Not paying your taxes on time entails various consequences. If you are having trouble paying your taxes in full, don’t let it hinder you in filing your tax return timely. Consider paying as large a percentage of the amount owed or borrow money from others in order to settle your tax liability in full. Filing a return and not including full payment can save you large amounts of penalties and fees. Moreover, payment plans are available and being on a current payment plans avoids IRS collection process which may include, property seizures, garnishments etc. Most CPA firms can advise you on these matters.
These are the ordinary penalties:
· “Filing Failure” penalty
5% per month on the amount of tax due on the return to a maximum of 25%
· “Payment Failure” penalty
.5% per month on the amount of your tax due on the return to a maximum of 25%
· Both “Filing Failure” penalty and “Payment Failure” penalty apply
The “Filing Failure” penalty lowers to 4.5% per month and “Payment Failure” penalty is
.5% per month. The combined penalty stays at 5%. The maximum penalty for both is 25%.
Students should aim to improve their financial knowledge before graduating from college. Otherwise, they will succumb to temptations and live in bondage to debt. Further, debt will prevent them from pursuing projects and activities later in life. Not only does debt create a financial burden, it generates emotional stress that can stymie an entire family. It is debilitating!
Handling finances well means learning to choose wisely. And learning to discern and choose wisely should be an important lesson students acquire at college. This ability applies not only to finances but every area of life. Indeed, I think learning to choose wisely should be a continuing process as students journey through life. To be sure, folks must deal effectively, at each life stage, with important lifestyle decisions.
Students might not be able to take formal credit courses in finances; however, on their own, they should set out to learn to handle finances well. Certainly they should do this before taking on student l Meanwhile, I believe, before leaving college, each student should follow the six steps below to learn and develop his or her financial knowledge.
Six steps to improve financial knowledge
1. Start developing a
If you are of the opinion that paying your bills late won’t have an impact on your credit score, think again. The late payment of bills under any circumstances can tarnish your credit history. Initially (for the first 180 days),the longer the debt goes unpaid, the more it will affect your credit score. In case the unpaid credit card debt reaches a point where the lender thinks that it will be irretrievable, it will be known as a “charge off”.
A charge off enables creditors to write off the debt and claim a tax exemption. Typically, an unpaid amount is recorded as a charge off when you don’t pay the bill for at least six months. However, the tenure varies from lender to lender.
Why Avoid Charge Offs?
A charge off means that you have been delinquent in making payment on the debts that you owe. After a debt is charged off, it is no longer considered as a revolving debt. It becomes a balance that is due to be paid. If possible, it is always advisable to avoid a charge off. This is because when your
A pocket full of plastic money gives one a feeling of success and security. Using your credit cards for purchases is so easy, choose what you want to buy and pay for it with a piece of plastic instead of cash: bought, done. That is fine as long as you keep your spending limited within your monthly income and pay the full amount of your accounts by the date due. Unfortunately, in many cases, there is not enough income to cover the payments. This starts many people to begin using two or three or even more credit cards, making payments by rolling money from one of them to another in order to survive.
Use of cards comes with a credit limit that you can buy for. This is set by the bank issuing it and is dependent on monthly income. Each bank has a different limit setting as well as some of the cards having budget payment facilities where as others do not offer this kind of service.
Acquiring a card is usually easy to get as long as you qualify financially. In fact, the banks are only too willing to give them to you so they can make some
When it comes to business privileges and perks, one of the most common ones that employers give to their employees are corporate credit cards. Although this does not necessarily mean that you can use this card anytime and anywhere you want to as this is limited to company rules, still this gives you convenience and security whenever you are in a business trip.
And having said this, it is very important that you know how to choose the best ones. Here are some tips that you can use as your guide in your selection.
- Choose a corporate credit card that offers high spending limit. There are different types of cards and these offer different spending limits. Depending on your job position or your role in the company, it should provide you with just enough spending limit so you can pay for the things and services you need.
- Choose a corporate credit card that has specific perks. If your company requires you to travel a lot for business or to meet up with some clients abroad, you should choose a card that gives travel perks. There are several different types of cards and all of them offer several different perks. If you are
When used wisely, corporate credit cards can definitely help businesses simultaneously achieve career goals and reap personal perks. On the contrary, this can lead to a corporate free-fall when used poorly.
