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How Much Will the IRS Settle For?

tax settlement

How Much Will the IRS Settle For?

Tax settlement is a service that deserves discussion in the midst of tax season. If you are wondering how much money the IRS will settle for in an offer of compromise, there is an average number that is available. On average, the IRS settles for $6,629. In the year 2014, the IRS received 68,000 offers in compromise from American taxpayers. Of those offers, the IRS only accepted 27,000 of those offers. This means that the IRS rejected sixty percent of the offers that were made. The monetary amount that was accepted totaled $179 million.

How Does a Settlement Affect My Taxes?

Are you wondering how a settlement will impact your taxes? If so, please review the following list to discover more after-effects of a tax settlement.

  • To begin with, a debt settlement will appear on your credit report.
  • The debt settlement will hurt your credit score.
  • You will be required to pay taxes on the difference between what you paid and what you owed.
  • The amount of debt that was not paid will be reported to the IRS as income.

Can You Negotiate a Settlement With the IRS?

Are you wondering whether or not you can negotiate a settlement with the IRS? If so, it will suit you to know that the IRS can’t accept a settlement offer if the taxpayer can afford to pay what they owe. When applying for a settlement offer, taxpayers will need to make an initial payment. After that, the IRS will apply submitted payments to reduce taxes that are owed. For this process, the IRS has an Offer in Compromise Pre-Qualifier tool on their website.

What is the Fresh Start Program with the IRS?

Have you ever heard of the Fresh Start Program with the IRS? The Fresh Start program is intended for people who owe a tax debt of fifty thousand dollars or less to the IRS. They can start the Fresh Start repayment process at any time. If taxpayers are unemployed for thirty days or longer may be eligible to have their IRS penalties waived.

Does IRS Forgive Tax Debt After 10 Years?

Ten years may seem like a long time, but it is important to recognize that this increment of time can have consequences for your tax future. The Internal Revenue Service, also known as the IRS, has ten years in which unpaid tax debt can be collected. After the time increment of ten years, the debt is wiped clean from the books. At that time, the IRS will write it off. This process is what is known as the Ten Year Statute of Limitations.

Is Settlement Tax-Free

According to the Internal Revenue Service, if a person receives a settlement for personal physical injuries or physical sickness and does not take an itemized deduction with regard to medical expenses related to the injury, then the full amount is non-taxable. Because this is the case, you do not include the settlement proceeds in your income.

What is Tax Settlement Definition

The definition of what a tax settlement is is important is you are not already aware of the term. A tax settlement is an arrangement that is deemed acceptable to the IRS or state taxing authorities. It allows a taxpayer to retire an outstanding tax debt for less than the original amount that was owed. This is usually based on current tax regulations. It is also based on the circumstances of the taxpayer.

What is Income Tax Settlement Commission

The Tax Settlement Commission is a quasi-judicial body. It was apparently set up under section 245B of the Income-tax Act of 1961. It was actually set up as a recommendation that was made by the Direct Taxes Enquiry Committee. That committee is usually known as the Wanchoo Committee. The purpose behind setting up the Commission was to settle the tax liabilities in complicated cases. To this end, it would avoid endless and prolonged litigation and consequential strain on the resources of the Income-Tax Department.

tax settlement

What is Tax Equalization Settlement

Have you ever heard of the term, “Tax Equalization Settlement”? If not, it’s important to understand that tax equalization is essentially to equalize the amount of tax paid so that the taxpayer who is ostensibly living and working abroad will pay what he or she would have paid in tax domestically. This statement is applicable when an individual is working for an international company and is beginning to work abroad in his home country. It will always be important to follow up on the important process of one’s taxes. Hiring a qualified tax expert will be an excellent step in the right direction.

If you would like to discuss a tax settlement in Fort Worth, TX, please reach out to us at 817-905-1040.

Does my small business really need CPA services?

cpa hard at work

What is a CPA?

CPA is the abbreviation for a certified public accountant, a profession recognition that is licensed by the professional organization, American Institute of Certified Public Accountants. Persons that are awarded a CPA have passed the stringent Uniform CPA Examination after completed the education requirements and a level of work experience. That work experience is typically gained after employment of working with a CPA for small business taxes or other areas of business finance areas. Without the completed education along with work experience with a local CPA for small businesses, the official licensing cannot be attained.

These requirements established by AICPA gives the organization the ability to enforce and maintain professional standards within the accounting industry. A CPA becomes a trusted CPA small business services and a tax advisor for individuals. Once a person has been licensed by AICPA, they may hold the position of, or provide the services of these positions:

  • Accounting consultants
  • Auditors
  • Business advisers
  • Decision makers
  • Tax consultants
  • And more that coincides with the duties of a CPA for small business taxes and other financial matters. 

An accountant and a CPA have many of the same duties, but there are four major differences: 

  1. Professional Licensing: As we stated earlier, a CPA has completed educational requirements and passed the exam issued by the American Institute of Certified Public Accountants. The exam is based on the state law where the CPA will do business. Once a person has received their CPA, they are required to take continuing education classes to maintain their knowledge of changes and issues in the accounting industry.
  2. Fiduciary Responsibilities: Businesses are often required to have a monthly financial statement audit or review and must be completed by a CPA. A CPA has the legal duties with anything related to the company’s fiduciaries and has the authority to represent the company those fronts. A non-CPA accountant does not have that legal right.
  3. Taxes and Regulations: An accountant can prepare a tax return, but a licensed CPA has more tax code knowledge and has the legal right to represent their clients with the IRS. 
  4. Code of Ethics and State Requirements: In addition to having a CPA license, continuing education, but they are sworn to follow and uphold the strict code of ethics while meeting the profession’s high standards.

