Home | Start the New Year By Facing Your Tax Debt

Start the New Year By Facing Your Tax Debt

Jan 02, 2023

It’s 2023! The excitement from the holidays is dying down, and we are all working on re-focusing on professional and financial matters. If you owe a tax debt that isn’t resolved, you’ve probably committed to yourself that this is the year you will focus on taking care of that debt, but you might not know the best way to go about it. Below you’ll find our suggestions for approaching this issue in the best way possible for you, your family, and/or your business.

The very first thing you should do is research Tax Resolution Firms and find one that you feel comfortable with. Remember that you can’t rely on the “Top 5” lists found on the internet as many of those lists feature only paid partners; shocking, we know! Unfortunately, that’s the reality of the Google-led world we live in these days. Take the time to speak with your accountant, CPA, banker, or trusted financial advisor, as they can point you in a direction that usually includes professionals they have directly vetted.

Resolving a tax liability takes time, and during this time, you will be working closely with your Tax Resolution Specialist and their team. It would be best to find someone you feel answers your questions honestly, responds promptly and thoroughly to your questions, and whom you think will be a good advocate for you and your situation.

Once you have found the Tax Resolution Specialist you feel comfortable with, you should now be able to breathe a deep sigh of relief. You can then shift your focus to steps you can take to assist with resolving the debt as quickly as possible. Some of the steps you can take are also ones that will help you long after your tax debt is settled and are great habits to begin implementing.

First, if you’re a business owner or self-employed, implement an ongoing bookkeeping system. Whether you hire a bookkeeper, have someone on your staff whose duties include bookkeeping, or decide to tackle ongoing bookkeeping yourself, making sure your books are up to date on a weekly/monthly basis is key to running a successful business. This will allow you to make quick adjustments to business finances as needed, make sure business expenses (including taxes) are being paid timely, and keep an eye on Accounts Receivables to ensure the business’s cash flow is as sound as possible.

If you are a W-2 employee, check your withholdings from your paycheck. If you continue to file a tax return year after year with a balance owed, it’s most likely because you don’t have a sufficient amount of taxes withheld from your paycheck. Adjusting now, at the beginning of the year, will allow you to make a more minor tweak to your take-home pay than if you address it mid-year when the required adjustment could make a more significant impact on your household budget. If you aren’t sure how or if you should adjust your withholdings, you can speak with your Tax Return Preparer or your Tax Resolution Specialist for their input.

Next, establish separate bank accounts for specific purposes if you are a business owner or are self-employed. Determine what makes sense based on the size of your business and the type of expenses the business is responsible for. Establish a separate bank account for payroll and payroll taxes if your business has employees.

If your business is responsible for making sales tax payments, we recommend having a bank account strictly dedicated to sales tax. Remember that sales tax is money you collect from the public and hold in trust until you turn it over to the State and/or local government. This is not money meant for business operations and should be kept separate from all other business finances. Once you have your sales tax bank account, commit to transferring your sales tax from the business operating account into the sales tax account daily.

Make sure you have a system to separate business and personal expenses. This may or may not be a requirement depending on how your business is structured; however, we find it to be good practice regardless. If you have a personal expense that needs to be paid, ensure it is only paid with funds sitting in your personal bank account, and do not pay business expenses using personal funds or credit cards.

If you are an officer of a corporation, ensure you are aware of and adhere to officer compensation requirements. This is an area the IRS, in particular, focuses on when it comes to audits and an easy one you can control. Golden Lion Tax Solutions provides reasonable compensation reports for a minimal fee that can be used to confirm that you are paying yourself correctly from your corporation. The reports we provide are thorough, tailored to your specific tasks and duties within the business, and can be used to defend your business in case of an audit.

Last, whether you own a business, are self-employed, or strictly receive W2 income, take some time to analyze your finances with your Tax Resolution Specialist. They can be extremely helpful in determining which expenses will be considered allowable during their negotiation with the taxing authorities on your behalf. They can also often point out areas where adjustments could be made to your spending to create better future cash flow.

As you can see, taking the first step to finding a reliable, knowledgeable, and experienced Tax Resolution Specialist is the biggest and most important part of the tax resolution process. Once you have found someone that is right for you, that person will help guide you through the remainder of the steps outlined above.

At Golden Lion Tax Solutions, our Licensed Tax Professionals are dedicated to guiding you through this process. We know the trust it takes to hire someone to help resolve a tax debt and the short- and long-term effects your tax debt could have on your personal or business life. We are committed to assisting you through this process and making it as painless and informative as possible. If you think Golden Lion Tax Solutions might be a good fit for you and would like to hear more about the 941 tax debt solutions, 1040 tax debt solutions, sales tax debt solutions, or any other service we provide, take the first (and sometimes hardest) step and give us a call. We are here to be your trusted advocate while we pursue the best tax debt solution for your short and long-term goals.

--

Trust. Protection. Wisdom.

Your future and your family deserve the right protection. Golden Lion Tax Solutions will be your advisor and confidant throughout the entire journey. We guarantee to offer you or your business best-case solutions for your tax debt. We are by your side every step of the way. Start now and get your life back.

For help with your tax debts, email contactus@goldenliontaxsolutions.com or call 833-LION-TAX (833-546-6829)

Disclaimer: There are requirements that must be satisfied in order to qualify for some of the tax solutions we discuss on our website. Not all of our services will be suitable for every client. Golden Lion Tax Solutions is here to help you find the most appropriate solution to fit your situation.