Corporate credit cards are different from both personal and small business credit cards. These are offered only be a few issuers. Generally, such accounts are established by businesses by utilizing a banking relationship or through a deal negotiated directly with a card issuer. In order to develop such kind of relationship, the company’s credit will be considered.
Companies may give their employees with corporate credit cards for the payment of business-related expenses, which are often travel-relation. Though it is often issued in the company’s name, be aware that it can also display the name of the employee cardholder.
They are categorized into 2 – individual payment cards and company payment cards. Those who opt for individual payment cards, they will be the ones responsible for submitting their own expense report. Also, they will be paying the issuer directly for any charges. On the other hand, the employer will pick up the tab for all company-sanctioned changes with the company-payment cards. But for any personal or unapproved charges, the employee will still
Our eldest daughter recently graduated from college (1 down – 3 to go). She headed West to take an internship that will assist her in obtaining some certifications that she needs. During her college years our mailbox was filled with Student Loan companies making sure that she knew that they were there for her – to lend her what she needed to complete her degree. Now that she has her degree – our mailbox is full of offers from credit card companies offering her the credit that “she needs” to get her life in full gear.
I have been shredding the offers as quick as they come into the house. And I have shared with her the trap that these companies are setting for her and her contemporaries. Last week instead of shredding the offers – I let them accumulate in a pile on my desk. We opened them and the first few sentences of each letter was quite eye-opening.
“You worked hard to achieve your degree and that hard work earned you our respect… “
“Congratulations on achieving your college degree. As you begin your professional life you may need to rely on credit to get you started… “
“Great job. Let
Review your credit report
After 60 days of closing the bankruptcy case, request for your credit report. Check for any errors (inaccurate, outdated, incomplete or unverifiable information) which can be legally corrected or removed by the credit report agency. Write a brief statement to the agency explaining the reasons that led you to file for bankruptcy and what you’ve done to solve your financial problems. This explanatory statement (30- 50 words long) will always appear on your credit report unless you request for it to be removed.
Get a secured credit card
With a bankruptcy charge, it’s important to demonstrate that you are credit worthy. Get approved for a secured credit card. With this type of credit card, you are only allowed to spend what you’ve deposited in your account ahead of time. Make timely payments before any interest accrues so that the bank can forward a good account history to the reporting agency.
Choose a secured credit card from an issuer who reports to one of the three major credit reporting agencies to ensure it helps to rebuild your credit score. Try not to apply for too many credit cards (or new credit) because creditors always check your rating before approval and
The Fastest Ways to Recover from a Bankruptcy
No one expects being in a financial bind (personally or business wise) that makes them have to file for bankruptcy. In the worse case scenario if you have to file for bankruptcy (whether it is chapter 7 or chapter 13) understand that it is not the end of the world. All you have to do is understand that there is a way to rebuild your finances back up to normal and eventually live life stress free again (at least in this situation).
Save, save, save!
The main key to recovering from a bankruptcy is beginning to save your money wisely. After a financial burden such as bankruptcy you will not only have to pay off your debt (which could include interest) in addition to daily living. Once you begin saving your money and budgeting correctly you will be able to pay off your debt while being able to pay current bills and other life necessities.
Re-adjust your lifestyle
This element goes hand in hand with the first step, which is to save your money. Although it may be a bit tough mentally to scale back on your lifestyle, at the end it will be all worth
Most people don’t pay much attention to their credit score, which is easy to do when you’ve always been able to pay your bills on time and haven’t acquired much debt. But even the most responsible consumers can be hit with unforeseen circumstances such as a job loss or medical bills. Credit cards may be able to float the expenses for a while, but eventually the debt can mount up to a point where payments are no longer manageable. Missed or late payments can lower your credit score, but you may avoid bankruptcy, hoping to stop any further damage. However, sometimes bankruptcy is the correct choice, and there are things you can do to rebuild your credit score after filing.
