It’s scary when you find a tax lien has been levied on your assets. If this is the first time it’s happened to you, you will have many questions. How will this impact your ability to pay your bills? Will someone be coming to take your property away? What are your options?

Tax liens and other tax-related issues can be complicated, and it’s no different in Utah. Whether this is your first time dealing with a problem like this or not, understanding the tax lien process and how it will affect you makes all the difference.

Our tax and accounting specialists can help clear up the mystery of tax liens and help you navigate what’s ahead of you.

Here are some key facts to understanding the basics of tax liens in Utah. Getting familiar with the ins and outs of the process can help you find a foothold during this uncertain time.

Understanding What a Tax Lien Is

First, what exactly is a tax lien? This is a “judgment filed by the Tax Commission against a taxpayer’s real or personal property” when a person has failed to settle their Utah tax balance.

This is a public document that lists everything from the taxpayer’s personal or business name right down to the amount owed. It’s sobering to realize that the Tax Commission can use a lien to take and sell the delinquent taxpayers’ property to satisfy a tax balance. This doesn’t always happen, but it’s their right to do so.

If the Tax Commission has filed a tax lien against you, they will send you a certified Notice of Lien. This lien guarantees that payment to satisfy the tax debt or assets will be seized and sold.

The Tax Lien Process

1. Once the taxpayer receives the demand for payment, the process begins.

2. If the taxpayer cannot satisfy a tax debt or set up a payment plan, the government will place a lien on the person’s assets.

3. The lien covers all the delinquent taxpayers’ assets, including property, vehicles, and securities. Any new assets purchased while the lien is in place will also be included.

4. If the choice is made to file for bankruptcy, this will not wipe out the tax debt. This only applies to federal tax debt.

Lien Removal

You can have your lien withdrawn in one of these two ways:

• Satisfying the balance of what is owed, including the penalty and interest.
• If you can prove to the Tax Commission that your lien was an error from the get-go, it may be withdrawn.

Tax Liens And Your Credit Rating

It’s no secret that credit reporting agencies can access county records. This means tax liens will show up on a credit report. This can create a big problem when looking for a loan or trying to sell or refinance a property. Another thing to be aware of is that even after your lien is withdrawn, it will still appear on your credit report as “set aside.”

Vital Takeaways

• If you do not satisfy your tax debt in the state of Utah, a lien will be placed on your assets.
• If the debt is satisfied or an agreement is made with the government for a payment plan, the taxpayer may have the lien removed.
• No attempt to repay the debt will cause the government to seize the taxpayers’ assets and sell them to satisfy the tax debt.

Utah Tax Lien Information

Tax liens are processed electronically, making it easier to view and note active liens online. You can search the Utah Courts website for tax lien cases.
The liens are posted by Tuesday at 1 pm each week and can be downloaded for your viewing and records. The liens are listed by county, with the newest files listed last.

Contact the Tax Commission at 801-297-7703 or 1-800-662-4335 ext. 7703 for more general information.

Let Us Help You

Your bank account won’t be raided, or your paystubs slashed in half if you find yourself with a tax lien. But there is a real possibility of losing your assets if you don’t act. The onus is on you, the taxpayer.

If you find yourself with more questions and would like to discuss your specific tax lien situation, contact one of our experts at AA Tax & Accounting Services. We have the experience and expertise to guide you through the process and get you back on level footing. Contact us. We’re here to help.

Have you ever returned home after a day of errands only to realize all the money is gone from your wallet?

Or maybe you logged into your credit card’s online portal only to be shocked by a high card balance. Credit card debt is on the rise — the average American family has about $6,270 in credit card debt, according to the most recent data from the Federal Reserve’s Survey of Consumer Finances.

Although most people think about accountants helping out around tax season, they can also manage your finances all year long.

If you’ve noticed an uptick in your spending habits or you need help creating (and sticking to) a budget, a personal accountant can assist you in lowering your debt and increasing your net worth.

Whether you are a high-income earner, have multiple income streams, or are working your way out of debt, an accountant can help you take control of your finances.

