Monthly Archives: October 2015

Facing an IRS Tax Audit?

Are you being audited by the IRS or perhaps you’re simply in a situation where you fear an audit is possible or likely? If you’re facing an IRS audit, you know the situation is potentially very serious. The best treatment, as always, is prevention. Get help from a tax expert. There are certain measures that can be helpful with mitigating the chances of an audit. More importantly, they may ensure that if you are not audited. If you are, we can help avoid unnecessary complications. Naturally, some people are more likely to be audited than others. For instance, sole proprietors who report more than $100,000 on their 1040 have a much higher chance of being audited than an employee reporting the same amount on their W-2, according to expertbeacon.com.

Entrepreneur.com describes some of the criteria the federal government uses when determining who to audit.

“The IRS chooses tax returns to audit through computerized screening. Additionally random sampling or document matching may select you. It’s not possible to predict when a taxpayer’s number will come up.”

Therefore, if you’re not already being audited, there isn’t necessarily a reason to panic. Regardless, the best defense is preparation. Consult with a professional team of tax experts. Business and Financial Solutions is an excellent choice. We specialize in helping clients resolve tax issues with the IRS. That includes audits as well as helping impending audits have the best outcome possible. Business and Financial Solutions can help guide you at significantly less the cost of a tax attorney. But still, we come equipped with detailed tax knowledge and expertise.

If you are facing an audit our team is be your best option. Schedule an appointment with one of our enrolled agents. Foxbusiness.com describes the enrolled agent role as:

“EA’s only tend to focus on preparing taxes, and many specialize in tax resolution. In addition to an IRS-administered testing and application process, enrolled agents must complete at least 72 hours of continuing education every three years.”

An enrolled agent has specialized tax knowledge that other professionals may not emphasize to the same degree. Strangely, EAs are some of the least understood yet most essential among tax and financial professionals largely.

The tax code is complicated and constantly changing…

The knowledge base that enrolled agents, CPAs, and other tax experts have overlaps greatly but not completely. This means that you should work with a team comprised of a variety of certified tax professionals. Thus, offering you the widest breadth of pertinent information. Regardless of the firm you use for the audit, there are a few things you’ll want to get done immediately…

First, prepare your documentation. This means gather up (and procure when necessary) all documents that are being requested by the IRS as well as any documents that you’ve been advised to prepare by your consulting firm (such as BFS) or tax attorney where applicable. However, don’t bring more documentation than you need. You don’t get extra-credit for proving how many hard copy items you can squeeze into one room. It’s about having everything that is relevant and useful handy.

During the whole ordeal, make sure to cooperate with the auditor. If you treat them like your enemy, they are more likely to act the part. They’re going to find out what they want to know eventually. So it behooves you if you’re the one who helps them get there. And the less hassle or grumbling the better.

As you go through the audit, rely on your tax professional to ensure that the auditor is correct. The auditors are quite human and make mistakes. And the last thing you want is a mistake to happen that ends up costing you. Use the expertise of firms like BFS to make sure that you’re protected against negligence or overreach. You need someone in your corner who can point to overlooked errors and deductions in your favor. You need someone who can advocate for you.

We have offices located in Rockville, Vienna and Frederick and proudly service clients in all 50 states. Call us now at 855-557-2222

Tax Expert for IRS Audit

‘What do I do if I missed the tax deadline?’

Missed the Tax Deadline?

Did you file your taxes? Something came up. You got busy. Or you’re just human. One way or another, you missed the tax deadline. (again?) The first thing to do is forgive yourself. We all make mistakes. The second thing to do is to file your taxes! There are many reasons to not wait any longer. First of all, a refund may be waiting which may have come from tax credits or withholdings. Of course, missing the deadline may not cause as much hassle in terms of penalties if you are actually expecting a refund. But there is still no reason to wait especially since if you wait too long you could lose the refund. However if you back taxes as a result of late filing, you will want to avoid additional penalties and interest. The later you wait, the more the tax debt.

Seeking out an extension may be necessary as an extra 6 months is always helpful when you are running behind. But remember: whatever complexities or difficulties with your personal or tax situation that caused you to put off filing your taxes—or made it difficult to do so before, are not going away on October 15^th. You may run into the same brick wall of anxiety and confusion with the new deadline.

Don’t procrastinate, file your taxes…

Whether or not you have money waiting for you, the one thing you don’t want waiting for you is accumulated penalties and interest. Remember that it is cheaper to pay late than to file late. The penalty for missing the filing deadline and paying late is 5% of what you owe. If you’re more than 60 days late, the penalty will be even higher. If you pay late but still file on time then the penalty is only .05%. Even if you can’t send an immediate payment, it is still worthwhile to file. Whether you’re waiting for more money to arrive or you have it already, there is never a good reason to wait to do the necessary paperwork. As a rule, the failure to pay penalty is significantly less burdensome than the penalty for filing late.