Your Credit Report
If you have a pattern of late payments, filing bankruptcy can discharge many of your unsecured debts and put an end to those late payments. A bankruptcy will lower your credit score, but after you file, you’ll be given a “Discharge of Debtor” document that shows your debt has been forgiven. At this point, negative credit events stop, and you can begin establishing a positive credit history. First, you’ll need to request credit reports from the three credit
It’s no secret that being in debt is one of the most stressful life events one can experience. But for most types of debts, there are solutions. Many creditors, such as credit card companies and medical facilities, will be glad to set up payment plans for you to ensure your debt is taken care of. Some hospitals even have funding available for those who cannot pay their medical bills. You may also be able to discharge unsecured debts through bankruptcy. However, when it comes to tax debts, the federal government can be a little more difficult to work, and tax debts are not dis chargeable through bankruptcy. There are always exceptions, and a Bankruptcy Attorney can help you work with the government to take care of your tax debts.
How are Tax Debts Handled?
While you may not be able to discharge tax debts through a Chapter 13, the amount you owe will be taken into consideration as we design your repayment plan. You may be able to discharge back taxes when you file a Chapter 7, but only if you meet these five criteria:
1. In general, only income taxes may (or may not) be included in a bankruptcy; all other
Calculating federal payroll taxes is easy once you understand a few concepts that are fundamental to the earnings you receive regardless of whether you’re salaried, paid by the hour, or a contractor who has chosen to have deductions applied. This article breaks down how the federal payroll taxes seen on employee pay stubs are calculated.
How Federal Taxes Affect Different Types of Employees
When calculating your taxes, the type of employee you are – salaried, hourly, or contractor, isn’t nearly as relevant as the amount of income you generate. The exception, of course, is that contractors and other individuals who typically don’t have taxes retained, will have a value of zero for the federal tax withheld unless they specifically request otherwise.
Federal income deductions are levied among citizens based on the amount they generate annually. The lower the income, the smaller the tax rate that is applied. As of 2016, anyone with an annual income over $2,250 must have federal taxes deducted from their income. Salaried employees, those who generate a set earning amount annually, will have a set amount deducted in federal taxes each pay period. Hourly employees, however, will have a federal tax rate that is projected based on the
Every year many tax payers have no idea whether they will owe taxes or not. Often, some tax payers feel that they may owe, but have no idea how much or why? Understanding how to determine your tax liability will not only help you make better decisions about the way you treat income, but it will go a long way to ease the stress that is often experienced when it’s time to file your tax return.
Obviously, the first variable in the tax formula is gross income. This is the aggregate of all earned and unearned income from various sources throughout the year. Income is either earned or unearned. Earned income is cash or in-kind benefits people receive in exchange for work or service, including employment and self-employment. Unearned income is cash or in-kind benefits that people receive without being required to perform work or service. Depending on the type of income you receive, as well as other variables your tax outcome could vary.
Next, certain deductions are subtracted from gross income. These deductions are referred to as above the line deductions, and are used to arrive at adjusted gross income or AGI. The name comes from their paperwork placement. They
There are some tax downfalls linked with trading mutual funds that should be given consideration. Awareness of these downfalls will reduce taxes and stop surprises from happening while visiting your CPA firm.
One thing to be aware of is, that it is possible to sell a mutual fund unknowingly or what one client called a “Stunner” sale. This may arise if your mutual fund has an option to issue checks out of your investment in the fund. Whenever checks are deducted from the investment, a partial sale of the investment is being executed. A taxable gain or deductible loss arises from each check written, with the exception of funds that have shares that are always one dollar values (e.g. money markets). Furthermore, each sale needs to be listed on the annual income tax return as a line item.
Some clients are also surprised when taxable sales results from rebalancing the portfolio of fund investments. Most mutual funds allow investors make modifications and allocate the way the account is invested. Rebalancing and reviewing an investment portfolio is a basic principle of money management. The rebalancing and transferring of money from one mutual fund to another mutual fund is a taxable sale of
My parents taught me to earn and save money from an early age. I had a checkbook before I was 10, I was in stock market club in 5th grade and had a job as soon as was legally possible. I always balanced my checkbook, had a credit card before 18, paid it off monthly and even learned to file my own taxes. You could say I was quite financially responsible for any age. I took a risk moving across the country when I was 22 and lost my savings trying to “make it”. So when I became pregnant, I was practically starting completely over. Thankfully I already had the skills and resourcefulness to make it work. Now, with my little 3 person family, I am taking seriously all the things I could have done earlier to ensure our financial stability. Benefit from my mistake, and see if you can implement any of these now before you wish you had.
