Tax Preparation
Tax preparation can be tedious,frustrating, complicated, and time-consuming. Professional tax preparers are trained to handle any situation for the best outcome. Income taxes for self-employed and business owners involve assets and business expenses and income. Tax preparation for business also involve payroll taxes. The IRS recommends using professionals in the preparation of taxes.
Individuals, including those self-employed or sole proprietors, earning income in the United States pay a percentage of their earnings to the Internal Revenue Service (IRS) in the form of individual income taxes.
All employers must report and deposit employment taxes to the Internal Revenue Service (IRS) throughout the year.
Every business except partnerships must file an annual income tax return, whether they are a small business, sole proprietor or large corporation.
Late Returns
Return filed
In compliance with the tax authorities
Proceed with tax resolution work
Return not filed
Tax authorities will not cooperate with any tax resolution work
Stop tax resolution work
Tax preparation: The importance of filing all unfiled tax returns
- Become and stay in compliance
- The IRS or the state tax authorities will require you to file all tax returns due and be in compliance before they allow for any tax resolution measures. Also, at anytime during the tax resolution period, you are still required to be in compliance, which means you have to be current on filing all tax returns and paying any outstanding taxes.
- For example, if you owe the IRS $6,000 in income tax and have a plan to pay $100 a month for 5 years, and you do not file your tax returns or pay taxes due in the third year of your plan, you run the risk of having the IRS cancel your plan and begin collection actions against you.
- Avoid tax assessment by the tax authority
- If you do not file your taxes, the tax authority will estimate (assess) your taxes on your behalf. In most cases, the tax amount assessed will be significantly greater than what it really is had you assessed your own taxes by filing your own tax returns.
- Avoid penalties
- The failure to pay your taxes on time adds a penalty of about 25% in most cases to your amount of taxes due. This can add a substantial amount of money on top of your taxes. This is another important reason you want to file taxes timely.
Tax preparation: the challenges of filing late tax returns
- Collecting tax info
It is very difficult to collect all of the documents you need to file a late tax return. This is especially true if you have several years’ worth of unfiled tax returns. Furthermore, a less-than organized record keeping system compounds the problem. Documents include W-2s, 1099s, interest statements, mortgage statements and more. It is not impossible to collect all the required tax data and prepare an accurate and complete tax return. However, it not only presents a challenge, but is very time consuming. This is especially true the further back you need to go.
- Time
When you are dealing with a tax issue that is time sensitive, the least thing you have is time. Preparing multiple years of late tax returns can take a significant time commitment. It becomes more challenging if you do not have the experience of dealing with such returns.
- Cost
The cost of completing and filing many tax returns at the same time can be expensive. The same complexity extends beyond the time commitment to the cost commitment.
The options of filing all your returns
- Use your own tax preparer
Use your own tax professional to prepare your delinquent tax returns. It is important that you make sure your preparer is aware of your tax default situation and the time constraints associated with it. You can also try to negotiate the tax preparation costs per tax return.
- Prepare your own tax return
You can use a self-preparation software that would allow you to enter your tax information into the system in an interview style. Of course, you have to assume the risks that comes with preparing your own tax return. These risks are due to the lack of experience or a low level of experience in preparing tax returns, especially ones for past years and / or the ones that are more complex.
- Have us prepare your tax returns
As a tax company, our management team has prepared tens of thousands of tax returns at all levels of complexity, covering individuals and businesses of all legal structures and in many industries. Our experience will ensure that your tax returns are prepared in the best way possible, minimizing your tax liability as much as it is possible.
We are experts in preparing tax returns for prior years, even when you do not have the source documents and cannot locate important information. With your authorization, we pull that information and use it to prepare the tax return.
Contact us as soon as you can
Our consultation is FREE. The sooner you contact us, the sooner we can get to work for you.