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IRS Warns Taxpayers to Beware of First-Time Homebuyer Credit Fraud

2009-09-13T07:55:00.000-07:00

IRS Warns Taxpayers to Beware of First-Time Homebuyer Credit Fraud

IRS Special Edition Tax Tip 2009-05 - July 29, 2009

The Internal Revenue Service today announced its first successful prosecution related to fraud involving the first-time homebuyer credit and warned taxpayers to beware of this type of scheme.

On Thursday July 23, 2009, a Jacksonville, Fla., tax preparer, James Otto Price III, pled guilty to falsely claiming the first-time homebuyer credit on a client’s federal tax return. Price faces the possibility of up to three years in jail, a fine of as much as $250,000, or both.

To date, the IRS has executed seven search warrants and currently has 24 open criminal investigations in pursuit of potential instances of fraud involving the credit. The agency has a number of sophisticated computer screening tools to quickly identify returns that may contain fraudulent claims for the first-time homebuyer credit.

“We will vigorously pursue anyone who falsely tries to claim this or any other tax credit or deduction,” said Eileen Mayer, Chief, IRS Criminal Investigation. “The penalties for tax fraud are steep. Taxpayers should be wary of anyone who promises to get them a big refund.”

Whether a taxpayer prepares his or her own return or uses the services of a paid preparer, it is the taxpayer who is ultimately responsible for the accuracy of the return. Fraudulent returns may result not only in the required payment of back taxes but also in penalties and interest.

First-Time Homebuyer Credit

The First-Time Homebuyer Credit, originally passed in 2008 and modified in 2009, provides up to $8,000 for first-time homebuyers. The purchaser, however, must qualify as a first-time homebuyer, which for purposes of this credit means someone who has not owned a primary residence in the past three years. If the taxpayer is married, this requirement also applies to the taxpayer’s spouse. The home purchase must close before Dec. 1, 2009, to qualify, and the credit may not be claimed on the purchaser’s tax return until after the taxpayer closes and has purchased the home.

Seven Tax Facts About Selling Your Home

2009-09-11T06:34:00.000-07:00

Seven Tax Facts About Selling Your Home

IRS Summertime Tax Tip 2009-10

During summer months, some people sell their home. Many of those individuals will make a profit on the sale and still will not have to pay a single dime of additional income tax to the IRS.

Here are seven tax facts about selling your home.

1. Ownership and Use Tests In general, you are eligible to exclude from your income all or part of any gain from the sale of your main home if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its sale. Refer to Publication 523, Selling Your Home, for the complete eligibility requirements as well as exceptions to the two year rule.

2. Main Home Your main home is the one in which you live most of the time.

3. Capital Gain Exclusion If you have a gain from the sale of your main home and you meet the ownership and use tests, you may be able to exclude up to $250,000 of the gain from your income or $500,000 on a joint return in most cases. The exclusion may be claimed each time that you sell your main home, but generally no more often than once every two years.

4. Reduced Exclusion If you do not meet the requirements to qualify for the $250,000 or $500,000 exclusion, you may still qualify for a reduced maximum exclusion. But you must have sold the home for other specific reasons such as serious health issues, a change in your place of employment, or certain unforeseen circumstances such as a divorce or legal separation, natural or man-made disasters resulting in a casualty to your home, or an involuntary conversion of your home.

5. Reporting the Gain Do not report the gain of your main home on your tax return unless you have a gain and at least part of it is taxable. Report any taxable gain on Form 1040, Schedule D, Capital Gains and Losses.

6. More Than One Home If you have more than one home, you can exclude gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.

7. Loss You cannot deduct a loss from the sale of your main home. If you have a loss on the sale of your main home for which you received a Form 1099-S, Proceeds From Real Estate Transactions you must report the loss on Form 1040 Schedule D, even though the loss is not deductible.

Publication 523, Selling Your Home is available on IRS.gov or can be ordered by calling 800-TAX-FORM (800-829-3676).

Six Things You Need to Know About Mortgage Workouts

2009-09-10T05:33:00.001-07:00

Six Things You Need to Know About Mortgage Workouts

IRS Summertime Tax Tip 2009-09

There is tax relief for struggling homeowners. If your mortgage debt is partly or entirely forgiven at any time during 2007 through 2012, you may be able to claim special tax relief on your federal income tax return for that year.

Here are six things the IRS wants you to know about mortgage debt forgiveness.

1. Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude from tax up to $2 million of debt forgiven on your principal residence. The limit is $1 million for a married person filing a separate return.

2. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, may qualify for this relief.

3. The debt must have been used to buy, build or substantially improve your principal residence and must have been secured by that residence. Debt used to refinance qualifying debt is also eligible for the exclusion, but only up to the amount of the old mortgage principal, just before the refinancing.

4. Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the tax-relief provision. In some cases, other kinds of tax relief – based on insolvency, for example – may be available.

5. If your debt is reduced or eliminated you should receive a Form 1099-C, Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property given up through foreclosure.

6. Taxpayers who qualify claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attaching it to their federal income tax return for the year.

For more information about the Mortgage Forgiveness Debt Relief Act of 2007, visit the IRS Web site at IRS.gov. A good resource is IRS Publication 4681, Canceled Debts, Foreclosures, Repossessions and Abandonments. This publication and Form 982 can be downloaded from IRS.gov or ordered by calling 800-TAX-FORM (800-829-3676).

Five Tax Scams to Avoid this Summer

2009-09-09T07:17:00.001-07:00

Five Tax Scams to Avoid this Summer

IRS Summertime Tax Tip 2009-08

Every year, The IRS releases its list of the top 12 tax scams and schemes. These scams – known annually as the Dirty Dozen – are illegal and can lead to problems for taxpayers who risk significant penalties, interest and possible criminal prosecution. Here are five scams from the 2009 Dirty Dozen list every taxpayers should be aware of this summer.

1. Phishing Phishing scams often take the form of an e-mail that appears to come from a legitimate source, including the IRS, that contain enticements for the recipient such as additional money back on their previous year's tax return. Regardless of how official this e-mail may look and sound, the IRS never initiates unsolicited e-mail contact with taxpayers about their tax issues. The Internet-based scam artists use the personal information obtained through these e-mails and Web sites to steal the victim’s identity, access bank accounts, run up credit card charges or apply for loans in the victim’s name. If you receive an e-mail that you suspect is a phishing attempt or directs you to an imitation IRS Web site, please report them to the IRS at phishing@irs.gov. You can also visit the IRS Web site at IRS.gov and enter the keyword phishing for additional information.

2. Abuse of Charitable Organizations and Deductions The IRS continues to observe the misuse of tax-exempt organizations. This includes arrangements to improperly shield income or assets from taxation and attempts by donors to maintain control over donated assets. The IRS also continues to investigate various schemes where donations are highly overvalued or the organization receiving the donation promises that the donor can purchase the items back at a later date at a price the donor sets.

3. Abusive Retirement Plans The IRS continues to uncover abuses in retirement plan arrangements, including Roth Individual Retirement Arrangements. Taxpayers should be wary of advisers who encourage them to shift appreciated assets into IRAs or companies owned by their IRAs at less than fair market value to circumvent annual contribution limits.

4. Hiding Income Offshore Taxpayers have tried to avoid or evade U.S. income tax by hiding income in offshore banks and brokerage accounts. Recently, the IRS provided guidance to auditors on how to deal with those hiding income offshore in undisclosed accounts. Taxpayers also evade taxes by using offshore debit cards, credit cards, wire transfers, foreign trusts, employee-leasing schemes, private annuities or life insurance plans.

5. Misuse of Trusts While there are many legitimate, valid uses of trusts in tax and estate planning, some promoted transactions promise reduction of income subject to tax, deductions for personal expenses and reduced estate or gift taxes. Such trusts rarely deliver the promised tax benefits and are being used primarily as a means to avoid income tax liability and hide assets from creditors, including the IRS.

For more the full list of 2009 Dirty Dozen tax scams or to find out how to report suspected tax fraud, visit IRS.gov.

IRS Drops and Gives You Ten…Military Tax Tips

2009-09-08T07:20:00.000-07:00

IRS Drops and Gives You Ten…Military Tax Tips

IRS Summertime Tax Tip 2009-07

Summer is a busy time for everyone, but particularly for military members and their families. Whether it’s moving to a new base or traveling to a duty station, members of the military have many obligations that could impact their tax situation. Here are 10 IRS tax tips military members can keep in mind this summer to help with filing a tax return next year.

1. Moving Expenses If you are a member of the Armed Forces on active duty and you move because of a permanent change of station, you can deduct the reasonable unreimbursed expenses of moving you and members of your household.

2. Combat Pay If you serve in a combat zone as an enlisted person or as a warrant officer for any part of a month, all your military pay received for military service that month is not taxable. For officers, the monthly exclusion is capped at the highest enlisted pay, plus any hostile fire or imminent danger pay received.

3. Extension of Deadlines The time for taking care of certain tax matters can be postponed. The deadline for filing tax returns, paying taxes, filing claims for refund, and taking other actions with the IRS is automatically extended for qualifying members of the military.

4. Uniform Cost and Upkeep If military regulations prohibit you from wearing certain uniforms when off duty, you can deduct the cost and upkeep of those uniforms, but you must reduce your expenses by any allowance or reimbursement you receive.

5. Joint Returns Generally, joint returns must be signed by both spouses. However, when one spouse may not be available due to military duty, a power of attorney may be used to file a joint return.

6. Travel to Reserve Duty If you are a member of the US Armed Forces Reserves, you can deduct unreimbursed travel expenses for traveling more than 100 miles away from home to perform your reserve duties.

7. ROTC Students Subsistence allowances paid to ROTC students participating in advanced training are not taxable. However, active duty pay – such as pay received during summer advanced camp – is taxable.

8. Transitioning Back to Civilian Life You may be able to deduct some costs you incur while looking for a new job. Expenses may include travel, resume preparation fees, and outplacement agency fees. Moving expenses may be deductible if your move is closely related to the start of work at a new job location, and you meet certain tests.

9. Tax Help Most military installations offer free tax filing and preparation assistance during the filing season.

10. Tax Information IRS Publication 3, Armed Forces’ Tax Guide, summarizes many important military-related tax topics. Publication 3 is available for download at IRS.gov or may be ordered by calling 1-800-TAX-FORM (800-829-3676).

Eight Cool Reasons to visit IRS.gov/Espanol this Summer

2009-09-07T05:45:00.001-07:00

Eight Cool Reasons to visit IRS.gov/Espanol this Summer

Summertime Tax Tip 2009-06, July 20, 2009

Tax information can be difficult to understand in any language but it can be even more difficult if it is not in your first language. To assist Spanish speaking taxpayers, the IRS provides a wide range of free products and services on its Spanish Language web site IRS.gov/Espanol.

Here are eight features you can find on IRS.gov “en español” this summer:

1. Get answers 24 hours a day seven days a week Whether you need a form or have tax questions, IRS.gov/Espanol has a wealth of information. IRS.gov/Espanol is accessible all day, every day for individuals and businesses.

2. Get tax forms and publications You can view and download several tax forms and publications in Spanish directly from IRS.gov/Espanol at any hour of the day or night.

3. Find out all about electronic filing You can e-file your 2008 federal income tax return through October 15, 2009 from the comfort of your home. E-file is fast, easy and free for some taxpayers, and available in English or Spanish.

4. Check the status of your tax refund Whether you chose direct deposit or asked the IRS to mail you a check, you can check the status of your refund through the online tool “¿Dónde está mi reembolso?” on our secure Web site.

5. Find out if you qualify for the Earned Income Tax Credit EITC is a refundable tax credit for people who work but don’t earn much income. Find out if you are eligible by answering some questions and providing basic income information using the “Asistente EITC.”

6. Protect yourself from identity theft Learn how identity theft affects your taxes and how you can protect yourself from common scams.

7. Find answers to the “What Ifs” of an economic downturn The Internal Revenue Service recognizes that many people may be having difficult times financially. There can be a tax impact to events such as job loss, debt forgiveness or tapping a retirement fund. Find answers to these questions and more by typing the keyword “Qué pasa si” into the search box.

8. Get up-to-date at the “Multimedia Center” Video tax tips and audio podcasts on various IRS topics can be found in English and in Spanish with keyword “Centro Multimediático.”

Seven Tips for Students with a Summer Job

2009-09-05T06:23:00.000-07:00

Seven Tips for Students with a Summer Job

IRS Summertime Tax Tip 2009-05

Many students get a summer job during their time off from school. Here are the top seven things the IRS wants everyone to know about income earned while working a summer job.

1. Taxpayers fill out a W-4 when starting a new job. This form is used by employers to determine the amount of tax that will be withheld from your paycheck. Taxpayers with multiple summer jobs will want to make sure all their employers are withholding an adequate amount of taxes to cover their total income tax liability. To make sure your withholding is correct, visit the Withholding Calculator on IRS.gov.

2. Whether you are working as a waiter or a camp counselor, you may receive tips as part of your summer income. All tip income you receive is taxable income and is therefore subject to federal income tax.

3. Many students do odd jobs over the summer to make extra cash. Earnings you received from self-employment are subject to income tax. These earnings include income from odd jobs like baby-sitting and lawn mowing.

4. If you have net earnings of $400 or more from self-employment, you will also have to pay self-employment tax. This tax pays for your benefits under the Social Security system. Social Security and Medicare benefits are available to individuals who are self-employed the same as they are to wage earners who have Social Security tax and Medicare tax withheld from their wages. The self-employment tax is figured on Form 1040, Schedule SE.

5. Subsistence allowances paid to ROTC students participating in advanced training are not taxable. However, active duty pay – such as pay received during summer advanced camp – is taxable.

6. Special rules apply to services you perform as a newspaper carrier or distributor. You are a direct seller and treated as self-employed for federal tax purposes if you meet the following conditions:

• You are in the business of delivering newspapers.
• All your pay for these services directly relates to sales rather than to the number of hours worked.
• You perform the delivery services under a written contract which states that you will not be treated as an employee for federal tax purposes.

7. Generally, newspaper carriers or distributors under age 18 are not subject to self-employment tax.

Tax Tips for Recently Married Taxpayers

2009-09-04T08:56:00.001-07:00

Tax Tips for Recently Married Taxpayers

IRS Summertime Tax Tip 2009-04

If you have recently gotten married or plan to get married in the near future, the IRS has some tips to help you avoid stress at tax time.

1. Notify the Social Security Administration Report any name change to the Social Security Administration, so your name and SSN will match when you file your next tax return. Informing the SSA of a name change is quite simple. File a Form SS-5, Application for a Social Security card at your local SSA office. The form is available on SSA’s Web site at www.socialsecurity.gov, by calling 800-772-1213 or at local offices.

2. Notify the IRS If you have a new address you should notify the IRS by sending Form 8822, Change of Address. You may download Form 8822 from the IRS website IRS.gov or order it by calling 800–TAX–FORM (800–829–3676).

3. Notify the U.S. Postal Service You should also notify the U.S. Postal Service when you move so it can forward any IRS correspondence.

4. Notify Your Employer Report any name and address changes to your employer(s) to ensure receipt of your Form W-2, Wage and Tax Statement after the end of the year.

5. Check Your Withholding If both you and your spouse work, your combined income may place you in a higher tax bracket. You can use the IRS Withholding Calculator available on IRS.gov to assist you in determining the correct amount of withholding needed for your new filing status. The IRS Withholding Calculator will even provide you with a new Form W-4, Employee's Withholding Allowance Certificate you can print out and give it to your employer so they can withhold the correct amount from your pay.

Five Tax Facts about Summertime Child Care Expenses

2009-09-03T06:07:00.000-07:00

Five Tax Facts about Summertime Child Care Expenses

IRS Summertime Tax Tip 2009-03

Many parents who work or are looking for work must arrange for care of their children under 13 years of age during the school vacation.

Here are five facts the IRS wants you to know about a tax credit available for child care expenses. The Child and Dependent Care Credit is available for expenses incurred during the lazy hazy days of summer and throughout the rest of the year.

1) The cost of day camp can count as an expense towards the child and dependent care credit.

2) Expenses for overnight camps do not qualify.

3) If your childcare provider is a sitter at your home or a daycare facility outside the home, you'll get some tax benefit if you qualify for the credit.

4) The actual credit can be up to 35 percent of your qualifying expenses, depending upon your income.

5) You may use up to $3,000 of the unreimbursed expenses paid in a year for one qualifying individual or $6,000 for two or more qualifying individuals to figure the credit.

For more information, including rules for claiming this credit for your spouse or a dependent age 13 or over who is not able to care for himself or herself, check out IRS Publication 503, Child and Dependent Care Expenses. This publication is available on the IRS Web site, IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Top Seven Tips for Taxpayers Starting a New Business

2009-09-02T05:54:00.001-07:00

Top Seven Tips for Taxpayers Starting a New Business

IRS Summertime Tax Tip 2009-02

Anyone starting a new business this summer should be aware of their federal tax responsibilities. Here are the top seven things the IRS wants you to know if you plan on opening a new business this year.

1.
First, you must decide what type of business entity you are going to establish. The type your business takes will determine which tax form you have to file. The most common types of business are the sole proprietorship, partnership, corporation and S corporation.

2.
The type of business you operate determines what taxes you must pay and how you pay them. The four general types of business taxes are income tax, self-employment tax, employment tax and excise tax.

3.
An Employer Identification Number is used to identify a business entity. Generally, businesses need an EIN. Visit IRS.gov for more information about whether you will need an EIN. You can also apply for an EIN online at IRS.gov.

4.
Good records will help you ensure successful operation of your new business. You may choose any recordkeeping system suited to your business that clearly shows your income and expenses. Except in a few cases, the law does not require any special kind of records. However, the business you are in affects the type of records you need to keep for federal tax purposes.

5.
Every business taxpayer must figure taxable income on an annual accounting period called a tax year. The calendar year and the fiscal year are the most common tax years used.

6.
Each taxpayer must also use a consistent accounting method, which is a set of rules for determining when to report income and expenses. The most commonly used accounting methods are the cash method and an accrual method. Under the cash method, you generally report income in the tax year you receive it and deduct expenses in the tax year you pay them. Under an accrual method, you generally report income in the tax year you earn it and deduct expenses in the tax year you incur them.

7.
Visit the Business section of IRS.gov for resources to assist entrepreneurs with starting and operating a new business.

Tax Benefits for Job Seekers

2009-08-26T05:11:00.001-07:00

Tax Benefits for Job Seekers

IRS Summertime Tax Tip 2009-01

Many taxpayers spend time during the summer months polishing their résumé and attending career fairs. If you are searching for a job this summer, you may be able to deduct some of your expenses on your tax return.

Here are the top six things the IRS wants you to know about deducting costs related to your job search.

