When filing your taxes, ensure you are taking these deductions so that you can save money when tax season arrives. A person buys a house with a mortgage and pays interest on that mortgage. That interest is tax deductible, which is offset against the person’s taxable income. Tax shields allow for taxpayers to make deductions to their taxable income, which reduces their taxable income. The lower the taxable income, the lower the amount of taxes owed to the government, hence, tax savings for the taxpayer. The benefit of using depreciation with a tax shield is that you can subtract any depreciation expenses from taxable income.
- The reason that he was able to earn additional income is because the cost of debt (i.e. 8% interest rate) is less than the return earned on the investment (i.e. 10%).
- My repeated emailed requests for a fee refund have been met with replies that they are being looked into.
- Failure to address back taxes can result in serious penalties.
- We proudly offer a PRICE PROTECTION GUARANTEE which guarantees what we quote you is what you pay!
- You may be able to set up a payment plan or apply to have some of the debt forgiven.
- For tax purposes, a deductible is an expense that can be subtracted from adjusted gross income in order to reduce the total amount of taxes owed.
The effect of a tax shield can be determined using a formula. This is usually the deduction multiplied by the tax rate. A tax shield is a fully legal strategy that taxpayers can use to reduce their tax burden and should not be confused with tax evasion. Tax evasion, also known as tax fraud, is the illegal and intentional failure to pay the full tax balance owed to the U.S. government. The IRS allows you to reduce your taxable income by a specific dollar amount—called a standard deduction.
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When your back taxes becomes more than you can reasonably pay, it’s important to turn to an experienced professional who can help you find the best way to resolve the situation. US Tax Shield has negotiated its clients out of more than $450 million of back taxes. The easiest way to get an offer in compromise is to prove that your assets and income aren’t sufficient to pay for the debt. In this case, you will typically set up a payment plan for a smaller sum than what was originally owed. US Tax Shield primarily helps customers to deal with outstanding debt.
- After putting their heads together, they came up with the awesome strategy of “you should get a loan to pay your tax debt”.
- This is usually the deduction multiplied by the tax rate.
- The only interest and urgency they displayed was in squeezing me for a $13,000 fee.
- Tuan graduated from California State University of Northridge where he received a Bachelor of Science in Accounting.
- This happens through claiming allowable deductions like medical expenses, charitable donations, or mortgage interest.
About five years ago I had a six figures back tax problem with the IRS I couldn’t deal with them, understand or settle with them and I tried. I reached out to US Tax Shield and they were able to negotiate a settlement with the IRS resulting in a monthly payment plan. Consequently, it’s all paid off, also removed the lien against me.
Examples of Tax Shields
An optimal capital structure is a good mix of both debt and equity funding that reduces a company’s cost of capital and increases its market value. The good news is that calculating a tax shield can be fairly straightforward to do as long as you have the right information. You will need to know your individual tax rate as well as the amount of all your tax-deductible expenses. A tax shield is a legal strategy to help reduce the amount of taxes owed on taxable income. The intuition here is that the company has an $800,000 reduction in taxable income since the interest expense is deductible.
- The State tax alone withheld nearly ten thousand in federal tax.
- In some cases, this requires a close investigation to determine your liability for the taxes owed.
- Similar to the tax shield offered in compensation for medical expenses, charitable giving can also lower a taxpayer’s obligations.
- Unlike other services that leave you hanging, US TAX gave me a life rope.
- They listen to the client’s concerns and respond in a timely manner.
Your standard deduction can help lower your tax liability, especially for those who don’t have tax-deductible expenses, as outlined above. Using illegal methods to avoid tax payment is known as tax shield tax evasion. Many middle-class homeowners opt to deduct their mortgage expenses, thus shielding some of their income from taxes. A tax shield may not be suitable for lower-income families.
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Examples of tax shields include deductions for charitable contributions, mortgage deductions, medical expenses, and depreciation. If you’re facing an audit, it helps to have a knowledgeable tax professional on your side. You have the right to appeal any disagreements that you have with the IRS regarding your taxes. The tax attorneys at US Tax Shield have successfully represented clients in tax audits.
Click the company name to explore its salary ranges and a comparison with pay at Us Tax Shield. Whether you’re a small business looking for quick, accurate answers or a global Fortune 500 firm that needs to support deep analysis, we have you covered with our family of datasets. † To check the rates and terms you qualify for, one or more soft credit pulls will be done by SuperMoney, and/or SuperMoney’s lending partners, that will not affect your credit score. Start by reading customer reviews, check their accreditations, and request a free consultation before making up your mind. Companies like Optima Tax Relief, BC Tax LLC, and Advanced Tax Team are a good place to start. US Tax Shield may offer a refund if you’re not satisfied with their services or cancel your account .
What Is An Interest Tax Shield?
The first step is to properly file all outstanding returns. The professionals at US Tax Shield can help you catch up on back taxes by assisting as you prepare and submit these returns. US Tax Shield back tax assistance reviews are mixed on other sites, such as the Better Business Bureau. While some customers report having an excellent experience with the company, others were unhappy with their results. This is likely due to the uncertain nature of back tax assistance. While a tax relief company can increase the chances of success, the final determination for each case is in the hands of the IRS.