Follow along as AA Tax & Accounting Services, LLC explains why you need to talk to an accountant about your finances.

Increase savings

No matter what your income is, you should be setting aside money into your savings. There is a lot to consider, from your emergency fund to your retirement savings, and it can be overwhelming trying to determine how much of your salary you can comfortably set aside.

When working with a personal accountant, you will sit down and examine your finances together, combing through where your money is going each month.

Are there areas where you are spending unnecessary money?

Do you pay for subscriptions or services where the amount you use doesn’t justify the cost?

Your accountant will work with you to determine where every dollar of your paycheck should go by creating a budget. By using a budget, you’ll ensure you aren’t spending too much in any given area while also putting money into your savings funds and paying off any debts.

Lower debt

While building up your nest egg is extremely important to set yourself up for success in retirement, you also want to focus on paying off any debts you’ve accumulated over the years.

Whether you have a couple of thousand dollars in debt or are in the six figures, it can seem daunting when looking at that number. Your accountant will work with you to put together a plan of action you can follow to pay off your debts, allowing you not only to put more money towards savings but improve your credit score simultaneously.

Analyze your investments

If you’ve put a portion of your savings into investments, you may be wondering if you made the right moves financially. An experienced personal accountant will be able to review your investment portfolio and identify which investments are worth keeping and which ones may be worth moving on from.

Their primary goal is to make sure you are investing in areas with good returns, helping you to become more profitable and increase your net worth.

Save time

Tax season can be a stressful time for many. Without maintaining the proper tax forms and financial records throughout the year, you may find yourself scrambling when it is time to submit your taxes.

Instead of tracking your expenses and keeping your financial records organized throughout the year, your accountant will handle the heavy lifting for you. This saves you both time and stress, allowing you to spend time generating more income, invest in new business ventures, or hang out with your family and friends.

Tax consulting services in Cedar City, Utah

If you’re looking to get out of debt (or prevent getting into debt), the certified public accountants at AA Tax & Accounting Services can help you get your finances in order. We have the experience to guide individuals on the best strategies for maximizing their savings and investments while lowering their debt-to-income ratio with our full-service accounting services.

If you have been looking for a full-service accounting firm, you don’t need to look any further than AA Tax & Accounting Services, LLC. Contact us to schedule an appointment.

Do you have a monthly budget for your family that you stick to each month?

If you’ve been doing it for quite some time, you may have noticed the increase in the price of food, gas, cars, and other necessities you need — this increase in cost is known as inflation.

What exactly is inflation and how does inflation affect my monthly budget?

Inflation is when the cost of goods or services goes up. While inflation can affect any purchases you make, it is most noticeable on items you purchase regularly. Ultimately, inflation means that the dollar doesn’t go as far as it once did, costing you more for the same amount in the long run.

Although minor inflation may not seem like a drastic change, inflation can make it challenging to meet your financial obligations, such as your monthly budget.

Follow along as AA Tax & Accounting Services walks you through a few steps you can take to deal with inflation in your monthly budget without relying on your credit cards and accumulating unnecessary debt.

Stick to a monthly budget

One of the most effective ways to beat inflation is to create a monthly budget and stick to it. By monitoring where your money is going and what it is being spent on, you’ll be sure to only spend the money you have in the bank (preventing a buildup of debt on your credit cards).

However, one of the biggest problems with monthly budgets is that people underestimate how much they will need for specific goals, causing them to go over budget each month.

Set realistic goals for groceries, dining out, gas, and other necessities to ensure your purchases align with your family’s needs. At the beginning of the month, allocate your money to each goal and stick to these spending limits to help beat inflation costs.

Because inflation is continually on the rise, use your budget to determine where you can curb your spending habits. If you decide you need to increase your grocery budget, you’ll need to pull that extra from another category or change your shopping habits.

Find ways to cut spending

Setting and sticking to a budget is one of the most effective ways to beat inflation — but you may also be looking for ways to increase the money being dispersed throughout the budget. If there isn’t a way to increase your monthly income streams, it may be time to get creative and determine where you can cut back or change your habits.

