Help With Your Federal Income Tax, Articles and stories related to the IRS, taxes, tax credits, EITC and tax deductions and updated tax news

Thursday, January 31, 2008

EITC Awareness Kicks Off Today; Free Tax Help Available

WASHINGTON — The Department of Treasury, the Internal Revenue Service and scores of community partners nationwide today kicked off EITC Awareness Day to promote the refundable tax credit for low-wage workers and options for free tax preparation.

January 31 – designated as EITC Awareness Day by the IRS - also marks the deadline for employers sending Forms W-2 to employees which enable them to file their tax returns. More than 60 percent of tax returns claiming the Earned Income Tax Credit are filed during the month of February.

More than 22.4 million taxpayers received more than $43.7 billion in EITC on their 2006 federal income tax returns. The IRS estimates that approximately one in four eligible taxpayers fails to claim EITC. Eligibility requirements for the credit can be complex. Also, people who have earned income but may not have a filing requirement, non-English speakers, non-traditional families, the homeless, childless workers and rural residents are among those who may not realize they qualify.

“Ensuring that more eligible families receive their EITC is important this year, as it is every year. I encourage people all across America to check to see if you are eligible for the Earned Income Tax Credit,” said Treasury Secretary Henry M. Paulson, Jr.

“Believe it or not, there are many taxpayers who are eligible to receive the Earned Income Tax Credit, but fail to claim it simply because they are not informed. That is why the many partners involved in today’s effort – from Congress, to state local and community leaders – are so critical,” said U.S. Treasurer Anna Escobedo Cabral.

“The IRS wants all eligible taxpayers to claim this important tax credit. We also want people to know that free help is available. There are volunteers staffing free tax-help sites nationwide. Free File at IRS.gov offers free software and e-filing. And, many professional tax preparers also donate their time and services to low-income taxpayers,” said Acting IRS Commissioner Linda Stiff.

Many organizations offering free tax help also are encouraging taxpayers to save a little money or open a bank account. The IRS has helped in this effort by creating a split-refund program that allows all taxpayers to divide their refunds among up to three financial accounts, such as checking, savings and retirement.

More than 150 coalitions and partners across the nation will mark EITC Awareness Day with a series of news conferences or news releases promoting this refundable tax credit for low-wage taxpayers. These organizations operate free tax preparation sites for low-income individuals, for seniors and for other eligible taxpayers.

EITC claimants are eligible for free tax preparation services provided at nearly 12,000 volunteer sites nationwide, they can also link to Free File through IRS.gov if they wish to prepare their own returns or many tax professionals also offer free service as part of their pro bono requirements.

The credit was created in 1975 in part to offset the burden of Social Security taxes and to serve as a work incentive. The amount of the credit varies but it is generally determined by income and family size. Some states also have a local version of EITC also can increase a taxpayer’s refund.

For the 2007 tax year, the maximum credit is $4,716 for a family with two or more children; $2,853 for a family with one child and $428 if the taxpayer does not reside with children.

The maximum amount of earned income allowed is higher for tax year 2007 than it was for 2006. Please see Fact Sheet 2008-11 for all eligibility requirements. Generally, a taxpayer may be able to take the credit for tax year 2007 if the taxpayer:

* has more than one qualifying child and earns less than $37,783 ($39,783 if married filing jointly),
* has one qualifying child and earns less than $33,241 ($35,241 if married filing jointly), or
* does not have a qualifying child and earns less than $12,590 ($14,590 if married filing jointly).

The maximum amount of investment income also increased to $2,900 for tax year 2007. For families, there also are certain requirements for child residency that must be met.

Nearly 70 percent of all EITC returns are prepared by a third party or tax professional. The IRS reminds tax professionals that they must perform due diligence when preparing an EITC tax return. To help, the IRS created an EITC Tax Preparer Electronic Toolkit which is available at www.eitcfortaxpreparers.com.

Taxpayers should seek out reputable tax preparers. People should be wary of tax preparers who offer larger refunds based on ETIC fraud or make other enticements based on EITC. False EITC returns have serious consequences and deliberate inaccuracies can result in a lengthy ban on eligibility.

This year, the IRS also will keep 70 Taxpayer Assistance Centers open the first three Saturdays during February to help prepare EITC returns. These will be located in areas underserved by volunteer tax preparation sites.

