Martin Cantu, EA - Tax Consultant - Tax Relief Services Blog

As the saying goes, "Follow the money". The money in question here is your government stimulus check. #stimuluscheck Think of this as a video game, with the player (you) trying to get home with hard dollars in your hand. Along the way there are several times others will attempt to get those dollars from you, leaving you empty handed by the time you get home. Understanding this problem requires looking closely at a couple of different areas - tax law and Texas garnishment law. Without getting to technical, here is a quick summary: Normally, any government issued dollars are subject to offset by the IRS to pay off a government obligation. The most common is are an IRS debt and a federally insured student loan. The IRS would take any refund earned and apply to those obligations. The current Presidential Order prevents the IRS from making those offsets, at least until August. As with all things there are exceptions. The main exception at this time is a child support oblig...

The IRS recently announced two tools to assist you in easing delivery of your COVID Relief Check. Click on this IRS link  for the information. It provides two sections - one for non-filers and one for those who did file in 2018 or 2019 but did not provide direct deposit information. Currently the portal allowing you to input your direct deposit information is not active. The website indicates that it will be available mid month, which in the coming week. I suggest that you monitor this website daily. Your #COVIDReliefcheck will get to you easier than waiting for it in the mail. The website will ask for your bank's routing number and your account number. You can obtain both numbers from the bottom of a check, or off of your bank's website. Keep the information handy before you logon, as the site is likely to have a lot of traffic.

President Trump signed the massive coronavirus relief bill last week. Money will be distributed to the public by the IRS. So will the IRS offset what I owe against the check? What about my spouse? Here are some specific takeaways that you need to know now, and take appropriate action: 1. The government is using the IRS to distribute the checks only. They will not offset any IRS debts against the checks as this is not an IRS matter. The government is just using their infrastructure. 2. However, the only exception to this rule is child support obligations. If you owe back child support, it will come out of the check. This is the only exception at this time. 3. The only way the IRS will know about you is if you have filed a return in 2018 or for 2019. If you have not filed for 2018, and have not filed 2019, you will not receive a check.  In order to receive a check you must file a return for either of those years.  We love working with taxpayers who are delinquent ...

From the impact of #COVID19 on our daily lives, keeping up with an IRS refund is a must.  The IRS maintains a Where's my Refund Tool that allows taxpayers to track and verify that its headed to the intended destination.  Taxpayers will need three things to use the tool: Their Social Security number Their tax filing status The exact amount of the refund claimed on their tax return Once the taxpayer enters that information the tool will display the progress of their tax return through the following stages: Return received Return approved Refund sent Great information to keep handy as your go through the return process.  #IRS #IRSRefund

Here are some additional tips on Series LLCs that you may want to consider. 1. I copied the exact language of the statute in my formation document: XYZ, LLC is a Series LLC within the meaning of Subchapter M, Sections 101.61 et seq, Texas Business Organizations Code. Refer to the attatched addendum, which is incorporated herein by reference as if set forth in full, for detail notice of the series and the separate rights, powers, or duties with respect to specified property or obligations of the limited liability company or profits and losses associated with specified property or obligations. The attached addendum also includes the names of the series. The debts, liabilities and obligations and expenses incurred, contracted for or otherwise existing with respect to a particular series, whether now existing or hereafter established, shall be enforceable against the assets of that series only, and not against the assets of XYZ, LLC generally or any other series thereof, and n...

During his press conference last Wednesday, President Trump announced that he was authorizing the #IRS to defer tax payments without interest or penalties. "Using emergency authority, I will be instructing the Treasury Department to defer tax payments, without interest or penalties, for certain individuals and businesses negatively impacted,” he said during a prime-time address. “This action will provide more than $200 billion of additional liquidity to the economy. Finally, I am calling on Congress to provide Americans with immediate payroll tax relief. Hopefully they will consider this very strongly.” The tax deadline falls on the traditional April 15 due date, and although the Treasury and the IRS have not yet issued a formal announcement, they have deferred the date in the past, as when the IRS computer servers couldn’t handle a surge of last-minute tax filings. This is a fluid situation, so check back with us periodically for new details. 

The 2017 tax overhaul presented a new set of challenges and questions for taxpayers to deal with in preparing their returns and making financial plans.   Tara Siegel and Ron Lieber of The New York Times wrote a great article on some of the more difficult questions facing taxpayers as a result of that legislation. You can read the article here . I want to add my input to some of the points they raise in a series of blog entries, in no order. The first issue I want to address is that of Qualified Business Income (QBI). It applies to so many taxpayers and in my opinion is the most confusing section of the new tax law. Reviewing the IRS website addressing QBI, you can tell that this area provides fertile ground for future #IRSAudits and adjustments. The key provision from my viewpoint is what is not QBI: A qualified trade or business is any section 162 trade or business, with three exceptions (Specified Service Trades or Businesses or SSTB): 1.    ...

The #IRS will extend the April 15 filing deadline in response to the  #COVID-19 emergency. There is no word from the #IRS at the time, but it is expected that the new date will fall on June 15 or thereabouts. Please contact #Austin-Tax-help for further details.

