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

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.

Exemptions and Dependents 101

When preparing your federal 2009 tax return for filing, make sure to know the basic rules about exemptions and dependents. Understand what happens when someone claims you as a dependent or how exemptions affect your return. Your refund will be affected by all these conditions.

To begin with, when someone claims you as a dependent you may still need to file a return. Depending on your income, your filing status, special tax situations, or Advanced Earned Income you will need to file a return to the IRS. Check Publication 501 for exact details about … Read the rest

Exemptions and Dependents 101

Exemptions are yourself and your dependents and they reduce your tax bill. The standard exemption is $3,650 but can be phased out when your income reaches certain levels. Now if you are being claimed as a dependent by someone else and you discover that you need to file a return, you cannot take the personal exemption.

Your spouse’s exemption will be claimed on your joint filing and could be claimed on your Married Filing Separate return. If your spouse did not earn any income during the tax year and is not claimed as a dependent by their parents, you can claim them on your separate return.

Other groups that cannot be claimed on your return include non US citizens, resident aliens, and residents of Mexico and Canada. The only exception is for an adopted child where you should consult your tax professional to see if they qualify.

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

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

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

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.

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.
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

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.
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.
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.
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.
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.
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.
Watch IRS.gov. The government website has updates throughout the tax season with great advice when you need your questions answered.
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.
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.
Contact the IRS. If you have a question to hesitate to call 1-800-829-1040 toll free.

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