IRS Secret Agent

Quote of the week:

"The purse of the people is the real seat of sensibility. Let it be drawn upon largely, and they will then listen to truths which could not excite them through any other organ."

-Thomas Jefferson

IRS Secret Agent

Quote of the Week:

"Any tax is a discouragement and therefore a regulation as far as it goes."

-Oliver Wendell Holmes

Is Your Social Security Secure?

So you are retired and it's time to relax and live life at a more relaxed pace. This is the life you have been waiting on. You can finally live life with no worries. You have a retirement nest egg and of course you have your Social Security Income. But wait...you also have some lingering tax issues you did not get cleared up before you retired. Most might fear that the IRS can gather up your nest egg and leave you with an empty "coop." This is true but there IS another concern...the IRS can also levy your Social Security Check. Let me say that again...

The IRS can levy your Social Security Check!

The IRS can levy up to 15% of your Social Security Income in order to retrieve the money you owe the IRS for past due taxes. I know what you are thinking...I don't make enough in my social security check now...how am I going to pay my bills if they take even more money out of it? There are solutions that can be reached so if you want to know what your options are before this happens to you please contact a professional tax resolution company.

IRS Secret Agent

Quote of the Week:

"The Congress will push me to raise taxes, and I'll say no, and they'll push and I'll say no, and they'll push again. And all I can say to them is read my lips: No New Taxes."

-George Herbert Walker Bush

Tax Challenges for Business Income - Part I

Understated business income...the IRS says this is becoming more and more prevalent especially in small businesses. Are more and more small business owners trying to cheat the IRS out of tax dollars? The IRS thinks it is more likely to be the lack of knowledge on the part of small business owners of just how to calculate and document gross business income. Here are some helpful tips from the IRS to help out those who struggle with this on their tax returns.

First of all, what is business income? Business income is any and all income associated with a business. If there is any connection between the income and a business it is business income. You can answer that question with another one...if the business did not exist would the income have been received? If you can answer that with "yes," then put it in the business income column. As a business owner you are legally required to report ALL income that is derived from your business.

There are numerous ways to receive business income. Typically, the income is from simple forms of payment such as cash, checks or credit cards. However, trades, bartering, exchanging of services, exchanging of property are additional ways of paying for the goods and services provided by a company. All of these are considered taxable as sources of income. This leads us into Cost Of Goods Sold (COGS) where businesses will sell products in order to trade for services needed. This is where a lot of things are not as "black and white" on the business income spreadsheet. Next week we will continue with this topic and get into how to actually calculate gross business income though these types of sources.