When tax time comes around, are you being reactive or proactive? Do you find yourself swimming in a sea of questions? Like, is it better to do my tax return cheaply? How do I know if I’m doing them the right way? Welcome to The Tax Answers Advisor with Marcelino Dodge. Today we’ll answer these questions and many more, sharpen your pencils and take some notes. Now here is your host, Marcelino Dodge.
Marcelino: Welcome to The Tax Answers Advisor. I am Marcelino Dodge here, working on number show 19. And we just keep a building here so much appreciate all of you around the world listening to this podcast throughout the US, Japan, Italy, and many, many areas around, it’s so wonderful to be able to reach you try to talk to everyone about what’s happening with the Internal Revenue Service in the United States then be able to help you to do what you need to do to save on taxes to make good plans and to be able to just move on as best we can in this crazy world we live in.
You can contact me anytime regarding matters I discussed on this program at www.cashtracksfinancial.com. My email, firstname.lastname@example.org or give me a call, it’s 844-394-4287. As well as visit me on Facebook, it’s facebook.com/cashtracks. While we’re catching up a little bit from last week, a few updates that have come in since our last show is the IRS has released the self-employment claim form for those who are self-employed.
So they can claim sick and family leave credit for time they had off between April 1st 2020 and December 31st 2020. And to qualify for this, you must have conducted trader business that qualifies for self-employment income. So that’s really wonderful. And in particular, that’s for those who file a Schedule C as sole-proprietors, which is, once again for those self-employed who were affected by the pandemic, it’s can be very useful, and you’re filing your 2020 tax return.
Also, as the e-filing season begins, actually tomorrow, which is February 12th, all are encouraged to electronically file their tax return now more than ever, because you will avoid pandemic delays. And as you prepare to file your tax return, make sure you double check you have all of your tax documents before you go and prepare that includes like 1099 G’s, for unemployment, W-2s, other 1099s and a whole list of other forms.
Now this is essentially very, very important because you want to make sure you have all of your documents. Because if you don’t, and I see this happen every year, people will get a letter from the IRS, six months to 12 months down the road saying, you forgot to put this form on your tax return. And so because you forgot, we’re going to charge you this extra tax, plus this interest, plus this failure to report this income penalty. So better get all that on there. Or if you happen to file early, and get it done.
But then you oh wait a minute, I got one more document here. Oh, I forgot about this W-2 that arrived late of this other job that I had. Right, you may have to file an amended return. While at least the good news about that if you file an amended return is that in most cases, you’ll be able to electronically file that amended return now, so you won’t have to be waiting that three to four months for a refund.
I also am reminding all make sure that you check your 1099 G if you refer if you received unemployment, make sure you check that for accuracy. Because that was so much unemployment fraud that went rapid through the country this year because of filings and because of the pandemic. Just make sure yours is accurate. And then go ahead and file once you know it’s accurate. Or if you have other information that knows, wait a minute, your 1099 G is not accurate, you can still file with accurate figures, then make sure that you contact your Department of Labor to get that information correct.
Then another point I’d like to make at this here is we see a lot of people perhaps advertising or probably doing it under the table, about doing tax returns? Well, we always of course, warning I’ve been warning about this the last few weeks about the ghost prepare or those who do not sign the tax return. They use some type of do-it-yourself software to prepare your return they charge 25 or say $50 to do it, but they don’t actually sign it as a paid preparer.
That’s known as a “ghost prepare”, and many times they’re just relying on software and many times they do it wrong. And so you need to avoid those types of prepares and make sure that if they do you pay somebody to do it, then they are assigning the tax return. So it’s showing that they’re taking some responsibility for that. Also, there are other tax preparers out there who are actually advertising?
Oh, wow, come see us, we our rates are really good to prepare a tax return will give you a good deal. These kinds of efforts. Yeah, well, it’s like everything else in the world, you get what you pay for. Yes, these ones may be legitimate preparers, they may be signing the tax return, they may have their P10 number, all of that. But just be aware of these individuals, are they going to be the best choice to do there? Are they really going to be around if you have issues during the year?
Are they can they really be your partner in helping you to be successful financially? And to reach specific business goals, or specific personal goals as well? So you need to just be aware and really look at the whole big picture, not just look at what the cost of the tax preparation is. But look at what value you’re going to get from working with that preparer, which is why here, when I work with individuals, I charge a fair price to do tax preparation.