What do small business accountants do?

A small business accountant responsibility to verify data, analyze data, and use that data to generate reports, perform financial reporting records, and perform audits. They also complete balance sheets, income statements, and tax returns. The analysis the accountant has created can be used for the owners to create their forecast while looking at the current business trends, determining where their opportunity for growth. 

Can a CPA help you start a business?

Yes, a licensed CPA can be a great source of help and information for a small business. This should be one of the first people you should see before you get your business off the ground. A CPA for small business taxes is only one benefit of having a CPA on your team staring your new business. Other benefits in addition of having a CPA for small business taxes:

  • Evaluate Business Idea: Your CPA will evaluate the viability of the plan. What may sound good in your mind may not be profitable after figuring in the start-up costs and ongoing cost to run the business.
  • A Business Entity: A CPA for small business taxes will also help you determine that entity a small business should be set up under C corporation, S corporation, LLC, Sole proprietorship, Partnership
  • The business entity has to be right from the beginning, which will determine how the business needs to run. If liability protection is needed, are the business partners, how to budget for estimated taxes, and more. 
  • Tax Responsibilities: Where a CPA for small business taxes is most helpful in advising what various tax responsibilities are required, like payroll taxes, doing business taxes, sales tax to charge, and more. 
  • Set-Up Bookkeeping: A business’s transactions must be kept in a bookkeeping system, including expenses, sales, and returns. A licensed CPS will have the knowledge to set up the system, explain to the owner what their duties are in this regard. 
  • Deductions: A CPA for small business taxes will know what deductions a small business can take, both ordinary, necessary, and complicated.        

How do I choose a CPA for my small business?

Once the decision has been made to hire an accountant or CPA, use the following CPA small business checklist on what to look for from this person

  • Location: Today, a CPA’s location isn’t as important because more businesses are working online with their CPA and with the Cloud, it’s even easier and safer than ever. If you want a CPA that can be hands-on, location is important 
  • Certification:  Ask any CPA you’re considering if they have their current license, update with continuing education, and in good standing with the American Institute of Certified Public Accountants. 
  • Relative Experience Choose a CPA firm for a small business like yours, they’ll be better knowledgeable to with all things small business and not confused with other clients that are large. 
  • Dividing Duties: A CPA will either charge you by the hour or a flat monthly rate.  Don’t give them small daily duties to handle, you’re paying for their knowledge and experience, not daily bookkeeping.
small business with sign

How do I choose a business accountant?     

The following are basics to use to search for a business accountant. You may think of more things to check too. 

  • You need to understand what you need: an accountant or a CPA. What duties and responsibilities do you expect the accountant or CPA to handle – that could tell you that an accountant is sufficient.  
  • Avoid the big accounting firms, stick with an accountant or CPA that specializes in small businesses.  
  • Ask other small business owners for the recommendation of an accountant or CPA they use. 
  • Compare charges and fees, some charge by the hour, some by the month. 3
  • Use Social Media to find CPA firms and accountants.  
  • What accounting software do they use and what do you use? Are they compatible?  Do they use Cloud Technology?

Call 817-905-1040 today for quality CPA services from Don R. Walker, C.P.A.!

Which is an Example of a Payroll Tax?

payroll tax

Which is an Example of a Payroll Tax?

Generally speaking, there are four basic types of payroll taxes. Payroll taxes include federal income, Social Security, Medicare, and federal unemployment. It is important to consider that employees must pay Social Security and Medicare taxes. They do this through payroll deductions. As a matter of fact, most employers also deduct federal income tax payments.

What is the Current Payroll Tax?

The current tax rate is six percent on the first seven thousand dollars of each employee’s wages each year. Many employers can qualify for a five-point-four percent federal tax credit. They can accomplish this by paying their state unemployment taxes on that.

What is the Difference Between Payroll Tax and Income Tax?

Are you wondering what the difference is between a payroll tax and an income tax? If so, answers await. Please review the following bullet-pointed list to find out more.

  • Payroll tax. Payroll taxes are taxes that are paid on the wages and salaries of employees. 
  • Income tax. Income tax is a tax that governments impose upon income. This income is generated by businesses and individuals within their jurisdiction. According to the law, taxpayers must file an income tax return annually. This is in order to determine their tax obligations.

What do Employers Pay in Payroll Taxes?

If you need payroll tax preparation, it is important that you find the proper resources to assist. Are you wondering what employers pay in payroll taxes? It’s relevant to consider that both employers and employees pay FICA tax. FICA tax is Social Security and Medicare Taxes. It is split fifty-fifty. In order to determine each employee’s FICA tax liability, an employer must multiply their gross wages by 7.65 percent. If you are wondering whether an employer or an employee pays federal unemployment taxes, you may be surprised by the answer. Federal unemployment taxes, which are called FUTA taxes are paid by employers based upon the gross pay of employees. The FUTA tax percentage may change from year to year.

