Help! I Have Tax Debt from Flipping a House. What Do I Do Now?
Flipping houses can be an exciting and profitable venture. Transforming neglected properties into beautiful homes not only revitalizes neighborhoods but can also yield substantial financial rewards.
However, many house flippers find themselves facing unexpected tax debt, turning a dream project into a financial nightmare. Understanding why this happens and how to address it is crucial for anyone in the business.
Why Does Tax Debt Happen in House Flipping?
- Capital Gains Tax: The most common tax issue flippers face is capital gains tax. When you sell a property for more than you paid for it, the profit is considered a capital gain. If the property was held for less than a year, this gain is taxed at a higher short-term rate, which can be as high as 37%. For properties held longer, the rate is typically 15% or 20%.
- Self-Employment Tax: Many house flippers operate as sole proprietors. In this case, profits from flipping are considered self-employment income, subject to self-employment tax in addition to regular income tax. This can significantly increase your tax liability.
- Lack of Proper Deductions: Properly tracking and claiming deductions can reduce your taxable income, but many flippers fail to do this effectively. Expenses such as renovation costs, property taxes, insurance, and interest on loans are deductible, yet they are often overlooked or improperly documented.
- Overlooking State Taxes: Each state has its own tax regulations, and some impose additional taxes on capital gains. Flippers focusing only on federal taxes may be surprised by a hefty state tax bill.
Solutions to Manage and Reduce Tax Debt
- Tax Planning: Engage in proactive tax planning. Consider the timing of your flips to benefit from long-term capital gains rates and strategize your sales to minimize tax impact.
- Proper Business Structure: Structuring your business correctly can reduce tax liabilities. For instance, forming an LLC can offer tax advantages and liability protection.
- Track All Expenses: Meticulously document all renovation costs, travel expenses related to the project, and other deductible expenses. Use accounting software or hire a professional to ensure nothing is missed.
- Payment Plans and Settlements: If you find yourself with a significant tax debt, don't panic. There are options such as installment agreements or offers in compromise that can make the debt more manageable.
- Hire a Tax Professional: Working with a tax resolution expert like Ben Butterfield of BPB Tax Resolutions can help you navigate complex tax laws, identify all possible deductions, and develop a strategy to minimize your tax burden.
Flipping houses can be lucrative, but it's essential to be aware of the tax implications and take steps to mitigate potential liabilities.
At BPB Tax Resolutions, we specialize in helping individuals like you navigate the complex world of tax debt.
Contact BPB Tax Resolutions Today
If you're struggling with tax debt from house flipping, don't wait until it spirals out of control.
Let us help you find the best solution to your tax problems so you can focus on your next big flip with confidence.
Call Ben Butterfield at BPB Tax Resolutions today at (402) 779-7399 for a free consultation!
What Should I Do if I Have an IRS Balance?
Are you feeling the weight of an IRS balance?
If so, you're not alone. Many people find themselves in this situation, unsure of the best course of action to resolve their tax issues. However, there's no need to face it alone. With the right guidance, you can confidently navigate through this challenge and find a solution that works for you.
What Should I Do?
Face the Issue: Ignoring your IRS balance won't make it disappear. In fact, delaying action can lead to additional interest and penalties. It's essential to address the issue head-on and take proactive steps towards resolution.
Don't Ignore It: Ignoring an IRS balance will only make matters worse. The longer you delay addressing the issue, the more interest and penalties you'll accumulate. Instead, face the situation head-on and take proactive steps to resolve it.
Assess Your Situation: Start by assessing your financial situation and understanding the root cause of your IRS balance. Did you miss filing a tax return? Or maybe you couldn't afford to pay your taxes in full? By understanding the underlying factors, you can develop a targeted strategy for resolution.
Explore Payment Options: Contrary to popular belief, the IRS offers various payment options for individuals with tax balances. These include installment agreements, offers in compromise, and currently not collectible status, among others. Ben Butterfield can help you explore these options and determine which one aligns best with your financial circumstances.
Stay Compliant: Once you've entered into a payment arrangement or reached a resolution with the IRS, it's crucial to stay compliant moving forward. This means filing your tax returns on time and making timely payments according to the agreed-upon terms. By demonstrating good faith and compliance, you'll avoid future tax troubles.