Tax preparers and taxpayers can find a wealth of information at IRS.gov. Both can use the EITC Assistant at www.irs.gov/eitc which is an easy-to-use interactive tool to help determine if the taxpayer is qualified for EITC. This step-by-step online program helps answer questions about eligibility, filing status, qualifying children and credit amount. The EITC Assistant also is available in Spanish.

In addition to on-line tools, the IRS also produces Publication 596, Earned Income Credit, which explains all the eligibility rules and also includes a worksheet to determine eligibility. The publication is available in English and Spanish.

There also is an electronic press kit for the media available at www.irs-eitc.info. This kit provides state-by-state EITC statistics; lists the states that provide local EITC benefits and provides other information of interest.

Related Items:

* EITC Awareness Day Partner Activity Highlights
* IR-2008-12, IRS Partners Host Free Tax Help for Low-Income, Elderly Taxpayers
* Fact Sheet 2008-11, Eligibility Rules Outlined for EITC
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Tuesday, January 29, 2008

e-file – A Smart Way To Do Your Taxes

The IRS is again offering eligible taxpayers the opportunity to electronically prepare and file their tax returns for free through Free File, a program offered in partnership between the IRS and private-sector software companies. For information on taxpayer eligibility, access the Free File Web page at IRS.gov.

For more information on e-file, check the IRS Web site at www.irs.gov/efile. You will also find a withholding calculator and worksheet, along with Form W-4, Employee’s Withholding Allowance Certificate, on the Web site. You may also get Form W-4 from your employer or by calling the IRS at 800-TAX-FORM (800-829-3676).

Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.

Links:

Friday, January 25, 2008

Free Tax Filing Services

The preparation of tax documents and filing of tax returns is a complicated process and requires professional handling. Professional help is generally expensive and can burn the pockets of taxpayers if availed of. Taxpayers can also prepare tax files on their own but there are risks of committing errors when a large number of deductions and exemptions are taken into consideration. As a result, taxpayers seek professional help even though it is expensive. In recent times however, some tax experts and tax companies have started offering free tax filing services.

The principal means of filing taxes for free is through online websites of tax companies and use of software provided by them. These companies offer online tax preparation help and electronic filing through a partnership agreement with the IRS. Almost all the free tax filing companies offer services based on different sets of criteria to qualify taxpayers for the service. Companies offer free filing service for taxpayers whose gross annual income is below or equal to $50,000. There are also many age and area restrictions for free tax filing service. Some tax filing companies prepare and file taxes for people of only certain area codes and states.

Primarily, Form 1040EZ is used to file tax returns of these types of customers. The companies fill out the forms and prepare tax liabilities and file papers with IRS, abiding by certain rules and regulations as specified by the IRS. The IRS advises people to go through the IRS website and approach only listed companies for free tax filing. A majority of free tax filing companies provides quality feedback about the status of the filed papers. Nevertheless, there are some companies who may only offer sub standard services and may make the entire tax filing process slow and sluggish.

Free tax filing also existed over phone lines. However, they have now ceased to exist. Free tax filing is one of the best ways for people to seek professional help with tax payments at zero costs.

Tax Filing provides detailed information on Tax Filing, Online Tax Filing, Free Tax Filing, Filing Payroll Taxes and more. Tax Filing is affiliated with Tax Return Filing Preparations.

By: tax guy

Article Directory: http://www.articledashboard.com

Free Tax Filing - a smart, easy to use next generation online tax preparation services to prepare and efile your federal & state taxes. Free Online Tax Filing design to make your tax Return Filing smart.

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Tax Return Online Saves Time And Energy

Returning tax on time is everyone’s moral duty. Even today people are earning heavy amounts; they hesitate to pay their income return. Every year names of many prominent people are flashed on the television and newspaper who do not return their income on time. Even a well educated people show their back when time comes to return their tax. There are many people who play tricks when the date approaches. People very cleverly hide their income. There are a section of people who is ready to pay their income return but the entire procedure of filling forms and to go to the tax return office upsets them. With the advent of tax return online, people can very easily pay their tax.

