PJN Tax Solutions Group

12/16/2024

Self-Employment Taxes and The Common Traps To Avoid So You Don’t Owe Back Taxes

People often dream of quitting their jobs and going into business for themselves so that they can pursue a passion and work without a boss. Self-employment can be a rewarding career decision, but it can lead to higher taxes and tax returns that are more complex that what you initially bargained for.

Definition of Self-Employment

The IRS considers you to be self-employed if you work as a contractor, freelancer, small business owner or are otherwise in business for yourself. If you earn income directly from clients and you don’t have an employer that withholds money from your pay for tax purposes, you are self-employed.

Tax Withholding and Estimated Taxes

If you work as an employee, your employer automatically takes a certain amount of money out of your pay each month to cover your tax obligations, which is called tax withholding.

Self-employed workers do not have an employer to withhold income for tax purposes, so they are responsible for paying their own taxes to the IRS through estimated tax payments.

The due dates for estimated tax payments are April 15, June 15, September 15 and January 15. Failure to plan properly and pay enough estimated taxes during the year can result in a tax penalty and a large surprise tax bill.

Self-Employment Taxes

Self-employed workers must pay the self-employment tax (SE tax) which goes toward Social Security and Medicare in addition to normal income tax. Employees split the cost of paying into Social Security and Medicare with their employers, but self-employed workers must pay the full amount themselves.

Do I Have To Report Side-Income If I Have A Normal Job As Well?

Individuals with self-employment income must file an income tax return if they have net income from self-employment of $400 or more. In addition, you must report any self-employment income you make during the year on your taxes even if you hold down a normal job.

For example, if you work as an employee year round but you take on small contract jobs on the side to make extra cash, that money must be reported as self-employment income when you file your tax return even if you don’t make enough extra cash to warrant paying estimated taxes.

It’s a common misconception that you don’t have to file or report income if it’s “cash” or if it’s from a side hustle. Not reporting it could lead to more trouble than it’s worth and the IRS will add penalties and interest on top of the taxes owed.

OWE BACK TAXES?

If you’re going to owe money to the IRS after filing your return, It’s important to note that only experienced firms like ours are able to handle tax debt cases since negotiating with the IRS requires specialized skills that often fall outside of the scope of most conventional accounting, tax, and tax law firms.

Our firm specializes in tax problem resolution.

Call us NOW 630/415-5296

12/13/2024

3 Essential Steps To Prepare for Tax Season and Avoid Tax Trouble

Taxes are one of those topics people hate to talk about or even think about, especially if they end up owing money in back taxes every year. That’s why many taxpayers wait until the very last moment to prepare for tax season. It’s also why nearly 14 million Americans find themselves receiving threatening letters from the IRS and in some sort of collection proceedings.

In order to help you minimize your tax headache, we wrote this article to help you before you find yourself in tax trouble. Here are three simple steps to start preparing now for tax season.

With that said, let’s jump into the article on how to prepare for tax season.

1. Get Your Paperwork Organized

Start organizing all of the financial information you may need in order to file your taxes this year. It’s best to do this throughout the year rather than at the last minute to ensure that you don’t miss anything.

We suggest making a checklist of all the documents you’ll need to gather such as;

Income from your salary/main job via a W2
1099 income you might have earned throughout the year on any side gigs or one-off projects
Cryptocurrency account statements
Brokerage accounts
Savings account that earn interest
Any asset sales
A list of qualifying expenses and deductions you think you qualify for with proper documentation.

Failing to report income or having questionable expenses are two of the biggest pitfalls we see with taxpayers who find themselves in tax debt or getting audited. Make sure you have documentation for everything.

2. Evaluate Your Tax Obligations, Filings And Compliance

As a small business owner, it’s essential to start working on your tax obligation management early on. At this time, you should also consider income taxes, employment taxes, self-employment taxes, sales tax, and local taxes.

If you find yourself behind on your payroll taxes or other business tax problems, contact our firm now.

3. Ask Questions and Be Proactive

This step is necessary, but you may not feel comfortable doing it. It’s essential to ask the basic questions from your tax professional. What types of receipts should you be saving? What will happen if I hire additional employees this year? What if I owe back taxes and can’t pay? If you owe back taxes and know you won’t be able to pay, and if your tax professional doesn’t have good answers, it could be time to consult a professional tax relief firm like ours.

