New Standard Operating Procedure for My Local Clients - Due to the Pandemic

 


With the pandemic many CPA's are changing the way they do things. For the most part I don't need to make adjustments because most of my clients are located in other states or other countries and we have done things virtually for many years. In a previous post, I wrote that I would require clients that come to my office to wear a mask this year. Now with the pandemic getting increasingly worse, I am now planning not to see any clients face to face this tax season. So the question then is - how will that work?

For most of my clients things will remain the same as they already send me their stuff virtually and we communicate via phone, Zoom, Whatsapp, or email. This year all my interactions with clients will be without face to face in person contact.

This will be interesting because many in this area, in Central Illinois, are accustomed to doing things in person - live face to face. But out of concern for my clients, myself and family, and my community I am now planning to avoid having people come in to my office. So I am looking at a new standard operating procedure for them. 

Having a casual attitude about the pandemic can be costly. The scriptures wisely point out at Proverbs 22:3:

"The shrewd one sees the danger and conceals himself. But the inexperienced keep right on going and suffer the consequences."

So here are some options for my local clients.

Virtually or Electronically Exchanging Documents

Follow the same procedure my other clients follow and send me their information virtually and we can communicate via phone, Zoom, Whatsapp, or email. I use an online file sharing program to exchange documents and tax returns with my clients. Additionally my clients pay me electronically. 

Using the Postal Service

Another option that a couple of my Texas clients use is to mail their documents to me. I then prepare their returns and send them back to them electronically via an online shared file or by email. I can also send them a digital copy of the information that they sent me. However, it is risky to mail original documents to me. They really should make and send me copies but they don't. After all, if they would make copies, they could scan electronic copies and send them digitally rather than through the mail. But I get it, they don't want to make copies or scan. But I also charge more when I receive paper that I have to scan. And then if I have to mail them back to the client that will be another up charge. I prefer my clients send everything to me digitally. But if you don't want to you can mail it to me and pay for the extra cost and time. 

A Drop Box at My Office

Finally, my local clients can use a real drop box. Weather permitting I can put a box outside my office door and clients can drop off their tax information. When I am done I can send their tax returns to them via a file sharing service or by email. If they have to have a paper copy I can for an extra charge print their returns and setup a time for my clients to pick up their returns and their documents and then I can leave them in the drop box for them to pickup. I will keep my door locked but they can waive to me if they want. Additionally, the conversation about their taxes can then take place over the phone when they have their returns to look at. I don't like this option because it involves printing paper copies and that is not what I normally do for my clients. Even my Texas clients that mail their stuff to me don't mind receiving electronic copies of their returns. 

Conversations

So I am not planning to see clients in person this year. However, I will still have conversations with my clients about their situations and their returns. Nothing is changing for most of my clients. For my local clients I will be interested to see their response to this new procedure for them. I am sure some will love it and some won't like it, and that is OK. I am sure there will some local preparers that will offer the in person option for them. They will probably have to drive a half hour or so each way to drop off their stuff and then go back to pick up their returns. 

Payments

When it comes to paying me I prefer to be paid electronically as well but I can take a check if necessary. When it comes to electronic payments I prefer to be paid via Zelle or Venmo but I can also send an invoice electronically that can be paid via a credit or debit card. 

Safety Precautions For Handling Paper Documents and Paper Returns

To add some value for my clients that will receive copies of their tax returns by mail, here are some suggestions I found in a WebMD article.

When receiving paper documents either sent through the mail or picked up at my office there are recommendations to provide a level of protection against the pandemic. But first note this observation from the article:

"Keep in mind that researchers still have a lot to learn about the new coronavirus. But you’re probably more likely to catch it from being around someone who has it than from touching a contaminated surface."

Here is another observation about paper:

"Examples: mail, newspaper
The length of time varies. Some strains of coronavirus live for only a few minutes on paper, while others live for up to 5 days."

Here is another one about a delivered newspaper which would seem to apply to delivered paper documents as well:

"Wash your hands with soap and warm water for at least 20 seconds after you visit the drugstore or supermarket or bring in takeout food or a delivered newspaper."

And finally here is a suggestion about receiving things in the mail:

"The virus probably won’t survive the time it takes for mail or other shipped items to be delivered. The highest risk comes from the person delivering them. Limit your contact with delivery people as much as you can. You might also leave packages outside for a few hours or spray them with a disinfectant before bringing them in. Wash your hands after you handle mail or a package."

