Tax Debt Reduction: New Flexibility for Offers In Compromise

New Flexibility for Offers in Compromise

For some taxpayers, an offer in compromise –– an agreement between a taxpayer and the IRS that settles the taxpayer’s debt for less than the full amount owed –– continues to be a viable option. IRS employees will now have additional flexibility when considering offers in compromise from taxpayers facing economic troubles, including the recently unemployed.

Specifically, IRS employees will be permitted to consider a taxpayer’s current income and potential for future income when negotiating an offer in compromise. Normally, the standard practice is to judge an offer amount on a taxpayer’s earnings in prior years. This new step provides greater flexibility when considering offers in compromise from the unemployed. The IRS may also require that a taxpayer entering into such an offer in compromise agree to pay more if the taxpayer’s financial situation improves significantly.

These immediate steps are part of an on-going effort by the IRS to ensure the availability of the Offer in Compromise program for taxpayers.

Contact First Tax Solution to see if you qualify for assistance. With our Professional Personalized Accounting Management Team we can find any tax solution to fit your personal needs.

Our Motto is Accounting and Tax Service When You Need It

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When Did The Inter Net Revolution Really Start?

Image via CrunchBase

The beginning legs actually started back in 1969. Scientists at the University of California, Los Angeles, were ready for a critical experiment. They had a computer and communications node, while colleagues installed similar equipment up the coast in Menlo Park. They planned to test whether they could link the two computers over telephone lines to operate as one system. The researchers began to tap in the message: 'log in' to make the link. The system crashed.

Thus was the beginning of internet revolution. By the end of the month they achieved the link. Of course, the purpose in those days was to ensure that nuclear missile systems could be kept operative even if part of the network was put out of commission in a war.

With the telecom boom and bust of the 90"s. Technology continued to grow and expand world wide.

Fax machines, cell phones, e-mail and hi speed internet service was the norm, smaller and faster the connection to communicate the better.

With Skype and Google Chat and Video we could now see each other while online.

2010 brings another step into the future of technology with the Internet Video phone.

More and More businesses today will continue to use the internet and more will be home based businesses and more will become virtual with the use of advanced technology like the video phone.

Accounting firms historically have always been very conservative and so therefore are behind the 8 ball in the online virtual world, except for First Tax Solution LLC.

First Tax Solution with their sister company started Online Tax Preparation and Filing Services as far back as 2000 and today First Tax Solution is ahead of the accounting industry by offering Virtual Tax Prep, Virtual bookkeeping and Virtual accounting services.

With the use of the video phone, skype and google chat and video individuals and businesses can have all their accounting needs met and never leave home or their office.

First Tax Solution offers Tax Service When You Need It.

contact us today for all your accounting needs First Tax Solution

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Small Business Owners Under more Scrutiny from the IRS

Self-employed business owners will continue to be the target of more scrutiny, thanks to the Internal Revenue Service's new Small Business/Self-Employed Operating Division. This Division will focus on partnerships and sole proprietors with more than $100,000 in total gross revenues, and small corporations with less than $5 million on their balance sheets. In addition, Congress has approved an increase in funding that the IRS is going to use to try to increase the number of audits conducted.


Congress wants to make sure that every deduction is legal and is documented. Stressed Out Try our Virtual Bookkeeping

Is your record keeping a nightmare? Most small business owners are very unorganized when it comes to bookkeeping and accounting. There just isn't enough hours in the day and enough of us to go around.

Here are some tips to help make the task less painful.

* Keep all your receipts. (everything: whether you need it or not)
* Keep a large envelope in your car; put every receipt in it. Not in your visor, glove box or console.
* Buy a calendar with small boxes for each day. Write down the odometer reading in the box for that day and where you are going. Do this every day.
* At the end of the month calculate the miles driven for business and personal: write the total for each on the calendar.
* Compile your receipts from the envelope and match with credit cards, debit cards and bank account.

