Tax Planning for Retirement: Things to Remember

Posted on by PM Editor

Many people look forward for the day they retire. This is the time when they can relax and enjoy the fruits of their labor. But, regardless of how you want to spend your retirement, having a good tax strategy and plan for retirement is a must.

It is important to understand that there are many potential tax events that can be triggered when handling your retirement assets and financial transactions. With the help of tax experts like TaxPM you should be able to optimize your tax strategy. In any case, you should take a few things into consideration.

Asset Protection

According to many experts in this area, if you want to improve your asset protection, you will have to diversify your retirement assets. Use different vehicles like investments and insurance products to keep your assets safe. You should also think about the tax laws and regulations that may eventually affect your sources of income.

Now let’s consider some of the sources of income generated by retirees.

401 (k)

As you are probably aware, a 401 (k) represent a retirement savings plan sponsored by your employer/s. (1) With its help, you can save and invest a part of your paycheck before the removal of taxes. But, you should keep in mind that 401 (k) distributions are completely taxable. This is quite logical because the contributions were made before taxation.

Roth IRA

When it comes to Roth IRA, you should know that there are no deductions for the contributions. In other words, they act as so-called after-tax funds. People are free to withdraw contributions from the plan at any point, however depending on age there are often taxes and/or penalties applied to the transaction. In other words, Roth IRAs could be a more flexible option compared to traditional IRA.

SEP IRA

SEP IRA is the ideal solution for self-employed persons who want to make sure that their retirement plan will get them significant income in the future. It’s also good for sole proprietors. Many people use a SEP IRA to create tax-deductible contributions for the last year. It’s possible to change the amount you contribute at any time of the year.

Traditional IRA

Traditional IRA has deductible contributions, but only from current income. (2) So, when there are withdrawals of contributions at retirement, they are taxable as any ordinary income. The same goes for the income. Generally speaking, those who belong to the lower tax bracket can expect significant, permanent tax savings with Traditional IRA. Keep in mind that the income is taxed equally no matter what kind of origin it has – interest, dividends or capital gains.

Proper tax planning for retirement depends on your income, goals, qualified plans and tax filing status. Use professional advice whenever you are making a plan like this. TaxPM is here to help you.

(1)  http://money.cnn.com/retirement/guide/401k_basics.moneymag/index7.htm

(2) https://www.irs.gov/retirement-plans/traditional-iras

 

 

 

 

 

Business and Personal Accounting Service

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Are you interested in trying personal accounting services? Or maybe you need accounting assistance for your business? Regardless of your answer, you are probably aware that there are two options that individuals and organizations are using in situations like this.

First of all, they are relying on the so-called do-it-yourself approach. This means that they are taking care of these things on their own. The main reason why they are doing this is to save money. The other option is to hire a professional accounting service provider like TaxPM. The fact is that the second option is much better because it will not only save you time, but it will also save you money in the long run. Professional accounting service providers have experience, knowledge, and expertise in this field and they are less likely to make mistakes. Ordinary people don’t have the resources to finish this task in the right way. Now let’s see what you can expect from reliable personal and business accounting service providers:

Bookkeeping (end to end service)

It’s the best idea to leave the professional to take care of your bookkeeping needs from the beginning to the end. The typical bookkeeping service includes receiving, keeping and paying vendor invoices, creating electronic payroll taxes deposits, preparing payroll tax returns and payroll in general, preparing debt service payments as we all other occasional payments and taking care of sales tax returns. (1)

IRS Communication and Negotiation

Owing the IRS is a big deal. This is the reason why it is important to communicate and negotiate with the agency in the best possible way. There are professionals that can help you with this. It turns out that this is an investment that pays off. Through this process of communication and negotiation with the IRS, these professionals can help you get the best option for tax relief. In the end, you will use the best option for tax debt relief – penalty abatement, installment plan, offer in compromise, currently not collectible etc.

Payroll and corporate tax filings

Payroll and corporate tax filings let business owners take care of their employees and their company. Instead of wasting time on this time-consuming process, business owners should leave this task in the hands of true professionals. (2) With the right service provider on your side, you can rest assured that the payroll and corporate tax filings will be accurate and reliable and completed on time. They can help you file literally all the payroll and corporate taxes you need to pay.

Tax planning and preparation

It doesn’t really matter whether you are an individual or a business owner, you will need tax planning and preparation strategy that includes tax saving tactics and strategies like insurance strategies, employee benefit plans, financing alternatives and more. All these things can be overwhelming for an ordinary person, but the experts in this field like TaxPM are doing this on a daily basis for dozens of individuals and businesses.

These are some of the reasons why individuals and business needs professional personal and business accounting service.

 

 

 

 

Texas Corporation Compliance

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Corporate compliance is a term that people have started using more frequently in the last few years. This is quite natural because the number of corporations in Texas is growing rapidly. Unlike in the past, companies today are not free to do what they want. The laws and regulations are here to create a balance between rationality and ethics. For instance, companies can’t ask their employees to work for countless hours per week without a break just because there is a high unemployment rate in the area and they can find workers willing to do this. In addition, they can’t pollute the environment just because this will help them cut the expenses.

Industry standards, agency law, state laws and federal laws are the forms of the law and regulation for corporations in Texas. So, those who will form a corporation must take specific steps regularly in order to keep their company in compliance. So, there are some specific requirements that every Texas Corporation must meet.

Annual Report

This is a detailed report that has one objective – to provide information to shareholders as well to other interested parties about the activities and financial transactions and overall performance of the company in the past year.