I am looking out for the best interests of my clients, myself and my family, and my community. This will mean some inconvenience but we value life and act accordingly.

If you want my help in preparing your tax returns this year then contact me using my email address below to arrange a conversation via the phone, Zoom, or Whatsapp.


Jeff Haywood, CPA
The CPA Superhero
jeff.jhtaxes@gmail.com






Posts - IRS Collection Issues and Options:







Be careful when reading about tax law and its application, including my articles, because the wording and definitions are such a challenge and are influenced by writers perspective, specifically his own clients situations that he is mindful of and other situations the writer is not thinking of. The point is talk to your CPA about your situation and circumstances and don't rely on or make conclusions based on articles you read, including articles form irs.gov, because concepts and definitions are not very clear, and of course, they are subject to change. Now is the time to be having discussions about your situation and developing strategies for you and your business. Again, contact me using my information above to discuss your situation. I help business owners all over the U.S. and in foreign countries with their tax returns.

Choice of Business Entity and Taxes Under the Tax Cuts and Jobs Act (TCJA): The Equalizing Impact of the Qualified Business Income Deduction (QBID)



This is a copy of an email to follow up on a phone conversation with a client about taxes and choices of business entities. In this client's situation with net income from businesses that are expected to be around $250,000 per year you can see the how the Tax Cuts and Jobs Act (TCJA) leveled the playing field and actually shows the advantage of using a sole proprietorship(s).
The initial question referenced forming LLCs. 
First, there is no federal tax return for an LLC. When you form an LLC you have to decide how you want it to be taxed. If it is just a one member LLC it is automatically considered a disregarded entity that shows its income on a schedule C on your personal income tax return unless you elect to have it treated differently. The choices other than a sole proprietor with a schedule C on your personal return, a partnership form 1065, a C corporation form 1120, or an S Corporation form 1120S. The partnership and S corporation income flows through to the partners or shareholders personal returns.

Former Tax Advantage for S Corporations 

There used to be a sizable income tax advantage to operating as an S Corporation. With the S Corporation you are required to pay yourself a reasonable salary.  So if your S Corporation made $250,000 and you paid yourself a salary of say $125,000 then you only paid the employment taxes on the salary which saved you about 15% of the other half of the profit of about $125,000. With a schedule C you would pay the self employment tax on basically the full amount.

Impact of The Tax Cuts and Jobs Act (TCJA): Example

Now though, with the Tax Cuts and Jobs Act (TCJA), the qualified business income deduction (QBID) sort of leveled the playing field as far as taxes are concerned. Here is a comparison for you of income from a sole proprietor vs an S Corporation with your taxable income at $250,000 on a personal return filed Married Filing Jointly:

Notes:
QBID is the Qualified Business Income Deduction which is basically 20% of qualified business income.
SE/employment taxes are the Self Employment Tax or both halves of the payroll taxes (the business portion and the employer portion withheld from income) on S Corporation officer shareholder. 

Income from business $250,000
Sole proprietor
Schedule C on personal return
Adjusted Gross Income      $238,115
Stannard Deduction              $24,800
QBID                                    $42,802
Taxable Income                  $170,513
income taxes                         $29,093
SE/employment taxes           $23,770
Total Taxes                            $52,863

S Corporation
Income from business $250,000 less $125,000 salary for officer shareholder would be shown as $125,000 on a K-1 for the S corp. and $125,000 on your (the officer shareholder's) W-2.
K-1 entered on schedule E on personal return
Adjusted Gross Income      $250,000
Standard Deduction              $24,800
QBID                                    $25,000 (20% of the $125,000 profit of the S Corp. not your salary)
Taxable Income                  $200,200
income taxes                         $36,207 on your personal income tax return
SE/employment taxes           $19,125 on the federal payroll tax returns
Total Taxes                            $55,332

So you can see the S Corporation no longer has a favorable tax situation at this income level.  The taxes on the S Corporation are somewhat higher at this income level. However when your income climbs above the threshold of $421,400 things would change because of limitations for the QBID. 
Also, note that the business in this example is not a Specified Service Trade or Business (SSTB).
What about with a C Corporation.

