In face of tighter enforcement measures that the IRS is expected to use to strengthen its tax collection and monitoring policies, tax problems have become, if possibly, more stressful to deal with. Among truck drivers, in particular, the need to immediately address tax problems is more pressing than it has been in previous years. However, given the present economic climate, dealing with tax problems can prove hard for truckers, truck drivers. This is where tax relief for truck drivers plays an integral role. The IRS provides tax relief for truckers, provided that they certain law mandated qualifications and criteria.

Available relief for drivers

Truck drivers have at their disposal the same kind of tax relief available to all citizens of the United States. The first of these relief services is back tax return assistance. Back taxes are taxes accumulated from years of unfiled returns, delayed filings, or missing records. If left unattended, back taxes can cause major problems for a truck driver because he or she is likely to be considered evading his or her responsibilities. If you have a good amount of unfiled returns in your hands, you can set your record straight through services offering tax relief for truckers. Our firm, Mike Habib, EA, offer such service basically helps our clients to reconstruct tax records and prepare past due tax returns.

Another tax relief for truck drivers is installment agreement, which can be especially helpful for truckers with excessive tax debts. This type of tax relief service would allow a truck driver who is indebted with the IRS to pay his or her owed taxes through small installment payments. The amount to be paid for each installment and the repayment schedule would be based on the truck driver’s current financial status. This setup, along with the amount and schedule, can be negotiated with the IRS given that the truck driver meets certain qualifications. If you are yet unfamiliar with this kind of tax relief for truck drivers, you can retain our tax professional services to help you explore it.

Truck drivers also have the option to get relief through offer in compromise or OIC. This is perhaps, the best kind of tax relief for truckers since it would allow them to pay less than what they actually owe the IRS in tax debt and back taxes. On the same note, OIC comes with the strictest qualifications, rules, and guidelines to ensure that only qualified truck drivers and tax payers in general are able to avail of it.

Related to offer in compromise is a tax problem resolution called penalty abatement. This is actually a step above OIC in that it opens the possibility of eliminating penalties on the tax debt if the taxpayer is able to present reasonable and justifiable cause explaining why he or she accumulated the tax debt in the first place. Some examples of reasonable and justifiable cause accepted by the IRS are family sickness, natural disasters, and other situations that are beyond a person’s control.

Regardless of the type of relief for truckers that you can avail of, what is important is that you try and avail of one. Tax problems are hard burdens to live with. They are among the many number of things that you cannot live normally with. By seeking tax relief, you free yourself of tons of headache and worries. More importantly, you would no longer fear the IRS tax letters coming in, the phone ringing, or the doorbell ringing.

Knowing the right one

Before you seek tax help for truck drivers, however, you must know what kind to of option is best suited for your situation. This is because every kind of financial situation requires a different approach in the same way that each kind of tax relief approach comes with requires different qualifications. It is best to present your case to a tax professional so he or she can advice you on which tax relief is most suitable to your position.

Mike Habib is an IRS licensed Enrolled Agent who concentrates his tax practice on helping individuals and businesses solve their IRS tax problems. Mike has over 16 years experience in taxation and financial advisory to individuals, small businesses and fortune 500 companies.

The tax relief industry has experienced significant change over the past several years. As the economy worsened and Americans faced increased financial pressures, many people and businesses sought relief from the strain by not paying their taxes. In response, an enormous number of tax companies started sprouting up to absorb the unprecedented demand for tax services. Tax gurus on late-night TV and radio advertise, they’ll “settle your tax debt for pennies on the dollar.” Despite being tax geeks ourselves, we couldn’t make sense of which tax companies are good and which are bad.

Tax Relief Firms – Choosing the Right One For You

Under the broad umbrella of “tax relief firms,” there are three types of professional firms: Law firms, CPA Firms, and Hybrids. The first two types are self-explanatory, and since there’s really no industry-standard name for the latter category, calling them a “hybrid” is probably acceptable. But which of the three categories is right for you?