1.
In order to deduct job search costs, the expenses must be spent on a job search in your current occupation. You may not deduct expenses incurred while looking for a job in a new occupation.
2.
You can deduct employment and outplacement agency fees you pay while looking for a job in your present occupation. If your employer pays you back in a later year for employment agency fees, you must include the amount you receive in your gross income up to the amount of your tax benefit in the earlier year.
3.
You can deduct amounts you spend for preparing and mailing copies of a résumé to prospective employers as long as you are looking for a new job in your present occupation.
4.
If you travel to an area to look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area. You can only deduct the travel expenses if the trip is primarily to look for a new job. The amount of time you spend on personal activity compared to the amount of time you spend looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job.
5.
You cannot deduct job search expenses if there was a substantial break between the end of your last job and the time you begin looking for a new one.
6.
You cannot deduct job search expenses if you are looking for a job for the first time.

For more information about job search expenses, see IRS Publication 529, Miscellaneous Deductions. This publication is available on the IRS Web site, IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Check Withholding to Avoid a Tax Surprise

2009-08-24T05:57:00.001-07:00

Check Withholding to Avoid a Tax Surprise

IRS Special Edition Tax Tip 2009-04 - June 25, 2009

With 2009 nearly half over, the Internal Revenue Service reminds individual taxpayers there is no better time to check their 2009 federal income tax withholding levels to make sure they do not face any surprises when returns are due next spring.

The Making Work Pay Credit lowered tax withholding rates this year for 120 million American households. However, particular taxpayers who fall into any of the following groups should review their tax withholding rates to ensure enough tax is withheld: multiple job holders, families in which both spouses work, workers who can be claimed as dependents by other taxpayers and pensioners.

Failure to adjust your withholding could result in potentially smaller refunds or may cause you to owe tax rather than receive a refund next year. So far in 2009, the average refund amount is $2,675 and 79 percent of all returns received a refund.

Because retirees typically have withholding from their pension payments, pension plan administrators or pension payors should be aware of the optional adjustment procedure for pension withholding announced in Notice 1036-P, Additional Withholding for Pensions for 2009.

Social security beneficiaries, supplemental security income recipients, disabled veterans and railroad retirees that receive this year’s one-time $250 economic recovery payment should be aware that the Making Work Pay credit will be reduced by the $250 payment amount. They may also want to review their withholding.

The IRS withholding calculator on IRS.gov can help a taxpayer compute the proper tax withholding. The worksheets in Publication 919, How Do I Adjust My Withholding?, can also be used to do the calculation. If the result suggests an adjustment is necessary, the taxpayer should submit a new Form W-4, Withholding Allowance Certificate, to his or her employer or adjust the amount of quarterly tax paid.

In addition, the IRS reminds unemployed workers that the first $2,400 of unemployment benefits they receive during 2009 are tax-free for federal income tax purposes. People who expect to receive more than that should consider having tax withheld from their benefit payments in excess of $2,400. Use Form W-4V, Voluntary Withholding Request, or the equivalent form provided by the payer to request withholding to begin or end.

Taxpayers should visit IRS.gov for more information about how to adjust federal income tax withholding. The Web site also has details on various tax incentives in the American Recovery and Reinvestment Act as well as downloadable forms and publications. Free tax forms and publications are also available by calling 1-800-TAX-FORM (1-800-829-3676).

Seven Facts about the New Sales Tax Deduction for Vehicle Purchases

2009-08-24T05:56:00.000-07:00

Seven Facts about the New Sales Tax Deduction for Vehicle Purchases

(Corrected April 21, 2009)

Taxpayers who buy a new car or several other types of motor vehicles this year may be entitled to a special tax deduction when they file their 2009 federal tax returns next year. The tax break is part of the American Recovery and Reinvestment Act of 2009.

Here are seven things you should know about this new deduction:

1.
State and local sales taxes paid on up to $49,500 of the purchase price of qualifying vehicles are deductible.
2.
Qualified motor vehicles generally include new (not used) cars, light trucks, motor homes and motorcycles.
3.
Purchases must occur after Feb. 16, 2009, and before Jan. 1, 2010.
4.
This deduction can be taken regardless of whether or not you itemize other deductions on your tax return.
5.
Taxpayers will claim this deduction when filing their 2009 federal income tax return next year.
6.
The amount of the deduction is phased out for taxpayers whose modified adjusted gross income is between $125,000 and $135,000 for individual filers and between $250,000 and $260,000 for joint filers.
7.
The deduction may not be taken on 2008 tax returns.

Consumers who are considering buying a new car may find that this tax incentive means there may have never been a better time to buy.

For more information about the sales and excise tax deduction for motor vehicle purchases visit the official IRS web site at IRS.gov.

What Happens After I File?

2009-08-24T05:55:00.000-07:00

What Happens After I File?

IRS Tax Tip 2009-73

Most taxpayers have already filed their federal tax returns but may still have questions. Here’s what you need to know about refund status, recordkeeping, mistakes and what to do if you move.

Refund Information
You can go online to check the status of your 2008 refund 72 hours after IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after you mail a paper return. Be sure to have a copy of your 2008 tax return available because you will need to know the filing status, the first SSN shown on the return, and the exact whole-dollar amount of the refund. You have three options for checking on your refund:

• Go to IRS.gov, and click on “Where’s My Refund.”
• Call 1-800-829-4477 24 hours a day, 7 days a week for automated refund information.
• Call 1-800-829-1954 during the hours shown in your form instructions.

What Records Should I Keep?
Good record keeping allows you to prepare a complete and accurate income tax return. You should keep all receipts, canceled checks or other proof of payment, and any other records to support any deductions or credits you claim.
Normally, tax records should be kept for three years, but some documents — such as records relating to a home purchase or sale, stock transactions, IRAs and business or rental property — should be kept longer.
You should keep copies of tax returns you have filed and the tax forms package as part of your records. They may be helpful in amending filed returns or preparing future ones.

Change of Address
If you move after you filed your return, you should send Form 8822, Change of Address to the Internal Revenue Service. If you are expecting a refund through the mail, you should also notify the post office serving your former address, which will ensure your check makes it to your new address.

What If I Made a Mistake?
Errors may delay your refund or result in notices being sent to you. If you discover an error on your return, you can correct your return by filing an amended return using Form 1040X, Amended U.S. Individual Income Tax Return. Here are five reasons to file an amended return:
1. You did not report some income,
2. You claimed deductions or credits you should not have claimed.
3. You did not claim deductions or credits you could have claimed.
4. You should have claimed a different filing status. Taxpayers who filed a joint return cannot choose to file separate returns for that year after the due date of the return. However, an executor may be able to make this change for a deceased spouse.
5. If you bought or are thinking of buying home, you may be able to file an amended return to claim the First Time Home Buyer Credit. Taxpayers who purchased a qualifying home can claim the Homebuyer Credit on the 2008 return without waiting until next year to claim it on their 2009 return.

What to do if You Receive an IRS Notice

2009-08-24T05:54:00.002-07:00

What to do if You Receive an IRS Notice

IRS Tax Tip 2009-72

It’s a moment many taxpayers dread. A letter arrives from the IRS — and it’s not a refund check. Don’t panic; many of these letters can be dealt with simply and painlessly.

Each year, the IRS sends millions of letters and notices to taxpayers to request payment of taxes, notify them of a change to their account or request additional information. The notice you receive normally covers a very specific issue about your account or tax return. Each letter and notice offers specific instructions on what you are asked to do to satisfy the inquiry.

If you receive a correction notice, you should review the correspondence and compare it with the information on your return.

• Agree? If you agree with the correction to your account, usually no reply is necessary unless a payment is due.

• Disagree? If you do not agree with the correction the IRS made, it is important that you respond as requested. Write to explain why you disagree. Include any documents and information you wish the IRS to consider, along with the bottom tear-off portion of the notice. Mail the information to the IRS address shown in the upper left-hand corner of the notice. Allow at least 30 days for a response.

Most correspondence can be handled without calling or visiting an IRS office. However, if you have questions, call the telephone number in the upper right-hand corner of the notice. Have a copy of your tax return and the correspondence available when you call to help us respond to your inquiry.

Be sure to keep copies of any correspondence with your records.

For more information about IRS notices and bills, see Publication 594, What You Should Know about the IRS Collection Process. Information about penalties and interest charges is available in Publication 17, Your Federal Income Tax. Both publications are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Top Ten Facts about Amended Returns

2009-08-24T05:54:00.001-07:00

Top Ten Facts about Amended Returns

IRS Tax Tip 2009-71

Taxpayers who need to make a change or adjustment on a return they already filed can do so by filing an amended return. Here are the top 10 things every taxpayer should know about amending your federal tax return.

1. Taxpayers needing to amend their return use Form 1040X, Amended U.S. Individual Income Tax Return.

2. Taxpayers can use Form 1040X to correct previously filed Forms 1040, 1040A or 1040EZ. The 1040X can also be used to correct a return filed electronically.

3. Taxpayers should file an amended return if they discover any of the following items were reported incorrectly: filing status, dependents, total income, deductions or credits.

4. Generally, you do not need to file an amended return for math errors as the IRS will be able to make the correction for you.

5. You also do not usually need to file an amended return because you forgot to include forms – such as W-2s or schedules – when you filed; the IRS normally requests those forms from you.

6. Be sure to enter the year of the return you are amending at the top of Form 1040X. Generally, you must file Form 1040X within three years from the date you filed your original return or within two years from the date you paid the tax, whichever is later.

7. If you are amending more than one tax return, prepare a 1040X for each return and mail them in separate envelopes to the IRS processing center for the area in which you live. The 1040X instructions list the addresses for the centers.

8. If the changes involve another schedule or form, attach it to the 1040X.

9. If you are filing to claim an additional refund, wait until you have received your original refund before filing Form 1040X. You may cash that check while waiting for any additional refund.

10. If you owe additional tax for 2008, you should file Form 1040X and pay the tax as soon as possible to limit interest and penalty charges. Interest is charged on any tax not paid by the due date of the original return, without regard to extensions.

Things You Need to Know About Tax Refunds

2009-08-24T05:52:00.000-07:00

Things You Need to Know About Tax Refunds

IRS TAX TIP 2009-70

Are you expecting a refund from the IRS this year? Here are the top ten things you should know about your refund.

1. Refund Options You have two options for receiving your individual federal income tax refund: a paper check or a direct deposit.
2. Separate Accounts You may use Form 8888, Direct Deposit of Refund to More Than One Account, to request that your refund be allocated by direct deposit among up to three separate accounts, such as checking or savings or retirement accounts.
3. Paper Return Processing Time If you file a complete and accurate paper tax return, your refund will usually be issued within six weeks from the received date.
4. Returns Filed Electronically If you filed electronically, your refund will normally be issued within three weeks after the acknowledgment date.
5. Check the Status Online The fastest and easiest way to find out about your current year refund is to go to the IRS.gov Web site and click on the “Where’s My Refund?” link available from the home page. You will need your Social Security number, filing status and the exact whole dollar amount of your refund to check the status online.
6. Check the Status By Phone Call the IRS Refund Hotline at 800-829–1954. When you call, you will need to provide your Social Security number, your filing status, and the exact whole dollar amount of the refund shown on your return.
7. Delayed Refund There are several reasons for delayed refunds. For things that may delay the processing of your return, refer to Tax Topic 303 on IRS.gov, which includes a Checklist of Common Errors When Preparing Your Tax Return.
8. Larger than Expected Refund If you receive a refund to which you are not entitled, or one for an amount that is more than you expected, do not cash the check until you receive a notice explaining the difference. Follow the instructions on the notice.
9. Smaller than Expected Refund If you receive a refund for a smaller amount than you expected, you may cash the check, and, if it is determined that you should have received more, you will later receive a check for the difference. If you did not receive a notice and you have questions about the amount of your refund, wait two weeks after receiving the refund, then call 800–829–1040.
10. Missing Refund The IRS will assist you in obtaining a replacement check for a refund check that is verified as lost or stolen. If the IRS was unable to deliver your refund because you moved, you can change your address online. Once your address has been changed, the IRS can reissue the undelivered check. For more information, visit IRS.gov or call 800-829-1040.

Read This If You Need More Time to File Your Federal Tax Return

2009-08-23T08:09:00.001-07:00

Read This If You Need More Time to File Your Federal Tax Return

IRS TAX TIP 2009-69

If you can't meet the April filing deadline to file your tax return, you can get an automatic six month extension of time to file from the IRS.

Here is what you need to know about filing an extension:

1.
An extension will give you extra time to get your paperwork to the IRS, but it does not extend the time you have to pay any tax due. You will owe interest on any amount not paid by the April deadline, plus a late payment penalty if you have not paid at least 90 percent of your total tax by that date.
2.
If your return is completed but you are unable to pay the full amount of tax due, do not request an extension. File your return on time and pay as much as you can. The IRS will send you a bill or notice for the balance due. To apply online for a payment agreement, go to IRS.gov and use the pull-down menu under “I need to …” and select “Set Up a Payment Plan.” If you are unable to make payments, call the IRS at 800-829-1040 to discuss your payment options.
3.
Request an extension to file by submitting Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, with the IRS by the April 15, 2009, or make an extension-related electronic credit card payment. For more information about extension-related credit card payments, see Form 4868.
4.
You can e-file an extension request using tax preparation software on your own computer or by going to a tax preparer that has the software. The IRS will acknowledge receipt of the extension request if you file by computer.
5.
You can use Free File Fillable Forms to file for an extension. You can access Free File Fillable Forms via the IRS Web site at IRS.gov.
6.
If you ask for an extension via computer, you can also choose to pay any expected balance due by authorizing an electronic funds withdrawal from a checking or savings account. You will need the appropriate bank routing and account numbers and must also have available the adjusted gross income from your 2008 federal income tax return to verify your identity. For information on these and other methods of payment, visit IRS.gov or call 800-TAX-1040 (800-829-1040).
7.
To obtain a copy of Form 4868 or other forms and publications use E-file tax preparation software, download them from IRS.gov or visit your local IRS office. Forms and publications can be ordered by calling 800-TAX-Form (800-829-3676). However, telephone requests normally take 10 days to fill and may not arrive before the tax deadline of April 15.

Payment Options

2009-08-23T08:08:00.002-07:00

Payment Options

IRS TAX TIP 2009-68

If you cannot pay the full amount of taxes you owe by the April deadline, you should still file your return by the deadline and pay as much as you can to avoid penalties and interest. There are also alternative payment options to consider:

* Additional Time to Pay Based on your circumstances, you may be granted a short additional time to pay your tax in full. The IRS is sometimes able to allow a brief additional amount of time to pay in order to facilitate tax debt repayment. A brief additional amount of time to pay can be requested through the Online Payment Agreement application at IRS.gov or by calling 800-829-1040. Taxpayers who request and are granted an additional 30 to 120 days to pay the tax in full generally will pay less in penalties and interest than if the debt were repaid through an installment agreement over a greater period of time.
* Installment Agreement You can apply for an IRS installment agreement using our Web-based OPA application on IRS.gov. This Web-based application allows taxpayers who owe $25,000 or less in combined tax, penalties and interest to self-qualify, apply for, and receive immediate notification of approval. You can also request an installment agreement before your current tax liabilities are actually assessed by using OPA. The OPA option provides you with a simple and convenient way to establish an installment agreement and eliminates the need for personal interaction with IRS and reduces paper processing.
* Pay by Credit Card or Debit Card You can charge your taxes on your American Express, MasterCard, Visa or Discover credit cards. Additionally, you can pay by using your debit card. However, the debit card must be a Visa Consumer Debit Card, or a NYCE, Pulse or Star Debit Card. To pay by credit card or debit card, contact one of the service providers at its telephone number or Web site listed below and follow the instructions. There is no IRS fee for credit or debit card payments, but the processing companies charge a convenience fee or flat fee. If you are paying by credit card, the service providers charge a convenience fee based on the amount you are paying. If you are paying by debit card the service providers charge a flat fee of $3.95, do not add the convenience fee or flat fee to your tax payment.
o Link2Gov Corporation:
+ To pay by debit or credit card: 888-PAY-1040 (888-729-1040), www.pay1040.com
o Official Payments Corporation:
+ To pay by credit card: 800-2PAY-TAX (800-272-9829), www.officialpayments.com
+ To pay by debit card: 800-866-4PAY-TAX (866-472-9829), www.officialpayment.com/debit

For more information about filing and paying your taxes, visit the IRS Web site at IRS.gov and choose “1040 Central” or refer to the Form 1040 Instructions or IRS Publication 17, Your Federal Income Tax. You can download forms and publications at IRS.gov or request a free copy by calling toll free 800-TAX-FORM (800-829-3676).

Top Ten Things You Need to Know About Making Federal Tax Payments

2009-08-23T08:08:00.001-07:00

Top Ten Things You Need to Know About Making Federal Tax Payments

IRS TAX TIP 2009-67

Will you be making a payment with your federal tax return this year? If so, here is what you need to know about making tax payments correctly.

1. Never send cash!

2. If you file electronically, you can file and pay in a single step by authorizing an electronic funds withdrawal via tax preparation software or a tax professional.

3. You can pay by phone or online using a credit or debit card whether you file a paper return or electronically.

4. Electronic payment options provide an alternative to paying taxes or user fees by check or money order. You can make payments 24 hours a day, seven days a week. Visit IRS.gov and search e-pay, or refer to Publication 3611, e-File Electronic Payments for more details.

5. If you itemize, you may be able to deduct the convenience fee charged for paying individual income taxes with a credit or debit card as a miscellaneous itemized deduction. The deduction is subject to the 2 percent limit on Form 1040, Schedule A, Itemized Deductions.

6. Enclose your payment with your return, but do not staple it to the form.

7. If you pay by check or money order, make sure it is payable to the “United States Treasury.”

8. Always provide your correct name, address, Social Security number listed first on the tax form, daytime telephone number, tax year and form number on the front of your check or money order.

9. Complete and include Form 1040-V, Payment Voucher, when sending your payment and tax return to the IRS. This will help the IRS process your payment accurately and efficiently.

10. For more information, call 800-829-4477 for TeleTax Topic 158, "Ensuring Proper Credit of Payments.” You can also find out more in Publication 17, Your Federal Income Tax and Form 1040-V, both available at IRS.gov.

