FAQ

I received a tax notice in the mail, should I just pay what they say I owe?

No! You should always fax or mail it to our office so we can review it for you. We can then advise you on whether the notice is correct, and what needs to be done to take care of it.

Do I need to pay estimated taxes each quarter?

The IRS and all states may require you to pay quarterly estimates where your wage withholding will not be sufficient to pay for your annual tax liability. This deficit may be due to your self-employment income, unearned income, alimony income, etc. In general, the taxing authorities do not like to get all of their money on April 15th, or when you file your return. They expect to get your tax payments throughout the year.

Whether you should make quarterly payments depends on several factors, including whether you expect to owe tax with your return at year-end. For instance, if you expect to owe more than $1,000 with your 2006 Form 1040, you may need to pay estimated taxes. If estimates are required, we help you compute your payments and assist you with preparation of your vouchers. We help you to avoid estimated tax penalties by assuring that your tax withholdings plus estimated tax payments exceed the lesser of:

90% of your current year’s tax, or 100% of your prior year’s tax (110 percent if your Adjusted Gross Income exceeds $150,000 (if married filing jointly)).

Even if estimates are not required, we typically recommend paying any state tax liability prior to year-end if you expect to owe money with your state return on April 15th.

I am afraid I may owe tax with my returns at year-end and I don’t want to pay quarterly estimates. How do I get my employer to withhold more taxes from my paycheck?

You should complete a new W-4 form reflecting your nonwage income and deductions. We can help you with this if you’d like.

I just got married this year. Should I file jointly or separately?

In most cases, filing separately does not result in a lower overall tax. However, there are exceptions (e.g., when one spouse has excessive medical or job expenses which would not be deductible on a joint return). Additionally, you may wish to file separately where you are separated from your spouse or you do not wish to be held liable for your spouse’s underpayment of tax.

I haven’t received my refund yet. How can I find out when it will be sent to me?

Please review our "Where's My Refund?" resource.

Should I itemize my deductions or take the standard deduction?

You should always itemize if you can. This means you claim all of your allowable deductions on Schedule A when, in total, they exceed the standard deduction.

Allowable itemized deductions include Medical Expenses, Taxes, Interest, Charitable Contributions, and Job Expenses. While itemizing your deductions may take you some time gathering your deduction information, you will pay less tax.

I lost some of my receipts for valid business expenses. May I still claim these items as deductions?

Yes. If you incurred the expense, you should take the deduction. However, if you are audited (which is not likely), the IRS may request documentation of these expenses to substantiate your deductions.

I pay a woman to take care of my children while my wife and I work. Do I need to report this income to the IRS?

Yes. This woman is your domestic employee and you should register as her employer. This involves withholding payroll taxes and filing additional payroll returns each year. Additionally, you can be held personally liable if you don’t report this payroll on Schedule H of your Form 1040.

I have heard that the IRS will settle old tax liabilities for “pennies on the dollar”. How do I sign up for this?

If you qualify, the IRS may settle your back taxes for an amount much lower than you presently owe. This is done by submitting an Offer in Compromise. The FulServ Group has extensive experience in negotiating such tax settlements. Please call us today to set up an appointment to get started.

I owe some taxes from the past 2 years and I don’t want the IRS to hurt my credit with a tax lien. What should I do?

You must be proactive. If you do nothing, they will take whatever course is necessary to ensure that you will pay your past due taxes. This may involve a tax lien, which will surely impact your credit score.

If an Offer in Compromise is not an option (e.g., because the amount owed is not significant compared to your ability to pay over time), we recommend either setting up an Installment Agreement or requesting they assign your account as currently noncollectible. If you have outstanding tax bills, please contact our office immediately to set up an appointment.