And I go even beyond that, because we’re available year-round, we’re available by a web chat, available of course by the phone, to help ones throughout the year, especially when they enroll into one of our bundles that we have either personal or business bundles that help you to not only prepare your tax return, but as well help you to be successful in reaching goals. And in other areas as well as we take a whole big look at your big picture, which in these times, we know.
Many people are concerned with their health, which we take the very same precautions as many other places do we have places things in place here if people want to come in. But of course, if you want to visit via web chat, we do that, we got secure documents stored, which makes it very easy to do business with us. You can transfer up documents, Id documents, tax documents, e-sign your tax return very easily, we can chat and I can work with you on and send you a copy of it.
So it can work very well, no matter where you are happy to work with you and want to help you to be successful. What we do want to talk about today is as the title of this episode is that, “If you’re a Non-Filer, you need to get caught up now!” And that is very, very important to do, especially if you want to have things straight and make sure you get all your taxes paid. We see, I hear on the radio, and you see on the TV, and I’ve seen this year after year after year.
In fact, we’ve talked about it at various seminars, I go to of commercials of those wanting to help you to catch up your taxes, or help you with overdue taxes. If you’re a non-filer, they want you to help you to catch up. Well, you just got to be careful with a lot of these ads, because some of these places may be good. I don’t know, they say they claim they’re good. But I don’t know if they are but you just got to be careful with them because they can charge high fees to do that.
Sometimes they make guarantees that really are not, I’d say really are not completely valid or honest. Sometimes they’ll say, well, we’re gonna settle with the IRS for your tax debt for pennies on the dollar. Well, they make it sound easy, but it’s not really that easy. And the IRS does not accept every offer if you owe a lot of tax bills and with this charge, they charge you high fees, they can’t guarantee the IRS is going to accept an offer.
It’s a special program called offer and compromise that the IRS has for certain tax bills and it’s just very truth in being very truthful with you is that the IRS accepts less than 50% of those offers in compromise. S,o some people still end up doing it and they can’t guarantee that the IRS is going to accept an offer, as well as in many of these cases, when you send in one of these offers to do it.
It takes six months to a year before the IRS even responds. And currently right now it may take even longer under these circumstances. And so these places that are telling you, oh, we’re going to get you immediate results. Well, be very, very cautious about it because it’s not something that happens right away. And especially now because these offers you’re dealing with it, you have to mail in that information and we know how fast the mail was processed with the IRS normally, and in the current circumstances, it’s processed even slower.
So yes, be very, very cautious if you want to use any one of these services to help you get caught up. Now this course this is a service that we help and we offer to help ones to get caught up on their tax returns. But how big of a problem is it for non-filing? Well, I just think consider this as we look over a few numbers here, in the year 2018, it was found there’s over 14 million Americans that owed $131 billion back taxes, penalties and interest.
And as well as there’s eight to 12 million, who did not file a required tax return, that means that they had some type of document being W-2 or 1099, or a K1 from some type of flow through entity that they work with, that they didn’t they had a required requirement to file. And they didn’t file for who knows what reason that could be, there could be some legitimate reasons. But either way, they were required to file one, and they did not file a tax return, and then each year, and this maybe not so much in 2020.
But, each year though the IRS does put millions of investigations out on delinquent tax returns they want, because they want everybody to get they want everybody to pay. And if you have a filing requirement, you do need to get those taxes paid and get that return file to get the government off your back there. As they say you don’t want the IRS to come knocking on your door. Sometimes we see that some of the taxpayers they will receive notices of non-filing, especially when there’s been informational returns such as the W-2s and 1099 filed with their tax information.
They’ll receive these notices and saying such and such has been filed or as I mentioned a little bit earlier in this program, there will be notices sent if there’s unreported income, even if you file the tax return. And in the matching process the IRS does, there could be a W-2, you didn’t report, there could be a 1099, you didn’t report and it could be a 1099 of any type could be for interest dividends, could be a miscellaneous income 1099.
So could be any number of things. And in one case, I’ve encountered where a person did not report sale of their home, which is a 1099 S. And so non-filing can also include non-reporting as well. And those non reporting can really be costly to you. If when a tax preparer I mean, when a taxpayer gets that notice, you stop and you think okay, well, this is what the IRS. But, see we also have to consider your state if you’re in a state that has income tax, a non-reporting also affects the state. And so we’re just mainly talking about the IRS. But you also got to consider whatever state you’re in, if your state has income taxes, non-filing will also affect you with the State Department of Revenue, which I will tell you State Department of Revenues can be much more vicious than the IRS can when it comes to collections. And pursuing you as a taxpayer. I haven’t encountered this so much on the state level.
