Cook County bankruptcy lawyer, loan modificationFalling behind on one debt can cause a cascading effect on other debts. Credit card bills, school loans, and mortgages are some of the most common reasons why people to fall behind on their financial obligations. Debt can quickly get out of hand leaving some confused, desperate, and vulnerable.

Is Bankruptcy My Only Option?

There are ways where one can avoid filing a bankruptcy or ways to use bankruptcy in tandem with other debt relief measures.

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Cook County IRS issues lawyer, past due tax returnsSmall or large business owners and self-employed individuals alike run the risk of losing out significantly when neglecting to file past due tax returns. Failing to file your taxes in general, even when they are already overdue, can cause excessive IRS issues that end up following you long term.

While many people delay filing their taxes or choose to not file them at all with the goal to save money, the idea often backfires. The consequences pile up quickly when the IRS hits them with penalties and interest charges for failure to file and pay the balance owed.

The Negative Impact of Neglecting Your Tax Returns

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Cook County IRS issues lawyer, IRS installment agreementWhether you are an incorporated business owner or a self-employed individual, you likely work to avoid any and all IRS issues as you manage your ongoing tax-payment responsibilities. Tax mistakes with the IRS can result in countless costly scenarios, including fees and penalties, and in extreme cases, jail time. Dodging troubles with taxes requires constant, attentive maintenance, however. Being proactive in your approach to filing and paying correctly is often your best bet, especially when your finances—and maybe even your reputation—are at stake.

Using Installment Agreements as a Preventative Measure

An installment agreement is something offered to us by the IRS when we are unable to pay the entire lump sum we owe immediately. It is a helpful tool that allows us to pay the balance in pieces, over time, while still upholding our tax obligation. It may not be available to everyone, and certain requirements do apply; however, an installment agreement can be a nice option to take advantage of when you are at risk of being fined for failing to pay your balance correctly or on time.

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Tinley Park bankruptcy lawyer, creditor harassmentWhen you file for bankruptcy, you are granted a stay on most of your debts. Essentially, this means your creditors cannot contact you or attempt to collect the debt. What happens, though, if the creditor keeps calling and harassing you through the mail, at your work, or at your home? Rest assured: you can enforce the protections that bankruptcy offers.

When Contact is a Genuine Oversight

All creditors know (or should know) that a bankruptcy filing means they must cease all contact with the debtor. As such, most who violate this rule have simply experienced an oversight. Perhaps they did not remove your name from the system properly, or have not received the paperwork yet that notifies them of your filing. In any case, it is important that you not panic during the initial contact from a creditor. Instead, simply inform them that you have filed for bankruptcy and politely refer them to your attorney.

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Tinley Park bankruptcy attorney, small business bankruptcyWhen starting up a business, it is recommended that you plan to have at least five years of savings to support your business without profiting by a single dime, and if you can make it past the five years, your business has a higher potential for long-term success. The truth is, any company can experience financial turmoil at any point, be it two days or two centuries into service. The industry for which your company operates may fluctuate, or an unforeseen public catastrophe may drive business away. At what point do you decide to file for bankruptcy?

Small Business Bankruptcy

In some cases, but not all, you may be eligible to continue your business operation after filing for bankruptcy. Bankruptcy is an option when a company has accumulated more debt than the profit it is bringing in, with no hope of catching up. There are two options for small businesses which become a decision based on the future goals of the operation. If you would like to try to remain in business but need help with the accumulating debt, Chapter 11 bankruptcy may be an option where debts reorganize. If quietly closing the doors on this business and this part of your life is the best avenue, Chapter 7 may be the better option.

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Tinley Park small business IRS defense attorney, tax filing blundersTax season has come to an end, yet many small businesses have filed for extensions. That means there are still companies at risk for potential issues with the IRS. How can you avoid them? You can start by being aware of the most common tax filing blunders made by small businesses.

Attempting to Hide Income

It can be tempting to reduce your tax bill by hiding cash transactions. However, the IRS knows that small businesses and sole proprietors are far more likely to hide money than corporations and employed tax payers. As such, the IRS scrutinizes these at-risk businesses closely.

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Cook County tax law attorney, common tax deductionNo matter the time of the year, it never hurts to start sifting through your drawers and records for potential tax breaks you may be eligible for when the next tax season rolls around.

Like all tax planning, searching for possible deductions for your IRS tax returns is best done early on, for multiple reasons. For one, you can save yourself from racing around at the last minute to collect the information, and two, you can get a jumpstart on running the numbers by your accountant to ensure you have covered all your bases. Additionally, you can catch errors before you file. 

While getting a head start on your deduction claims is helpful, it can be detrimental when you have not done your homework and you miss those errors. Intentionally claiming the wrong deductions or reporting them incorrectly can land you in hot water if you are not careful.

