Charlotte Attorney's Informative Blog

The deadline to file your federal return is April 18th 2012. North Carolina returns are due by April 15th 2012, unless you have filed an extension to file your return.

Penalties and Interest

Penalties and interest are applied to returns that are filed late. The longer you wait the more interest will have accrued on your account.

Failure to file returns

If you are required to file a return for that year and do not file one, IRS will file a substitute return on your behalf. This substitute return will not include any of the credits that you are entitled to, or exemptions, and your deductions could be far less than you are entitled to. The end result is that you are taxed at the maximum rate possible. You can file a return to remedy this issue. You have up to ten (10) years after the substitute return is filed by IRS to file a return. You only have three (3) years after a return is due to file a return or an amendment and receive a refund if one is due. Just because the deadline has passed that does not mean you can not correct the the return.

Maxwell Law Firm, PLLC can assist you with filing your 2011 and prior year returns. We represent clients all over the United States on Tax related issues: Garnishments, Tax Liens, Tax Collection Defense, Offers in Compromise, Installment Agreements, and Income Tax Services you may call them at 704-461-1883 or receive a discount off our already low fees by your appointment scheduling online.

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Taxpayer’s are often ignore notices from irs and the state and allow the problem to snowball, says Tax Attorney, Victorianne C. Maxwell. Finding a solution to your tax debt asap is the best thing to do and can help you avoid unnecessary penalties and garnishments.

Collectability of the tax debt

IRS has a 3-year statute of limitations for the IRS auditing a tax return (from the date of filing) and a 10-year statute of limitations for collecting tax once it is deemed owed.

Under N.C. Gen. Stat. § 105‑241.8, North Carolina Department of Revenue has three (3) years from the filing of the return or when the tax would be due. Pursuant to N.C. Gen. Stat. § 105‑242, the department of revenue has ten (10) years to collect on a debt, once the assessment has been properly performed.

Programs available for Tax Payers

Under the new and expanded provisions, certain taxpayers who have been unemployed for 30 days or longer will be able to avoid failure-to-pay penalties. The IRS is also doubling the dollar threshold for taxpayers eligible for installment agreements to help more people qualify for the program.

Installment agreement programs are similarly available for North Carolina State Tax Collections.

OTHER FORMS OF TAX RELIEF

There are a number of things that can be done to relieve a taxpayer’s liability, often times filing an unfiled return with all the taxpayer’s available credits and exemptions will relieve their liability. In other occasions, where a return has been filed, these old taxes are subject to discharge in bankruptcy or are no longer collectible. Talking to a tax professional will be the best thing an individual can do, even if a garnishment is already in place.

Maxwell Law Firm, PLLC represents clients all over the United States on Tax related issues: Garnishments, Tax Liens, Tax Collection Defense, Offers in Compromise, Installment Agreements, and Income Tax Services you may call them at 704-461-1883 or receive a discount off our already low fees by your appointment scheduling online.

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SAVE 30% OFF THE FEES WHEN you prepay for your tax preparation services and schedule the Service online.

You’ve decided to hire someone to file your taxes this year. You’ve looked at your tax pro options and decided which kind of paid preparer fits your needs.

Now the next step: Thoroughly vetting the tax professional.

Remember, regardless of who fills out your 1040 and sends it on to the IRS, when you sign your tax return, you are legally responsible for everything on it. So it’s crucial to hire a tax pro who’s not only knowledgeable, but also ethical.

Most tax preparers are honest and provide quality service. But as with any consumer transaction, it’s up to you, the buyer of the services, to make sure you’re hiring a true professional.

Here are some things to keep in mind when someone else prepares your return.

Check on IRS registration

Starting this year, preparers must be registered with the IRS to file a return. Make sure the person you hire has done so.

If you live in a state that licenses or registers tax preparers, contact that regulatory office to make sure there are no complaints against the person you plan to hire.

Do they belong?
Check your preparers professional affiliations. Membership in such groups requires that a tax preparer follow a code of ethics and participate in continuing education programs.