Easy changes include opting for store brands over name brands or utilizing coupons or discounts to determine your weekly groceries. By allowing your money to stretch a bit farther each month, you’ll be able to allocate those funds elsewhere in your budget.

Evaluate your monthly expenses

Another way to save some additional money in your budget each month is to evaluate all of your expenses.

Are you paying for anything that isn’t completely necessary?

Do you have monthly subscriptions to Netflix, Hulu, HBO, Spotify, or other subscription services?

Do you grab a specialty coffee on the way to work every day?

Are you letting groceries go to waste and eating out multiple times a week?

Spotting areas in your budget to cut back and eliminating those expenses will allow your money to go a lot further.

Don’t forget about savings

If you’re struggling to stay within your monthly budget due to inflation, you may find yourself cutting into your savings or skipping adding money each month. By utilizing tactics to lower your monthly expenses, you will still save money without accumulating debt.

Along with saving money, it’s important to continue saving towards your retirement goals. With the inflation you see today, you’ll also need to consider how inflation will affect your retirement goals. Make sure you’re considering your retirement portfolio as the rate of inflation increases over time.

If the thought of inflation is stressing you out, the AA Tax & Accounting Services team can help you execute the right tax strategies to maximize your nest egg for retirement. Contact us to schedule an appointment.

In recent years, you may have heard the term cryptocurrency being thrown around in everyday conversation. You may even dabble in cryptocurrencies yourself. While this new decentralized, digital store of value and medium of exchange is all the rage, it also leaves many individuals wondering what to do come tax season.

Whether you have Bitcoin of your own, or you have another form of cryptocurrencies such as Litecoin, Ripple, or Dogecoin, you must understand how it is taxed, so you don’t have the Internal Revenue Service knocking at your door for owed taxes. Cryptocurrencies that are bought, sold, or mined are all taxable, which means you need to report this income on your tax return.

To ensure you understand all tax obligations for cryptocurrency, the team at AA Tax & Accounting Services has put together a quick guide so you can confidently file your tax return by the new deadline of May 17.

When to pay taxes on cryptocurrency

When determining if you need to pay taxes on any cryptocurrency, you need to take stock of any taxable events you’ve encountered over the past year. These taxable events typically occur upon the sale or trade of crypto — meaning that you won’t owe taxes simply for buying or holding onto cryptocurrency, but only if a sale or transaction takes place.

You may be liable for cryptocurrency taxes if you made any of the following transaction during the previous tax year:

• Traded crypto to fiat currency
• Traded cryptocurrency to virtual currency
• Received cryptocurrency as the result of a fork
• Received crypto as compensation for goods or services

With any of these transactions, you need to consider capital gains and capital losses on your crypto. If any of these transactions resulted in a profit gain, that income is taxable and needs to be reported. However, if you incurred a loss from the transaction, you can write off the loss when filing this year’s tax return.

Although you may have received cryptocurrency as a gift, this crypto exchange will not incur taxes unless it is higher than the gift exemption amount. To ensure you avoid dealing with tax penalties, it’s important that you accurately calculate any gains and losses on any crypto transactions that have taken place. Without accurate record-keeping, you’re putting yourself at risk of an IRS penalty.

How much do I owe on my cryptocurrency?

Every person’s taxes are different, which is why there isn’t a solid answer we can give you regarding how much you will owe after using cryptocurrency. The primary consideration for how much you will owe depends on how long you have held onto your cryptocurrency and whether you earned a profit or experienced a loss.

Your tax rate is determined by how long you’ve had your cryptocurrency. For instance, if you have had Dogecoin for more than one year, you will be required to pay a long-term capital gains tax rate on any profits you make from a sale. But if you’ve had your Dogecoin for only a few months, your profits will be taxed at your standard income tax rate.

