Category: tax tips

IRS tax tips

Benefits of e-Filing Your Return

Benefits of e-Filing Your Return

Last year nearly 67% of federal tax returns were submitted to the IRS by electronic transfer, or e-file. The IRS likes tax returns to come in electronic format as it is easier for them to process and recently provided a list of benefits for you to consider.

The speed with which your return can be sent, processed, and a refund sent to you is much better when you file your federal return electronically. The IRS is also able to correct your information if there happens to be a missed calculation on the return. Ten days … Read the rest

Benefits of e-Filing Your Return

Last year nearly 67% of federal tax returns were submitted to the IRS by electronic transfer, or e-file. The IRS likes tax returns to come in electronic format as it is easier for them to process and recently provided a list of benefits for you to consider.

The speed with which your return can be sent, processed, and a refund sent to you is much better when you file your federal return electronically. The IRS is also able to correct your information if there happens to be a missed calculation on the return. Ten days is a standard turn-around if you file this way and request direct deposit into a checking account.

The IRS maintains strict security on their transferred communications and feels your information is entirely safe filing electronically. And once your return is received by the IRS your tax preparer or tax preparation software, like TurboTax or TaxAct, will let you know it was received. Then you can monitor its progress to know when your refund will be coming.

Finally, if you do happen to owe taxes, you can e-file immediately when your return is complete and wait until the end of the tax season to send the IRS the amount due. And state returns are often able to be transmitted with the same benefits you will enjoy from your federal tax electronic filing.

Use the Tax Form that fits You

Use the Tax Form that fits You

Filing your Federal Tax Return requires you to select at least one form, a 1040 form. But there are a number of 1040 forms available depending on the complexity of your return. Here are the criteria to consider when selecting a 1040 form.

The 1040EZ is used when your taxable income is less than $100,000, your are married filing joint or single, you are under the age of 65, not blind, you have no dependents, your income from interest earning accounts produced less that $1,500 during the year, and you do not … Read the rest

Use the Tax Form that fits You

Filing your Federal Tax Return requires you to select at least one form, a 1040 form. But there are a number of 1040 forms available depending on the complexity of your return. Here are the criteria to consider when selecting a 1040 form.

The 1040EZ is used when your taxable income is less than $100,000, your are married filing joint or single, you are under the age of 65, not blind, you have no dependents, your income from interest earning accounts produced less that $1,500 during the year, and you do not plan to take certain deductions.

The 1040A can be used when your taxable income is less than $100,000, you do have some capital gains, you do have tax credits, and you plan to claim an IRA deduction, a student load deduction, an education expense, or a higher education expense.

When you cannot use the 1040EZ or the 1040A, you need to file the 1040 (sometimes called the long form). This happens when your income is greater than $100,000, you want to itemize on Schedule A, you have Self-Employment income, and you have capital gains from the sale of a home. The 1040 long form isn’t as impossible to complete as you might think and tax preparation software like TurboTax will use the form if your situation requires it.

Getting your Filing Status Correct

Getting your Filing Status Correct

Selecting the right filling status makes a great difference in your refund ultimately and is quite important. Your standard deduction and the amount of tax your owe varies based on whether you are single, married, or head of household. The IRS wants you to make the right selection and therefore is providing some useful tips.

If you have gotten married or gotten a divorce during the tax year, your filing status is your status on the last day of the year. And maybe more than one status applies to you. For instance, you are both … Read the rest

Getting your Filing Status Correct

Selecting the right filling status makes a great difference in your refund ultimately and is quite important. Your standard deduction and the amount of tax your owe varies based on whether you are single, married, or head of household. The IRS wants you to make the right selection and therefore is providing some useful tips.

If you have gotten married or gotten a divorce during the tax year, your filing status is your status on the last day of the year. And maybe more than one status applies to you. For instance, you are both single and Head of Household. Select Head of Household as the tax your owe will be less.

Married couples have the unique ability to file jointly or separately. Often this selection is made based on the overall tax consequences of the filing status. State taxes can be reduced be filing separately in states like Ohio, make this selection attractive.