Office hours are important
Make sure your tax preparer will be around after the April filing deadline. Some offices open up just during filing season and then disappear as soon as returns are filed. But the IRS can come asking questions about a return months later. The person who helped you file it should be around so you can get the answers to any possible IRS questions. We are open five days a week and if you are unable to come to the office you can mail or fax your tax documents to us. Our turnaround time for tax information that are faxed or mailed in is often less than a week.

Who does the actual work?
If your tax preparer is part of larger firm, determine whether he or she will be the person actually doing your tax work or whether your taxes will be delegated to someone else in the office, perhaps a person with less tax training.

Also find out if your preparer exports tax returns for preparation. Foreign countries do not have the same security and privacy laws as the United States, nor is there any recourse should your information be compromised as a result of lax or nonexistent privacy procedures.

How do they charge?
Don’t hire a tax preparer whose fee is based on how big of a refund you get. That’s usually an indication that tax law envelopes will be pushed to get you more money than you’re rightfully entitled to just so your tax preparer can make more money.

Similarly, avoid preparers who claim they can get you a larger refund than other preparers. If your returns are prepared correctly, every preparer should come up with essentially the same tax and refund numbers. Our fees are competitive and relatively low for the amount of expertise and professional services you are receiving. HR Block charge anywhere from $200 – $300 for a single w2 earner where as we are charging you $150.00 or less. HR preparers are only required to have a high school diploma. Our Attorney has been assisting clients with tax related issues for several years and is familiar with most deductions.

Find someone who wants to know
Be wary of preparers who aren’t concerned about documentation. Reputable tax preparers will request to see your receipts and will ask you detailed questions to determine your qualifications for expenses, deductions, credits and the like. It’s always better that these questions are asked by your preparer and answered before filing, rather than later by an IRS examiner.

Avoid blank return requests
Remember that warning about being responsible for the return you sign? If a tax preparer asks you to sign a blank tax return, find a new tax pro. Never sign a tax document before it’s finished and then only after you’ve read it carefully and understand the entries.

If you’re unsure about an entry and your tax pro can’t explain it to your satisfaction, then don’t sign the return. A tax preparer who won’t or can’t explain the items on your 1040 and associated schedules is either incompetent or unscrupulous.

Sure, thoroughly checking out your tax pro takes some time. But it’s time well spent when it ensures that your taxes are completed properly.

For several years now Attorney Maxwell has assisted clients with tax collection defense and has seen several of her clients audited based on improperly prepared returns and countless other issues and errors on income tax returns which cause her clients a lot of trouble and money in the end. She is a Tax Lawyer that offers Low Cost Income tax preparation services, FREE ELECTRONIC FILING for both individuals and businsess tax payers, 1040 filings, 1099 filing assistance,  and year round income tax service

She also assists with:

•Itemized Deductions (Sch A)
• Interest and Ordinary Dividends (Sch B)
•Sole Proprietorship Income & Expenses (Sch C)
• Capital Gains and Losses (Sch D)
• Calculating Cost Basis on Long Term Investments
• Rental Property Income, Expenses and Depreciation (Sch E)
• Household Employment Taxes (Sch H)
• Income Tax Filing Extensions

Clients have several options for having their returns prepared. We have two locations one on Charlotte and One in Concord. For more information see our tax intake form. Save 30% off the fees by prepaying for the service and scheduling your appointment and or the service online.

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INDIVIDUAL INCOME TAX FORMS

Individuals are required to file individual tax returns if you meet certain filing requirements. There are three type of individual tax return forms : 1040, 1040EZ, 1040A.

1040

This is the catchall tax form and anyone can file this form even if you qualify to file the other forms. If you can not  file Form 1040EZ or Form 1040A, you will file Form 1040. All types of income, credits, deductions, and taxes can be reported on this form. Additional schedules and forms can be attached to this form for individuals who own businesses (Schedules C) or claim itemized deductions (Schedule A), and certain credits (Earned Income), ect.