Any profits you earn from the sale of cryptocurrency are taxable income and must be reported to the IRS. However, not all sales result in profits. If you experience any losses related to your cryptocurrency, you have the option to reduce your taxable income by a maximum of $3,000, and those losses can be carried over to future years.

Tax consulting services in Cedar City, Utah

Determining exactly how much you owe on your crypto transactions can be overwhelming. If you aren’t sure where to start, AA Tax & Accounting Services’ tax consultants can walk you through the process with our tax consulting services.

The AA Tax & Accounting Services team can help you execute the right cryptocurrency tax strategies to save you money. Contact us to schedule an appointment.

You have your entire future laid out in front of you, and with proper planning for retirement, you’ll be able to settle down without worrying about finances. Investing in your future early on is a great way to set yourself up for success — but it’s never too late to start. If you’re a new investor heading into your first tax season, you might be wondering what you need to know about your taxes and investments.

We know that tax season can be daunting, and with multiple investments, it can seem even scarier — it doesn’t have to be that way! The team at AA Tax & Accounting Services is here to help you navigate the tax process so you can feel confident in your investments. Here are our top tips for first-time investors for tax time.

Understand Realized Gains

If you’re new to investing, you might not fully comprehend how investments are taxed. Something you need to consider is the realized gains on your investment. If you purchase a stock that sees an increase in value, you won’t be expected to pay taxes on those gains every tax season. You will only be expected to pay taxes when you “realize” the gain when you sell your stock shares.

For example, if you purchase 50 shares of a stock for a cost of $50 but the stock value increases to $75, you won’t be required to pay taxes on the $25 gain until you choose to sell your shares. With any investment, you can expect to see values rise and fall over time. If your stock share goes down in value, it will be a similar situation to realized gains where you won’t face any tax implications until your shares are sold.

Long Term & Short Term Gains

Now that you’re on your way to becoming an investing pro, you must understand the difference between short-term capital gains and long-term capital gains before heading into tax season.

Your investments’ tax implications will vary depending on how long you have held onto that particular stock. This means that your gains will be taxed at the short-term capital gains rate if you sell your shares after only holding them for a year or less. If you have held onto the stock for more than a year, your gains will be tased at the long term capital gains rates. Knowing how long you have held each of your investments can help you determine if selling or holding onto your shares a little longer is the best choice financially.

The tax rate for short-term capital gains is determined by your specific income tax bracket, while long term capital gains tax rates are typically lower than your income rate and not specific to an income bracket.

Offset Income with Capital Losses

If a few of your investments didn’t pay off this year and you have more losses than gains, you can apply up to $3,000 of your investment losses and apply that against your income. Although experiencing a loss on the investment isn’t the goal, applying the loss against your income allows you to reduce your annual income and potentially offset having a higher-taxed income. If your losses are more than $3,000, you can apply that loss to a future tax season as well.

Tax Consulting Services in Cedar City, Utah

As a first time investor, it can be difficult to understand the tax implications of your investments. If you’d like to feel confident in executing the right tax strategies to save you the most money, we recommend consulting certified public accountants like AA Tax & Accounting Services when preparing this year’s tax return.

From one-time tax consulting services to ongoing consulting services, our tax consultants work with many clients as their tax advisor and tax preparer — ensuring that your tax team understands your taxes backward and forwards. You can have peace of mind knowing that our team has unparalleled experience dealing with taxes on investments and can provide effective strategies for maximizing deductions and tax credits with our tax consulting services.

The AA Tax & Accounting Services team can help you execute the right tax strategies to save you money come tax season. Contact us to schedule an appointment.

The COVID-19 pandemic has impacted the lives of many — from getting sick yourself or knowing someone with a positive test result to losing a job or business to being stuck inside working remotely. There have been a lot of obstacles to overcome. Because of the impact on the economy, many United States citizens received stimulus checks from the government.

While everyone likes waking up to a surprise deposit in their bank account, it might leave you with a lot of questions.

What are the qualifying factors to receive the money?

Will you need to pay taxes on the stimulus check?