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Cook County IRS issues lawyer, quarterly tax paymentsWhen it comes to taking care of obligatory tax balances each year, it is not uncommon for self-employed individuals and business owners to run into trouble with IRS issues whenever tax season rolls around.

Depending on the circumstances surrounding your income, if you fall under one of these categories, you are likely required by the IRS to pay estimated taxes, or quarterly tax payments. This is necessary to report—and pay—for your taxes as you receive your earnings throughout the year. For many, making estimated tax payments to the IRS can feel costly and burdensome. However, when properly prepared for, quarterly payments can work to your advantage.

What You Gain from Paying Quarterlies

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Tinley Park bankruptcy attorney, personal debtsThe United States is a notoriously consumeristic society. Having good credit is a necessity to buy a home and a reliable vehicle. Credit must be built, often through the usage of credit cards and the ability to repay the credit card debt.

Sometimes we accumulate debt and get in too far over our head. Other times, a major unforeseen life event occurs, one we are unprepared to handle financially. When this happens, there is a process known as bankruptcy to help struggling individuals and families. When considering bankruptcy, the first question on many minds is, “will it get rid of all of my debt?"

What is Bankruptcy?

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Cook County tax law attorney, unreported tips, businesses filing taxesThe service industry creates a significant portion of the United States economy. One estimation from 2012 indicated the economy as divided into 79.7 percent employed in the service industry, 19.2 percent employed the manufacturing sector, and 1.1 percent were employed in agriculture. Much of the service sector consists of tipped positions, such as a food server or a hair stylist.

Many owners of businesses offering professional services understand it is their responsibility to report and pay taxes on tips reported to them by their employees. There is also an amount of tips left unreported by employees. The business owner must also declare the income with social security and Medicare taxes.

Employee Responsibility

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Tinley Park bankruptcy lawyers, personal bankruptcyThe decision to file for bankruptcy is not one easily made. Moreover, the days, weeks, and months following the decision can also be difficult. There may be feelings of fear or concern. Then there is still the stress of preparing for the bankruptcy process. The following may be able to help alleviate some of that stress, and provides guidance on how to find the assistance you need.

Start by Contacting an Attorney

While there are many steps to take during the bankruptcy process, your first should be to contact an experienced bankruptcy lawyer. Not only will this help you prevent missteps during the bankruptcy process, it can expedite the next steps. A skilled bankruptcy lawyer can get you on your way to less stress from the creditor calls and collection letters.

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Cook County IRS issues lawyer, estimated taxesAs an individual or business owner, the Internal Revenue Service (IRS) requires that you pay taxes as you receive your income throughout the year. This happens in one of two ways: Via withholding from your employer, or through estimated tax payments.

Failing to pay taxes or paying them incorrectly can easily cause you to experience IRS issues that have the potential to follow you for months, maybe even years. This is why it is so crucial to make sure you are not only paying your taxes, but that you are paying them properly and in the most efficient way possible for both you, and for the IRS.

The Purpose of Quarterly Payments

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Cook County bankruptcy lawyer,  Chapter 11 bankruptcyBusiness corporations, partnerships, and individuals whose debt exceeds the maximum limit for Chapter 13 bankruptcy turn to Chapter 11 bankruptcy, also known as reorganization, to essentially save their businesses and pay off the debt they can no longer keep up with over time.

Chapter 11 can offer a huge relief to business owners who have exhausted their debt management options, allowing them to propose a debt repayment plan and start fresh. However, failure to have that repayment plan approved or failure to follow through with an approved plan can result in forced liquidation, which means the debtor is sadly past the reorganization stage.

In order to ensure you successfully reorganize your business finances and have a smooth experience with Chapter 11 bankruptcy, it is important to do the following: 

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Tinley Park small business bankruptcy attorney, bankruptcy basicsBankruptcy can happen to any business, of any size, and at any time. Unfortunately, knowing this does not make the process easier, or less devastating. What can make it easier, however, is knowing what to expect and where to find assistance. The following can help you with both aspects of small business bankruptcy, and may even provide you with hope for an alternative solution.

Deciding Whether You Should File

When your business has overextended itself, fallen short of income projections, or otherwise taken a major financial hit and the debts begin piling up, bankruptcy might seem like the only option. Thankfully, this is not always the case. It may be possible to negotiate your debts, or to restructure your business spending so you save more money. Whatever your situation, you should commit to speaking with an attorney before moving forward. He or she can examine your business earnings, debt, and projections to help you determine what options may be most suitable for the future of your company.