Ten Last Minute Filing Tips

2009-08-23T08:07:00.002-07:00

Ten Last Minute Filing Tips

IRS TAX TIP 2009-66

With the tax filing deadline close at hand, the IRS offers ten tips for those still working on their tax returns:

1.
File Electronically - Consider filing electronically instead of using paper tax forms. If you file electronically and choose direct deposit, you can receive your refund in as few as 10 days.
2.
Check the Identification Numbers - When filing a paper return carefully check the identification numbers — usually Social Security numbers — for each person listed. This includes you, your spouse, dependents and persons listed in relation to claims for the Child and Dependent Care Credit or Earned Income Tax Credit. Missing, incorrect or illegible Social Security Numbers can delay or reduce a tax refund.
3.
Double-Check Your Figures - If you are filing a paper return, you should double-check that you have correctly figured the refund or balance due.
4.
Check the Tax Tables - If you are filing using the Free File Fillable Forms or a paper return you should double-check that you have used the right figure from the tax table.
5.
Sign your form - Taxpayers must sign and date their returns. Both spouses must sign a joint return, even if only one had income. Anyone paid to prepare a return must also sign it.
6.
Mailing Your Return - Use the coded envelope included with your tax package to mail your return. If you did not receive an envelope, check the section called "Where Do You File?" in the tax instruction booklet.
7.
Mailing a Payment - People sending a payment should make the check out to “United States Treasury” and should enclose it with, but not attach it to the tax return or the Form 1040-V, Payment Voucher, if used. The check should include the taxpayer’s Social Security number, daytime phone number, the tax year and the type of form filed.
8.
Electronic Payments - Electronic payment options are convenient, safe and secure methods for paying taxes. You can authorize an electronic funds withdrawal, or use a credit card or a debit card. For more information on electronic payment options, visit IRS.gov.
9.
Extension to File - By the April due date, taxpayers should either file a return or request an extension of time to file. Remember, the extension of time to file is not an extension of time to pay.
10.
IRS.gov - Forms and publications and helpful information on a variety of tax subjects are available around the clock on the IRS Web site at IRS.gov.

Six Important Facts about Your Appeal Rights

2009-08-23T08:07:00.001-07:00

Six Important Facts about Your Appeal Rights

IRS Tax Tip 2009-65

The IRS has an appeals system for people who do not agree with the results of an examination of their tax returns or with other adjustments to their tax liability. Here are the top six things to know when it comes to your appeal rights.

1.
When the IRS makes an adjustment to your tax return, they will send you a report or a letter explaining the proposed adjustments. This letter will alert you of your right to request a conference with an Appeals office and how to put in a request for such a conference.

2.
In addition to examinations, many other things can be appealed. You can also appeal penalties, interest, trust fund recovery penalties, offers in compromise, liens and levies.

3.
If you request an Appeals conference, be prepared with records and documentation to support your position.

4.
Appeals conferences are informal meetings. You may represent yourself or have someone else represent you. Those allowed to represent taxpayers include attorneys, accountants or individual enrolled to practice before the IRS.

5.
If you do not reach agreement with IRS Appeals or if you do not wish to appeal within the IRS, you may appeal certain actions through the courts.

6.
For further information on the appeals process, refer to Publication 5, Your Appeal Rights and How to Prepare a Protest if you Don't Agree. This publication, along with more information about IRS appeals, is available on the IRS Web site at IRS.gov.

Seven Things to Know About the Taxpayer Advocate Service

2009-08-23T08:06:00.001-07:00

Seven Things to Know About the Taxpayer Advocate Service

IRS Tax Tip 2009-64

If you’re experiencing problems with the Internal Revenue Service, you may be able to get help from the Taxpayer Advocate Service. Here’s what every taxpayer should know about this independent organization within the IRS.

1.
The Taxpayer Advocate Service is your voice at the IRS.

2.
You may be eligible for TAS help if you’ve tried to resolve your tax problem through normal IRS channels and have gotten nowhere, or you think an IRS procedure just isn’t working as it should.

3.
TAS helps taxpayers whose problems are causing financial difficulty or significant cost, including the cost of professional representation.

4.
TAS employees know the IRS and how to navigate it.

5.
TAS will listen to your problem, help you understand what needs to be done to resolve it, and stay with you every step of the way until your problem is resolved.

6.
TAS has at least one local taxpayer advocate in each state, the District of Columbia, and Puerto Rico.

7.
To contact TAS you can call your local advocate, whose number is in your phone book, or call the toll-free case intake line at 1-877-ASK-TAS1. You can also visit TAS online at www.IRS.gov/advocate.

Nine Common Errors Made on Tax Returns

2009-08-23T08:05:00.000-07:00

Nine Common Errors Made on Tax Returns

IRS Tax Tip 2009-63

Errors made on tax returns may delay the processing of your return and the arrival of your refund. Avoiding the common errors below will help ensure your refund arrives on time:

1.
Recovery Rebate Credit - Many returns filed in 2009 have errors involving the Recovery Rebate Credit, a credit for people who did not receive a stimulus payment in 2008 or who did not receive the maximum amount. To avoid delays in tax refunds, it is critical that taxpayers know whether they received a payment in 2008 and the correct amount of that stimulus payment. For people using a paper tax return, the stimulus payment amount will be required when completing the related worksheet. For people using tax software, the stimulus payment amount will be needed as part of the return preparation process.

2.
Incorrect or missing social security numbers - When entering SSNs for anyone listed on your tax return, be sure they are entered exactly as they appear on the social security cards. Incorrect or transposed numbers will cause delays in the processing of your return.

3.
Incorrect or misspelling of dependent’s last name - When entering dependent’s last name on your tax return, ensure they are entered exactly as they appear on the social security cards. Incorrect or misspelling of dependent’s last name will cause delays in processing of your return.

4.
Filing status errors - Make sure you choose the correct filing status for your situation.

5.
Math errors - When preparing paper returns you should review all addition and subtraction to ensure it is correct. Remember, when you file electronically, the software takes care of the math for you!

6.
Computation errors - Take your time. Many taxpayers are making mistakes when figuring the taxable income, withholding and estimated tax payments, Earned Income Credit, Standard Deduction for age 65 or over or blind, the taxable amount of social security benefits, and child and dependent care credit.

7.
Incorrect bank account numbers for Direct Deposit - If you are due a refund and requested direct deposit did you check your financial institution routing and account numbers?

8.
Forgetting to sign and date the return - An unsigned tax return is like an unsigned check – it is invalid.

9.
Incorrect Adjusted Gross Income information - Taxpayers filing electronically must sign the return electronically using a personal identification number. To verify their identity taxpayers will be prompted to enter their AGI from their originally filed 2007 federal income tax return or their prior year PIN if they used one to file electronically last year. Taxpayers should not use an AGI amount from an amended return, Form 1040X, or a math error correction made by IRS.

Top Ten Tips for Last Minute Filers

2009-08-22T07:25:00.000-07:00

Top Ten Tips for Last Minute Filers

IRS Tax Tip 2009-62

With the tax filing deadline close at hand, here are the top 10 tips for taxpayers still working on their tax return.

1.
E-file your return. Consider filing electronically instead of using paper tax forms. Choosing to e-file is the best way to ensure your return is accurate and complete.

2.
Review tax ID numbers. Remember to carefully check all identification numbers on your return. Incorrect or illegible Social Security Numbers can delay or reduce a tax refund.

3.
Double-check your figures. Whether you are filing electronically or by paper, review all the amounts you transferred over from your W-2 or 1099.

4.
Review your math. Taxpayers filing paper returns should also double-check that they have correctly figured the refund or balance due and have used the right figure from the tax table.

5.
Sign and date your return. Both spouses must sign a joint return, even if only one had income. Anyone paid to prepare a return must also sign it.

6.
Choose Direct Deposit. To get your refund quicker, select Direct Deposit and the IRS will deposit your refund directly into your bank account.

7.
How to make a payment. People sending a payment should make the check out to "United States Treasury" and should enclose it with, but not attach it to the tax return or the Form 1040-V, Payment Voucher, if used. Write your name, address, SSN, telephone number, tax year and form number on the check or money order.

8.
File an extension. Taxpayers who will not be able to file a return by the April deadline should request an extension of time to file. Remember, the extension of time to file is not an extension of time to pay.

9.
Visit the IRS Web site. IRS.gov has forms, publications and helpful information on a variety of tax subjects, which is available around the clock on the IRS.gov.

10.
Review your return….one more time. Before you seal the envelope or hit send, go over all the information on return again. Errors may delay the processing of your return, so it’s best for you to make sure everything on your return is correct.

Top Ten Tips about IRA Contributions

2009-08-22T07:24:00.000-07:00

Top Ten Tips about IRA Contributions

IRS Tax Tip 2009-61

There is still time to make contributions to your traditional Individual Retirement Arrangement, better known as an IRA. Below are the top ten things you should know about money you put aside for retirement in an IRA.

1.
You may be able to deduct some or all of your contributions to your IRA and you also may be eligible for a tax credit equal to a percentage of your contribution.

2.
Contributions can be made to your traditional IRA at any time during the year or by the due date for filing your return for that year, not including extensions. For most people, this means contributions for 2008 must be made by April 15, 2009.

3.
The amount of funds in your IRA are generally not taxed until you receive distributions from that IRA.

4.
To figure your deduction for IRA contributions, use the worksheets in the instructions for the form you are filing.

5.
For 2008, the most that can be contributed to your traditional IRA generally is the smaller of the following amounts: $5,000 or the amount of your taxable compensation for the year. Taxpayers who are 50 or older can contribute up to $6,000.

6.
Use Form 8880, Credit for Qualified Retirement Savings Contributions, to determine whether you are also eligible for a tax credit.

7.
You cannot deduct an IRA contribution or claim the Credit for Qualified Retirement Saving Contributions on Form 1040EZ; you must use either Form 1040A or Form 1040.

8.
To contribute to a traditional IRA, you must be under age 70 1/2 at the end of the tax year.

9.
You must have taxable compensation, such as wages, salaries, commissions and tips. If you file a joint return, only one of you needs to have compensation.

10.
Refer to IRS Publication 590, Individual Retirement Arrangements, for information on the amounts you will be eligible to contribute to your IRA account.

Both Form 8880 and Publication 590 can be downloaded at IRS.gov or ordered by calling 800-TAX-FORM (800-829-3676).

Six Important Facts about Tax-Exempt Organizations

2009-08-22T07:23:00.002-07:00

Six Important Facts about Tax-Exempt Organizations

IRS Tax Tip 2009-60

Every year, millions of taxpayers donate money to charitable organizations. Here are six things you should know about the tax treatment of tax-exempt organizations.

1. Tax returns are made available to public. Exempt organizations generally must make their tax return available for public inspection. This also includes the organization’s application for exemption. These documents must be made available to any individual who requests them, and must be made available immediately when the request is made in person. If the request is made in writing, an organization has 30 days to provide a copy of the information.

2. Donor lists generally are not public information. The list of donors filed with Form 990 is specifically excluded from the information available for public inspection. There is an exception for donors to private foundations and political organizations, which must make their donor list available to the public.

3. How to find tax-exempt organizations. The easiest way to find out whether an organization is qualified to receive deductible contributions is to ask them, as most will be able to tell you. You can also search for organizations qualified to accept deductible contributions in IRS Publication 78, available online at IRS.gov.

4. Which organizations may accept charitable contributions. Not all exempt organizations are eligible to receive tax-deductible charitable contributions. Organizations that are eligible to receive deductible contributions include most charities described in section 501(c)(3) of the Internal Revenue Code and, in some circumstances, fraternal organizations described in section 501(c)(8) or section 501(c)(10), cemetery companies described in section 501(c)(13), volunteer fire departments described in section 501(c)(4), and veterans organizations described in section 501(c)(4) or 501(c)(19). For more general information on the rules for Charitable Contribution Deductions, you can go to the IRS Publication 78 Help page, Part II, which is linked from the Search for Charities page on IRS.gov.

5. Requirement for organizations not able to accept deductible contributions. If an exempt organization is ineligible to receive tax-deductible contributions, it must disclose that fact when soliciting contributions.

6. How to report inappropriate activities by a charity. If you believe that the activities or operations of a tax-exempt organization are inconsistent with its tax-exempt status, you may file a complaint with the Exempt Organizations Examination Division by completing Form 13909, Tax-Exempt Organization Complaint (Referral) Form. The complaint should contain all relevant facts concerning the alleged violation of tax law. Form 13909 is available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

IRS Tips on Preparing for a Disaster

2009-08-22T07:23:00.001-07:00

IRS Tips on Preparing for a Disaster

IRS Tax Tip 2009-59

Planning what to do in case of a disaster is an important part of being prepared. The Internal Revenue Service encourages taxpayers to safeguard their records. Some simple steps can help taxpayers and businesses protect financial and tax records in case of disasters.

Listed below are tips for individuals and businesses on preparing for a disaster.

1. Recordkeeping Take advantage of paperless recordkeeping for financial and tax records. Many people receive bank statements and documents by e-mail. This method is an outstanding way to secure financial records. Important tax records such as W-2s, tax returns and other paper documents can be scanned onto an electronic format. You can copy them onto a ‘key’ or ‘jump drive’ periodically and then keep the electronic records in a safe place.

2. Document Valuables and Business Equipment The IRS has disaster loss workbooks for individuals and businesses that can help you compile a room-by-room list of your belongings or business equipment. This will help you recall and prove the market value of items for insurance and casualty loss claims.

3. Check on Fiduciary Bonds Employers who use payroll service providers should ask the provider if they have a fiduciary bond in place. The bond could protect the employer in the event of default by the payroll service provider.

4. Continuity of Operations Planning for Businesses How quickly your company can get back to business after a disaster often depends on emergency planning done today. Start planning now to improve the likelihood that your company will survive and recover. Review your emergency plans annually. Just as your business changes over time, so do your preparedness needs. When you hire new employees or when there are changes in how your company functions, you should update your plans and inform your people.

5. Update Emergency Plans Emergency plans should be reviewed annually. Individual taxpayers should make sure they are saving documents everybody should keep including such things as W-2s, home closing statements and insurance records. Make sure you have a means of receiving severe weather information; if you have a NOAA Weather Radio, put fresh batteries in it. Make sure you know what you should do if threatening weather approaches.

6. Count on the IRS In the event of a disaster, the IRS stands ready to help. The IRS has valuable information you can request if your records are destroyed. If you have been impacted by a federally declared disaster, you may receive copies or transcripts of previously filed tax returns free of charge by submitting Form 4506, Request for Copy of Tax Form, or Form 4506-T, Request for Transcript of Tax Return, clearly identified as a disaster related request.

Do You Barter?

2009-08-22T07:22:00.000-07:00

Do You Barter?

IRS Tax Tip 2009-58

Bartering is the trading of one product or service for another. Usually there is no exchange of cash. Barter may take place on an informal one-on-one basis between individuals and businesses, or it can take place on a third party basis through a modern barter exchange company.

Bartering is the most ancient form of commerce. While our ancestors may have exchanged eggs for corn, today you can barter computer services for auto repair.

Another example of a one-on-one, non-barter exchange transaction is a plumber doing repair work for a dentist in exchange for dental services. The fair market value of the goods and services exchanged must be reported as income by both parties.

Here are a few things you should know about bartering:

• Barter Exchange A barter exchange functions primarily as the organizer of a marketplace where members buy and sell products and services among themselves. Whether this activity operates out of a physical office or is internet based, a barter exchange is generally required to issue Form 1099-B, Proceeds from Broker and Barter Exchange Transactions, annually to their clients or members and to the IRS.

• Barter Income Barter dollars or trade dollars are identical to real dollars for tax reporting. If you conduct any direct barter - barter for another’s products or services - you will have to report the fair market value of the products or services you received on your tax return.

• Taxes Income from bartering is taxable in the year it is performed. You may be subject to liabilities for income tax, self-employment tax, employment tax, or excise tax. Your barter activities may result in ordinary business income, capital gains or capital losses, or you may have a nondeductible personal loss.

• Reporting The rules for reporting barter transactions may vary depending on which form of bartering takes place. Generally, you report this type of business income on Form 1040, Schedule C Profit or Loss from Business, or other business returns such as Form 1065 for Partnerships, Form 1120 for Corporations, or Form 1120-S for Small Business Corporations.

Ten Tips for Deducting Charitable Contributions

2009-08-22T07:21:00.000-07:00

Ten Tips for Deducting Charitable Contributions

IRS TAX TIP 2009-57

When preparing to file your federal tax return, don’t forget your contributions to charitable organizations. Your donations could add up to a sizeable tax deduction if you itemize on IRS Form 1040, Schedule A.

Here are a few tips to ensure your contributions pay off on your tax return:

1. Contributions must be made to qualified organizations to be deductible. You cannot deduct contributions made to specific individuals, political organizations and candidates.

2. You cannot deduct the value of your time or services. Nor can you deduct the cost of raffles, bingo or other games of chance.

3. If your contributions entitle you to merchandise, goods or services, including admission to a charity ball, banquet, theatrical performance or sporting event, you can deduct only the amount that exceeds the fair market value of the benefit received.

4. Donations of stock or other property are usually valued at the fair market value of the property. Special rules apply to donation of vehicles.

5. Clothing and household items donated must generally be in good used condition or better to be deductible.

6. Regardless of the amount, to deduct a contribution of cash, check, or other monetary gift, you must maintain a bank record or a written communication from the organization containing the name of the organization, the date of the contribution and amount of the contribution.

7. To claim a deduction for contributions of cash or property equaling $250 or more you must obtain a written acknowledgment from the qualified organization showing the amount of the cash and a description of any property contributed, and whether the organization provided any goods or services in exchange for the gift. One document from the organization may satisfy both the written communication requirement for monetary gifts and the written acknowledgement requirement for all contributions of $250 or more.

8. If you claim a deduction of more than $500 for all contributed property, you must attach IRS Form 8283, Noncash Charitable Contributions, to your return.

9. Taxpayers donating an item or a group of similar items valued at more than $5,000 must also complete Section B of Form 8283, which requires an appraisal by a qualified appraiser.

10. Contributions made for relief efforts in a Midwest disaster area receive special benefits. For more information, see Publication 4492-B, Information for Affected Taxpayers in the Midwest Disaster Areas.

For more information on charitable contributions, check out Publication 526, Charitable Contributions, which is available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Ten Things You May Not Know about Farm Income and Deductions

2009-08-22T07:20:00.002-07:00

Ten Things You May Not Know about Farm Income and Deductions

IRS Tax Tip 2009-56

If you are in the business of farming, here are some things you may want to know before filing your federal tax return.

1. Crop Insurance Proceeds You must include in income any crop insurance proceeds you receive as the result of crop damage. You generally include them in the year you receive them.

2. Sales Caused by Weather-Related Condition If you sell more livestock, including poultry, than you normally would in a year because of weather-related conditions, you may be able to choose to postpone reporting the gain from selling the additional animals until the next year.

3. Farm Income Averaging You may be able to average all or some of your current year's farm income and refiguring your tax over the three prior years. This may give you a lower tax if your current year income from farming is high, and your taxable income from one or more of the three prior years was low.

4. Deductible Farm Expenses The ordinary and necessary costs of operating a farm for profit are deductible business expenses. An ordinary expense is an expense that is common and accepted in the business. A necessary expense is one that is appropriate for the business.

5. Employees You can deduct reasonable wages paid for labor hired to perform your farming operations.

6. Items Purchased for Resale You may be able to deduct the cost of livestock and other items purchased for resale in the year of sale. This cost includes freight charges for transporting the livestock to the farm.

7. Net Operating Losses If your deductible loss from operating your farm is more than your other income for the year, you may have a net operating loss. If you have a net operating loss this year, you can carry it to other years and deduct it. You may be able to get a refund of all or part of the income tax you paid for past years, or you may be able to reduce your tax in future years.

8. Repayment of Loans You cannot deduct the repayment of a loan. However, if you use the proceeds of a loan for farm business expenses, you can deduct the interest you pay on the loan.