But the IRS I’ve seen this many times with the IRS is that they will file on some cases a tax return on your behalf, they’ll just do it. They have some information there. They’ll file a tax return, they’ll say, okay, we file it. Let me see you’re single, you don’t have any dependents. Here’s the standard deduction we’re giving you. So here, here’s how much withholding was on there. So then, okay, here’s how much you owe us. Oh, then by the way, because you didn’t file this or file it on time, here’s your non-filing penalty, then here’s your non-payment penalty.
And so that’s happens when you’re not filing as well. And so the IRS can do that filing return on your behalf. There’s a lot of other enforcement actions they can do as well as they pursue these. So it’s, again, a big problem of ones not filing which is why once again you see a plethora of these ads here and I’m on the radio or through the television. Also there was here think about this at the end of 2018, there’s 1.77 million open IRS taxpayer delinquency investigations and so that’s just the open ones and so we see that there’s a lot investigations are doing and it is a problem.
And see most of this type goes where this non-reporting is as non-filing comes in is with self-employed people. Self-employed income, that’s not reported on informational documents like the 1099 miscellaneous or now the 1099 NEC and see this is where self-employed people, mainly your sole-proprietors at file on a schedule C. They can really get themselves into trouble. Because there is this myth out there. And it is a myth that well, “I got paid in cash, so it’s not reportable.” I’m not going to report that.
So I would have to turn that into the IRS. Well, frankly, that is a myth. Because if you are paid cash, you need to be keeping a record, you need to be keeping some type of ledger of that transaction. Or there are of course, I hear this a lot people say, “I was paid under the table, so it’s not considered income.” Well, that’s also a myth. Is that because when you’re paid for a service that you perform for somebody that is considered income, as a self-employed person, if you don’t report that income, in reality, you are only hurting yourself.
Yes, you are only hurting yourself because that income is beneficial to you against any expense, any expenses. But as a self-employed person, there’s an even more important point that goes right along with this. And we’re gonna go ahead and touch on that point of why that’s so important to even be reporting your cash as a self-employed person filing on a schedule C. And we’re going to go ahead and touch on that in just a couple minutes. When we returned back here, on The Tax Answers Advisor on The Voice America Business Channel.
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Are you wanting to grow wealth faster, save time and build a nest egg? Hire a tax pro who makes you money and does more than just file your tax return? Marcelino Dodge of Cash Tracks Financial identifies your key numbers, works year-round, improve your numbers, keeps you compliant and helps you achieve goals faster. Call Marcelino Dodge today, 719-336-8739 to schedule your free tax strategy review. Call 336-8739 or visit cashtracksfinancial.com.
Many people want to build wealth or grow their business faster, but do not know what specific numbers to look at that actually helped build monthly cash flow. Hire a tax pro who makes you money and does more than just filing your tax return? Marcelino Dodge of Cash Tracks Financial identifies your key numbers, works year-round to improve your numbers, keeps you compliant and helps you achieve goals faster. Schedule your free tax strategy review by calling 719-336-8739 or visit cashtracksfinancial.com.
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This is The Tax Answers Advisor with host, Marcelino Dodge. To reach our program today, please call in the number is 1-866-472-5790. That’s 1-866-472-5790. You may also send an email to email@example.com. Now back to The Tax Answers Advisor.
Marcelino: Welcome back to The Tax Answers Advisor. I am Marcelino Dodge, Enrolled Agent. I’m just speaking today about non-filing of your tax return. And also perhaps under reporting of income on your tax return. Yes, as I was talking about before the break, self-employed people or sole-proprietors, particularly those that filing Schedule C. When they fail to report even cash sales on their tax return or include that in their income, they are actually hurting themselves.
Yes, I can already hear them saying, but I was paying cash and whole bunch of excuses that come up there and well, I shouldn’t have to pay taxed on that because that was cash. Well, you should pay tax on it. But in particular, as a self-employed person because you consider that term self-employed, that is vital because you’re not just self-employed, but you’re also paying your own Social Security tax, your own Medicare tax, because you don’t have an employer matching that for you, on a form W-2.
