Frugal Taxpayers LLC

Frugal Taxpayers LLC We help individuals and small businesses with accurate, reliable, and stress-free tax preparation.

Our goal is to ensure compliance, maximize your refund where possible, and give you peace of mind during tax season and beyond.

💰 You made money from your hobby… does that mean you now have a business?Maybe.Let's say you love photography, baking, c...
09/04/2026

💰 You made money from your hobby… does that mean you now have a business?

Maybe.

Let's say you love photography, baking, crafting, making jewelry, woodworking, creating content, or selling things online.

It started just for fun.

Then someone paid you.

Then someone else paid you.

And suddenly you're wondering:

“Do I have a business now?” 🤔

For tax purposes, the difference between a hobby and a business matters.

The IRS doesn't decide based simply on how much money you made or whether you registered an LLC.

Instead, it looks at the facts and circumstances and whether you're genuinely carrying on the activity with the intention of making a profit.

Some questions to think about:

* Do you operate the activity in a businesslike manner and keep complete and accurate records?

* Do you put significant time and effort into making it profitable?

* Do you depend on this income for your livelihood?

* Have you changed the way you operate in an effort to improve profitability?

* Do you or your advisers have the knowledge needed to run the activity successfully?

* Have you made profits from similar activities in the past?

* Has the activity made a profit in some years?

* Is there a reasonable expectation that assets used in the activity could increase in value?

No single factor decides the answer.

So why does the distinction matter?

👉 If it's a business, income and allowable business expenses are generally reported as business activity, and net earnings may also be subject to self-employment tax.

👉 If it's a hobby, the income is still taxable and must generally be reported — but the tax treatment of expenses is different.

And here's something important:

Making money from something you enjoy doesn't automatically make it a hobby.

A business can absolutely be something you love doing.

The real question is whether you're pursuing the activity with a genuine intention of making a profit and operating it accordingly.

If your side activity is starting to generate income, this is a good time to start keeping good records of your income and expenses — not when tax season arrives and you're trying to remember everything.

Official IRS resource: https://www.irs.gov/newsroom/heres-how-to-tell-the-difference-between-a-hobby-and-a-business-for-tax-purposes

Follow Frugal Taxpayers for tax information explained in simple terms.

09/02/2026

Got an IRS notice? 😟

Your first thought might be:

“I'll just call the person who prepared my taxes.”

But here's something many taxpayers don't realize:

👉 Preparing a tax return and representing you before the IRS are NOT the same thing.

Tax professionals have different levels of representation rights.

Enrolled Agents, CPAs and attorneys generally have unlimited representation rights before the IRS.

That means they can represent taxpayers in matters such as:

📄 IRS examinations and audits
💰 Collection and payment issues
⚖️ IRS appeals
📬 Certain IRS notices and disputes

Other tax return preparers may have limited representation rights — or no representation rights at all, depending on their credentials and the circumstances.

But there's another resource taxpayers should know about:

The Taxpayer Advocate Service — TAS.

TAS is an independent organization within the IRS, and its assistance is free.

TAS may be able to help when:

👉 You're experiencing financial hardship because of an IRS problem.

👉 You've tried to resolve an issue with the IRS and you're experiencing significant delays.

👉 The IRS hasn't responded by the date it promised.

👉 An IRS system or procedure isn't working as it should.

But TAS also has limitations.

TAS is not your tax return preparer and generally isn't there to provide tax preparation or legal/tax advice.

So if you receive an IRS notice:

Don't panic.
Don't ignore it.
And don't assume every tax professional can provide the same type of help.

First understand what the IRS is asking — then determine what kind of help you actually need.

Not every tax problem qualifies for TAS assistance, but you can check your situation using their official “Can TAS Help Me?” tool.

👉 Start with the official Taxpayer Advocate Service Get Help page:
https://www.taxpayeradvocate.irs.gov/get-help/

You can find information about common IRS problems and check whether your situation may qualify for TAS assistance.

And remember: receiving an IRS notice doesn't automatically mean something terrible has happened. Read the notice carefully, understand what the IRS is requesting, and get the appropriate help when you need it.

Follow Frugal Taxpayers for tax information explained in simple terms.