1040EZ

You may file a 1040EZ form if:

• Your taxable income is less than $100,000.
• You are under age 65 and are not blind.
• Your filing status is single or married filing jointly.
• You do not claim any dependents.
• You do not claim any adjustments to gross income.
• You do not claim any credits other than the Making Work Pay Credit or Earned Income Credit.

1040A

You may file a 1040 form if:

• You are claiming standard deductions
• Your taxable income is less than $100,000
• Your income is only from:
  • Wages, salaries, tips
  • Interest and ordinary dividends
  • Capital gain distributions
  • Taxable scholarship and fellowship grants
  • Pensions, annuities and IRAs
  • Unemployment compensation
  • Taxable Social Security and railroad retirement benefits
  • Alaska Permanent Fund dividends.
• Your adjustments to income are only from: Educator expenses, IRA deduction, student loan interest deduction, and or Tuition and fees deduction.

Maxwell Law Firm, PLLC represents clients all over the United States on Tax related issues: Garnishments, business start up services, Income Tax Services you may call them at 704-461-1883 or save 25% off our already low fees by your appointment scheduling online

Disclaimer: This post is for information purposes. Nothing in this post should be construed to be providing legal/tax advice and or creating an Attorney-client relationship.

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WHAT IS AN EIN

An EIN or employer identification number is similar to a social security number but it is used by a business owner in lieu of using their individual social security number.

WHAT IS THE PURPOSE OF EIN

Most transfers and income is reported under an identification number. This income is reported to IRS during a tax year as income to the payee. The number is used to track taxable payments income received by  that payee.

WHO NEEDS TO USE AN EIN

You are required to have EIN if any of the following is true:

• If you have employees or contractors or required to withhold taxes
• If you operate an incorporated business (LLC, S-corp, C-Corp, Partnership)
• Nonprofit Organizations
• If you are required to file any of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms?
• Certain Trusts or Estates

YOU NEED TO CONSULT WITH A TAX PROFESSIONAL 

To avoid confusion, notices, and issues in the problems consult with an Attorney to assist you in setting up your business such as incorporation and provide you with general tax advice.

Maxwell Law Firm, PLLC represents clients all over the United States on Tax related issues: Garnishments, business start up services; Income Tax Services  you may call them at 704-461-1883 or save 25% off our already low fees by your appointment scheduling online.

This post is for information purposes. Nothing in this post should be construed to be providing legal/tax advice and or creating an Attorney-client relationship.

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BY TAX ATTORNEY

Under some circumstances people may not be required to file a Federal Tax Return. But in most cases individuals are required to file a Federal Tax Return annually.

2011 Minimum Income Requirements to File a Federal Income Tax Return

If you are unable to pay to have your return prepared there are low income free filing services available at VITA locations. Our firm offers great fast, affordable services and free e-filing services too our clients.

Maxwell Law Firm, PLLC represents clients all over the United States on Tax related issues: Garnishments, Tax Liens, Tax Collection Defense, Offers in Compromise, Installment Agreements, and  Income Tax Preparation Services  you may call them at 704-461-1883 or save 25% off our already low fees by your appointment scheduling online.

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The state of North Carolina has collected more than $135 million in taxes from confiscated illegal substances since 1990 – about $50 million of it within the past five years.

WHAT IS AN UNAUTHORIZED SUBSTANCE TAX

North Carolina imposes  an excise tax on controlled substances (marijuana, cocaine, etc.), illicit spirituous liquor ("moonshine"), mash and illicit mixed beverages.

HOW DOES NORTH CAROLINA DETERMINE THE RATE OF TAX

They have a chart and scale of tax depending on the type of substance and the amount.

HOW DOES NORTH CAROLINA ENFORCE THIS TAX

Not paying it within 48 hours of acquiring the substances can also mean a 40 percent penalty on the tax due.