Tax return season is very hectic for any income tax officer. They are tightly packed with accounting; book keeping and income return preparation work. During this season, accountants do not get time to relax. There are many private firms that provide excellent service to their clients and also earn huge amounts of revenue. There service is hassle-free and it saves time and money. Undertaking tax return online services help the client to get quality work using less manpower. Therefore, clients can use their resources in other areas and generate new business. A reputed tax return online company promises full security. Before they handover the income return work to any professional, they verify the background of the person properly. No employee belongings are permitted inside the work premises and they also do not have access to printers or any other removable media devices.

Tax return online is hassle-free and one need not have to struggle with pen, paper and stamp. There are many people who wonder whether tax retuning online would be safe or not. But, one need not have to worry because there are many security measures against theft and people can rely on this online service totally. With the upcoming of this modern service, people can very easily return their income. The method is quite safe and easy to access. There are also some services that offer optional live chat programs, so that you can ask your questions directly to an expert. It is within the reach of all and online tax service saves time and energy. People need not have to bear the rush of returning income in the income tax office. Now, people can pay their tax sitting anywhere according to their convenience.

Tax return online is very modern and it is within the reach of all. If you are totally inexperienced in returning your income online then there are many websites that will guide you how to proceed. There are several sites on the web where you can calculate your income return. Tax return online is very easy and saves your valuable time. There is less possibility of any sort of mistakes. Now, you need not have to make any prior plan to return your income. The process takes place very fast and it is free from any error.

By: Michelle Barkley

Article Directory: http://www.articledashboard.com

Michelle Barkley is a CPA who advises people on tax preparation and tax calculation.She specializes in Tax return outsourcing,Tax return online and Outsourced Accounting.To know more about Accounting outsourcing services and accounting outsourcing in India and to use the services visit www.ifrworld.com

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Thursday, January 24, 2008

Tax Tips For Recently Divorced Or Married Taxpayers

Newlyweds and the recently divorced should ensure the name on their tax return matches the name registered with the Social Security Administration (SSA). A mismatch could unexpectedly delay a tax refund.

• For recently married taxpayers, the tax scenario begins when the bride says "I do." If she takes her husband's last name, but doesn't tell the SSA about the name change, a complication may result. If the couple files a joint tax return with her new name, the IRS computers will not be able to match the new name with the Social Security Number (SSN).

• After a divorce, a woman who had taken her husband’s name and made that change known to the SSA should contact the SSA if she reassumes a previous name.

It's easy to inform the SSA of a name change by filing Form SS-5 at a local SSA office. It usually takes two weeks to have the change verified. The form is available on the agency's Web site, www.socialsecurity.gov, by calling 800-772-1213 and at local offices. The SSA Web site provides the addresses of local offices.

Generally, taxpayers must provide SSNs for each dependent claimed on the tax return. For adopted children without SSNs, the parents can apply for an Adoption Taxpayer Identification Number, or ATIN, by filing Form W-7A with the IRS. The ATIN is a temporary number used in place of the SSN on the tax return. The form is available on the IRS Web site, IRS.gov, or by calling 800-TAX-FORM (800-829-3676).

Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.

Links:



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Wednesday, January 23, 2008

Tax Time Tips For Mortgage Holders

It's that time of year again when numbers such as 1040, W-2 and INT-1099 become all too familiar to millions of people. One of the benefits of holding a mortgage on your house is the ability to claim certain deductions that can assist you in offsetting some of your tax burden. As you prepare to file your yearly taxes let's look at a few areas where you can take advantage of tax deductions and keep a little more green in your pocket this tax season.

The most obvious deduction that many tax filers take advantage of is the interest paid on the mortgage for their primary residence. For those of us with a mortgage balance of less than $1 million dollars (and hopefully that is the majority of us!) you can fill out Schedule A, also known as "itemized deductions", and claim all the interest paid in the previous year on your mortgage. Keep in mind this is for your primary residence (where you live) only and does not include other properties and houses you may own for rental purposes, etc. If you paid off your mortgage this year and were slapped with a pre-payment penalty you can also use Schedule A to take a deduction on those fees as well.
Taxes paid to local governments, known as real estate or property taxes, are also tax deductible. If your mortgage company pays your taxes for you through an escrow account you can find the deductible amount listed there - else check your assessment notice sent to you by your local taxing authority.