💰 Why is your IRS balance getting bigger even though you haven't added any new taxes?If you owe the IRS, the original ta...
08/31/2026

💰 Why is your IRS balance getting bigger even though you haven't added any new taxes?

If you owe the IRS, the original tax bill may not be the only amount you eventually have to pay.

Interest and penalties can continue to increase what you owe.

Here are a few common reasons:

*You filed your tax return late.

If you owe tax and don't file by the deadline — including an approved extension — a failure-to-file penalty may apply.

*You filed, but didn't pay the tax by the original payment deadline.

A filing extension gives you additional time to file, but generally does NOT give you additional time to pay.

For individuals, the failure-to-pay penalty is generally 0.5% of the unpaid tax for each month or part of a month, up to 25%.

*Interest is also accumulating.

Interest generally starts on unpaid tax from the original payment due date and continues until the balance is paid in full.

And interest compounds daily.

That's why ignoring a tax balance usually doesn't make it disappear — it can make it more expensive.

What if you can't afford to pay everything?

Don't avoid filing your return because you can't pay.

File on time, pay as much as you reasonably can, and look into IRS payment options for the remaining balance.

Depending on your circumstances, you may be able to set up a payment plan.

And in some situations, taxpayers may also qualify for penalty relief, such as First Time Abate or reasonable-cause relief.

The important thing is to address the problem instead of ignoring it.

The earlier you deal with an unpaid tax balance, the more options you may have — and the less opportunity there is for additional charges to accumulate.

Follow Frugal Taxpayers for tax information explained in simple terms.

08/29/2026

Can't afford to pay your tax bill?

Don't make this mistake:

DON'T avoid filing your tax return just because you can't pay.

File your return on time — even if you don't have the money to pay the entire balance.

Why?

Not filing can create an additional failure-to-file penalty, while the unpaid balance can also continue accumulating applicable penalties and interest.

So what should you do?

1️⃣ FILE THE RETURN

Even if you can't pay.

2️⃣ PAY WHAT YOU CAN

Even a partial payment reduces the balance on which additional interest and applicable penalties can accumulate.

3️⃣ LOOK AT YOUR IRS PAYMENT OPTIONS

Depending on your situation, you may qualify for:

* A short-term payment plan

* A long-term installment agreement with monthly payments

* An Offer in Compromise — in certain circumstances, this can settle qualifying tax debt for less than the full amount owed

A temporary delay in collection if paying would prevent you from meeting basic living expenses

The most important thing?

Don't ignore the tax return.
Don't ignore IRS notices.
And don't assume you have to pay everything immediately before you can file.

File first. Then deal with the balance.

Follow Frugal Taxpayers for tax information explained in simple terms.

The tax code has its own version of FAFO.FA:Buy a $90,000 truck because “it's a write-off.”Put your kids on payroll beca...
08/28/2026

The tax code has its own version of FAFO.

FA:

Buy a $90,000 truck because “it's a write-off.”

Put your kids on payroll because “the IRS lets you pay them tax-free.”

Rent your house to your business for 14 days because “Augusta Rule.”

Buy a rental and do a cost segregation study because “paper losses offset your income.”

Open an LLC because “LLCs save taxes.”

Take a giant Roth conversion because “tax rates are going up.”

FO:

Your truck still cost $90,000.

Your 4-year-old needs to actually do something worth getting paid for.

The Augusta Rule is not a magical $30,000 transfer from your business to your checking account.

Your rental loss might not be deductible against your other income.

An LLC, by itself, does approximately jack s**t to your federal income taxes.

And voluntarily paying 32% tax today to avoid a hypothetical 22% tax later is not automatically a win.

Here's the annoying thing about legitimate tax strategies:

They have rules.
Qualifications.
Limits.
Documentation.
And sometimes downsides.

The internet loves the FA part.

Tax professionals usually meet you during the FO part.

💰 Tax refunds have changed — and if you normally receive a paper check, this is important to know before your next tax r...
08/27/2026

💰 Tax refunds have changed — and if you normally receive a paper check, this is important to know before your next tax return.

During the 2026 tax filing season, the IRS changed how many refunds are delivered as the federal government moves away from paper checks and toward electronic payments.

So what does this actually mean for taxpayers?

👉 Direct deposit is now the primary way to receive an IRS refund.

