A woman working on her taxes on a computer

Take Advantage of the IRS’ First-Time Penalty Abatement Policy

/0 Comments/in /by

Filing and paying state and federal taxes can be complicated, inconvenient, and unnerving. Deadlines can be hard to remember and even harder to meet. And since state and federal tax law is constantly changing, it’s nearly impossible to keep up.

With all this confusion and bureaucracy, failing to file and pay your taxes is an understandable mistake—and one that is easy to make.

If you’ve missed a filing or payment deadline, you’re probably subject to penalties. But you could be eligible to waive these fees if you meet certain criteria. Keep reading to learn more about the IRS First Time Penalty Abatement program and how it could improve your tax situation.

Read more

A ride-share driver driving a client

What Tax Deductions Can I Receive as an Uber Driver?

/0 Comments/in /by

One of the biggest side effects of pandemic lockdowns was the rise in some gig economy jobs—namely, things like Uber Eats and Instacart. These jobs, and other rideshare and delivery services, are very popular because of their flexibility in both time commitment and working hours.

One potential downside, however, is that filing taxes for these jobs can require a little more work, especially if you want to take advantage of all the business tax deductions available to you as a driver.

It’s always a good idea to seek out tax advice on the specifics of your tax return, although most of these tax deductions will apply to almost all drivers. Talking to a tax accountant like S.H. Block Tax Services can prepare you for what kind of expense tracking you should do throughout the year in order to get the biggest tax deductions available to you.

Read more

A truck driver driving while talking into his radio

11 Tax Deductions for Truck Drivers—Maximizing Your Return

/0 Comments/in /by

If you’re a long-haul truck driver, chances are you make several work-related purchases in a typical day. You grab a cup of coffee and hit the road. You have to stop for fuel, and you pick up some lunch while you’re off the freeway. As you make these notes in the logbook you purchased for your trips, you realize your truck is due for regular maintenance soon. After driving another leg of your journey, you get to your truck stop or hotel. That evening, you check your credit card app and see that your automatic payment for union dues went through. After buying some dinner and a shower, it’s time to hit the hay so you can get an early start tomorrow.

There are a lot of expenses when you spend your day traveling! These can eat away at your hard-earned paycheck. However, smart truck drivers know that by carefully keeping records of all expenses, they can use these costs to reduce their taxable income with truck driver tax deductions.

The record-keeping is your responsibility, but knowing exactly how to take these tax deductions can get complicated. If you’re uncertain about how these deductions work, or simply don’t want to bother with the minutiae of tax law, hiring an experienced tax professional can make your taxes easy.

Read more

A close-up of the folded arms of a medical professional

Tax Deductions for Nurses: What Can You Claim?

/0 Comments/in /by

Nurses have gotten a lot of press lately with labor shortages and wage concerns. If you are a full-time employee in a hospital, you may be questioning whether now is the time to make the leap into travel nursing or other contract work.

One of the considerations for employees vs. self-employed nurses (also called contract employees) is the difference in how income tax is treated. There’s also a whole list of tax breaks that are available when you are a contract worker.

If you have any questions about what expenses can be deducted when you are a nurse, it’s always a good idea to talk to a tax professional. S.H. Block Tax Services can help you navigate the specifics of tax law to make sure you are taking the right deductions available to you.

Read more

A couple reviewing tax records and tax returns

How Far Back Can You File Taxes?

/0 Comments/in , /by

If you’ve fallen behind on filing your taxes, you’re not alone. There are a multitude of reasons that people get behind on taxes, from family emergencies to mental health crises to natural disasters. This can turn a difficult situation into an even bigger source of stress, but fixing the problem might not be as bad as you think.

You can file back taxes for any year, no matter how far in the past. However, in order to be considered “in good standing” with the IRS, you only need to have filed your federal income tax return for the previous six years. Unfortunately, if you are owed a tax refund, the IRS will only pay you up to three years past the due date.

One of the biggest challenges of filing back taxes is finding the right tax documents to show your income, deductions, and tax credits. Hiring professional tax preparation services, such as S.H. Block, can help you rebuild your financial history and get those past due tax returns properly filed.