The North Carolina Department of Revenue gets the money by seizing bank accounts, garnishing wages or auctioning off personal assets, such as cars, boats, motorcycles, electronics and jewelry.

The statute is not clear as to whether a conviction is required and I am sure more litigation will have to occur for the law to either be ruled unconstitutional or to define exactly whether a conviction on the underlying drug possession charge will be necessary.

Maxwell Law Firm, PLLC represents clients all over the United States on Tax related issues: Garnishments, Tax Liens, Tax Collection Defense, Offers in Compromise, Installment Agreements, and  Income Tax Services  you may call them at 704-461-1883 or save 25% off our already low fees by your appointment scheduling online.

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People often come into my office once they owe a IRS or the State unpaid taxes and If they are a W2 employees? and then I ask them what their withholding exemptions are on their w4 form? Says Tax Attorney Victorianne Maxwell of Maxwell Law Firm, PLLC.

WHAT IS A W2 FORM?

A W2 an IRS tax form issued by employers and stating how much an employee was paid in a year. It also includes your taxable income and how much was withheld from your wages for federal and state taxes if they apply. The W2 is sent or transmitted to IRS and provided to the employee at the beginning of the current year for the previous calendar year. This is why IRS is able to know how much you have earned in one year, whether or not you report the income.

WHAT IS A W4?

When you are hired by an employer they should have you fill out a W4. It is an IRS form that your employer has you fill out so your employer can withhold the correct federal income tax from your pay. The purpose of the form is to prevent  having too much or too little Federal income tax withheld from your pay.

WHAT SHOULD BE INCLUDED ON YOUR W4 FORM?

The W4 Should include:

· Your name,

· Address,

· Marital Status,

· Social Security Number &

· The number of withholding allowances you are claiming.

WHAT EXEMPTIONS SHOULD I CLAIM?

An withholding allowances is essentially the same as the number of exemptions you can claim when you will file your tax return. You can claim one allowance for yourself, one for your spouse and one for each of your dependents. You should not claim that you are tax exempt unless you meet the criteria. I will discuss this in a later blog. Even if you do have several exemptions you can claim as little as 0 or 1 for yourself. I recommend that most of my clients do this. People will sometime say that they do not want to give IRS a interest free loan that they will eventually refund me. Here is my take on things. IF you claim too many or all your exemptions then there is a strong possibility that enough taxes will not be taken out and you will end up owing a balance on your taxes that year. Even if you are getting the money you put in come tax season, it is far better than owing a balance every year. In the long run if you owe a balance you will be looking at paying possible fines and penalties, in addition to those balances. Fines and Penalties will cost you more than giving IRS an interest free loan.

Maxwell Law Firm, PLLC represents clients all over the United States on Tax related issues: Garnishments, Tax Liens, Tax Collection Defense, Offers in Compromise, Installment Agreements, and  Income Tax Services  you may call them at 704-461-1883 or save 25% off our already low fees by your appointment scheduling online.

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Often times my tax clients tell me they have not filed their most recent return in April and want to know the ramifications of their actions, says Tax Attorney, Victorianne C. Maxwell of Maxwell Law Firm, PLLC.

WHEN ARE TAXES GENERALLY DUE

2010 Federal Returns were due on April 18, 2011 and North Carolina Tax Returns were due on or before April 15, 2011, unless you are not required to file a return or have filed an Extension to file your return. If you have filed an extension than your federal tax returns are due on or before 10/17/2011.

BENEFITS OF FILING AN EXTENSION TO FILE YOUR TAX RETURN 

People often file extensions because they do not have enough money to pay the balance on their  taxes either:

(1) Self-employed and have not made any or enough estimated payments to cover the full balance owed on their tax return OR;

(2) They will owe a balance on their return because they have received some untaxed income, sale of property, or investment that does not have any deferred or non-taxable treatment for that year OR:

(3) They simply do not have enough taxes withheld from their earnings either because they are 1099 or the exemption amount they listed on their W2 Employee Form.