And then upload the information to your client portal at First Tax Solution and we will do the rest for you. First Tax Solution is the Number 1 Small Business Accounting Firm. We really do make your life easier. With our On line Business Tax Preparation, our IRS Problem Resolution and Virtual Bookkeeping. We have you covered.

We are the Nations first Virtual Accounting Firm, Our motto is Accounting, Business Consultation and Tax Service When You Need It.

Contact us today First Tax Solution

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CORPORATE TAXES ARE DUE MARCH 15

Corporate taxes are due. Are you a small business? even though you file a corporate tax return.

Your 1120 C or 1120 S corporate return is due on March 15, 2010.

Are you one of the many 1120C's and 1120S corporate tax filers that are required to file electronically?

If you do not meet the requirements to file electronically, small Corporate Business's may elect to file electronically for convenience.

Filing Electronically save a great deal of time and money for you the tax payer. First Tax Solution LLC is a Small Business Accounting Firm; that specializes in Online Business Tax Preparation.

We can help you file you Corporate Business Tax Return in plenty of time to meet the March 15, 2010 deadline.

Our Motto is Accounting and Tax Service When You Need It

Contact First Tax Solution

Help I am drowning in Tax worries!!

Are you a working mom or dad? or a professional business person consistently on the go?
Do you regret tax season? Do you regret having to gather all your receipts for the entire year?

And gosh where in the world are all your receipts. In the sofa cushions, on the kitchen counter, in the junk drawer, on your desk under all the paperwork that has been laying there for 3 months.

In the ash tray in the car, in the console in the car, in the glove box or stuck in the visor of the car. How many have you washed because you forgot to take them out of your pockets before putting your clothes in the washing machine.

And you look at the calender and see Oh! no it is April 14, and you have not even thought about scheduling an appointment with a tax preparer to file your taxes.

Believe me when I tell you, been there done that and it is no picnic. But, there is a solution. First Tax Solution offers not only full accounting services but Tax Service When You Need It.

First Tax Solution offers Virtual Accounting, Virtual Bookkeeping and Virtual Tax Preparation, while you are in the comforts of your own home. You scan and up load your tax information using our secure on line client portals and 'voila" your taxes are done.

Contact First Tax Solution to schedule an appointment.

Free Tax Organizer

Most of us can't tackle all of our spending and saving needs at once. But following this outline can make it a lot easier to keep your finances on track.

http://articles.moneycentral.msn.com/SavingandDebt/ManageDebt/the-9-step-guide-to-your-finances.aspx


By Liz Pulliam Weston
MSN Money

Here's a money secret that might keep you from driving yourself crazy: You can't do it all.

We're supposed to max out our retirement savings, pile up huge emergency funds, pay off all our debts and buy tons of insurance. Yet we've also got other bills to pay, kids to raise and, yes, fun to have.

Even in good times, many of us can't cover all the bases perfectly. Now that many are facing pay cuts, unemployment or unpaid furloughs, more of us are facing painful trade-offs on less income.

Here's what you need to know now to properly prioritize your spending and manage your money. You may not be able to cover everything right away, but as more money comes in you can work your way down the list and be reasonably sure you're getting the important stuff right.
Priority No. 1: Pay your bills
Obviously, you need to keep a roof over your head and food in the fridge. But your ability to manage all your other financial priorities will be greatly enhanced if you can get a handle on your basic living expenses.

Bankruptcy expert Elizabeth Warren recommends limiting your "must-have" bills to 50% of your after-tax income. Must-haves, as she wrote in "All Your Worth" (co-written by her daughter Amelia Warren Tyagi), include shelter, utilities, transportation, food, insurance, child care and minimum loan payments.
More from MSN Money
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* Your 5-minute guide to managing debt
* 6 steps to dumping toxic debt
* When paying off debt is a bad idea
* 5 money mistakes in a bad economy
* Calculator: Too much debt for your income?

Her plan leaves 30% for "wants" such as new clothes, entertainment and vacations, and 20% for savings and debt repayment.

