Wednesday 31 July 2013

Tips to Deal with 941 Payroll Tax Problems

Being an employer, you must pay certain taxes for your employees, which include federal income taxes, federal unemployment taxes, Medicare and social security taxes etc. Even if you are an employer to one or two people, paying the 941 tax is a must for you and failure in paying these taxes within the given time period can lead to levies, penalties and even garnishments. Whether you need to make payroll tax deposits on a semi-weekly or monthly basis depends on the size of your payroll, which is determined by the IRS.

Here are some tips that will help you deal with 941 payroll tax problems

•    Check out how severe the problem is and if the IRS is hammering you with huge penalties and fines. If not, try to solve the problems either by filling up the forms, or by making the deposits as soon as possible. Remember, this is the easiest and cheapest possible solution for the tax problem.

•    If the tax problems have reached a severe level, probably you need to hire a professional who will represent you in front of the IRS. This is important because an experienced agent has the specialized knowledge using which he will be able to represent you at all the administrative levels of the IRS.

•    Ask your tax lawyer if he can make any kind of negotiation or settlement between you and the IRS. Though these type of settlements will never relieve you of the responsibility of making the tax deposits that you failed to make, your tax attorney might reduce or remove the amount that you are supposed to pay in the form of penalties, fines or interests.

These are some of the most effective tips to follow while dealing with 941 payroll tax problems. It is always advisable to contact an experienced professional before it’s too late.

Friday 26 July 2013

How to Fill out IRS Form 1040, 1040A and 1040EZ in Simple Steps

Internal Revenue Service (IRS) Form 1040 (or 1040A or 1040EZ, which are variations of the same)
 is used to calculate and file the annual income tax returns with the IRS. Individuals, including married couples, who have earned more than $3,700 in a given tax year, should use this form for filing their tax returns. Since these forms need to be filled out the right way, here are some simple tax help tips that would help you in your endeavor:
•    Provide all personal information accurately – While filling up IRS Form 1040, you need to mention your full legal name, correct mailing address, and accurate social security number. Keep in mind that if you have recently changed your name due to a marriage, divorce or any other reason, make sure that you report this name change to the Social security Administration before filing the tax return.

•    Select the correct status – Before you fill up the form, determine your filing status and then mark the appropriate box in lines 1-5. The typical statuses include married filing jointly, single, head of household, married filing separately, and qualified widow with dependant child.

•    Complete the exemption section properly – First, check the box for ‘yourself’ and then check the box for ‘spouse’ if you are married. Note that according to the federal tax laws, ‘married’ signifies a legal bond with a person, belonging to the opposite sex. If you have any dependants, list their information in the spaces on line 6c 1-3.

•    Fill out the income section – Before filling out this section, it is advisable to refer to the instructions mentioned in pages 19-27 of Form 1040 in order to know the information about each type of income and who need to fill what etc.

•    Complete the section of Other Taxes – Though most filers usually don’t need to fill this section, you should complete this, if you have any other additional taxes to report.

Friday 12 July 2013

Tax Attorney: Best Option to Minimize Your Tax Liabilities


Paying tax is often a job involving a lot of trouble and stress. But since it is an unavoidable part of our life, and it’s not possible to get rid of this altogether, you must try to lower your tax liabilities. There are a number of ways by which you can minimize your tax burden. For New Yorkers, it is advisable to Consult a New York Tax Lawyer in order to get customized solutions. Here are certain effective ways that will help you do the same –


1.    There are different employer participation plans like health savings account, health insurance, 401k retirement plans, childcare expense accounts etc, which you can take advantage of. Since contribution towards these plans gets subtracted from paycheck pre-tax, your taxable income would get lowered, leading to reduced tax liabilities.

2.    Make it a point to invest in a retirement plan, even if your company doesn’t offer a 401k program or if you are self-employed. This would help to lower your tax liability as it gives you a tax credit.

3.    If you don’t have a health savings account, gather receipts for prescriptions, medical bills and co-pays. If the total medical expense happens to be more than 7.5% of your gross income, a deduction is possible, which in turn will lower your tax responsibilities.

4.    If you have been living in a rented house for the past few years, try to purchase a home now. This is important because buying a home not only helps you build equity, but also minimizes your tax burden as mortgage interest is eligible for a tax deduction.

5.    If you have dependents, claim them properly as each of them reduces the amount that you have to pay taxes on.

In addition to following these five simple tips, it is advisable to hire the professional help of a New York tax lawyer who can guide you on what deductions to claim and what tax benefits to apply for, all of which will significantly reduce your tax liabilities.

Friday 5 July 2013

Tips to Avoid Common Mistakes While Filing Tax Return

The tax season often turns out to be crucial as you need to perform many tasks like finding all the relevant documents, organizing your tax forms, filing up the specific ones etc. It’s no wonder that while handling so many tasks within a limited time frame, you tend to commit some mistakes. Here are some effective tips which you must follow to avoid the most common mistakes that people make while filing their tax returns –

•    Opt for electronic filing – It is advisable to file the tax returns electronically through IRS free file or e-file. Since the calculations are done by the tax software and the common errors are flagged, chances of errors are reduced. Moreover, the software also prompts the taxpayers for missing information.


•    Check out if you have signed the tax return – Though it sounds a bit trite, this is the most common mistake that people tend to commit. You should also remember that if it is a joint return, it needs two signatures – both the spouses should sign, or else, the return will not be accepted. E-filers can sign the document using a self selected PIN or Personal Identification Number. You shouldn’t forget to date the return as well.

•    Make sure the paper return is mailed to the right address – If you are filing a paper return, make sure that you put the right address where the return should be mailed. This is important, especially if you don’t want the process to be delayed. Read all the instructions, mentioned in the form thoroughly and fill all the requested numbers accurately, including your social security number.

•    Attach all the forms to the front of the return – Paper filers must attach forms like W-2s, or other forms that show tax withholding and other required schedules and forms, in front of the tax returns. If you are claiming any credits that would require special documentation, don’t forget to include the relevant documents in your tax return. 

If you keep these facts in mind, you would find it fairly easy to file your tax return without making the common mistakes.