With $250,000 of taxable income in a C Corporation the tax to the corporation would be 21% or $52,500. Then you would pay taxes on the dividend when you take it the profit out of the C Corporation. If you took the full $250,000 as a long-term qualified dividend you would pay tax on your personal return of $21,780 assuming no other income. Your total tax would be $74,280 running your business as a C Corporation. However in this case, you could take up to $104,800 in qualified dividends per year and assuming no other income then you would not pay income taxes on the dividends. Finally, if you don't take the dividends then you don't pay taxes on them. You only pay the income tax on the dividends in the year they are paid to you out of the C Corporation. However, there are implications of leaving accumulated profits in a C Corporation.

Strategy:

It used to be advantageous to take profits in an S Corporation. But from now through 2025 under the TCJA that is not the case at this income level. After 2025  we don't know what the tax situation will be. The advantage with operating out of a C Corporation is only in the ability to delay taxes. You may get liability protection but that is a discussion for an attorney.
With some clients they use C Corporations for their operating entities and an S Corporation as a management company for their businesses. The C Corporations pay out their profits to the S Corporation management company and the income then flows through to their personal returns. This is done for the protection provided by the C Corporation and the profits are moved to the S Corporation which flows through to the personal return. 

In the future, after 2025, there may be advantages to one or more entity types. So you could look at having various entity types in place but I would only recommend that if you have a use for them now. Otherwise you can always set up different entities in the future if it is beneficial for you. 

Simplicity
Personally, I prefer simplicity and the sole proprietor is not only simple but also the best from a tax standpoint at this income level. So you could set up LLCs for your operations and operate them as one member LLCs and report the income and expenses on your personal return on schedule Cs. (Ask an attorney about the protection aspects and reporting requirements.) But in this case you can benefit from a tax standpoint and you don't have to file a separate business income tax return, like you would for an S Corporation, and you don't have to do payroll, so that looks like the best scenario in this case. 

Payment of Taxes on Sole Proprietorship

 

When operating as a sole proprietor you won't have payroll or payroll taxes so you will instead need to file quarterly estimated tax payments. If you go this route we would talk at least quarterly about how you business is going and project your taxes and you can make the estimated tax payments online.

Other Tax Scenarios

 

As I referred to above, there are income thresholds where the QBID phases out and so the tax picture can change at higher income levels. If you want to look at any of those scenarios let me know. 

That is a lot of information. Feel free to contact me using my email address below to arrange an appointment to discuss your situation.


Jeff Haywood, CPA
The CPA Superhero
jeff.jhtaxes@gmail.com





 

Posts - IRS Collection Issues and Options:






Be careful when reading about tax law and its application, including my articles, because the wording and definitions are such a challenge and are influenced by writers perspective, specifically his own clients situations that he is mindful of and other situations the writer is not thinking of. The point is talk to your CPA about your situation and circumstances and don't rely on or make conclusions based on articles you read, including articles form irs.gov, because concepts and definitions are not very clear, and of course, they are subject to change. Now is the time to be having discussions about your situation and developing strategies for you and your business. Again, contact me using my information above to discuss your situation. I help business owners all over the U.S. and in foreign countries with their tax returns.

The CPA Superhero - Virtual CPA - Income Tax Services

 Virtual CPA

The CPA superhero is not new to virtual services. Now with the pandemic many CPA's are making adjustments to offering virtual services rather than having live face to face meetings. I have been providing services virtually for clients for over ten years. In 2010 my wife and I moved to Acapulco Mexico and I started a virtual CPA practice. Previously, while working for another CPA I tried to convince him to go paperless and do away with the growing number of paper files. He even had a separate office that was used primarily to store old files. 

I was a little concerned about how potential clients would react both to me offering to be a virtual CPA and also doing so from another country. I spoke with another CPA who split his time between the U.S. and Puerto Vallarta in Mexico. He told some people would be OK with it and others would not and that was OK. Not everyone is going to be a fit for my practice. Others, he said, would love the idea. He typically did not mention to his clients which office he happened to be working out of but some would ask and they loved the idea of having a CPA located in another country. He said some would be fine with sharing documents virtually and some would not. It is interesting to note that some want a CPA locally that they can visit live in person but in reality most never or very seldom see their CPA face to face. 

When I was working for another CPA I noticed that each year a higher percentage of our clients never talked to us face to face. So the trend was going that way but some still want to be able to walk into their CPA's office even if they almost never do. I get it. To each his own.