If your tax return shows a refund but you didn't provide banking information — or the information you provided was incorrect or rejected by your bank — your return can still be processed.

But your refund may be held.

The IRS may send you a CP53E notice asking you to take action.

If you receive one, you generally have 30 days to:

📌 Add or update your banking information through your IRS Individual Online Account, OR
📌 Request a paper-check exception if you qualify.

What if you don't have a traditional bank account?

The IRS says other options may include certain prepaid debit cards, mobile payment apps or digital wallets that provide routing and account numbers. Limited exceptions for receiving a paper check are also available.

And here's something especially important:

The IRS will NOT call or text you asking for your banking information for this process.

If someone contacts you unexpectedly and asks for your bank account information while claiming they need it to release your IRS refund, don't provide it.

The IRS sends the CP53E notice by mail, and banking information is updated through your IRS Individual Online Account.

For your next tax return:

Before filing, double-check your routing number, account number and that the account is in your name (or is a joint account that includes your name).

A few extra minutes checking this information could help prevent a much longer wait for your refund.

Follow Frugal Taxpayers for tax information explained in simple terms.

08/25/2026

Living outside the United States?

You may STILL have to file a U.S. tax return. 🇺🇸

If you're a U.S. citizen or resident alien, moving abroad generally doesn't end your U.S. tax obligations.

The U.S. generally taxes citizens and resident aliens on their worldwide income — including income earned outside the United States.

But that doesn't necessarily mean you'll pay tax twice.

Depending on your situation, you may qualify for provisions such as:

✅ Foreign Earned Income Exclusion
✅ Foreign Housing Exclusion or Deduction
✅ Foreign Tax Credit

And there's something else many people don't realize…

💰 Foreign bank accounts may also have separate reporting requirements.

For example, an FBAR may be required if the combined value of your foreign financial accounts exceeded $10,000 at any time during the calendar year.

So remember:

Living abroad doesn't automatically mean you're done with U.S. taxes.

Your filing and reporting requirements depend on your individual situation.

Frugal Taxpayers
Tax information made easier to understand.

Most tax returns go through without a problem. But what happens when yours doesn't?The National Taxpayer Advocate recent...
08/23/2026

Most tax returns go through without a problem. But what happens when yours doesn't?

The National Taxpayer Advocate recently released its latest report to Congress, reviewing the 2026 tax filing season.

Overall, there was good news. The IRS processed almost 99% of individual returns received, and the vast majority of refunds were issued by direct deposit.

But the report also highlighted something taxpayers should be aware of:

When a return requires extra attention, resolving the problem can take much longer.

For example, the Taxpayer Advocate reported that identity-theft victim cases were taking an average of about 600 days to close.

The IRS also had more returns requiring manual processing, while fewer calls were answered by live IRS representatives compared with the previous filing season.

So, remember:

📌 File accurate and complete returns.
📌 Keep your tax documents and records.
📌 Don't ignore IRS notices.
📌 Respond promptly when the IRS requests information.
📌 And if something doesn't look right, don't wait months before addressing it.

You can't prevent every IRS delay, but good records and responding quickly can make a big difference if your return does run into a problem.

At Frugal Taxpayers, we're here to help you understand your tax situation before, during, and after tax season.

08/22/2026

🍂 Summer is almost over… and October 15 will be here faster than we think!

If you filed an extension for your 2025 federal individual income tax return, your extended filing deadline is generally October 15, 2026.

But here's something important:

👉 You don't have to wait until October 15 to file.

If you already have your W-2s, 1099s, business records, investment documents, and everything else you need, you can get your return prepared and filed now.

And remember — an extension gave you more time to file, not more time to pay. If you owed federal income tax, it was generally still due April 15, and interest and possible penalties may continue on an unpaid balance.

So instead of waiting until 🍂 fall turns into 🎃 spooky season and suddenly realizing the deadline is around the corner, this is a good time to start gathering anything you're still missing.

Have questions or aren't sure what documents you still need? Contact us now. It's much easier to figure out what's missing while we still have time than a few days before the deadline.

📞 Frugal Taxpayers
Professional tax preparation and bookkeeping services

Extension deadline: October 15, 2026

Address

4515 North River Blvd #200 (suite 216, 213, 212)
Cedar Rapids, IA
52411

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