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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.

What is Payroll Tax Rate?

Hiring a CPA can help ensure your employees' withholds are accurate for tax filing.

Payroll Taxes and Your Business

If you own a business with employees, then you know there is a lot that goes into owning that business. Specifically speaking, there is a lot of paperwork and finances that go into owning a business. Unfortunately, many employers are not aware of just how much is needed to properly withhold taxes from employee paychecks. The payroll tax in Fort Worth, TX exists to help provide an insurance measure for current or retired employees. When calculated incorrectly, there can be serious ramifications. Let Don R. Walker, C.P.A. help today. Call us at 817-905-1040 to learn more.

Payroll taxes help provide financial insurance for your employees.

What’s Payroll Tax?

How payroll tax works is that a percentage of employee salaries that are paid to them by their employer. In other terms, these are the taxes paid on the wages and salaries of employees. These taxes are used to finance programs like Social Security and Medicare. Payroll taxes are often classified two ways:

  • Deductions from an employee’s paycheck
  • Taxes paid by an employer based on an employee’s wages

With deductions, employers can withhold a certain amount from an employee paycheck every time. That amount withheld then goes back in to an employee’s Social Security and Medicare benefits. Taxes paid by an employer, however, are typically paid from an employers own funds to a particular employee. More often than not, employees of any business will see taxes withheld from their paychecks. It is generally easier for employers to operate that way than trying to calculate what is owed to each employee.

Examples of Payroll Tax

What is an example of payroll tax? Good question. The two most prominent payroll taxes fall under the FICA umbrella. FICA stands for Federal Insurance Contributions Act and requires employers to take out taxes for insurance benefits such as:

  • Social Security
  • Medicare

As of right now, employers are expected to withhold 6.2% for employes and 6.2% for employers, for a total of 12.4% for Social Security. For Medicare, a total of 1.45% of all wages paid to an employee are held. On top of FICA withholdings, employers must also hold a percentage of wages for:

  • Federal Income Taxes
  • State Income Taxes
  • Federal Unemployment
  • State Unemployment

The total amount that an employer withholds from their employee wages is very important. Inexperienced accountants can overlook things and ultimately cause more stress for employees when it comes time to file their own taxes. That’s why it’s important to work with a reputable CPA like Don R. Walker, C.P.A.. It’s the same idea as if you were looking for a contractor to provide residential roofing services. In either case, you want someone that is reliable, efficient, and accurate.

Why You Have to Pay a Payroll Tax

The payroll tax to business relation is important. If employers are not paying or withholding the correct amount in taxes, it can create serious consequences for their employees. Mistakes are often made, which is why it is recommended for businesses of any size to look into CPA services if they are concerned about their payroll tax calculations. Don R. Walker, C.P.A. is a great place to turn to. We offer every kind of accounting service you need to make sure your business is running smoothly.

All that being said, it is mandatory that employers either pay from their own funds or withhold a certain amount from their employee wages. Those withheld taxes are used in finance insurance programs, income tax program, and more. They provide a blanket or a security for employees during their time with a business and afterwards when they are retired. While it can feel like a nuisance at the time, these taxes are meant to make things easier for employees.  

Payroll Tax vs Employment Tax

The employment tax is an all-encompassing term to refer to federal income taxes that are withheld from their paycheck and paid to the IRS on the employees behalf. The federal income tax is tax on the earned income of anyone employed with a business. Generally speaking, however, there is no real difference between a payroll tax and an employment tax because according to the IRS, everything falls under the employment tax umbrella. Meaning, federal income tax, Social Security, Medicare, and anything else are considered an “employment tax.” Meaning, if you are employed by a business, a certain amount of your wages are expected to go into financing for employee benefits.

The best way to break this down is as such:

  • Payroll Taxes are designed to withhold funds that will provide a certain amount of insurance for current and retired employees. Funds are held for the insurance programs Social Security and Medicare.
  • Employment Taxes are the taxes or finances that employees are expected to pay towards the federal income tax. These funds are withheld from an employee’s paycheck and paid to the IRS on the employees behalf.