Seek Professional Help: Dealing with the IRS can be complex and intimidating, especially if you're unfamiliar with tax laws and procedures. That’s why it’s vital to have a tax expert on your side. In fact, the IRS prefers working with tax resolution professionals, and you’ll usually get a far better outcome with a seasoned expert on your side…
An expert like Ben Butterfield.
Ben Butterfield, founder of BPB Tax Resolutions, provides comprehensive tax resolution services to people facing an IRS balance. He understands the complexities of the tax system and has the expertise necessary to guide you through the settlement process.
With his personalized approach, Ben will be your advocate for dealing with the IRS.
Don’t face the IRS on your own.
Call Ben Butterfield now for your free case evaluation!
The IRS Sent Me an LT11 Letter. What Are My Next Steps?
Receiving an LT11 letter from the IRS can be incredibly unsettling.
This notice is a serious warning that the IRS is prepared to take tough action to collect unpaid taxes. If you’ve received this letter, it’s important to understand what it means and why you need to act quickly.
What is an LT11 Letter?
An LT11 letter, also known as the "Final Notice of Intent to Levy and Notice of Your Right to a Hearing," is sent by the IRS when you have unpaid taxes and haven’t responded to previous notices.
This letter means the IRS is ready to levy your assets, which means they can legally take your property to pay off the tax debt. This could include money in your bank accounts, your wages, your home, or other valuable belongings.
What Can Happen If You Ignore It?
If you ignore an LT11 letter, the IRS can take serious actions, such as:
- Seizing Money from Your Bank Account: The IRS can freeze your bank accounts and take the money.
- Garnishing Your Wages: Your employer will have to send a portion of your paycheck to the IRS.
- Taking Your Property: The IRS can seize your house, car, or other valuable items.
- Damaging Your Credit Score: A levy or lien can hurt your credit score, making it hard to get loans or credit in the future.
Why You Need to Act Quickly
The LT11 letter gives you only 30 days to respond. Within this time, you have the right to request a Collection Due Process (CDP) hearing. This hearing is your chance to dispute the levy action, propose a different payment plan, or challenge the amount you owe. If you don’t act within these 30 days, the IRS will start the levy process, and your options will be very limited.
The Importance of Professional Help
Dealing with the IRS and resolving tax problems can be very complex, and trying to handle it on your own can lead to mistakes that might make your situation worse.
A tax resolution professional has the knowledge and experience to help you navigate this challenging process.
Benefits of Professional Help:
- Expert Negotiation: A professional can negotiate with the IRS on your behalf to secure the best possible terms.
- Strategic Planning: They can develop a plan to resolve your tax issues without causing financial hardship.
- Legal Protection: A professional ensures that your rights are protected throughout the process.
If you’ve received an LT11 letter, don’t wait another moment.
Contact Ben Butterfield at BPB Tax Resolutions immediately.
Ben is a skilled tax resolution specialist who can help you navigate your tax issues and achieve the best possible outcome.
Call him NOW at (402) 779-7399 to prevent the IRS from taking your hard-earned money and assets.
Understanding the CP1058 Letter: Act Now Before It's Too Late
Getting a CP1058 letter from the IRS can be a huge wake-up call.
This letter is a serious warning that the IRS is about to take strong action against you. If you’ve received this letter, it’s important to know what it means and why you need to act fast.
What is a CP1058 Letter?
A CP1058 letter is also called the "Final Notice of Intent to Levy and Notice of Your Right to a Hearing."
This letter means that you owe taxes, and the IRS is getting ready to take your property to cover the debt. This could include money in your bank accounts, your paycheck, your house, or other valuable things you own.
What Can Happen If You Ignore It?
If you don’t respond to a CP1058 letter, the IRS can take serious steps, such as:
- Taking Money from Your Bank Account: The IRS can freeze your accounts and take the money.
- Taking Part of Your Paycheck: Your wages could be garnished, meaning your employer would have to send part of your paycheck to the IRS.
- Taking Your Property: The IRS can take your house, car, or other belongings.
- Hurting Your Credit Score: A levy or lien from the IRS can damage your credit score, making it hard to get loans or credit cards in the future.