How Does a Payroll Tax Cut Work?

If you are wondering whether you would benefit from a payroll tax cut, it is critical for you to consider the advantages and benefits. A payroll tax cut could free up more cash for employees and employers. If Social Security and Medicare taxes aren’t taken out of paychecks, then workers and businesses could take home a little more money with each paycheck. A payroll tax cut would give employers more money, which in turn would reduce the need to lay off employees.

What Payroll Tax Relief

Payroll tax relief is an interesting concept. In basic terms, an employee and employer split payroll taxes. For Social Security, 6.2 percent of your wages, which are up to $137,700 for 2020, are withheld from your paycheck and sent to the IRS. Essentially, the IRS receives the equivalent of 12.4 percent of your wages to support social security.

Which Payroll Taxes are Deductible

Social Security and Medicare taxes, also known as Payroll taxes, can be deducted when they are paid. It is important to remember that the company will deduct only the portion of the payroll tax that is paid by the company. That means 7.65 percent of the initial $97,500 of pay for each employee. That will be 1.45 percent of any payment in excess of $97,500. 

When are Payroll Tax Deposits Due

If you are wondering when payroll tax deposits are due, you can rest assured that you will discover the answer momentarily. Monthly deposits have to be made by the fifteen day of the month following the month when you paid the employees. For instance, if the employees were paid in July, the deposit has to be made by the fifteenth of August.

payroll tax

Why Payroll Tax is Bad

Suspending the Social Security payroll tax is apparently a very controversial idea. According to leading experts, eliminating the payroll tax sets a bad precedent, and messes unnecessarily with the program. Some experts stipulate that despite presidential support, it is best to put the idea to bed. To that end, eliminating the payroll tax has met with little enthusiasm from Congress. Cutting the payroll tax would involve a massive loss of revenues. The Congressional Budget Office reports that the total payroll taxes in 2019 was 1.2 trillion. In terms of people losing their jobs, a payroll tax cut wouldn’t be a salve. A payroll tax cut only helps workers currently employed versus employees who have been furloughed by the crisis. Furthermore, any relief that would come out of the tax cut would be measured in bits and pieces.

Would you like to discuss payroll tax in Fort Worth, TX? We have dedicated resources to assist. Please reach out to us at 817-905-1040.

What is a Return in Tax?

tax return

What is a Return in Tax?

Are you wondering what a tax return is? If so, you’ve come to the right place. A tax return is a form or multiple forms that are filed with a tax authority. A tax authority will report income, expenses, and other important tax information. For the most part, countries will have tax returns filed annually for a business or an individual with reportable income. This reportable income includes any wages, interest, dividends, capital gains, or any other profits that have been accumulated over the year.

When Should I Get My Tax Return?

According to recent reports, the Internal Revenue Service, also known as the IRS, stipulates that nine out of ten e-filed tax returns with direct deposit will be processed within 21 days of IRS e-file acceptance. If an individual has mailed a paper return, they should wait approximately four weeks before checking the status of the tax return. Generally speaking, the refund processing time is about six to eight weeks from the date the IRS receives the tax return.

Who Gets a Tax Return?

Are you wondering what types of people will receive a tax return? The answer is quite simple. Your refund will be determined by comparing your total income tax to the amount of income that was withheld for federal income tax. If the amount withheld for federal income tax was greater than the income tax for the year, then the individual will receive a refund for the difference. It’s important for people to realize that a refund is not actually free money given by the government, but is actually money that was already earned by the individual.

Do Presidents Pay Taxes?

This is a very interesting question. With regard to the question of whether former presidents pay taxes, the president, like many American citizens, must pay taxes and file a tax return. As a matter of fact, the same laws that govern taxpaying American citizens apply to the president as well because presidents are still considered citizens. It is interesting to note that the Secretary of the Treasury pays a taxable pension to the president. Former presidents receive a pension that is equal to the pay that the head of the executive department would be paid, which is over $200,000 a year.

What is the Maximum Tax Refund You Can Get?

Tax return services are a very beneficial service for many people. In terms of the maximum tax refund, it’s interesting to note that there are some variables. For individuals, $12,000 is the maximum tax refund that one can receive. If you file as head of household, it is $18,000, and it is $24,000 if you are a married couple filing jointly.

Why Tax Refund Take So Long

Are you wondering why a tax refund would take longer than usual? Please review the following reasons to find out more:

  • If you do not receive a tax refund within 21 days, the tax return might need further review.
  • If the tax return was not filed properly, it will need to be reviewed. The tax return could be incomplete or incorrect.
  • If you have claimed the Earned Income Tax Credit, you could experience delays.
  • If you have claimed the Additional Child Tax credit, you could experience delays.

Why Tax Return So Low

Are you wondering why your tax return is so low in 2019? Apparently it is due to withholding changes in early 2019. Some taxpayers began receiving larger paychecks, which means that they were paying less in tax as the year went on. For those taxpayers, such a change could result in a smaller tax refund than expected even if they paid fewer taxes overall.