So it is important that you report that cash as part, so that you do have profit in your business. And with profit in your business, you pay into Social Security and Medicare, which is, will only help you down the road, we don’t want to be listening to that excuse, well, it’s not going to be there. When I get there, you know that that point, that does not really matter it seriously it doesn’t, you just got to think about what’s going to help me now. You don’t want any zero years or very few zero years reported on Social Security.
And that just kills, it’s really rough on your Social Security payments down the road. So I definitely encourage you, if you’re not reporting the cash, you need to be reporting the cash as part of your income. So that you pay a good amount of Social Security and Medicare tax the self-employment tax, with your tax return, that way, you get the Social Security quarters, you get the income reported, so that it only helps your Social Security benefit down the road there.
So that’s kind of my soapbox on that area. Because so much income, there’s only a certain amount of income report on like the 1099, miscellaneous, your 1099 NEC, or even your 1099 Ks now. But yet, those only present the partial picture for a self-employed person, your Schedule C person. So as well, you got to think about it, the IRS files a tax return for you, because they’ll use those when they don’t use reporting there for those to calculate your tax return for you.
But usually what they’ll do, is I’ll not put any expense on there because they don’t know what your expenses are. And so if they don’t know that, then you can really be messed up. We’re gonna come back to that a little bit later. But why does a person not file their tax return? Well, sometimes there’s just IRAs notices, get you bogged down, just kind of get lost, because you’re trying to do it on your own instead of coming to a tax professional, like me to help you out and to get it taken care of, because we’re always interested in saving money.
But when you’re trying to save money, as I’ve already accounted for some tax returns I prepared this year, it actually ends up costing you money. Also, sometimes there’s life events that happens because life does happen that can keep one or actually contribute, I should say to one who does not get their tax return filed for one year or more years. Events we have death, divorce, loss of a job, sickness, can be any number of these that come in, there’s one person may not get their tax returns filed and certainly in some sicknesses can have an effect on the mind. And sometimes the IRS will work with you on that. But you do need to work on getting caught up or having someone help you to get caught up on that. Another reason why sometimes there’s a non-filer is just business events. You perhaps are part owner of some type of business not sole-proprietor, but maybe you’re part owner, maybe you’re a partnership in a business.
And for whatever reason the business didn’t get its tax return file, and then you didn’t get the form the K1 that you need from the business as being a partner or member, or is the owner in like an S-Corp. Who knows? So those flow through entities may not giving you what you need to be able to do it. Maybe there’s only self-employment income there in that business. And thus, because you didn’t get it, you couldn’t get it done.
Another reason why you may not file is just there may be a dispute in the business, some type of argument going on with the business, maybe the partners had some type of disagreement over something in the business tax return didn’t get filed. The business tax return didn’t get filed. And see these are some of the biggest violators of non-timely filed tax returns is actually some partnerships in some corporations that something happens.
There’s still a tax return due for that business for what however many number of years. But because there’s this dispute going on among the shareholders, or the partners, or the LLC members, the business tax return just does not get done. And does that creates a problem for the business. So, non-filers are not just individuals, non-filers can also be entities that have a filing requirement, but just don’t get it done. And so it’s important that these business disputes, not get in the way of getting it done.
But sometimes, it just doesn’t happen, especially when you got businesses who are trying to do everything on their own. Instead of using a tax professional, like Cash Tracks Financial here, they’re just trying to, we’re gonna do our, all of our accounting, we do all of our payroll, we’re gonna do the tax return, who do all that because we just want to save money. Well, that save money thinking oftentimes will get a business into big trouble.
And we’re talking 1000s of dollars of penalties with the IRS because they just did not get their tax return filed in a timely manner. And it could be two or three years, and those penalties can really add up. So entities definitely need to avoid it and get it done and use a professional of some sort to get it done. Maybe perhaps, a non-filer would include, or non-filing part can include a side gig aside, like some type of side business, like in the gig economy, you’re perhaps selling items over some type of a marketplace, or you’re using like an Airbnb, or maybe you’re doing a little Uber on the side, who knows you’re doing something like that. And maybe not filing those or including that information and income. While that could be an issue for you as well, especially when the IRS gets the reporting forms, you get those nice little letters, six to 12 months down the road from the IRS saying oh, by the way, you didn’t report this, you don’t want that you want to make sure you get all of that proper income report, because the IRS will always do what is in their favor.
