What Is IRS Levy And How To Get Exemptions?
Tax levies put your assets at risk. To remove them, you need to work with the IRS to pay your back taxes. A tax levy is a serious business if you owe back taxes.
Here’s how a tax levy can affect you, and how you can remove the IRS levy.
What Is A Tax Levy?
A tax levy is the seizure of property to pay taxes owed. Tax levies can include penalties including garnishing wages, seizing assets and bank accounts. Tax levies show up after you have gotten a tax lien. It is a claim the government makes on the property, when passed due on the income taxes.
What To Know About IRS Levy Exemptions?
Pay The Tax Bill
Sounds obvious, but in most cases paying back taxes is the only way to stop the tax levy. The most important thing is to cooperate with the collection action. If they ask for something, you give it to them.
Get On IRS Payment Plan
Your tax balance will accrue interest and penalties until it’s paid off, but if you allow the IRS to take three consecutive payments, you may convince the IRS to withdraw the lien from public record.
Ask For Offer In Compromise
It is a request to settle your back taxes for less than the full amount you owe. Beware: the IRS accepts fewer than half of the applications it gets in a year. You also won’t be considered if you are in bankruptcy or being audited.
File An Appeal
You have 30 days from the time the IRS notifies you of its intent to levy an asset to make a formal appeal. This appeal temporarily stops the IRS levy from being enacted until a decision is made on the tax situation.
Now, to file a formal appeal, you need to complete and submit IRS form 9423 that can be found on IRS.gov.
Appealing a levy may be a relatively straightforward process. However, it is no guarantee that the IRS will reverse its decision to levy the assets.
Request Installment Agreement
When the levy your assets, it will not relinquish its claim until tax debt is satisfied.
Rather than wait for months or years before it happens, you could have the IRS levy release fast by requesting an installment agreement with which to pay off the debt.
How Can Tax Levy Affect You?
Your paycheck shrinks- wage garnishment is common tactic. It means your employer must fork over a portion of the earnings each payday.
Your bank accounts are frozen- bank accounts are prime targets for recouping back taxes. Usually, the IRS contacts the bank and places a 21 day hold on the account.
Can You Reverse Tax Levy?
The IRS is required to provide a legal notice stating the time gap the taxpayer has for arranging the funds, reversing a tax levy, and securing assets once again.
However, it is harder for levied assets to be returned than it is to avoid levy before it takes place. The IRS only reverse a levy if:
- The IRS levy was made before a taxpayer was given 30 days to request a hearing.
- The IRS didn’t follow procedures
- The seized property is needed to earn income, thus helping the taxpayer pay the debt.
Finally, these methods are available to you when you want to have a tax levy against the property released. These are designed to help avoid having the assets sold off in order to settle the IRS debt.
Contact Us Today:
Locations:
Tax Planning For Beginners- Some Key Principles For You
Tax planning involves assessing the financial situation from the taxpayer’s perspective. It helps reduce the money that you owe the government. The goal is taking that money and choosing financial options for promoting tax treatments.
Do it through proper planning, including strategizing, timing, leveraging tax-advantageous vehicles, and more. Let us check out some basic principles for the benefit of individuals and small business owners.
Schedule A Consultation Today!
Estimate The Total Income
The first step in income tax planning is determining how much money you have or expect to earn for that calendar year. For anyone working as an employee, the primary source will be the W-2 that the employer will send within January 31. You even have various 1099s for miscellaneous incomes.
Take Time For Financial Transactions
Simple Tax planning strategies for high income earners to reduce tax liability is this: defer revenue, accelerate expenses. What in the world does this mean?
It is most useful for businesses with high revenues and expenditure. It holds for individuals.
While maximizing retirement benefits may seem like a bonus, business owners can get into the action. If you have any extra income, set up a 401(k) in your business for the employees and yourself.
There are many plans for small businesses, such as IRAs, SEPs, and more.
Some amount of reading, a little common sense, and a trusted financial advisor can go a long way to help reduce the tax bill.
Choose The Right Tax Deductions
For financial planning tax deduction, you have two deduction options: standard tax deduction and itemized tax deduction. You may only choose one every year.
With the changes of the Tax Cuts and Jobs Act of 2017, voted on December 22, 2017, and effected for the upcoming tax year, this area has changed.
Schedule A Consultation Today!
Retain Essential Documents
As you have seen, as a new business owner, you will need a financial statement filing for tax returns. Whether filing a Schedule C or a business tax return, it is essential to retain all the financial records. These include bills, invoices, receipts, slips, and other documents related to money transactions.
Business owners should keep copies of their previous year’s tax returns for three years after filing. It is usually the statute of limitation for the IRS to audit the return or for you to amend the return.
Team Up With Professionals
It is difficult going ahead with business tax planning on your own. For this reason, most experts recommend business owners get help with preparing for tax season from an experienced accountant.
Even individual filers with complicated investments, deductions, and contributions must consider getting expert assistance.
Understand Tax Credits
Tax credits are government sponsored form of tax assistance. Unlike deductions, these credits lower the tax liability.
It makes them superior savings options to reduce the tax burden- assuming you qualify. Individuals can take advantage of many tax credits.
Finally, the key to America tax plan for new businesses lies in knowing what to do to streamline tax planning.
Contact Us Today:
Locations:
How to Hire the Best Agency for Tax Services Santa Monica
The one word that nobody is fond of hearing is, “taxes”. Irrespective of the taxes being uncomplicated or complicated, the majority of individuals do not have any idea on figuring out the write off’s, and in most cases these can actually help you get back the money instead of owing it. This happens due to lack of knowledge of tax services, rules, and regulations. This is the reason individuals and business owners take advantage of companies that offer tax services Santa Monica. Doing tax services include a lot of work, right from your earnings to the investments made on the current year, properties owned by you, the significant purchases made by you, donation amount given by you for a social cause, and so on. The benefits of tax services outweigh the expenses, as the IRS would not bother much about saving your hard earned money, and with software programs, there is no scope for personalizing the tax returns, like the professionals offering tax services can.
The most advantage of hiring a tax service agency in Santa Monica is to get a panel of experienced and knowledgeable professionals at your service, who would oversee your accounts. These professionals would be able to dig up every opportunity so that your money can be saved and even collected. There are manifold opportunities to save your money and for this extensive worksheets need to be filled out and reports to be prepared. These tax experts would help you by filling out all complicated paperwork, so that there would not be any error, if an audit is done by the IRS. All you need to do is sign off the papers and be on your way.
Hiring such a tax service expert also means you can get their help to resolve any concern or query whenever you need. Whenever there is a financial situation that makes you worried, you can just give them a call and they would be able to answer you about the specific tax situation. These experts also give you sound advice on the next year’s tax filing, so that everything becomes easier for you to deal with.
How to find a good tax preparer?
Instead of randomly choosing a tax preparer without background checking, you need to make sure that the chosen agency is really credible and would help your purpose of shelling out the money. You need to check the website of the agency offering the tax service to find out whether they really provide the high quality of services as advertised. You should ask for referrals, who has the specific tax returns just like your business or personal account. You need to know whether the agency has certified CPAs, who spend hours in learning tax laws, accounting, tax regulations, IRS functions, and the annual changes in the IRS code. You also have to check whether they come with updated certificates, to make sure that the professional in charge of your tax preparation has really mastered all the knowledge required for the job.