Basically, there is no real difference because ultimately the money withheld from a paycheck all goes to the same place. But there are two terms to help identify what is being withheld for being an employee and what is being withheld to help an employee.

Frequently Asked Questions

  • How much does the employer pay in payroll taxes?
    • In the current market, employers are expected to pay 6.2% in Social Security taxes for the employee and 1.45% in Medicare taxes, also for the employee.
  • What taxes does the employer pay?
    • Employers are responsible for paying, or withholding, an employee’s Social Security tax and Medicare tax.
  • How is payroll tax calculated?
    • The most simplistic way to explain this is that the total amount of federal tax amounts are subtracted from an employees annual wages.
  • Do I need to pay payroll tax?
    • Generally speaking, if you are an employer with at least one employee then yes, you need to pay a payroll tax. But then there are things like the federal income tax which employees are expected to pay.
Work with our team to make sure all your business finances are in order.

Contact Don R. Walker, C.P.A. for More Information

Reach out to Don R. Walker, C.P.A. today, 817-905-1040, for help with your employee payroll tax in Fort Worth, TX.

What Bookkeeping Means in Business

Bookkeeping can help keep your business thriving.

Bookkeeping in Fort Worth, TX

There are many obstacles to starting up a new business and even just one accountng mistake can put a new business at risk for failure. One thing we do know is, bookkeeping can seem like a pointless or mundane task. It can also seem daunting if you haven’t kept up with recording your finances. Which is why quality bookkeeping can be the difference between a thriving and a struggling business, whether you are well-established or a start-up business. We don’t want to see any business, big or small, struggling with their finances and that is where we come in.

Don R Walker C.P.A. offers a variety of bookkeeping and accounting services to big and small businesses. If you are needing any kind of bookkeeping in the Fort Worth, TX area, contact us at 817-905-1040.

A professional bookkeeper can help you better understand your businesses finances and transactions.

What Exactly Does a Bookkeeper Do?

A bookkeeper is responsible for organizing all of a business’s accounts or the general ledger.

They are the person that goes through to record all transactions including accounts receivable, accounts payable, and inventory. For every month, quarter, yearly projection, the bookkeeper produces financial statements or reports for superiors. Additionally, a bookkeeper may be involved in a business’s payroll.

Basically, a bookkeeper keeps detailed tabs on all financial transactions in and out of a business. It’s important to note here that, your bookkeeper can help to pay taxes and even fill out tax forms, but they are not qualified to provide tax info or advice. Most bookkeepers do not have a degree in accounting or a related field. Their job is not to audit finances and determine the best use of them, but simply to record financial data. As a business owner, you can help yourself, and your bookkeeper, by understanding a few bookkeeping basics.

Bookkeeping vs. Payroll

Payroll is the process of calculating a company’s income to pay employees. While it can involve a certain amount of bookkeeping, the two are not interchangeable. Payroll accountants have to keep records of company income, employee checks, and such

Payroll duties:

  • Calculate and distribute employee checks
  • Keep the financial record of employee wages, salaries, bonuses, taxes withheld, etc.
  • Understand the amount of money available to pay employees

Bookkeeping duties

  • Documenting receipts and transactions
  • Recording invoices
  • Billing for services provided
  • Processing employee payroll

The biggest distinction that needs to be pointed out the fact that bookkeeping will almost always refer to the recording and documenting the financial process. Payroll, on the other hand, will almost always refer to the process of calculating an employee’s wages and/or salary. At the end of the day, bookkeeping and payroll go hand in hand. The jobs are not interchangeable, instead, the two work in conjunction to make sure the finances of business are functioning.

Bookkeepers do the job of recording and tracking the financial transactions of a business.

Local Bookkeeping Services

The days of trying to do bookkeeping with excel by yourself are over. Don R Walker C.P.A. provides high-quality bookkeeping services to the Fort Worth, TX community. We utilize our accounting services as well as great software like QuickBooks to keep close tabs on your business finances. Outside of bookkeeping, we do have a wide variety of other services, so we can help you with any financial needs. Regardless if your business is big or small, we have the tools to provide high-quality accounting and bookkeeping.