So it’s time to get someone like me, Marcelino Dodge on your side, to help you to solve these issues. And then another reason, will have a lot of this year are those who perhaps don’t file because of some type of natural disaster, a firestorm, a fire, a storm, hurricane, tornado could be some type of disaster like that as to why one may not get their tax return filed, which is why, as I’ve mentioned before, there are some of these filers in some of these areas that have an extended period of time to file their tax return.
And some of those because of wildfires and so on, have been into 2021 before they have to file. And of course, we’re going to talk a little bit more also about how you can file especially if you have some natural disasters, all your records may be destroyed. So, how do we deal with that? Well, we’re going to come back to that as well. Now, when we endeavor and we work to help non-filers to get caught up, there are some requirements that Cash Tracks Financial has as just operating procedure to help ones because we are very willing to help and assist these non-filers to get caught up.
But there is certain requirements that we have in place that protects the taxpayer, it also protects us as the business. And some of that is we must have an ID of the taxpayer we’re working with that’s pretty standard procedure with us regards to who we’re working with, we have copies of IDs on hand, because many state tax returns actually ask for the ID. Colorado has ID information on it. Some other states have ID information on it.
Some states you can’t even file the tax return without an ID, an active government idea some sort of information on it. So also, there’s a fee structure when we come in once talked, we have a fee structure that is required as part of getting caught up, which could include as much as paying 50% down on the anticipated rate can include also making sure that any calculation time that we may have extra work we may need to do. So there’s all that so worked out ahead of time.
There’s also engagement letters that are signed for each year that, we’re getting this tax return for this year, you’re paying to help us to get that to help you get that proper tax return filed and documents. Go looking for documents, we help to track down documents, some people will have their source documents. Others will maybe need some help getting those source documents which we can get those from the IRS or maybe from other sources as well.
And with that, the tax return can be filed a due date. We work with individuals which is why when we work with individuals to help them we make it easy for them to get us documentation through our secure web portal. So you don’t have to actually bring it into the office, if you’re located in another area, or it’s the weekend and you’re not able to bring your information in, well, that’s okay. You can take a picture of it, you can upload it to our web portal, it becomes a part of your file in the office right at that time.
And we can read and you can reach your deadline. And if you don’t reach your document deadline, now we can withdraw from the engagement or put some stuff on hold until we get all the information because there’s only so much we can do if we don’t have the right information. Also, we deal with various high visibility issues, such as foreign income, how that comes into play, how we need to be careful there and how we may need to in some cases exclude or there may be some other reporting that’s required with that foreign income.
Also, you may have underpayment penalties for not making estimated payments, as well. So those are some high visibility things and as I’ve been mentioning, as well, income under reporting, which, that that’s one of the biggest issues I’ve dealt with is that people just didn’t report all their income, they forgot about a W-2, or they forgot about a 1099, of where they worked, or where they got paid from. And all of those come in and are very, very challenging to do but we do try to resolve those best.
Examinations from taxing authorities come in now, if what I’ve encountered in working with this is a fact that if we’re working on to get it caught up, and when these tax returns are caught up, at least very seldom have I had an extra examination of attack from a taxing authorities from the IRS, or even states for most, for the most part is that when you get caught up, and you get that tax information in, get that tax return file, usually they’re pretty happy. And as long as everything is reasonable on the tax return, usually there is not a problem.
There are certain kinds of numbers they’re looking for, if they’re within certain limits, certain ranges, you’re usually okay. And we have to determine those and help you in building up records and so on. A retainer is usually required by this office to be able to even get started on such an on that so that as we get paid to get the work done, you get it, get the work done. Here’s the tax return for the first year, boom, let’s get that out.
And we don’t usually mail them all together, we send them out separately, that way, they can easily get identified not getting mixed up together. And of course, as I mentioned, they’re required information, I touched on some of this, that we’re going to need various records or in some cases, rebuilt records of what you would need to be able to do it. And some of this, of course, includes maybe bank statements from the year which you may or may not have those readily available. But being so many banks today, you can get electronic copies that depending on the bank, depends how far back you can go. But those would definitely be good. Of course, any 1099, you can get a hold of W-2s, which if we need to, we can always get those from the IRS because they get those reported to them unless we can go and pull that.
