Pay Off Back Taxes This Year: Here’s Why

Pay Off Back Taxes This Year: Here’s Why

Why should you pay off back taxes today? We're glad you asked!

According to the IRS, more than 13.2 million Americans owe back taxes. The majority of these cases involve amounts that seem impossible to pay off.

That leaves those tax-owing Americans in a difficult position. They want to pay, but they can't, and the end result is feeling a lot of guilt about the situation.  There is no easy way to get out of paying your back taxes. Uncle Sam wants his money, and he'll get it somehow.

There are steps you can take to find a solution and make 2020 the year you finally deal with your taxes.

Note, we always recommend getting in touch with a specialized Tax Resolution Professional to negotiate with the IRS on your behalf. If you’d like to schedule a no-cost confidential tax relief consultation, contact us here. www.blackhawktaxsolutions.com

Why You Should Pay Off Back Taxes This Year:

#1 You'll End Up Owing Less

The longer you wait to pay your back taxes, the more you are going to end up owing. That's because the IRS can and will add penalties that run up to 50% of the tax bill. That can add up quickly. The longer you drag out the situation, the more you'll need to pay your tax resolution specialist to help you handle everything. The sooner you act, the sooner you can resolve the issue and the less you'll have to pay.

If you need help from a CPA, enrolled agent or a lawyer who is also a tax resolution professional, look for someone that will charge you a flat fee rather than an hourly rate. Some cases take longer to resolve, so it’s important to know up front what you’ll be paying in service fees to get your back tax issue resolved.

#2 Housing prices are at an all time high. Time to cash in?

If you own your home or have equity in it, selling it and downsizing may be the best way to settle your tax debt and get a clean slate. Now is a perfect time, too, with housing prices at a premium in many areas of the country. You can use that cash in the bank to settle your back taxes almost immediately. Additionally, if your home is worth more than you owe, you can then reinvest that money or save it for a rainy day. That gives you a clean financial slate to start rebuilding your life.

#3 Economic Uncertainty

Most experts agree we’re due for a recession soon. How soon? Well, no one knows. What we do know is that having a large back tax bill will only hinder your ability to weather a storm in the event of an economic downturn.

You might be able to take a low interest loan out now that the economy is still good and settle your tax bill. Taking care of your taxes while the economy is still good will give you peace of mind and breathing room in case things go south with the economy.

Don't let the burden of back taxes hang over your head any longer. Discover how to solve your tax problem by speaking with our tax relief professionals: www.blackhawktaxsolutions.com

Blackhawk Tax Solutions, LLC

(719) 694-5505

lauren@blackhawktaxsolutions.com


When to Hire a Tax Relief Professional.

When to Hire a Tax Relief Professional.

When it comes to tax debt issues, many people wonder when the correct time is to seek help from a tax relief professional. We know what you're thinking, there’s only one person that truly has your best interests at heart - and that person is looking back at you in the mirror. Handling your own finances and making your own decisions can give you peace of mind and help you avoid a costly mistake.

There is a lot to be said for the do-it-yourself approach to your money, yet the go it alone path does have its limitations, especially when it comes to the IRS and back taxes.

We see clients that have tried to handle their taxes on their own, sometimes raising red flags with the IRS, resulting in audits, or getting hit with a big tax bill they can’t pay. They might setup an installment agreement on their own, but often times, the DIY approach just makes the penalties and interest keep stacking up putting in an endless loop of back taxes. Many of our clients started out by trying to do this on their own or with their current tax preparer.

Dealing with the IRS takes a very specialized skill set that most tax preparers and even CPA’s don’t possess.  Make sure you have a tax resolution specialist on your side.

So, before you end up in that horror story, here are 3 times when hiring a tax pro, or a tax relief firm like ours, is the only way to go.

#1 You Received a Major Windfall

Even if you know how to handle your finances, receiving a major windfall can throw your plans for a loop. Whether you are the lucky holder of a winning lottery ticket or the recipient of a major inheritance, it pays to seek outside advice.

If you choose the DIY approach and make a mistake, you could end up paying more in taxes than you should, but a high tax bill is not the only danger. Handling your windfall the wrong way could throw off your asset allocation, impact financial aid for your college-bound children and create additional problems down the road.

#2 You Have Existing Tax Problems with the IRS

When you have issues with the IRS, you absolutely cannot afford to go it alone. Attempting to resolve tax issues on your own is unwise in the extreme, and a single slip-up could leave you on the hook for even more. I mean, ask yourself if you would go before a judge in court without a lawyer representing you?  Probably not.  It’s the same here.  Representing yourself before the IRS is generally not a good idea.  Don’t do it. You most likely will get “creamed”!

When you receive a notice from the IRS, time is of the essence, but you should not let the desire for fast action override the need for professional help and guidance. If you want to resolve your issues fairly without going broke, do yourself a favor and find the right tax relief professional to help you get back on track. Hiring an enrolled agent, CPA or an attorney that is trained in tax relief is the best way to preserve your rights, and you do not want to go it alone.

#3 You Have Assets You Need to Protect

When you owe taxes, the IRS only cares about one thing, and that is to get paid what they think you owe them.