Law Firms

As you know, a law firm is made up of ONLY lawyers. A law firm may employ assistants, like paralegals, but a tax attorney is ALWAYS the person ultimately responsible for any tax work performed. All tax attorneys employed by a law firm are subject to the ethics rules and disciplinary action of their state bar. A tax attorney may generally represent any client in any state on any U.S. federal income tax matter.

The pros to employing a law firm are that you can feel comfortable that (i) an attorney is the one ultimately responsible for your tax matter, (ii) you have a clear method to file grievances (i.e., with the sate bar) if the attorney screws up, and (iii) lawyers are subject to strict ethics rules so they should work according to the highest of standards. The cons are that law firms generally are more expensive than the other two types of tax firms. Additionally, some law firms (or attorneys) do not focus solely (or even primarily) on tax related work, so they may lack some of the skill and expertise needed to fight the IRS. Just ask your attorney what other types of work he or she performs, and that will give you a sense of whether tax (and specifically, tax relief) is his or her specialty.

CPA Firms

At CPA firms, you will obviously find CPAs (i.e., certified accountants), but you may also find tax attorneys. Like law firms, it’s nice to know that at CPA firms, there is a professional behind the scenes who is ultimately responsible for any tax work performed on your behalf. The pros and cons of CPA firms are similar to those of law firms, except the method of reporting grievances with CPAs isn’t as well defined (but exists nonetheless) as it is for attorneys. CPA firms are generally a little less expensive than law firms.

“Hybrid Firms”

The hybrid firms include tax relief firms that are not law firms or CPA firms. Tax relief firms in this category employ a mix of tax professionals, including tax attorneys, CPAs, and so-called “Enrolled Agents.” Enrolled Agents are tax professionals certified by the IRS. They are neither attorneys nor CPAs, but are tax professionals that the IRS has concluded (either through examination or experience) that they are qualified to represent taxpayers before the IRS.

Many tax relief firms fit in the “hybrid” category. Lots of the tax firms that advertise on the internet and radio are made up of tax attorneys, CPAs and enrolled agents and thus are hybrid tax relief firms. The pros are that these companies generally charge less for tax relief work and are very good at performing tax services and working with IRS since tax controversy work is their specialty. The cons are that unlike law firms and CPA firms, these hybrid firms are largely unregulated, so there’s no clear channel (like, for example, the state bar for attorneys) to file grievances. Since they are unregulated, many of the hybrid firms are just plain bad and if they rip a client off, there’s little recourse, except the traditional routes of going to the BBB or other quasi-regulatory bodies.

There are various new tax relief credits and deductions that are available to small businesses. These are an ideal opportunity for any small business to reduce their tax liabilities. Some of these available tax relief options are explained here:

Small Business Healthcare Tax Relief

One of the new and major tax credits is the Small Business Healthcare Tax Relief. This tax credit is given to small businesses and small charities that employ a fair number of low income earning employees. The credit allows for such qualifying organizations to receive a tax break for the premiums that they have paid for their employee’s Healthcare. This tax credit runs from 2010 to 2013. The qualifying tax credit amount is a maximum of 35% of the premiums paid in a tax year for small businesses and a maximum of 25% for qualifying tax exempt nonprofit organizations. However, for the two qualifying years after 2013, the tax credit will be a maximum of 35% for qualifying nonprofit organizations and 50% for qualifying small business. The credit is set such that the smaller businesses and nonprofits with less than 10 full time employees and paying a wage-average of $25,000.00 annually get the greatest tax credit (the credit reduces for larger businesses and nonprofit organizations). For a small business or nonprofit organizations to qualify for this Healthcare tax credit, they must have a maximum of 24 full time employees and must also have a maximum annual average wage of $49,999.00.

Tax Deduction for Healthcare Cost of Self-Employed Individuals

The tax deduction for self-employed individuals who pay for their own Healthcare is another new tax relief that takes effect in 2011. The tax relief is part of the Small Business Jobs Act of 2010. Under this relief, the self-employed individual may reduce the taxable income for a given tax year with the premiums paid for his or her healthcare. The Healthcare coverage needs to be registered under the business name of the self-employed.

