Save on Tax Preparation: File Your Own Taxes

Tax preparation can be costly so save money and try doing your taxes yourself. Tax preparation can cause you hundreds especially if you opt for an expedited refund. Filing your taxes yourself is easy with the help of the Internet. Several tax preparers offer online tax services in which you can file your taxes for very little if anything at all. Depending on your income, you may even qualify to file your federal taxes for free.

Where is my W-2?

By the end of each January, employers must mail your W-2 wage information to you if you are a wage earner. If you are self employed, you will not have a W-2 form. Other tax forms, such as 1099s, you may receive for other income such as investments, retirement, or contract work. If you do not receive your W-2, contact your employer or the IRS. The IRS can send you a Form 4852 with your income information on it to complete your tax returns.

How to Begin Your Tax Returns

Begin filing your tax returns by deciding whether you are going to complete paper forms or file electronically using an online tax preparer such as TurboTax, TaxAct, H &R Block or IRS FreeFile.

Gather all income forms such as W-2s and 1099s. If you are married and filing together, you will also need your spouse’s W-2 and 1099 forms. To begin filing your tax returns, you will need basic information such as your name, address, phone numbers and social security number. You must decide how you are filing your taxes such as single, married filing separately, married filing jointly, or head of household. Each filing status has requirements and if you are using an online tax preparer it may help you decide which filing status fits you the best.

Standard Deduction vs. Itemize Deductions

After entering your income information, which will come directly off of your W-2 and 1099, you must decide on whether you will accept a standard deduction or itemize your deductions. Your standard deduction is an allowable deduction from your taxable wages that the IRS allows conditional on your taxation filing status. Dependent on your actual expenses and allowable tax credits, a standard deduction can possibly be beneficial. To determine which deduction you prefer to file, review your allowable deductions and tax credits. Charitable donations, legal fees, prior taxes paid, tax preparation fees, student loan interest paid, educational expenses, job-related expenses not reimbursed, childcare costs, as well as volunteer time are all allowable deductions and tax credits that can reduce your taxable income.

If these deductions and tax credits are more that the standard deduction the IRS allows, it is more advantageous for you to itemize. But, be careful because those that itemize deductions are more probable to be audited from the government. Ensure you have receipts for all expenses you deduct. If you are audited and do not have receipts for expenses you claimed, the IRS can adjust your return which could cost you thousands of dollars in taxes.

IRS: Publication 501: Exemptions, Standard Deduction, and Filing Information.

IRS: Eight Facts About Filing Status

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Do I Really Need to Hire a Tax Consultant?

If you ever start your own part time business, keeping track of your finances is one of the needed keys to a successful business. In addition, learning how to read the tax laws is important as it allows you to keep your hard earned money. However, since the tax laws change frequently, it’s a good idea to hire your own professional tax consultant. It saves you on hassle and if you find a good one, they will do their job better than you ever could. So if you want your business to run smoothly, learn how to find a tax consultant.

First, ask your friends and family if they know someone suited for the job. A tax adviser that someone else knows is more likely to be trustworthy. If not, then it’s time to pick up the phone book and start interviewing everyone. Keep in mind that some people only want your money and aren’t necessary good for your business. Avoid these scammers. If you are interviewing a potential adviser and they demand to be paid for being interviewed, they are a bad fit, drop them fast. Be sure to interview several people before deciding on who to go with. Also, even if you hire someone that sounds good, there is a small chance that it may not work out. If it doesn’t, simply fire them and try again.

You may not need to hire a tax consultant if you are determined to do your own taxes. However, unless you plan to study up on all of the laws, you may make a mistake somewhere. Some people don’t want to get a tax consultant because it costs money, but the resources they save you are worth more than you are paying them. A good tax consultant will be able to save your business money in places that you may not have figured out yourself. Of course, a bad consultant can do the same thing, but they won’t follow the tax laws correctly, leading to trouble down the line. Before you choose a tax specialist, weigh the pros and cons first.

The Consistent Decline Of The Las Vegas’ Housing Market

As the economy starts to improve, the housing market of Las Vegas has not been up to par. The prices of the median home declined in May and the historically depressed level of new-home sales remained constant according to a local housing analyst.

The Home Builders Research agency has reports of 291 new-home being sold in May, which increased from 258 in April, but is down from 506 in the same month in 2010 when there was a home-buyer tax credit government sponsored, at the federal level, was in effect. The median price of a home dropped from a year ago to a value of over $192,000.

The number of new-home sales has stayed low throughout the whole year, with an average of just 262 houses sold per month, and the total of 2011 is down 36 percent at 1,311.

The Home Builders Research president, Dennis Smith, said that the tally of new-homes sales should rise over the summer. They could reach up to 300 to 400 a month.

Smith’s regular traffic reports show the net sales per subdivision are now up to about one house every fortnight, up from about one per three weeks or month.

Also, home builders pulled over 430 new permits in May, up over a hundred from around 320 last month. The monthly permit counts are an indicator of the absorption of future new-homes.

“I’m not saying the recession is over,” Smith said. Smith also said to see the numbers go up over the next one to two months.