If you decided to spruce up your home and took out a home equity loan you may also be eligible to take a deduction for the interest of the home equity loan. One thing to keep in mind though is if the home equity loan plus your mortgage amount puts you over the real value of your home in total amount owed there are limits to what you may deduct.

Points of all types are usually tax deductible as well. If you refinanced in the past year any points you paid to buy down the mortgage rate can be written off proportionately over the life of the loan. This means that if you have a 20 year mortgage, you get to deduct 1/20th of the points each year. An added bonus comes if you refinanced in a prior year and then refinanced against in the past year and ended up paying off the first refinance. Any points you had not deducted from that first loan now become eligible for write off in their entirety.
If you took out your mortgage in the past year, any points that you paid on the purchase are fully deductible if the mortgage was for your primary residence and you paid an amount down at least equal to the points you were charged. This one can be tricky, so be sure to consult your tax prepared for more information.

This tax season make sure you are taking advantage of every deduction you can; part of owning a home and having a mortgage means that you get to reap some of the benefits of that ownership through the tax system. Don't let the IRS keep the money that you can use to help pay off that mortgage faster!

By: ratetake

Article Directory: http://www.articledashboard.com

Susan Duey represents, Best Low Mortgage Refinance offers low mortgage refinance rate marketplace which connects consumers with multiple companies that compete for their business. For more information please visit Tax Time Tips for Mortgage Holders



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Tuesday, January 22, 2008

Rules For The Earned Income Credit

The Earned Income Credit (EIC)

The Earned Income Credit (EIC) is a refundable credit for low-income taxpayers who may or may not have a qualifying child. The EIC is is directly subtracted from your total tax, and it can be refunded even if you have no tax liability.

Here are the Adjusted Gross Income (AGI) limits to qualify for the EIC:

  • $37,783 ($39,783 for married filing jointly) if you have more than one qualifying child,

  • $33,241 ($35,241 for married filing jointly) if you have one qualifying child, or

  • $12,590 ($14,590 for married filing jointly) if you do not have a qualifying child.



Rules For A Qualifying Child

Here are the rules for the EIC:

1.) You must have earned income. If you file Married Filing Jointly (MFJ), this rule is met if you or your spouse have earned income.

2.) Your earned income and AGI must be under the limits posted above.

3.) You cannot be the qualifying child of another person.

4.) You must have a Social Security number that allows you to work.

5.) The Social Security number of each person you claim as your qualifying child must be included on Schedule EIC.

6.) Your qualifying child or children must have lived with you in the U.S. for at least half of the year. If you are in the military and on extended leave outside of the U.S. are considered to be in the U.S. during the duty period.

7.) You cannot file Forms 2555 or 2555-EZ, which are for foreign earned income.

8.) You must be a U.S. citizen or resident alien the entire year.

9.) You cannot have more than $2,900 in investment income. This includes interest, dividends, net income from rent, net capital gains, and net passive income that is not self-employment income.

To qualify for the EIC, you must meet all of these requirements. Even if you are not required to file, you still could qualify for the EIC. To get the credit though, you must file a return.

Tim

Monday, January 21, 2008

Getting Out Of Tax Debt - 5 Methods

When an individual has tax debt their options depend on their unique situation. There are 5 key methods to getting out of tax debt and only some may apply to an individual depending on their current financial situation. The following methods are ways to alleviate tax debt if the full amount cannot be paid immediately.

Method 1 - Setting up an installment agreement with the IRS

The IRS understands that some individuals cannot pay the entire amount owed and they are willing to work with individuals to set up payment plans to ensure that they will collect the money owed by the tax payer. These installment agreements allow for the tax payer to pay the entire amount of tax in smaller, more manageable payments over a period of time.

To set up one of these agreements you can fill out a form which is available online on the IRS website which is called Form 9465, or you can call the number on the tax bill to receive instructions. This is a good option if the bill cannot be paid in full, but be aware that there are some fees associated with setting up an installment agreement and it is always best to pay off these debts in full.

Method 2 - Partial payment Installment Option

This method is similar to Method 1 by setting up a monthly payment plan for the individual tax payer, but the tax payer does not pay off the entire amount owed in taxes. Under this method the tax payer goes under financial review every two years and this could increase the payment owed by the tax payer or the agreement could be terminated if the tax payers condition improves.