Why You Need to Act Quickly
The CP1058 letter gives you only 30 days to respond. In these 30 days, you can ask for a Collection Due Process (CDP) hearing. This hearing is your chance to argue against the IRS taking your property, suggest a different way to pay your debt, or dispute the amount you owe.
If you don’t act within these 30 days, the IRS will start taking your property, and your options will be very limited.
Why You Should Get Professional Help
Dealing with the IRS and fixing tax problems can be complicated. If you try to handle it on your own, you might make mistakes that could make things worse. A tax resolution professional has the knowledge and experience to help you get through this.
Why Professional Help is Important:
- Expert Negotiation: A professional can talk to the IRS for you and get you the best deal possible.
- Smart Planning: They can create a plan to resolve your tax issues without ruining your finances.
- Legal Protection: A professional makes sure your rights are protected the whole time.
If you’ve received a CP1058 letter, don’t wait.
Contact Ben Butterfield at BPB Tax Resolutions right now.
Ben is a skilled tax resolution specialist who can help you deal with your tax problems and get the best outcome.
Get in touch with Ben NOW at (402) 779-7399 to take control of your finances and stop the stress caused by tax debt.
Tax Resolution for Truckers: Your Guide to Financial Relief
Are you a trucker feeling the weight of tax problems bearing down on you like an overloaded trailer?
You're not alone.
It's a common predicament in the industry, and understanding why can help you steer clear of these financial potholes. Let's look into why truckers often find themselves in tax trouble and what you can do to get out of it:
- Complex Tax Regulations: Tax laws are complicated, and they're especially labyrinthine when it comes to truckers. Between fuel taxes, highway use taxes, and deductions for meals and lodging, navigating the tax landscape can feel like traversing a maze without a map.
- Misclassification Issues: The classification of truckers as independent contractors or employees can be a contentious issue. Misclassification can lead to discrepancies in tax filings and, consequently, IRS scrutiny.
- Record-Keeping Challenges: With long hours on the road, keeping meticulous records of expenses can fall by the wayside. Yet, accurate record-keeping is crucial for claiming deductions and avoiding audits.
- State Tax Compliance: Truckers often traverse multiple states, each with its own tax regulations. Keeping track of and complying with varying state tax laws can be overwhelming and prone to errors.
- Overlooked Deductions: Many truckers miss out on valuable deductions simply because they're unaware of what they're entitled to. This oversight can result in overpayment of taxes.
- Cash Flow Constraints: Seasonal fluctuations and delayed payments in the trucking industry can lead to cash flow problems, making it challenging to meet tax obligations on time.
- Lack of Professional Guidance: Without the guidance of a knowledgeable tax professional who understands the unique challenges of the trucking industry, truckers may inadvertently make costly mistakes on their tax returns. A professional becomes necessary when you’ve gotten into debt, so that you can get the best outcome possible.
Now that we've identified some common reasons why truckers find themselves in tax trouble, how do you get out of tax debt?
That's where Ben Butterfield with BPB Tax Resolutions comes in.
Ben Butterfield is a seasoned tax expert with a deep understanding of the complexities faced by truckers. With his expertise, you can navigate the tax landscape with confidence, ensuring compliance with regulations and maximizing deductions.
Don't let tax problems derail your journey.
Take control of your finances and reach out to Ben Butterfield at BPB Tax Resolutions today.
The IRS is Auditing My Small Business. What Should I Do?
As a small business owner, you pour your heart and soul into building and growing your business. An IRS audit can be incredibly stressful, and you might feel like everything you’ve worked hard for is in jeopardy.
You're not alone.
Navigating the complexities of IRS audits can be overwhelming, but with the right approach and guidance, you can effectively address the situation and protect your business interests.
If you’re facing an IRS audit on your small business, here's what you need to do next:
Face the Issue Head-On: Much like with an IRS balance, ignoring a small business audit won't make it disappear. In fact, avoidance can exacerbate the problem and lead to additional scrutiny from the IRS. It's crucial to confront the audit head-on and take proactive steps towards resolution.
Assess the Situation: Start by carefully reviewing the audit notification and understanding the specific issues being examined. Whether it's income discrepancies, expense deductions, or other areas of concern, gaining clarity on the scope of the audit will help you develop a targeted strategy for response.
