Tax Filing Assistance For Taxpayers

If you are yet to file your federal income tax returns for 2012, luck is at hand. This year, you will have a couple of additional days to do it.

Rather than the usual 15th April deadline, taxpayers can send their returns in as late as midnight 17th April.

A spokesman for the IRS, Christopher Miller, assured people that they have no need to panic.

The 2 day extension has been granted because the 15th falls on a Sunday, followed by Emancipation Day on the 16th, which is a federal holiday in the Colombia District.

As ever, according to Miller, lots of tax filing assistance is provided for filers completing returns at the last minute. For example, taxpayers can visit www.irs.gov/freefile and utilize the free IRS File on the internet. It provides complimentary software to e file and prepare taxes.

Miller stated that the group of tax help software businesses, called Free File Alliance, have affiliated with the IRS Volunteer Program for Income Tax Assistance to aid a greater number of lower and moderate level taxpayers. With this new affiliation, software is accessible at self serve computer terminals located in virtually 300 areas throughout 29 states, which includes the Quad Cities.

The group executive director, Tim Hugo, said that the Free File Alliance aims to offer online e filing and preparation services for US residents who may not be capable of paying for professional tax filing assistance or tax software.

The program, that started in 2003, offers people who earn $50000.00 or below complimentary tax preparation, along with personal tax help at nationwide locations. IRS certified voluntary staff assist taxpayers in the completion of their yearly tax returns, and offer tax credit information about credits that some taxpayers may be able to claim, like Child Tax Credits, Credits for the Disabled or Elderly and Earned Income Tax Credits.

At a local level, this program is managed by Quad Cities United Way and by additional sponsors, according to Scott Crane, who is president of the Quad City United Way company.

Crane said that, during the previous year, they did 5500 returns and that this year, by the 1st March, they were 15% up. Apparently, this meant that $5.5 million was returned back to the community last year.

The program ends on 14th April and is reachable in numerous local sites. These include the offices of the United Way in Davenport.

Paul Gilbert is a retired agent for the IRS from Davenport, who recently decided to volunteer for the program. Gilbert claimed that he has seen a constant stream of clients, while he was helping a client in the offices of the United Way.

LaVaughn Narbone, from Moline, started at the United Way the previous week, having learned about the program through a referral.

Narbone said that she had her taxes for this year completed in the Rock Island Martin Luther King Center, but that she also needed to complete her returns for the previous two years. The King Center, unfortunately, did not possess the correct software for doing this.

Sharon Scott from Davenport, another client, has used the program for a decade. She said she loves it because it is free and extremely thorough.

The H&R Block manager at Rock Island (1610 2nd Ave), Darnett Aldridge, claimed that lots of people are making use of his business’s offer to re assess tax returns which have been completed somewhere else.

Aldridge stated that many people who complete returns do it incorrectly and that he can sometimes save people as much as $10000.00.

The IRS said that most tax returns are electronically filed. A taxpayer that e files utilizes tax software which usually incorporates a question and answer style format. This format ensures that taxpayers get all of the deductions and credits to which they are entitled. Generally, the rate of error for e filed returns is lower than 1%, compared to about 20% for paper filed returns, according to the IRS.

Miller stated that people who are falling behind schedule can request a deadline extension on the internet, or by completing a 4868 Form.

Miller said that deadline extensions relate to tax filing, not to the time people have to pay the taxes they owe.

People who are unable to meet the tax paying deadline can phone the IRS to make arrangements for payment.

Miller added that a Fresh Start initiative was recently expanded by the IRS, which tries to help struggling taxpayers review their options for payment.

The owner of 4 Liberty Tax Services franchise offices, Theresa Harris, said she can see identical trends occurring this year that mirror trends which have occurred in the past.

Harris said that some people wanted their cash instantly, but then everything slowed down by March. Now though, she said the business owners who have to pay and the procrastinators are appearing. Apparently, this is exactly what happened over the past few years.

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.

http://www.irs.gov/publications/p501/ar02.html#en_US_2010_publink1000221074

IRS: Eight Facts About Filing Status

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FreeTaxUSA and The Amended Tax Return

As the April deadline approaches and you have already sent your tax return in the mail to the IRS or you have completed a return on the computer, the only way to change the tax return is to file an amended tax return. If you have filed with FreeTaxUSA, you can sign in with your account and correct the return.

The Internal Revenue Service does not let you do an e-file amended return.  Your only choice is to prepare and send back the amended return.

If you completed your original tax return through another source besides FreeTaxUSA, you can go to the website for the IRS and use form 1040X to manually do an amended return. If you would like to use FreeTaxUSA, just enter all of your tax information.

It is recommended that a person not amend their tax return until they have received their refund or paid their taxes.  Often times, the IRS will automatically correct any errors, in which case, you do not need to amend anything.  The IRS sends a notice as to the adjustments that were made or asks for more documentation.