A tax resolution firm like ours has years of experience helping taxpayers just like you resolve IRS and State tax problems and negotiating the best deal on your behalf.

The good news is the IRS has several debt settlement options including their Fresh Start Initiative and is generally willing to settle with taxpayers who have been blindsided by a surprise tax bill and can’t pay it off in full.

By being prepared, you can reduce the pain of a surprise tax bill.

If you need help, call us today 630/415-5296

12/11/2024

Do You Need A Tax Attorney if You Owe Back Taxes?

If you owe back taxes you might think you need a tax attorney, but that’s not necessarily always the case. Just like hiring a traditional accountant to try to resolve your tax debt might not be the best choice, hiring a tax attorney, who doesn’t specialize in tax resolution might be the same thing.

When you owe the IRS back taxes, it’s best to have the right tax relief firm representing you so you can get the best result possible. Don’t try to face the most brutal collection agency on the planet alone. You’ll be sorry you did.

In this article we talk about some of the differences between a tax attorney and someone who specializes in tax relief and IRS negotiation.

What Do Tax Attorneys Do?

Tax lawyers help businesses and taxpayers with a number of tax related issues such as;

Legal issues pertaining to taxes
Corporate tax matters
Starting up a business and entity formation
Taxable estate matters
Tax controversy and tax negotiation (only if a tax resolution specialist too)

Tax attorneys work on both the state level and the federal level.

The biggest and most important difference between a regular tax attorney and someone who is a tax resolution specialist, (who’s a CPA, Enrolled Agent or attorney), is their work generally includes minimizing taxes on a go-forward basis. A tax resolution specialist is someone who can help resolve your back tax issues on amounts already owed, or will be owing, to the IRS/State.

Most CPAs and Enrolled Agents, who are tax resolution specialists too, can be just as effective as an attorney that has experience in tax resolution matters.

Are tax attorneys accountants?

The short answer is no.

They both work with taxes, yes, and they both have a background education in accounting, but tax attorneys focus on the legalities of taxes.

They do not generally help you to prepare your tax returns unless they specialize in tax relief and specifically help you catch up on years of unfiled tax returns.

Common Reasons for Hiring a Tax Attorney

Common reasons why people seek out the assistance of these professionals include when:

They need legal tax advice for business purposes
They are faced with complex or criminal IRS matters.
They are dealing with estate-related issues.
They need to file a suit against the IRS.

Do you owe back taxes?

It’s important to note that only experienced tax resolution firms like ours are able to handle tax debt cases since negotiating with the IRS requires specialized skills that often fall outside of the scope of most conventional firms.

Our firm specializes in tax problem resolution. We have CPAs, EAs and attorneys who can represent you before the IRS. If you want an expert tax resolution specialist who knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem.

Call us today 630/415-5296

12/06/2024

Did You Know You Might Owe Taxes On Debt That’s Forgiven? Here’s How It Works.

When you owe creditors money that you can’t afford to repay, sometimes you may be able to get the debt forgiven or otherwise canceled. When this happens, you no longer owe your creditors the money that you used to owe them.

The IRS, however, usually treats such canceled debt as income that you’ve received. Income that you could owe taxes on.

When Do I Not Owe Taxes On Forgiven Debt?

In some cases, you may get an exemption and there are some circumstances in which you won’t owe taxes.

Your debt is discharged through bankruptcy proceedings:

If you are in serious financial trouble, you may file for bankruptcy and have your debts discharged by the court. Such debts, while they are forgiven, are not considered taxable.

You’re insolvent:

When you are able to settle with a creditor by paying them less than you owe them, your financial situation may be bad enough that you owe, in general, more than you own. If you are considered financially insolvent in this way by the IRS, you may have either part or all of your debt excluded from taxation. If you believe that you may qualify for insolvency exemption, you should hire a tax resolution professional to help make sure.

A canceled debt from friends or family:

If you borrow from friends or family and have them forgive the debt, the money forgiven is considered a gift, and is not taxable income.