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Cook County IRS issues lawyer, owe the IRSWhen it comes to saving money where your taxes are concerned, avoiding issues with the IRS is key. This means filing your taxes properly, filing them on time, and paying your taxes time, whenever you owe a balance. Neglecting any of these responsibilities automatically places you at risk for various fees and fines, and under extreme circumstances, even possible jail time. As soon as the IRS discovers where and when you dropped the ball, you may end up owing significantly more than you originally owed. 

Preventing Further Debt with the IRS

Not everyone is fortunate enough to receive a refund when tax season rolls around. Maybe you, like many individuals, end up owing the IRS, instead of receiving a nice refund check each year. Whatever the case, being proactive and taking preventative steps to avoid tax debt or manage existing tax debt will save you money—and a lot of hassle—in the long run. Consider the following ways to eliminate or minimize potential fees and fines and ultimately save yourself a lot of money when you owe a debt to the IRS:

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Cook County IRS issues lawyer, life events impact your taxesStaying on top of your taxes is an important part of managing your overall finances, as it can prevent you from incurring unnecessary fines and experiencing more serious IRS issues. Moreover, it may even save you money. Anytime you experience significant life events, you are especially susceptible to seeing changes in your taxes, such as a difference in how much you owe, how much of a refund you are entitled to receive, or a difference in the types of tax breaks you may be eligible to claim. 

When to Consult with a Professional

Whenever you experience any of the following life changes, it is wise to speak with a qualified accountant and tax law attorney to ensure you are properly filing your taxes to reflect the changes. This will help you avoid any potential conflict with the IRS that can arise from reporting incorrect information on your returns.

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Tinley Park IRS tax attorney,  selling your businessWhen businesses must be sold—either out of necessity or desire—owners must plan carefully. Not only is there the risk of financial loss during the actual sale, the IRS closely monitors the sale of companies. Make the wrong moves and you could be liable for back taxes on the sale price. Thankfully, there are also “right” moves—ones that can protect your business and financial future before, during, and after the sale. The following explains further.

Start Planning Your Exit Early On

Before you begin searching for a buyer, before you take a single step toward selling your business, it is critical that you speak with an experienced attorney. You need an exit strategy long before you actually sell. This can ensure that you make sound decisions during the sale process. It can ensure you invest your money properly, and that the financial moves you make do not put your financial future at risk.

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Cook County IRS issues lawyer, tax liabilitiesPreventing possible tax liabilities as an individual or a business owner is imperative if you want to avoid costly, headache-inducing IRS issues. We can easily incur a financial liability with the IRS when we are not properly prepared to pay our taxes. It does not take much to rack up a few fees and fines for filing late, filing incorrectly, or neglecting to file at all. Additionally, if enough time passes, more serious consequences can occur, including significant damage to your financial standing and even prison penalties.

Fortunately, the IRS provides a wealth of information for every kind of taxpayer to ensure everyone has access to the resources they need to address their tax responsibilities. To avoid trouble in the first place, put the following three practices into action to stay ahead of the game:

1.Stay on top of your Withholding allowance. As an employee, your withholding allowance helps your employer (and you) keep track of how much money to withhold from your paycheck to account for tax payments. Use the IRS withholding calculator when filling out a W-4 form for your employer to make sure the right amount of Federal income tax is being withheld from your paycheck. The calculator may not work for those who are self-employed or those who owe other types of taxes, so be sure to consult with your accountant and tax law attorney if you are unsure.

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Cook County IRS issues lawyer, IRS collection noticesWhether you are an individual taxpayer, are self-employed, or own a business that staffs employees, avoiding IRS issues begins with properly responding to any IRS collection notices you receive. Lagging in your response or simply ignoring the IRS all together guarantees trouble, especially when there are options available to you to help you settle your tax responsibilities.

Response Time Can Cost or Save You Money

Despite our best efforts, sometimes paying the amount we owe after we have filed our taxes is difficult. If you have received a collection notice of some kind, you either owe money, have a refund due to you, or the IRS requires more information from you regarding your return. Whatever the reason for your notice, it is important to respond to the IRS promptly to avoid any potential delays or problems with your return, which can result in costly fines and penalties. The general rule of thumb is this: The longer you wait to respond when the IRS contacts you, the more likely you will experience financial consequences. Do yourself a favor and avoid unnecessary fines, fees, or interest, and respond to the notice right away.

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Cook County business tax and IRS defense attorney, business taxesMaking sure you are caught up on your IRS tax obligations as a business owner is an important part of maintaining your company’s finances and avoiding a myriad of IRS issues. Failing to file, filing too late, or simply filing incorrectly can potentially land you in serious trouble, with repercussions ranging from hefty fines and lawsuits to even more extreme consequences, such as jail time.

No matter how small or large your company, it is a good idea to stay up on your business tax knowledge, especially if you are a new business owner just beginning operation.

General Tax Categories

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