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Who is Most Likely to be Audited by the IRS?

Tax season is stressful for everyone.  You never know when you are going to get that awful letter in the mail that informs you that you are being audited.  Preparation is important.  You should spend the whole year as if you expect to be audited.  Unfortunately, regardless of preparation, some people are more likely to get audited.

Cash Employees

The audit selection process is not completely random.  If you are an employee that makes the bulk of their income from cash, you are at a higher risk of being audited.  Professions such as wait staff, bartenders, or anyone else who earns tips should keep careful records.

Small Business Owners

Small business owners are also more likely to be audited.  It is important to keep all records for any deductions and credits you claim.  Some tax professionals also suggest that you claim income earned from side-jobs as “other income” on your return instead of filing on Schedule C.  This may help keep you off the radar as a Schedule C tends to be an audit magnet.


People Claiming Home Office Deductions

A home office deduction really comes in handy.  If you work from home and are self-employed at least part-time, you are allowed to dedicate a room in your house to office space.  The deduction amount is determined by the percentage of square footage your office occupies compared to the total square footage of your home.  For example, if your home is 2,000 square feet and your office is 400 square feet, you can deduct 20% of your utilities, internet, home phone, and mortgage interest payments (just to name a few) as home office expenses.  The IRS does love to audit people who claim this deduction so be honest and be careful!


Those Who Claim $0 and Those Who Claim Over $10 Million in Adjusted Gross Income

According to an article on time.com, in 2014, individuals claiming $0 in adjusted gross income were audited at a rate of 5.26%.  That same year, those claiming over $10 million were audited at a rate of 16.22%.  To offer some perspective, people earning between $50,000 and $100,000 had a 0.5% chance of being audited.

If you are one of the unfortunate souls that gets “randomly” selected to be audited by the IRS, do not panic.  If you have proof to back up your deductions, you have nothing to worry about.  In any case, if you are being audited, you should enlist the services of an experienced tax attorney in Florida.  Elias Dsouza of Dsouza and Strachan Lawgroup Group has the skills and experience you need to work through your tax issues.

How to Close Your Small Business in 5 Easy Steps

When you started your business, you did not do it with this day in mind.  That day is here nonetheless.  The business is no longer viable and you have made the decision to close it.  Do not fret, you will be back in the game soon enough!  However, you must first deal with this steaming pile of failed business.  Doing it the right way makes all the difference if you intend to start over at some point.

 

Step 1 – What is the Steaming Pile of Failed Business Worth?

Take stock of every asset your business still owns.  Everything is worth something.  If you are closing the business, it is probably because the plan is not working and you may have accrued some debt while trying to save it.  The remaining assets will help offset any liabilities you still have.

Step 2 – Make the Announcement

While this step is very difficult, it is better than firing everyone one day as they walk in the door.  Notify employees of the date their employment will end, contact your customers directly, inform your utility companies, landlord, and anyone else that will be affected by the loss of your business.  While you do not HAVE to necessarily do some of these things, it could benefit you to leave bridges un-scorched so when you raise from the ashes one day you will have friends.

Step 3 – Haggle and Settle

Liquidate your assets.  This money will be used to settle up with your creditors and anyone else you still owe.  You may be able to negotiate to reduce the value of liabilities you still have.  If you have creditors to worry about, they may be thrilled to talk to you about ways you can pay a lesser amount as opposed to filing for bankruptcy which leaves them with empty-handed.

Step 4 – Pay the Man

Meet with your accountant and file any and all tax returns.  This includes federal and state returns.  While this can be stressful, you should not put it off because you can incur fees and interest on unfiled returns.

Step 5 – Closing Time

  • Bank accounts – At this point, your bank accounts are most likely bruised and limping. It can be expensive to keep them open because most business checking accounts incur fees if the minimum balance is not maintained.
  • Your business – This is the end of the road. Time to move on and come up with the next great idea!