It’s important to ask yourself: why you are late? The fact is that whether you were just too busy, your tax situation was overly complicated, or you felt you had owed too much money and need some relief, these are all reasons to seek out and work with a reputable firm of tax preparation experts like Business and Financial Solutions.

Owe money? Work with professionals…

When you have back taxes that you need to pay and you’re lacking the funds, it may be time to consider some other options besides just letting penalties accrue. Tax payment plans can be great ways to get the debt you owe the government under control. For some individuals, an Offer in Compromise is an excellent way to tackle your back taxes all at once.

Whether you think you owe money, or you just don’t want to be late anymore, let us help reduce your stress so you have one less thing to worry about. Taxes are complicated and the relevant laws and rules change often. We serve clients from across the country and have offices in Frederick MD, Rockville MD, and Vienna VA. Call us now at 855-557-2222 and learn what your options are. We’re here to help you find the tax solution that’s best for you.

Should (and can) my Business get 8(a) Certified?

You may have asked yourself if your business qualifies for 8(a) certification. You may not know what the basic parameters are. Or you are just curious what 8(a) certification. Whether you’re on the cusp of making an important move for your organization, or this is the first time you’ve even heard of the designation, you should be equipped with a good understanding. Read on. First, are you a minority owned business? Let’s see.

The 8(a) ‘Business Development Program‘ helps small, disadvantaged businesses compete in the marketplace. The purpose behind the program is to offer a useful tool and assistance with businesses. But this help is only available to those that have traditionally been at a disadvantage in the American marketplace. What is the purpose? According to https://www.sba.gov/content/about-8a-business-development-program, where the SBA (Small Business Administration) goes into some finer details about this often-obscure government program, the point is to help “socially and economically disadvantaged entrepreneurs gain access to the economic mainstream of American society. The program helps thousands of aspiring entrepreneurs gain a foothold in government contracting.”

Sound good! But is it a little vague? The benefits of becoming 8(a) certified are actually rather interesting. Here are just a few of them…

Sole Sourcing

You have the ability to win sole source government contracts without a bid or competition is gigantic. These are often large. This is one reason that a disproportionately large percentage of the fastest growing businesses in the United States are 8(a) certified in recent year. 8(a) firms are selected first and have less competition to deal with when finding government contracts.

Federal Dollars

In 2011, an average of $3,000,000 was spent per 8(a) certified firm! It’s easier for federal clients to purchase your product. This is because 8(a) contracts cannot be protested. And they have less red tape overall. Less paperwork means less hassle for customers. And that means more money for you.

Joint Venture (Mentor Protégé)

8(a) firms have the latitude to partner with large successful firms. They often benefit from their assistance in achieving contract goals. Of course, the mentor is incentivized too. They have access to certain federal government contracts after entering into a joint-venture arrangement with the protégé. Granted, the (business development) Mentor-Protégé program has it’s own caveats and nuances. But it’s an important boon that you may be able to utilize if you become 8(a) certified.

Efficiency

On average, 8(a) contracts are quicker to be awarded than contracts gained by other methods. This means you can get to work, earn money for your business, and enjoy that critical growth! The advantages are even greater than this short list. Though the basic premise is that you’ll get some preferential treatment when it comes to procuring government contract work. And all while cutting through red tape. But am I even eligible?

We’ve scratched the surface on why it’s both useful and financially advantageous to get certified. But discovering whether it’s worth it or even possible for you might be a more complicated story. Look at it from SBA’s perspective. They’re trying to benefit people who need the benefit based on actual societal disadvantages. For example; are you a United States citizen who is: Hispanic, Asian, Black, Native American? Or has your ethnic background experienced chronic discrimination based on gender, culture, race, veteran status, or disability? If you can prove it to the SBA then you just met one important criteria for getting certified. But it’s more than this. Because other factors are accounted for and have to be verified. Your wealth is another such factor. If your personal net wroth is over $250k, it’s likely you don’t have a shot at getting that coveted certification.

Requirements

But let’s boil down the 3 main requirements to get a SBA 8(a) certification: First, you have own a small business by the SBA’s standards. (including those we already mentioned). Second, you need to be unconditionally owned or controlled by one or more disadvantaged individuals. (with a few caveats). That’s right. You can’t just employ individuals who qualify. You need to be one of these people. Finally, you need to show that your organization is potentially effective at garnering success. Basically, they want to see that what you’re doing is viable as a business. Therefor, they don’t throw good money after bad.

Learn more details about 8(a) certification status. And see how professional consulting firms like Business and Financial Solutions can help you. Give us a call today at 855-557-2222. And get linked up with the experts. We have offices in Frederick and Rockville MD and Vienna VA. However, we proudly serve clients in all 50 states.