small business recordkeeping

6 More Tips to Help With Small Business Recordkeeping

Running a small business can involve a huge amount of work. When you’re dealing with customers and taking care of day-to-day business needs, bookkeeping may not seem like the most pressing issue. But if the IRS decides to audit you and your records are lacking, you can wind up in a bad position.

Part of the challenge is that many business owners don’t know exactly which records they need to keep. We’re here to help. In this blog article, we’ll provide six tips that will help you stay on the right side of state and federal tax laws. (Afterward, if you want more help, you can read five additional bookkeeping tips here.)

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maryland tax lien

How to Avoid a Maryland State Tax Lien

Like most things related to tax debt and back taxes, tax liens are no fun. However, if you have a Maryland tax lien or are worried about one, ignoring the problem won’t help.

The good news is that whatever your tax problems, there’s always a way to start addressing them and improving your situation. Often, that path starts with learning about the issue and figuring out your options. In this article, we’ll try to help by explaining what Maryland tax liens are, how they work, and how you can avoid or get rid of them.

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correspondence audit

What to Expect in an IRS Correspondence Audit 

If you’ve received a letter from the Internal Revenue Service asking for more information to support your tax return, then you have a correspondence audit on your hands. If this sounds like your situation, don’t panic — a correspondence audit can be straightforward and simple as long as you stay organized and understand the process.

In this article, we’ll explain how correspondence audits work and give you some tips to help manage the process.

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earned vs unearned income

Earned vs. Unearned Income: What’s the Difference?

When it comes to filing taxes, the distinction between earned and unearned income might seem like a minor one. However, the IRS doesn’t think so, and if you mix up earned and unearned income on your tax returns or forget income sources of either type, you could end up with a lot of tax problems on your hands.

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is debt forgiveness taxable 

Is Debt Forgiveness Taxable?

Most people struggle at one time or another to their pay bills. Often, the payments fall further and further behind, and climbing out from the debt cycle feels hopeless.

If you’re in this situation, you may have asked the bank, credit card company, or another creditor to write off or forgive your debt — usually for much less than is due on your account. In some cases, the lender will agree and stop trying to collect due to time, circumstances, or other contributing factors.

What you may not know is that when the lender writes off your debt, they may assign you a form 1099-C (cancellation of debt). This 1099 gets sent to the appropriate taxing agencies, and it will appear in your IRS file for the year the debt was charged off or forgiven. But what does a 1099-C really mean? Do you have to do anything after a creditor writes off your debt? What is your responsibility? In this article, we’ll answer those questions and explain the basics of how debt forgiveness affects taxes.

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irs collection due process

Understanding Your Collection Due Process (CDP) Rights

If you have an outstanding tax debt and you’re facing collection actions, you may want to consider a collection due process (CDP) appeal. A CDP appeal offers you an opportunity to pause IRS collections and speak directly with an IRS settlement officer. These officers have significant power and can approve a resolution that normal IRS employees would never be able to approve.

However, the CDP appeals process can be intimidating and confusing for many taxpayers. If you’re considering a CDP appeal or are currently facing liens and levies from the IRS, read this article to learn more about your rights and the appeals process.

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irs fresh start program

A Quick Guide to the IRS’ Fresh Start Program

If you’ve heard about the IRS’ Fresh Start program for tax debt relief, you may be wondering whether you qualify and what options are available to you. Fresh Start is a helpful initiative that makes it easier for some taxpayers to pay their back taxes and avoid bad consequences like liens, levies, and wage garnishments.

However, there’s also a lot of misinformation and misunderstanding about Fresh Start. The program isn’t a magic wand that can wave away your tax problems. If you want to take advantage of the tax relief programs available under Fresh Start, you’ll need to understand your options and get prepared for a process that’s rarely simple.

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taxpayer rights

Have Tax Issues? Know Your Taxpayer Rights

When you’re dealing with an IRS audit or threatening letters and collections based on outstanding tax liability, it’s easy to feel powerless. What can you do when a federal agency has it out for you?

One of the great things about living in the United States is that our government recognizes that people have certain rights that can never be taken away. Our Constitution describes these rights in the Bill of Rights, which are the first 10 amendments to the Constitution. So, no matter how bad your tax situation seems, no matter the amount of tax debt, and no matter how aggressive the IRS’ tactics feel, remember: you have rights!

Your strategies to deal with your tax problems should begin with that knowledge. In this article, we’ll outline some of your key legal rights when you’re dealing with a tax issue.

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single member LLC

Is It Worth It to Create a Single-Member LLC?

Working for yourself is both rewarding and challenging. You’re in complete control of your business, but it can also be tough to get others to recognize you as a real business.

For some people, a limited liability company (LLC) provides a solution. An LLC can offer a bridge between operating as a sole proprietorship and acting as a corporation for tax purposes. And for individuals who are also their whole business, a single-member LLC (SMLLC) is a great place to start.

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being audited by irs and no receipts

Help — I’m Being Audited by the IRS, and I Have No Receipts!

It’s the type of nightmare that could make a person wake up in a cold sweat: you get a letter that says the IRS is going to audit your business, and you haven’t kept any kind of organized records. You’re missing all sorts of documentation and receipts for business expenses.

If you’re facing this worst-case scenario, you’re probably a little stressed. We’re here to help, and to tell you that you can get through this — you don’t need to flee to Mexico or buy a fake mustache and glasses. In this article, we’ll talk through your situation and explain how to put yourself in the best possible position to survive your audit.

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