Closing a business can be very complex and overwhelming.  Do yourself a favor and obtain the services of an experienced business attorney in Broward County, Florida.  Elias Dsouza has been working with business owners for over a decade and has the skills needed to steer you safely onto your next venture.

3 Steps to Winning a Credit Card Debt Lawsuit

The short answer: get an attorney.  However, there are some who would rather try to defend themselves in court.  If you receive a summons to appear in court because you are being sued by a debt collection company, you have options.

Step 1 – Time is of the Essence

If you received a summons to appear in court because you are being sued by a debt collection company for credit card debt, you have a limited window of time to answer the complaint.  When being sued by a debt collection company in Florida, you have 20 days (including Saturdays and Sundays) to answer.  If you do not answer, you will be subject to a summary judgement which means you automatically lose.  Over 90% of credit card debt lawsuits end in a summary judgement because people do not respond after being summoned.

Step 2 – The All-Encompassing Answer

While submitting an answer in time is essential, it is not enough.  You must submit an answer that addresses ALL complaints listed by the plaintiff.  At this point, making excuses for why you did not pay will only hurt your case as excuses are an admission that you, in fact, owe the debt.

If you wish to deny every complaint made by the plaintiff, you can easily do so by saying “All allegations brought forth by the plaintiff are false.”  Keep in mind, this must be true or you are lying to the court.  If you are in court fighting a lawsuit for credit card debt, there is a good chance you did not pay that debt.  In this case, you have what are called “affirmative defenses”.  Creditinfo.com describes three common debt lawsuit affirmative defenses:

  • Statute of Limitations – This is one of the most powerful defenses in any case. In Florida, a debt stemming from revolving credit is outside of the statute of limitations after four years have passed.
  • Lack of Standing – As one of the most common defenses, Lack of Standing finds itself in most answers. Lack of Standing means the debt collection company does not own the debt and has no right to sue you for it.
  • Failure of Consideration – Failure of Consideration means there was no exchange of goods or services between the plaintiff and defendant, thus, nothing is owed to the plaintiff.

Step 3 – The Beauty of Discovery

During Discovery, you can ask the plaintiff for documents they will be using to prove your guilt.  In many cases, the plaintiff will lack these documents so it is important that you demand they provide them.  Once you have these documents, it is up to you to show the court that the plaintiff lacks the evidence to prove you are guilty.

This is a simplified guide to a very complex process.  The most appropriate way to give yourself the best chance to win a credit card debt lawsuit is to retain the services of an experienced debt defense attorney in Florida.  Elias Dsouza has been defending people from debt collectors for over 15 years.

Green Cards Explained

If someone is looking to attain permanent residency in the U.S., a green card (officially known as a “Permanent Resident Card”) is the way to go.  There are many ways to be eligible for a green card in the United States.  Read on to learn what you need to know about green cards.

So, What is a Green Card?

A green card is a means to permanent residency for those wishing to migrate to the United States.  If you have a green card, you can:

  • Gain employment in just about any field you wish (assuming you are qualified).
  • Reside in the U.S. as long as you wish.
  • Enjoy the protection of the U.S. legal system provided you follow the law.

These rights are not afforded to people with visas (see U.S. Visas Explained for more information).  Of course, being a permanent resident of the U.S. means you must:

  • File income tax returns at the state and federal levels.
  • Support the current form of democracy and not try to change it illegally.
  • File for selective service if you are between the ages of 18 and 25.

What Expenses Are Involved in Applying for a Green Card?

Of course, the rights that come along with permanent residency in the United States do not come without a price tag.  The “Application to Register Permanent Residence” or Form I-485 must be submitted with a filing fee of $985.  More potential forms and fees include:

  • Form I-485 Supplement A or the “Adjustment of Status Form” may be filed by individuals temporarily in the U.S. if they want to gain permanent residency. Filing fee, $1000.
  • Form I-130, “Petition for Alien Relative”. If you are a permanent U.S. citizen or resident and you have a relative interested in permanent residency, file this form with a money order for $535.
  • Form I-90, “Application to Replace Permanent Resident Card”. If you lose your green card, you can get a replacement, but it is going to cost you $455.