9. Fuel and Road Use You may be eligible to claim a credit or refund of excise taxes on fuel used on a farm for farming purposes.

10. Farmers Tax Guide More information about farm income and deductions can be found in IRS Publication 225, Farmer’s Tax Guide, which can be obtained online at IRS.gov or by calling the IRS at 800-TAX-FORM (800-829-3676).

Nine Reasons to Visit an IRS Taxpayer Assistance Center

2009-08-22T07:20:00.001-07:00

Nine Reasons to Visit an IRS Taxpayer Assistance Center

IRS Tax Tip 2009-55

IRS Taxpayer Assistance Centers are your source for personal tax help when you believe your tax issue cannot be handled online or by phone, and you want face-to-face tax assistance.

Here are nine reasons to visit an IRS TAC.

1.
Face-to-Face Assistance No appointment is necessary -- just walk in.
2.
Multilingual Assistance Don’t let a language barrier prevent you from getting the face-to-face tax assistance you may need. Multilingual services are offered to taxpayers in over 150 languages. These services are provided through bilingual employees and an Over-the-Phone Interpreter.
3.
Free Federal Tax Return Preparation Your local TAC will prepare basic tax returns for those who qualify for EITC or those whose income is less than $42,000. Visit your TAC for an appointment.
4.
Form 2290, Heavy Highway Vehicle Use Tax Return Your local TAC can help you prepare Form 2290, accept your payment and provide the needed receipts for you to take when registering your vehicle.
5.
Individual Taxpayer Identification Number If you are not eligible for a Social Security Number but need to file a tax return, bring the completed tax return, Form W7 and certified identification documents to your local TAC to apply for your ITIN and file your return. For more information, see Publication 519, U.S. Tax Guide for Aliens.
6.
Alien Clearances Before leaving the United States, most aliens must obtain a certificate of tax compliance. This document, also popularly known as the sailing permit or departure permit, must be secured from the IRS before leaving the U.S. You can get the permit from your local TAC. For more information, see Publication 513, Tax Information for Visitors to the United States.
7.
Payments You can make payments at your local IRS TAC. Be sure you know the tax period and type of tax the payment is for. If you received a notice from the IRS, be sure to bring it with you.
8.
Tax Forms Do you need tax forms? If so, most forms are available at your local TAC.
9.
Tax Return and Tax Account Transcripts Do you need a copy of your tax return for financial aid or to obtain a mortgage? If so, a tax return or tax account transcript will generally meet the requirements of these lending institutions. Visit your local TAC for free transcripts, which are generally available for the current and past three years.

TAC locations, business hours and an overview of services are available at IRS.gov. Just go to the “Individuals” tab and click on the link for Contact My Local Office in the left tool bar section under IRS Resources.

Seven Things you Should Know When Selling Your Home

2009-08-22T07:18:00.000-07:00

Seven Things you Should Know When Selling Your Home

IRS Tax Tip 2009-54

People who sell their home may be able to exclude the gain from their income. Here are seven things every homeowner should know if they sold, or plan to sell their house.

1.
Amount of exclusion. When you have gain from the sale of your home, you may be able to exclude up to $250,000 of the gain from your income. For most taxpayers filing a joint return, the exclusion amount is $500,000.
2.
Ownership test. To claim the exclusion you must have owned the home for at least two years during the five year period ending on the date of the sale.
3.
Use test. You also must have lived in the house and used it as your main home for at least two years during the five year period ending on the date of the sale.
4.
When not to report. If you are able to exclude all of the gain from the sale of your home, you do not need to report the sale on your federal income tax return.
5.
Reporting taxable gain. If you have gain which cannot be excluded, it is taxable and must be reported on your tax return using Schedule D.
6.
Deducting a loss. You cannot deduct a loss from the sale of your home.
7.
Rules for multiple homes. If you have more than one home, you may only exclude gain from the sale of your main home and must pay tax on the gain resulting from the sale of any other home. Your main home is generally the one you live in most of the time.

For more information see IRS Publication 523, Selling Your Home, available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Claiming a Deduction for Your Home Office

2009-08-22T07:17:00.002-07:00

Claiming a Deduction for Your Home Office

IRS Tax Tip 2009-53

Taxpayers who use a portion of their home for business purposes may be able to take a home office deduction if they meet certain requirements.

In order to claim a business deduction, you must use part of your home for one of the following two reasons:

1.
Exclusively and regularly as either: your principal place of business, or as a place to meet or deal with patients, clients or customers in the normal course of your business. Where there is a separate structure not attached to your home, the regular and exclusive use does not need to be your principal place of business as long as the use is in connection with your trade or business.
2.
On a regular basis for certain storage use -- such as storing inventory or product samples -- as rental property, or as a home daycare facility.

Generally, the amount you can deduct depends on the percentage of your home that you used for business. Your deduction for certain expenses will be limited if your gross income from your business is less than your total business expenses.

If you use a separate structure not attached to your home for an exclusive and regular part of your business, you can deduct expenses related to it.

There are special rules for qualified daycare providers and for persons storing business inventory or product samples.

If you are self-employed, use Form 8829 to figure your home office deduction and report those deductions on line 30 of Schedule C, Form 1040.

Different rules apply to claiming the home office deduction if you are an employee. For example, the regular and exclusive business use must be for the convenience of your employer.

For more information see IRS Publication 587, Business Use of Your Home, available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Top Ten facts about the Tuition and Fees Deduction

2009-08-22T07:17:00.001-07:00

Top Ten facts about the Tuition and Fees Deduction

IRS Tax Tip 2009-52

The Tuition and Fees deduction of up to $4,000 is available to help parents and students pay for post-secondary education. Below are ten important facts about this deduction every student and parent should know.

1.
You do not have to itemize to take the Tuition and Fees deduction. You claim a tuition and fees deduction by completing Form 8917 and submitting it with your Form 1040 or Form 1040A.
2.
You may be able to claim qualified tuition and fees expenses as either an adjustment to income, a Hope or Lifetime Learning credit, or – if applicable – as a business expense.
3.
You cannot take the tuition and fees deduction on your income tax return if your filing status is married filing separately.
4.
You cannot take the deduction if you are claimed, or can be claimed, as a dependent on someone else's return.
5.
The deduction is reduced or eliminated if your modified adjusted gross income exceeds certain limits, based on your filing status.
6.
You cannot claim the tuition and fees deduction if you or anyone else claims the Hope or Lifetime Learning credit for the same student in the same year.
7.
If the educational expenses are also allowable as a business expense, the tuition and fees deduction may be claimed in conjunction with a business expense deduction, but the same expenses cannot be deducted twice.
8.
You cannot claim a deduction or credit based on expenses paid with tax-free scholarship, fellowship, grant, or education savings account funds such as a Coverdell education savings account, tax-free savings bond interest or employer-provided education assistance.
9.
The same rule applies to expenses you pay with a tax-exempt distribution from a qualified tuition plan, except that you can deduct qualified expenses you pay only with that part of the distribution that is a return of your contribution to the plan.
10.
IRS Publication 970, Tax Benefits for Education, can help eligible parents and students understand the special rules that apply and decide which tax break to claim. The publication is available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Seven Important Points about Penalties

2009-08-22T07:16:00.000-07:00

Seven Important Points about Penalties

IRS Tax Tip 2009-51

Taxpayers who do not file their return and pay their tax by the due date may have to pay a penalty. Here are seven things you should know about failure-to-file and failure-to-pay penalties.

1.
The failure-to-file penalty is generally more than the failure-to-pay penalty. So if you cannot pay all the taxes you owe, you should still file your tax return and explore other payment options in the meantime.
2.
The penalty for filing late is usually 5 percent of the unpaid taxes for each month of part of a month that a return is late. This penalty will not exceed 25 percent of the taxpayer’s unpaid taxes.
3.
If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.
4.
You will not have to pay a failure-to-file penalty if you can show that you failed to file on time because of reasonable cause and not because of willful neglect.
5.
You will have to pay a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid.
6.
If you filed an extension and you paid at least 90 percent of your actual tax liability by the due date, you will not be faced with a failure-to-pay penalty.
7.
If both the failure-to-file penalty and the failure-to-pay penalty apply in any month, the 5 percent failure-to-file penalty is reduced by the failure-to-pay penalty. However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax.

Link:

Five Tips to Avoid Tax Time Stress

2009-08-22T07:12:00.002-07:00

Five Tips to Avoid Tax Time Stress

IRS Tax Tip 2009-50

Are you looking for ways to avoid the last-minute rush for doing your taxes? Here are some stress-relieving tips to help you.

1.
Don’t Procrastinate – Resist the temptation to put off your taxes until the very last minute. Your haste to meet the filing deadline may cause you to overlook potential sources of tax savings and will likely increase your risk of making an error.

2.
Visit the IRS Online – In 2008, there were more than 330 million visits to IRS.gov. Anyone with Internet access can find tax law information and answers to frequently asked tax questions.

3.
File Your Return Electronically – Nearly 90 million taxpayers filed their returns electronically in 2008. Aside from ease of filing, IRS e-file is the fastest and most accurate way to file a tax return. If you’re due a refund, the waiting time for e-filers is half that of paper filers.

4.
Don’t Panic if You Can’t Pay – If you cannot pay the full amount of taxes you owe by the April deadline, you should still file your return by the deadline and pay as much as you can to avoid penalties and interest. You also should contact the IRS to discuss your payment options at 1-800-829-1040. The agency may be able to provide some relief such as a short-term extension to pay, an installment agreement or an offer in compromise. More than 75 percent of taxpayers eligible for an Installment Agreement can apply using the Web-based Online Payment Agreement application available on IRS.gov. To find out more about this simple and convenient process type “Online Payment Agreement” in the search box on the IRS.gov homepage.

5.
Request an Extension of Time to File – But Pay on Time If the clock runs out, you can get an automatic six month extension of time to file to October 15. However, this extension of time to file does not give you more time to pay any taxes due. You will owe interest on any amount not paid by the April deadline, plus a late payment penalty if you have not paid at least 90 percent of your total tax by that date. See IRS Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return for a variety of easy ways to apply for an extension. Form 4868 is available at IRS.gov or by calling 800-TAX-FORM (800-829-3676). Taxpayers needing Form 4868 should act soon to be sure they have the item in time to meet the April deadline.

Links:

Get Credit for Retirement Savings Contributions

2009-08-22T07:12:00.001-07:00

Get Credit for Retirement Savings Contributions

IRS Tax Tip 2009-49

If you make eligible contributions to an employer-sponsored retirement plan or to an individual retirement arrangement, you may be able to take a tax credit.

The Savers Credit, formally known as the Retirement Savings Contributions Credit, applies to individuals with a filing status and income of:

*
Single with income up to $26,500

*
Head of Household with income up to $39,750

*
Married Filing Jointly, with incomes up to $53,000

To be eligible for the credit you must be at least age 18, not a full-time student, and cannot be claimed as a dependent on another person’s return.

If you make eligible contributions to a qualified IRA, 401(k) and certain other retirement plans, you may be able to take a credit of up to $1,000 or up to $2,000 if filing jointly. The credit is a percentage of the qualifying contribution amount, with the highest rate for taxpayers with the least income.

When figuring this credit, you generally must subtract the amount of distributions you have received from your retirement plans from the contributions you have made. This rule applies for distributions starting two years before the year the credit is claimed and ending with the filing deadline for that tax return.

The Retirement Savings Contributions Credit is in addition to other tax benefits which may result from the retirement contributions. For example, most workers at these income levels may deduct all or part of their contributions to a traditional IRA. Contributions to a regular 401(k) plan are not subject to income tax until withdrawn from the plan.

For more information, review IRS Publication 590, Individual Retirement Arrangements, Publication 4703, Retirement Savings Contributions Credit and Form 8880, Credit for Qualified Retirement Savings Contributions. The publications and form can be downloaded at IRS.gov or ordered by calling 800-TAX-FORM (800-829-3676).

Standard or Itemized Deductions

2009-08-22T07:11:00.000-07:00

Standard or Itemized Deductions

IRS Tax Tip 2009-48

Whether to itemize deductions on your tax return depends on how much you spent on certain expenses last year. Money paid for medical care, mortgage interest, taxes, charitable contributions, casualty losses and miscellaneous deductions can reduce your taxes. If the total amount spent on those categories is more than the standard deduction, you can usually benefit by itemizing.

The standard deduction amounts are based on your filing status and are subject to inflation adjustments each year. For 2008, they are:

Single $5,450
Married Filing Jointly $10,900
Head of Household $8,000
Married Filing Separately $5,450

*
Some taxpayers have different standard deductions. The standard deduction amount depends on your filing status, whether you are 65 or older or blind, whether an exemption can be claimed for you by another taxpayer, whether you plan to claim the additional standard deduction for state and local real estate taxes, and whether you have a net disaster loss from a federally declared disaster. If any of these apply, you must use the Standard Deduction Worksheet in the Form 1040EZ, 1040A or 1040 instructions.

*
Limited itemized deductions. Your itemized deductions may be limited if your adjusted gross income is more than $159,950 ($79,975 if you are married filing separately). This limit applies to all itemized deductions except medical and dental expenses, casualty and theft losses, gambling losses, investment interest and certain qualified cash contributions for relief efforts in a Midwestern disaster area.

*
Married Filing Separately. When a married couple files separate returns and one spouse itemizes deductions, the other spouse cannot claim the standard deduction and should itemize their deductions.

*
Some taxpayers are not eligible for the standard deduction. They include nonresident aliens, dual-status aliens and individuals who file returns for periods of less than 12 months.

*
Forms to use. To itemize your deductions, use Form 1040, U.S. Individual Income Tax Return, and Schedule A, Itemized Deductions.

These forms and instructions may be downloaded from the IRS.gov Web site or ordered by calling 800-TAX-FORM (800-829-3676).

Additional Standard Deduction for Real Estate Taxes

2009-08-22T07:10:00.000-07:00

Additional Standard Deduction for Real Estate Taxes

IRS Tax Tip 2009-47

There is an additional standard deduction for those who don’t qualify to itemize their tax deductions, but who do pay state or local real estate taxes. This deduction is available for the 2008 and 2009 tax years.

Here are six things you need to know about the additional standard deduction for real estate taxes:

1.
The additional deduction amount is equal to the amount of real estate taxes paid. The amount can be up to $500 for single filers or up to $1,000 for joint filers.

2.
The taxes must be imposed on you.

3.
You must have paid the taxes during your tax year.

4.
The taxes must be charged uniformly against all property in the jurisdiction and must be based on the assessed value. Many states and counties also impose local benefit taxes for improvements to property, such as assessments for streets, sidewalks and sewer lines. These taxes usually cannot be deducted.

5.
Real estate taxes paid on foreign or business property do not qualify for the increased standard deduction.

6.
You must file a Form 1040 or 1040A to claim the additional deduction. When claiming the additional standard deduction for real estate taxes, be sure to check the box on line 39c of Form 1040 or line 23c of Form 1040A.

For more information, see Form 1040 or 1040A Instructions. The instructions can be downloaded at IRS.gov or ordered by calling 800-TAX-FORM (800-829-3676).

Top Ten Facts About the Child and Dependent Care Credit

2009-08-22T07:09:00.000-07:00

Top Ten Facts About the Child and Dependent Care Credit

IRS Tax Tip 2009-46

If you paid someone to care for a child, spouse, or dependent, you may be able to reduce your tax by claiming the Child and Dependent Care Credit on your federal income tax return. Below are the top ten things you need to know about claiming a credit for child and dependent care expenses.

1.
The care must have been provided for one or more qualifying persons. A qualifying person is your dependent child under age 13. Additionally, your spouse and certain other individuals who are physically or mentally incapable of self-care may also be qualifying persons. You must identify each qualifying person on your tax return.

2.
The care must have been provided so you – and your spouse if you are married – could work or look for work.

3.
You – and your spouse if you are married – must have earned income from wages, salaries, tips, other taxable employee compensation or net earnings from self-employment. One spouse may be considered as having earned income if they were a full-time student or they were physically or mentally unable to care for themselves.

4.
The payments for care cannot be paid to your spouse, to someone you can claim as your dependent on your return, or to your child who is under age 19, even if he or she is not your dependent. You must identify the care provider on your tax return.

5.
Your filing status must be single, married filing jointly, head of household or qualifying widow(er) with a dependent child.

6.
The qualifying person must have lived with you for more than half of 2008.

7.
The credit can be up to 35 percent of your qualifying expenses, depending upon your income.

8.
For 2008, you may use up to $3,000 of the expenses paid in a year for one qualifying individual or $6,000 for two or more qualifying individuals.

9.
The qualifying expenses must be reduced by the amount of any dependent care benefits provided by your employer that you exclude from your income.

10.
If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer. If you are a household employer, you may have to withhold and pay social security and Medicare tax and pay federal unemployment tax. For information, see Publication 926, Household Employer's Tax Guide.

For more information on the Child and Dependent Care Credit, see Publication 503, Child and Dependent Care Expenses. You may download these free publications from IRS.gov or order them by calling 800-TAX-FORM (800-829-3676).

Can You Claim the Child Tax Credit?

2009-08-22T07:01:00.000-07:00

Can You Claim the Child Tax Credit?

IRS Tax Tip 2009-45

With the Child Tax Credit, you may be able to reduce the federal income tax you owe by up to $1,000 for each qualifying child under the age of 17.

A qualifying child for this credit is someone who meets the following criteria:
• Age - Was under age 17 at the end of 2008
• Relationship - Is your son, daughter, adopted child, stepchild or eligible foster child, brother, sister, stepbrother, stepsister, or a descendant of any of these individuals
• Citizenship - Is a U.S. citizen, U.S. national or resident of the U.S.
• Support - Did not provide over half of his or her own support
• Lived with you - Must have lived with you for more than half of 2008 (note that some exceptions to this criteria exist)

The credit is limited if your modified adjusted gross income is above a certain amount. The amount at which this phase-out begins varies depending on your filing status:
• Married Filing Jointly $110,000
• Married Filing Separately $ 55,000
• All others $ 75,000

In addition, the Child Tax Credit is generally limited by the amount of the income tax you owe as well as any alternative minimum tax you owe.

If the amount of your Child Tax Credit is greater than the amount of income tax you owe, you may be able to claim some or all of the difference as an “Additional” Child Tax Credit. The Additional Child Tax Credit may give you a refund even if you do not owe any tax. The total amount of the Child Tax Credit and any Additional Child Tax Credit cannot exceed the maximum of $1,000 for each qualifying child.

For more information see IRS Publication 972, Child Tax Credit, available from the IRS Web site at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Mortgage Debt Forgiveness

2009-08-21T06:15:00.002-07:00

Mortgage Debt Forgiveness

IRS TAX TIP 2009-44

If your mortgage debt is partly or entirely forgiven during tax years 2007 – 2012, you may be able to claim special tax relief and exclude the debt forgiveness income.

Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence. The limit is $1 million for a married person filing a separate return.