Filing for an extension to file your tax return can provide you an extra six months to get the necessary documents and or funds necessary to pay off the balance. Filing an extension may also help reduce the amount of penalties and fines you will have to pay in some circumstances. You can also elect to send in some payment with the Extension you are filing.

HOW FILING AN EXTENSION CAN HAVE A NEGATIVE IMPACT

There are a few things you should be aware of when you file an extension to file your tax return. Here are just a few:

(1) Filing an extension to file your tax return changes the due date on those returns. The due date on your return because it determines the amount of time IRS or the State has to perform an audit on your tax return or access a different amount that what you have listed on your return. Under normal circumstances IRS has the later of three (3) years from the date you file or the date the tax return was due to make to make a final assessment on your tax return. By filing an extension to file your tax return you are extending the time IRS has to access your taxes and generate a notice.

(2) Filing an extension to file your tax return may not protect you from being charged penalties and interest on your tax liability. Keep in mind IRS will often charge a penalty when you fail to make enough estimated payments or have enough money withdrawn from your paycheck.

(3) Filing an extension to file your tax return will affect the dischargeability of those taxes should you need to file for Bankruptcy. Under 11 USC 507 (a) (7) (E ) tax debt that is filed or due less than three years before the date of the filing of the bankruptcy petition is non-dischargeable. For example a debtor  receives an extension to file his 2007 return until October of that year and  then files his 2007 taxes in July of 2008. Debtor later tries to file for chapter 7 bankruptcy  on May of 2011, still owing a balance on 2007 taxes. The 2007 taxes are non-dischargeable because the taxes were technically due on October of 2008. For the tax liability to be dischargeable Debtor would have had to wait to file for bankruptcy After October of 2011.

IF YOU ARE EXPERIENCING DIFFICULTIES WITH YOUR TAX DEBT SEEK HELP

Either a CPA or Tax Attorney can sit down with you and assist you with the best route to take to eliminate, reduce, or pay off your tax liability. Remember doing nothing simply will not work, because both IRS and the state have the ability to garnish your wages or your account for unpaid taxes.

Maxwell Law Firm, PLLC represents clients all over the United States on Tax related issues: Wage Garnishments, Tax Liens, Tax Collection Defense, Offers in Compromise, Installment Agreements, and  Income Tax Services.  You can call 704-461-1883 to schedule your appointment or save 25% off the fees by scheduling online.

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Frequently, I have people come in with notices and ask me what they can do how much time they have to respond? The first thing I look at is whether IRS followed procedures, says Tax Attorney Victorianne C. Maxwell of Maxwell Law Firm.

In order for you to owe a balance IRS must do one of two things.

The first is an audit this where IRS says that your tax liability is greater than what you indicated on your return because you improperly applied a deduction, exemption, or some other mistake. They must provide you with a copy of this report and you should or will get an opportunity to meet with an IRS examiner regarding your audit.

OR

In some cases IRS may send you an assessment. An assessment is when IRS states that you owe an amount based on the fact that you did not file a return or the return you filed was defective.

WHAT SHOULD YOU DO IF YOU RECEIVE AN AUDIT OR AN ASSESSMENT

Contact a Tax professional immediately. A reputable tax professional would be a CPA or Tax Attorney who will have an office open year round. Some local tax shops are only open seasonally and can do noting more but file a simple return. A Tax professional can take a look at your audit and or assessment and tell you if it has any merit and look at your options. Often times, I can find some flaws in the audit report or assessment and save my clients some serious money. Waiting till the last minute will simply hurt you and cost you more $ money in the long run, especially if you are garnished.

Attorney Maxwell is a Tax Attorney at Maxwell Law Firm, that represents clients all over the United States on Tax related issues: Wage Garnishments, Tax Liens, Tax Collection Defense, Offers in Compromise, Installment Agreements, and  Income Tax Services. You can save 25% off the fees by scheduling your appointment online or you can call 704-461-1883 to setup your in person or telephone consultation.

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