There’s no reason to stress about your stimulus check as you head into tax season. To help you better understand who receives stimulus checks, how you’ll receive the payment, and if the payment will be taxed, AA Tax & Accounting Services, LLC has put together a quick guide to answer some of the most common questions about the stimulus checks.

Who Qualifies for a Stimulus Check?

Individuals will receive a stimulus check if they:

• Have a social security number – Those with a social security number are eligible to receive the stimulus payment, as well as an additional payment for any children in the household with a social security number.
• Are not claimed as a dependent – If claimed as a dependent, the individual will not be eligible to receive the stimulus check. The person claiming them would receive it.
• Earned within the qualifying bracket – Individuals filing taxes solo and earned less than $87,000 are eligible to receive the payment. For joint filers, they must earn less than $174,000 jointly to receive the stimulus check. Those earning more than the specified amount will receive a reduced payment.

These are only a few of the qualifications to receive a stimulus check, but the most common ones to be aware of.

How Will You Recieve Your Stimulus Check?

If you continue to be eligible for upcoming stimulus checks, you’ll continue to receive them the same way you have previously. The three ways for you to receive a stimulus check are through a direct deposit (which will automatically be set up if you received your 2019 tax return via direct deposit), a paper check that you will receive by mail, or by a debit card.

If you did not receive any of the stimulus checks that went out in 2020 or early 2021 but were eligible for the payment, it’s not too late to receive it. When filing your tax return this year, you can claim the tax credit.

Will I Need to Pay Taxes on My Stimulus Check?

If you are eligible to receive a stimulus check, you will not be required to pay taxes on the payment when you file your tax return this year — this goes for stimulus checks received in both 2020 and 2021. In addition, your stimulus payment will not be counted as income used to determine your eligibility for government assistance.

Tax Consulting Services in Cedar City, Utah

Do you still have questions regarding stimulus checks?

If so, AA Tax & Accounting Services can help you better understand the stimulus check process and how it impacts your tax returns. No one should go into tax season with their questions unanswered. Our team of tax consultants has the experience navigating the most effective strategies for maximizing their deductions and tax credits with our tax consulting services.

The AA Tax & Accounting Services team can help you execute the right tax strategies to save you money. Contact us to schedule an appointment.

Gift Laws and Tax Implications in Utah

Everyone loves gifts, but did you know that if you gift a large sum of money you might need to pay a federal gift tax? Before gifting money, you must understand the federal tax laws to ensure you’re following all gift tax guidelines set by the Internal Revenue Service (IRS).

AA Tax & Accounting Services has compiled a guide to help you navigate gift tax for Utah residents — keep reading to learn more.

What Is Gift Tax?

The gift tax is a federal tax that is applied to money or property that is gifted to another person for nothing in return. It also applies to transfers where the gift giver receives less than the full value in return.

You may be wondering why you’ve never heard of this or paid a gift tax — it doesn’t apply to all gifts. If your gift or inheritance meets the set criteria, the IRS can collect a tax if you’ve already exceeded the annual or lifetime gift exemptions. So what are these exemptions? Let’s find out.

When Is a Gift Tax Applied?

As of 2020, the annual exclusion is set to a gift of at least $15,000 in a single calendar year — this number increases to $30,000 if a couple is gifting money from joint accounts or assets. Additionally, there is a cap on the amount a person can be gifted within their lifetime. This lifetime exclusion was raised to $11.58 million in 2020.

If your gifts are valued at or above these thresholds, you will need to report it to the IRS. Any gift of money or assets under these amounts are excluded from gift taxes.

Gift Tax for Utah Homeowners

If you live in Utah, there is no inheritance tax. But that doesn’t mean you’re always off the hook when it comes to paying taxes. If you are gifted something in an inheritance from a person who lives in a state other than Utah, there might be an inheritance tax applied to out-of-state inheritors. This varies from state to state, so you must take the time to understand inheritance laws if you inherit money or assets above the specified threshold from someone who lives outside of Utah.