Why Tax Return Over 100k

If an individual earns more than one-hundred thousand dollars annually, then they will need to file assessment tax returns with the HMRC. If for some reason the individual has not been sending in their tax returns, they should register by the fifth of October after the tax year in which the income was realized. If, for example, and individual is living in California and makes over one-hundred thousand dollars a year, they will be taxed $28,923. That means that the net pay will be $71,077 per year. This equates to roughly $5,923 per month. If the average tax rate is 28.92%, then the marginal tax rate is 40.95%.

tax return

Can Tax Return Be Double Sided

Surprisingly enough, this question is very pertinent to tax forms. It is important to note that while each form can be double-sided, different forms should not share the same page. To illustrate this idea, each page of a Form 1040 can be double-sided. However, to ensure that you don’t experience any issues with your tax return, the smartest way to move forward is to print single-sided pages.

Do you need help with your tax return? Our friendly staff at Don R. Walker, C.P.A. are ready to take your phone call at 817-905-1040. Receive quality help with your tax return in Fort Worth, TX!

What Does a CPA Do Exactly?

A CPA Reviews Financial Data.

What does a CPA do exactly?

A CPA, or certified public accountant, has many roles. CPAs are financial advisors providing their services to individuals, businesses, and organizations. In general, they help their clients plan and reach their financial goals. CPA services can range from basic bookkeeping to providing payroll services to preparing taxes. When you are in need of CPA services in Fort Worth, TX, you can always rely on Don R. Walker, C.P.A.. To find out more about how he and his team can help you or schedule an appointment, all you need to do is call 817-905-1040.   

What services do CPAs typically provide?

CPA services are wide-ranging. They help clients with financial services and provide financial advice. Among the most common services CPAs provide include:

  • Auditing and reviewing books and financial statements to determine financial well-being and status. Such information is often provided to third parties like investors.
  • Consulting on business or financial strategies or about adequate systems.
  • Advising about taxes and preparing tax returns.
  • Providing forensic accounting services, investigating whether fraudulent financial activities have occurred.  
  • Providing individuals or businesses with advice about financial planning
  • Offering services for litigation purposes. CPAs can provide financial analysis in court cases ranging from divorce cases to business disputes to bankruptcy hearings.

Can a CPA do payroll?

If you run a business and have employees, when you need help keeping up with payroll, CPA services may be required. Payroll is a typical service that CPAs provide. Not only do they oversee payroll, but everything that goes with it, including preparing payroll taxes. Having a CPA managing your payroll can save you a great deal of time, money, and from potential problems with the IRS. CPAs understand the tax codes and make sure you are not paying too much or too little in payroll taxes. When you want to make sure your payroll taxes are taken care of right, reach out to the professionals at Don R. Walker, C.P.A..  

What can CPAs do that accountants cant?

While most trained accountants can provide many of the same services that CPA services provide, CPAs provide two specific services for businesses that other accountants do not.

A CPA can:

  • Provide audits and reviews of financial statements and file reports with the Securities and Exchange Commission. If you have a publicly owned company, you have to file audited financial statements with the SEC.
  • Provide representation in front of the IRS in lieu of an attorney.  

CPA services for small businesses

When you are a small business owner it is advised to hire a CPA to help you with accounting services. CPA services include basic bookkeeping, as well as payroll services like preparing payroll taxes. A CPA can also help you with financial planning and help you meet your financial goals. While most accountants can provide similar services, there are some services only CPAs provide. For instance, as your business succeeds and grows, you may consider publicly trading it. For this, you will need a CPA to audit your financial statements and report to the SEC.

CPA tax service

As most individuals know, preparing taxes can be complicated. If you run your own business, you can run into more tax complications. Getting help from CPA services can alleviate a lot of the hassle of taxes for small business owners. CPAs can help you with payroll and bookkeeping, and make sure all of your taxes are in order. They can thoroughly review your financial statements to make sure everything is in order.

Are CPA services tax deductible

Many CPA services are tax-deductible. If your CPA does your bookkeeping, those expenses can be deducted. Similarly, if a CPA audits or reviews your statements, you can deduct those services as well, if your firm is public. Tax deductions are just one of many advantages of using a CPA firm like Don R. Walker, C.P.A. for your business’ financial needs.

How much does a CPA charge?

Costs for CPA services will vary. Primarily, the cost will depend on the fee schedule the CPA has set. Individual accountants or firms will set the fees they charge. Usually, the fees are hourly rates, though some set fixed rates. Fees will fluctuate based on location, experience and training. On average, though, you should plan to spend anywhere from $30 to $500 per hour. While this may sound like a great deal, you are paying for highly trained and educated individuals performing invaluable services like tax preparation and audits. While other financial services exist that may charge lower fees, you’ll often get more insight from a CPA. Many CPAs specialize in particular fields like taxes and tax preparation and have a deep understanding of tax codes that can serve to benefit you greatly.

A CPA Reviews Tax Documents.

CPA and bookkeeping services near me

If you are looking for reliable CPA services in Fort Worth, TX, you can always count on Don R. Walker, C.P.A.. Our firm has experienced professionals that provide a full range of services for individuals and businesses alike. Find out how we can help you with your financial future by calling 817-905-1040.

