IRS Using Private Debt Collection Agencies

In 2015, President Obama signed into law the Fixing America’s Surface Transportation Act, known as the FAST Act. It provides long-term funding for transportation projects. Buried in the bill is a requirement that the IRS must use private debt collection companies.

Starting in 2016, the IRS is required to use private debt collection companies to collect “inactive tax receivables” (i.e., any outstanding assessment that the IRS includes in potentially collectible inventory). Traditionally, this debt has been hard to collect tax.

IRS Collections Program: When the IRS first began using private tax collectors, it assured taxpayers that they would know they are in the program before being contacted by a private collection agency. This way, taxpayers could be wary of any bill collectors who claim to be working on behalf of the IRS.

Contact By Letter: Private tax collectors will usually contact a taxpayer by letter. If the taxpayer’s last known address is incorrect, the private collector searches for the correct address. Next, the private collector will telephone the taxpayer to request full payment.

Payment Directly to the IRS: If the taxpayer cannot pay in full right away, the private collector offers an installment deal for up to five years. Please note, private collectors cannot accept payments. Do not pay them directly! All checks will still be made payable to the U.S. Treasury—not to an individual or firm. The collection agency will provide the appropriate IRS mailing address for payments. The collection agencies will never request that cash or checks be sent to individuals.

There is some speculation that this requirement may result in additional attempts by fraudsters to collect payments. If you receive a letter or phone call, please do not hesitate to contact Green FS immediately so that we can help you determine if this is a legitimate debt collection.

Estimated Taxes Payment Schedule

Who Must Pay Estimated Tax?

If you are filing as a sole proprietor, partner, S corporation shareholder, and/or a self-employed individual, you generally have to make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return.
If you are filing as a corporation you generally need to make estimated tax payments for your corporation if you expect the corporation to owe tax of $500 or more when you file the tax return.

Due Dates:

Q1 January 1-March 31 – DUE April 18, 2016

Q2 April 1- May 31, 2016 DUE June 15, 2016

Q3 June 1 – August 31, 2016 DUE September 15, 2016

Q4 September 1 – December 31, 2016 DUE January 17, 2017

Missing payments can equal to hefty penalties for you and your business. If you need help filing your estimated taxes please contact us today 888.391.9993 or info@greenfs.com.

 

Mileage Rates for Business, Medical and Moving For 2016

Beginning on Jan. 1, 2016, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

54 cents per mile for business miles driven, down from 57.5 cents for 2015

19 cents per mile driven for medical or moving purposes, down from 23 cents for 2015

14 cents per mile driven in service of charitable organizations

The business mileage rate decreased 3.5 cents per mile and the medical, and moving expense rates decrease 4 cents per mile from the 2015 rates. The charitable rate is based on statute.

2014 IRA Contribution is Still Possible

There is still time to make your IRA contribution for the 2014 tax year. You have until April 15 to contribute.  Below are tax tips from the IRS about saving for retirement using an IRA.

Age rules

You must be under age 70½ at the end of the tax year in order to contribute to a traditional IRA. There is no age limit to contribute to a Roth IRA.

Compensation rules

You must have taxable compensation to contribute to an IRA. This includes income from wages and salaries and net self-employment income. It also includes tips, commissions, bonuses and alimony. If you are married and file a joint tax return, only one spouse needs to have compensation in most cases.

When to contribute

You can contribute to an IRA at any time during the year. That means most people must contribute by April 15, 2015. If you contribute between Jan. 1 and April 15, make sure your plan sponsor applies it to the year you choose (2014).

Contribution limits

 If you contribute between Jan. 1 and April 15, make sure your plan sponsor applies it to the year you choose (2014). The full amount you can contribute is $5,500 (or $6,500 if you’re age 50 or older) or your taxable compensation for the year.

Taxability rules

You normally won’t pay income tax on funds in your traditional IRA until you start taking distributions from it. Qualified distributions from a Roth IRA are tax-free.

Deductibility rules

You may be able to deduct some or all of your contributions to your traditional IRA. You may not deduct contributions to a Roth IRA.

Saver’s Credit

If you contribute to an IRA you may also qualify for the Saver’s Credit. The credit can reduce your taxes up to $2,000 if you file a joint return. Use Form 8880, Credit for Qualified Retirement Savings Contributions, to claim the credit.

Contact GFS if you have questions about your IRA contributions.