Similarly, Utah also doesn’t have a gift tax. You will follow the same federal exclusions of $15,000 per individual — if you receive a gift at or above this amount you will need to report it to the IRS. While you won’t pay tax on the specified amount, the gift will reduce your lifetime exemption of $11.18 million.

Tax Consulting Services in Cedar City, Utah

There’s no reason to stress out about receiving a gift or inheritance. If you have questions about reporting a gift over $15,000 to the Internal Revenue Service, AA Tax & Accounting Services can help you navigate the process and walk you through everything you need to know.

The AA Tax & Accounting Services team is committed to helping you feel confident come tax season. Contact us to schedule an appointment.

With November 3rd on the horizon, the deadline to cast your vote in the presidential election is nearly here. Democratic presidential nominee, Joe Biden, has shared his tax policy proposals that will impact both business owners and individuals. As a way to raise federal revenue by $3.2 billion, Biden focuses on getting more taxes from both the wealthy and big corporations.

AA Tax & Accounting is here to inform you of some of the biggest proposed tax changes, not to sway you on your presidential vote. Let’s take a deeper look at how Biden’s plans will impact individual taxes and business taxes so you can have a well-rounded picture when casting your ballot on election day.

Individual Tax Changes

Although everyone will likely see some tax changes in 2021 based on Biden’s proposed tax plan, the most impacted will be wealthier Americans.

Taxes Remain Steady for Incomes Below $400,000
Under Biden’s proposed tax plan, households with an annual income under $400,000 shouldn’t see the amount they pay in taxes change. While middle-income families’ taxes will typically remain steady, there are a few instances where they could end up paying more.

One way individuals could end up paying more is through Biden’s proposed reinstatement of Obamacare’s mandate penalty for not having insurance. If health insurance isn’t purchased, the penalty would be an additional tax. Another way households might find themselves paying more in taxes is because of corporate tax increases. This will directly impact those owning stocks.

Adjustments for the Top 1% of Taxpayers
While middle-income families are mostly in the clear for tax increases, high-income households will likely take the burden of the proposed tax plan. In fact, Americans in the top 1% of households would see an after-tax income decrease of 16%—averaging a tax increase of $265,640.

Cap Deductions for Wealthy Taxpayers
For taxpayers that earn less than $400,000, they’ll be able to take the full value of itemized deductions. Households earning more than the $400,000 threshold will have the value of itemized deductions capped at 28%.

Capital Gains Taxed as Income
This proposed tax change has the largest impact on investors — especially those who have large investments in the stock and bond markets. When investors currently sell a share, they’re taxed differently than income. Under Biden’s plan, these gains would be treated like standard income.

As a result, any capital gains earned annually would be added as a form of income similar to salary and bonuses. This means that if individuals currently earn a lot of money through capital gains, they could find themselves with a big increase in their taxes.

Business Tax Changes

Businesses tend to take the brunt of the impact of Biden’s proposed business tax changes.

Increase the Corporate Tax Rate to 28%
The current tax rate for corporations is 21%. Under Biden, he is proposing the tax rate is increased to 28%—a pretty big jump in size. While there is a chance that tax increases get passed down to consumers through raised prices and labor, the increase in corporate tax rates shouldn’t impact the consumer much.

Set a Corporate Tax Minimum
In the past, large corporations like Amazon have been able to find ways to not pay taxes through various loopholes. However, Biden’s proposed tax plan ensures that all companies, no matter the scenario, will pay a minimum of 15% on all reported profits.

Tax Foreign Profits at 21%
One of the most drastic changes to tax rates impacts corporations and is related to foreign profits. Any money that is earned by foreign arms will have its tax doubled from 10.5% to 21%.

Tax Consulting Services in Cedar City, Utah

With proposed tax changes right around the corner, it can be overwhelming wondering what to expect. As you run into scenarios that may affect your taxes, you might decide that you’d like a tax consultant on your side to walk you through everything you need to know.

The AA Tax & Accounting Services team is committed to maximizing our clients’ tax savings and helping you feel confident come tax season. Contact us to schedule an appointment.