They’ll levy your bank account, emptying everything you have in there. If you run a business, that means you won't be able to pay your employees, pay your office rent or keep your lights on, ultimately putting you out of business.

Another way they'll collect is to garnish your paycheck leaving you about 10% to 25% of your net pay to live on.  Good luck with that.

They can also put a lien on your assets, including real estate, personal property and financial assets. This puts in jeopardy everything you’ve worked so hard to attain.

Hiring the right tax relief professional can help you avoid such extreme measures taken by the IRS. They’ll communicate with the IRS on your behalf and can often remove a lien or levy. If you have assets you can’t afford to lose, then hiring a tax relief pro is the only way to go.

The Bottom Line

Even if you are confident in your DIY approach or feel your tax problem isn’t so serious, it never hurts to get a second opinion. If you are doing everything right, that tax relief specialist’s advice will give you peace of mind. If there are deficiencies in your actions, the advice you get could stop you from making a devastating, and possibly irreversible, mistake.

Are you experiencing tax trouble? Reach out to our tax resolution firm and we’ll schedule a free, no-obligation confidential consultation to explain your options in full to permanently resolve your tax problem.

Blackhawk Tax Solutions, LLC

blackhawktaxsolutions.com

(719) 694-5505

lauren@blackhawktaxsolutions.com


What is Currently Not Collectible Status from The IRS?

Currently Not Collectible Status from The IRS.

Big companies are known for getting all sorts of breaks, but when average people fall behind, they rarely receive help. When you owe back taxes, but can’t afford to pay them, then you may qualify for a special tax status known as currently not collectible.

If you’re approved for currently not collectible status, then the IRS must not only cease its collection efforts but can no longer garnish your wages or seize your property.

Want to know if you qualify for currently not collectible status? Contact our firm here for a specific evaluation of your situation.

Blackhawk Tax Solutions, LLC

(719) 694-5505

blackhawktaxsolutions.com

What is Currently Not Collectible Status?

If the IRS agrees you can’t both pay your back taxes and cover your reasonable living expenses, it may place your account in Currently Not Collectible status. It’s based on your current financial situation.

You can request currently not collectible status by submitting the proper form and proof to the IRS of your income and expenses, as well as whether you can sell any assets you may have or get a loan.

As you’ll need to be able to document your inability to pay, be sure to gather copies of all your bills, your most recent paycheck stubs, and statements detailing other sources of income such as alimony, pensions or investments. If the IRS determines that your necessary expenses exceed your income, then it will notify you of your Currently Not Collectible status

WARNING: Don’t try to do this alone. We recommend reaching out to our tax resolution firm to guide you through your options. Talking to the IRS directly could be like shooting yourself in the foot. They’ll ask you very invasive questions that could land you in deeper trouble. Remember, the IRS is not your friend. Their job is to collect what they believe you owe them, so it’s best to have a professional in your corner.

Not a Permanent Solution

Keep in mind that currently not collectible status applies only to your back taxes. You will still have to file tax returns, and you will not be exempted from paying current and future taxes. You will also continue to accumulate penalties and interest on your unpaid taxes. After a year or two, the IRS may review your status, and if you’re able to begin paying your back taxes, then you must do so. If you’re still not able to pay, then your status will be renewed.

Statute of Limitations   

The IRS can attempt to collect outstanding taxes for only 10 years from the date the taxes were assessed against you, usually that’s the date you filed.  If at the end of this 10-year period the IRS hasn’t collected, then the taxes are no longer owed.

In difficult times, many families have trouble meeting their commitments. If you’re worried about the IRS garnishing your wages, levying your bank account or taking your home, then reaching out to our firm and getting a free, no-obligation, confidential consultation on your tax problem may give you some peace of mind. If you’re not approved for Currently Not Collectible status, our firm will explain the many other tax relief options with you. Contact us now.

Blackhawk Tax Solutions, LLC

(719) 694-5505

blackhawktaxsolutions.com


Filing Taxes? 4 Mistakes to Avoid.

Filing Taxes? 4 Mistakes to Avoid.

It can be a stressful experience preparing your taxes and filing them. It can be even more stressful however, if you make these mistakes that land you into tax trouble. It's important to remember that if you make mistakes that are serious enough, you might end up triggering an audit of your tax return or owe more in back taxes.

It’s early to be talking about tax season, but if you're planning on filing your own taxes this year, here are four mistakes that you should avoid.

Don't neglect to report all your income

Whatever your sources of income may be, whether it's your regular paycheck, a side gig, gains that you've made on the stock market, or interest that you've earned from deposits in the bank, it's important to remember that you should account for all of it in your tax return. If you don't, the IRS may come looking for it.

Every time you make at least $600 in income working as an employee of any description, you get a 1099 form stating what you've made. The IRS gets a copy of the form, as well. This means that it makes no sense to try to hide your income from the IRS.

When you make any kind of income, you should report it on your tax return. Technically, you should even record smaller chunks of income, the kind for which you don't get 1099 forms.

