In this series, “Mint Makes You Money” by EverydayCPA, we are going to talk about why and how personal wealth begins not with good investment decisions but with good spending decisions and how and why we like to use Mint by Intuit to help us do that.
EverydayCPA exists to help small business owners and families better manage their businesses and finances. We help you learn and adopt strategies and tactics on business, family accounting, budgeting, and credit management and improvement. And we show you ways to build and grow savings to help you compete, win, and succeed and hopefully live a happier, healthier, stress-free life.
The Confiscatory Power of the Tax Man
There is an urban myth that the IRS, somewhere in their collection offices, has a sign that reads “We have what it takes to take what is yours.” I don’t know if that’s true or not, but I do know that the IRS and state revenue collectors certainly have what it takes to take what is yours. But there are some significant restrictions on what these Tax Collectors can take from you, so if you have tax debt and you are worried about the tax collectors taking what is yours, I am going to show you how you can use Intuit Mint program to help you keep the IRS off your back and hinder their ability to take what is yours.
Tax Resolution Options through EverydayCPA
In addition to helping businesses and individuals prepare and file their tax returns, EverydayCPA spends a lot of time helping clients reduce, remove, and resolve past tax debts. There are over 15 million taxpayers with over $85 billion in unpaid federal taxes. Left unresolved, the IRS can make the lives of these people miserable until something gets done.
At EverydayCPA.com we have three approaches to this.
- DIY, do it yourself. Through Tax Resolution Help Center, for 19.95 per month, you can have unlimited access to live virtual open office sessions with tax resolution experts throughout the country including audio, video content, and, of course, sessions to teach you how to resolve your tax debt yourself.
- Do it together. An hourly, fee-based, one-to-one consulting service. You talk to an expert of your own choosing who can guide you to do it yourself with coaching and assistance.
- Full service, a fixed fee-based service where you hire an expert to do it for you. If you don’t want to ever talk to the IRS directly, this is for you!
In each of these approaches, the goal is to get the IRS or State revenue to reduce or eliminate the amount you owe. To do this, you need a budget.
Tax Relief Begins with Budgeting
Anytime you say ‘budget’ you should think of Intuit Mint program to help you do it. Here’s why… in order to qualify for an Offer in Compromise, or a Low Payment Plan, or a Currently Not Collectible program, you have to demonstrate that you only have a specific amount of free cash flow to pay the IRS or the State or both. They cannot extract a monthly payment amount that puts you and your family in an economically harmful position. Now their version of what is economically harmful is much different than yours. But it starts with you understanding the budgeting requirements of the IRS.
We start with the Allowable Housing Standards. These range from $900 to $3800 per month for a family of two, based on where you live. You put this in your allowable housing budget then you add a car payment, which is budgeted at about $500 a month. Car operations are about $200 a month. Allowable living expenses are about $1300 a month for a family of two. This would cover things like food, housekeeping supplies, apparel, and personal care products and services. You can keep these in one category in Mint, or you can break them down into separate categories.
But the total for a family of two is about $1,300 a month. That’s not much! There are other expenses that are permitted, especially those where you have a contractual commitment to pay. Tax revenue collectors cannot force you to breach a contract in order to pay them off. Your credit cards are committed at a minimum payment level.
Mint Helps You Organize Expenses
Mint’s tag function helps you to identify and organize these contractual commitments. You can call them Needs and the others Wants. Mint likes to use that language. If you read the language in the IRS form 433-A Collection Information Statement for Wage-earners and Self-employed Individuals, you will see the categories of expenses. So set up these budget targets in Mint and then for every transaction that comes through your account, make sure you classify in one of the permitted expense categories, or as a committed category. And if there’s anything left over, the IRS or state will want it directed to them to pay down your tax debt.
Remember the IRS limit is 10 years from the assessment date, so if the debt in question is sufficiently aged, then sometimes a delay or stall tactic would be a better idea, to run out the clock. Then a minimum payment plan. Many states follow this statute of limitations, but a few states have extended the limits.
If you need help with your tax debt, sign up for a membership with Tax Resolution Help Center for $19.95 per month. And learn to do it yourself or maybe pick one of our instructor experts to do it for you.
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About Mint: Intuit Mint brings together everything from spending, balances, and budgets to your credit score and more. Mint allows user to access their financial lives in one powerful app.