And then as well as we would need to get transcripts of whatever the IRS has for you to make sure that once again, what is being reported is being reported accurately, so that all your information is caught up with the IRS and you’re absolutely moving forward. And so as a firm Cash Tracks Financial is here and a lot of different requirements I just went over but yet, had a lot of information is so valuable to you.
Now, when you haven’t filed your tax returns for a few years, you just need to get caught up, there’s no explanation other than you need to get caught up. Because what happens is that once you file the tax return, and this is true, whether you’re once again talking about whether you’re an individual, or whether you’re a corporation of some sort or entity. Once you file that initial tax return, you’re basically you need to keep filing unless in case of an individual for some reason, you don’t have a filing requirement, maybe because your income falls below a certain threshold.
We had in general, you must be filing continuously once you file a tax return, because you don’t file it. What happens and I see this constantly is that you can be subject to interest. You could be subject to late fees, penalties. All of this comes in there when you don’t file the tax return on time because even if you can’t pay the taxes, and you know, okay you know, I know I’m gonna owe tax, but I don’t want to file tax return because you know that is the wrong thinking.
Even if you cannot pay the tax, you need to file the tax return. Because by at least filing the tax return, you’re avoiding what’s known as the non-filing or late filing penalty. So that has automatically saved you some money right there. And so that’s why it’s very important to go ahead and get your tax return file, and a few other issues are actually matters. I’m going to go ahead and discuss here in a little bit, because there’s so many other reasons why you want to get caught up on filing your tax return, and so many positive reasons why you need to do that, and why Cash Tracks Financial.
Why we can help you to get that done and do it as soon as possible? So, we’re going to go into a few more of these reasons why getting caught up is so vitally important? When we return in a couple minutes here on The Tax Answers Advisor with Marcelino Dodge, on the Voice America Business Channel.
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Are you wanting to grow wealth faster, save time and build the next egg? Hire a tax pro who makes you money and does more than just file your tax return? Marcelino Dodge of Cash Tracks Financial identifies your key numbers, works year-round to improve your numbers, and keeps you compliant and helps you achieve goals faster. Call Marcelino Dodge today, 719-336-8739 to schedule your free tax strategy review. Call 336-8739 or visit cashtracksfinancial.com.
Many people want to build wealth or grow their business faster, but do not know what specific numbers to look at that actually helped build monthly cash flow. Hire a tax pro who makes you money and does more than just file your tax return. Marcelino Dodge of Cash Tracks Financial identifies your key numbers, works a year-round to improve your numbers, keeps you compliant and helps you achieve goals faster. Schedule your free tax strategy review by calling 719-336-8739 or visit cashtracksfinancial.com.
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When it comes to business, you’ll find the experts here. Voice America Business Network.
This is The Tax Answers Advisor with host, Marcelino Dodge. To reach our program today, please call in the number is 1-866-472-5790. That’s 1-866-472-5790. You may also send an email to firstname.lastname@example.org. Now, back to The Tax Answers Advisor.
Marcelino: Welcome back to The Tax Answers Advisor, this is Marcelino Dodge. I sure appreciate your listening to the program today as we’re encouraging those who have not filed their tax return, or if they’re behind for a few years on their tax returns. Why it is so important to get caught now? Yes, important to reduce your interest, late fees and penalties. Now, even a bigger reason, I would say to make sure you file your tax return is if you have a refund coming.
Yes, I have had and I know of people who have lost refunds, because they did not file their tax return on time. Few years ago I had a case where ones missed the tax return because they did not actually file it according to my instructions. Yes, because you have three years from the due date of the tax return to file and get a refund. So say for example, we’re in the year 2020 right now, April 15th is the due date. So we go back to 2000, we were in 20, 19, 18. So 2017, tax returns renew April 15th of 2018. Right now, I’m getting my ears mixed up here I’m sorry. So, we’ve got 21, 20, and 19. So, the 2018 tax returns were due April 15th 2019. Anyway, what we got to keep in mind is that you have, because we got the 2020, which is due.
We got the 2019, which is now a year past, we got the 2018, which is two years. So, we got the 2017 that’s back to my original point 2017. So basically, if you do not file by April 15th of 2021. For 2017 refund, you will permanently lose that refund, there will be no recovery, there’ll be no way to get it back. It is gone for-ever. And I know this is exactly true because several years back, I had told someone.