Bookkeeping for Small Business

The office of Don R Walker C.P.A provides quality bookkeeping services. We know all too well that starting a new business can be daunting. Finances are tight and seemingly non-existent. All it takes is one accounting mistake for even smooth operating businesses to be at risk. Don’t let this happen to your business and call Don R Walker C.P.A for bookkeeping in the Fort Worth, TX area. For competitive pricing, we help you cover all your bases to help make sure your small business starts off right. And with tax season right around the corner, a Don R Walker C.P.A. bookkeeper is a great resource when filing small business taxes in Fort Worth, TX.

Frequently Asked Questions

What are the differences between accounting and bookkeeping?

Bookkeepers help to record transactions and lay the foundation for accountants to go through and do a complete audit of a business’s accounts. An account does need at least a bachelor’s degree to do their job while bookkeepers just need a basic understanding of the accounting process.

Do bookkeepers do taxes?

Bookkeepers can help pay taxes and even fill out certain tax information, but they are not qualified to provide tax information or advice.

What services do bookkeepers provide?

Bookkeepers help to keep an accurate recording of a businesses transactions as well as the income received. They create reports that help to map out a business’s financial status.  

What Are The Duties of a Bookkeeper?

A bookkeeper is responsible for keeping an accurate recording of a business’s financial transactions and income.

All it takes is one accounting mistake to put your business at risk.

Contact Your Local Bookkeepers

From bookkeeping to accounting, make sure you have a great team on your side. Call Don R Walker C.P.A., 817-905-1040, for bookkeeping services in the Fort Worth, TX area.

What does IRS lien mean?

IRS Tax Lien Options

If you’ve received an IRS tax lien, you have several options to go about fixing the issue.

If you have recently received an IRS lien and would like to know the implications surrounding it, we’re here to help! Legal jargon and the steps to take to ensure that you’re handling the situation in the right manner can be stressful without proper research. At the very least, what you shouldn’t do if you get a notice for payment from the IRS is to ignore the situation altogether! There can be negative implications on your records and your property if you don’t work towards remedying and replying to an IRS lien notice.

Here is an IRS lien definition that can help you understand the main point surrounding the meaning. An IRS tax lien is when you neglect or fail to pay a tax debt and the government thereby issues a legal claim against your property including any financial assets, personal property and real estate that you may own.

IRS Lien or Levy

Tan Lien vs Levy

Know the differences between an IRS tax lien or levy as they both have different implications.

An IRS lien doesn’t mean that the government immediately seizes your property, it just protects and secures their interest on it. With a levy however, the government can seize and sale any type of personal property to settle the debt.

Please keep in mind, if you don’t answer the IRS to pay or at least make arrangements to pay or work towards appealing your tax debt in regards to responding to your lien notice, than they reserve the right to issue a levy.

What happens when the IRS files a lien?

Before a lien is officially created, the IRS first assesses your liability and puts your balance due in the books. You will then receive a pre IRS lien notice in the form of a bill titled Notice and Demand for Payment. After these two steps, if your tax debt has not been paid in full after 10 days than a lien is filed. If you neglect or refuse to pay the debt on time than the IRS files a public document called a Notice of Federal Tax Lien to alert creditors of the government’s legal right to your property.

How do I get rid of an IRS tax lien?

It is recommended that you respond to the bill notice either by contacting the IRS yourself through the necessary measures described on your Notice or immediately seek out legal assistance to act as the intermediary in the situation so they can conduct and offer you proper Lien solutions.

Filing an Appeal

Remember that you have a right to a hearing, file a request for an appeal if you can!

If you disagree with the IRS’s determination, you have a right to a hearing and you may *respond within the time limit of the Notice with a request for an IRS Lien Appeal.

*It is recommended by the IRS government site not to send the request to the Office of Appeals as this may delay the process but to send it to the address provided in your letter explaining your Appeals rights.

Depending on your tax history and payment status you may be eligible for Discharge of Property, Subordination or Withdrawal.