If your must-haves balloon over 50% of your after-tax pay, you may be able to rein in your costs by trimming your food bills and lowering your home's thermostat. If not, you may have to make more painful adjustments, such as finding a cheaper place to live or getting rid of a too-expensive car.

What you shouldn't do is cut your insurance coverage. Shopping around for coverage and choosing higher deductibles are better ways to lower costs than dropping your policies altogether, since that can leave you exposed to catastrophic expenses from accidents, illness or lawsuits. What you need:

* If you have a car, you need liability coverage, at least. Comprehensive and collision insurance is a good idea on newer cars and may be required by your lender.

* If you own a home, homeowners insurance is essential. Make sure you have enough coverage to rebuild your home, plus adequate liability insurance ($500,000 is good, and more is better).

* If you rent, renters coverage is a smart buy. Your landlord's policy doesn't cover your stuff or your liability.

* Health insurance is a basic expense you shouldn't forgo if you have any choice, because a single accident or illness can bankrupt you. If you don't have or can't afford coverage, read "A survival guide for the uninsured."

* Life insurance may be an essential, but only if you have financial dependents (people who need your income to survive). Term insurance is the cheapest way to go; learn more at MSN Money's Save on Life Insurance Decision Center.

Video on MSN Money
Credit cards © Fancy/Veer/Corbis
Dump your credit cards
Liz Pulliam Weston says your best investment move now is paying off credit card debt.

If your income isn't stretching far enough to cover your must-have bills, read "How not to pay your bills" and consider a consultation with a bankruptcy attorney. For more on bankruptcy, visit MSN Money's "Guide to Personal Bankruptcy."
Priority No.2: Save $500
Just a few hundred bucks in the bank can eliminate expensive bounced-check and late-payment fees. Having $500 in the bank also allows you to pay for minor emergencies without adding to your credit card debt. Furthermore, there's a huge psychological advantage to having even this small cushion, as I wrote in "Want to sleep better? Save $500."

Eventually, you'll want a bigger stash to guard against financial setbacks, but $500 is a good initial goal. Set up an automatic transfer from your checking account into a high-yield savings account, or jump-start your savings with a windfall, such as your tax refund check.
Priority No. 3: Start saving for retirement
You may be surprised to see retirement so high on the list. Surely your credit card debt and your kids' college educations are more important.

Except they're not. You have only so many working years to set aside enough cash to last you for the rest of your life, and any delay in getting started will cost you big time. Waiting just five years to begin can reduce your total nest egg by as much as 30%.

* Facebook users: Become a fan of Liz Pulliam Weston

Stopping or reducing your contributions is another bad move. It may be hard to contribute when markets are so volatile, but it's still important if you hope to build a nest egg. (Read "Under 35? Hurray for the meltdown" for more.)

But how much should you save? In "16 favorite money rules of thumb," I suggested that you save "10% for basics, 15% for comfort, 20% to escape." If you start saving for retirement by your early 30s, putting aside 10% of your income should cover your basic expenses in retirement, while a 15% contribution rate should give you a more comfortable nest egg. A 20% rate should allow you to retire early or enjoy luxuries such as extensive travel.

Continued: What if you can't manage 10%?

Your money priorities, first to last

Continued from page 1
[Related content: savings, budgeting, Liz Pulliam Weston, 401k, financial planning]

What if you can't manage even 10% right now? Then:

* If your 401(k) still offers a match, contribute at least enough to get that.

* If there's no match, start by contributing whatever you can, and bump it up a percentage point or two whenever you get another raise. (See "No 401(k) match? Save anyway.")

* If you don't have a retirement plan at work, contribute to a traditional individual retirement account. You can contribute up to $5,000 a year if you're under 50 or up to $6,000 if you're 50 or older, and your contribution is tax-deductible.

