Monthly Archives: May 2019

What Should You Do When You Receive a Notice from the IRS?

Did you notice that the title states “when” and not “if” you receive a notice? The volume of notices received from the IRS, along with those from the states, has steadily increased over the years, which means that the odds of you receiving a notice are pretty high. What are some of the steps you should take?

Don’t ignore the notice: This may sound basic, but do not ignore the notice. Usually, there is a deadline for your response, and if you do not respond then the issue may get worse and more complicated. If you do not understand the notice or have an accountant, then quickly send the notice to him/her.

Make sure it belongs to you: Sometimes, the notice may not even be yours. Sometimes the IRS or the states have an old address on file, which happens to now be yours. If the notice does not belong to you then ask the post office to return to sender. That is an easy fix, but not as common as one could hope for.

Time period and type of tax: The notice should show what periods and type of tax the notice relates to. Common notices are for Form 1040 (individual taxes), Form 941 (payroll taxes), and various states’ sales and payroll taxes.

What is the notice asking for: A commonly received notice from New Jersey and New York is one requesting additional information to process a refund after filing your tax return. You should provide the information requested and send a cover letter via certified mail. Other common notices state that there was additional income that was not reported, such as stock sales or pension income, and now there is a proposed change to your tax return. The scariest notices are levy notices or lien notices, which are supposed to come after no action has been taken on previous notices.

Compare the notice to your records: In many cases you want to verify the validity of the notice and should compare the information in the notice to your own records. It is possible that the notice may be incorrect or only partly correct.

Always respond timely: Make sure to always adhere to the timeline of the notice and to send any correspondence by certified mail as timely proof of a response. Even though you may respond timely this does not mean that the IRS or states will respond timely to you, and you may have to be patient.

As a warning, the IRS will never email you nor will they ask you to purchase prepaid gift cards from CVS to provide to them. Also, they will not threaten to deport you or throw you in jail. If you did something criminal then they will just show up at your house at 6 AM or possibly 5 AM, and I am sure that you already know why they are there.

If you like what you just read then don’t hesitate to forward/share with your friends and click “Like” on LinkedIn

Make sure to subscribe to our weekly emails to receive practical business, financial and tax strategies! Sign Up Now!

Do This to Avoid a Big Tax Surprise

If there is one recurring theme from this tax season that caused the biggest tax surprise it is this:

Double-check your withholdings: The withholding tables were revised and many taxpayers were under withheld, which caused them to owe taxes versus receiving a refund. The easiest way to correct this is to see how much you owed and then divide it by the number of paychecks left in the year. Then, either ask your employer to withhold this extra amount or complete a new Form W-4 to request this additional amount to be withheld from your paycheck.

Remember, a lower refund does not mean a lower tax liability. A refund is a function of your withholdings and estimated tax payments versus your tax liability.

If you like what you just read then don’t hesitate to forward/share with your friends and click “Like” on LinkedIn

Make sure to subscribe to our weekly emails to receive practical business, financial and tax strategies! Sign Up Now!

The Instructions Said 20 – 25 Minutes

Recently, I purchased a bed from Wayfair that had to be assembled from four large boxes that it was delivered in. I waited until the weekend to assemble it and learned a few things:

After spending hours and hours assembling and completing the bed, I took a look at the assembly time to see if I was in line with how long it should take to assemble. Over the years I have, or at least I thought I have, become proficient with assembling toys, bikes, trampolines, furniture, and just about everything else. However, the instructions said that it should take 20 – 25 minutes for two people to assemble the bed. It took about that long just to take the pieces out of the box. This made me realize either: I assemble way too slowly (hope this isn’t true, but it is humbling), the time on the instructions apply to professionals who assemble beds on a daily basis, and most importantly, you can’t believe everything that you read.

To apply this in business (hopefully you are not putting together a bed when you should be working), are you spending the proper amount of time on the right activities and minimizing or eliminating tasks that you should not be doing? Are you seeking the help of professionals when necessary? Are you seeking the correct information to determine what you need to do to succeed?

If you like what you just read then don’t hesitate to forward/share with your friends and click “Like” on LinkedIn

Make sure to subscribe to our weekly emails to receive practical business, financial and tax strategies! Sign Up Now!

Business Lessons from a Paperboy

I was a paperboy when I was a kid and I also mowed some of my neighbors’ lawns. These are two activities that have become extinct in modern times. I was fortunate to learn some good business lessons from these entrepreneurial endeavors.

The value of money : If I worked not only hard, but did a good job then I made more money. I learned the value of money, how to save up for larger purchases, spending money wisely, and also saving for the future. Unfortunately, kids and adults nowadays tend to ignore these basic financial principals and choose impulsive, debt-incurring decisions.

Customers are interesting: Each customer is unique and interesting. Some more than others, but if you take the time to learn about your customers then you will find out about their lives, families, interests, personalities, and unique characteristics. Positive interactions create a wonderful experience and help to make your job or business responsibilities easier to handle, especially on a rainy day.

Responsibility: Take responsibility for your actions. There are many things that are out of your control, but many things that are. Be accountable to yourself and others even when it is the hard thing to do.

Sometimes bad stuff just happens: The owners of the newspaper I delivered newspaper for decided to replace us all with adults. I believe we had some notice of the transition, but we had no control. It was just like a corporate layoff or having your largest customer go bankrupt.

I could probably list another dozen or two lessons from my experience as a paperboy, which have stayed with me through all these years.

If you like what you just read then don’t hesitate to forward/share with your friends and click “Like” on LinkedIn

Make sure to subscribe to our weekly emails to receive practical business, financial and tax strategies! Sign Up Now!