Method 3 - Submitting an Offer in Compromise (OIC)

This method is available for tax payers who have exhausted the previous two options and are not able to make the payment in full or the payments in installments. An OIC allows tax payers to settle their tax debts for less than the full amount. This option will only work if it is in the best interest of both the taxpayer and the government and promotes voluntary compliance with all future payments and filings. Tax debt on an individual can be compromised if they meet any of the following criteria:

-Doubt exists that the tax is correct

-Doubt as to collectibility

-Collection of the tax would create a financial hardship or would be unfair and inequitable

Method 4 - Bankruptcy

Bankruptcy can seriously hurt a person's credit making it very difficult for an individual to obtain any kind of financing in the future and should only be used if all other options are exhausted. When Bankruptcy is filed tax debts may be eligible for discharge under Chapter 7 or Chapter 13.

Method 5 - Currently not Collectible

When analysis of the IRS indicates that the tax payer is unable and has no ability to pay their tax payments the tax payments maybe waved. After this all subsequent refunds are withheld and subsequent actions may cause recurring collectibility determinations at later dates. When that tax payer is determined to be Currently not Collectible the IRS will not currently pursue collection.
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By: Manny Vetti

Article Directory: http://www.articledashboard.com

At EndThisDebt.com we will match you with a Tax Specialist based on your individual tax problem. We get you the best solution by having specialists compete for your business. Our service is free, confidential and comes with no obligation. Click to get your free consultation and estimated savings!!

Thursday, January 17, 2008

Filing Your Tax Return: Rapid Refund Or Rapid Trouble?

Who can you trust? It’s tax time again…and if you have a lot of deductions or you have investments and property it can seem very hard to do your own taxes. There are numerous companies both national and local that will offer to file your taxes for you, for a small fee.

But should you use one of these companies, or try to file on your own? For the sake of argument let’s say you want to have someone file your taxes for you. Depending on the company, you may be walking into a trap. That is why the first thing you should do is check out the company with the Better Business Bureau.

Are they qualified? Many of these tax prep company’s employees are not tax experts. They are not enrolled agents. They’ve had a three week training course at best. When you go to them they’re going to make all kinds of promises to get you more money than you’ve ever gotten back from Uncle Sam. Be very cautious at this point, “easy money” always has a catch.

Prepare, prepare, prepare…Make sure you have all of your paperwork and do all of the math yourself first. This will give you a frame of reference for when that company does your taxes. Also if they recommend a deduction that you’re not sure about, you probably shouldn’t take it. Don’t be seduced by the promise of a big payoff, ask the agent handling your taxes to prove the deduction is legitimate. If he/ she can’t, ask for a manager. It’s your money and you need to protect it.

They saw you coming a mile away. Do not be taken in by a “rapid refund”. If your taxes are filed electronically you’ll get the money in about two weeks. A rapid refund seems great: the tax company pays you right away. But wait, this is actually a loan and your planned tax return is the collateral. If you get audited, or your return denied, you still owe the tax prep company and you don’t have the tax return or worse, you owe the IRS too.

Statistics: For the tax year 2006 nearly $650 million was paid out to these companies for these rapid refund loans. That’s $650 million that people filing their taxes could have used.

I’m not saying all of these companies are crooked. Many of them can help you if you feel like you’re drowning in paperwork and don’t know which tax form to use. Just remember to be careful because you don’t want an IRS-Hitman showing up at your door.

Now you have the smoking gun…Use it!

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By: Richard Close The IRS Hitman

Article Directory: http://www.articledashboard.com

I’m Richard Close and I was a “Hitman” for the IRS. I took out anyone who owed the IRS money as my father had before me. Now I help thousands of Americans beat Uncle Sam and save thousands of dollars. Tax problems? Contact me and get free tips and techniques to deal with wage and bank seizures and slash tax debt: email me at IRS-Hitman@taxdefensenetwork.com or call 1-888-248-9058. Visit me irs-hitman.blogspot.com or www.taxdefensenetwork.com

Help! I Can’t Pay My Irs Tax Debt

Will the IRS help me? I can tell you from experience that many of you who owe money to Uncle Sam’s collection agency have no way to pay off the debt in full.