Need some inspiration to put the money aside? Think about how hard it is to live on your current income. Now image living on about $12,000. That's the typical Social Security benefit, and it's all you'll get if you don't start saving. For more, read "Could you survive on Social Security?"
Priority No. 4: Pay off 'toxic' debt
Now it's time to tackle your credit card bills and other dangerous debts, including payday, car title and pawnshop loans.

As I explained in "6 steps to dumping 'toxic' debt," debt is toxic if:

* The lender can change rates and terms at any time, with little or no provocation.

* The standard or default interest rate is in the double digits, or higher, which typically prolongs the time you remain in debt.

* Initially easy payment terms encourage you to rack up more debt than you can comfortably repay.

The best way to pay off toxic debt is usually to target the highest-rate debt first, paying as much on that as possible while paying the minimums on your other debts. But you also could tackle your smallest debt first, just to give yourself the psychological boost of retiring a bill.
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* Your 5-minute guide to managing debt
* 6 steps to dumping toxic debt
* When paying off debt is a bad idea
* 5 money mistakes in a bad economy
* Calculator: Too much debt for your income?

Priority No. 5: Bolster your emergency fund
As layoffs mount, the perils of living paycheck to paycheck become more obvious, and your $500 cushion will disappear fast if you lose your job.

So focus on building up an emergency stash worth at least three times your must-have expenses. That should tide you through a typical spell of unemployment if you cut all nonessential costs. (The median duration of unemployment was 11 weeks in February, according to the Bureau of Labor Statistics, up from 8.9 weeks a year earlier.)

You might want to bolster your cushion even more in many cases. If you work in a troubled industry that's already swamped with job seekers -- say, newspapers, real estate or auto manufacturing -- your joblessness might extend for months. The bigger your fund, the better you'll sleep. (See "Why I'm saving up $15,000 this year.")
Priority No. 6: Check out long-term-disability insurance
You've probably heard it before: Your earning power is your greatest asset. Meanwhile, your chances of a disabling accident or injury during your working life are much higher than your risk of dying in the same period.

But workers' compensation will pay you only if you're injured on the job, and disability benefits from Social Security are tough to get. So long-term-disability insurance is a smart purchase if you can afford it.

The cheapest way to get coverage is usually from your employer. If your job doesn't offer it, check with any professional organizations to which you belong to see whether disability coverage is offered.

If not, you may need to look for an individual policy. These can be prohibitively expensive, so you may need to compromise by agreeing to a longer waiting period before benefits begin (such as 90 or 180 days, instead of 30 or 60) and/or by limiting the benefit period to five years instead of to age 65. For more, see "Disability insurance can save your life."
Video on MSN Money
Credit cards © Fancy/Veer/Corbis
Dump your credit cards
Liz Pulliam Weston says your best investment move now is paying off credit card debt.
Priority No. 7: Enhance your retirement savings
Once you're contributing at least 10% of your income to a tax-deductible retirement plan, you can consider what's known as tax diversification.

That means putting money in various retirement buckets that will receive different tax treatment in retirement.

Retirement plans that give you a tax break upfront, such as 401(k)s and traditional IRAs, will require you to pay income taxes on withdrawals in retirement.

* Your 5-minute guide to retirement

* Retirement planner

Contributions to a Roth IRA, by contrast, don't give you an upfront deduction, but you can withdraw from them tax-free in retirement.

If you can't contribute to a Roth (the ability to contribute begins to phase out once your modified adjusted gross income exceeds $105,000 for single filers or $166,000 for those who are married filing jointly), consider putting money into a taxable brokerage account. Again, there's no upfront tax break, but investments held a year or more qualify for more-attractive capital-gains tax rates.

Continued: Start saving for college


ontinued from page 2
[Related content: savings, budgeting, Liz Pulliam Weston, 401k, financial planning]

Priority No. 8: Start saving for college
You're on track for retirement, your toxic debts are retired, and you've got a decent emergency fund going. Only now should you lift your sights from your future to that of your kids.