Tax Relief on Capital Expenditure for Small Businesses

This tax relief enables small businesses to claim the expense costs incurred in purchasing certain business assets under IRS Schedule 179-Property. Ideally, such expenses should be depreciated over several years. However, with this tax relief, a business can claim expenses up to $500,000.00 of the first $2 million of the cost of the property. The tax relief applies for both tax years 2010 and 2011. Come 2012, the allowed maximum that a business can deduct for capital expenditure will come down to $125,000.00.

Bonus Depreciation Tax Relief

Besides the 179-property relief, a small business can also deduct a bonus depreciation of 100% of the cost of qualifying assets if such assets were purchased after September 8, 2010 and put into use before January 1, 2011

Limitation on Car Expenditure

For business cars, there is a cap on the total amount of deductions that you can place both under the 179- Property tax relief and the bonus depreciation relief. For passenger cars, the total amount of deductions you can make in the first year of purchase is $11,060.00 and if you did not deduct the bonus depreciation relief, it goes down to $3,060.00. For trucks and vans, the maximum amount that you can deduct after making the bonus depreciation deduction is $11,160.00 and if you did not take the bonus depreciation deduction, you can deduct a maximum of $3,160.00 on the first year of purchase.

There are different pension plans in action, and the plan that will be applicable to you would be dependent on a number of factors. At first, the choices and options may appear mind-boggling and overwhelming to you, but once you make up your mind to give some time to these tax relief schemes, you will be amazed to look at the sheer number of choices you have. For instance;

There are two types of pension plans; company pension plans and personal pension plans (PPP).

In company pension plans, you don’t have to worry about anything; your contributions for the pension will be automatically deducted, and tax deductions would be made in the similar manner. However, in personal pension plans, things are a little bit complicated. Let ‘s try to understand personal pension plans (PPP) in somewhat more detail.

How personal pension plans work?

If you are using a personal pension plan, then the relief that you will get would be depend on a number of factors. One of the most important factors is your tax payer status. That simply means, the PPP will give you tax relief depending on whether you are a high rate tax payer or a basic rate tax payer.

If you are one of the basic rate tax payers at 20% and make contributions to the personal plan, then most of the tax relief that you will get will be dependent on your pension provider. They will help you to claim the tax back from the relevant office. For instance, if you are paying the basic tax rate of 20%, you will get 20% tax back on your contributions. That simply means for every £100 you will get £120 in your pension fund. Similarly, if you are a higher rate tax payer at 40%, you will get a tax relief of 40%. However, the tax relief is available for only that amount of income that is taxed at 40%.

It’s also worth mentioning here that the tax relief you will get is claimed differently. While the initial 20% would be claimed from HMRC (Her Majesties Revenue and Customs), but the other 20% you have to claim from your tax office by showing them all the evidences of the payments that you have made in the pension relief scheme.

If you are a non tax payer, you can still get the tax relief by making these pension contributions. However, there is a limit of £2,880 a year, but you will still get the basic tax relief of 20% on your contributions. It simply means that if you invest £2880, your invested money will automatically be increased to £3,600.

Pension tax relief limits

One of the most important things that you should always remember to save yourself from tax penalties is that you should always be aware of the limitations while making your contributions. If you make contributions under the annual allowance, then you can get as much as 100 % tax relief on your contributions. You are eligible for 100% tax relief if you have paid the contributions before the age of 75 and all contributions are under annual allowance.

It’s important to note here that for the year of 2010-2011, the tax allowance is £255,000, as well as for the year of 2009-2010, it was £245,000. Also, if you have made contributions above the annual allowance and a separate life-time allowance; you may have to face tax penalties. There are some changes in the 2009 Budget. As from April 2011 the amount of tax relief will taper if your income is £150,000 or more. These changes are introduced on 22 April 2009, because it came to the notice of the tax department that some people were making extra pension contributions, and they wanted to prevent them from receiving full tax relief before April 2011.