Tax-deductible interest:

If debt that is forgiven includes interest that is tax-deductible, the interest component does not need to be reported as taxable income. Discharged student loans are also usually exempt from taxation.

Including the forgiven debt in your tax return

If you don’t tell your tax professional about the forgiven debt, in most cases, you won’t know about paying taxes on forgiven debt until you receive a notice in the mail about it. Usually, a creditor who forgives you over $600 sends you a 1099-C form stating the amount forgiven. If the debt forgiven is exempt, you may need to fill out a Form 982 to state how much should be exempt, and why.

What do you do if you pay taxes on forgiven debt that should be excluded?

If debt forgiven is actually exempt from taxes, but you still pay, you’re allowed to amend your tax return for three years. You simply need to file Form 1040X, and mention your exemption on Form 982.

Working with forgiven debt can be complex. It is usually a good idea to hire a tax resolution professional to work out the details.

OWE BACK TAXES?

Our firm specializes in tax problem resolution. We serve clients virtually so don’t hesitate to reach out. If you want an expert tax resolution specialist who knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem.

Call us TODAY 630/415-5296

12/02/2024

Filing Your Taxes When You Know You’ll Owe Money to The IRS

As we wrap up the year the last thing most people are thinking about is their taxes. But planning ahead can have a serious impact on your tax bill next year, especially if you know you’ll owe taxes.

In this article, we’ll talk about some steps you must take if you know you’ll be owing taxes to the IRS or state.

Report All Your Income

One of the biggest reasons people get in trouble with the IRS is their failure to report income. Oftentimes it’s an honest mistake and they simply forget about income they’ve made throughout the year.

Did you take on a consulting gig? Your client might have filed a 1099 reporting your income.

Did your savings and investments earn interest? You’ll likely need to report that income as well.

If you sold stock and cashed in on the gains, these gains are reported to the IRS and it means that a lot of Americans might get an unexpected tax bill.

Run The Numbers Ahead of Time

Some people like surprises but when it comes to taxes, it’s best to avoid them.

You do not have to wait for tax filing season to estimate how much you might owe. Be proactive about consulting with your tax advisor and estimate your tax liability based on how you did for the year.

They’ll be able to suggest tax strategies before the year ends that can save you thousands of dollars on your tax bill.

Set Money Aside to Pay Your Taxes

Taxes are inevitable. If you know for certain you’ll owe money to the IRS but don’t have the money to pay all of it up front, it’s best to set at least some money aside early so you can pay as much of your tax bill upfront as possible.

Learn About Tax Relief Options

The IRS has the authority to levy your bank account, garnish your paycheck and seize your assets if it has to, but they also have many tax relief options to help taxpayers in need.

If you owe money to the IRS and can’t afford to pay, you have options. It’s best to reach out to a tax relief firm like ours to learn more about them.

Don’t talk to the IRS, talk to us first.

If you do get hit with a surprise tax bill and lack the money to pay it, you need to settle your tax problem as soon as possible. The IRS wants their money, and they have unbridled authority to get it, so simply avoiding the tax bill will not make it go away, but make it worse. A lot worse.

A tax resolution firm like ours has years of experience helping taxpayers just like you resolve IRS and State tax problems and negotiating the best deal on your behalf.

The good news is the IRS has several debt settlement options including their Fresh Start Initiative and is generally willing to work with taxpayers.

Hopefully, tax filing season will bring the big fat refund you are expecting, but it is important to be prepared for the unexpected. By being prepared, you can reduce the pain of a surprise tax bill, so you can get on with the rest of your life.

Any questions, we are here to help!

630/415-5296

12/04/2023

Business Owners: Owe Back Taxes? Actionable Steps for Facing IRS Debt

Entrepreneurship can be hard. Some years are good, others are not so great. But every year, like clockwork, the IRS comes calling and asks you for what’s theirs.

Although the IRS may appear patient initially, resting on one’s laurels can be a perilous decision. The IRS is the most brutal collection agency on the planet.

So, if you find your business in this situation, it’s paramount to be proactive. Here’s a comprehensive guide to help you correct the course.

1. Don’t Ignore The IRS

The first step is paying attention and taking action. The sooner you confront the reality, the better you can strategize a solution.