How Important is It to Stick to a Budget?

budgeting and bookkeeping services

Understanding Your Business Inside and Out

Owning a business comes with a whole host of responsibilities and due-diligence situations. You have to stay on top of a number of things, including your finances. While you may have an okay system in place, things can almost always be better. For help with the financial aspect of your business, contact Don R. Walker, C.P.A.. We provide a variety of CPA services, including bookkeeping services for Fort Worth, TX business. Call us at 817-905-1040 to learn more. 

How to Plan a Budget for Your Business

The number one question we get asked is how to set up a budget. Many business owners have accountants that catalog and summarize their financial data, but they have no idea how to make heads or tails of what it all means. Or they have a bookkeeper that helps them record all their transactions, but they have no idea how much money they need to move forward with a new project. When it comes to budgeting, you can’t look at things as accounting services vs bookkeeping services. Instead, you have to see how the two services can help you. By utilizing the best of both options, you’ll be able to establish a consistent budget for your business. So how do you do that?

  • Goals: Before setting out on any budgeting journey or quest, you have to figure out your goals. Do you want to have money saved up for benefits within the next year? Do you plan on buying someone out? Understanding your financial goals in the terms of your business will help you understand other aspects of your business. 
  • Analysis: Once you know your goals, you need to go through your finances. Figure out where all your money is coming from. Then figure out where all your money is going. What are you spending the most money on? What are you spending the least amount of money on? This is when professional bookkeeping services for businesses can be incredibly beneficial. 
  • Outline the Costs: Now that you know your goals and the state of your finances, it’s time to start putting pen to paper, so to speak. What we mean is it’s now time to begin figuring out the costs of your goals. How much money are you going to need to pay for better benefits? How much money will you need to save to buy someone out? As soon as you have those numbers, you can set tangible goals to begin working towards them. 
  • Create: Setting those tangible goals is the first step in creating your budget. Taking into consideration your past income, expenses, and savings, you can create a budget that will help you reach the initial goals that you set. This is essentially a formal document that outlines everything so your business is financially successful. 

When you need reliable bookkeeping services, turn to Don R. Walker, C.P.A.. We are the experts you can trust to help you determine a tangible budget that will work for your business. Call us today to learn more.

bookkeeping services

Advantages of Bookkeeping and Budgeting

Perhaps the number one advantage of bookkeeping and budgeting is simply the knowledge. Knowing exactly how much money you have you have to spend, save, donate, and more will allow you to make more informed throughout the rest of your business. You can better understand what risks you can take and which ones you can’t. Bookkeeping services costs can seem like frivolous or unnecessary expenses, but the really can help you in the long run. 

Frequently Asked Questions

  • What is budget analysis?
    • This is the process of closely examining the means of income as well as expenditures within your business. The goal is to figure out where the money is coming and going from so you can better allocate resources where they are needed.
  • What are the 3 types of budgets?
    • In a nutshell, the three types of budgets are a balanced budget, surplus budget, and a deficit budget. It will depend on your situation and what your business needs are that will determine which of these options is best for you. 
  • What are the advantages of budgeting? 
    • The main benefit is knowing what you can afford and what you can’t. That might seem simple, but that’s the beauty of a budget. Knowing what can and can’t be afforded will help you make decisions in other areas of your business. 
  • What is meant by budgeting?
    • By definition, a budget is a formal statement estimating the income and expenditures of a business. What is meant by budgeting is determining where all the money is coming and going and how what is left over can be properly allocated to the correct areas of your business. 
  • What is the main purpose of budgeting?
    • Ultimately, the main purpose is to refine the allocation, use, and coordination of funds within your business. You may have a good idea of everything, but a true budget will help you see exactly where all your money is coming from and going.
bookkeeping services

Schedule an Appointment With Our Team Today

If you need help with budgeting or bookkeeping services in Fort Worth, TX, connect with Don R. Walker, C.P.A.. We can help you get your financial situation in order so you have a truly successful business. Call us at 817-905-1040 to get started. 

Tax Return Information

Income Tax Return With Pen & Calculator

Learn More About A Tax Return

Your taxes are taken from your paycheck in order to pay state and federal dues. However, most Americans will get a tax return on expenses made the previous year at the beginning of the first few months of the new year. With the new year comes tax season. It’s important that when you’re filing a tax return to make sure to have them done correctly and in time. There can be many specifics regarding a tax return that will defer per person and business that can make it confusing. Reach out to a professional tax filing service if you feel assistance would be optimal for you. H ere is some basic information that may be of use to you.

What is the tax return?

A  tax return is a form that reports expenses, income, dividends, capital gains, profits, and other information. Most countries have tax returns filed annually and this can be done with both businesses and individuals. 

Why is it called a tax return?

Income tax is called a tax return based on the evolution of the legal use of the term return. Basically, when a  legal document is given the documented response is called a return. In the case of the provisions of the IRS imposing a tax liability on US person, the US person will legally respond to said tax liability with a return of tax documents which note their actual tax liability.

What are tax return documents?

Tax return documents will calculate a person’s tax liability, will schedule their tax payments or request refunds from the over-payment of taxes. 

What are tax return deductions?

A tax return deduction will lower the taxable income of a person thus reducing their tax liability. How this can be calculated is that the tax deduction is subtracted from income which makes taxable income lower. The smaller the taxable income comes out the lower the tax bill will be.

