Current Year Tax Preparation

Most people need to file tax returns. But it depends on three factors:

• Gross Income: Did you earn salary, wages, tips, bonuses or dividends? If you get a 1099-Misc. and it exceeds $600 dollars, you must file a tax return. If you’re getting social security money, you need to file if your total income is more than $25,000. If you’re married and receiving social security, you need to file if you are: a) married, living together at any time during the tax year, and filing separate returns b) your total gross income and any tax-exempt interest you earn is more than $25,000 ($32,000 if married and filing jointly).
• Filing Status: Were you single, married, married filing separate, head of household, or a qualifying widow/widower with dependent child on the last day of the tax year (December 31)? Your status, combined with your age, determines the gross income thresholds for filing a return. You can determine your status by using the IRS filing status tool: https://www.irs.gov/help/ita/what-is-my-filing-status
• Age: If you are age 65 or older in the current tax year, you will be taxed at a different rate and eligible for additional deductions. In addition, If you are turning 65 on January 1, 2018, you can file as 65 years of age on your 2017 tax return. The rule only works for age 65, and only if your birthday is on the first day of the year.

Our tax experts can help you determine if you need to file a tax return. Or, you can use this IRS online questionnaire: https://www.irs.gov/help/ita/do-i-need-to-file-a-tax-return.

The key advantage is that you may be eligible for a refund for the current year. This refund would then be used to reduce the back taxes you owe.

Refunds are also issued on a “use it or lose it” basis. The statute of limitations for claiming a tax refund is three years from the tax return due date or two years from the date the tax was paid, whichever is later.

Finally, if you do not file your own return, the IRS may file for you. When the IRS files a return, it is not in your best interest. If you have several unfiled returns, your smartest course of action is to get them filed. Only when your returns are filed can you start negotiating with the IRS to resolve any back taxes owing.

It depends.

If the amount of the refund is more than the amount of the tax debt you owe, you may be able to keep the difference.

If your refund is seized due to an IRS error, we can make a case to get your refund.

The Treasury Department’s Offset Program can seize your federal tax refund to pay other outstanding debts (for example, child support, student loans, state income tax or unemployment compensation debts). These debts must be negotiated separately from your IRS tax liabilities.

Tax laws are complicated. Deductions, credits and tax rates change regularly. As a result, people who prepare their own taxes can easily overlook deductions and credits to which they’re entitled.

Using tax software also has shortcomings. Software is designed to apply general logic to the data you enter. Software cannot apply critical thinking about tax law to your personal situation.

At Precision Tax Relief, we prepare hundreds of tax returns annually and have thorough knowledge of the most current tax laws. We provide personalized advice to find the maximum possible tax savings. And because we specialize in resolving tax debt, we are experts on keeping our clients safe from IRS collections.

Most taxpayers can file for an automatic extension by submitting an electronic form or a paper Form 4868 (Form 7004 for businesses).

However, some taxpayers are not eligible for extensions. When you have an active tax debt with the IRS, one of the conditions of most agreements is to accrue no new tax debt. Filing and paying your current year taxes past the deadline can be seen by the IRS as a violation of your agreement.

If you were approved for an Offer in Compromise, you must file by the April deadline during your five-year probationary period. If you do not file by the April deadline, the IRS can revoke your Offer in Compromise and reinstate the original amount owed.

If you have an existing installment agreement, you can request an extension on the deadline to file your tax return — but not an extension on the deadline to pay any tax debt from the current year. To protect your installment agreement, you will need to pay at least 90% of the estimated amount owed by the April tax deadline. Make sure you also request your extension to file before the April deadline (usually April 15) and file by the extension date (October 15).

Likewise, when you are Currently not Collectible, it is very important to comply with your tax filing requirements. The IRS can — and does — re-evaluate cases of hardship status on a regular basis. If you do not file or pay current year taxes on time, the IRS can revoke Currently not Collectible status and resume collection activities.

We can help you to file on time and protect your agreement with the IRS.

Yes, amended returns can reduce tax debt and stop IRS collections. If you reported any of the following items incorrectly, you should get help filing an amended return:

• Your total income
• Your filing status
• Your dependents
• Your tax deductions or credits

To file an amended tax return, use a Form 1040X. Individuals have three years from the date you filed your original tax return to claim a refund. You can file your Form 1040X within two years from the date you paid the tax, if that date is later. That means the last day for most people to file a 2017 claim for a refund is April 15, 2021.