No matter which pension investment scheme you choose, but you cannot take away the fact that this is one of the most important things you do for your retirement planning and also for getting a substantial amount of tax relief.

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Tax-relief attorneys are attorneys who help taxpayers with tax-related issues and, in particular, assist taxpayers with obtaining all of the tax relief that they are eligible for from the federal and state tax authorities. Most tax-relief attorneys focus on providing their clients with services related to offer in compromise, full audit representations, and penalty abatement petitions. Tax-relief attorneys work as private practitioners or are employed with tax firms. Most of these tax firms have dedicated tax personnel who also undertake preparation of tax forms and filing of taxes, apart from helping clients with obtaining tax relief.

The federal and state tax authorities have numerous tax-relief programs that are aimed at reducing the tax burden on the taxpayers. Most of the tax-relief measures come under property tax relief, income tax relief, and relief for small business owners. However, working through the tax forms and finally obtaining the eligible tax relief is quite a challenge to many taxpayers. Tax-relief attorneys are particularly helpful in this situation since they are trained in taxation and law and are aware of the constant changes to tax regulations and legislations both at the federal and state levels. Since tax relief is targeted in a large part at taxpayers belonging to the low income and senior citizen categories, the services of a tax-relief attorney can be very crucial in ensuring that the tax relief is quickly and easily obtained.

In short, tax-relief attorneys are professionals who help with resolving tax-related issues. The broad services that they provide can be listed as settling tax debt for a fraction of the debt; stopping wage garnishment, tax levies, and property seizures; settling state and payroll tax; trust fund recovery; tax planning; audit representation; and investment advice. So, even though tax-relief attorneys focus on providing services related mostly to tax relief, they also engage in other tax-related work.

Tax-relief attorneys are attorneys who help taxpayers with tax-related issues and, in particular, assist taxpayers with obtaining all of the tax relief that they are eligible for from the federal and state tax authorities. Most tax-relief attorneys focus on providing their clients with services related to offer in compromise, full audit representations, and penalty abatement petitions. Tax-relief attorneys work as private practitioners or are employed with tax firms. Most of these tax firms have dedicated tax personnel who also undertake preparation of tax forms and filing of taxes, apart from helping clients with obtaining tax relief.

The federal and state tax authorities have numerous tax-relief programs that are aimed at reducing the tax burden on the taxpayers. Most of the tax-relief measures come under property tax relief, income tax relief, and relief for small business owners. However, working through the tax forms and finally obtaining the eligible tax relief is quite a challenge to many taxpayers. Tax-relief attorneys are particularly helpful in this situation since they are trained in taxation and law and are aware of the constant changes to tax regulations and legislations both at the federal and state levels. Since tax relief is targeted in a large part at taxpayers belonging to the low income and senior citizen categories, the services of a tax-relief attorney can be very crucial in ensuring that the tax relief is quickly and easily obtained.

In short, tax-relief attorneys are professionals who help with resolving tax-related issues. The broad services that they provide can be listed as settling tax debt for a fraction of the debt; stopping wage garnishment, tax levies, and property seizures; settling state and payroll tax; trust fund recovery; tax planning; audit representation; and investment advice. So, even though tax-relief attorneys focus on providing services related mostly to tax relief, they also engage in other tax-related work.

IHT

The amount of revenue that the UK Government derives from Inheritance Tax is growing all the time with significantly more estates being liable to the Tax. If your estate is worth more than £325,000, your beneficiaries will be liable to pay a 40% taxation on the entire amount above that threshold.

As the Government becomes aware of the growing value of this tax, they are focusing more on removing options open to people to reduce this burden. Examples of this are the recent changes to trust legislation.

There are never the less a number of ways in which you can reduce the impact of IHT and it is worth trying to take advantage of as many of them as you can, to ensure you pass on as much of your estate as possible.