If your spouse passed away during 2009, you can file jointly for this one year only with your deceased spouse. And if your spouse died during either 2007 or 2008 and you have a dependent child, filing Widow(er) with Dependent Child can improve your tax return if you meet certain conditions. (Check Publication 501)

Head of Household implies that you are single, have paid more that 50% of the cost of your home, and have a qualified dependent in the home. This status was often claimed incorrectly but has recently been looked at closely but IRS auditors for misapplication.

Just Married or Divorced, Get Your Filing Name Right

Just Married or Divorced, Get Your Filing Name Right

According to the IRS, if you were just married in 2009 or you just got divorced, there are some things to consider to make sure your tax return has the correct name and will be processed. Entering the right taxpayer name is vital to getting your refund quickly.

If there was a last name change of either spouse because of a marriage, make sure to contact the Social Security Administration. If the SSA doesn’t have record of your new name, the tax return can not be matched to your Social … Read the rest

Just Married or Divorced, Get Your Filing Name Right

According to the IRS, if you were just married in 2009 or you just got divorced, there are some things to consider to make sure your tax return has the correct name and will be processed. Entering the right taxpayer name is vital to getting your refund quickly.

If there was a last name change of either spouse because of a marriage, make sure to contact the Social Security Administration. If the SSA doesn’t have record of your new name, the tax return can not be matched to your Social Security Number. Likewise, if you changed your name after a divorce, you need to notify the SSA.

The SSA has a form you will need to complete called form SS-5. Changing your name with this government agency is fairly simple. You can also get a copy online, at a local SSA office or by calling them at 1-800-772-1213.

Adopting a child that doesn’t have a Social Security Number is the final issue that might delay your return. You need to apply for a SSN for the child or get an Adopted Taxpayer Identification Number (ATIN).

Top Ten Tax Tips for Early January

Top Ten Tax Tips for Early January 2010

The IRS has released their first tax tip of the season with the Top Ten Tax Time Tips. Their tips range from record gathering and filing options to Publication 17 review and contacting the IRS with your questions.

  1. Get your records ready. Start gathering all the records you will need to prepare your tax return when all tax forms have arrived in the mail.

  2. Watch the mailbox. Keep your eyes open for tax documents in the mail including mortgage interest and W2s from your employer. Some mortgage companies do not send the

… Read the rest

Top Ten Tax Tips for Early January 2010

The IRS has released their first tax tip of the season with the Top Ten Tax Time Tips. Their tips range from record gathering and filing options to Publication 17 review and contacting the IRS with your questions.

  1. Get your records ready. Start gathering all the records you will need to prepare your tax return when all tax forms have arrived in the mail.

  2. Watch the mailbox. Keep your eyes open for tax documents in the mail including mortgage interest and W2s from your employer. Some mortgage companies do not send the forms separately but enclose them with your monthly statement.

  3. eFile When Complete. File your return electronically when it is prepared. The majority of Americans are now filing their returns electronically and the process is much faster than the traditional method of mailing in a paper return.

  4. Free File your Return. Many preparation software solutions have teamed up with the IRS to provide free filing options when your income is below certain levels. If you use TurboTax or TaxAct, try the free Federal version before paying for the service.

  5. Consider Free Consultations. Many parts of the country now offer free filing consultations. Check with your local library or your local community center to see if they have experienced help for you tax preparation.

  6. Direct Deposit is Faster. You can speed up your refund from the IRS if you have them directly deposit the funds into a bank account instead of sending you a check.

  7. Watch IRS.gov. The government website has updates throughout the tax season with great advice when you need your questions answered.

  8. Publication 17. This IRS document is the end all when it comes to information about your tax return. Check it for changes to the tax code that will affect your return in 2010.

  9. Review your return. Mistakes and missing information are common when you send a return without it reviewing it first. Take your time to consider every part of your return for additional deductions and credits your might be eligible for.

  10. Contact the IRS. If you have a question to hesitate to call 1-800-829-1040 toll free.