Franchise Tax Report

The franchise tax represents a privilege tax that every taxable entity in Texas must pay. The annual franchise tax report is due May 15th. In case this day falls on a holiday or weekend, the due date is moved to the next business day. So, the franchise tax report is the report to the state of Texas that includes information about the annualized total revenue and calculation of the tax you are paying as a company.  You can send the franchise tax report in a few different ways – with the help of certified electronic submission software providers, electronic services or simply download and print the necessary forms and mail them. There are a few forms to choose from and that’s why we recommend using professional help in this process.

Texas Business License

According to some sources, there are more than 250 occupational, professional and facility business licenses that people and organizations in Texas can obtain from the state. There is more than one reason why business licenses were introduced in Texas. They are here to make the identification process of companies easier and to add a sense of responsibility and accountability for the owners’ activities. In addition, they make taxation simpler. Finally, they keep the general public’s health and safety protected.

Texas Corporate Records

The principal office of any corporation in Texas is the place where the corporate records must be stored. These records can include different kinds of items, but there are a few of them that must be available to the authorities at any time. These corporate records include records of accounts and books of accounts, a clear list of past and current shareholders with their personal information, minutes of shareholder and director meetings and a stock transfer ledger with information about the initial issuance of shares as well as information about all the transfers.

 

 

 

 

 

Tax Debt Relief

Posted on by PM Editor

There are many reasons why people are unable to pay their taxes – economic setbacks, loss of job, disability, illness etc. In situations like this, many people believe that paying certain taxes and debts is not that important. But, the fact is that people have to pay their taxes because IRS can use forced collections methods to get this money from you.

People need good tax debt solutions in order to prevent or fight the aforementioned IRS collection methods like IRS tax liens, IRS bank levies, interest and penalty abatement, wage garnishments and more. (1) Keep in mind that any taxpayer can get in a situation where they have to face serious tax problems. There is a chance that you have not be contacted by the IRS for a few years, but out of nowhere, you can get a notice of intent to levy mail. From that moment on, you will have to figure out how to avoid the IRS collections methods.

Staying Away From Serious Tax Problems

Preventing things is much smarter than trying to fix them. You should address this issue from the start. In order to achieve this goal, you have to act fast and identify the problems early on.

First of all, you should get in touch with the IRS in case you can’t pay taxes when you file. It turns out that the IRS is willing to assist individuals who can’t pay debts by providing a few tax debt solutions. By doing this you will avoid critical tax problems. Explain why you are unable to pay the taxes and they will help you.

Next, you should file and pay the taxes on time in case you want to avoid IRS collections. In cases like this, you won’t need any tax debt solutions. Remember that if you are able to pay the taxes, you must file and pay that debt.

IRS Collections Actions

If you have tax debt, the IRS can use a few collections actions/methods to get that money from you. For starters, they are using Wage Levy. This method is used frequently and it can seriously affect your everyday life. Namely, this method can take up to 75% of people’s paychecks. (2) So, you should give away between 50% and 75% of your paycheck until the debt is cleared. The worst part is that they usually don’t take your monthly bills into account. This is a serious situation and that’s why it is highly recommended to use professional assistance like the one provided by TaxPM.

Additionally, they can use bank levy and asset seizure.

Tax Debt Relief Solutions

There are a few tax debt relief solutions that you can use. For instance, the installment agreement allows you to pay the debt over a pre-determined period of time. There’s also an Offer in Compromise which allows you to pay a portion of your debt, but the IRS will consider that you have paid the entire debt.

These tax issues can be quite complex and that’s why it’s a smart idea to get professional tax advice from companies like TaxPM.

 

 

Assistance To Appeal Your Property Taxes

Posted on by PM Editor

There are seven States with no income tax. (1)  Of course, Texas is one of them and this is one of the reasons why many people want to move to Texas. However, this doesn’t mean that there are no other taxes involved. Unfortunately, Texas has one of the highest property taxes in the United States. The tax rate for this tax is 1.94% on average. (2) However, it turns out that many of these property tax bills are not accurate and individuals have the right to appeal their property taxes.

Why appeal?

Let’s take an example. If your property is assessed at $200.000 and your property tax is cut by 5% this means that your assessed value is reduced by $10.000 which can save you around $200. Of course, it all depends on the property tax rate and the value of your property. So, in case you believe that your property has been valued higher than it is, there is a chance to appeal to the tax authority. People can file a property 30 days after they have received the appraisal district notice or until May 31st.

Property Tax Appeal in Texas – How to File One?

Just to be clear – you have to disagree with the appraisal deliver by the authorities in order to file an appeal. This protest must be delivered to the appraisal review board. In most cases, you will be called to a meeting and in the majority of cases, the issue will be resolved during this informal session. Every meeting ends with a written notice that you can use later in the process. If you are unable to resolve this issue during this meeting there is a complex legal procedure.

How to get the most from appealing your personal property taxes?

There a few things that every taxpayer can do to get prepared for their appeal. For instance, it’s a smart move to talk to a district appraiser in your area and get information about the appraisal process. It’s also wise to analyze the appraisal. Every measurement and the description, in general, should be correct. Sometimes, a small technical error can lead to huge problems and an unrealistic appraisal.

The appraisal should include the defects that are not clearly visible as outdated and improper plumbing or damages to the foundation or under the roof. Use an independent appraiser or a simple photograph to provide evidence for these defects.

Experienced tax experts like TaxPM will advise you to check the appraisal information about similar real estates in your area. Of course, your property must be treated in the same way as these properties. Using an independent appraisal provided by a real estate expert in this field can also be very useful. Finally, analyze the expenses that you can expect for appealing this decision and compare them to the potential savings.

Hopefully, this blog post will help you understand when and how to appeal personal property taxes in Texas.

(1) https://www.usatoday.com/story/money/personalfinance/2014/04/26/these-states-have-no-income-tax/8116161/

(2) https://smartasset.com/taxes/texas-property-tax-calculator