Tax Preparation Personal and Corporate
It is every American’s duty to fulfill tax obligations honestly and in a timely manner. If you have income and fail to file an income tax return, you may incur fines and penalties from the IRS. But with all the personal and corporate tax laws, as well as agency filing and reporting requirements, we understand if some of you find tax preparation complex and burdensome. Even Albert Einstein himself, quoted saying, “The hardest thing in the world to understand is the income tax,” gave up in despair and obtained the services of a tax specialist.
PJ Testa Accounting PA provides professional services on personal and corporate tax preparation. We educate our clients on how their individual and business decisions impact their tax liability. We explain the details involved in the preparation of a complete and accurate tax return to minimize repercussions from taxing authorities.
If you are concerned with personal income tax, we are here make the process easier for you. We will help you identify opportunities to save tax by ensuring that you do not miss any benefit. If you are a corporate customer, we are here to make your business thrive and expand by providing professional advice on everything that has something to do with income tax. We will guide your business through the tax preparation process and explain everything you need to know. We will make sure that the tax planning opportunities we develop is carefully customized to the needs of your business.
No matter if you’re simply an individual filer with a basic return or you own multiple business entities that require numerous filings, it’s a good idea to work with an accounting professional to ensure you’re staying compliant—and to help you save more of your hard-earned money. Call our office today so we can begin your tax preparation.
Partnerships are unincorporated businesses that are run by two or more owners. It is defined by the Internal Revenue Services as the “relationship existing between two or more persons who join to carry on a trade or business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business.”
If you are part of a partnership, the essential concept of partnership taxation that you should always bear in mind is the profits and losses of your partnership venture flow through to the partners. Simply put, the business entity does not pay income taxes. It files an annual information return to report the income, deductions, gains, losses, etc., from its operations, but it is the partner that includes his or her share of the partnership's income or loss on his or her tax return.
The IRS issued the following guidelines if you are a partnership or a partner (individual) in a partnership. You may use the information in their charts to help you determine some of the forms that you may be required to file. Essentially it includes:Annual Income Return (for the partnership)
Employment Taxes (for the partnership)
Excise Taxes (taxes paid by the partnership on specific goods and activities)
Income Tax (for each partner in the partnership)
Self‐Employment Tax (for each partner in the partnership)
Estimated Tax (for each partner in the partnership)
Partnerships must supply copies of Schedule K‐1 (form 1065) annually to all partners
Partners are not employees and should not be issued W2 forms at the end of the year
PJ Testa Accounting, PA recognizes that Partnership Tax Preparation can be confusing for first-timers. We understand that owning or controlling a business is a lot of work, and there are a lot of forms required in order to operate your business as smoothly as possible. We are here to help you sort through the paperwork and get through it with ease. Call us today and let us discuss the best filing options for your business.
Coping with the loss of a loved one is already hard as it is --- then comes all the resulting estate tax issues. Preparing Form 706 is hard especially since it is not a form that tax payers prepare regularly. But when a loved one dies, somebody must step up to handle this responsibility. This person may be identified in the decedent’s will as executor of the estate. If there isn’t a will, however, the probate court will appoint someone to be the administrator, which is often the surviving spouse or another family member.
It is best to seek professional help – both from accountants and lawyers – in estate tax preparation to avoid costly errors. Here is an overview of the four major steps you need to consider:
- filing the final 1040 (decedent’s taxes for the year of his or her death);
- filing the estate’s income tax return (any income generated by his or her holdings after death);
- filing the estate’s estate tax return (Form 706 is due nine months after death); and
- miscellaneous details such as getting the estate a federal employer identification number (EIN), filing Form 56 (Notice Concerning Fiduciary Relationship) notifying the IRS as to who will be acting on behalf of the estate regarding tax matters, and open a checking account in the name of the estate.
Not all accountants offer fiduciary duty to their clients. This is most often true with respect to accountants providing only routine professional services, such as compiling financial statements or preparing tax returns. In a fiduciary relationship, one party places special trust, confidence and reliance on the other, who then is bound to the highest legal duty to ethically act in the other's best interests. In most cases, fiduciary involves financial management – managing the assets of another person, or of a group of people, for example.
