Texas Corporation Compliance

Posted on by PM Editor

Corporate compliance is a term that people have started using more frequently in the last few years. This is quite natural because the number of corporations in Texas is growing rapidly. Unlike in the past, companies today are not free to do what they want. The laws and regulations are here to create a balance between rationality and ethics. For instance, companies can’t ask their employees to work for countless hours per week without a break just because there is a high unemployment rate in the area and they can find workers willing to do this. In addition, they can’t pollute the environment just because this will help them cut the expenses.

Industry standards, agency law, state laws and federal laws are the forms of the law and regulation for corporations in Texas. So, those who will form a corporation must take specific steps regularly in order to keep their company in compliance. So, there are some specific requirements that every Texas Corporation must meet.

Annual Report

This is a detailed report that has one objective – to provide information to shareholders as well to other interested parties about the activities and financial transactions and overall performance of the company in the past year.

Franchise Tax Report

The franchise tax represents a privilege tax that every taxable entity in Texas must pay. The annual franchise tax report is due May 15th. In case this day falls on a holiday or weekend, the due date is moved to the next business day. So, the franchise tax report is the report to the state of Texas that includes information about the annualized total revenue and calculation of the tax you are paying as a company.  You can send the franchise tax report in a few different ways – with the help of certified electronic submission software providers, electronic services or simply download and print the necessary forms and mail them. There are a few forms to choose from and that’s why we recommend using professional help in this process.

Texas Business License

According to some sources, there are more than 250 occupational, professional and facility business licenses that people and organizations in Texas can obtain from the state. There is more than one reason why business licenses were introduced in Texas. They are here to make the identification process of companies easier and to add a sense of responsibility and accountability for the owners’ activities. In addition, they make taxation simpler. Finally, they keep the general public’s health and safety protected.

Texas Corporate Records

The principal office of any corporation in Texas is the place where the corporate records must be stored. These records can include different kinds of items, but there are a few of them that must be available to the authorities at any time. These corporate records include records of accounts and books of accounts, a clear list of past and current shareholders with their personal information, minutes of shareholder and director meetings and a stock transfer ledger with information about the initial issuance of shares as well as information about all the transfers.

 

 

 

 

 

Tax Debt Relief

Posted on by PM Editor

There are many reasons why people are unable to pay their taxes – economic setbacks, loss of job, disability, illness etc. In situations like this, many people believe that paying certain taxes and debts is not that important. But, the fact is that people have to pay their taxes because IRS can use forced collections methods to get this money from you.

People need good tax debt solutions in order to prevent or fight the aforementioned IRS collection methods like IRS tax liens, IRS bank levies, interest and penalty abatement, wage garnishments and more. (1) Keep in mind that any taxpayer can get in a situation where they have to face serious tax problems. There is a chance that you have not be contacted by the IRS for a few years, but out of nowhere, you can get a notice of intent to levy mail. From that moment on, you will have to figure out how to avoid the IRS collections methods.

Staying Away From Serious Tax Problems

Preventing things is much smarter than trying to fix them. You should address this issue from the start. In order to achieve this goal, you have to act fast and identify the problems early on.

First of all, you should get in touch with the IRS in case you can’t pay taxes when you file. It turns out that the IRS is willing to assist individuals who can’t pay debts by providing a few tax debt solutions. By doing this you will avoid critical tax problems. Explain why you are unable to pay the taxes and they will help you.

Next, you should file and pay the taxes on time in case you want to avoid IRS collections. In cases like this, you won’t need any tax debt solutions. Remember that if you are able to pay the taxes, you must file and pay that debt.

IRS Collections Actions

If you have tax debt, the IRS can use a few collections actions/methods to get that money from you. For starters, they are using Wage Levy. This method is used frequently and it can seriously affect your everyday life. Namely, this method can take up to 75% of people’s paychecks. (2) So, you should give away between 50% and 75% of your paycheck until the debt is cleared. The worst part is that they usually don’t take your monthly bills into account. This is a serious situation and that’s why it is highly recommended to use professional assistance like the one provided by TaxPM.

Additionally, they can use bank levy and asset seizure.

Tax Debt Relief Solutions

There are a few tax debt relief solutions that you can use. For instance, the installment agreement allows you to pay the debt over a pre-determined period of time. There’s also an Offer in Compromise which allows you to pay a portion of your debt, but the IRS will consider that you have paid the entire debt.

These tax issues can be quite complex and that’s why it’s a smart idea to get professional tax advice from companies like TaxPM.

 

 

Assistance To Appeal Your Property Taxes

Posted on by PM Editor

There are seven States with no income tax. (1)  Of course, Texas is one of them and this is one of the reasons why many people want to move to Texas. However, this doesn’t mean that there are no other taxes involved. Unfortunately, Texas has one of the highest property taxes in the United States. The tax rate for this tax is 1.94% on average. (2) However, it turns out that many of these property tax bills are not accurate and individuals have the right to appeal their property taxes.

Why appeal?

Let’s take an example. If your property is assessed at $200.000 and your property tax is cut by 5% this means that your assessed value is reduced by $10.000 which can save you around $200. Of course, it all depends on the property tax rate and the value of your property. So, in case you believe that your property has been valued higher than it is, there is a chance to appeal to the tax authority. People can file a property 30 days after they have received the appraisal district notice or until May 31st.

Property Tax Appeal in Texas – How to File One?

Just to be clear – you have to disagree with the appraisal deliver by the authorities in order to file an appeal. This protest must be delivered to the appraisal review board. In most cases, you will be called to a meeting and in the majority of cases, the issue will be resolved during this informal session. Every meeting ends with a written notice that you can use later in the process. If you are unable to resolve this issue during this meeting there is a complex legal procedure.

How to get the most from appealing your personal property taxes?

