No April 15th Deadline This Year.

The usual tax return filing deadline is April 15th each year but the IRS has approved April 18th, 2011 as the deadline for 2010 tax returns and extension requests. The extension is due to the fact that the Emancipation Day holiday is celebrated in Washington DC on April 15th this year. The tax deadline is extended for everyone even though not all states observe the holiday. Taxpayers who request an extension will have until October 17^th  to file their 2010 Tax Returns.

The American Opportunity Tax Credit  is  Good News for College Students

The American Opportunity Tax Credit is the expanded and renamed version of the existing Hope Credit. The new credit can be claimed for tuition and certain fees you paid for higher education in 2009 and 2010.

The original Hope credit only applied to the first two years of college, but the new credit can be claimed for four years of college.

Qualified expenses have been expanded with the new credit. In addition to tuition, the credit also includes expenditures for required course materials such as books, supplies and equipment whether or not the materials are purchased from the school. A computer even qualifies if it is needed as a condition of enrollment or attendance at the educational institution.

 Note: You can take advantage of tax credits even if you do not itemize your deductions. A tax credit lowers your tax bill dollar for dollar. A tax deduction reduces the amount of your taxable income.

According to Greg Fey, EA the answer is, “Both.”  Understanding complicated tax code and keeping up with all the significant and frequent changes that occur requires an analytical mind and a scientific approach. The art is in being able to utilize the knowledge in a way that best serves the taxpayer.

 Speaking of Art, performing artists for example, qualify for many unique deductible expenses that would be considered personal expense for most people.  Musicians, Actors and other performing artists may take a deduction on items like makeup, manicures, dance lessons, music lessons, music CDs, photography etc.   To qualify for a deduction, a business expense must meet certain criteria; qualifying deductions are those that are incurred in connection with your trade, business or profession, the expense must be ordinary and necessary and it must not be lavish or extravagant under the circumstances.

These guidelines are not exactly scientific. Words like “necessary” and “extravagant” leave lots of room for interpretation.  A competent Tax Professional understands the art and the science involved and can get you the greatest deductions that you are legally entitled to without landing in an IRS trouble zone.

An enrolled agent is someone who has demonstrated competence in the understanding and application of tax laws, has a history of professional ethics and has been empowered by the U.S. Department of the Treasury to represent taxpayers before the Internal Revenue Service.

A Tax Professional must meet the following 3 criteria to become certified as an Enrolled Agent

1. Demonstrate Competence

                Enrolled Agents must study and pass a comprehensive 3 – part  written examination administered by the IRS. The exam includes questions and exercises in various tax related subjects including; tax law, preparation of all types of tax returns, tax rules and ethics. To keep the Enrolled Agent License, the EA must successfully complete 72 hours of continuing tax education during each 3 year license period.

2.  A History of Ethical Conduct

                Prospective Enrolled Agents must pass a background check administered by the United States Treasury Department. Enrolled Agents are required to conduct themselves according to the standards of ethical conduct as described in U.S. Treasury Circular 230.

3. Receive an Enrolled Agent License directly from the Federal Government.

An Enrolled Agent is empowered by the U.S. Department of the Treasury to represent taxpayers before the Internal Revenue Service. Enrolled Agents are the only taxpayer representatives who receive their right to practice directly from the U.S. government.  Enrolled Agents are licensed to practice in every state and most foreign countries.

Certified Public Accountants (CPAs) specialize in accounting and may or may not choose to specialize in taxes.  Enrolled Agents specialize in taxes.  

Greg Fey, EA explains why he became an Enrolled Agent

Tax laws are constantly changing and the IRS requirements become more complicated each year.  I wanted to focus and specialize in taxes In order to provide the highest quality service to my clients. While I am competent in many areas of finance, I am most passionate about taxes because it is an area that affects most every U.S. citizen. Taxes can be a source of frustration and confusion.  As an Enrolled Agent, I help people stand up to the IRS and solve their tax problems. I can represent taxpayers for audits, appeals and collections before all administrative levels of the Internal Revenue Service.  I gain a great personal satisfaction from giving people the tools to take complete control of their tax issues and get a good result.

A good business name gives a clue as to what the business actually does. Unless like Google or Yahoo, you have millions of dollars to spend on brand recognition. For small business owners like myself, I believe the name should tell potential clients exactly what we do.

I’ve seen the reaction when people hear the name 20/20 Financial Services. I notice a squint of the eye and wheels turning to figure out what exactly are Financial Services and what type might I offer. The desire to eliminate confusion is what prompted the name change.

The new name, 20/20 Tax Services accurately describes what we do best. Dealing with taxes and the IRS is not exactly a pleasure moment for most people. My job is to make it as painless as possible and to help you keep more of your hard earned money.

I have a question for Business Owners: Do you plan to stay in business?