Ultimately, the best way to remove a lien is to pay the amount in full whereby the tax lien will be released after 30 days. Within the 30 days it is the IRS’s responsibility to grant you a Certificate of Lien Release as well as releasing the title encumbrance from your home. If the IRS has not given you this Certificate within the 30 after you’ve paid off your tax debt than you have the right to file a lawsuit against the IRS (but not against any specific IRS employees.)

How long does an IRS lien stay on your property?

Once the IRS has a tax lien in place, it can stay on your property for a total of 10 years.

Do IRS liens expire?

Tax liens can be extended beyond 10 years with variable amounts of time either voluntarily by you or through legal operations. There are several scenarios where extensions can take place from submitting and negotiating an Offer in Compromise, filing an IRS Form 900, having a Collection Due Process appeals hearing or even filing for bankruptcy.

How do I avoid an IRS lien?

The best way to avoid an IRS lien is to file and pay your taxes on time. Remember, if you are unable to pay, reach out to the IRS in order to make payments over time with the several payment options they have available.

As long as you are actively responding and sending in the required information asked upon you, you can only help your situation. By no means should you ignore the letters your receive altogether. Remember, if you fail to respond to make arrangements or pay once a tax lien has been filed, you may eventually risk having your property seized if the IRS decides to issue a levy!

If you have recently received an IRS tax lien and require legal assistance in the Fort Worth, TX area, contact Don R. Walker, C.P.A. at 817-905-1040!

What Payroll Taxes Do I Pay?

As a business owner, you have a responsibility to the United States to pay payroll tax for all of your non-contracted employees. These wages are figured according to the IRS and are available on the IRS website. While most employers have an accounting program or professional that keeps track of these schedules, it’s important to understand the tax system in order to plan and track payments accurately. This can help keep you from accruing fines and Form 941 (Rev. January 2018)Form 941 (Rev. January 2018)other ramifications that can stem from changing laws or miscommunication.

Professional Going Over Tax Records

Ensure Your Taxes are Always Completely Accurately With Our Tax Assistance.

 

What Payroll Tax do Employers Pay and When do I Pay Payroll Tax?

For employers, payroll taxes can be paid either semi-monthly or monthly, depending on your company’s tax liability amount. This payment schedule will be arranged at the beginning of the year and will be monthly for businesses who reported less than $50,000 in tax liability in the previous quarters. Semiweekly payments will be arranged for businesses with more than $50,000 in tax liability. If your business is required to pay semiweekly, your payment schedule will depend on your company payday. Monthly paid companies have a due date of the 15th of the following month. Form 941 (or 940) should be filed every quarter reporting the monthly tax amounts made as well as including any leftover balances. Late deposits accrue a 5 percent penalty for every month they are not fully paid.

Form Details

In general, employers must file a quarterly Form 941 to report each month’s withholdings from employees as well as any taxes paid by the employer. However, if you are a small business owner that paid out $1000 or less during the year in federal and state withholdings, you may be eligible to file a Form 940 Annual Payment form. It’s always best to check with a professional before completing any tax forms, payment, or audits to ensure accuracy.

These taxes will be paid at the local, state, and federal level, and include FICA. They should be paid on every employee that works at your business. Employees are defined as a worker who is controlled by the employer. This includes details such as start and end times, scheduled lunch breaks, driving a company vehicle, or being told in what manner to complete a job. A contract worker is defined as a worker that schedules his or her own work hours, is paid by the job instead of an hourly or salary rate, and drives his or her own vehicle. If you aren’t sure if a worker is contract or employee status, a skilled accountant or tax professional can help.

Figuring Payroll Taxes

How do You Figure Out Payroll Taxes?

Payroll taxes are figured based upon a predetermined schedule provided by the IRS. This schedule is created based upon the rate of pay and dependants for each employee. Because the schedule changes regularly, it’s imperative that you ensure you are using the most up-to-date version to avoid costly fines. Payroll taxes are based on a percentage rate and change depending on the wage amount of the employee. Because of how payroll tax is calculated, you will likely owe a different amount for every employee you have. Current payment schedule charts and payroll tax forms can be found on the IRS website and at your city’s IRS office.

Incorrectly Filed Taxes

What Happens if My Payroll Taxes Are Turned in Late or filed incorrectly?