Gather Documentation: The key to a successful audit defense is thorough documentation. Collect all relevant financial records, receipts, invoices, and other supporting documents that substantiate your business activities. Having organized and comprehensive documentation will strengthen your position and help you navigate the audit process with confidence.
Cooperate with the Auditor: While facing an audit may seem intimidating, cooperation with the auditor is essential. Be responsive to requests for information, provide clear explanations when needed, and maintain open communication throughout the process. A cooperative attitude demonstrates your willingness to comply with IRS regulations and can positively influence the outcome of the audit.
Seek Professional Guidance: Dealing with a small business audit can be overwhelming, especially if you're unfamiliar with tax laws and audit procedures. That's where a qualified tax professional like Ben Butterfield will make all the difference.
Ben Butterfield, founder of BPB Tax Resolutions, specializes in assisting small business owners facing IRS audits. With a decade of experience in tax resolution, Ben understands the nuances of IRS audits and provides expert guidance tailored to your specific situation.
With his in-depth knowledge of tax laws and audit procedures, Ben will be your advocate throughout the audit process, ensuring your rights are protected and your interests are represented.
Don't face a small business audit alone.
Call Ben Butterfield today for a free consultation and take the first step towards resolving your audit concerns with confidence.
What Should I Do if I have an IRS Balance?
Are you feeling the weight of an IRS balance?
If so, you're not alone. Many people find themselves in this situation, unsure of the best course of action to resolve their tax issues. However, there's no need to face it alone. With the right guidance, you can confidently navigate through this challenge and find a solution that works for you.
What Should I Do?
Face the Issue: Ignoring your IRS balance won't make it disappear. In fact, delaying action can lead to additional interest and penalties. It's essential to address the issue head-on and take proactive steps towards resolution.
Don't Ignore It: Ignoring an IRS balance will only make matters worse. The longer you delay addressing the issue, the more interest and penalties you'll accumulate. Instead, face the situation head-on and take proactive steps to resolve it.
Assess Your Situation: Start by assessing your financial situation and understanding the root cause of your IRS balance. Did you miss filing a tax return? Or maybe you couldn't afford to pay your taxes in full? By understanding the underlying factors, you can develop a targeted strategy for resolution.
Explore Payment Options: Contrary to popular belief, the IRS offers various payment options for individuals with tax balances. These include installment agreements, offers in compromise, and currently not collectible status, among others. Ben Butterfield can help you explore these options and determine which one aligns best with your financial circumstances.
Stay Compliant: Once you've entered into a payment arrangement or reached a resolution with the IRS, it's crucial to stay compliant moving forward. This means filing your tax returns on time and making timely payments according to the agreed-upon terms. By demonstrating good faith and compliance, you'll avoid future tax troubles.
Seek Professional Help: Dealing with the IRS can be complex and intimidating, especially if you're unfamiliar with tax laws and procedures. That’s why it’s vital to have a tax expert on your side. In fact, the IRS prefers working with tax resolution professionals, and you’ll usually get a far better outcome with a seasoned expert on your side…
An expert like Ben Butterfield.
Ben Butterfield, founder of BPB Tax Resolutions, provides comprehensive tax resolution services to people facing an IRS balance. He understands the complexities of the tax system and has the expertise necessary to guide you through the settlement process.
With his personalized approach, Ben will be your advocate for dealing with the IRS.
Don’t face the IRS on your own.
Call Ben Butterfield now for your free case evaluation!
Working With Tax Attorneys in Southwestern Iowa
Navigating tax matters in Southwestern Iowa can be a daunting task. Fortunately, you don't have to tackle these complexities alone. Enter Ben Butterfield, a seasoned tax expert with over 9 years of experience in tax resolution, serving the residents of Southwestern Iowa.
As the founder of BPB Tax Resolutions, Ben Butterfield has established himself as a trusted authority in resolving tax issues in the region. Leveraging his extensive expertise and strategic partnerships with skilled attorneys, Ben leads a dynamic team dedicated to addressing the unique tax concerns of Southwestern Iowa residents.
Collaborating with experienced attorneys allows Ben Butterfield to offer a comprehensive approach to tax resolution. Together, they meticulously explore all available avenues to provide tailored solutions to even the most complex tax problems.
