An Enrolled Agent (EA) is the highest credential awarded by the IRS to certify elite tax experts. Like attorneys, EAs can represent you before the IRS. Unlike state-licensed CPAs, EAs are federally licensed to practice nationwide, specializing strictly in taxation rather than broader accounting.

Yes, you must report all winnings on your tax return, whether the place that you gambled reports them to the IRS or not. For example, if you hit the trifecta on Derby Day, you are required to report the winnings as income. You can, however, subtract the amount you wager from your overall winnings from a single bet.

Yes, if your gross income exceeds your filing status threshold, you must file a tax return. We can determine your exact filing obligation, contact us.

Depreciation is an IRS tax deduction that allows you to recover the cost of a business asset over its “useful life” and this can lower your tax bill. This is too complex for this simple guide. Contact my office and we can go over your exact situation to use depreciation to lower your tax bill.

Filing back taxes will not get you into trouble but staying silent will. By voluntarily filing, you avoid maximum failure-to-file penalties, start the statute of limitations, and show good faith, which significantly reduces the risk of criminal investigation.

If you haven’t paid your payroll taxes, take immediate action to limit massive penalties. Immediately contact a trusted local Enrolled Agent (EA). File all your tax returns immediately, even if you cannot pay. The IRS plays hardball because these are “trust fund” taxes that you withheld directly from your employees’ paychecks. Contact my office and we will help you.

No, your employer’s deduction is probably incorrect. State income tax is generally based on where the work is physically performed and your state of residence. Because payroll systems may lag, we can help you with the actionable steps to stop the deductions and recover your money.

Technically, the IRS has no statute of limitations on unfiled returns and can legally go back indefinitely. However, under standard IRS Policy Statement 5-133, the IRS generally limits its requests to the most recent six years of unfiled returns to bring a taxpayer into good standing.

If your tax situation is becoming more complex (such as adding self-employment, rental properties, or investments), upgrading to an Enrolled Agent (EA) is highly recommended. EAs hold the highest credentials from the IRS, allowing them to represent you directly if you ever face an audit or tax dispute.

You can successfully file your taxes without original records by requesting your Wage and Income Transcripts directly from the IRS to identify your reported income, then reconstructing your personal or business expenses using bank statements, receipts, and reconstructed ledgers. Contact us and we can assist in calculating your income and deductions. The goal is to file the taxes and mitigate your IRS problem, without paying an exorbitant tax bill. This requires expertise.

Charitable donations do lower your taxable income, but you only get an extra tax benefit if your total itemized deductions (like donations, medical expenses, and mortgage interest) exceed the standard deduction. Because of current tax laws, most Americans still benefit more from taking the standard deduction.

Yes, doing your taxes from home is incredibly easy, as many tax professionals offer secure online portals. Because your situation may vary, you can approach doing taxes from home using our remote professional services. Many taxpayers choose to work with an EA or tax professional without stepping into an office. How it works: You securely upload your tax documents (like W-2s and 1099s) to a client portal. The preparer does the math, and you finalize everything via secure email. Benefits: You get expert advice and peace of mind without leaving the house.

Most IRS employees, in general, are good people. They are generally reliable. However, as your financial security and peace of mind can be put at risk by erroneous tax advice, you need a competent and experienced tax adviser on your side. Tax laws and regulations are complex and untrained or inexperienced IRS staff can make mistakes. You are wise to have someone who knows tax represent you when dealing with the IRS.

Yes, the IRS can legally seize or levy your assets to satisfy unpaid back taxes. Before taking your property, the IRS is required by the Taxpayer Bill of Rights to send a Notice and Demand for Payment, followed by a Final Notice of Intent to Levy at least 30 days prior. It is important to seek the help of a competent tax pro and sort it out. Do not ignore it. If liens and levies are already in place, you are already behind. Get competent tax help FAST.

This is an area that requires considerable expertise. Good records certainly help. A detailed tax strategy is highly specific to your situation. Consult with a trusted tax professional by mid-year and go over your exact situation. The law is too complex for a one-size-fits-all answer. That being said, I will mention a couple things. If you are self-employed or use your car as an employee, keep track of your mileage. Lots of people keep gas receipts and repair receipts. And this is fine. The IRS allows a standard business mileage deduction of $.70 per mile. At $.70 per mile, if you have an economical car, you might come out ahead. If you do 20,000 business miles per year, that is $14,000 deductible expense. 1000 gallons of gas is only a few thousand dollars. Another area of huge potential savings is incorporation. The self-employed pay 15% self-employment tax in addition to income tax. If they incorporate, the net income they take is not subject to self-employment tax. This is an area of much misinterpretation and confusion. So, if you are considering it, contact a trusted tax expert. There are MANY other tax breaks out there. Strategic tax planning is one of the most effective ways to lower your taxable income and boost your refund.

