would cause an IRS audit and you would probably get ten different answers. Therefore, we thought we would take a few minutes to clear up a few common myths and misconceptions about what does and does not trigger an IRS audit.

Myth #1 – If you e-file, it will increase the likelihood that you’ll be audited.

The process in which the IRS determines which returns should be audited has nothing to do with the way you chose to file your return. E-filing could actually reduce the chances that your return will be audited due to the fact that electronically filed returns are usually more accurate; therefore, if you e-file, your tax return is less likely to trigger an IRS audit.

Myth #2 – You don’t have to pay taxes on your Social Security benefits.

Many people believe that their Social Security benefits are not taxable. However, that’s not always the case. There are certain income levels that, if exceeded, will require the taxes to be paid. If the bulk of your retirement income is from your Social Security benefits, you won’t have to pay taxes. However, if you receive income from other sources as well, up to 85% of your social security benefits could be taxed.

Myth #3 – If you file an extension, you could trigger an IRS audit.

Some people believe that if they file for an extension, they will draw attention to themselves. Extensions were designed to give taxpayers, who file an extension, an additional six months to complete their returns. There’s no definitive proof that filing an extension triggers an IRS audit. Additionally, it’s possible that filing an extension could actually lessen the likelihood of an audit because you won’t be as rushed to complete your taxes and therefore fewer errors are likely to be made.

Myth #4 – If you file an extension, you will have more time to pay your taxes.

Unfortunately, this is not true. Everyone must pay their taxes by April 15; otherwise, you will have to pay interest and penalties. You can pay your taxes by estimating what you anticipate owing then you need to go ahead and submit your estimated tax payment for that amount. This payment should be included with your file extension request and it should be submitted on or before April 15.

Conclusion

Due to the ever-increasing tax laws and the fact that they’re so difficult to understand, it’s no wonder there’s so much confusion. And that’s exactly how myths and misconceptions get started. When it comes to your taxes, it’s imperative that you understand what’s required of you. The best thing to do if you don’t understand what your rights and responsibilities are is to contact a professional tax consultant and pay for a private consultation or you can call the IRS directly. But whatever you do, don’t assume you know what’s right and what’s wrong. You need to be sure.

Click Here to contact Steve Klitzner of the Florida Tax Solvers or call at
(305) 834-4160

How To Prepare For an IRS Audit

If the three letters IRS give you nightmares, you’re not alone. The fear of the IRS is a common emotion and one that will send chills down your spine. The good news is the chances of being selected for an IRS audit are relatively low. However, that doesn’t mean it won’t happen. Therefore, we would like to give you some tips on how to prepare for an IRS audit.

Should You Hire a Professional Tax Attorney or CPA?

An IRS tax audit is a very long and stressful process. In addition, understanding the tax code, for most people, is like trying to read a foreign language. It’s extremely difficult, unless you know what you’re doing. Hiring professional representation will ensure that you have someone representing you who has been educated in tax law and will be better able to speak for you than you could for yourself. Additionally, people sometimes unwittingly reveal too much information, information that isn’t required and that could potentially do more harm than good.

Gather All Your Documents In Advance

Having the proper documentation is essential when it comes to an IRS tax audit. You’ll need to gather all your bills, your receipts, spreadsheets, mileage logs and previous tax returns for the past three years. If you haven’t practiced good record keeping, try to go back and recreate those records as accurately as possible. You may need to contact your doctor, your employer, your mortgage company, the county, etc. to obtain the documents you need for your audit. Organize all your documents neatly and create a summary with the supporting documentation attached.

If you find that you don’t have enough time to gather the documents you need, call the IRS auditor well in advance and request an extension. The IRS will generally grant you an extension if you give them reasonable cause.

Be Pre-Prepared If You Will Be Representing Yourself

If you’ve chosen not to hire professional representation, you need to thoroughly prepare yourself for the audit. Interview as many people as you can who have already been through an audit. Ask them about the audit process, how they prepared themselves, what to avoid, what types of questions the auditor asked, etc. Additionally, the IRS provides its examiners with an audit guide and many times you will find these guides posted on the IRS website. You should obtain as many of these as you can and study them thoroughly.

You should always conduct yourself in a professional manner. Make sure you’re on time to your audit. Be polite and answer all the auditor’s questions. But don’t offer any information other than what they have directly asked of you. In addition, you should dress professionally, don’t show up in your tattered blue jeans and a dirty shirt. Don’t forget to bring all of your receipts and the necessary documentation. It’s not a good idea to bring a shoebox full of receipts. You should have your receipts separated and organized properly.

Conclusion

Just remember that the IRS is not your friend. The IRS auditor is there with the assumption that you have probably done something wrong, whether you have or not. Be polite, remain confident and never act fearful. Additionally, you should answer his questions honestly and accurately but don’t offer any information other than what you’re asked. We can’t stress this enough.