What can you do to pay the IRS? Well collection agencies accept payment installment plans, and the IRS is the biggest collection agency in the world, right? The IRS does allow you to setup a payment plan for your debt, but there’s a few things I need to tell you first.

What’s a Streamline? A payment plan with the IRS or a Streamline Payment Agreement can provide assistance, but as with anything that the IRS does, there is a catch. In fact there are several catches.

Since you don’t have much of a choice except to enter into a payment plan with the IRS, there are a few things that you need to expect:

What’s the minimum amount you can pay? Unfortunately it doesn’t work that way. The IRS determines how much you’re going to pay. And how we determine what you will pay is not to your benefit. You will have to commit to the IRS getting to really know you; this is called Full Financial Disclosure. They get to know all of your business and I do mean every little detail. Your entire life is an open book for them. Not just how much money you have, but how you live. Based on that they determine what your “allowable” expenses are for the month, and the rest goes to them.

What are your allowable expenses? They’re not what you think. For example, the IRS doesn’t consider credit card payments as “allowable” they’re luxuries and the IRS won’t take them into account, no matter how much you owe.

If you believe that some of the money you spend is allowable then you have to prove to the IRS that it is necessary. People have the misconception when dealing with us that the burden of proof wasn’t on them. As far as we were concerned, everyone was guilty until proven innocent.

The interest and penalties on your debt continue to get added on, to the tune of 25% in a given year. Depending on the debt owed, and the amount of your payments, you may not even see that debt go down.

If you start making more money, the IRS will know about it and will increase your payment amounts. Your raise that you worked hard for goes straight to Uncle Sam’s pocket.

The IRS wants you to default on your payment plan. The IRS doesn’t want you to be able to keep up your payment plan. I know, because we used to wait in the wings for someone to miss a payment. Why? Because once you default we swoop in like vultures and start the hardcore collection actions. And since you had to tell the IRS all of your financial information, we would know about everything that could be seized, and where you kept it.

It’s the only choice. A payment plan is the only solution for thousands of people in tax debt. It seems almost impossible to come out on top of the payments, but the alternatives such as wage garnishment are much worse. .

Now you have the smoking gun…Use it!
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By: Richard Close The IRS Hitman

Article Directory: http://www.articledashboard.com

I’m Richard Close and I was a “Hitman” for the IRS. I took out anyone who owed the IRS money as my father had before me. Now I help thousands of Americans beat Uncle Sam and save thousands of dollars. Tax problems? Contact me and get free tips and techniques to deal with wage and bank seizures and slash tax debt: email me at IRS-Hitman@taxdefensenetwork.com or call 1-888-248-9058. Visit me irs-hitman.blogspot.com or www.taxdefensenetwork.com

Tuesday, January 15, 2008

Do I Have to Pay Taxes on My Google Adsense Earnings?

Do I Have to Pay Taxes on My Google Adsense Earnings?

Google Adsense is required to collect tax information from those who participate in the program. If you’re a business, you’ll need to put your EIN number on your application. If you’re an individual, all you’ll need is your social security number. If you don’t have that information when you initially sign up, you can still apply for the Google Adsense program. But be advised that Google Adsense will withhold payments to you until they receive your tax information.

While Google does not withhold taxes or provide any tax advice, they will send you a 1099 once your earnings reach a certain amount. Of course, if you are a Non-US business and have no activity in the United States, you will not need to provide this information. For more tax information regarding the Google Adsense program, visit the Google Adsense Support site. For other tax-related questions or concerns, you can log onto www.irs.gov.

If you use a separate room of your house just to make money on the internet, and it is used for that purpose only, or is considered a home office, some tax deductions you can take are the cost of your internet, your phone, your computer, fax machine and copier. You can take the section 179 deduction or depreciate the equipment. Software you buy for your business and the cost of ads you place across the Internet are also tax deductible. Just make sure you have accurate records.

Tim
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U.S. Master Tax Guide!!

Monday, January 14, 2008

Snipes' team says actor did nothing illegal

By KEVIN GRAHAM, Times Staff Writer
Published January 14, 2008

Wesley Snipes sat at the top of the box office charts for most of the 1990s.

New Jack City. Jungle Fever. White Men Can't Jump. Passenger 57. Blade.