It was a marriage dispute I had told these parties involved, that you needed to file the 2013 tax return before April 15th 2017, get it mailed in. Guess what? They didn’t listen to me they mailed in the 2014 one first, and then they mailed it in 2013, and thus, they did not get the 2013 refund. And then they tried to appeal it. And there’s no appeal because that’s what the law is, so get those returns in on time file for your refunds because there’s millions of dollars gets lost because people just don’t file, timely for their refund so be sure to get filed there.
Another reason you need to get caught up with your tax returns, is to report and protect for Social Security benefits. We don’t need to worry about any of the arguments one say, about this Social Security. All of those arguments are really irrelevant in this, because what you got to do. This is where you got to think about yourself. You got to get your Social Security benefits protected, especially if you’re a self-employed person as I spoke about earlier if you’re not reporting all the income you need to report.
You’re not getting credit for social security because you need 10 years, you need 40 credits which is basically, 10 years for credits each year to even qualify. But then, you need also to have 35 years of income. And if there’s too many zero years in there that’s going to drastically affect your Social Security benefit. So a self-employed person needs to pay Social Security tax, they need to pay that self-employment tax that is on their tax return.
If you don’t pay the income tax, well that’s not going to harm you really, but you got to file to get that in there, so that you can get your Social Security requirement, or disability benefits calculated accurately and get that protected in there because otherwise, as I’ve mentioned so many times during this program as a self-employed person you will be hurting yourself down the road. You got to think, not just the here and now you got to think down the road. You got to think long term, because failing the file, and failing to get this information to the IRS and failing to pay that self-employment tax is a big detriment to you, years down the road, and I have had these conversations with a lot of individuals that I’ve worked with over the years and when I explained this concept to them. It makes sense. And we make adjustments, we have them paying some Social Security tax. That way, they get their benefits and try to maximize it as much as we can.
According to what they can do, so that they don’t have a zero here so that they are timely file. And once again, that comes back as I mentioned before, even if you had a really good year. Maybe 2021s gonna be a better year, I don’t know what 2020 was like for some I know some had a rough year. Some had good years, it just really depends what your business was. But I do know is that once again as I’ve stressed, even if you feel you cannot pay the tax.
You absolutely need to file the tax return, and work on some type of payment arrangement with the IRS, which they’re actually for if it’s an amount due was I think it’s up to 250,000 now or less, they’re really working on payment arrangements down so you can work on that, and then work on getting where you can get some quarterly payments in as well so that you get your benefits. This is a big pet peeve of mine with individuals, and I really try to stress how important it is to pay your self-employment tax.
Now another reason to get caught up is loans. If you’re not caught up on your tax returns, you have difficulty approving loans. Now, this is always a challenge when I’m working with people because I get these requests from lenders for these certain letters and lenders really don’t need these letters from tax preparers. And so, we always have that discussion, but one thing we do know you’re going to get a loan, whether you’re getting a business loan or you’re going for your home owners loan usually, they ask for a copy of the tax return.
And if you don’t have the tax returns done, that can end up causing a delay because oh wait a minute, I’m trying to get this loan. And they’re asking for tax returns now, I’ve given them all this other information now they want tax returns, because we know lenders they have a tendency not to ask for everything up front. They ask, well, now we need this. No, now we need this. Well, if you have the tax returns ready and you’re already done, you’re not you’re going to be able to get your loan process faster so definitely.
That’s another reason to get caught up to help you on a personal level, and also getting caught up, is absolutely essential because the IRS, as I mentioned earlier, they’ll file a substitute return. And it’ll be returned filed that’ll benefit them that’ll have you paying the most tax because when they file a tax return for you, they probably won’t give you any credit or deductions. You’ll just get everything standard going down the road, whatever that is, if you file a single in a prior year, they’re probably just gonna follow you a single, or if it happens to be married filing joint, they may just be new married filing joint and just go down, all the basic stuff, nothing special. And whatever that result is, all you owe us is tax and then once they file that one for you which they are totally allowed to do. They send in a notice of deficiency, you know, here’s our proposed tax assessment. We filed this tax return for you.
And because this is the result we came out with. We’re going to now assess you this tax. When they do that, they do give you an out. There is a 90-day window that you have, which it’s always nice because IRS letters when you get them. You always get them around the date that’s on the letter, because they like. When they print those letters, they’re the dates like an advanced date, which is a week or two after what the actual mailing date is. So, I’ll kind of skip that part it’s kind of nice.