Taxpayers may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure. To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence. Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion.
However, proceeds of refinanced debt used for other purposes (for example, to pay off credit card debt) do not qualify for the exclusion.

If you qualify, you claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attaching it to your federal income tax return for the year.

Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the new tax-relief provision. In some cases, however, other tax relief provisions, (for example, insolvency), may be available. See Form 982 for details.

If your debt is reduced or eliminated you will receive a year-end statement, Form 1099-C, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.

The IRS urges borrowers to examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven (Box 2) and the value listed for your home (Box 7).

For more information about the Mortgage Forgiveness Debt Relief Act of 2007, visit the IRS Web site at IRS.gov. A good resource is IRS Publication 4681, Canceled Debts, Foreclosures, Repossessions and Abandonments. Taxpayers may obtain a copy of this publication and Form 982 either by downloading from IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Five Important Tax Credits

2009-08-21T06:15:00.001-07:00

Five Important Tax Credits

IRS Tax Tip 2009-43

Check it out! You might be eligible for a tax credit. A tax credit is a dollar-for-dollar reduction of taxes owed. Some credits are even refundable. That means you might receive a refund rather than owe any taxes.

Here are five popular credits you should consider before filing your 2008 Federal Income Tax Return:

1. The Earned Income Tax Credit is a refundable credit for low-income working individuals and families. Income and family size determine the amount of the credit. For more information, see IRS Publication 596, Earned Income Credit.

2. The Child and Dependent Care Credit is for expenses paid for the care of your qualifying children under age 13, or for a disabled spouse or dependent, to enable you to work or look for work. For more information, see IRS Publication 503, Child and Dependent Care Expenses.

3. The Child Tax Credit is for people who have a qualifying child. The maximum amount of the credit is $1,000 for each qualifying child. This credit can be claimed in addition to the credit for child and dependent care expenses. For more information on the Child Tax Credit, see IRS Publication 972, Child Tax Credit.

4. The Retirement Savings Contributions Credit, also known as the Saver’s Credit, is designed to help low- and moderate-income workers save for retirement. You may qualify if your income is below a certain limit and you contribute to an IRA or workplace retirement plan, such as a 401(k) plan. The Saver’s Credit is available in addition to any other tax savings that apply. For more information, see IRS Publication 590, Individual Retirement Arrangements (IRAs).

5. Health Coverage Tax Credit Certain individuals, who are receiving certain Trade Adjustment Assistance, Alternative Trade Adjustment Assistance, or pension benefit payments from the Pension Benefit Guaranty Corporation, may be eligible for a Health Coverage Tax Credit when you file your 2008 tax return.

There are other credits available to eligible taxpayers. Since many qualifications and limitations apply to the various tax credits, taxpayers should carefully check their tax form instructions, the listed publications, and additional information that is available on the IRS Web site at IRS.gov. IRS forms and publications are also available by calling 800-TAX-FORM (800-829-3676).

Free Volunteer Income Tax Assistance

2009-08-21T06:13:00.000-07:00

Free Volunteer Income Tax Assistance

IRS TAX TIP 2009-42

Need help filing your tax return? If so, then you should look into the free, IRS-sponsored, volunteer tax return preparation programs.

Trained community volunteers can help eligible taxpayers with all special credits, such as the Child Tax Credit or the Credit for the Elderly. Also, many sites have language specialists to assist people with limited English skills.

Nearly 12,000 free tax preparation sites will be open nationwide this year as the Internal Revenue Service continues to expand its partnerships with nonprofit and community organizations performing vital tax preparation services for low-income and elderly taxpayers.

The IRS Volunteer Income Tax Assistance Program offers free tax help to people who earn less than $42,000. The Tax Counseling for the Elderly Program offers free tax help to taxpayers who are 60 and older.

As part of the IRS-sponsored TCE Program, AARP offers the Tax-Aide counseling program at nearly 7,000 sites nationwide during the filing season. Trained and certified AARP Tax-Aide volunteer counselors help people of low-to-moderate income with special attention to people age 60 and older. To locate the nearest AARP Tax-Aide site, call 1-888-227-7669 (888-AARPNOW) or visit AARP's internet site.

The military also partners with the IRS to provide free tax assistance to military personnel and their families. The Armed Forces Tax Council oversees the operation of the military tax programs worldwide, and serves as the main conduit for outreach by the IRS to military personnel and their families. The AFTC consists of the tax program coordinators for the Army, Air Force, Navy, Marine Corps and Coast Guard. Volunteers are trained and equipped to address military specific tax issues, such as combat zone tax benefits and the effect of the new EITC guidelines.

Locations and hours of operation are often available through city information hotlines and local community organizations. Local volunteer tax preparation site information is also available by calling the IRS toll-free number 1-800-906-9887.

How to Find Free Tax Services

2009-08-21T06:11:00.002-07:00

How to Find Free Tax Services

IRS Tax Tip 2009-41

The IRS provides free publications, forms and other tax material and information to help taxpayers meet their tax obligations. Free help is available on the IRS Web site, by phone, at local IRS offices and at many community locations.

• IRS.gov You can access free tax information at IRS.gov. At 1040 Central on the Individuals page, you can obtain forms, instructions and publications, learn about IRS e-file, determine your eligibility for the Earned Income Tax Credit, read about the latest tax changes and find answers to Frequently Asked Questions. In the Online Services section, you can access numerous applications to help with your taxes, including Free File, the IRS Withholding Calculator, the Alternative Minimum Tax Assistant, the EITC Assistant and more. You can also check the status of your refund by clicking on Where’s My Refund?

• Telephone Call the IRS Tax Help Line for Individuals, 800-829-1040, to get answers to your federal tax questions. To order free forms, instructions and publications call 800-829-3676. To hear pre-recorded messages covering various tax topics or check on the status of your refund, call 800-829-4477. TTY/TDD users may call 800-829-4059 to ask tax questions or to order forms and publications.

• Taxpayer Assistance Centers When you believe your tax issue cannot be handled online or by phone, and you want face-to-face assistance, you can find help at a local Taxpayer Assistance Center. Locations, business hours and an overview of services are available at IRS.gov. Just go to the “individuals” tab and click on the link for Contact My Local Office in the left tool bar section under IRS Resources.

• Community Resources Free tax preparation is available through the Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs in many communities. Volunteer return preparation programs provided through IRS and its partners offer free help in preparing simple tax returns for low- to moderate-income taxpayers. Call 800-906-9887 to find the VITA or TCE site nearest you. You may also call AARP — the largest TCE participant — at 888-227-7669 (888-AARPNOW) or access www.aarp.org to find the nearest Tax-Aide site.

For more information about services provided by the IRS, review Publication 910, IRS Guide to Free Tax Services available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Free Tax Assistance for Members of the Military

2009-08-21T06:11:00.001-07:00

Free Tax Assistance for Members of the Military

IRS Tax Tip 2009-40

If you or your spouse are a member of the military, you may be eligible to receive free tax return preparation assistance. The U.S. Armed Forces participates in the Volunteer Income Tax Assistance program and provides free tax advice, tax preparation, return filing and other tax assistance to military members and their families.

The Armed Forces Tax Council oversees the operation of the military tax programs worldwide, conducting outreach with the IRS to military personnel and their families. The AFTC consists of tax program coordinators for the Marine Corps, Air Force, Army, Navy and Coast Guard.

Volunteer assistors at Military-based VITA sites are trained to address military-specific tax issues, such as combat zone tax benefits and the new Earned Income Tax Credit guidelines.

To receive this free assistance, you should bring the following records to your military VITA site:

*
Valid photo identification
*
Social Security cards for you, your spouse and dependents or a social security number verification letter issued by the Social Security Administration
*
Birth dates for you, your spouse and dependents
*
Current year’s tax package, if you received one
*
Wage and earning statement(s) -- Form W-2, W-2G, 1099-R
*
Interest and dividend statements (Forms 1099)
*
A copy of last year’s federal and state tax returns, if available
*
Checkbook (to get routing number and account number for direct deposit)
*
Total amount paid for day care and day care provider’s identifying number
*
Other relevant information about income and expenses

If your filing status is Married Filing Jointly and you wish to file your tax return electronically, both you and your spouse should be present to sign the required forms. If it isn’t possible for both to be present, a valid power of attorney that allows tax preparation can be used to sign and file the return.

There is a special exception to using a power of attorney for spouses in combat zones that permits the filing spouse to e-file a joint return with only a written statement setting forth that the other spouse is in a combat zone and is unable to sign.

For more information, review IRS Publication 3, Armed Forces’ Tax Guide, available on the IRS Web site at IRS.gov or order a free copy by calling 800-TAX-FORM (800-829-3676).

Checking the Status of Your Federal Tax Refund is Easy

2009-08-21T06:10:00.000-07:00

Checking the Status of Your Federal Tax Refund is Easy

IRS Tax Tip 2009-39

If you already filed your federal tax return and are due a refund, you can check the status of your refund online, in English or Spanish.

Where’s My Refund? and ¿Dónde está mi reembolso? are interactive tools on the IRS Web site at IRS.gov. Whether you split your refund among several accounts, opted for direct deposit into one account, or asked the IRS to mail you a check, Where’s My Refund? and ¿Dónde está mi reembolso? give you online access to your refund information nearly 24 hours a day, 7 days a week.

If you e-file, you can get refund information 72 hours after IRS acknowledges receipt of your return. If you file a paper return, refund information will be available within three to four weeks. When checking the status of your refund, have your federal tax return handy. To get your personalized refund information you must enter:

*
Your Social Security Number (or Individual Taxpayer Identification Number).
*
Filing status (Single, Married Filing Joint Return, Married Filing Separate Return, Head of Household, or Qualifying Widow(er)).
*
Exact refund amount shown on your tax return.

Once you enter your personal information, you could get several responses, including:

*
Acknowledgement that your return was received and is in processing.
*
The mailing date or direct deposit date of your refund.
*
Notice that the IRS could not deliver your refund due to an incorrect address. In this instance, you can change or correct your address online using Where’s My Refund?

Where’s My Refund? also includes links to customized information based on your specific situation. The links guide you through the steps to resolve any issues affecting your refund. For example, if you do not get the refund within 28 days from the original IRS mailing date shown on Where’s My Refund?, you can start a refund trace online.

Where’s My Refund? is also accessible to visually impaired taxpayers who use the Job Access with Speech screen reader used with a Braille display and is compatible with different JAWS modes.

If you do not have internet access, you can check the status of your refund by calling the IRS TeleTax System at 800-829-4477 or the IRS Refund Hotline at 800-829-1954. When calling, you must provide your or your spouse’s Social Security number, your filing status and the exact refund amount shown on your return.

Refunds are sent out weekly on Fridays. If you check the status of your refund and are not given the date it will be issued, please wait until the next week before checking back.

What Every Parent Should Know about Child’s Investment Income

2009-08-21T06:09:00.000-07:00

What Every Parent Should Know about Child’s Investment Income

IRS Tax Tip 2009-38

Children with investment income may have part or all of this income taxed at their parent’s tax rate rather than at the child’s rate. Investment income includes interest, dividends, capital gains and other unearned income

This rule applies to children who have investment income of more than $1800 and meet one of three age requirements for 2008:

1. The child is younger than 18.

2. The child is 18 and has earned income that does not exceed one-half of their own support for the year.

3. The child is older than 18 and younger than 24 and a full-time student with earned income that does not exceed one-half of the child’s support for the year.

To figure the child's tax using this method, fill out Form 8615, Tax for Certain Children Who Have Investment Income of More Than $1,800, and attach it to the child's federal income tax return.

When certain conditions are met, a parent may be able to avoid having to file a tax return for the child by including the child’s income on the parent’s tax return. In this situation, the parent would file Form 8814, Parents' Election To Report Child's Interest and Dividends.

More information can be found in IRS Publication 929, Tax Rules for Children and Dependents. This publication and Forms 8615 and 8814 are available on the IRS Web site at IRS.gov in the Forms and Publications section. You may also order them by calling the IRS at 800-TAX-FORM (800-829-3676).

Five Facts about the Foreign Earned Income Exclusion

2009-08-21T06:08:00.000-07:00

Five Facts about the Foreign Earned Income Exclusion

IRS Tax Tip 2009-37

If you are living and working abroad you may be entitled to the Foreign Earned Income Exclusion. Here are some important facts about the exclusion:

1. The Foreign Earned Income Exclusion: United States Citizens and resident aliens who live and work abroad may be able to exclude all or part of their foreign salary or wages from their income when filing their U.S. federal tax return. They may also qualify to exclude compensation for their personal services or certain foreign housing costs.

2. The General Rules: To qualify for the foreign earned income exclusion, a U.S. citizen or resident alien must have a tax home in a foreign country and income received for working in a foreign country, otherwise known as foreign earned income. The taxpayer must also meet one of two tests: the bona fide residence test or the physical presence test.

3. The Exclusion Amount: The foreign earned income exclusion is adjusted annually for inflation. For 2008, the maximum exclusion is up to $87,600 per qualifying person.

4. Claiming the Exclusion: The foreign earned income exclusion and the foreign housing exclusion or deduction are claimed using Form 2555, which should be attached to the taxpayer’s Form 1040. A shorter Form 2555-EZ is available to certain taxpayers claiming only the foreign income exclusion.

5. Taking Other Credits or Deductions: Once the foreign earned income exclusion is chosen, a foreign tax credit or deduction for taxes cannot be claimed on the excluded income. If a foreign tax credit or tax deduction is taken on any of the excluded income, the foreign earned income exclusion will be considered revoked.

For more information about the Foreign Earned Income Exclusion get Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad and the instructions for Form 2555. Both are available on the IRS Web site at IRS.gov.

Top Ten Facts about Taking Early Distributions from Retirement Plans

2009-08-21T06:07:00.002-07:00

Top Ten Facts about Taking Early Distributions from Retirement Plans

IRS Tax Tip 2009-36

If you took an early distribution from your retirement plan, here are some things you need to know:

1. Payments you receive from your Individual Retirement Arrangement before you reach age 59 ½ are generally considered early or premature distributions.

2. Early distributions are usually subject to an additional 10 percent tax.

3. Early distributions must also be reported to the IRS.

4. Distributions you rollover to another IRA or qualified retirement plan are not subject to the additional 10 percent tax. You must complete the rollover within 60 days after the day you received the distribution.

5. The amount you roll over is generally taxed when the new plan makes a distribution to you or your beneficiary.

6. If you made nondeductible contributions to an IRA and later take early distributions from that same IRA, the portion of the distribution attributable to those contributions is not taxed.

7. If you received an early distribution from a Roth IRA the distribution attributable to contributions is not taxed.

8. If you received a distribution from any other qualified retirement plan, generally the entire distribution is taxable unless you made after-tax employee contributions to the plan.

9. There are several exceptions to the additional 10 percent early distribution, such as when the distributions are used for purchase of a first home, certain medical and educational expenses or if you become disabled. Other exceptions can be found in IRS Publication 590, Individual Retirement Arrangements (IRAs).

10. More information about early distributions from retirement plans and the additional 10 percent tax can be found in IRS Publication 575, Pension and Annuity Income and Publication 590, Individual Retirement Arrangements (IRAs). Both publications are available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).
.

Tax Facts About Capital Gains and Losses

2009-08-21T06:07:00.001-07:00

Tax Facts About Capital Gains and Losses

IRS TAX TIP 2009-35

Do you have questions about reporting gains and losses on your tax return? Here are some facts from the IRS.

1.
Almost everything you own and use for personal purposes, pleasure or investment is a capital asset.
2.
When you sell a capital asset, the difference between the amount you sell it for and your basis, which is usually what you paid for it, is a capital gain or a capital loss.
3.
You must report all capital gains.
4.
You may deduct capital losses only on investment property, not on property held for personal use.
5.
Capital gains and losses are classified as long-term or short-term, depending on how long you hold the property before you sell it. If you hold it more than one year, your capital gain or loss is long-term. If you hold it one year or less, your capital gain or loss is short-term.
6.
Net capital gain is the amount by which your net long-term capital gain is more than your net short-term capital loss.
7.
The tax rates that apply to net capital gain are generally lower than the tax rates that apply to other income and are called the maximum capital gains rates. For 2008, the maximum capital gains rates are 0%, 15%, 25% or 28%.
8.
If your capital losses exceed your capital gains, the excess can be deducted on your tax return, up to an annual limit of $3,000 ($1,500 if you are married filing separately).
9.
If your total net capital loss is more than the yearly limit on capital loss deductions, you can carry over the unused part to the next year and treat it as if you incurred it in that next year.
10.
Capital gains and losses are reported on Schedule D, Capital Gains and Losses, and then transferred to line 13 of Form 1040.

For more information about reporting capital gains and losses, get Publication 17, Your Federal Income Tax, and Publication 550, Investment Income and Expenses, available on the IRS Web site at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Gambling Winnings Are Always Taxable Income

2009-08-21T06:06:00.000-07:00

Gambling Winnings Are Always Taxable Income

IRS TAX TIP 2009-34

Gambling winnings are fully taxable and must be reported on your tax return. Gambling income includes, but is not limited to, winnings from lotteries, raffles, horse and dog races and casinos, as well as the fair market value of prizes such as cars, houses, trips or other noncash prizes.

Depending on the type and amount of your winnings, the payer might provide you with a Form W-2G and may have withheld federal income taxes from the payment.

Here are some general guidelines on gambling income and losses:

*
Reporting winnings: The full amount of your gambling winnings for the year must be reported on line 21, Form 1040. You may not use Form 1040A or 1040EZ. This rule applies regardless of the amount and regardless of whether you receive a Form W-2G or any other reporting form.
*
Deducting losses: If you itemize deductions, you can deduct your gambling losses for the year on line 28, Schedule A (Form 1040). You cannot deduct gambling losses that are more than your winnings.

It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show the amount of both your winnings and losses.

For more information see IRS Publication 529, Miscellaneous Deductions, or Publication 525, Taxable and Nontaxable Income, both available on the IRS Web site, IRS.gov, or by calling 800-TAX-FORM (800-829-3676).

Seven Facts to Help You Understand the Alternative Minimum Tax

2009-08-21T06:05:00.000-07:00

Seven Facts to Help You Understand the Alternative Minimum Tax

IRS TAX TIP 2009-33

1.
Tax laws provide tax benefits for certain kinds of income and allow special deductions and credits for certain expenses. These benefits can drastically reduce some taxpayers’ tax obligations. The Alternative Minimum Tax attempts to ensure that anyone who benefits from these tax advantages pays at least a minimum amount of tax.
2.
Congress created the AMT in 1969, targeting a small number of high-income taxpayers who could claim so many deductions they owed little or no income tax.
3.
Because the AMT is not indexed for inflation, a growing number of middle-income taxpayers are discovering they are subject to the AMT.
4.
You may have to pay the AMT if your taxable income for regular tax purposes plus any adjustments and preference items that apply to you are more than the AMT exemption amount.
5.
The AMT exemption amounts are set by law for each filing status.
6.
For tax-year 2008, Congress raised the alternative minimum tax exemption to the following levels:
*
$69,950 for a married couple filing a joint return and qualifying widows and widowers
*
$46,200 for singles and heads of household
*
$34,975 for a married person filing separately
7.
Taxpayers may find more information about the Alternative Minimum Tax and how it impacts them by referring to IRS Form 6251, Alternative Minimum Tax —Individuals, available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

A Career at the IRS Adds Up

2009-08-21T06:04:00.002-07:00

A Career at the IRS Adds Up

IRS TAX TIP 2009-32

If you are looking for a new job or a career change, consider the IRS. No matter what your professional specialty, the IRS offers a variety of full-time careers or seasonal job opportunities in many U.S. cities.