Read more

A couple going over Safe Harbor tax rules

Self-Employed? IRS Safe Harbor Tax Rules Can Help You Avoid Costly Penalties

/0 Comments/in /by

The gig economy is here to stay, and more people than ever are earning money through self-employment or contract work. For taxpayers who get a portion or all of their income from self-employment sources, knowing the rules of estimated taxes can save them a big headache—and financial penalties—come tax time.

One of the biggest challenges with this kind of income is that it can be unpredictable. If you’re selling holiday decorations on Etsy, for example, you may make far more income at the end of the year than you do at the beginning. Other people choose to put in hours based on their needs, so in months with high expenses they may work more hours to help offset extra expenditures.

When your income isn’t steady, how can you make accurate quarterly estimated tax payments? Underpaying can cause financial penalties, but overpaying means the government holds on to your hard-earned cash until tax refund season.

With IRS Safe Harbor tax rules, you can make estimated tax payments and avoid penalties despite having a highly variable income stream.

Read more

A couple reading a paycheck stub

How to Stop Wage Garnishment by the IRS

/0 Comments/in /by

Life can get hectic, and it seems like when bad things happen, several happen at once. Maybe you were going through a rough patch and forgot to file your tax return. Nothing bad happened when you didn’t file, so the next year you didn’t worry about filing taxes. And the next year. And the next. Then, suddenly, you received a notice from the IRS of their intent to levy.

When the IRS takes a part of your paycheck, aka wage garnishment, it can leave you without enough income to live on. This is especially true if you are in a higher cost-of-living area.

Moreover, because it involves your employer, it is not only embarrassing, but it may even put your job in jeopardy. While it is illegal for an employer to fire you for having your wages garnished for “any one debt,” you may not be protected if you have additional wage garnishments from creditors other than the IRS. Furthermore, some employers see debt and money problems as a red flag that may change how they view their employees.

If you’ve received notice that the Internal Revenue Service intends to garnish your wages, or your wages are already being levied, it’s time to take action. There are several ways you can stop a wage garnishment by the IRS. The help of a tax expert can be invaluable for deciding the best course of action to successfully get your wage garnishment released and start receiving your full paycheck once again.

Read more

A person reviewing tax paperwork with a professional

What Is a Partial Pay Installment Agreement (and Do I Qualify)?

/0 Comments/in , /by

Many people find themselves in a situation where they owe $10,000 or more in back taxes to the IRS. This can be so overwhelming that they choose to ignore the problem, since they know they cannot pay the IRS such a huge amount. If you’re one of those people, take a deep breath. There may be manageable payment options that you don’t know about yet, and you may even pay less than the full amount that you owe—if you qualify.

With a partial payment installment agreement (PPIA), you make monthly payments to the IRS until the Collection Statute Expiration Date (CSED), at which point the remaining tax debt is forgiven and erased. The catch is that it can be challenging to qualify for this type of agreement, because you must prove to the Internal Revenue Service that you cannot afford to make payments that would satisfy the entire tax debt.

Read more

A woman reviewing and calculating taxes

Tax Evasion Vs. Tax Avoidance: The Difference and Why It Matters

/in /by

Although both sound like something the IRS would frown upon, tax evasion and tax avoidance are very different things. Tax avoidance refers to using legitimate methods to lower your tax liability, while tax evasion is reducing your tax liability through deception and other fraudulent actions.

While some taxpayers knowingly initiate tax evasion tactics on their own, others fall for the promise that a questionable third party can reduce their taxes owed. The IRS often catches these tax scheme promoters and sometimes finds their clients guilty of attempting to evade taxes as well.

Understanding the difference between tax avoidance and tax evasion can help keep you out of trouble with the IRS. Keep reading to learn more about the difference between tax evasion and tax avoidance and how an experienced tax attorney may be able to help clear up misunderstandings with the IRS.

Read more

A traveler waiting at the airport with his passport in hand

Can I Get a Passport if I Owe Taxes to the IRS?

/0 Comments/in , /by

While federal taxes are the realm of the IRS, and passport issuance is under the purview of the State Department, the IRS is able to influence other governmental agencies when it comes to overdue taxes.

While the IRS can take away your driver’s license or your professional business license if you’ve fallen behind on your taxes, denying or revoking your passport is a sign that your debt has reached “seriously delinquent” status. If you owe the IRS more than $59,000 total in back taxes, penalties, and interest (this is the 2023 number, which is adjusted annually for inflation), then your debt has been classified as “seriously delinquent tax debt.”

Read more