Yes, the IRS has strict statutory deadlines. In general, it is ten years from the date your tax was assessed, but the IRS categorizes these timeframes into two main periods: Assessment (how long they have to audit/add tax) and Collection(how long they have to recover it). It can be tricky and can be extended in certain cases.

Sure? Because of the U.S. progressive tax system, your marginal tax rate only applies to the portion of your income that falls within that specific bracket. Artificially reducing your gross income just to drop into a lower bracket means you end up with less money in your pocket overall. Instead of lowering your gross income, the most effective strategies involve reducing your taxable income (Adjusted Gross Income) or utilizing tax credits, amongst other strategic ways to do this. Contact a competent tax professional for a consultation. At RT Smith & Company, we are happy to give you a free initial consultation to maximize your after-tax income.

The IRS “Un-collectable” status, formally known as Currently Not Collectible (CNC), is a designation applied to taxpayers who are experiencing severe financial hardship. When an account is placed in CNC status, the IRS formally acknowledges that pursuing collection of the tax debt would prevent you from meeting basic, reasonable living expenses. Once again, you need a good EA. Contact my office for a free consultation.

Filing a joint return is generally recommended to avoid the higher taxes and penalty rates that come with the “Married Filing Separately” status. Instead, you can protect your portion of a joint tax refund from being seized for your spouse’s back taxes by filing an Injured Spouse Allocation. Filing as an injured spouse ensures the IRS separates your income, deductions, and tax payments from your spouse’s, allowing you to get your share of the refund back.

When an Offer in Compromise (OIC) is rejected or disallowed, the IRS generally provides a window for you to appeal the decision. However, because you are currently unable to pay, you will need to pivot to other resolution programs. Contact an Enrolled Agent you can trust. This will need individual review.

Yes, Enrolled Agents (EAs) are specially trained, federally licensed tax practitioners authorized by the U.S. Treasury to prepare and file corporate tax returns.

If you miss a payment on your IRS installment agreement, your plan enters default status. To prevent your agreement from being terminated and to avoid enforcement actions like wage garnishments or bank levies, you must act within 30 days of receiving a default notice. The exact steps to get back into compliance depend on what stage of the collection process your account is currently in. Contact us for an individual review.

To get your books in order and file, the very first step is compiling 12 months of bank statements, receipts, and payroll records so a professional can untangle your transactions. Leaving records unreconciled can result in inaccurate filings, missed deductions, and IRS penalties (e.g., a late filing penalty that can reach up to 25% or a minimum of $525). RT Smith & Company specializes in catching up messy books, bookkeeping, and tax preparation. They can help file and classify your financial data regardless of your business structure.

We are a client-focused Enrolled Agent (EA) practice. By bundling bookkeeping and payroll with tax services, you prevent the “shoebox on April 14th” panic while offering the crucial financial analysis that helps business owners maximize profits and eliminate wasteful spending. Because running a small crew leaves no time for business owners to navigate complex payroll laws, taking these tasks off their plates provides massive value. For an EA firm, integrating this service model with modern tools is straightforward:

Tax Preparation: We utilize professional tax preparation software designed specifically for accountants and Enrolled Agents. Our Software helps us to execute full-workflow data ingestion, handle book-to-tax adjustments, and prepare individual and business returns (such as Schedule C, 1120S, 1120, 1065, K-1s, and more) for your final review.

Bookkeeping: We automate transaction categorization, matching, and reconciliation across platforms like QuickBooks. It allows us to generate real-time profit and loss reports and catch losing operations before a business burn through cash.

Payroll: Outsourcing payroll functions through streamlined portals allows clients to run their teams without worrying about IRS or state compliance penalties.

IRS Problem Resolution: Enrolled agents (EAs) specialize in handling complex tax issues, offering vital assistance if you are facing IRS collections, audits, wage garnishments, or unfiled returns. As federally licensed tax practitioners, they can represent you directly before the IRS to negotiate settlements, establish payment plans, and resolve penalties. If you are dealing with IRS tax problems, it helps you to understand what options are available to you and how different issues are classified. We can help!