Tax Debt - Can I Really Pay Pennies on the Dollar?!

Have you have run into tax troubles and owe the IRS big money?  The reasons so many taxpayers incur a big tax bill vary from simply avoiding filing tax returns, to being self-employed and underestimating the amount of income and self-employment tax you will owe at year end.  It can start one year and then just keep piling up to the point where you have trouble catching up.

There are commercials out there that hawk “Settle your IRS debt for pennies on the dollar!”  This sounds great – but it is not as attainable as it sounds.  These ads are referring to Offers in Compromise, agreements with the IRS for taxpayers that have a large balance due and cannot afford to pay it back in full. 

The IRS does not write off debts unless they are pretty certain they will not be able to collect the full debt within a given time period, or if to do so would cause an undue hardship on the taxpayer.  It is an option for people who truly cannot and will not be able to pay off their debt in the near future.  If the IRS accepts you into this program, you will agree to pay a smaller amount of tax to settle the debt.  This sum is usually paid in one lump sum, but may also be spread over a few payments.  The process from application to end can take several months and sometimes up to a year.

More commonly used is an agreement to pay your tax debt over time.  The IRS offers installment payment plans depending on the amount you owe.  This option allows you to pay your overdue tax bill monthly until it is paid off.

Both of these options require that you stay compliant, meaning that all tax filings are filed and paid on time in the future.  

Honorine M. Campisi, CPA

Sales Tax: Admission Charges to a Place of Amusement

Welcome to the latest installment of our blog “What are the rules for NYS Sales tax for my profession?” In this blog we are highlighting another industry with a few of the broad guidelines to follow! Our hope is to not only provide helpful information for the business owners, but the consumers as well!

This blog focuses on Admission Charges to a Place of Amusement.

An admission charge is any amount that is paid to gain entry to any place of amusement. This includes cover charges, service charges, and any other charges to entertainment. A place of amusement is any facility where entertainment, amusement, or sports are provided.

Taxable admission charges are subject to a state sales tax of 4% and local sales tax based on the location of the place of amusement.

Examples of taxable admission charges are as follows:

•       Professional or college sporting events
•          Amusement parks
•          Beaches
•         Museums, zoos, and aquariums

Examples of nontaxable admission charges are as follows:

•          Motion picture theaters,
•          Live dramatic, choreographic, or musical arts performances
•          Live circus performances

Season tickets to taxable events are taxed on the total selling price of the ticket regardless of the price for admission to each event.

Box seats are taxable based on the amount for which a similar box or seat is sold for each taxable performance or event.

This is just a brief overview of the sales tax laws regarding admission charges to a place of amusement. Feel free to give our office a call for more information.

By Renee Greenspan

Is Your Paycheck Withholding Enough?

Is Your Paycheck Withholding Enough?

Tax season is over for most and the results were hard to swallow for some.  If you are one of the taxpayers that had a large tax bill for 2018, this post is for you.

There were several changes in play that resulted in the unexpected tax bill that many taxpayers faced this year.  The tax law changes that the TCJA brought, reduced deductions for many and eliminated exemptions for all.  Further compounding the problem was the change to federal withholding tables that employers use to calculate how much tax to withhold from your paycheck each pay period.  The amounts required to be taken from your check decreased and resulted in less taxes credited to filers at tax time.

The fix for 2019?   Call your CPA and ask them to review your paystubs for changes you can make to withholding now.  You will still have 6 months of paychecks to reduce next year’s tax bill.

Honorine M. Campisi, CPA