Income tax problems and the IRS might be what's on your mind with April 15 approaching. But, tax help and hope is available. Accountant and attorney, Martin Shenkman offers RVers some suggestions.
by Martin M. Shenkman, CPA, MBA, JD
Many people were hit hard by the recession. There has been a lot of talk, articles, and more about those who became full-timers, not so much because they wanted to but because the economy forced them to. Regardless of why you are a working RVer, you may be required to pay income taxes, but not have the cash to do it.
If you’re a working RVer and in that tough boat and owe tax, you probably know April 15 is close at hand. And if you’re reading this after April 15, don’t give up, read on.
If you owe Uncle Sam a chunk of change for income tax but can't afford to pay the full amount by the April 15, 2010, deadline DO NOT play Ostrich. Hiding your head in the sand will prove financially devastating and will not help your income tax problems.
What do you do? What you don’t do is ignore it. The problem won’t go away; it will get worse. However difficult or unpleasant, or seemingly impossible to resolve, you’ll end up better off confronting it.
• File your income tax returns on time. If you’re reading this after the filing deadline and didn’t file, FILE now. The sooner the better.
• Pay as much as you can, whatever you can. This will show a good faith effort. It will also reduce penalties and interest.
• Don’t assume that it is the big bad IRS after you. Anger or fear won’t solve your tax issue. Confronting it will. That attitude breeds fear and helps some in the tax industry make more money. Most folks at the IRS are just doing their job and they often will try to help where they can. If an IRS agent refuses to cut you slack on an interest charge, the law may not permit them to.
• Request more time to pay the tax when you file. Explain your specific circumstances and why you need time.
• Request an “installment agreement” from the IRS. If you don’t owe more than $25,000 in tax, interest and penalties you might qualify for a payout over time. Start by checking out the “Online Payment Agreement” (OPA) at www.irs.gov/individuals/article/0,,id=149373,00.html before spending a bundle on a consultant.
• Consider whether you can or should charge your tax bill on a credit or debit card.
• See IRS Tax Tip 2010-68 on the IRS website for more info.
• Don’t forget the state tax issues or you may have state income tax problems, also.
Martin M. Shenkman, CPA, Esq. sponsors a free legal website LawEasy.com.
Martin is an RVer with a special cause. He is an avid fundraiser for the National Multiple Sclerosis Society and The Michael J. Fox Foundation For Parkinson's Research. See his RV4TheCure.com website for how you can help him fight MS. Besides RV business tax and legal information, he will share some of his RVing and fundraising experiences with us.
Caution: This article and other columns can never substitute for professional legal, tax, and accounting guidance. These columns can provide only broad general advice, which may not apply to your situation. The rules differ substantially from state to state. Tax, business, and other laws change rapidly over time so there can be no assurance that the information in this column is current. The best approach is to review the ideas in this article with your own CPA and attorney. The application of general tax and legal principles to some of the unique facts presented by RV working is particularly complex and there is little specific law providing guidance to rely upon.