When are tax return due?

Tax returns deadlines can vary per year but will typically fall in the middle of April. How a tax return due date is determined is if the due date falls upon a weekend or holiday it will be moved to the first following workday. 

What is the difference between a tax return and a tax refund?

The difference between a tax refund and tax return is that a tax refund is money that the IRS will send after accepting your tax return. This refund is sen if the tax return shows that you paid more in taxes the past year than was required. As such, more than ¾ of Americans receive a refund.

How do I get my tax return?

The tax return transcript can be obtained by ordering it online with the get transcript tool at the IRS.gov website. Another way could be to order it by phone. If you order it by the mail Form 4506-T or Form 4506T-EZ will need to be completed and the return will be sent by mail.

When should I get my tax return?

For tax returns which were e-filed and direct deposit is selected, you can expect funds processed within 21 days of the e-file being accepted. WIth mailed paper returns allow for 4 weeks before checking up on the status. From the date the IRS receives this kind of tax return expect processing time to run from 6-8 weeks.  

Laptop With Tax Form on Desk

Where File Tax Return

Can you go to jail for not filing your tax return?

In certain cases yes, you could go to jail for not filing a tax return. You can also go to jail after lying on your tax return. Depending on your circumstances you can go to jail for 1-3 years. However, if you don’t have enough money to pay your taxes you won’t go to jail. A mistake on your tax return will not land you in jail. In any case, a criminal charge will need to be made against you for you to go to jail. Most tax liabilities will fall under civil judgments and will need to follow up with you needing to pay the money.

Contact A Professional Tax Return Service For Assistance

When your taxes are convoluted or just confusing to you in general, it’s not uncommon to rely on the services of a tax return specialist. They will be able to best assist you with the details surrounding your tax documents and what needs to be included. Get in touch with a professional today, like skylight repair it’s best to have services completed as needed with guideline in mind. Have the process of your tax return completed and filled out accurately in a timely manner today.

If you’re interested in assistance with your tax return in Fort Worth, TX call 817-905-1040 with Don R. Walker, C.P.A.! 

What’s the sales tax?

Sales Tax at Time of Purchase

What Exactly Does Sales Tax and Use Mean?

We all pay for it and we all complain about it. What are we talking about? Taxes, more directly, sales taxes. Texas is one of the lowest property taxes and sales tax rates.  Who wants to pay for something that they don’t have any benefit or return for though, right? Well, we do get quite a bit for our sales taxes, and we’re going to take a look at that here as well as answer a few common and important questions.

The first thing that every consumer should understand is that Texas is a Seller Privilege Tax state. What this means is with sales taxes, the consumer pays the sales taxes to the seller. The seller then pays the amount they collect in taxes to the state – it isn’t part of their profit. This is where the sales tax and use come into the equation. The consumer pays sales tax, and the seller pays those taxes for use of selling their product or services in Texas.

Since it does not require the sales taxes to be paid by the consumer, there is no requirement for the taxes to be listed separately an invoice or receipt, even though most sellers do break it down. 

Most other states are “Consumer Tax state”, where it is the consumer that is imposed with the responsibility of paying the taxes to the seller vs the seller charging the taxes. This doesn’t mean the seller doesn’t have to pay sales taxes, it just means the seller doesn’t have to pay taxes for selling in the state, but the consumer does for shopping in the state.

How is sales tax calculated?

Sales taxes are calculated by dividing the amount of the item being purchased by 1 plus the sales tax rate. Sales tax examples in Texas where the tax rate is 6.25 percent of all retail sales, leases, and rentals for most goods and taxable services.

So, with the sale tax rate in Texas at 6.25%, using a calculator or manually, divide the sales taxable receipts by 1.0625 and the tax is .08 cents on every dollar. There are also various sales tax calculators that you can find online or in a retail office supply store now.

For a business owner selling a product or service, the software they use for their POS system will figure the sales taxes automatically. This makes it error-free for the employee and the company.

Is it illegal to not charge sales tax?

For a retailer that hasn’t established a nexus in a specific state, there is no obligation to pay sales taxes in that state. However, if sales taxes are collected by a retailer in any state and is not registered in the state to collect sales taxes, that is illegal.

What happens if you don’t charge sales tax?

The daily operations of a small business can challenge any owner, especially if you handle several aspects of the business. So, with the bookkeeping and paying sales taxes, it’s easy to overlook filing and paying certain taxes monthly, quarterly, or annually, which is why most small business owners use the services of CPA.

What would happen if a business owner doesn’t collect sales taxes? A CPA, financial consultant, or lawyer would be the best person to ask this question, but here we have researched and found the following consequences a business owner could face:  

  1. The state could demand a year of sales taxes paid at once.
  2. The state could seize your assets, both business and personal.
  3. They will require you to pay the sales taxes and interest and penalties.
  4. Additional costs such as a CPA and a lawyer. Afterward, you will need professional financial analysis and clean-up services so you don’t find yourself in this position again.
  5. You could face fraud charges.

There are just a few of the risks involved when you don’t collect sales taxes, which is why the services of a professional CPA is always recommended no matter the size of your business.

What do sales taxes pay for?

The short answer to this is sales taxes provide funds for state and local budgets that pay for our public services such as fire and police, road repairs, and schools.