Discover the specialized services offered by BPB Tax Resolutions for residents of Southwestern Iowa:
- IRS Notice Resolution
- Tax Lien Assistance
- Offer in Compromise (OIC) Consultation
- Installment Agreements
- Innocent Spouse Relief
- Audit Representation
- Penalty Abatement
- Bank Levy Release
- Wage Garnishment Release
Ben Butterfield's commitment to client satisfaction is amplified by his strategic partnerships with attorneys. By crafting personalized strategies, they not only address immediate tax concerns but also safeguard the long-term financial well-being of Southwestern Iowa residents. This collaborative approach has earned Ben a reputation for delivering results and securing favorable outcomes for his clients.
If you're facing tax challenges in Southwestern Iowa, know that help is available. With Ben Butterfield and his team of seasoned attorneys by your side, you can confidently navigate the intricate tax landscape of the region.
Don't let tax troubles overwhelm you. Let BPB Tax Resolutions guide you towards resolution and a brighter, financially stable future.
Take the first step towards resolving your tax issues by calling BPB Tax Resolutions at (402) 779-7399 today!
Taxation of Gambling Winnings in Nebraska
Have you run into tax problems because of gambling winnings? Winning big can be incredibly exciting, but there are a host of tax issues that can come with it.
Whether you're an occasional player or a seasoned bettor, grasping how the government perceives your winnings is important.
Unraveling the Deduction Maze: Essential Insights
All gambling earnings are deemed taxable income. The IRS, however, permits you to offset those gains by itemizing your gambling losses.
However, it's not merely a matter of subtracting losses from winnings. To claim these deductions, you must meticulously itemize them on your tax filings. And remember, your recorded losses must not surpass your reported gambling profits. It's a delicate balancing act between federal and state stipulations, but with a bit of guidance, you can traverse it adeptly.
Handling Tax Disputes: Your Ally in Defense
Now, what if the IRS probes into your declared winnings? Don't panic; BPB Tax Resolutions is here to fight them for you.
From IRS audits to inquiries from the state, BPB Tax Resolutions will help you with even the most challenging tax disputes. They will fight for the best possible resolution in your case, giving you time and energy to focus on your life.
Why Trust BPB Tax Resolutions and Ben Butterfield?
The team at BPB Tax Resolutions, under the leadership of CEO Ben Butterfield, go above and beyond to get you the best possible result.
With 10 years of experience and a commitment to personalized service, Ben and his team will guide you through your tax resolution case and fight the IRS for you.
If you're ready to regain control of your tax situation, Ben Butterfield is your advocate in your fight against the IRS. Call him today for a risk-free case evaluation!
The IRS Sent Me an LT38 Notice. What Do I Do Now?
When you get an LT38 notice from the IRS, it's not just another piece of junk mail. It's a wake-up call, a reminder that your tax matters demand immediate attention.
The IRS is back in action after the pandemic, and your financial standing hangs in the balance.
The Time to Act is Now
Let's get straight to the point: procrastination isn't an option here. Each day you delay addressing this notice, your tax debt compounds. This is a serious matter that requires your prompt action.
Start by thoroughly examining the contents of the LT38 notice. Understand the implications of the outstanding balance it describes, and why the IRS is contacting you. Ignoring the issue won't make it disappear–in fact, it could exacerbate the situation.
If you've been procrastinating on filing overdue tax returns, consider the LT38 letter your last warning. The longer you wait, the deeper the hole you're digging for yourself. Take control before matters spiral further out of control.
Payment Options
While settling for less than the full amount owed would be optimal, it might not be an option for everyone. Nevertheless, delaying payment only results in accruing more interest and penalties. It's imperative to address your tax obligations promptly, even if full payment isn't immediately possible.
Financial hardship is a valid concern. The IRS offers options for people facing difficulties, such as payment plans or debt settlement arrangements. These options could be a great asset in helping you relieve your tax debt.
Seek Professional Help
Feeling overwhelmed? Seeking professional assistance can provide clarity and guidance in navigating your tax situation. Don't hesitate to reach out for help from experts who understand the complexities of tax matters.
Enter Ben Butterfield and the team at BPB Tax Resolutions. With their expertise and dedication, they'll work diligently to resolve your tax issues efficiently and effectively. Don't wait until it's too late – take action now to secure your financial future.