Now a Virtual CPA located in the United States 

Now, I am in Greenup in Central Illinois with a population of around 1,000 people. We moved here in 2016 to help take care of my aging grandmother who has since passed away. We are not planning to move anywhere now especially with the COVID-19 pandemic. But we want to be keep the option of traveling in the future. With a virtual business we can make a trip somewhere and as long as there is an internet connection, I can work from anywhere in the world. 

As it is, I now have clients all over the world. I do many returns for people that live in different countries and I have clients living all over the U.S. I have only a handful of local clients here in Illinois. Most of my U.S. clients are in the Dallas TX area where I lived for ten years before moving to Acapulco. Now I have been picking up clients all over the country that need help getting into compliance with the IRS. It is interesting that the majority of those new clients are from New York and California. So while I live in Illinois I have been working with the New York and California income tax authorities and they have been pleasant to work with. I have worked with several other state agencies as well.

In Illinois I have picked mainly Trust and Estate Tax Returns. I currently do a few individual income tax returns for clients locally and I expect that number will continue to grow. My concern is what will happen if I start  spending the cold part of the tax season in a warm climate. So I really want clients that are OK, or better yet, who are excited about having a virtual CPA to help them with income taxes. 

How Does It Work?

For over ten years now I have been exchanging information with my clients electronically. Most of my clients get information to me via a shared file through the internet. Others send things to me via email. And, now that I am back in the U.S., some clients mail there information to me. 

The electronic shared file was the preference of some of my clients that are programmers and data security specialists. Each year I have conversations with them about data security and best practices and each year I have made changes to the way I do things in order to protect sensitive information. 

How Does It Work for My Local Clients?

This is the harder question because for me this is the unusual way of doing business now. So far all of my Illinois clients want to physically bring their information to me and pick it up. Now with the COVID-19 pandemic I have to be really careful. I had a chance to purchase a local practice and decided against it because most of the clients would not really fit what I do. I do tax returns where I can really make a difference for my clients and add real value, so they tend to be more complicated returns or more complicated and dynamic clients and often both. Additionally, it seems many potential clients in this areas want the face to face tax person, not necessarily a CPA. So during the pandemic for my local clients I will require everyone that comes into my office to wear a mask, but I would prefer if they could send me everything electronically, and if not they could mail everything to me. One of my local clients mailed me their tax information last year and I mailed her returns back to her. This year I want to increase that number. 

What About You?

Do you want a virtual CPA. If so you should contact the CPA Superhero for your income tax needs and help with IRS issues. I work with different state taxing authorities and can file income tax returns for any of the fifty states. So it does not matter to me where you are located, I can work with you. If it doesn't matter to you where I am physically located then contact me using my email below to arrange a conversation to  get started. I can do a phone call, Zoom, WhatsApp, or any method that you prefer. 

Below you find a list of some of my posts about IRS collection issues and options.



Jeff Haywood, CPA
The CPA Superhero
jeff.jhtaxes@gmail.com








Posts - IRS Collection Issues and Options:







Be careful when reading about tax law and its application, including my articles, because the wording and definitions are such a challenge and are influenced by writers perspective, specifically his own clients situations that he is mindful of and other situations the writer is not thinking of. The point is talk to your CPA about your situation and circumstances and don't rely on or make conclusions based on articles you read, including articles form irs.gov, because concepts and definitions are not very clear, and of course, they are subject to change. Now is the time to be having discussions about your situation and developing strategies for you and your business. Again, contact me using my information above to discuss your situation. I help business owners all over the U.S. and in foreign countries with their tax returns.

What is an Offer-In-Compromise?

 What is an Offer-In-Compromise?

While an Offer-In-Compromise (OIC) is an offer to compromise with the IRS to pay less than you owe, in reality an OIC is primarily a calculation of what the IRS is willing to accept to settle your tax debt. On irs.gov it does say:

An offer in compromise allows you to settle your tax debt for less than the full amount you owe.

But it also says:

It may be a legitimate option if you can't pay your full tax liability, or doing so creates a financial hardship.

Notice the "if". You may be able to get an Offer-In-Compromise "if" you can't pay in full your tax liability, or if it creates a financial hardship. Yeah, yeah, I know you feel it will create a financial hardship for you. But how does the IRS decide if they will be really nice to you and let you settle for "pennies on the dollar"? We don't have to guess the IRS tells us:

We consider your unique set of facts and circumstances:

 And how much will they accept? Here is what the IRS says:

We generally approve an offer in compromise when the amount offered represents the most we can expect to collect within a reasonable period of time. 