Add it up. At the IRS you can excel with one of the world's largest financial institutions and be part of one of the most well trained professional workforces anywhere. A career at the IRS has its advantages: flexibility, job security, advancement opportunities and great benefits. It all adds up.

So, where do you get information about careers, benefits, training and life at the IRS? You’ll find what you’re looking for on IRS.gov in the “Careers” section.

When you’re ready, applying for an IRS position is easy. Instead of filling out piles of paper to send in the mail, you can apply on-line through USAJOBS. Search for current IRS job announcements and apply by following these four easy steps:

1.
Go to www.usajobs.opm.gov.
2.
Click “Search Jobs”. In the Keyword Search box, type: “Internal Revenue Service.” Scroll to the bottom of the page and click the “Search for Jobs” button. A list of currently available IRS Job Announcements will appear.
Click on the Job Announcement you’re interested in to learn about its duties, qualification requirements and available locations.
3.
When you’re ready to apply, scroll to the bottom of the Job Announcement and click “Apply Online” to post your resume.
4.
Remember, you never have to pay a fee to apply for an IRS job. From time to time you may see ads advising readers to call for an application and job information. The ads claim that they will send you the information you need to apply for an IRS position. The truth is, anyone seeking information regarding employment at the IRS can have it, free for the asking. All of our positions are posted at www.usajobs.opm.gov.

Are Your Social Security Benefits Taxable?

2009-08-21T06:04:00.001-07:00

Are Your Social Security Benefits Taxable?

IRS TAX TIP 2009-31

How much, if any, of your social security benefits are taxable depends on your total income and marital status. Generally, if social security benefits were your only income for 2008, your benefits are not taxable and you probably do not need to file a federal income tax return.

If you received income from other sources, your benefits will not be taxed unless your modified adjusted gross income is more than the base amount for your filing status. Your taxable benefits and modified adjusted gross income are figured in a worksheet in the Form 1040A or Form 1040 Instruction booklet.

Before you go to the instruction book, do the following quick computation to determine whether some of your benefits may be taxable:

*
First, add one–half of the total social security you received to all your other income, including any tax exempt interest and other exclusions from income.
*
Then, compare this total to the base amount for your filing status. If the total is more than your base amount, some of your benefits may be taxable.

The 2008 base amounts are:

*
$32,000 for married couples filing jointly
*
$25,000 for single, head of household, qualifying widow/widower with a dependent child, or married individuals filing separately who did not live with their spouses at any time during the year
*
$0 for married persons filing separately who lived together during the year

For additional information on the taxability of social security benefits, see IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits. Publication 915 is available on the IRS Web site at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Offset Education Costs

2009-08-21T06:03:00.000-07:00

Offset Education Costs

IRS TAX TIP 2009-30

Education tax credits can help offset the costs of higher education for yourself or a dependent. The Hope Credit and the Lifetime Learning Credit are two education credits available which may benefit you. Because they are credits rather than deductions, you may be able to subtract them in full, dollar for dollar, from your federal income tax.

The Hope Credit

*
The credit applies for the first two years of post-secondary education, such as college or vocational school. It does not apply to the third, fourth, or higher years of undergraduate programs, to graduate programs, or to professional-level programs.
*
It can be worth up to $1,800 ($3,600 if a student in a Midwestern disaster area) per eligible student, per year.
*
You're allowed a credit of 100% of the first $1,200 ($2,400 if a student in a Midwestern disaster area) of qualified tuition and related fees paid during the tax year, plus 50% of the next $1,200 ($2,400 if a student in a Midwestern disaster area).
*
Each student must be enrolled at least half-time for at least one academic period which began during the year.
*
The student must be free of any federal or state felony conviction for possessing or distributing a controlled substance as of the end of the tax year.

The Lifetime Learning Credit

*
The credit applies to undergraduate, graduate and professional degree courses, including instruction to acquire or improve job skills, regardless of the number of years in the program.
*
If you qualify, your credit equals 20% (40% if a student in a Midwestern disaster area) of the first $10,000 of post-secondary tuition and fees you pay during the year, for a maximum credit of $2,000 ($4,000 if a student in a Midwestern disaster area) per tax return.

You cannot claim both the Hope and Lifetime Learning Credits for the same student in the same year. You also cannot claim either credit if you claim a tuition and fees deduction for the same student in the same year. To qualify for either credit, you must pay post-secondary tuition and certain related expenses for yourself, your spouse or your dependent. The credit may be claimed by the parent or the student, but not by both. Students who are claimed as a dependent cannot claim the credit.

These credits are phased out for Modified Adjusted Gross Income over $48,000 ($96,000 for married filing jointly) and eliminated completely for Modified Adjusted Gross Income of $58,000 or more ($116,000 for married filing jointly). If the taxpayer is married, the credit may be claimed only on a joint return.

For more information, see Publication 970, Tax Benefits for Education, which can be obtained online at IRS.gov or by calling the IRS at 800-TAX-FORM (800-829-3676).

How to Correctly Claim the Recovery Rebate Credit on your 2008 Return

2009-08-21T06:02:00.000-07:00

How to Correctly Claim the Recovery Rebate Credit on your 2008 Return

IRS Tax Tip 2009-29

The IRS sent taxpayers nearly 119 million economic stimulus payments last year. When filing a 2008 federal tax return, taxpayers will need to know the amount of their stimulus payment to properly determine if they are eligible for a recovery rebate credit.

Here are six tips for finding how much you received and correctly claiming the credit on your return.

1.
Get your notice. Check the amount listed on Notice 1378, which the IRS mailed last year to individuals who received the economic stimulus payment.

2.
Visit IRS.gov to find the amount. If you don’t have your Notice 1378, go to the “How Much Was My 2008 Stimulus Payment?” tool that is available on the IRS Web site, IRS.gov. This tool can provide the correct amount in a matter of a few seconds.

3.
Call the IRS at 1-866-234-2942. If you don’t have Internet access, call the IRS. After a brief recorded announcement, select option one to find out the amount of your economic stimulus payment. You will need to provide your 2007 filing status, Social Security Number and the number of exemptions claimed on the tax return.

4.
Keep the amount handy. With the amount of last year’s economic stimulus payment in hand, you will be able to enter the figure on the recovery rebate credit worksheet or in the appropriate location when your tax preparation software requests it. This number will not appear on your actual tax return but is vital to ensure the accurate determination of the recovery rebate credit amount.

5.
Trust the software or the worksheet to get it right. Tax preparation software will automatically and correctly calculate the amount of the rebate recovery credit for you. The software will also properly report the credit on your tax return. If you are filing a paper return, the worksheet will guide you in calculating the proper amount of the credit. The recovery rebate credit should be reported on Line 70 of Form 1040, Line 42 of Form 1040A or Line 9 of Form 1040EZ. In order to avoid an error, use extra care when responding to the software questions or when completing the worksheet. Do not enter the stimulus payment directly on your return.

6.
Most taxpayers won’t qualify for more. For most taxpayers, the correct entry for the recovery rebate credit line on the return will either be blank or zero because they have already received the money as a stimulus payment. If you would like the IRS to determine the correct amount of your recovery rebate credit you should enter "RRC" on the recovery rebate credit line of your return. The IRS will determine whether you qualify for a recovery rebate credit and, if so, how much.

What to Do If You Are Missing a W-2

2009-08-21T06:01:00.000-07:00

What to Do If You Are Missing a W-2

IRS TAX TIP 2009-28

Did you get your W-2? These documents are essential to filling out most individual tax returns. You should receive a Form W-2, Wage and Tax Statement, from each of your employers each year. Employers have until February 2, 2009 to provide or send you a 2008 W-2 earnings statement either electronically or in paper form. If you haven’t received your W-2, follow these steps:

1.
Contact your employer. If you have not received your Form W-2, contact your employer to inquire if and when the W-2 was mailed. If it was mailed, it may have been returned to the employer because of an incorrect or incomplete address. After contacting the employer, allow a reasonable amount of time for them to resend or to issue the W-2.

2.
Contact the IRS. If you still do not receive your W-2 by February 17th, contact the IRS for assistance at 800-829-1040. When you call, have the following information:
*
Employer's name, address, city, and state, including zip code;
*
Your name, address, city and state, including zip code, and Social Security number; and
*
An estimate of the wages you earned, the federal income tax withheld, and the period you worked for that employer. The estimate should be based on year-to-date information from your final pay stub or leave-and-earnings statement, if possible.

3.
File your return. You still must file your tax return on time even if you do not receive your Form W-2. If you have not received your Form W-2 by February 17th, and have completed steps 1 and 2 above, you may use Form 4852, Substitute for Form W-2, Wage and Tax Statement. Attach Form 4852 to the return, estimating income and withholding taxes as accurately as possible. There may be a delay in any refund due while the information is verified.

4.
File a Form 1040X. On occasion, you may receive your missing documents at a later date and some may have conflicting information. You may receive a Form W-2 or W-2C (corrected form) after you filed your return using Form 4852, and the information differs from what you reported on your return. If this happens, you must amend your return by filing a Form 1040X, Amended U.S. Individual Income Tax Return.

Form 4852, Form 1040X, and instructions are available on the IRS Web site, IRS.gov or by calling 800-TAX-FORM (800-829-3676).

To File or Not To File

2009-08-21T06:00:00.000-07:00

To File or Not To File

IRS TAX TIP 2009-27

You must file a tax return if your income is above a certain level. The amount varies depending on filing status, age and the type of income you receive.

For example, a married couple both under age 65 generally is not required to file until their joint income reaches $17,900. However, self-employed individuals generally must file a tax return if their net income from self employment was at least $400.

Check the “Individuals” section of the IRS Web site at IRS.gov or consult the instructions for form 1040, 1040A, or 1040EZ for specific details that may affect your need to file a tax return with IRS this year.

Even if you don’t have to file, here are six reasons why you may want to file:

1.
Federal Income Tax Withheld. If you are not required to file, you should file to get money back if Federal Income Tax was withheld from your pay, if you made estimated tax payments, or had a prior year overpayment applied to this year's tax.
2.
Recovery Rebate Credit. If you did not qualify or did not receive the maximum amount for the 2008 Economic Stimulus Payment, you may be entitled to a Recovery Rebate Credit when you file your 2008 tax return.
3.
Earned Income Tax Credit. You may qualify for the Earned Income Tax Credit, or EITC, if you worked, but did not earn a lot of money. EITC is a refundable tax credit meaning you could qualify for a tax refund.
4.
Additional Child Tax Credit. This credit may be available to you if you have at least one qualifying child and you did not get the full amount of the Child Tax Credit.
5.
First time Homebuyer Credit. If you bought a main home after April 8, 2008, and before July 1, 2009 and did not own a main home during the prior 3 years, you may be able to take this refundable credit.
6.
Health Coverage Tax Credit. Certain individuals, who are receiving certain Trade Adjustment Assistance, Alternative Trade Adjustment Assistance, or pension benefit payments from the Pension Benefit Guaranty Corporation, may be eligible for a Health Coverage Tax Credit when you file your 2008 tax return.

For more information about filing requirements and your eligibility to receive tax credits, visit the IRS Web site at IRS.gov.

Tax Benefits for Disabled Taxpayers

2009-08-21T05:59:00.000-07:00

Tax Benefits for Disabled Taxpayers

IRS TAX TIP 2009-26

There are several tax credits and benefits available to qualifying taxpayers with disabilities as well as to the parents of disabled children. Listed below are several tax credits and other benefits available if you or someone else listed on your federal tax return is disabled.

The Earned Income Tax Credit
The EITC is available to disabled taxpayers as well as to the parents of a child with a disability. The EITC is a tax credit that not only reduces a taxpayer’s tax liability but may also result in a refund. Many working individuals with a disability, who have no qualifying children, but are older than 25 and younger than 65 do, in fact, qualify for EITC. Additionally, if the taxpayer’s child is disabled, the age limitation for the EITC is waived. The EITC has no effect on certain public benefits. Any refund you receive because of the EITC will not be considered income when determining whether you are eligible for benefit programs such as Supplemental Security Income and Medicaid.

The Credit for the Elderly or Disabled
This credit may be available to taxpayers who are age 65 or older, or who are younger than 65 and are retired on permanent and total disability.

Child or Dependent Care Credit
Taxpayers who pay someone to come to their home and care for their dependent or spouse may be entitled to claim this credit. There is no age limit if the taxpayer’s spouse or dependent is unable to care for themselves.

Impairment-Related Work Expenses
Employees who have a physical or mental disability limiting their employment, may be able to claim business expenses in connection with their workplace. The expenses must be necessary for the taxpayer to work.

Impact on the Standard Deduction
Taxpayers who are legally blind may be entitled to a higher standard deduction on their tax return.

Gross Income
Certain disability-related payments, Veterans Administration disability benefits, and Supplemental Security Income may be excluded from a taxpayer’s gross income.

What Income is Taxable?

2009-08-21T05:58:00.002-07:00

What Income is Taxable?

IRS TAX TIP 2009-25

While most income you receive is generally considered taxable, there are some situations when certain types of income are partially taxed or not taxed at all.

Some common examples of items that are not included in your income are:

*
Adoption Expense Reimbursements for qualifying expenses
*
Child support payments
*
Gifts, bequests and inheritances
*
Workers' compensation benefits
*
Meals and Lodging for the convenience of your employer
*
Compensatory Damages awarded for physical injury or physical sickness
*
Welfare Benefits
*
Cash Rebates from a dealer or manufacturer
*
Economic Stimulus Payment received in 2008

Some income may be taxable under certain circumstance, but not taxable in other situations. Examples of items that may or may not be included in your income are:

*
Life Insurance. If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy. Life insurance proceeds paid to you because of the death of the insured person are not taxable unless the policy was turned over to you for a price.
*
Scholarship or Fellowship Grant. If you are a candidate for a degree, you can exclude amounts you receive as a qualified scholarship or fellowship. Amounts used for room and board do not qualify.
All other items—including income such as wages, salaries and tips—must be included in your income, unless it is specifically excluded by law.
Taxable income may be in a form other than cash. One example of this is bartering, which is an exchange of property or services. The fair market value of goods and services exchanged is fully taxable and must be included as income on Form 1040 of both parties.

These examples are not all-inclusive. For more information, visit the IRS Web site at IRS.gov to view or download Publication 525, Taxable and Nontaxable Income from the Forms and Publications section or call 800-TAX-FORM (800-829-3676).

Five Important Changes for Taxpayers

2009-08-21T05:58:00.001-07:00

Five Important Changes for Taxpayers

IRS Tax Tip 2009-24

Here are a few tax law changes you may want to note before filing your 2008 federal tax return:

1. Expiring Tax Breaks Renewed
The following popular tax breaks were renewed for tax-years 2008 and 2009:

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Deduction for state and local sales taxes on Form 1040 Schedule A, Line 5
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Educator expense deduction on Form 1040, Line 23 or Form 1040A, Line 16
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Tuition and fees deduction on Form 8917

In addition, the residential energy-efficient property credit is extended through 2016. In general, solar electric, solar water heating and fuel cell property qualify for this credit. Starting in 2008, small wind energy and geothermal heat pump property also qualify.

2. Standard Deduction Increased for Most Taxpayers
The 2008 basic standard deductions all increased. They are:

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$10,900 for married couples filing a joint return and qualifying widows and widowers
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$5,450 for singles and married individuals filing separate returns
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$8,000 for heads of household

Beginning this year, taxpayers can claim an additional standard deduction based on the state or local real-estate taxes paid in 2008. Also new for 2008, a taxpayer can increase his standard deduction by the net disaster losses suffered from a federally declared disaster.

3. Contribution Limits Rise for IRAs and Other Retirement Plans
This filing season, more people can make tax-deductible contributions to a traditional IRA. The deduction is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes between $53,000 and $63,000. For married couples filing jointly, the income phase-out range is $85,000 to $105,000.

4. Standard Mileage Rates Adjusted for 2008
The standard mileage rates for business use of a vehicle:

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50.5 cents per mile from Jan. 1 to June 30, 2008
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58.5 cents per mile driven during the rest of 2008

The standard mileage rates for the cost of operating a vehicle for medical reasons or a deductible move:

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19 cents per mile Jan. 1 to June 30, 2008
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27 cents from July 1 to Dec. 31, 2008

The standard mileage rate for using a car to provide services to charitable organizations remains at 14 cents a mile. Special rates apply to the Midwest disaster area.

5. Kiddie Tax Revised
The tax on a child's investment income previously only applied to children younger than age 18. It now applies if the child has investment income greater than $1,800 and is:

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Younger than 18
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18 years of age and had earned income that was equal to or less than half of his or her total support in 2008
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Older than 18 and younger than 24, a student and during 2008 had earned income that was equal to or less than half of his or her total support.

Special Charitable Contributions for Certain IRA Owners

2009-08-21T05:57:00.000-07:00

Special Charitable Contributions for Certain IRA Owners

IRS Tax Tip 2009-23

As an alternative method for donating to a charity, certain taxpayers may transfer funds from their IRA to an eligible charitable organization. Here are ten things taxpayers who are thinking about making such a donation will need to know.

1. The IRA owner must be age 70 ½ or older.

2. The donor must directly transfer the money tax-free to an eligible organization.

3. The maximum amount that an IRA owner may transfer annually tax-free is $100,000 to an eligible organization.

4. This option, created in 2006 and recently extended through 2009, is available to eligible IRA owners, regardless of whether they itemize their deductions.

5. Distributions from employer-sponsored retirement plans, including SIMPLE IRAs and simplified employee pension plans – commonly referred to as SEP Plans – are not eligible.

6. To qualify, the funds must be contributed directly by the IRA trustee to the eligible charity.

7. Amounts transferred are not taxable and no deduction is available for the amount given to the charity unless nondeductible contributions are transferred.

8. Not all charities are eligible. For example, donor-advised funds and supporting organizations are not eligible recipients.

9. Transferred amounts are counted in determining whether the owner has met the IRA’s required minimum distribution rules. Where individuals have made nondeductible contributions to their traditional IRAs, a special rule treats transferred amounts as coming first from taxable funds, instead of proportionately from taxable and nontaxable funds, as would be the case with regular distributions. If nondeductible contributions are transferred to an eligible organization, a charitable contribution deduction may be allowed if itemizing deductions.

10. More information about qualified charitable distributions can be found in Publication 590, Individual Retirement Arrangements.