2. Open Lines of Communication

Ignoring IRS notices can exacerbate your situation. Timely responses showcase your commitment to resolve the issue and the right firm will guide you through every step of the process.

Owing 941 payroll taxes is double jeopardy. Not only can the IRS levy and lien your business income and assets, they can pierce the corporate veil, without a court order, and go against you personally.

3. Understand Penalties and Interest

Unpaid taxes don’t just stay static; they accumulate penalties and interest daily. With current IRS interest rates hovering at 8%, compounded daily, each day you procrastinate is costing you big time.

4. Consider Installment Agreements

The IRS often allows businesses to pay their tax liabilities over a period of time in monthly installments. If you can demonstrate genuine inability to pay the lump sum, they might consider an installment agreement.

5. Offer in Compromise (OIC)

In specific circumstances, the IRS might accept a reduced amount to settle the entire debt. Known as an Offer in Compromise, this option is contingent on demonstrating you cannot pay the full tax liability over the remaining 10-year collection statute.

6. Temporarily Delay the Collection

If your business is in a dire financial situation, the IRS might temporarily delay their collection efforts. While this offers a short-term reprieve, it’s essential to use this time wisely and strategize a long-term solution.

7. Seek Professional Assistance

Engaging with a tax resolution firm can be invaluable. They can guide you through the intricacies of tax laws, help keep your business open, negotiate with the IRS on your behalf, and help formulate a plan tailored to your unique circumstances.

8. Preventative Measures

While addressing current unpaid taxes is vital, implementing systems to avoid future discrepancies is equally crucial.

Unpaid taxes are a looming storm cloud for any small business owner. While the IRS might seem lenient initially, their eventual intervention can be formidable.

If you’re facing IRS problems and owe $10,000 or more in back taxes or are being audited, reach out to our tax resolution firm.

Call us at 630/415-5296 to schedule your FREE confidential consultation or visit our website at

12/01/2023

Pitfalls: How Individuals Often Find Themselves in IRS Trouble

Paying taxes is a civic responsibility that every working American is subjected to. However, millions of Americans find themselves in hot water with the IRS.

Here are 10 common ways taxpayers run into IRS trouble.

1. Failing to File Returns

Perhaps the most direct way to invite IRS scrutiny is simply not filing a tax return. Some people, especially those anticipating a tax bill, might decide to avoid filing. It’s also important to note that you can go to prison for a year and be fined $10,000 for each legally required tax return that isn’t filed.

2. Incorrectly Reporting Income

Intentional or unintentional underreporting of income is a red flag. Discrepancies between the income reported to the IRS by employers (via W-2s or 1099s) and what’s declared on individual or business returns can trigger audits.

3. Claiming Excessive Deductions

While tax deductions can significantly reduce tax liability, overstepping by claiming excessive or unwarranted deductions can be problematic.

4. Ignoring IRS Notices

The IRS often sends notices for minor discrepancies or requests for additional documentation. Ignoring these can escalate the issue, leading to more severe consequences.

5. Engaging in Tax Evasion Schemes

Illegal schemes, such as hiding money in offshore accounts or engaging in identity theft and fraudulent returns, are serious offenses that can lead to criminal charges.

6. Misclassifying Workers

Business owners might be tempted to classify workers as independent contractors rather than employees to save on taxes. However, if the IRS determines this is a misclassification, it can lead to back taxes and penalties.

7. Not Making Estimated Tax Payments

Self-employed individuals and some other taxpayers often need to make quarterly estimated tax payments. Failure to make these payments or underestimating the amount can result in penalties and often a surprise tax bill.

8. Not Reporting Foreign Income

U.S. citizens and resident aliens are typically required to report worldwide income, including from foreign trusts and bank accounts.

9. Engaging in High-Transaction or Cash Businesses

Those engaged in businesses that deal primarily in cash transactions (like restaurants, construction, or salons) are often on the IRS radar for underreporting income.

10. Ignoring State Tax Obligations

While much focus is on federal taxes, individuals also have state tax obligations. Neglecting to file state returns or not paying state taxes can lead to trouble.

What happens if you land in tax trouble?

IRS problems, once initiated, can escalate quickly, leading to hefty fines, penalties, or even legal actions.