To begin the negotiation for an OIC you will have to present all your financial information to the IRS to consider this option. Then based on their calculation of what you can reasonably pay they may accept or decline your offer. 

The IRS realizes:

The Offer in Compromise program is not for everyone.

But it may be worth exploring. For help to determine if this is realistic option for you contact me today using my email address below to arrange an initial consultation via Zoom, telephone, or another virtual option. 

Qualifications

Before the IRS will even consider an Offer in Compromise need to first be in compliance with your tax obligations. They include:

  • Filing all your tax returns
  • Making all required tax payments
There is more to an Offer in Compromise but this may help you decide to explore this option or not. 

Options

In addition to an OIC you may be able to get: 
  • Installment Agreement
  • Get Classified as Currently Not Collectible
  • File for a Bankruptcy

Types

There are a few different types of OICs and they go beyond the scope of this post. However, if you want help to determine if you should explore an OIC we can discuss these options. Just use my email below to arrange an initial consultation.

Below you find a list of some of my posts about IRS collection issues and options.

I have helped many people to apply for an Offer in Compromise and get relief from their tax debts. The first step is to find out if you qualify for an OIC. Contact me today using my email address below to arrange a consultation to help you get started.


Jeff Haywood, CPA
The CPA Superhero
jeff.jhtaxes@gmail.com




Posts - IRS Collection Issues and Options:






Be careful when reading about tax law and its application, including my articles, because the wording and definitions are such a challenge and are influenced by writers perspective, specifically his own clients situations that he is mindful of and other situations the writer is not thinking of. The point is talk to your CPA about your situation and circumstances and don't rely on or make conclusions based on articles you read, including articles form irs.gov, because concepts and definitions are not very clear, and of course, they are subject to change. Now is the time to be having discussions about your situation and developing strategies for you and your business. Again, contact me using my information above to discuss your situation. I help business owners all over the U.S. and in foreign countries with their tax returns.

The CPA Superhero Fixes Tax Problems - Leaping Tall Buildings

“Faster than a speeding bullet! More powerful than a locomotive! Able to leap tall buildings in a single bound!”

I walked into a shoe repair business and met the owner. After some small talk about his business I told them that I am a CPA and I do tax returns. He goes into the back office and comes back with IRS notices. He asks if I can help him with them and explains he hasn't been able to get his CPA who did these tax returns on the phone. He had left messages for quite a while and never got a call back and he had the feeling his CPA was retiring. In many ways this call shaped me as the CPA Superhero. Basically, make sure you do two things; return calls and fix problems. It is not exactly leaping over tall building and certainly not in a single bound, but it real life a superhero helps people with problems and that is what I do. 

Now, I do income tax returns and I don't do payroll, and here is a potential new client with a payroll tax issue. While I don't do payroll I have done payroll in past jobs and I am familiar with the issue at hand with the shoe repair business owner. It is really a matter of figuring out why his W-2s and his 941s for the year don't match. So I fixed his problem with the IRS and recommended he use a payroll company for his payroll and he has not had any of these type of problems since. He is a happy client. And I still, years later, return all his calls and all my clients calls. 

Not everyone is a potential client for the CPA Superhero. Potential clients are people for whom I can make a big impact on their business and their lives. Isn't that what a superhero does? Many of the clients I am currently working with, like the shoe repair business owner, have tax issues with the IRS, like late filing and late paying. Some have relatively simple issues like the payroll tax returns not matching the W-2s but they all want to have a CPA take care of their IRS problems for them. 

Do you need help with tax issues? Are you "struggling with tax debts"? Many people are struggling financially right now and also have outstanding tax debts or have neglected to file all their tax returns. I can help with these situations. If you want a CPA Superhero to help work through these problems and IRS options, then contact me today sing my email address below to arrange a consultation to help you get started.

Below you find a list of some of my posts about IRS collection issues and options.