The audit process will take some time; therefore, you shouldn’t plan anything else on your scheduled audit day. You never want to come across as rude or impatient and you want to make sure you turn off all your electronic devices while in the meeting. Fortunately, not all IRS audits will result in you owing more money in taxes. In fact, sometimes they reflect that the IRS owes you money instead. Sit back, relax and remain confident. You, like those who’ve gone before you, will get through this!

Click Here to contact Steve Klitzner of the Florida Tax Solvers or call at
(305) 834-4160

What to Expect From an IRS Audit

During an audit, the Internal Revenue Service conducts an examination of a person’s or business’s accounts and financial records to check for compliance with the tax codes. Selection does not mean that an error was necessarily made, only that the IRS wants to verify or gather additional information. IRS Publication 556 fully details the audit process and what to expect.

The Audit Process

The IRS selects taxpayers to audit in several ways — some random and some targeted. Upon selection, the IRS notifies the tax payer by letter. In some cases, they call before sending the letter.

An audit may either be conducted by mail or in person depending on what information the IRS is seeking. An in person audit may be scheduled at home, in your office or place of business, or at an IRS office. IRS agents are instructed to be flexible when scheduling an audit, but maintain the final say over when and where it is held.

You may choose to attend alone or with representation. Authorized representatives may include attorneys, Certified Public Accountants, or other individuals properly registered with the IRS. You will need to sign an authorization allowing them to represent you and receive confidential information from the IRS.

Before the audit, the IRS will notify you what documents to bring. They will often also make proposed changes to your tax return. The time an audit will take depends on the complexity of the matter. An obvious mathematical error may lead to a quickly agreed to resolution, while a business taking a large number of deductions may come under heavier scrutiny and a more in-depth look.

There are three possible outcomes to an audit. First, the IRS may be satisfied with your records and your tax return may be unchanged. Second, you may agree to changes proposed by the IRS and to pay the difference. Finally, you may disagree with the proposed changes and the case will be escalated to a manager, mediation, or appeal.

Tips to Survive an Audit

  • While you do not have an absolute right to silence as in a criminal investigation, you also do not need to volunteer additional information. Give short, direct answers to each question. Don’t stonewall or evade because IRS agents are trained that those are signs the taxpayer has something to hide and will dig deeper.
  • Remember the IRS agent is not your friend. They are trained to be professional and to answer your questions, but this is more than just being nice or wanting to improve their image — it’s also a tactic to get people to open up to them.
  • Be prompt. Ignoring IRS notices, missing meetings, or other delay tactics may lead to increased penalties either for late payment or because the IRS decides any errors were more than a simple mistake.
  • Make your case if needed. The IRS is not always right and the tax code is sometimes vague. If a significant amount of money is on the line and you believe you acted in good faith, hire professional help and don’t be afraid to appeal.
Click Here to contact Steve Klitzner of the Florida Tax Solvers or call at
(305) 834-4160

Why Choose Steven Klitzner

I’m tax attorney Steve Klitzner. My practice is limited solely to
representing individuals and businesses with IRS problems. And you’ve seen
the commercials, and I’m just like those guys, except for one thing. I’m
nothing like those guys, because I actually do the work.

When you call my office, you don’t speak to a salesperson. You speak to me.
The consultation is free. You actually speak to the lawyer that’s going to
handle the case from start to finish.

And you know what? I love what I do.

Why? Isn’t this pretty boring; represent people doing tax law? No. The best
part is this. There are certain rules the IRS must follow. Some are part of
the law. Some are part of the Internal Revenue Manual. I know the rules. I
know some of the rules better than they do. And when I exercise someone’s
rights, there’s nothing better. There’s no better feeling than being able
to do what the law says you have the right to do. And in my case, it’s
helping people solve their IRS problems so that they can get a good night’s
sleep and get back to their lives.

So if you’ve got an IRS problem, feel free to call me for a free personal
consultation at the number below.

Click Here to contact Steve Klitzner of the Florida Tax Solvers or call at
(305) 834-4160

Most Common Question

Hi. I’m tax attorney Steve Klitzner. My practice is limited solely to
representing individuals and businesses with IRS problems. Here’s a common
question that people ask. Probably the most asked question when somebody
comes in to the office is: “Am I going to jail?”

Now I can’t speak right here about every single case, but I can tell you
this. The answer is probably not. If you haven’t filed some tax returns or
you haven’t paid the taxes, the IRS really isn’t looking at you to put into
jail. They’re more interested in the high profile people or the people that
are filing false returns or writing the IRS letters like, “It’s
unconstitutional to file taxes.” Those people have a chance of going to
jail. But most people, just like you, don’t pay their taxes, have a couple
of unpaid years, maybe they haven’t filed some returns, and for the most
part, in those cases, the IRS is really just looking to get paid.

So call me for a free consultation, and we’ll talk more about this. My name
is Steve Klitzner and you can reach me at the number below.

Click Here to contact Steve Klitzner of the Florida Tax Solvers or call at
(305) 834-4160