Forms I-485 and I-90 may also require an $85 fee if any biometric information is required.  Biometrics can include:

  • Facial recognition scanning.
  • DNA testing.
  • Retinal scanning.
  • Handwriting analysis.
  • Voice prints.

If you or a family member is interested in attaining permanent residency, you may need help navigating the process.  Elias Dsouza of Dsouza and Strachan Lawgroup Group has the knowledge and experience to guide you and your family to permanent U.S. residency.

US Visas Explained

Becoming a permanent resident of the United States can be very difficult especially these days.  The wait can be short or long depending on your goals.  Some people may choose a visa over a green card if it suits them, but there are costs associated with each option.  Keep reading for more on visas and check back next week for a quick guide to green cards.

The Difference Between a Green Card and a Visa in the United States

The main difference between a green card and a visa is that a visa grants its holder the temporary right to stay in the United States.  Also, a visa expires on a specific date.  Conversely, a green card does not expire.  Other differences include:

  • Unless a person has a certain type of visa called a “work visa”, that person cannot legally work in the United States while a green card does allow it.
  • In general, a visa is more quickly attainable than a green card.
  • In general, a visa is less expensive than a green card.

Non-Immigrant Visas

Non-immigrant visas do not typically lead to citizenship in the United States. A few types of this visa are:

  • Student visasAn “F” type student visa is for people wishing to attend school (including seminary) in the United States and then leave when the visa expires. An “M” type student visa is for those that wish to attend vocational school.
  • Business and tourist visas – This type of visa is for someone who wants to temporarily be in the United States for…you guessed it, business and tourism.
  • Work visas – A person can apply for a work visa if they wish to work in the United States for a predetermined amount of time and then leave.

Immigrant Visas

Immigrant visas are intended to lead to permanent residency.  A few types of immigrant visas include:

The requirements and details of each type of visa can be overwhelming.  The process of attaining any type of visa is enormously complex.  If you are trying to determine which type of visa is appropriate for you and your family, the assistance of an experienced immigration lawyer in Plantation, Florida such as Elias Dsouza of Dsouza and Strachan Lawgroup Group is excited to offer you a free consultation today.

A Quick Guide to Shared Equity Mortgages

Short on funds and looking for a home?  Looking for an investment that could yield nice returns?  A shared equity mortgage may be the arrangement for you.  Before you decide to jump into this type of partnership, you should know exactly what the loan is as well as the risks involved.  Also, the term “lender” is used throughout this article.  The “lender” may not necessarily be the investor in this partnership.  Independent investors can be a partner.

What is a Shared Equity Mortgage?

A shared equity mortgage is an arrangement in which the lender and borrower become partners.  The borrower still lives in the home just like a normal mortgage agreement, but the lender also invests a certain amount of money into the loan.  This means the lender owns a portion of the equity in the home (when equity is available).  When the home sells, the lender gets a portion of the profits as well.

How Is This Beneficial for the Borrower?

As previously stated, the lender invests money to cover a portion of the loan for the home.  This means the borrower is only responsible for the remainder of the loan.  For example, say the purchase price of the home is $200,000 and the lender invests $50,000 into the loan.  The borrower is then only responsible for $150,000 or (75%) of the loan.  A monthly payment on $150,000 (let’s say a 30-year mortgage in this example) is less than a monthly payment on a $200,000.  Another benefit for the borrower is that the lender’s investment can be used as the down payment.  If the down payment is large enough, you can avoid paying private mortgage insurance (PMI).

What Are the Drawbacks of Shared Equity Mortgage?

Of course, there are a number of potential downsides.  Sticking with the same scenario, if a lender invests 25% of the total loan amount, they are entitled to 25% of the profit when the home sells.  Other drawbacks include:

  • A mandatory 20% down payment on the home.
  • You cannot take out a second mortgage on the home.
  • If the investor is not the same as the lender, you could be required to pay double mortgage fees.
  • If you want out of the arrangement, you must pay the lender and investor an amount equal to their investment.