Jeff Haywood, CPA
The CPA Superhero
jeff.jhtaxes@gmail.com







Posts - IRS Collection Issues and Options:







Be careful when reading about tax law and its application, including my articles, because the wording and definitions are such a challenge and are influenced by writers perspective, specifically his own clients situations that he is mindful of and other situations the writer is not thinking of. The point is talk to your CPA about your situation and circumstances and don't rely on or make conclusions based on articles you read, including articles form irs.gov, because concepts and definitions are not very clear, and of course, they are subject to change. Now is the time to be having discussions about your situation and developing strategies for you and your business. Again, contact me using my information above to discuss your situation. I help business owners all over the U.S. and in foreign countries with their tax returns.

The Foreign Earned Income Exclusion: U.S. Person Unable to Return to Foreign Residence During the Pandemic


IRS Relief

Yes, IRS issued relief related to qualifying for the Foreign Earned Income Exclusion (FEIE), but what is the provide relief for? The relief is for the requirements to qualify for foreign residency. This is an issue for those who are foreign residents who were in the United States during 2020 due to the pandemic and were unable to return to their residence. The problem is the Foreign Earned Income Exclusion (FEIE) allows you to exclude foreign earned income and not US earned income which is what you earn while you are in the U.S. Foreign earned income is income you earn while you are in a foreign country.  So if a US person traveled to the US and was unable to return to the country of their residence all the income they earned while in the US does not qualify as Foreign Earned Income and thus can't be excluded on their U.S. income tax return using the FEIE.

Here is a quote from IRS.gov from a post on Foreign Earned Income - What is Foreign Earned Income

For this purpose, foreign earned income is income you receive for services you perform in a foreign country in a period during which your tax home is in a foreign country and you meet either the bona fide residence test or the physical presence test.

Let's consider an example, a taxpayer is a qualified foreign resident under one of the two tests (Physical Presence Test or Bona Fide Residence Test), and he comes back to the U.S. to take care of say aged relatives for a few months, the money he or she earns while in the U.S. is considered U.S. earned income and not foreign earned income and does not qualify for the FEIE.

Qualified for the Foreign Earned Income Exclusion (FEIE) But Their Income is U.S. Earned Income Not Foreign Earned Income

Some taxpayers who are foreign residents were not able to return to their county of residence because of travel restrictions due to the pandemic and while they may still qualify to be considered a foreign resident they don't get to use the FEIE for income they earned while they were in the United States during 2020. That is the issue. There are separate components that a person need to qualify for the FEIE. One, they have to qualify as a foreign resident under the Physical Presence Test or the Bona Fide Residence Test. And two, they have to have foreign earned income to qualify for the exclusion.

But the IRS granted relief for the FEIE. Yes, but just for qualifying as a foreign resident but not to make income that you earned while in the U.S. to qualify as foreign earned income. The issue is the definition of foreign earned income not the foreign residency part. I researched this again today (November 25, 2020) and I again did not find anything in any releases by the IRS or posts by tax people that indicate the money a foreign resident earns while stuck in the U.S. because of the pandemic can be considered foreign earned income. Believe me, I wanted to find that for my clients in this situation but I did not find it. I have a folder of recent articles and it just is not there. But this is 2020 and who knows what will happen. Maybe the IRS will have sympathy on U.S. Persons who are foreign residents and grant an exception that their income earned while in the U.S. due to the pandemic can qualify as foreign earned income. But I just don't see that happening. But that does not mean it won't happen. 

By the way, when I say stuck in the U.S. I don't mean it like that, it is just for effect. I mean that a U.S. person who is a resident of a foreign country found themselves back in the U.S. and unable to return to their residence in a foreign county due to reasons beyond their control. 

Impact

The impact of these developments can be substantial for the foreign resident. Consider that a qualifying person is eligible to exclude up to $107,600 from taxable income for income tax purposes. A qualifying married couple both with foreign earned income could qualify to exclude up to $215,200 from taxable income for income tax purposes. Assuming income taxes at 30% that would be potentially as much $32,280 per qualifying person at stake for this issue. Probably it would be less because most people would not be unable to reside at their foreign residence for the full year. But you get the picture.

None of the articles I found addressed this question about the foreign earned income component only the relief to qualify as a foreign resident.

Adjust Income Tax Expectations and Estimated Tax Payments

Barring any new information from the IRS I would recommend persons in this situation to project their taxes based on the income earned while in the U.S. as taxable to them and make estimated tax payments accordingly.