If so, I’m sure you’ll agree that protecting your profit is a top priority. Federal Income Tax is one of the greatest threats to your profit margin.  This is one bill that should never be left until the last minute.

If you are on extension and you have not had your 2009 income tax return prepared, you are putting yourself and your business at risk.

Corporations that requested an extension of time to file their 2009  Federal Income Tax returns have until September 15^th 2010 to file.

However, if you are interested in protecting your profits, you will have your taxes prepared as soon as possible. Notice, I said prepared not filed.  Here’s why…you can 

have your taxes prepared and wait until a few days before the deadline to actually file them. In other words, your tax return will be ready to go but not gone yet.

Having your return prepared well before the deadline puts you in control and gives you the ability to make an informed decision about when to actually file the return.

You and your Tax Professional can use the extra time to review your bookkeeping and search for any additional deductions you might miss if you’re in a hurry.                     

Your hard earned money belongs to you. When it comes to taxes: Pay what is legally necessary and not a penny more.

Getting your taxes prepared early is a proven strategy to save you time and money

Corporations that requested an extension of time to file their 2009 Federal Income Tax returns have until September 15^th 2010 to file. Individuals on extension for 2009 have until October 15^th 2010.

However, if you want to SAVE TIME AND MONEY, you will have your taxes prepared as soon as possible. Notice, I said prepared not filed.  Here’s why…you can have your taxes prepared and wait until a few days before the deadline to actually file them. In other words, your tax return will be ready to go but not gone yet.

Having your return prepared early puts you in control and gives you the ability to make an informed decision about when to actually file the return. In some cases, it’s to your advantage to wait to file (i.e.  you owe more in taxes than you can afford to pay at the moment)  but you should always have your taxes prepared as early as possible, so you know exactly what your situation is and you have time to plan.

You will probably find yourself in one of the following 3 categories:

Category  1 – You have your taxes prepared and discover that you thought you owed, but you are actually due a refund (this happens a lot). In this case,  go ahead and file the return so you can get your money sooner rather than later.

Category  2 – You discover that you owe more taxes than you planned for. Don’t  file that return just yet.  You have plenty of time to search for receipts or gather any additional deductions that you may have missed.  You have time to recover any missing documents that would reduce your tax bill.  We’ve provided a  FREE Tax Organizer  for your convenience.

“ I recently had a client who was not able to obtain his w-2 from a company that had gone out of business and disappeared.  As an Enrolled Agent, I was able to quickly retrieve his missing W-2 from inside the IRS and get him his refund.” Greg Fey, EA

 Waiting until the last minute to find out that you are missing important documents can cost you money.  

Category  3 – You have your tax return prepared and the result is exactly what you expected.  Good, now you know for sure and you can confidently choose when you will actually file the return.

Your hard earned money belongs to you. When it comes to taxes : Pay what is legally necessary and not a dime more.   Getting your tax returns prepared early  is a proven strategy to save you time, money and frustration.

If you do not file a return, the IRS will file a substitute tax return for you and I seriously doubt you’ll like their version.

The return will be based only on the information the IRS has from other sources.  Most likely, the return that the IRS files for you will overstate what you actually owe in taxes.  Once the tax is assessed, the IRS will start the collection process, which can include placing a levy on wages or bank accounts or filing a federal tax lien against your property.

20/20 Financial Services is a full service tax firm located in Montrose, CA.  Greg Fey, EA has served the residents and business owners of Crescenta Valley including Glendale, Burbank and surrounding areas for 20 years.  Get help with back taxes, late tax returns, prior year returns and IRS notices.

 It is in your best interest to take control of filing your own tax return so that you are sure to take advantage of all the exemptions, credits and deductions you are entitled to. Contact our office for a free consultation on what it will take to fix your tax problem.

Imagine finding out that your spouse has been cheating and going behind your back and lying… to the IRS. 

You may not discover your spouse’s cheating ways by checking  for secret text messages or emails. But stumbling upon a  “love letter” from the IRS can be just as devastating. 

Here’s what you need to know

The IRS created Innocent Spouse Relief  because innocent parties need a way to get out from under the burden of tax debt acquired through the fault of their spouses.  You must meet certain conditions and eligibility requirements to qualify for Innocent Spouse Relief. The rules can be especially tricky in Community property states like California.  So, be sure and contact our office  to discuss the specifics of your particular situation before you take any action.

 ” I have handled many unusual tax situations requiring a knowledge of laws buried deep in the tax code. I know how to help clients who are in tough tax situations. In the case of an IRS audit, divorce or any other messy tax situation: you need a tax expert. I have helped the residents and business owners in the Crescenta Valley with their tax problems for 20 years. Give me a call and get Tax Help Today.”

Greg Fey, EA

(818)249-7865