Backed with years of experience in the industry, PJ Testa Accounting, PA is a leading provider of court accounting and tax preparation services. Maintaining industry standards on fiduciary tax and accounting is an essential part of our team. We can handle all of your fiduciary and court accounting needs such as:
State specific accounting formats
Formal or informal accountings for annual or event-driven matters
Preparation of Guardianship, Estate, Trust and Conservatorship accountings
Services for the completion of 706, 1041, and 709 tax returns, and various state estate and state fiduciary matters
Call our office today to set an appointment and discuss your fiduciary needs.
All phases of Income Tax
Planning is the key to successfully and legally reducing your tax liability. At PJ Accounting, PA, we make it a priority to enhance our mastery of the current tax law, complex tax code, and new tax regulations so that we can go beyond tax compliance and proactively recommend tax saving strategies to maximize your after-tax income.
Your income and filing status help determine which tax benefits you qualify for and what tax bracket you are in. Tax brackets range from 10 percent to 39.6 percent of taxable income. If you find yourself on the edge between two tax brackets, you may want to find ways to decrease their taxable income, for example through charitable donations or pre-tax retirement plan contributions which lower both AGI and taxable income. Meanwhile, tax benefits actually phase out as your income increases. At a certain point, the tax benefit may be eliminated altogether or it may be available only at a small amount. If you are close to a phaseout range of a tax benefit you are eligible for, lowering the adjusted gross income is one option you may explore so you can claim the tax benefit.
Businesses and individuals pay the lowest amount of taxes allowable by law because we continually look for ways to minimize your taxes throughout the year, not just at the end of the year. Call us today so we can better guide you in all phases of your income tax.
Negotiate with IRS: OFFER IN COMPROMISE
In recent years, the Internal Revenue Service (IRS) has been more amenable to working out late tax payments. If you can’t pay the taxes you owe the government, you have two options: negotiate a payment plan or ask the IRS to allow you to pay a reduced amount through an offer in compromise (OIC). An OIC is the most amount of money the IRS can expect to collect from you in the shortest period of time. Unfortunately, obtaining an OIC is very difficult to accomplish. The acceptance rate is under 20%, and you must have very little income or ability to generate income and have liabilities higher than your assets for your OIC to be accepted.
If you are interested in requesting an OIC payment plan, you must offer the IRS a minimum of 20% of what you owe, and the balance within five months or five payments. The longest repayment period it will negotiate is 24 months.
If your application for OIC is rejected, you can appeal the decision, but in the meantime penalties and interest on the amount you owe will accrue. If you really cannot pay anything as of the moment, just declare it so that the IRS can place your file in their uncollectible category. However, bear in mind that it will revisit it every year or so to determine if your financial circumstances have changed and if you’re now able to pay them something.
Ready to negotiate and offer in compromise? Find a smart, experienced accountant to walk you through the whole process. Call us now.
Not able to pay your tax in full nor qualify to submit an Offer in Compromise? Installment plans may be the best way for you to request the IRS for penalty abatement. Form 9465 is used by taxpayers with the IRS to make an Installment Agreement Request to set up a monthly payment plan. They are often much better financial options, as they frequently result in a lower cash outlay.
Only those who meet the rules, guidelines, and procedure for submitting an Offer or who have the financial ability to pay the tax and interest in full at the time of requesting a penalty abatement are qualified for installment plans. A Guaranteed Installment Agreement is available for those who owe the Internal Revenue Service less than $10,000. To qualify for this, you must have timely filed and paid all income tax returns for the last five years and have not used an installment agreement during this period. This plan is still available if you owe the IRS more than $10,000, but the IRS may request additional information to determine and validate that you are not able to pay the present amount owed in full.
As part of the rules for installment plans in all levels of tax debt, the IRS expects you to file and pay all future tax filings on a timely basis. Failure to do so will immediately invalidate your Installment Agreement allowing the IRS to use liens, levies, and garnishments to effect and force collection. The IRS will typically file a general lien to protect its financial interest, thus, necessitating you as taxpayer to get permission from the IRS in advance to either refinance or sale assets. Also, please note that the IRS will apply all monies as they see fit allowing dollars to be first applied to penalties and interest leaving the principal balance potentially unchanged.
For more questions regarding installment agreement requests, call PJ Testa Accounting, PA. We are more than happy to guide you through the whole process.