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For honest taxpayers, receiving a letter from the IRS can be extremely daunting. Unlike most other government agencies, the IRS has the power to attack your wages, freeze your bank account, and even confiscate your property, which is enough to send shivers down any taxpayer’s spine.

However, if you receive a letter from the IRS stating that you owe additional taxes, it’s essential not to panic. While it may be a daunting situation, you can settle your tax debt and get back on the good side of the IRS by taking certain steps.

As a Tax Resolution Firm, we encourage all readers facing a tax problem to contact us for a free consultation here.

In any case, it’s important to be an informed taxpayer. Below are three strategies you can use to resolve your tax debt and keep your peace of mind. Not all of these options will be suitable for everyone, but knowing what they are can help you set your mind at ease. The IRS can be intimidating, but they can be reasonable if you know what to say and how to approach the situation.

Review the Amount Owed and Your Tax Return in Question

If the IRS says you owe money, don’t assume they are correct. The tax agency makes mistakes, and so do taxpayers and tax preparers.

Whether you filed your taxes on your own or hired someone else to do it for

you, it’s crucial to examine your return and compare what you find with what the IRS is claiming. It’s advisable to seek professional assistance for this tax review, even if you initially filed your taxes yourself. A professional with IRS experience may be able to uncover errors and inconsistencies that you would have missed on your own, which could save you money.

While this review may not eliminate the extra taxes the IRS says you owe, it doesn’t hurt to be sure. Many taxpayers who believed they owed money to the IRS have ended up owing nothing or even receiving a refund from the agency.

Set Up a Payment Plan

Getting a notice of additional tax due from the IRS can be frightening, particularly if you cannot afford to pay what the agency says you owe. However, keep in mind that you don’t necessarily have to pay the bill all at once.

The IRS is frequently willing to work with taxpayers and set up payment plans, which could make paying what you owe more manageable and less stressful. Once again, it’s a good idea to seek professional assistance and guidance here. The IRS can drive a hard bargain, and you don’t want to end up with a payment plan you can’t afford.

If you fall behind on the payment plan you agreed to, the IRS may take further enforcement action, including garnishing your paycheck or freezing your bank accounts. Seeking the assistance of a tax resolution professional upfront can help you avoid these serious consequences.

Explore an Offer in Compromise Settlement

If you genuinely can’t pay the amount the IRS claims you owe, you may be able to negotiate a smaller payment. The IRS may not advertise this program, but the tax agency is often willing to work with taxpayers by accepting smaller amounts, particularly if those taxpayers have few assets and limited income. Sometimes, these can be for a fraction of what’s owed if you qualify. We offer a free no-obligation consultation to determine whether you qualify [add your contact page link].

If you plan to pursue this last option, working with a tax resolution expert is crucial. These compromise offers can be incredibly complex, with legal language and terms that can be difficult to comprehend. You don’t want to make a mistake here, and you want to ensure that paying the compromised account will result in a complete settlement of your tax bill.

So you’ve started a new business in the last year or two and you’re starting to generate more revenue. Or, maybe you’re an established business owner who finds themselves wishing there were more hours in the day to handle everything you need to. Whatever phase you find your small business in one thing is certain, a company cannot survive without someone handling the bookkeeping. Here is a list of the top reasons you should hire a bookkeeper for your small business.

1.) You don’t have the time

Phone calls, meetings, customer problems, family time, do we need to go on? As a business owner, it can feel as if the weight of the world is on your shoulders at times. It’s no wonder why bookkeeping often gets put on the back burner, especially for small businesses. It is not surprising to us that when we review a company’s books for the first time that we discover they’ve never reconciled any of their accounts. Do you find yourself every year on April 10^th trying to figure out if you’ve added up all your receipts correctly in your excel spreadsheet all while hoping that your accountant has the time left to get your return done before the deadline? If any of this sounds familiar, one of the biggest time-saving measures you could invest in for your business is to hire an outsourced bookkeeper. Having someone provide your company with monthly profit and loss and balance sheet reports not only can save you loads of time , but can also help you understand how your business is doing throughout the year instead of just hoping that your company is profitable. By reviewing the numbers on a month-to-month basis you can see what areas of your business are performing well and what areas can see room for improvement. Having your bookkeeping done through-out the year can also help you plan for decisions that can help you save on your taxes.

2.) You don’t like handling the numbers

Most people go into business because they’re good at what they do, not because they enjoy accounting and bookkeeping. Bookkeeping often gets overlooked as an insignificant portion of someone’s business due to the fact most people don’t enjoy bookkeeping. Our outsourced bookkeeping service handles all aspects of your business’ books so that you don’t ever have to worry about it. If you don’t necessarily enjoy this aspect of running your business , hiring an outsourced bookkeeper is an excellent way to delegate this responsibility to someone else.

3.) You’re not 100% sure if you’re handling the books properly

Let’s face it, bookkeeping can sometimes be a difficult process depending on your business model and experience handling books. If you’re not sure you’re doing the best job of keeping your books as accurate as possible, hiring an experienced bookkeeper with knowledge of your industry can make a big impact on your business. Being able to provide clients with accurate numbers of how their business is performing is something we take pride in doing. Being able to see exactly how your business is performing can help you as a business owner make decisions that directly impact your bottom line. Without a doubt, businesses left a lot of money on the table with the Covid-19 stimulus packages due to not having accurate books. One of the best ways to ensure your books are as accurate as possible is to hire an experienced bookkeeper to handle this aspect of your business for you.