Other Posts on the Foreign Earned Income Exclusion

Here are some of the other posts I have written on the Foreign Earned Income Exclusion:

Living Outside the US You May Be Able to Exclude Foreign Earned Income on Your U.S. Income Tax Return

The Foreign Earned Income Exclusion and Number of Days Outside the United States

10 Things To Know About Taxes Before Moving Out of the United States

Requirement to File Tax Returns

U.S. persons are required to file U.S. Income Tax Returns even if they live outside of the United States. Additionally, U.S. persons are required to report all of their worldwide income on their tax return. There may be ways to avoid getting taxed on the same income by more than one country and in some cases by any country. The Foreign Earned Income Exclusion is just one of the ways you may be able legally avoid some income taxes.

I have done income tax returns for clients living all over the world. If you would like my help to prepare your tax returns then contact me today using my email address below to arrange for an initial phone conversation.



Jeff Haywood, CPA
The CPA Superhero
jeff.jhtaxes@gmail.com





Foreign Earned Income Exclusion - IRS

Posts - IRS Collection Issues and Options:






Be careful when reading about tax law and its application, including my articles, because the wording and definitions are such a challenge and are influenced by writers perspective, specifically his own clients situations that he is mindful of and other situations the writer is not thinking of. The point is talk to your CPA about your situation and circumstances and don't rely on or make conclusions based on articles you read, including articles form irs.gov, because concepts and definitions are not very clear, and of course, they are subject to change. Now is the time to be having discussions about your situation and developing strategies for you and your business. Again, contact me using my information above to discuss your situation. I help business owners all over the U.S. and in foreign countries with their tax returns.

The IRS Makes it Easier For Taxpayers Struggling With Tax Debts

In November 2020 the IRS announced a number of changes to help "struggling taxpayers impacted by COVID-19". These changes are designed to help these taxpayers "more easily settle their tax debts with the IRS."  

Because of the economic uncertainty and the impact of the COVISD-19 pandemic, the IRS has sought ways to help struggling taxpayers. The new IRS Taxpayer Relief Initiative is expanding the help available through payment plans and other tools from the IRS.  Here are the highlights of the new IRS Taxpayer Relief Initiative. Note too who this initiative is designed to help. 

The revised COVID-related collection procedures will be helpful to taxpayers, especially those who have a record of filing their returns and paying their taxes on time. Among the highlights of the Taxpayer Relief Initiative:

  • Taxpayers who qualify for a short-term payment plan option may now have up to 180 days to resolve their tax liabilities instead of 120 days.
  • The IRS is offering flexibility for some taxpayers who are temporarily unable to meet the payment terms of an accepted Offer in Compromise.
  • The IRS will automatically add certain new tax balances to existing Installment Agreements, for individual and out of business taxpayers. This taxpayer-friendly approach will occur instead of defaulting the agreement, which can complicate matters for those trying to pay their taxes.
  • To reduce burden, certain qualified individual taxpayers who owe less than $250,000 may set up Installment Agreements without providing a financial statement or substantiation if their monthly payment proposal is sufficient. 
  • Some individual taxpayers who only owe for the 2019 tax year and who owe less than $250,000 may qualify to set up an Installment Agreement without a notice of federal tax lien filed by the IRS.
  • Additionally, qualified taxpayers with existing Direct Debit Installment Agreements may now be able to use the Online Payment Agreement system to propose lower monthly payment amounts and change their payment due dates.

There are many different payment options available to individuals "struggling with tax debts". I have been helping people with these situations for years. There have been a lot of new changes recently and I expect more changes will be forthcoming. Many people are struggling financially right now and also have outstanding tax debts or have neglected to file all their tax returns. I can help with these situations. If you want a CPA Superhero to help work through these problems and IRS options, then contact me today sing my email address below to arrange a consultation to help you get started.

Below you find a list of some of my posts about IRS collection issues and options.



Posts - IRS Collection Issues and Options:






Be careful when reading about tax law and its application, including my articles, because the wording and definitions are such a challenge and are influenced by writers perspective, specifically his own clients situations that he is mindful of and other situations the writer is not thinking of. The point is talk to your CPA about your situation and circumstances and don't rely on or make conclusions based on articles you read, including articles form irs.gov, because concepts and definitions are not very clear, and of course, they are subject to change. Now is the time to be having discussions about your situation and developing strategies for you and your business. Again, contact me using my information above to discuss your situation. I help business owners all over the U.S. and in foreign countries with their tax returns.

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