Small Tax Relief Measures

Gifting it away

One of the easiest ways to start minimising your tax burden is by giving away gifts to your loved ones during your lifetime. There are a number of gifts that you can make without incurring a tax liability. You are able to make as many small gifts of less than £250 as you like and in addition you can gift a further £3,000 per annum. You can also make unlimited gifts to certain organisations such as charities or political parties.

If you make larger gifts these may either be a chargeable life time transfer if the gift is to a discretionary trust or a potentially exempt transfer (PET). If the gift is a PET then there will be no tax liability providing you survive for at least 7 years from the date of the gift, however, if you die within 7 years, initially the gift will reduce your nil rate band. If the gifts in aggregate exceeded the Nil Rate Band, the excess may be subject to taper relief.

Taper relief has the effect of reduce the amount of tax payable if you die between 3 and 7 years after the gift is given. If you pass away 7 years or longer after the gift was given, the recipient and your estate do not pay IHT on the gift. Any gifts made within 3 years of your death will be subject to a 100% tax liability; however this taxable amount reduces from year 4 to year 7,translating to between 80% and 20% tax liability. Furthermore, any gifts of any value given to your spouse or civil partner are not subject to IHT.

There are other gifting allowances which include wedding gifts to your children, grandchildren or anyone else of £5,000, £2,500, and £1,000 without paying IHT. You can also give £250 to as many individuals as you want in a year without paying IHT, as long as those individuals do not fall within another exemption.

Charities

You can also endow or gift a charity, museum, university or community amateur sports club with any size gift as these are also IHT free. In fact, if you gift up to 10% of your estate, you can qualify for a 4% reduction in IHT.

Political Support

Gifts to a political party are exempt from tax as long as the party has 2 members in the House or 1 member and at least 150,000 votes in the previous general election.

Primary Residence

Your primary residence, if gifted to your spouse, is tax free. Gifted to anyone else, however, it is subject to the 7 year gift rule. However starting in 2017, £100,000 of the value of the home will be considered tax free within the calculations of the state. This amount increases to £175,000 in 2020 and follows the consumer price index thereafter. This increased benefit is gradually withdrawn for estates worth more than £2m.

The saying “you cannot take it with you” is one that is relevant when it comes to the burden of IHT. Giving away your estate is a selfless act and may enable you to bring your estate to a level below the threshold of tax. However, if you want other alternatives or have a much larger estate to provide for your spouse or children, there are two more favourable options.

Business IHT Relief

The first of the two is a direct Business relief which amounts to 50% or 100% IHT relief. Your estate can claim a 100% business relief from IHT on any unlisted company you own or have shares in. A listed business can result in a 50% relief if you control more than 50% of the outstanding voting shares. Your estate could also receive 50% relief for business-related land, buildings or machinery that you owned or that were held in a trust that benefitted the business. However ownership in investment companies, realty companies, non-profits or a business being sold or wound up do not qualify for relief.

Enterprise Investment Schemes (EIS)and Business Relief

One the best ways to mitigate your tax liability is to invest in an EIS or SEIS. Not only do you reduce the impact of IHT but you also get relief against income tax as well as your capital gains taxes on EIS qualifying shares. EIS is an Enterprise Investment Scheme, which encourages investment in small and medium sized trading companies that would otherwise find it difficult to raise capital funding through regular channels.

These shares must be ordinary shares without preferential rights upon winding up of the company, but you can invest an unlimited amount, saving up to £300,000 income tax in any given yearsubject to the limit of 30% income tax relief against the amount of your investment. This is an amazing tax liability mitigation tool. Not only do you receive a tax savings on your annual income but you can also receive 100% IHT relief as long as you have held the investment for a minimum of 2 years at the time of death. You can defer a Capital Gains Tax Liability into an EIS and if you still own the shares when you die, you will never have to pay the Capital Gains Tax.

In order to qualify for the EIS you must not own more than 30% of the shares of a company or be employed by that company. You must also pay for the shares in total to receive the benefits.

Start planning to mitigate your IHT risk by actively gifting parts of your estate and investing in a quality EIS.