Dubbed one of 12 "Promising New Actors of 1990" in John Willis' Screen World, Snipes, 45, ended the decade by getting a star on Hollywood's Walk of Fame.

Today, the celebrity will find himself seated in a federal courtroom in Ocala. Prosecutors plan to spend the next month trying to prove that he worked with two other men to defraud the IRS of $11.4-million in tax refunds.

In a telephone interview with the St. Petersburg Times, Snipes' lawyers say he did nothing illegal, and they're ready to show it. "The truth will surprise and shock the public," says Robert Barnes, a Snipes attorney.

Why did the government charge Snipes?

Federal prosecutors charged the actor with conspiracy to defraud, making a false claim and six counts of willfully failing to file federal income tax returns. They accuse him of seeking bogus refunds in 1996 and 1997 and of filing no returns between 1999 and 2004.

Prosecutors also plan to present evidence that Snipes participated as an anti-IRS tax protester for several years.


Read The Rest


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Friday, January 11, 2008

More Overlooked Tax Deductions

Here are a few more of the most common tax deductions that are overlooked. Remember, depending on your filing situation, not all of these deductions will apply to you.

1.) Adjustment on Form 1040 for student loan interest.

2.) Adjustment on Form 1040 for one-half of the self-employment tax you paid

3.) Health insurance premiums for some self-employed taxpayers. This is also and adjustment on Form 1040.

4.) Adjustment on Form 1040 for penalty on early withdrawal on savings.

5.) Alimony you paid, also an adjustment on Form 1040.

6.) Nursing home expenses which are primarily for medical care.

7.) Equipment for disabled or handicapped individuals.

8.) Certain stop smoking treatments and the cost of alcohol and drug abuse treatments.

9.) Part of life-care fee paid to a retirement home designated for medical care.

10.) Job seeking expenses within your present field of employment.


Tim
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Wednesday, January 9, 2008

Tax Deductions That Are Often Overlooked

Today was the first day I worked. Though we can't actually file until the 14, th, we can take a taxpayers last pay stub and complete the majority of the return. When the customer gets their W-2's, we just input that info and send it away. I was reading up on deductions, and here are some of the top tax deductions that are overlooked. Now, depending on your filing situation, not all of these deductions will apply to you. And I cannot stress this enough, make sure you have records and you keep them. Do this every year. The more accurate your records are, the better benefit it will be to you when it is time to file your taxes.

1. Unreimbursed casualty and theft losses that are more that $100 and total more than 10% of your AGI(Adjusted Gross Income).

2. Mileage driven in relation to charitable activities.

3. Wages for nursing services.

4. Cost of a safe deposit box used for investment purposes.

5. State income taxes that are owed from a prior year and paid in the tax year.

6. Taxes paid to a foreign government.

7. Required work uniforms not suitable for wearing on the street.

8. Gifts to business clients up to $25 for each person.

9. Special school costs for mentally or physically handicapped people.

10.Guard dog for your business, or a guide dog.

11. Union Dues.

12. Employment agency fees.

13. Professional journals and magazines.

14. Mandatory contributions to state disability funds.

15. Gambling losses, up to the amount of your winnings.

16. Tax preparation fees, advice, and software.

17. Commissions to brokers and agents for the sale of property.

18. Worthless stock and securities.

19. Cell phones required for your business.

20. Medical transportation including parking, tolls and mileage for picking up medicine, doctors and dentists.

I hope this is helpful.

Tim

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Monday, January 7, 2008

More On The Alternative Minimum Tax

Because Congress dragged their feet on the Alternative Minimum Tax issue, there may be as many as 13 million taxpayers who are affected by this. At least the filing season is expected to start on time, with the IRS accepting returns starting on January 14.

However, there are 5 forms that will not be accepted by the IRS no earlier than Feb. 11. Those affected are the Education Credits, Residential Energy Credits, Child and Dependent Care Expenses, Mortgage Interest Credit, and the District of Columbia First Time Homebuyer credit. If you are affected by any of these credits, you should wait until then to file your return, or you could file without using the credits and file an ammended return, though that might be too much for most taxpayers.