Budget Your Money
To budget your money, you first have to know what you are currently making and spending your money on. First include your bills, most important first, all the way down to expenses that vary month to month like
Many people have the disadvantage of not having the knowledge of what budgets are and how to set them up. Thinking about it, you wouldn’t be able to do much without setting up financial plans and to have your life organised is the most important thing to do.
It’s important to make sure that you record what you are spending your money on. By doing this you are eliminating the items and services you spend on a monthly basis. It’s surprising how many things you find in your records that are not necessities.
Always plan what you need to spend in the future. If you are looking at what your expenses will be in the upcoming month it will be easier to do so if you create one list of the items you need. Often you will notice that right before ordering something online, for instance, you forget what you have purchased and spend that money again on something totally unnecessary. This may not be a reoccurring action but there are possibilities that you forget about purchases that you’ve previously made.
Look for products and services that don’t cost a lot of money. There are often specials on various products that you
Budgeting and avoiding financial debt is a huge thing we could all improve upon. We all know that their needs to be some kind of improvement, but do we genuinely know exactly where to start? Luckily, to suit your needs, we did all the hard labor for you. Now all you have to do is remember these excellent solutions that will help you manage your regular finances and save money in more ways than one.
Automated Bill Payment
Utilizing an auto-payment service can save you time, strain, and most importantly tons of dollars over time. You need a service that’s unique since not only does it assist you to stay clear of expensive late charges or handle your payments in a single location, but also functions with every one of your loan providers to develop an accelerated personal debt reduction payment plan.
This service should help to get you away from personal debt a lot quicker and can likely aid in building you important equity and/or lower overall interest payments.
Never stress again about when your costs are due or the possibility of “snowballing” into personal debt. Get your loans paid out off faster and tailor your spending plan in the direction of
Have you received a state notice of audit for sales and use tax? If so, are you prepared for the business’s sales, purchase and expense accounts to be examined by auditors trained to collect every penny of state revenue they can find? Are you aware that state tax law is the one area of law where you are considered guilty until proven innocent? This means that once the state has assessed tax, penalty and interest on a transaction it is owed to the state unless you can prove otherwise. Many state even impose what is termed a “pay to play” strategy which requires the business to pay the full assessment before the state will even consider reviewing an audit protest.
Take it from a sales and use tax expert who has supervised numerous tax audits, your best defense in any tax audit is to go on the offensive as soon as possible and start to prepare your business for the many demands an audit will have, from reviewing the transactions that make up the company’s sales, purchase and expense accounts to making sure all required tax returns have been filed. Not being proactive and thinking you will address audit issues
Debt is arguably the greatest plague in our society today, it has a way of creeping up on us if we let it. It’s crucial to keep debt manageable and reasonable in order not to incur painfully large interest charges or struggle to make our payments. Even for those who manage debt well, unexpected life changes can result in difficulty making ends meet.
When debt seems to overcome our lives the first course of action is to take a look at the budget. Finding unnecessary expenses to cut back on can help us pay down debts and keep monthly bills current if we aren’t in too bad of a situation. But what happens when we can’t solve our debt problems with budgeting?
Sometimes we need outside professional help. It’s hard to admit when you’re having money troubles and to go to someone else, but if you don’t gain control over your debts, your credit rating will suffer and you might live the rest of your working life trying to get out. So it is important to take control and make a change before it’s too late.
Some debtors turn to consolidating their debt as an answer to debt problems. Others may even
Age brings with it wisdom especially when it comes to taking financial decisions. A 40-year-old may be aware about more of credit repair facts and myths as compared to a 20-year-old. However, there may be instances when people may be stuck with similar credit issues irrespective of their age.
To begin with, the key to improve your credit score is – a dynamic focus. You need to seek help from a proficient credit repair specialist and then prioritize certain things as you age in order to do away with the issues that come in your credit domain.
Things to Consider in Your 20s to Improve Your Credit Score:
In your 20s, there are specific things that calls for your attention, when it is about enriching your credit health.
Attend to the five Factors:
The first step to improve your credit score is to have a clear understanding of the rules. The actual status of your credit score is determined by five factors – debt utilization, payment history, new credit, credit length, and diversification. If you were unaware of the essential factors that have an impact on your credit score, you need to work on the strategies that will help you to take care of