Activity of resales is running ahead of last year with nearly 4,000 existing home sales in May, a 9 percentage point gain from May of the previous year, according to Home Builders Research. For 2011, houses that are being resold are up 4.8 percentage points to over 18,000.

Dennis Smith said that he is prepared to increase this year’s sales projections up to 44,000, which does not include deeds from trustees.

“Yes, prices are down,” Smith said. He continued by saying that the Smith also said that it is a good opportunity to buy property in Las Vegas for individuals and investors, both large and small.

SalesTraq, based in Las Vegas, reported almost 300 new-home closings in May, a staggering decrease of over forty percent from last year, showing more progress. The median price actually rose 0.3 percentage points, to the current level of just under $194,000.

Of the existing-home sales, which also includes sales from trustees, jumped over a surprising 17.0 percent to just fewer than 5,000 during the month. However, the middle prices for existing home price fell by about 14 percentage points, to over $100,000.

SalesTraq counted over 800 sales, short sales, which is when the homes were bought for less than the usual mortgage balance, at the medium price of around $120,000. There were almost 750 real estate auction sales with a resulting median of $90,100. Of the approximate 2,000 bank-owned, or real estate-owned, sales were at a median of $102,000. There were over 1,300 nondistressed sales with a median sale price of $120,000.

A key to Las Vegas housing is, in fact, the real estate-owned element, said the president of Marketing Solutions, Steve Bottfeld.

Bottfeld said there are practically no signs of improvement and to watch for the number of potential foreclosures in the future.

According to SalesTraq, there were over 2,200 bank repossessions in May, a large 31 percent jump from last May and the most repossessed houses in a single month since October 2009. Smith said there were over 50,000 foreclosures in what is known as “silent inventory” which could make it on the market if lender policies don’t change.

Smith said that this would not lead to a longer recession but it would take several years to see any noticeable appreciation which would still be very small at 2 or 3 percent.

The housing boom went bust five years ago and since then, sales have fallen almost every year for the U.S. Analysts are expecting sales to eventually level off at around 5 million a year. Last year was the worst showing in over a decade as only about 4.9 million homes sold.

IRS Revokes Nonprofit Tax Exempt Status

The Internal Revenue Service (IRS) has made changes to the nonprofit tax exempt status of agencies that are not for profit in the 445 area who have not filed required tax forms for three consecutive years now. This move has made it impossible for donors to claim deductions on their federal income taxes 2010 for donations given to these organizations.

About 275,000 local agencies all over the country have been affected by this IRS policy move, though according to the federal agency most of these agencies are not operating. A list of the affected agencies is available on the revoked list at Representative Chuck Shumer’s website. However some of the agencies listed are operating and according to them, they have been filing all the paperwork required. So work needs to be done to clarify who is tax exempt and how has lost their tax exempt status.

Unpleasant Surprise

Among these agencies include the Plattekill Public Library, New Windsor Little League, University of Michigan, Woodstock Area Meals, George Washington University and the Islamic Center in Washington D.C. According to these agencies, they have been filing their returns and their tax forms are up to date. They were all surprised when they found themselves on the list.

Why the List is Necessary

The 2006 Pension Protection Act claims that these organizations earning less than $50,000 should file their tax information. Cleaning up the list will increase tax revenues during a time when the US government is in need of increased revenue to help balance spending.

Assisting Potential Donors

The revocation is supposed to eliminate agencies not in operation. Donors can have a clear picture of existing agencies. The IRS had made attempts to reach out to all agencies but most of the organizations claimed that they did not get any information. What is puzzling for organizations is that copies of tax forms can be found on the Guide Star website filed in 2009.

The IRS Provides Offshore Account Disclosure

As we complete the strenuous task of paying our incomes taxes for 2010, we have to deal with the unleashed financial monster i.e. IRS tax audits.

Many taxpayers do everything possible to try the nearly impossible feat of evading the burden of taxes by using the measures as per the Internal Revenue Code to dodge their tax burden. Thus, they cause financial problems and auditing issues for the government, which in turn has doubled the auditing of tax returns for the richest USA citizens this tax season.

IRS professionals have definitely pulled up their socks with audits being increased 8% for the richest USA citizens in 2010 over the past tax season. Also the data released by the Internal Revenue Service shows that IRS audits have increased from 10.6% to 18.4% for the taxpayers with gross incomes above $10 million. Even audits for taxed adults within the income range of $5 million and $10 million have seen audit increases from 7.5% to 11.6%, which is a 55% increase.

Offshore accounts and tax evasions are the new catch with Global High Wealth groups being established in 2010 for improved strategies for high magnitude capital individuals.
As per Doug Shulman, IRS commissioner, the federal agency is looking for leverage points through which many tax evaders can be caught. Two of them are financial institutions and evasion scheme promoters.

The initiative of an Offshore Voluntary Disclosure process for the native and non-native English speaking taxpayers, provides information in 8 different languages. For tax evader’s benefit, they can now disclose their offshore accounts and come clean with the taxing authority, since evading taxes is a criminal offense and largely against the US’ interest.