Steven Klitzner with Florida Tax Solvers joined Good Morning Keys on Keys Talk 96.9/102.5FM yesterday morning to talk about taxes.
April 15 is coming up really fast.
Klitzner said, “If you can’t get it filed on time, there are ways to get an extension. Now you don’t get an extension to pay, but you can get an extension of file. And the reason that’s so important is that for every month you don’t file, and if you owe money, you’re hitting a four and a half percent penalty. That’s going to max out when it hits 22 and a half percent. So the idea is to get it filed. And a lot of this can be answered on the IRS website. They really do make the IRS site pretty easy to understand. It’s irs.gov. Don’t go to .com that’s probably a scam. It’s a form 4868 and you can mail it in. You can file it. You can e file it, but that buys you six months to file and if you can’t get it done by April 15, do that.”
The IRS will always contact you through the mail.
Klitzner said, “It’s going to be by letter, not email by letter, and nowadays they don’t even come knock on your door first. If they do, they’ll show you ID. But if you get a phone call, it’s because you’ve ignored the letters. You just need to verify who’s calling. If you get a phone call from somebody, you’re not sure they’re legit, get their phone number. It should be a local number. You can Google the number to make sure it’s legit, or go to the IRS website. I have no problem with giving somebody free advice. A lot of people think, well, it’s an attorney. He’s going to charge as soon as I call him on the phone, he’s going to have a way to get into my credit card and start charging me without me even knowing. It doesn’t work that way. If it’s something I can give you a little advice on, then I’ll be happy to do it, or at least lead you in the right direction.”
The IRS does have a free filing system.
Klitzner said, “They have IRS Free File that’s for people whose adjusted gross income is under $84,000 but there is some software we could fill it in, even if it’s more than that. And there’s other places. If you’re over 60, if you’re in the military, they have certain programs that will do that now, if you’re trying to do it, and it’s not just a simple return, because even Turbo Tax will let you do a simple w2 return for free. But if you’re having trouble, even if you buy the software, invest a few dollars, go to a legitimate tax preparer, Enrolled Agents, CPA, somebody that doesn’t have the line out the door, that’s a bad sign, but somebody that knows what they’re doing, even like H&R Block and those companies and spend a couple extra dollars just to prevent a headache down the road.”
Klitzner has a flat fee.
He said, “Once they determine what we’re going to do, it’s a flat fee. People would come to my office and I’d say, okay, here’s the fee. And they go, okay, let me go downstairs and get my checkbook or my credit card, because I think they were afraid that as a lawyer, I would use some Jedi mind tricks or something and force them to sign. And so they needed at least to have the buffer of going downstairs. And the good thing is, nobody ever left. I was always looking in the parking lot. Are they just going to leave? They always came back up, but they were always afraid to actually bring the form of payment. Think about you go to the supermarket and you’re at the checkout counter and you say, hold on. Let me just go to the car. I wasn’t sure I was actually going to do this. I’m going to get my money and I’ll pay for it. One guy years ago, I remember, I don’t remember the name of the beer company, but they had these vintage cans or bottles of beer, and he was some sort of distributor. He brought me a very nice assortment of beer, like some collectible. Now, some people will want to pay. I’ve had people say, I’ll give you my art. And I said, well, the last time I looked Florida Power and Light did not accept art as payment, but I’ll check on them again. A lot of people, they like to barter. But the problem with bartering, when you think about it, is, if someone says, listen, I’ll redo your bathroom, what are you going to do if you don’t like how they’re doing the work? You can’t fire them. You’re kind of stuck with how they do it. If you do barters, I don’t do bartering. When we talk about fees, I have to have value. If someone calls me, if I have no value, I really don’t want the case. I don’t want somebody at the end of the case going, what did I even need you? So I tell people right up front, this is why you need me. Sometimes I say to people in your particular case, fortunately, most people will need me, in your particular case, you don’t need me. If you want me to do it, I’ll be happy to do it. But I just want to be clear, you could theoretically do this yourself. And some people do pay me because they don’t want to wait on hold and they don’t want to go through paperwork. They just want me to do it, but most of what I do is more complex than people think. I am not just filling out forms and sending them in and seeing what happens. I’m actually doing the work, coming up with a plan and doing what’s best for my clients who owe the IRS.”
Finding a resolution really is worth the investment.
Klitzner said, “Too many people call me after they’ve talked to the IRS, whether they’ve called the 800 numbers, spoke to the revenue officer or revenue agent handling their their collection or audit case, and they say, not that they would ever lie, but they say things that will haunt the case for a long time to come. It’s better not to check it out, see what happens and then get to me. Just let me take care of it from the beginning, it’ll be a lot less stressful. Because there is a lot of stress, even talking to the IRS, most of them, they’re just trying to get to the right answer. But some of them can be, whether they mean to or not, be very overwhelming and very scary. Anything you say, can and will be used against you. And I’ve had audit cases where I’m making an argument, for instance, that a business is not a hobby, because if it’s a hobby, you can’t take the same losses. And I’ve had the revenue agents say, I spoke to your client before he represented you. He told me this, this, this and this. And it’s like, okay, case over, he said the wrong things or filled it out wrong. Because a lot of times what you think is important and going to help you that you emphasize has the exact opposite effect.”
Estimated payments can be tricky, too.
Klitzner said, “What you’re supposed to do, if you’re a realtor, if you’re self employed, if you’re a contractor and you have no income, where you’re having withholding, you’re supposed to make estimated quarterly payments during the year. April 15 is not the day you’re supposed to pay all your taxes. You’re supposed to pay during the year, which is why the IRS would love everyone to be an employee, and you have to make payments starting April 15 and then June 15, September 15, January 15. And there’s a formula. For the most part you have to pay in, it varies between 90 and 110%, but you figure out what that is based on your income the year before, if you’re making about the same amount of money or more, you have to make those payments in quarterly so that next year, you may owe a little, you may not owe a little, but you’re not going to get hit with an extra penalty for not paying in during the year.”
Has the tax code changed for this filing year?
Klitzner said, “There are some changes. There are some ways for taxpayers to save some money, and a good accountant knows what it is. There’s just been some increases and some deductions. So I think for the most part, the average person, if you made about the same as you did the year before, you’re not paying as much in the way of taxes. It’s not a fortune. But listen, every time you can save a few hundred dollars or a couple thousand with the IRS, it’s a win.”
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