Putting your progeny so low on the list is hard, I know. But they have other options to pay for school, including loans. Nobody will lend you money for retirement.

The best way to save is likely to be through a 529 college savings plan (though not everyone would agree). You can contribute lump sums or set up automatic withdrawals of as little as $25 a month.

* Your 5-minute guide to saving for college

How much should you save? If you're trying to pay the full freight at Harvard, one heck of a lot: $819 a month, starting at birth, according to the college savings calculator at Savingforcollege.com.

A more realistic goal for most families might be to save for one-third to one-half the cost of public-school education and rely on borrowing to cover the rest. That would require a contribution of $80 to $125 a month for a child who just entered kindergarten.
More from MSN Money
Poor © image100/Corbis

* Your 5-minute guide to managing debt
* 6 steps to dumping toxic debt
* When paying off debt is a bad idea
* 5 money mistakes in a bad economy
* Calculator: Too much debt for your income?

Priority No. 9: Save for spectacular experiences
If you've covered all the priorities and have cash left over, it's time to start putting money aside for something wonderful: a special trip, a family reunion, a sabbatical. (Yes, people take those, even in recessions.)

Because money isn't just about covering the essentials; it's also a tool for living life to its fullest.

We tend to forget that when we focus only on the bills, the retirement accounts or the tangible stuff money can buy. Yes, purchasing a new car or TV can give you a rush, but that fades fast. What lasts are our connections to other people and our memories of happy events.

Make sure you're getting enough of those.

First Tax solution LLC

Tax Credits Help Homeowners Winterize Their Homes and Save Energy

People can now weatherize their homes and be rewarded for their efforts. According to the Internal Revenue Service, homeowners making energy-saving improvements this fall can cut their winter heating bills and lower their 2009 tax bill as well.

The American Recovery and Reinvestment Act (Recovery Act), enacted earlier this year, expanded two home energy tax credits: the non business energy property credit and the residential energy efficient property credit.

Non-business Energy Property Credit

This credit equals 30 percent of what a homeowner spends on eligible energy-saving improvements, up to a maximum tax credit of $1,500 for the combined 2009 and 2010 tax years. The cost of certain high-efficiency heating and air conditioning systems, water heaters and stoves that burn biomass all qualify, along with labor costs for installing these items. In addition, the cost of energy-efficient windows and skylights, energy-efficient doors, qualifying insulation and certain roofs also qualify for the credit, though the cost of installing these items does not count.

By spending as little as $5,000 before the end of the year on eligible energy-saving improvements, a homeowner can save as much as $1,500 on his or her 2009 federal income tax return. Due to limits based on tax liability, other credits claimed by a particular taxpayer and other factors, actual tax savings will vary. These tax savings are on top of any energy savings that may result.

Residential Energy Efficient Property Credit

Homeowners going green should also check out a second tax credit designed to spur investment in alternative energy equipment. The residential energy efficient property credit, equals 30 percent of what a homeowner spends on qualifying property such as solar electric systems, solar hot water heaters, geothermal heat pumps, wind turbines, and fuel cell property. Generally, labor costs are included when calculating this credit. Also, no cap exists on the amount of credit available except in the case of fuel cell property.

Not all energy-efficient improvements qualify for these tax credits. For that reason, homeowners should check the manufacturer’s tax credit certification statement before purchasing or installing any of these improvements. The certification statement can usually be found on the manufacturer’s website or with the product packaging. Normally, a homeowner can rely on this certification. The IRS cautions that the manufacturer’s certification is different from the Department of Energy’s Energy Star label, and not all Energy Star labeled products qualify for the tax credits.

Eligible homeowners can claim both of these credits when they file their 2009 federal income tax return. Because these are credits, not deductions, they increase a taxpayer’s refund or reduce the tax he or she owes. An eligible taxpayer can claim these credits, regardless of whether he or she itemizes deductions on Schedule A.

contact First Tax Solution Our Motto is Accounting and Tax Service When You Need It