Tim

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Friday, January 4, 2008

Be Ready For Your Tax Preparer

In doing taxes for the last few years, I have had plenty of people come in not prepared to file their taxes. There have been plenty of times where I opened the the W-2's or other important tax information for people. They have no idea how much they made for the year, how much was withheld, or even if the Social Security and Medicare taxes where withheld at the correct rate. Taxes and filing an accurate tax return are very important, and I find it hard to believe that a lot of people do not even open their tax information to find out if all of the information is correct. The interview will go a lot smoother and faster if you are prepared and you have all of your records ready, plus your return will be accurate. Plus, it is really not fair to the other clients if a tax preparer has to spend 10 minutes opening stuff up that the taxpayer should have already done. That is 10 more minutes other customers have to wait, and everyone hates to wait, correct?

Now, I don't know how it is in other tax offices, but where I work, we are really going to be using due diligence. This means do not try to use a child that is not yours as a dependent, do not give us false information for your tax return, trying to take deductions you are not entitled to, things along these lines. We will ask questions. The IRS is really cracking down on fraudulent returns, and they have increased the penalties against tax preparers who file returns such as these. I also had to take a required course on fraud and ethics. Trust me, I'm not about to file a fraudulent tax return, I don't want or need the IRS after me. I am a professional tax preparer and I take my job seriously, as I'm sure the vast majority of tax preparers do.

In other news, I really haven't been able to do many updates, as I have been at the office doing my training, taking and passing the tests I need to, working on practice tax problems, and just getting ready for the start of the tax season.

Tim

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Thursday, January 3, 2008

Tax Deductions You Can Take

If you itemize, here are some of the tax deductions you can take for you and your dependents, provided your deductions are higher than the standard deduction for your filing status.

First, here are the standard deductions:

Single or married filing separately, your deduction is $5,350

Married filing jointly, your deduction is $10,700

Head of household, $7,850

The standard deductions are higher if you are blind or 65 and over.

Here are some of the tax deductions you can take:

Medical deductions: Some of the medical and dental expenses that you can deduct include doctor, hospital and lab fees, prescription medicines and insulin, medical and hospital insurance premiums, eyeglasses, eye surgery, special items such as artificial limbs, guide dogs, expenses for being an organ donor, stop smoking programs, treatment for drug and alcohol abuse, and transportation for medical care. Remember, you can only deduct medical expenses that are above 7.5% of your adjusted gross income(AGI) shown on line 38 of Form 1040.

Taxes: You can take a tax deduction for state and local income taxes, or state and local general sales taxes, but not both. Choose to deduct the one that gives you the best tax benefit. Real estate and personal property taxes are also deductible.

Mortgage interest: You can deduct your mortgage interest, and new for 2007, mortgage insurance premiums are also tax deductible. Certain points you paid can also be deducted.

Investment interest: If you borrow money to buy property you hold
for investment, the interest you pay is investment interest. You can deduct investment interest. However, you cannot deduct interest you incurred to produce tax-exempt income, nor can you deduct interest expenses on straddles. Investment interest does not include any qualified home mortgage interest or any interest taken into account in computing income or loss from a passive activity.

Charitable contributions: Contributions to qualified organizations include church, Red Cross, The United Way and other nonprofit organizations, Boy and Girl Scouts and other nonprofit educational organizations, and nonprofit medical organizations. The IRS requires that you have records documenting your contributions. The miles you drive for these purposes are also tax deductible at 14 cents a mile, or you can use actual expenses for gas and oil, and you can also deduct parking fees and tolls. If you contribute clothing or household items, they must be in good used condition or better.

Casualty and theft losses: If you suffer a loss to your home, household items or vehicle, these are tax deductible. You may not deduct casualty and theft losses covered by insurance unless you file a timely claim for reimbursement and you must reduce the loss by the amount of the reimbursement.

These are just some of the tax deductions you can take. For more detail, go to Itemized Deductions.

As always, it is vital you keep accurate records of your deductions. Keep them in a safe place with your copy of your return, and I suggest keeping them for at least 3 years, if not longer.

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IRS Tax Forms

Here are some links to 4 of the most popular IRS tax forms. The IRS website is not the easiest to find what you need, so I decided to post the links here. These are all in PDF format, and you can save them to your computer and print them off if you need to.

Form 1040

Form 1040-EZ


Form W-4


2007 1040 Tax Table


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