If you’re facing IRS problems and owe $10,000 or more in back taxes or are being audited, reach out to our tax resolution firm, and we’ll schedule a free and confidential consultation.

Call our office today 630/415-5296 to schedule your FREE confidential consultatio

11/29/2023

Tax Scams You Should Be Aware of That Could Get You In Trouble With The IRS

Tax filing season, which is little more than a month away, is a source of stress for just about everyone. That extra stress and uncertainty ramps up and up, and you never know if you must write a check to the IRS.

You also do not know which threats will loom, and that lack of knowledge could put you at real risk. Tax scams have increased in recent years.. Here are four tax scam dangers you should be aware of.

#1. IRS Impersonators

When tax season begins, fake IRS agents come out of the woodwork. Those phony IRS impersonators may flood your email inbox with threatening messages and text your smartphone with incorrect information.

Those IRS impersonators may call you on your landline or smartphone, ratcheting up the threats and the danger.

If you want to stay safe, know that the real IRS never initiates communication via email, text, or phone calls. If there is a problem with your taxes, the IRS will send a good old-fashioned letter, so watch your mailbox and ignore everything else.

#2. Phishing Scams

Phishing scams are always going on, but they really ramp up as tax season gets underway. Those cybercriminals know that tax season is a stressful time for their victims.

It’s always a good idea to treat unsolicited emails with a healthy dose of skepticism, but that’s even more true when tax season is on the horizon.

#3. Fraudulent Filing

If you do not file your taxes quickly, cybercriminals may do it for you.

These fraudulent filers use Social Security numbers and other personal information they buy on the dark web. Armed with that information, they file fraudulent tax returns, claiming refunds they are not entitled to. The best way to guard against this risk is to file your tax return as quickly as possible.

#4. Shady Tax Preparers

Sometimes the people you pay to prepare your taxes are the source of the scam. Shady unlicensed tax preparers mine information from their clients such a social security numbers, dates of bith, etc..

If you trust your taxes to a preparer who is less than honest, identity theft may not be your only problem. Those shady tax preparers may also commit fraud, making up deductions, claiming phony dependents, and ultimately getting you a huge tax refund you do not really qualify for. When the IRS catches the mistake, the tax preparer may be long gone, leaving you on the hook for penalties, interests, and the kind of stress only an IRS audit can provide.

Filing taxes is stressful enough, but falling for a scam could make your interactions with the IRS even worse. Cybercriminals see tax filing season as a golden opportunity.

If you’re facing tax troubles, reach out to our tax resolution firm, and we’ll schedule a free and confidential consultation to explain your options thoroughly and help you permanently resolve your tax problem.

Give us a call at 630/415-5296 or check out our website at www.pjntaxsolutions.com

IRS Tax Help | We Solve Tax Problems | PJN Tax Solutions St. Charles IL
pjntaxsolutions.com • 1 min read

A CPA and Certified Tax Problem Solver with almost 40 years of experience. We help with wage garnishments, delinquent tax returnsn IRS Bank Levies. Call 630.415.5296.

11/27/2023

Tax Resolution and Your Finances: What is an Offer in Compromise?

Dealing with tax debt can be incredibly intimidating. It’s natural to feel overwhelmed and powerless in such a situation, but it’s important not to let fear and helplessness paralyze you.

Every day you delay taking action, interest and penalties continue to accumulate, potentially causing your liabilities to skyrocket and wreak havoc on your financial stability. In this article, we’ll discuss one of the many available options for tax relief called an “Offer in Compromise.”

What Are Your Options?

Even if you believe it’s impossible to repay what you owe, it’s crucial to explore all available repayment options. While the IRS may be a formidable collection agency, they can be surprisingly reasonable when it comes to repaying back taxes and settling long-standing debts.

If you owe back taxes to the IRS or have unfiled tax returns from previous years, you may qualify for programs that make it easier and faster to pay what you owe. One such program is the offer in compromise, which allows eligible individuals to settle their IRS debt for significantly less than the full amount. However, qualifying for this program can be complicated, so the best way to determine your eligibility is by contacting our firm today.

An offer in compromise is a well-known but often misunderstood part of the tax code, and navigating its complexities can be challenging.