Just a reminder to be aware of phone scammers posing as IRS agents in the hopes of stealing your money or accessing your personal information. Scammers love to prey on the elderly, so please take extra precautions for those members of your family that are elderly. Keep in mind that any demographic with a land line and that may have contributed or subscribed to a group in the past is more likely to land on a phone list used by scammers. The elderly are more likely to have donated to political or charitable campaign, or receive frequent callers from insurance, medical or other solicitors. Sometimes its easy to get confused. Here are several things the IRS will never do: · Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes. · Threaten to immediately bring in local police or other law enforcement groups to have the taxpayer arrested ...

So many investors and entrepreneurs like to use the Limited Liability Company (LLC) format for entity planning.  I refer to LLCs as a Swiss Army Knife because it is so flexible and adaptable to so many situations. Corporations are still a viable and proper choice for many, especially with the flexibility provided by Sub S elections. The Series LLC now deserves special consideration as way to reduce entity costs, both initially and over the long run. Here's why.  What is a Series LLC? Its an LLC that allows you to form multiple series entities via one entity; protect the equity of one series entity against the liabilities of another series entity; and have a different set of owners for each series entity. This is a Swiss Army knife on steroids! Let’s review the most common reasoning behind choosing such a structure. We’ll assume an individual real estate investor, married with 2 children, living in Texas. He owns 3 properties. Property 1 is a small 6-unit apartment...

In this gig economy, many of us receive 1099s documenting the amount of income earned from that gig. The #IRS uses 1099s as a tracking mechanism. Just as an employer documents wages earned by an employee via a w-2, the #IRS uses 1099s to insure that individuals and companies reported all income earned. Its a compliance tool.  So what to do if the 1099 contains an incorrect amount? A bit of background first. The #IRS compares what income and expenses items that are subject to reporting requirements  against what you report on your tax return. Any difference results in a friendly letter from the #IRS with a bill. Occasionally omission results in an #IRSAudit.  Knowing this, your first attempt should be to contact the payer and attempt to get a substitute 1099. Keep a record of your request, and keep a record of how you calculated the correct amount.  Be sure to ask them to file the correction with #IRS.  If the payer fails to correct the amount you'll...

Some taxpayers may benefit from the credit for other dependents Taxpayers with dependents who don’t qualify for the child tax credit may be able to claim the credit for other dependents. The maximum credit amount is $500 for each dependent who meets certain conditions. These, include: Dependents who are age 17 or older. Dependents who have individual taxpayer identification numbers. Dependent parents or other qualifying relatives supported by the taxpayer. Dependents living with the taxpayer who aren’t related to the taxpayer. The credit begins to phase out when the taxpayer’s income is more than $200,000. This phaseout begins for married couples filing a joint tax return at $400,000. A taxpayer can claim this credit if : They claim the person as a  dependent  on the taxpayer’s return. They cannot use the dependent to claim the child tax credit or additional child tax credit. The dependent is a U.S. citizen, national or resident alien. Taxpayers can claim ...

You hopefully read our recent post on the Taxpayer's Bill Rights. Well, the flip side to that coin is the power of the IRS to regulate how taxpayers must report item, or comply with the law. Congress has given the IRS wide latitude in deciding how to enforce reporting and compliance of various items. Like an ambivalent parent, sometimes the IRS says "you (the taxpayers) must report (fill in the blank) in this manner." Just like a parent with a young child, sometimes the requirement is "I mean it", other times its "I really mean it.", and others "I triple mean now!!!".  The lesson here goes back to something we preach over and over - the key to success in an audit is preparation and then more preparation. Don't get into a situation where you are rushed into an audit. Review the document request, speak with the auditor, review the client files. Candidly speak with the auditor about your plans. Consider amending a return if needed b...

As tax season ramps up, this is a great time to go back and review your rights as a taxpayer. You can see them all here -  Taxpayer Bill of Rights . Here are a couple of things to keep in mind - 1. While most IRS personnel are competent and courteous, every now and then you'll run across an IRS representative who just does not meet their standards. Don't be offended. Instead, take action. Document your efforts. Enforce your rights. Get your case on someone else's plate. 2. Knowledge is power. The more you know, the more likely you will reach an amicable resolution with the IRS. 3. Don't stick your head in the sand. When IRS personnel see that you don't care, they're going to proceed with your case in the manner that is easiest for them. Its human nature. That course of action is not likely to be in your best interest. We'd love to hear your take on this - please send us your questions and comments. Thanks.

I've seen this again and again. While slipping into this pattern may be easy, after a awhile the burden gets bigger and bigger. Too big to contain any longer. Fear of the unknown takes over. You dread going to the mailbox.  I take a multi-step approach to the problem.  First, let me take on the burden. You focus on getting me the information and re-doing your budget to set aside some money for what I hope will be an installment plan of some type.  Second, let me assess the situation - I'll look at your transcripts, check on potential refunds and look at potential limitations issues on the refunds. I'll come up with a number.  Third, lets figure out the best approach to payment, given your individual situation. This is not a one size fits all approach.  The sooner you start the process the sooner you'll feel that burden lift. As they say, a journey of a thousand miles starts with one step. Lets grind at it together. 

Yes, tax filing deadlines are just ahead. Do yourself a favor and save some money in the process. Get your deadlines in order, make sure you file your extensions and run a quick estimate of what you owe. Even if you can;t pay the whole amount, lets get an idea of the amount and start to make arrangements.  Its so much easier (and cheaper) to work ahead instead of behind. Lets talk.