IRS Answers the "What If" Tax Questions of an Economic Downturn

2009-08-21T05:56:00.000-07:00

IRS Answers the "What If" Tax Questions of an Economic Downturn

IRS Tax Tip- 2008-22

What if I lose my job? Is my unemployment check taxable? Can I afford to take money out of my retirement account? These are just a few of the "What If" questions people are dealing with these days.

The IRS recognizes that many people are going through difficult times financially. Often, there is a tax impact to events such as job loss, debt forgiveness or dipping into a retirement account. If your income has decreased, you may even be eligible for certain tax credits, such as the Earned Income Tax Credit, which can mean money in your pocket.

Most importantly, if you believe you may have trouble paying your tax bill, contact the IRS immediately. There are steps the IRS can take to help. To avoid additional penalties, you should always file your tax return on time even if you are unable pay your tax bill.

Here are some “What if” questions that are answered on the official IRS Web site. Simply go to IRS.gov and type the keywords "What If" in the “Search” box at the top of the page.

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Job Related
What if I lose my job?
What if my income declines?
What if I withdraw money from my IRA?
What if my 401(k) drops in value

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Debt Related
What if I lose my home through foreclosure?
What if I sell my home for a loss?
What if my debt is forgiven?

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Tax Related
What if I can’t pay my taxes?
What if I can’t pay my installment agreement?
What if I can’t resolve my tax problem with the IRS?
What if I need legal representation to help with my tax problem but can’t afford it?

Eight Reasons to Try e-file

2009-08-21T05:55:00.000-07:00

Eight Reasons to Try e-file

IRS TAX TIP 2009-21

If you’ve never filed your tax return electronically, you should definitely consider trying it in 2009. Join the millions of taxpayers who are saving time and money to file their tax returns without the many headaches often associated with filing a paper return.

Here are the top eight reasons close to 90 million people filed their tax returns electronically in 2008:

1. It’s easy. You can usually file a state tax return at the same time you electronically file your federal tax return.

2. It’s accurate. No more human errors because e-file checks for math errors and necessary information. This not only increases the accuracy of your return, but it also reduces the need for correspondence with the IRS to clarify errors or omissions.

3. No more second-guessing yourself. When you file electronically, the computer software or online program guides you through the process step-by-step.

4. You’ll get your refund faster. When you use e-file, you can get your refund in as little as ten days.

5. There are more payment options. With e-file, you can file your return early, but wait to pay any balance due by the April deadline. You can also pay electronically using a credit card, electronic funds withdrawal or in some cases the Electronic Federal Tax Payment System.

6. It’s fast. You don’t have to make a trip to the post office. In fact, you won’t even need to walk to the mailbox to send your return. Just click Send.

7. You’ll know the IRS received your return. The IRS will send you an electronic notification acknowledging receipt of your return.

8. You’ll have peace of mind. After clicking send and receiving your notification from the IRS that they received your return…kick back and relax – you’re done!

Ten Things You May Not Know About the Earned Income Tax Credit

2009-08-21T05:52:00.000-07:00

Ten Things You May Not Know About the Earned Income Tax Credit

IRS TAX TIP 2009-20

The Earned Income Tax Credit is for people who work, but have lower incomes. Here are some things you may not know about the EITC.

1. A quarter of all taxpayers that qualify don’t claim the credit. The Earned Income Tax Credit is money you can use to make a difference in your life. Just because you didn’t qualify last year, doesn’t mean you won’t this year. As your financial situation changes from year-to-year you should review the EITC eligibility rules to determine if you qualify.

2. If you qualify, it could be worth up to $4,800 this year. If you qualify, you could pay less federal tax or even get a refund. The EITC is based on the amount of your earned income and whether or not there are qualifying children in your household.

3. Your filing status cannot be Married Filing Separately. Your filing status must be married filing jointly, head of household, qualifying widow or single.

4. You must have a valid Social Security Number. You, your spouse (if filing a joint return) and any qualifying child listed on Schedule EIC must have a valid SSN issued by the Social Security Administration.

5. You must have earned income. This credit is called the “earned income” tax credit because you must work and have earned income to qualify. You have earned income if you work for someone who pays you wages or you are self-employed.

6. Married couples and single people without kids may qualify. If you do not have qualifying children, you must also meet the age and residency requirements as well as dependency rules.

7. Special rules apply to members of the U.S. Armed Forces in combat zones. Members of the military can elect to include their nontaxable combat pay in earned income for the EITC. If you make the election, the combat pay remains nontaxable, but you must include in earned income all nontaxable combat pay you received.

8. You can visit the IRS Web site to estimate your credit online. It’s easy to determine whether you qualify for the EITC. The EITC Assistant, an interactive tool available on IRS.gov, removes the guesswork from eligibility rules. Just answer a few simple questions to find out if you qualify and to estimate the amount of your EITC. You will see the results of your responses right away.

9. E-file programs will figure the credit for you. If you are preparing your taxes electronically, the software program you use will figure the credit for you. If you qualify for the credit you may also be eligible for Free File. You can access Free File through the IRS Web site at IRS.gov.

10. Advanced Earned Income Tax Credit. You don’t have to wait until you file your tax return to receive your EITC. Advance EITC is a portion of the EITC that qualified workers may be able to receive in advance payments, added to their wages throughout the year. For more information, see Form W-5, Earned Income Credit Advance Payment Certificate.

For more information about the EITC and Advance EITC see IRS Publication 596, Earned Income Credit. This publication (available in both English and Spanish) and Form W-5 can be downloaded from IRS.gov or ordered by calling 800-TAX-FORM (800-829-3676).

Direct Deposit Puts Your Money In Your Pocket

2009-08-21T05:51:00.002-07:00

Direct Deposit Puts Your Money In Your Pocket...Faster

IRS TAX TIP 2009-19

Don’t wait around for a paper check. Have your federal tax refund deposited directly into your bank account. Choosing Direct Deposit is a secure and convenient way to get your money in your pocket faster.

Here are the main reasons 66 million taxpayers chose Direct Deposit in 2008:

1. Direct Deposit is secure. There is no chance for a check to get lost in the mail. Thousands of checks are returned to the IRS by the US Post Office every year as undeliverable mail. Direct Deposit eliminates the possibility you won’t receive your check and prevents your refund from being stolen.

2. Direct Deposit is convenient. The money goes directly into your bank account. You won’t have to make a special trip to the bank to deposit the money yourself.

3. Direct Deposit is easy. When you’re preparing your return, simply follow the instructions for “refund” on your return. Just make sure you entered the correct bank account and bank routing numbers on your tax form and you’ll receive your refund quicker than ever.

4. Direct Deposit offers options. You can also electronically direct your refund to multiple accounts. With the "split refund" option, taxpayers can divide their refunds among as many as three checking or savings accounts and three different U.S. financial institutions. A word of caution — some financial institutions do not allow a joint refund to be deposited into an individual account. Check with your bank or other financial institution to make sure your direct deposit will be accepted.

For more information about direct deposit of your tax refund and the split refund option, check the instructions for your tax form.

This and other helpful tips are available in IRS Publication 17, Your Federal Income Tax. To get a copy, visit the Forms and Publications section of the IRS Web site, IRS.gov, or call 800-TAX-FORM (800-829-3676).

IRS Publication 17 — The IRS Instruction Manual

2009-08-21T05:51:00.001-07:00

IRS Publication 17 — The IRS Instruction Manual

IRS TAX TIP 2009-18

Are you facing a lot of different tax questions this year?

IRS experts have pulled together an overview of common tax issues in one convenient place — Publication 17, Your Federal Income Tax. This publication, available on the IRS.gov, contains helpful information for individual taxpayers.

This year for the first time, the IRS will issue a Spanish language version of this popular publication.

The on-line version of Publication 17 contains electronic links that make finding your answer simple. Both the downloadable PDF and on-line 2008 Publication 17 have over 900 hyperlinks. These hyperlinks allow users to immediately go to other parts of the publication, reducing searches to just a few clicks.

From stock sales to student loans, this nearly 300-page publication holds the answers to many of your questions:

• Need help with a Roth IRA? Try Chapter 17 for Individual Retirement Arrangements.

• Do you have a new child in the house? See Chapter 34 for the Child Tax Credit.

• Are you selling stock for the first time? Check Chapter 16 for reporting capital gains. If you’re unloading losers, reporting capital losses is there, too.

• Do you need to report the profit on your home sale? See Chapter 15 for some good news. Generally, if you qualify you only need to report the sale of your home if your gain is more than $250,000 ($500,000 if married filing a joint return).

And the best part about Publication 17? It’s free. To get a copy, visit the IRS Web site at IRS.gov or call 800-TAX-FORM (800-829-3676).

Tips for Recently Married or Divorced Taxpayers

2009-08-21T05:50:00.001-07:00

Tips for Recently Married or Divorced Taxpayers

IRS TAX TIP 2009-17

If you were married or divorced recently, there are a couple of things you’ll want to do to ensure the name on your tax return matches the name registered with the Social Security Administration.

If a taxpayer takes their spouse’s last name or if both spouses hyphenate their last names, they may run into complications if they don’t notify the SSA. If the newlyweds file a tax return using their new last names, IRS computers would not be able to match the new name with their Social Security Number.

After a divorce, taxpayers who change back to their previous last name also need to notify the SSA of the change.

Informing the SSA of a name change is quite simple. File a Form SS-5 at your local SSA office. The form is available on SSA’s Web site at www.socialsecurity.gov, by calling 800-772-1213 or at local offices. It usually takes about two weeks to have the change verified.

Taxpayers who adopt their spouse’s child after getting married will want to make sure the children have an SSN. Taxpayers must provide SSNs for each dependent claimed on a tax return. For adopted children without SSNs, the parents can apply for an Adoption Taxpayer Identification Number – or ATIN – by filing Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions with the IRS. The ATIN is a temporary number used in place of an SSN on the tax return. The W-7A is available on the IRS Web site, IRS.gov, or by calling 800-TAX-FORM (800-829-3676).

Take the Free Way

2009-08-21T05:49:00.000-07:00

Take the Free Way

IRS TAX TIP 2009-16

If you have access to a computer and the Internet you may be eligible to prepare and file your 2008 federal tax return electronically — for free. Free File is an easy way to file your taxes and get your refund in half the time. Filing electronically is fast, accurate and secure.

Free File, a form of e-file, is a free federal tax preparation and electronic filing program for eligible taxpayers developed through a partnership between the IRS and the Free File Alliance. The Alliance is a group of private-sector tax software companies. Since Free File’s debut in 2003, a total of more than 24 million returns have been prepared and e-filed through the program.

Free File offers two options. The first, “full service” Free File includes 20 different software options that can assist taxpayers with an Adjusted Gross Income of $56,000 or less in 2008 to e-file their federal tax returns for free. That means 70 percent of all taxpayers can take advantage of tax software that will help them complete their returns through the Free File program. Three companies are offering their products in Spanish.

This year, the IRS and its partners are offering a new option, Free File Fillable Forms, which opens up Free File to virtually everyone, even those whose incomes exceed $56,000.

Free File Fillable Forms allow taxpayers to fill out and file their tax forms electronically, just as they would on paper. This option does not include an “interview” process like the other Free File offerings, but it does allow taxpayers to enter their tax data, perform basic math calculations, sign electronically, print their returns for recordkeeping and e-file their returns. This “self-service” option may be right for those who are comfortable with the tax law, know what forms they want to use or don’t need assistance to complete their returns.

Both the fillable-forms option and the previously available “full service” Free File offerings are available only through the IRS.gov Web site. Both new and returning taxpayers must access Free File through IRS.gov. Otherwise, the e-file provider may charge them a fee.

Four Tips to Help Taxpayers Avoid Errors On the Recovery Rebate Credit

2009-08-21T05:48:00.001-07:00

Four Tips to Help Taxpayers Avoid Errors On the Recovery Rebate Credit

IRS Special Edition Tax Tip 2009-2
Most of the nearly 119 million taxpayers who received the economic stimulus payment last year will not be able to claim the recovery rebate credit on their 2008 federal income tax returns. A small number of taxpayers who did not receive the full economic stimulus payment last year may be eligible to claim the Recovery Rebate Credit on their 2008 federal income tax return. Figuring the Recovery Rebate Credit incorrectly or entering inaccurate information will delay the processing of your tax return and any refund due.

Below are the four things every taxpayer should know about this one-time credit, which is related to last year’s Economic Stimulus Payment:

1. You do not have to pay back your Stimulus Payment and the payment is not taxable.

2. Only a small number of taxpayers are eligible. The vast majority of taxpayers are not eligible to receive the recovery rebate credit.

3. Did you have a major life change? If so, you may be eligible to claim the Recovery Rebate Credit. Some of the major factors that could qualify you for the Recovery Rebate Credit include:

1. Your financial situation changed dramatically from 2007 to 2008.
2. You did not file a 2007 tax return.
3. Your family gained an additional qualifying child in 2008.
4. You were claimed as a dependent on someone else’s return in 2007, but cannot be claimed as dependent by someone else in 2008.

4. Any Recovery Rebate Credit amount will be included in your refund. The IRS will figure the credit for you and include it in your refund or put it toward any taxes owed.

Tips for Taxpayers Making a Move IRS TAX TIP 2009-15 If you changed your home or business address, you’ll want to remember these six tips to ensur

2009-08-21T05:46:00.002-07:00

Tips for Taxpayers Making a Move

IRS TAX TIP 2009-15

If you changed your home or business address, you’ll want to remember these six tips to ensure you receive any refunds or correspondence from the IRS.

1. You can change your address on file with the IRS in several ways:

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Correct the address legibly on the mailing label that comes with you tax package

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Write the new address in the appropriate boxes on your tax return;

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Use Form 8822, Change of Address, to submit an address or name change any time during the year

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Give the IRS written notification of your new address by writing to the IRS center where you file your return. Include your full name, old and new addresses, Social Security Number or Employer Identification Number and signature. If you filed a joint return, be sure to include the information for both taxpayers. If you filed a joint return and have since established separate residences, both taxpayers should notify the IRS of your new addresses

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Should an IRS employee contact you about your account, you may be able to verbally provide a change of address

2. Be sure to also notify your employer of your new address so you get your W-2 forms on time.

3. If you change your address after you’ve filed your return, don’t forget to notify the post office at your old address so your mail can be forwarded.

4. Taxpayers who make estimated payments throughout the year should mail a completed Form 8822, Change of Address, or write the IRS center where you file your return. You may continue to use your old pre-printed payment vouchers until the IRS sends you new ones with your new address. However, do not correct the address on the old voucher.

5. The IRS does use the Postal Service’s change of address files to update taxpayer addresses, but it’s still a good idea to notify the IRS directly.

6. Visit IRS.gov for more information about changing your address. You can find the address of the IRS center where you file your tax return or download Form 8822, Change of Address. The form is also available by calling 800-TAX-FORM (800-829-3676).

IRS TAX TIP 2009-15

If you changed your home or business address, you’ll want to remember these six tips to ensure you receive any refunds or correspondence from the IRS.

1. You can change your address on file with the IRS in several ways:

*
Correct the address legibly on the mailing label that comes with you tax package

*
Write the new address in the appropriate boxes on your tax return;

*
Use Form 8822, Change of Address, to submit an address or name change any time during the year

*
Give the IRS written notification of your new address by writing to the IRS center where you file your return. Include your full name, old and new addresses, Social Security Number or Employer Identification Number and signature. If you filed a joint return, be sure to include the information for both taxpayers. If you filed a joint return and have since established separate residences, both taxpayers should notify the IRS of your new addresses

*
Should an IRS employee contact you about your account, you may be able to verbally provide a change of address

2. Be sure to also notify your employer of your new address so you get your W-2 forms on time.

3. If you change your address after you’ve filed your return, don’t forget to notify the post office at your old address so your mail can be forwarded.

4. Taxpayers who make estimated payments throughout the year should mail a completed Form 8822, Change of Address, or write the IRS center where you file your return. You may continue to use your old pre-printed payment vouchers until the IRS sends you new ones with your new address. However, do not correct the address on the old voucher.

5. The IRS does use the Postal Service’s change of address files to update taxpayer addresses, but it’s still a good idea to notify the IRS directly.

6. Visit IRS.gov for more information about changing your address. You can find the address of the IRS center where you file your tax return or download Form 8822, Change of Address. The form is also available by calling 800-TAX-FORM (800-829-3676).

IRS Forms and Publications

2009-08-21T05:46:00.001-07:00

IRS Forms and Publications: Get 'em when you need 'em

IRS TAX TIP 2009-14

The IRS has free tax forms and publications on a wide variety of topics. If you need IRS forms or information, try one of these easy options:

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Internet: You can access forms and publications on the IRS website 24 hours a day, 7 days a week, at IRS.gov.

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Phone: Call 1-800-TAX-FORM (800-829-3676) to order current year forms, instructions and publications and prior year forms and instructions. You should receive your order within 10 days.

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Locations in your community: During the tax-filing season, many libraries and post offices offer free tax forms to taxpayers. Some libraries also have copies of commonly-requested publications. Braille materials may also be available. Many large grocery stores, copy centers and office supply stores have forms you can photocopy or print from a CD.

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Mail: Order your tax forms and publications from the IRS National Distribution Center, 1201 N. Mitsubishi Motorway, Bloomington, IL, 61705-6613. You should receive your products 10 days after receipt of your order.

Getting a Free Transcript of My Tax Return Information

2009-08-21T05:45:00.001-07:00

Getting a Free Transcript of My Tax Return Information - Actual Copies $57 Each

IRS TAX TIP 2009-13

There are two easy and convenient options for obtaining free copies of your federal tax return information — tax return transcripts and tax account transcripts — by phone or by mail.

A tax return transcript shows most line items from the tax return (Form 1040, 1040A or 1040EZ) as it was originally filed, including any accompanying forms and schedules. It does not reflect any changes you, your representative or the IRS made after the return was filed. In many cases, a return transcript will meet the requirements of lending institutions such as those offering mortgages and student loans. You should receive your tax return transcript within 10 working days from the time the IRS receives your request.

A tax account transcript shows any later adjustments either you or the IRS made after the tax return was filed. This transcript shows basic data, including marital status, type of return filed, adjusted gross income and taxable income. The IRS does not charge a fee for transcripts, which are available for the current and past three years. Allow 30 calendar days for delivery of a tax account transcript.

To request either transcript:

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Phone: Call 800-829-1040 and follow the prompts in the recorded message.

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Mail: Complete IRS Form 4506-T, Request for Transcript of Tax Return.

If you still need an actual copy of a previously processed tax return, it will cost $57 per tax year and take much longer. Complete Form 4506, Request for Copy of Tax Form, and mail it to the IRS address listed on the form for your area. Please allow 60 days for actual copies of your return. Copies are generally available for the current and past six years.

Forms 4506-T and 4506 can be found on the IRS Web site at IRS.gov or by calling the IRS forms and publications order line at 800-TAX-FORM (800-829-3676).