As this arrangement is not typical, you may have questions and require guidance to get through the mortgage process.  You may require the services of a knowledgeable real estate attorney in Florida to make sure you know what you are signing up for.  Elias Dsouza of Dsouza and Strachan Lawgroup group in Plantation, Florida has the knowledge and experience to protect you from avoidable mistakes in your journey toward home ownership.

 

The First 4 Phone Calls You Should Make if Your Identity is Stolen

You are at the register at the store and your credit or debit card payment reads “NOT APPROVED”.  You assume it is a machine error and ask the cashier to run it again, but the payment is declined again.  Your stomach drops when you check your balance on your phone and your account has been decimated by fraudulent charges.  Resolving an identity theft is a team effort, but who is your team exactly?

Phone Call #1 – Damage Control

Call the companies which you know accounts were fraudulently opened and/or credit or debit cards were used.  Before things get worse, you need to try to freeze the accounts and let the companies know that you were a victim of identity theft.  Also, let them know that you will be contacting them again when a report is created and a case is opened.  Lastly, change any and all passwords you can think of to block unwanted future access.

 

Phone Call #2 – Damage Assessment

Now you should start talking to Experian, Transunion, or Equifax.  You only have to create a fraud alert with one of the companies.  That company alerts the other two.  Next, get your credit report.  You can get a free credit report annually at annualcreditreport.com.  For the final portion of the damage assessment, list any and all transactions and fraudulent accounts.  You will need this information later.

Phone Call #3 – FTC

You may not be aware of this, but identity theft is a federal crime and the Federal Trade Commision (FTC) has your back.  You can contact the FTC to report identity theft at 1-877-438-4338 or online here.  If you decide to use the FTC website, you will get an Identity Theft Recovery Plan tailored to your situation after answering some basic questions about your case.

Phone Call #4 – Local Authorities

This step may be considered optional, but it is recommended.  If all you get out of it is a police report, it is still a win.  The more documentation, the better.  If you decide to contact local authorities, you can call for advice, but you will most likely need to go to the police station in person.  Do not forget to bring:

  • An official government-issued ID.
  • Any reports you have received during this process so far.
  • Two pieces of mail showing your address.

While there is plenty of action to be taken at the federal level, you still may need guidance through this process from someone with knowledge of Florida state laws.  If credit bureaus are reluctant to remedy your credit report or collectors are insisting that you pay debts which are associated with your identity theft case, you need the help of an experienced debt defense lawyer in Florida.  Contact Elias Dsouza of Plantation, Florida for help defending yourself against debt collectors and credit bureaus.  He can help you put your debt issues in the past.

Estate Planning: A Summary of Probate

If you have a will, great job.  If you do not have a will, take a look at A Beginner’s Guide to Will and Testament Law to learn about what a will is and why you need one.

Choosing to create a will on your own is legal, but you should really consider enlisting the services of an experienced estate planning attorney in Florida because of two words: probate court.

What is Probate Court?

When it is time to execute a will, certain things must be done and verified before assets and liabilities can be dispersed and resolved respectively.  The responsibility of the court during the probate process is to:

  • Determine the validity of the will.
  • Determining what the assets are and their value.
  • Resolving liabilities.
  • Executing the distribution of remaining assets.

If the deceased did not have a will, the probate court will be appointed as executor by a judge.  This executor is responsible for proving which assets are yours, securing those assets, and presenting the court with a list of those assets.  If your liabilities exceed your available cash, the executor will be responsible for liquidating assets to resolve the liabilities.

Are All Assets Inaccessible During the Probate Process?

In short, no.  In Florida, exemptions (some temporary) to the probate process exist:

  • The homestead exemption allows people who lived with the decedent at the time of their death to stay in the home during the probate process.
  • The automobile exemption allows a family to maintain possession of up to two vehicles.
  • The household furnishing exemption allows family members to keep furniture, furnishings, and appliances up to $20,000 in value.
  • Certain college funds are protected.
  • Certain compensatory employee benefits, disability, and pensions can be exempt.