Business owners often have many tasks and projects to juggle, and sometimes, things can slip through the cracks. If you are late turning in your employer taxes or file incorrectly, you will incur a fine from the IRS which varies according to the late period. If your payment is less than five days late, you will incur a 2 percent late fee. However, if your payment is 6-15 days late, that fee goes up to 5 percent fee on the total and 10 percent penalty is assessed for any payment made 16 or more days late. It’s also important to note the IRS will charge interest on unpaid balances until it is completely paid.

What is Payroll Tax Used for?

Whether you’re an employee or employer, you pay taxes on every dollar you earn. While this may seem like a nuisance, our tax dollars fund vital projects, programs, and committees that help less fortunate, ill, and elderly. Our federal taxes are collected to fund a number of government-affiliated social insurance organizations that help assist elderly, ill, handicapped, and others with disabilities. These funds are also used for programs related to our safety and well-being. Some Programs and organizations affected by taxes are:

  • Social Security
  • Medicare
  • Medicaid
  • CHIPS
  • Food Stamps
  • HUD
  • Other Low-Income Housing Programs
  • Unemployment
  • Child Abuse and Child Neglect Programs

At the state level, taxes are used for multiple reasons that can include education and school funding, transportation and road work, healthcare, and much more. In fact, they help to fund:

  • Low-Income Healthcare
  • Correctional Facilities
  • State Education Programs
  • State College Funding and Grant Programs
  • Parks and Recreation Facilities
  • Public Employee Salaries
  • State Police

While nobody enjoys paying taxes, each business in the U.S. must comply and contribute to the tax pool. In order to ensure that your business pays its taxes timely and accurately, call the professionals of Don R. Walker, C.P.A. to help. Our experts can help with:

  1. Quarterly and Annual Tax Preparation
  2. Business Registration
  3. Tax Amendments
  4. Past Tax Year Filing
  5. Tax Form Review
  6. Assistance With IRS Regulations and Guidelines

When your business needs payroll tax preparation assistance that can be relied on, there’s only one team to call. The Don R. Walker, C.P.A. professionals have years of experience in tax law and scheduling so you can rest assured that your company’s taxes are completed efficiently, accurately, and timely for stress-free compliance. We provide tax services throughout the Fort Worth, TX area to deliver stress-free payroll tax completion for your business that’s correct, complete, and on time so you never have to worry about fines or other consequences. When you need payroll tax preparation for your business in Fort Worth, TX, call 817-905-1040 to reach our experts today.

What’s the Difference Between Accounting and Bookkeeping?

A Pen, Calculator, and Keyboard On a Paper Spreadsheet.

Know the Difference Between Accounting and Bookkeeping Service.

A lot of people tend to assume that accounting and bookkeeping are the same, but there are a couple of differences between the two. While bookkeeping and accounting deal with financials, one records financial data and the other interprets it. As a bookkeeper, the job involves recording all financial transactions that take place. As an accountant, they analyze and summarize the data that has been recorded by a bookkeeper. Both are integral in keeping the financial aspects of a business in order, but you will need a bookkeeping service in order to make sense of your financials. Below are the types of bookkeeping that are used for bookkeeping service.

Types of Bookkeeping

  • Single-Entry: If you have a small business or have minimal transactions that take place, single-entry bookkeeping is the method that should be used for your business. It’s not the most detailed method for bookkeeping as it only requires you to record revenue and expenses. This wouldn’t work for a bigger business because it doesn’t require the need to record accounts payable or receivable.
  • Double-Entry: For larger businesses that have two or more accounts, a double-entry system is needed. It’s more complex but considering bookkeepers have to record debits and credits of transactions. Because of how detailed it has to be, it is very reliable for financial records and you can see where you have gained or lost in profits.

To get bookkeeping services in Fort Worth, TX, call 817-905-1040 today! If you need help with an IRS Lien or need assistance with a wage garnishment, Don R. Walker, C.P.A. is at your service.

Dangerous Small Business Tax Mistakes, Plus How to Avoid Them

Tax Mistakes

It’s Great to Be Creative, Just Don’t Get Creative With Your Small Business Taxes. It Could Cost You!