Sales Tax Calculation

What sales taxes can I deduct?

This is an area that you need to the advice and guidance of a CPA that has the experience in IRS matters. It gets complicated and confusing.  As a business owner, the sales taxes that you pay for items used in your business are deductible if you list the purchase as a business expense.

Sales taxes are not something that you want to avoid collecting, reporting, and do not avoid paying. It could take years before the state or IRS catch it, but when they do, it is costly and not a pleasant experience. If you have concerns about not collecting or paying sales taxes, or you’re starting up a business, seek the advice of a CPA so you can get on the right road and enjoy your business venture! Need help with your taxes? Call Don R. Walker, C.P.A. today at 817-905-1040!

What Is a Notice of Seizure?

IRS Building Where IRS Seizure Decisions are Made

Paying Taxes and the IRS

One of the most dreaded days of the year for every person out there is April 14th, better known as Tax Day. Filing your taxes has long been a stressful, lengthy, and daunting project, regardless if you are a home or business owner. It can be easy to just skip paying your taxes, but there are serious consequences in doing so. The one thing we at Don R. Walker, C.P.A. hope our clients never receive is a Notice of Seizure from the IRS. That is one of the hardest and scariest letters to get in the mail. We want to help avoid those situations by offering CPA help to anyone that needs it. To learn more about the seriousness of an IRS seizure in Fort Worth, TX, keep reading or give us a call at 817-905-1040.

Stack of Tax Forms to Prevent IRS Seizure

What To Do With an IRS Seizure Notice

Obviously, this is a scary document to receive. Before going over what to do if you receive a notice, it’s important to understand what the notice actually is. A notice of seizure from the IRS is a written statement saying the government has taken your property. It’s actually the last step in the entire seizure process. Once you have received this notice you will have 30-days to pay back everything you owe in taxes. If you are unable to pay in full, there are installment and partial payment options. Failure to make the payments in a timely manner will result in the loss of your property. The property that the IRS can take is minimally restricted. They can take anything that does not contribute to your basic survival and shelter, such as cars, RVs, motorcycles, jewelry and more. The IRS seizure of assets can also include your house or your business to turn around and sell in order to pay off your tax debts. There is no crash-course in how to stop an IRS seizure, however, there are things you can do ahead of time to avoid finding yourself in this situation. There is a process that the government goes through to address and complete a tax settlement, they don’t just start by taking your property.

The IRS Seizure Process

As mentioned, there is a process when it comes to settling tax debt. The government doesn’t start out by just storming in and taking your things. The IRS actually has a 3-step process that they use in almost every situation. 

  • “Notice of Demand for Payment”: The first step in the process is a notice of payment. This occurs when you have failed or neglected to pay your taxes on time so the government sends a written notice to remind you that payment is due.
  • Response: Step number two is to wait. You, the property owner can acknowledge, ignore, or neglect the notice however you see fit. There is usually a time-frame in which you are expected to pay. If you don’t pay, the IRS will take action with step three. 
  • “Final Notice of Intent to Levy and Notice of Your Rights to a Hearing”: The final step in the IRS seizure process is a 30-day notice. This gives you 30-day to schedule an appeal or make payment arrangements. If nothing is done after 30-days, the IRS can begin taking your assets. 

If you are a business owner, a great step to take for yourself and your company is to invest in business coaching. There are courses that go over these things and can help you avoid being the subject of an IRS seizure. Regardless of the type of property you own, though, the biggest takeaway that we can offer for clients is to pay your taxes on time. Whether you are a homeowner or a business owner, paying your taxes in a timely manner will be the best way to avoid any of these problems. For that, rely on Don R. Walker, C.P.A.. We can help you with organizing, filing, and submitting your taxes so you avoid the possibility of this situation.

Frequently Asked Questions

  • What assets can the IRS seize?
    • The IRS can take any item that you do not need for your basic survival and shelter. This includes tax-deductible items such as boats, RVs, cars, fine jewelry, art, motorcycles and more.
  • Can IRS seize your home?
    • Yes, the IRS can take your home for failure to pay your taxes in a timely manner. There is very little that the IRS is not allowed to seize or take from taxpayers. 
  • How long does it take for the IRS to seize property?
    • Once it is determined that you have defaulted on your taxes, the IRS will issue a 30-day notice. As soon as the 30-days are up, if they have not received full or an agreed-upon partial payment, your property will be seized by the government. 
  • What happens when the IRS seizes your house?
    • If and when your home is seized by the IRS, it will be sold. The funds from the sale of your home will be used to pay for a few things. The first is the cost to actually seize and take your property. Once that is paid, whatever is left over will go towards your tax debt. 
  • Can the IRS seize your business?
    • Yes, just like your home, the IRS can seize your business for failure to keep up with your tax payments. There is very little that the IRS is prohibited from taking.
CPA Agent Calculating Taxes to Avoid IRS Seizure

Connect With Us Today for More Information

Rely on Don R. Walker, C.P.A. when you have questions and concerns about an IRS seizure in Fort Worth, TX. Call us today at 817-905-1040 for reliable service. 

Do You Have to Pay Taxes if You Own a Business?

Files with Business Tax

How Much Does a Business Pay in Taxes?