Tax forms can be tricky at times.  With the misplacement or miscalculation of one number throwing many things off.  When this occurs you must make every effort to correct the mistake through an amended tax returnSoftware from FreeTaxUSA makes this process as well as your initial tax filing easy.  Tax returns do not have to cause headaches.  Careful preparation is key.

IRS Sets Tax Filing Extension Now To Five Months For Partnership, Estate And Trust Returns

New rules set by the IRS have changed the time of automatic extensions.  These rules affect estate, trust and partnership tax returns.  Instead of the former six month tax filing extension, the new period is just five months.  For most individual taxpayers the new rules will have little to no effect on filing date or individual taxpayer extensions.

The filing options with an extension for these entities was a six month period.  However, the new rules have reduced the amount of time allowed by one month.

In the past, the extension only required the filing of a single form and by filing a second form another extension of three months was added.

At the public hearing on this change on extensions, there was concern issued that taxpayers might not receive information about changes in time to gather necessary paperwork to complete their filings in a timely or accurate manner.

When this proposal went to public hearing, there were just seventy comments made on the changes.  Many of those making comments suggested that the due date be changed instead of shortening the time allowed for extensions.  This could have been accomplished by changing tax day to April 30 for individuals, or extending the individual extension to seven months.  Others making comments, suggested changing the normal filing date for those affected by the shortened extension period be changed to March 15, but still allowing them to request a full six month extension in order to get the necessary information to taxpayers that it would affect.

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.

 

Ready for Tax Season? Learn the 3 Key Steps to Avoiding the Ire of the IRS

Just about everyone fears a tax audit from the IRS, but why? If you haven’t done anything wrong, there may really be no reason to fear such an inspection of your financial matters. Maybe this fear comes from the knowledge that we aren’t always sure we’re doing our taxes correctly in the first place. Maybe it comes from the fact that the tax code is so bloated with exceptions, exemptions, and deductions, that it leaves most us wondering if we indeed have a clue as to what we are doing when we fill in those simple looking tax forms that sit beside the huge instruction booklet. Maybe it’s just that as Americans, we don’t like having our privacy invaded by “the man” and don’t appreciate the fact that he’s checking up on us and our private financial affairs.

Whatever the reason, an audit is something the majority of us would prefer not to have to deal with. But mistakes, voluntary or not, can sometimes lead us in that direction. Here are three common tax mistakes that people often make and ways to avoid them.

Being and Staying Organized

Keeping all your pertinent financial and tax information together throughout the year isn’t necessarily easy. However, it can make a huge difference when it comes time to file. For many, one of the major mistakes when it comes to taxes is not having all the documentation they need at the end of the year easily at hand to make their filing process more efficient. Not having the proper documents can lead to mistakes and errors that could raise a red flag when your return gets to the state or federal level.

But being organized is only half the battle to avoiding this tax mistake. Staying organized after the fact can be important as well. Keeping your tax information together and in a location that is easy for you to find can help you if you need to reference information from a previous year or have to deal with an audit and need to provide documentation for your tax claims.

Deduction Fear

What if you happen to misplace certain documentation relating to your taxes such as a charitable donation receipt or similar item but have a legitimate claim to taking the item as a deduction or credit upon your taxes? This might lead to another common mistake — failure to take the deduction that you are eligible for anyway.

If you have legitimately made certain purchases or are eligible for certain credits or deductions, but may not have or can’t find the necessary documentation to prove it, this doesn’t necessarily mean you shouldn’t attempt to take the deduction. While it might be like playing a form of roulette — taking your chances of not being able to prove the item if you are audited — it’s not as if you are illegally claiming something you didn’t actually deserve, and your conscience should be clear even if the tax man gives you a slap on the wrist.

Knowing When to Call it Quits

Pride can be a dangerous thing, and when it comes to doing your own taxes, it can sometimes get in the way of a properly completed tax return. Frugality can also play into the mix of tax preparation mistakes, preferring cost savings by completing a tax return on your own as opposed to paying a professional to do it for you.

Saving a buck can be a great aspect of doing your taxes yourself, and the pride that comes with sealing that envelope and mailing a tax return you’ve completed yourself off to the IRS can a be a wonderful feeling, but these factors can also be common and dangerous mistakes in the realm of taxes. Knowing when to pack it in, swallow your pride and spend a buck to get a professional’s touch upon your tax return can save you time and even money by avoiding costly mistakes. Doing so might also provide you with peace of mind knowing that you haven’t missed any deductions and that you have a professional on your side should you indeed be audited.

Anastacio Mindiola is an accomplished attorney and business owner. His company helps home and business owners protest property taxes in Houston and the surrounding counties. For more information on how you can lower your property taxes visit http://www.republicpropertytax.com.