Do you want to guess what percentage of small businesses are audited by the I.R.S.? Over 2%. That means that one in fifty small business owners will have to go through this supreme headache. Your odds of being audited might go even higher if you make one of these common tax mistakes!

Common Small Business Tax Mistakes

Mishandling Receipts and Payments

Even the smallest of companies can take advantage of I.R.S. tax breaks, and all of it starts with proper record keeping. That means hanging on to your business related receipts. One of the most frequently made and very expensive mistakes to make is neglecting your expense receipts, so make sure to record them on a weekly basis.

Not Saving Tax Money

Depositing money into a separate account for your tax funds is absolutely essential. You want to store these savings in a place where you won’t be tempted to spend it, because it can be quite challenging to catch back up when you get behind.

Filing Too Many Deductions

Be very careful about what you claim as a business expense, as well as how much you claim (especially if you’re just starting your business). Instead of guessing about what you claim in your deductions, try looking at the I.R.S. website for insights.

How Not to Get Audited by the IRS

We laud creativity in the workplace, but tax season is not the proper time to get creative. There are some bad habits that will consistently come back to haunt you when you pay your taxes, such us…

  • Looking for Exploits, Instead of Opportunities
  • Trying to Hide Revenue
  • Bypassing Taxes by Dealing in Cash
  • Putting Off Tax Related Documentation
  • Entrusting Your Taxes to a Disorganized Employee or Family Member

Adjusting your mindset about taxes is one of the most important steps you can take to lower your chances of being audited. Instead of looking small business tax breaks to exploit, search for opportunities to streamline your tax documentation and filing process. Tax season champions are those that consistently record and store tax information on a day to day (or at least weekly) basis. Never entrust your tax work to an employee who can’t handle basic documentation management. Finally, remember this: while they still want you to pay your taxes, federal, state, and local government organizations consistently publishes new articles and guidelines to help you take advantage of tax incentives and avoid common tax mistakes.

Partner With a Trusted Tax Consultant

Proper, consistent documentation is the best way to avoid getting audited by the I.R.S. However, if you find yourself in need of a Fort Worth I.R.S. tax settlement advocate, the helpful team at Don R. Walker, C.P.A. would love to assist you! Feel free to call us with any questions at 817-905-1040! You also find more tax tips here!

Tax Settlement: What You Can Do

tax settlement

Tax Debt May Take You By Surprise, Leaving You In A Stressful Situation.

Are you dealing with tax debt? You are not alone. Many business owners and even individuals find themselves taken by surprise when they learn they have fallen into debt. This stressful situation can lead you to panic, wondering what it is you can do to resolve the situation. At Don R. Walker, C.P.A., we understand that finding a tax settlement solution can be difficult, however, we have compiled a few tips that can assist you during this time. Remember, you have some time to gather yourself and use these tips to get your debt taken care of.

Our Tips For Your Case

Organize Your Documentation

First things first: When it comes to dealing with the IRS, you will need to have all of your paperwork handy and in order. Gather together all relevant documentation, including any paperwork from the IRS themselves. This will make it easier on you as well as them and looks good for when you are reviewing your case.

Contact Your CPA

As with any other situation, you want someone in your corner to support you and possibly fight on your behalf. Contacting your CPA is the next logical step, as they will be able to tell you all of the available settlement options and review the paperwork to see if there is an error present. Don’t have a CPA? Take some time and research to find the best firm or individual for your needs to ensure you have someone you can work with. After you review with your CPA the options, they may recommend an attorney for your case.

Do Not Procrastinate

While you do have some time to get organized and review your options, do not take this to mean you do not have to get started on a solution. Procrastinating can make the debt worse and even lead to further issues. The IRS may even take more serious actions towards you. Getting everything ready and seeking a solution in a timely manner can prevent increased debt.

Tax debt can be scary, but there is good news. You do not need to deal with it alone. Don R. Walker, C.P.A. provides tax solutions for your case and will work with you and the IRS towards a tax settlement. Do you need assistance in Fort Worth, TX? Give us a call today at 817-905-1040 for your tax settlement needs.