For small businesses in 2019, it is important to consider the tax rate. The small business tax rate is currently a flat 21% for a C-corporation. Typically, the small business tax rate is 19.8%. There is some differentiation involved. Businesses will pay different amounts in taxes based upon their entities. C corporations pay 17.5% for their tax share, though it can be difficult to compare the rate. Sole proprietorships pay a 13.3 tax rate, compared to small partnerships, which pay a 23.6% tax rate, and small S corporations that pay a rate of 26.9% tax rate. Proper business accounting greatly assists with business owners who must shift funds to pay for their individual company taxes.

How Do I Do Taxes for My Small Business?

When the time of year eventually shifts into tax season, there are different ways for business owners to file their taxes. Initially, the steps will depend upon whether the business is a sole proprietorship or whether it uses a legal entity such as an LLC or corporation. Each type of entity requires a contrasting tax form for reporting. After determining this initial step, the taxable business income can be calculated. The first step for business owners is to collect and gather all relevant business records. If a computer program or spreadsheet has been utilized throughout the year to keep track of the income, the process will be streamlined already, and thus smoother. QuickBooks and Quicken are reputable.

What Kind of Taxes Does a Small Business Pay?

For both large and small businesses, business growth is the goal. This business growth translates, during tax season, into appropriate retribution for the government. There are three different varieties of taxes that small businesses pay: federal, state, and local taxes. All businesses are required to pay taxes on their income. This means that the business must pay a tax on the established profit of the company. How that tax is paid ultimately depends upon the form of the business. It is important to note that businesses don’t directly pay sales tax on services or products that they sell. However, if the business operates in a state that has a state income tax, there needs to be a system set up to collect, report and pay state sales tax.

Why Do Small Businesses Pay So Much Tax?

There have been some changes in the tax code that are worthy of note. The Tax Cuts and Jobs Act, which was signed in December 2017, came with several key changes to how small businesses pay taxes, and how much taxes they pay. According to the National Federation of Independent Business, it has been reported that most small businesses don’t pay income tax at a business rate. Instead, it is recorded that approximately seventy-five percent of small businesses are indeed not corporations. This substantial percentage of small businesses are considered “pass-through” tax entities, which means that each of these small businesses pays tax at the personal tax rate of the owner. The income tax rates that went into effect in 2018 and will continue for eight years have ramifications. Larger businesses and those taxed as corporations have the biggest tax cut under the new law. The corporate tax rate was cut from a table with the highest corporate taxes to a flat 21% and currently has no expiration date.

Can a Small Business Get a Tax Refund?

Whether or not a small business gets a tax return entirely depends on the type of business entity and the type of taxes that are paid. Typically, C-corporations are the only type of business eligible for a tax refund. Unlike other businesses, C-corporation profits are taxed separately from their owners. Subchapter C of the Internal Revenue Code specifies this. If a C-corporation pays more estimated tax during the year that is due on the final return, it can get a tax refund. A business could also get a tax refund if it overpays on payroll or sales taxes.

Business Taxes are Due

Tax filing deadlines have a habit of creeping up on business owners. Frustrations can surmount when business owners have to pay a tax-related fine that could otherwise be avoided. The first day that will be relevant for business owners is January 15th, which is the fourth and final quarterly tax payment for the previous tax year. January 31st is the next date to be aware of, as it is the form W-2 filing deadline. This deadline has been in place since the 2016 filing year. For businesses that have employees, two copies of the form W-2 will need to be filled out. Businesses that work with independent contractors need to be aware of the form 1099-MISC Copy A filing deadline, which also arrives on January 31st. February 15th is the Form 1099-MISC Copy B filing deadline. 

Business and Tax Services

There are many different tax services that are available for business owners. Millions of Americans pay a tax professional or a tax company to prepare and file their tax returns every year. One of the reasons why it is important to procure professional assistance is because Congress continues to make changes to the tax code. The changes in the tax code can be radical and certainly can leave many people confused and frustrated. Nevertheless, decoding taxes is of particular import, particularly since collecting appropriate evidence of profit margin will be a laborious activity for the small business owner.

1040 Tax Form for Business Tax Purposes

Business Taxes vs Personal Taxes

Filing business taxes is a very different process from filing personal taxes. To be sure, the same basic principle is at work, however, there are some significant differences between the two. Most people use one tax return, which is known as Form 1040 to file their personal income taxes each year. Business owners will have different choices in the form of tax returns. For sole proprietors, the business-related income will be reported on Form 1040. For C corporation business owners, the relevant form will be 1120. S corporation owners need to fill out a form of the 1120S. General partnership owners should use form 1065, and those who run nonprofit organizations will use the Form 990.

Business Taxes Checklist

Please consult the following list to determine your business taxes checklist.

  • Understand and select the tax forms that will need to be filled out for your business.
  • Meet with your professional bookkeeper.
  • If you use your personal vehicle for business, update your mileage log.
  • Gather your financial records.
  • Capture all the expenses you paid for out of pocket.
  • Gather any 1099s that have been received.
  • Pull receipts for asset purchases.
  • Request a tax filing extension if necessary.

To get started on your service, call our office, Don R. Walker, C.P.A., at 817-905-1040 to schedule an appointment for your business tax in Fort Worth, TX.