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Archives for November 2021

Big-name Firm? Local CPA? National Chain? How to Find the Most Qualified Tax Resolution Professional

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With the stakes so high, it’s surprising how little thought many people give to their taxes. All too often, people simply walk into a neighborhood storefront, hand over their most personal information and trust that the person on the other side of the desk will do the right thing. And that can mean trouble.

If you’re in hot water with the IRS because you chose the wrong tax preparer, you need a qualified tax resolution firm — and fast. Here are four tips to help you find the right one.

#1 Read their reviews online.

Online reviews can give you a good sense of a firm’s reputability, responsiveness and how they treat their clients overall. If you owe back taxes, for example, waiting weeks for a callback can cost you a significant amount of money. Even the most well-known firms that invest in huge marketing campaigns can have the worst customer reviews.

#2 Get to know their track record.

Negotiating with the IRS to settle your tax debt is a specialized skill, and not all tax professionals have it. Ask about their recent case settlements and success stories. A true tax resolution professional will have proof they’ve done this before.

#3 Ask about their communication process.

The IRS moves slowly, and there will likely be big gaps between their updates. But that doesn’t mean the tax firm you’re working with should go silent. The right firm will have systems in place to ensure you’re updated regularly. Find out their expected timeline and how you’ll be informed along the way.

#4 Avoid big firms that don’t deliver on personal attention.

You’ve seen their ads on TV and all over the internet. But if you call a big-name, national firm, you’ll likely get a salesperson who knows very little about taxes or how to settle your tax debt. They may promise you the moon on your initial call, but will fail to deliver because they didn’t take the time to understand your specific situation. They may not even be licensed tax resolution professionals. Find out who will be responsible for your case and try to speak with them directly before signing up.

Need tax relief? You’ve come to the right place  

If you’re looking for a tax resolution specialist who knows how to navigate tax resolution challenges, reach out to the professionals at Magone & Company. Call us today at (973) 301-2300, and we’ll schedule a confidential consultation to explain your options.

How to Turn Your Side Hustle into Tax Savings

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If you took on an extra gig last year to earn some extra cash, you may have found an unexpected surprise when you filed your taxes — a big bill. That’s because independent contractors don’t have money withheld by their employer.

But don’t worry. With the right preparation, your side hustle could actually help lower your taxes. Follow these tips to help ensure your extra work pays off.

Estimate what you expect to earn. When you have a good idea of how much income you’ll generate, you can better plan for potential deductions and make tax payments in advance to help avoid tax penalties later. Estimate your earnings by looking at how much you made last year. To further fine-tune the calculations, examine your monthly earnings to date and use that number to project this year’s income.

Consider a health savings account (HSA). Opening a health savings account can help reduce your taxable income more than you might expect. The money you contribute is fully tax deductible, and can be used to pay for out-of-pocket medical expenses. The earnings in the account grow tax free, and any funds left over at the end of the year are rolled over for future health expenses.

Open a self-employed retirement plan. There are a variety of retirement plans for the self-employed, allowing you to make tax-deductible contributions. If you’re simultaneously holding down a full-time job that offers a traditional 401(k) plan, you may also be eligible for a SEP-IRA — one of the simplest ways to shelter your self-employment income.

If your side-hustle becomes a second full-time job, you may also look into a solo 401(k). This type of retirement plan offers high contribution limits and has enormous potential for tax savings. Keep in mind, you’ll need to apply for an employer identification number (EIN) to open one.

Take advantage of deductions and write-offs. Do you run your busines out of your home? You may be eligible for the home office deduction, allowing you to write off part of your mortgage, utilities and other costs. You can also take a standard home office deduction based on the square footage of your dedicated workspace and the size of your home. Always consult your tax professional before claiming these deductions.

All it takes is one small misstep…

If you’re not careful, your hard-earned side hustle money can cost you big time when tax season rolls around. Find out how the tax experts at Magone & Company can help keep more money in your wallet.

The above information is provided for general education purposes and should not be considered financial or tax advice. Please consult your accountant or financial advisor for advice specific to your situation.