Don't just guess at what your deductions are

There are many possible tax deductions that you could take advantage of. It's important to remember, however, that you do need to back up every attempt at a deduction with documentary proof like receipts or logs. If you attempt a rough estimate at what your deductions should be, you could trigger suspicion, especially if the sum that you claim is high for your income level, or if it is a convenient round figure.

Don't automatically reject the idea of itemizing

Most tax filers choose to take the standard deduction, rather than itemize. This doesn't mean that you shouldn't itemize. It depends on your specific circumstances. If you have many legitimate deductions to make, say, because, you pay a great deal of mortgage interest, you might be better off itemizing, even if it takes more work to do it.

Don't put off filing your taxes

Preparing your taxes is a complex process. If you're self-employed, or if you need to itemize, it can only get worse. It's important to not rush through the process. Any mistakes that you make may prove costly. Take out the time to file your taxes well ahead of the tax deadline. If you need extra time, you can always file for an extension. This way, you can avoid the late filing penalty, which can add up to a whopping 25% of the original tax amount

Making a mistake on your tax return is the last thing you want to do. Mistakes can be complicated to correct and recover from. It's important to give yourself enough time.

Whatever you do, don’t skip filing. Many clients come to us with not only years of unfiled tax returns but owing large sums of money to the IRS.  Many times we can help you obtain a “fresh start’ settlement for up to 85% off the original amount owed, including penalties and interest, if you qualify.

If you do run into tax trouble, reach out to our tax resolution firm and we’ll schedule a free, no-obligation confidential consultation to explain your options in full to permanently resolve your tax problem.

Blackhawk Tax Solutions, LLC

(719) 694-5505

blackhawktaxsolutions.com


Why Early Adopters of Cryptocurrency Should Explore Their Tax Resolution Options Now

Why Early Adopters of Cryptocurrency Should Explore Their Tax Resolution Options Now

The stunning rise in the value of Bitcoin, along with the myriad of cryptocurrencies, is surely one of the biggest financial stories of the 21st century, at least so far. What started out as a mere curiosity and niche project for programmers and geeks has quickly blossomed into a full-fledged financial asset, and an increasingly popular one at that.

For early adopters, the financial returns have been simply mind boggling. You may have heard about the generation of Bitcoin millionaires, and there are plenty of those newly rich investors to go around.

The IRS and Cryptocurrency

Given the rapid rise and relative anonymity of Bitcoin transactions, it was only a matter of time before the IRS caught on, and the tax agency has caught on - and caught up - in a big way. After years of taking a hands-off approach to cryptocurrency investments, the IRS is now paying close attention - and requesting the real world identities of those supposedly anonymous buyers and sellers.

While every investor in cryptocurrency should be aware of their potential tax liability, the problem could be even more acute for early adopters - the very investors who have profited the most from this unique form of digital payment.

As with all things tax, the Internal Revenue Service is likely to start where the big money is, and the tax agency has increasingly set their sites on early adopters. If you were prescient enough to buy into the promise of Bitcoin and other cryptocurrencies when everyone else was looking the other way, it may be time to settle up with the IRS.

For early adopters of cryptocurrencies like Bitcoin, a little proactivity could go a long way. The IRS has already requested records from Coinbase and other big cryptocurrency exchanges, and it is only a matter of time before they catch up to you and your profits.

The Future of Cryptocurrency and Taxes

For now, the tax agency claims it has requested information on only the largest accounts, but it is reasonable to assume the IRS will expand its scope in the future. If you have booked your Bitcoin profits and want to settle up with the IRS, contacting a tax resolution agency now could save you a lot of money - and potentially a lot of grief.

There are many reasons for early adopters of Bitcoin and other cryptocurrencies to work with a tax resolution service, starting with the complexity of reporting profits in digital currency. The IRS is still fairly new to regulating and taxing cryptocurrency, and there has been a lot of confusion and misinformation over how profits are taxed and how people are supposed to pay.

Regardless, if you haven’t reported your crypto earnings or filed your taxes for the past few years, it’s time to do so now. By working with a tax resolution expert, you will gain access to a world of expertise, so you can draw on that knowledge to accurately report how much cryptocurrency you have purchased, how many coins you have used and how much you have gained or lost on each transaction.

This accounting is very important, since it could impact not only your tax bill but any future taxes and penalties. According to the IRS, holders and users of cryptocurrencies have been responsible for reporting their gains all along, and failing to do so could mean big penalties and lots of back interest.

How Do I Fix My Cryptocurrency Tax Problems?

A tax resolution specialist will be able to guide you through what is surely one of the most complicated tax situations in many years. The very complexity of the cryptocurrency market makes navigating the tax consequences especially difficult, and it never hurts to have some expert assistance in your corner. So do yourself a favor and come clean now - the IRS has finally caught on to the cryptocurrency revolution, and the tax agency is making up for lost time, and making the lives of early adopters a lot more difficult.

If you want an expert tax resolution professional who knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem.

www.blackhawktaxsolutions.com

Contact Us!

(719) 694-5505

lauren@blackhawktaxsolutions.com

13570 Meadowgrass Drive, Suite 205

Colorado Springs, CO 80921