Tag: Form

A Couple of Common Tax Problems

Unfortunately the IRS continues to make understanding tax filing difficult. Those white forms that are jammed to the brim with odd words don’t really make the situation any better. It looks like we’ll have to continue playing the “Guess what the IRS is thinking” game until some form of flat tax is implemented. This article will mention a couple of common tax problems and some potential solutions. Note that the author of this article highly recommends seeking a professional if you have a tax problem.

One of the most common issues faced when dealing with taxes is that the citizen is unable to make the tax payments. Whether it was bad budgeting or disaster struck, some people simply don’t have the money to pay their taxes when they are due.

What will happen if you fail to pay your taxes? Chances are you will be fined and the government will charge you interest on the unpaid portion of your taxes. If you find yourself in a situation where you are unable to pay your taxes, then you should apply for an extension with the IRS. Some people suggest that the IRS does not offer a payment extension time period. However, at least one expert in the field suggests that you can use File Form 1127 to apply for a 6 month extension. You have to send this form in before the April 15th payment deadline. If the IRS accepts your extension, then you are usually given around 6 months to come up with the money for your taxes. Probably the best thing you can do if you find yourself in this situation is ask a professional for help.

Another common IRS tax problem is that you will not be able to file your tax forms on time. This can happen because of procrastination or simply because you didn’t understand the filing requirements. The IRS does offer an automatic extension if you send then the correct forms. However, this form has to be sent before the April 15th deadline. Also note that your tax payments to the IRS are still due on April 15th even if you applied for this type of extension. In order to get a payment extension period, you’ll have to fill out Form 1127 mentioned above.

If you find yourself running into either of these two problems, you’ll simply want to contact a profession who knows what they are doing. Tax laws change annually and what might have worked for your friend “Joe” three years ago might not work today. Although it might cost you a chunk of change to hire a professional, at the end of the day you’ll be glad that you did.

Invest your Tax Return

Invest your 2009 Tax Return

The IRS is offering an investment option if you are getting a refund for your 2009 taxes this year. You can transfer your tax refund for a US savings bond of up to $5,000. You can purchase a bond in any denomination of $50, remaining funds need to be directly deposited into a banking account.

It’s just that simple, when you file choose the US Savings Bond option and you will receive your bonds in the mail instead of a refund check. The official form is Form 8888, used to deposit your refund into more … Read the rest

Invest your 2009 Tax Return

The IRS is offering an investment option if you are getting a refund for your 2009 taxes this year. You can transfer your tax refund for a US savings bond of up to $5,000. You can purchase a bond in any denomination of $50, remaining funds need to be directly deposited into a banking account.

It’s just that simple, when you file choose the US Savings Bond option and you will receive your bonds in the mail instead of a refund check. The official form is Form 8888, used to deposit your refund into more than one account. Tax preparation software packages like TurboTax and TaxAct provide the form for you when you indicate that you want to purchase one of the bonds.

The Form 8888 also has instructions if you are completing for the form by hand. This is a nice option if you would be investing the money into a savings account as the bonds provide a better rate of return on average.