A more in depth description of these exemptions can be found here.

This list of assets is not comprehensive and you may be entitled to more exemptions.  If you are an executor, having the guidance of an experienced probate attorney can help you handle creditors and family members.  Dsouza and Strachan Lawgroup Group has been guiding families through the probate process for over 15 years.  Contact us for a free consultation.

A Beginner’s Guide to Will and Testament Law

You may feel like you do not need a will at this point in your life.  Maybe you have not made one because you do not know what it is or how to have one created.  It is important to understand that you need a will if you are at least 20 years old because you do not want to leave your loved ones with a mess to sort through if something happens to you.

What Exactly is a Will?

A will is a legal document that tells the court exactly how you want certain things handled such as:

  • Naming the executor (a person or institution appointed to carry out instructions) of the will.
  • Naming the guardians of any children.
  • Assigning rights to assets.
  • Define instructions for paying debts.

If a will is not made, families can often have a difficult time handling the affairs of a deceased loved one.

What If You Do Not Have a Will?

In the state of Florida, if a will is not in place when someone dies, intestacy laws are used to determine who receives control of assets.  This is to say that the closest living relatives may get the assets.  In some cases, probate papers are filed.  Probate papers are usually filed by people who were supported by the assets of the deceased.  If these people can prove that they depend on any homes, personal property, or statutory allowance, they can ask the court for control of the assets.

How Do You Create a Will? 

In Florida, you can create a will without a lawyer.  However, if you think your wishes may be contested or you have specific instructions for how you want your assets and debt to be dispersed, you may want the services of an attorney.  For a will to be finalized in Florida, it has to be signed in front of two witnesses and the witnesses must sign the document.  Legally speaking, it does not have to be signed by a notary.  It is worth mentioning that Florida laws allow you to make a will “self-proving“.  A self-proving will must be signed by a notary.  The advantage to this type of execution is that the court does not have to contact the witnesses that signed the will before executing the wishes within it.

The creation of a will is extremely important.  If you have assets, children, or liabilities, you should leave instructions regarding their handling.  Situations that can occur after death can be difficult to anticipate.  Enlisting the guidance of an experienced estate planning attorney in Florida can solidify your plans and relieve the anxiety that accompanies this complex topic.  Consider Elias Dsouza of Dsouza and Strachan Lawgroup of Plantation, Florida to help you through this process.

Does Your Business Need an Attorney on Retainer?

Owning and operating a business is hard enough when things are going well, but when inevitable issues arise, you may need to call in reinforcements.  Most business owners are resourceful, competent, and ambitious which makes them ready and able to handle almost any problems as they come…. almost.  Before discussing what “almost” means here, let’s talk about things a business owner can usually handle without an attorney.

Starting a business can seem overwhelming, but the resources needed to get started on your own are out there.  Things you can do without an attorney can include:

In addition, there are some tasks that can be done on your own, but may be easier with the services of an attorney such as:

  • Choosing the structure of ownership (sole proprietorship, limited liability corporation, S corporation, etc.).
  • Creating contracts.
  • Trademark searches when choosing the legal business name.

Why Your Business Needs an Attorney

Hiring an attorney can be intimidating.  Most people are afraid of the costs involved, but keeping an attorney at the ready can actually reduce costs down the road.  Your business may need an attorney to handle things like:

  • Law suits filed by employees for discrimination and/or wrongful termination (See: A Quick Guide to Wrongful Termination).
  • Real estate acquisitions or issues.
  • Intellectual property protection.
  • Tax law consultation.
  • Protection against any potential future issues.

Perhaps one of the most important reasons to retain the services of an attorney is the prevention of future problems.  If you hire an experienced attorney, you may not have some of the issues listed above.  If you are starting a business or you already have an established business and you believe you need the guidance of an experienced attorney, consider Dsouza and Strachan Lawgroup of Plantation, Florida.  They have the knowledge and experience your business needs to move forward responsibly and securely.