So they give you like 90 days from that date, and they say on that okay you have 90 days to either file your real tax return, or this is what your record is going to become. And you got to pay this amount, or if you don’t agree with this amount owed you can go to tax court. And so that’s what you need to be doing and thinking about is that if you don’t file because, especially if the IRS has information or returns W-2s, a bunch of different types of 1099, they’ll file a tax return.
I once again, I’ve seen this done, they’ll do what’s in their best interest not your best interest, when they go ahead and do this. The IRS has the authority by law to do this. When they file a tax return in your behalf, it’ll lead to a tax bill that notice I say, also deficiency level, and then you can be liable for that plus, not just the taxes, penalties and interest can kick in there as well. And so once they do that, they get those tax returns filed, they’re doing for you.
That opens up a whole new range of problems for you if you haven’t filed, which can include a levy of wages, bank accounts. And I’ve seen this actually happen on occasion where the IRS has said, you haven’t paid us in taxes you owe us. We’re going to start basically garnishing the wages at your place of employment, I’ve seen this on a couple occasions. I’ve seen State Department of Revenue’s do the same thing for back taxes owed. Now, that’s usually the one of the last resorts the IRS goes to.
It doesn’t happen like right away. You get usually several notices, it can take six months, it could take a year just kind of really depends on the situation. But the IRS does not come after your bank accounts right away. If you’ve ignored them. If you have not responded to them. If you’ve not talked to them. Then these things can happen. Don’t let anybody scare you, don’t let even the IRS letters scare you because a lot of times it’s just a threat of some sort, they really haven’t taken any action yet.
But yet, that’s where having someone on your side, you can come, you can visit me cashtracksfinancial.com as part of our service, email me at email@example.com, call 844-394-4287. I’m here to help through these challenging times, if you need to get caught up with the IRS. We are here to help you. And to make it as easy as possible because a person has been a repeat non-filer. There could be real challenge is there for you as well, there can be additional enforcement measures, the IRS takes.
There can be penalties. And at some point even depending upon what the actual amount owed is and what the situation is. The IRS can go to criminal prosecution. Now I haven’t seen it actually happened yet, but I’ve heard from various other tax people around the country, is that you know you’re in trouble with the IRS. When a man with the badge and a gun shows up. And that’s the type of IRS official there that does that.
So, but that is real extreme when that happens, and for the most part that’s not going to happen so these are reasons why you need to get caught up. So keep that in mind, that absolutely essential to get caught up, you have Cash Tracks Financial, Marcelino Dodge here helping you and willing to help you to get caught up on your tax returns, keeping in mind that as a business, we do more than just tax returns.
Yes, we help you to achieve business and personal goals faster through a customized process with the tax and accounting work being just a part of that, there is so much more that we can do for you. We can help understand what you want most from business and professional life. Help you manage steps, action plans, help to build those for you so that you can be even more successful. And then of course, what everyone really needs to look to be proactive, is to have year around service solutions to needs to help you.
Then, once one becomes a member of our professional bundles, personal or business bundles, access to the team here that’s access to me, Marcelino Dodge, to be able to call, email, to be able to get your tax questions answered problems solved.
And so we invite you to visit us cashtracksfinancial.com, email firstname.lastname@example.org or call at 844-394-4284 and schedule a free discovery session, which we can do online, very easily, and get to meet you and get to know you a little bit and see if our program will work for you, and then if we need to, as well help you to get caught up on any back tax issues. We will be there to help you to do that as well.
We are so appreciative of you listening to the program today as we’ve covered so much information. One thing I didn’t get to cover is how, now you’re going to get compliant. We’ll cover that in a future program. If you’ve been a non-filer, how do you get compliant? There’s a few line points that we need to go ahead and cover there but I’d say, we’ll do that in another program to help you to see why it’s so, so important to do. We’ve covered all of those we encourage you, yes get in contact with us to help you to get caught up on your back taxes, and also be able to keep going forward and always stay caught up to achieve both business and personal goals, even faster.
Again, thank you for listening so much today as the Tax Answers Advisor, with Marcelin dodge. We’ll be back again next week at 9am Pacific on the Voice America Business Channel.
Thank you for listening to The Tax Answers Advisor with host, Marcelino Dodge. We’ll be back again next Thursday at 12 noon Eastern time, and 9am Pacific time, on The Voice America Business Channel. We’ll have more to share next week.