This is why it’s crucial to work with a tax resolution expert when you owe back taxes. Without an expert on your side, the IRS may reject your offer for a compromise, and the amount you owe could keep increasing due to additional penalties and interest.

If you’ve received a tax due notification from the IRS, you can’t afford to wait. When the tax agency wants their money, they want it immediately, and without an offer in compromise, your options may become severely limited. However, hiring the right tax professional—one who specializes in dealing with the IRS—can turn things around.

An experienced tax resolution specialist possesses comprehensive knowledge of all IRS programs, including the offer in compromise option. Even if you don’t qualify for an offer in compromise, a tax relief expert can help you explore alternative options, allowing you to settle your debt while still having enough money to sustain your life.

Few things in life are as daunting as owing money to the IRS. When that notice arrives in your mailbox, it’s easy to panic and do nothing. However, this situation demands prompt action. The faster you act, the easier it will be to find a qualified professional who genuinely cares about your best interests.

If you’re facing tax troubles, reach out to our tax resolution firm, and we’ll schedule a free and confidential consultation to explain your options.

Call us 630/415-5296 or check us out at www.pjntaxsolutions.com

IRS Tax Help | We Solve Tax Problems | PJN Tax Solutions St. Charles ILpjntaxsolutions.com • 1 min read

IRS Tax Help | We Solve Tax Problems | PJN Tax Solutions St. Charles IL
pjntaxsolutions.com • 1 min read

A CPA and Certified Tax Problem Solver with almost 40 years of experience. We help with wage garnishments, delinquent tax returnsn IRS Bank Levies. Call 630.415.5296.

11/22/2023

Tax Resolution and Your Finances: What is an Offer in Compromise?

Dealing with tax debt can be incredibly intimidating. It’s natural to feel overwhelmed and powerless in such a situation, but it’s important not to let fear and helplessness paralyze you.

Every day you delay taking action, interest and penalties continue to accumulate, potentially causing your liabilities to skyrocket and wreak havoc on your financial stability. In this article, we’ll discuss one of the many available options for tax relief called an “Offer in Compromise.”

What Are Your Options?

Even if you believe it’s impossible to repay what you owe, it’s crucial to explore all available repayment options. While the IRS may be a formidable collection agency, they can be surprisingly reasonable when it comes to repaying back taxes and settling long-standing debts.

If you owe back taxes to the IRS or have unfiled tax returns from previous years, you may qualify for programs that make it easier and faster to pay what you owe. One such program is the offer in compromise, which allows eligible individuals to settle their IRS debt for significantly less than the full amount. However, qualifying for this program can be complicated, so the best way to determine your eligibility is by contacting our firm today.

An offer in compromise is a well-known but often misunderstood part of the tax code, and navigating its complexities can be challenging.

This is why it’s crucial to work with a tax resolution expert when you owe back taxes. Without an expert on your side, the IRS may reject your offer for a compromise, and the amount you owe could keep increasing due to additional penalties and interest.

If you’ve received a tax due notification from the IRS, you can’t afford to wait. When the tax agency wants their money, they want it immediately, and without an offer in compromise, your options may become severely limited. However, hiring the right tax professional—one who specializes in dealing with the IRS—can turn things around.

An experienced tax resolution specialist possesses comprehensive knowledge of all IRS programs, including the offer in compromise option. Even if you don’t qualify for an offer in compromise, a tax relief expert can help you explore alternative options, allowing you to settle your debt while still having enough money to sustain your life.

Few things in life are as daunting as owing money to the IRS. When that notice arrives in your mailbox, it’s easy to panic and do nothing. However, this situation demands prompt action. The faster you act, the easier it will be to find a qualified professional who genuinely cares about your best interests.

If you’re facing tax troubles, reach out to our tax resolution firm, and we’ll schedule a free and confidential consultation to explain your options thoroughly and help you permanently resolve your tax problem.

Call us at 630/415-5296 or check us out at www.pjntaxsolutions.com

Happy Thanksgiving!

A CPA and Certified Tax Problem Solver with almost 40 years of experience. We help with wage garnishments, delinquent tax returnsn IRS Bank Levies. Call 630.415.5296.