4.) you think it’ll be too expensive

Most small businesses cannot afford to hire an in-house full-charge bookkeeper or justify the cost of having one. The average salary of a full-charge bookkeeper in the U.S. ranges between $40,000 and $50,000 annually. The great news is that outsourcing your bookkeeping can be one of the most cost-effective ways to delegate responsibilities to someone else. Typically, outsourced bookkeeping can run just a fraction of the cost of a full-charge bookkeeper.

If you’re a small business owner and you feel like any of these scenarios describe you, we’d love to discuss with you how our bookkeeping services can help take your business to the next level!

Contact us today to see how our bookkeeping services can help you!

As a practicing accounting and tax professional, I’ve had the unique opportunity to work with businesses of all sizes and industries in my nine years of experience. Without needing to say it, most people look forward to filing their tax returns to get their tax refunds. However, there is one group of people on average that dreads tax season, self-employed business owners. Most people who have never owned a business are unaware of all the complexities that exist in the compliance world for businesses.

To help combat some of the headaches business owners face, we’ve compiled a list of some of the top reasons small business owners hate tax season along with ways to help make your next tax season go a lot smoother.

#1) You know you’re going to owe money on your taxes (but you don’t know how much)

One of the largest challenges business owners face, especially if they’ve never owned a business before, is figuring out how much in taxes they’ll owe. Business owners commonly say to me “The IRS will get their money eventually” or “I filed an extension so I can worry about my taxes later.” These are common sayings from business owners who know they’re going to owe but never have any idea of how much.

Business owners on average tend to pay more in taxes than someone who is an employee earning the same income. Having the phone call at tax time with business owners telling them they owe a lot of money can be quite unpleasant. This is especially true if they were unaware they would owe or are new business owners.

What can business owners do to help combat this?

Working with your CPA or tax preparer throughout the year to do quarterly and year-end tax projections/planning can help you gather some kind of idea on how much your tax bill will be. Common strategies such as timely supply purchases and retirement plan contributions can make a big impact on your tax bill.

#2) You did not keep adequate records throughout the year

Most small businesses operate as either a sole-proprietorship or a single-member limited liability company (LLC). One of the major advantages of operating a business structured as such is that reporting your income on your tax return is not as complicated as other forms of doing business. Reporting the income for these types of businesses only requires their income and expenses. This provides a lot more flexibility in record-keeping which can help those who aren’t the best at accounting and bookkeeping.

However, this flexibility is also one of the cons to doing business as a single-member LLC or sole-proprietorship. One of the most common issues we see with clients is that they co-mingle their funds. What this means is that they combine all their business and personal transactions through one bank account. This makes recording and classifying business income and expenses extremely difficult and time-consuming. This is especially true if they go to the same vendors for business and personal purchases.

So what can business owners do to keep better records?

We always recommend opening a new bank account when opening a business or if a client is currently co-mingling funds. By separating your business and personal accounts you can dramatically reduce the likelihood to miss business income and expenses. This strategy also helps reduce the amount of time needed to comb through statements determining what is business and what is personal. Separating your funds can also help you determine very important items such as how much money your business is making and how much you have to pay yourself.

One of the best ways to make sure your records are accurate is to outsource your bookkeeping. As a business owner, you wear multiple hats in a company. Finding time to worry about your company’s accounting can be next to impossible. One of the easiest ways to help save you time and help make sure your records are as up to date as possible is to hire an experienced accountant to handle your books.

#3) You Do Not Have a Good Relationship With Your Accountant or Tax Preparer

Not having a good working relationship with your accountant can make things such as filing your tax return more difficult than they should be. Whether it is consistently poor communication, serious errors or omissions in their work, or other items such as unnecessarily high bills and poor service, having a struggling relationship with your accountant can make filing your tax return a burden on your business.

It always makes me take a step back when I discuss with a new or potential client who tells me that they’ve been unhappy with the service they’ve been getting from their current accountant for years. At first glance, the accountant in me goes “why didn’t you switch sooner?” However, when we look at the role an accountant plays for a business, it makes sense why people often drag their feet when making this decision.

A lot of times people have been working with the same accountant for many years. Although a lot of people operate a business under the adage of “business is business”, it can still be difficult to make the switch. This is especially true after forming a working relationship for any amount of time.

So how do you know when it’s time to make the switch?

If you’ve been unhappy with the service that you’ve been receiving from your current accountant and you either have had a discussion with them about it and things haven’t changed or your business sense is telling you that it’s time to move on, it’s probably time to do so. As your business grows and evolves, the needs of your business do as well. If your accountant can handle these changes they can continue being a great asset to your company. However, if they are not, it may be time to make a switch.

So, what steps should you take if you feel like you’re ready to make the move?

The first step is to ask your business connections, family, and friends for any referrals. A word-of-mouth referral is the strongest advertising a company can have.

The second step would be to research accountants on platforms such as Google, Yelp, Linked In, etc. I always recommend my clients work with CPAs, Enrolled Agents, or other credentialed accounting professionals with great online reviews.

The final step I would suggest is to request a free consultation. Most accountants will offer free consultations nowadays which should help you gauge if you would work well with them.

Needless to say, working with an experienced accountant can help eliminate these common, yet frustrating issues and turn tax time from a time-wasting burden into a much easier process for you and your company. If you are currently experiencing any of these issues, we’d love to hear from you!

Contact us today!