There a few things that every taxpayer can do to get prepared for their appeal. For instance, it’s a smart move to talk to a district appraiser in your area and get information about the appraisal process. It’s also wise to analyze the appraisal. Every measurement and the description, in general, should be correct. Sometimes, a small technical error can lead to huge problems and an unrealistic appraisal.

The appraisal should include the defects that are not clearly visible as outdated and improper plumbing or damages to the foundation or under the roof. Use an independent appraiser or a simple photograph to provide evidence for these defects.

Experienced tax experts like TaxPM will advise you to check the appraisal information about similar real estates in your area. Of course, your property must be treated in the same way as these properties. Using an independent appraisal provided by a real estate expert in this field can also be very useful. Finally, analyze the expenses that you can expect for appealing this decision and compare them to the potential savings.

Hopefully, this blog post will help you understand when and how to appeal personal property taxes in Texas.

(1) https://www.usatoday.com/story/money/personalfinance/2014/04/26/these-states-have-no-income-tax/8116161/

(2) https://smartasset.com/taxes/texas-property-tax-calculator

 

Analyzing the Impact of the New Tax Bill

Posted on by PM Editor

The Tax Cuts and Jobs Act was signed into law in December 2017. (1) According to experts, this law represents a significant modification of the existing tax law. Without any doubt, this law has an impact on tax planning for this year and that’s why it is crucial to have a professional tax expert on your side.

This is one of those laws that affect both individuals and businesses. The main accent is placed on the businesses, but millions of Americans will be affected too.

What can business owners expect from the Tax Cuts and Jobs Act?

First of all, they can expect a major reduction in corporate tax rate. At this moment, the United States has a corporate rate set at 35% which makes it one of the highest rates for this type of tax in the world. Thanks to this new bill, the rates will fall down to 21% making our country more competitive on the international market.

In addition, this bill will affect the multinational companies too. With the help of these changes, multinational corporations will be encouraged to bring their capital back to the United States instead of keeping it abroad. It’s also good to mention that the Tax Cuts and Jobs Act will allow businesses to deduct the cost of interest on loans for business activities at 30% of income. Of course, this monumental tax reform will bring other changes that should support the domestic companies.

What can individuals expect from the Tax Cuts and Jobs Act?

Just like the previous law, this one keeps the seven distinctive individual tax brackets. The only thing that has changed is the tax rates. Generally speaking, most people will pay less, although there are some people that will have to pay more in taxes.

In addition, the new bill modifies the income thresholds designed for each individual bracket. This makes the savings even greater. For instance, the highest rate (37%) is for individuals who have an annual income of more than half a million dollars. Last year, the highest rate was 39.6% and it applied to those who earned over $418.000 annually.

Another thing that taxpayers should be aware of is that the majority of itemized deductions are removed from the new law. For examples, the itemized deductions for things like investment expenses, alimony payments, personal casualty losses and tax preparation expenses are removed.

The home mortgage interest deductions are affected too. The Tax Cuts and Jobs Act sets a limit to the mortgage interest deduction – $750.000. In the past, this limit was set at one million dollars. Additionally, interest on home equity loans is not deductible anymore.  Also, people who have estates worth up to 11 million dollars will be exempt from the federal estate tax. The previous law had a different limit – 5.5 million dollars. (2)

Just like the law before, the new Tax Cuts and Jobs Act has some pros and cons. It is up to every business and individual to use the incentives and benefits that this law brings. Using the help of a professional accounting and income tax service provider like TaxPM is always a smart move.

7 Most Overlooked Tax Deductions

Posted on by PM Editor

Advice on tax deductions can help you save thousands of dollars in taxable income. Many people forget that the main objective of the IRS is to claim the money that they are entitled to. The rest of that can be deducted. Texas has lower taxes than most States, and on top of that, you can use tax deductions to make things easier. (1) After all, this is one of the reasons why people want to start a business in Texas.

Now let’s check some of the most overlooked tax deductions.

  1. EITC – Earned Income Tax Credit

The Earned Income Tax Credit represents a refundable tax credit. The credit itself was created to support wages for low income and moderate income workers. Those who want to use the refund should file a tax return. The process is a little bit complex and it may be a good idea to hire professional accountants to get the job done.

  1. Changing residence because of a new job or changing a job in general

It turns out that whenever a person has to move from one place to another and this move is over 50 miles away from your current residence can help you deduct specific moving expenses from the taxes. Of course, this relocation must come as a result of the new job you’ve found. This is how the country supports people looking for a job or a better job.

  1. Having a home on leased land

Another great way to deduct some of your taxes is to live in a home on leased land. This situation allows you to deduct rent payments for that land. Once again, we are talking about a complex procedure that requires the attention of a professional tax advisor like the ones from TaxPM.

  1. Home refinancing

Experienced homeowners know that refinancing a home comes with a few fees that can affect your budget. However, you can deduct some of these fees from your taxes. There is actually a list of refinancing deductible items that you can use to your advantage.

  1. Medicare premiums

In case you are a self-employed person, you may be able to deduct the premiums paid for Medicare (parts B and D), Medicare Advantage Plan and Medigap Insurance. You don’t have to itemize deductions to use these deductions.

  1. Casualty loss

Casualty losses represent a specific kind of tax losses that come as a result of an unexpected, unpredictable and sudden event. We are talking about weather-related or fire damage that has led to property loss. If this loss is not covered by an insurance claim, then you can use is at as a tax-deductible item.

  1. Car payments

If you have used your car for business purposes you can deduct actual expenses (oil changes, replacement tires etc.) and/or on the standard mileage rate. This is a nice way to save some money on your tax return. (2)

Keep in mind that these are some of the many overlooked tax deductions. Consult an expert in this area for additional information – contact TaxPM.