Tax Information Available in Spanish

2009-08-21T05:44:00.000-07:00

Tax Information Available in Spanish

IRS TAX TIP 2009-12

If you need federal tax information, the IRS provides free Spanish language products and services. Pages on the Internal Revenue Service’s Web site, pre-recorded tax topics, refund information, tax publications and toll-free telephone assistance are all available in the Spanish language.

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The Spanish language page (El IRS en Español) on the IRS Web site is located at IRS.gov/espanol. You will find links to tax related information like forms and publications, warnings about tax scams that victimize taxpayers, information on the Earned Income Tax Credit, Child Tax Credit, various other tax credits and more.

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TeleTax is a toll-free, automated telephone service available in English and Spanish. TeleTax provides helpful pre-recorded tax topic messages and refund information. You can find a list of over 150 TeleTax topics in the instructions for Form 1040, 1040A or 1040EZ. TeleTax can also help if at least four weeks have passed since you filed your tax return and you want to check on the status of your federal refund. Having a copy of the tax return handy will help you respond to the prompts on the automated system. TeleTax is available 24 hours a day, 7 days a week at 800-829-4477.

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Spanish Publications are available by calling 800-TAX-FORM (800-829-3676) or on the IRS Web site, IRS.gov.

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Toll-Free Telephone Assistance is available from Spanish-speaking IRS representatives by calling the IRS customer service line at 800-829-1040.

Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.

Ten Things the IRS Wants You to Know About Identity Theft

2009-08-21T05:21:00.000-07:00

Ten Things the IRS Wants You to Know About Identity Theft

IRS TAX TIP 2009-11

1. If you receive a letter or notice from the IRS which leads you to believe someone may have fraudulently used your Social Security Number, respond immediately to the name and address or phone number printed on the IRS notice.

2. If you receive a letter from the IRS that indicates more than one tax return was filed for you, this may be a sign that your SSN was used fraudulently.

3. Another sign that you may be the target of identity theft is an IRS letter indicating you received wages from an employer unknown to you.

4. The IRS has a department which deals specifically with identity theft issues. The IRS Identity Protection Specialized Unit is available if you have been in contact with the IRS about an identity theft issue and have not achieved a resolution.

5. You can contact the IRS Identity Protection Specialized Unit by calling the Identity Theft Hotline at 800-908-4490 Monday through Friday from 8:00 am to 8:00 pm local time (Alaska and Hawaii follow Pacific Standard Time).

6. The IRS Identity Protection Specialized Unit is also available if you believe your identity may be at risk of being stolen due to a lost or stolen purse or wallet or due to questionable activity on your credit card or your credit report.

7. The IRS never initiates communication with taxpayers about their tax account through emails. If you receive an e-mail or find a Web site you think is pretending to be the IRS, forward the e-mail or Web site URL to the IRS at phishing@irs.gov.

8. The IRS has many more resources available to help inform taxpayers about identity theft on the IRS Web site at IRS.gov. On IRS.gov you can access information on how to report scams and bogus IRS Web sites. You can also visit the IRS Identity Theft Resource Page, which you can find by typing Identity Theft Resource Page in the search box on the IRS.gov home page.

9. The Federal Trade Commission is also available to assist taxpayers with identity theft issues. You can reach them at 877-ID-THEFT (877-438-4338).

10. Visit OnGuardOnline.gov for protection tips from the federal government and the technology industry.

Links:

Owe the IRS a Prior Year Return?

2009-08-21T05:20:00.000-07:00

Owe the IRS a Prior Year Return?

IRS TAX TIP 2009-10

Don’t delay; file your prior year return now! The failure to file a federal tax return can be costly — whether you end up owing more or missing out on a refund.

If you owe taxes, a delay in filing may result in a failure-to-file penalty and interest charges. The longer you delay, the larger these charges grow.

If you are due a refund and don’t file you could lose your refund. There is no penalty for failure to file if you are due a refund. However, you cannot obtain a refund without filing a tax return. If you wait too long to file, you may risk losing the refund altogether. The deadline for claiming refunds is generally three years after the return due date.

There are several reasons taxpayers don’t file their taxes. Perhaps you didn’t know you were required to file. Maybe, you just keep putting it off or simply forgot. Whatever the reason, it’s best to file your return as soon as possible. If you need help, even with a late return, the IRS is ready to assist you.

Here are some steps for filing your prior year return:

1. Gather prior year tax return information. You will need Social Security numbers, income information and records for expenses, deductions and credits.

2. Determine if you have a filing requirement. Whether or not you must file a tax return will depend upon a number of factors, including your filing status, age, and gross income. Individuals who are entitled to the Earned Income Tax Credit must file their return to claim the credit even if they are not otherwise required to file.

3. Get forms and publications. Make sure you get the forms and publications for the year of the tax return you are filing.

4. Prepare your tax return. Complete, sign and date your tax return. Be sure to attach any required schedules and forms.

5. Mail the completed and signed prior year return to the correct address. Mailing a return to an incorrect address can delay the processing of the return.

If your income was $42,000 or less, your local Taxpayer Assistance Center may be able to assist you in preparing your prior year return. You can locate your nearest center at http://www.irs.gov/localcontacts/index.html. For more information on how to file a tax return for a prior year, visit the IRS Web site at IRS.gov or call the IRS Tax Help Line for Individuals at 800-829-1040.

Ten Reasons to Visit IRS.gov

2009-08-21T05:19:00.002-07:00

Ten Reasons to Visit IRS.gov

IRS Tax Tip 2009-09

1. Get answers 24 hours a day 7 days a week. Whether you need a form or have tax questions, IRS.gov has a wealth of information. IRS.gov is accessible all day, every day for individuals, businesses and tax-exempt organizations.

2. Get tax forms and publications. You can view, download and order tax forms and publications any hour of the day or night.

3. Find out all about electronic filing. You can e-file from the comfort of your home 24 hours a day, 7 days a week. E-file is fast, easy and free for some taxpayers.

4. Request a payment agreement. Paying your taxes in full and on time avoids unnecessary penalties and interest. However, if you cannot pay your balance in full you can use the Online Payment Agreement Application to request an installment agreement.

5. Find out how to make payments electronically. You can authorize an electronic funds withdrawal, use a credit or debit card or enroll in the U.S. Treasury’s Electronic Federal Tax Payment System. Electronic payment options are convenient, safe and secure methods for paying taxes.

6. Check the status of your tax refund. Whether you opted for direct deposit or asked IRS to mail you a check, you can check the status of your refund through “Where’s my Refund?” on our secure Web site.

7. Calculate the right amount of withholding on your W-4. The IRS Withholding Calculator will help you ensure that you don’t have too much or too little income tax withheld from your pay.

8. Find out if you qualify for the Earned Income Tax Credit. EITC is a refundable tax credit for people who work but don’t earn much. Find out if you are eligible by answering some questions and providing basic income information using the EITC Assistant.

9. Search for charities. Search Publication 78, Cumulative List of Organizations, to find out if an organization is exempt from federal taxation and, if so, how much of your contributions to that organization are tax deductible.

10. Get information about careers at the IRS. No matter what your professional specialty, the IRS can offer you a variety of full-time career or seasonal job opportunities.

Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov. Also, the IRS does not initiate communication with taxpayers about their tax account through e-mail. Before identity theft happens, safeguard your information. If you get a questionable e-mail claiming to come from the IRS, do not open it — forward it to phishing@irs.gov.

What Tax Records to Keep

2009-08-21T05:19:00.001-07:00

What Tax Records to Keep

tIRS TAX TIP 2009-08

You probably already keep records in your daily routine. This includes keeping receipts for purchases and recording information in your checkbook. Keeping these and other records will help you avoid headaches at tax time. Good recordkeeping will help you remember the various transactions you made during the year, which in turn may make filing your return a less taxing experience.

Records help you document the deductions you’ve claimed on your return. You’ll need this documentation should the IRS select your return for examination. Normally, tax records should be kept for three years, but some documents — such as records relating to a home purchase or sale, stock transactions, IRA and business or rental property — should be kept longer.

In most cases, the IRS does not require you to keep records in any special manner. Generally speaking, however, you should keep any and all documents that may have an impact on your federal tax return:

• Bills
• Credit card and other receipts
• Invoices
• Mileage logs
• Canceled, imaged or substitute checks or any other proof of payment
• Any other records to support deductions or credits you claim on your return

Good recordkeeping throughout the year saves you time and effort at tax time when organizing and completing your return. If you hire a paid professional to complete your return, the records you have kept will assist the preparer in quickly and accurately completing your return.

For more information on what kinds of records to keep, see IRS Publication 552, Recordkeeping for Individuals, which is available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Read This Before Choosing a Tax Preparer

2009-08-21T05:18:00.001-07:00

Read This Before Choosing a Tax Preparer

IRS TAX TIP 2009-07

If you will be paying someone to do your tax return, choose a tax preparer wisely. You are legally responsible for what’s on your tax returns even if they are prepared by someone else. So, it’s important to find a qualified tax professional.

Reputable preparers will ask multiple questions to determine whether expenses, deductions and other items qualify and remind clients that they need to keep careful and complete records in order to substantiate information on their tax return. By doing so, they have your best interest in mind and are trying to help you avoid penalties, interest, or additional taxes that could result from later IRS contacts.

Most tax return preparers are professional, honest and provide excellent service to their clients; you can use the following tips to choose a preparer who will offer the best service for their tax preparation needs.

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Find out what the service fees are before the return is prepared. Avoid preparers who base their fee on a percentage of the amount of your refund or who claim they can obtain larger refunds than other preparers.
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Only use a tax professional that signs your tax return and provides you with a copy for your records.
*
Avoid tax preparers that ask you to sign a blank tax form.
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Choose a tax preparer that will be around to answer questions after the return has been filed.
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Ask questions. Do you know anyone who has used the tax professional? Were they satisfied with the service they received?
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Check to see if the preparer has any questionable history with the Better Business Bureau, the state’s board of accountancy for CPAs or the state’s bar association for attorneys. Find out if the preparer belongs to a professional organization that requires its members to pursue continuing education and also holds them accountable to a code of ethics.
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Determine if the preparer’s credentials meet your needs. Does your state have licensing or registration requirements for paid preparers? Is he or she an Enrolled Agent, Certified Public Accountant, or Attorney? If so, the preparer can represent taxpayers before the IRS on all matters – including audits, collections, and appeals. Other return preparers can represent taxpayers only in audits regarding a return signed as a preparer.
*
Before you sign your tax return, review it and ask questions.

You can report suspected tax fraud and abusive tax preparers to the IRS on Form
3949-A, Information Referral or by sending a letter to Internal Revenue Service, Fresno, CA 93888. Download Form 3949-A from IRS.gov or order by mail at 800-829-3676.

Be Aware of Suspicious E-Mails

2009-08-21T05:17:00.000-07:00

Be Aware of Suspicious E-Mails

IRS TAX TIP 2009-06

Be aware of e-mail scams that fraudulently use the IRS name or Logo as a lure. The goal of the scam is to trick people into revealing personal and financial information, such as Social Security, bank account or credit card numbers, which the scammers can use to commit identity theft and steal your money.

The IRS does not send unsolicited e-mails about a person’s tax account or ask for detailed personal and financial information. Additionally, the IRS never asks people for the PIN numbers, passwords or similar secret access information for their credit card, bank or other financial accounts.

If you receive an e-mail from someone claiming to be the IRS or directing you to an IRS site,

*
Do not reply.
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Do not open any attachments. Attachments may contain malicious code that will infect your computer.
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Do not click on any links. If you clicked on links in a suspicious e-mail or phishing Web site and entered confidential information, visit our Identity Theft page on IRS.gov.

You can help shut down these schemes and prevent others from beingvictimized. If you receive a suspicious e-mail that claims to come from the IRS, you can forward that e-mail to a special IRS mailbox, phishing@irs.gov The e-mail must be forwarded using special instructions at IRS.gov, or it loses the encoding needed to track it to its source. The IRS can use the information, URLs and links in the suspicious e-mails you forward to trace the hosting Web site and alert authorities to help shut down the fraudulent sites. After you forward the e-mail to us, delete the message.

Remember that all of the web page addresses for the official IRS website, IRS.gov, begin with http://www.irs.gov. Don' t be confused or misled by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.

Choose the Tax Form that Best Fits Your Needs

2009-08-21T05:16:00.002-07:00

Choose the Tax Form that Best Fits Your Needs

IRS TAX TIP 2009-05

When you file your 2008 individual tax return, you will use one of three IRS tax forms. Be sure to use the simplest form you can, which will help you avoid costly errors or processing delays so you won’t have to wait to receive your refund. Each of these forms can be filed electronically, which speeds up the processing of your return.

Use the 1040EZ if:
• Your taxable income is below $100,000
• Your filing status is Single or Married Filing Jointly
• You (and spouse) are under age 65 and not blind
• You are not claiming any dependents
• Your interest income is $1,500 or less

Use the 1040A if:
• Your taxable income is below $100,000
• You have capital gain distributions
• You claim certain tax credits
• You claim deductions for IRA contributions, student loan interest, educator expenses or higher education tuition and fees

If you cannot use the 1040EZ or the 1040A, you’ll probably need to file using the 1040. You must use the 1040 if:
• Your taxable income is $100,000 or more
• You claim itemized deductions
• You are reporting self-employment income
• You are reporting income from sale of property

When preparing your return, be sure to carefully check the instructions for the appropriate form. All IRS forms and instructions can be found on our Web site, IRS.gov.

Top Five Facts about Dependents and Exemptions

2009-08-21T05:16:00.001-07:00

Top Five Facts about Dependents and Exemptions

TAX TIP 2009-04

1. Dependents may be required to file their own tax return. Even though you are a dependent on someone else’s tax return, you may still have to file your own tax return. Whether or not you must file a return depends on several factors, including: the amount of your unearned, earned or gross income, your marital status, any special taxes you owe and any advance Earned Income Credit payments you received.

2. Exemptions reduce your taxable income. There are two types of exemptions: personal exemptions and exemptions for dependents. For each exemption you can deduct $3,500 on your 2008 tax return. Exemptions amounts are reduced for taxpayers whose adjusted gross income is above certain levels, which is determined by your filing status.

3. Dependents may not claim an exemption. If you claim someone as a dependent, such as your child, that dependent may not claim a personal exemption on their own tax return.

4. Your spouse is never considered your dependent. On a joint return, you may claim one exemption for yourself and one for your spouse. If you’re filing a separate return, you may claim the exemption for your spouse only if they had no gross income, are not filing a joint return and were not the dependent of another taxpayer.

5. Some people cannot be claimed as your dependent. Generally, you may not claim a married person as a dependent if they file a joint return with their spouse. Also, to claim someone as a dependent, that person must be a U.S. citizen, U.S. resident alien, U.S. national or resident of Canada or Mexico for some part of the year. There is an exception to this rule for certain adopted children.

For more information on dependents and exemptions, including whether or not you or your dependent needs to file a tax return, see IRS Publication 501, Exemptions, Standard Deduction, and Filing Information.

IRS Help for Financially Distressed Taxpayers

2009-08-21T05:15:00.000-07:00

IRS Help for Financially Distressed Taxpayers

IRS Tax Tip- SPECIAL EDITION - January 8, 2009

If you are facing financial difficulties and struggling to meet your tax obligations the IRS can help. As the 2009 tax filing season begins, in addition to new credits, deductions and exclusions, the IRS is taking steps to help people who owe back taxes. Here are some areas where IRS can help:

• Added Flexibility for Missed Payments: The IRS is allowing more flexibility for individuals with existing Installment Agreements who have difficulty making payments because of a job loss or other financial hardship. Depending on the situation, the IRS may allow a skipped payment or a reduced monthly payment amount. Taxpayers in this situation should contact the IRS.

• Additional Review for Offers in Compromise on Home Values: An Offer in Compromise (OIC), an agreement between a taxpayer and the IRS that settles the taxpayer’s tax debt for less than full amount owed, may be a viable option for taxpayers experiencing economic difficulties. However, the equity taxpayers have in real property can be a barrier to an OIC being accepted. With the uncertainty in the housing market, the IRS recognizes that the real-estate valuations used to assess ability to pay are not necessarily accurate. So in instances where the accuracy of local real-estate valuations is in question or other unusual hardships exist, the IRS is creating a new, second review of the information to determine if accepting an offer is appropriate.

• Prevention of Offer in Compromise Defaults – Taxpayers who are unable to meet the periodic payment terms of an accepted OIC will be able to contact the IRS office handling the offer for available options to help them avoid default.

• Postponement of Collection Actions: IRS employees will have greater authority to suspend collection actions in hardship cases where taxpayers are unable to pay. If an individual has recently encountered a job loss or other financial problem, IRS assistors may be able to suspend collection in some situations without documentation to minimize burden on the taxpayer.

• Expedited Levy Releases: The IRS will speed the delivery of levy releases by easing requirements on taxpayers who request expedited levy releases for hardship reasons. Taxpayers seeking expedited releases of levies to an employer or bank should contact the IRS number shown on the notice of levy to discuss available options. When calling, taxpayers requesting a levy release due to hardship should be prepared to provide the IRS with the fax number of the bank or employer processing the levy.

If you are behind on tax payments there could be additional help available if you are facing an unusual hardship situation. For assistance with your back taxes contact the phone numbers listed on your IRS correspondence.

More information is available on the IRS web site at IRS.gov.

The Five Filing Status Possibilities

2009-08-21T05:14:00.001-07:00

The Five Filing Status Possibilities

IRS TAX TIP 2009-03

Everyone who files a federal tax return must determine which filing status applies to them. It’s important you choose your correct filing status as it determines your standard deduction, the amount of tax you owe and ultimately, any refund owed to you.

There are two things to consider when determining your filing status:
First, your marital status on the last day of the year determines your filing status for the entire year. Secondly, if more than one filing status applies to you, choose the one that gives you the lowest tax obligation.

Here are the five filing status options:
1. Single. This will generally apply to anyone who is unmarried, divorced or legally separated according to your state law.

2. Married Filing Jointly. A married couple may file a joint return together. If your spouse died during the year, you may still file a joint return with that spouse for the year of death.

3. Married Filing Separately. A married couple may elect to file their returns separately.

4. Head of Household. This generally applies to taxpayers who are unmarried. You must also have paid more than half the cost of maintaining a home for you and a qualifying person to qualify for this filing status.

5. Qualifying Widow(er) with Dependent Child. You may be able to choose this filing status if your spouse died during 2006 or 2007, you have a dependent child and you meet certain other conditions.

There’s much more information about determining your filing status in Publication 501, Exemptions, Standard Deduction, and Filing Information. Publication 501 is available on the IRS Web site at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

First-Time Homebuyer credit

2009-08-21T05:12:00.000-07:00

First-Time Homebuyer credit

NOTE: Information on this page applies to qualifying home purchases completed in 2008. The American Recovery and Reinvestment Act of 2009 expands the First-Time Homebuyer Credit for 2009. If you made a qualifying home purchase in 2009, the IRS has important information for you

IRS TAX TIP 2009-02

First-time homebuyers should begin planning now to take advantage of a new tax credit. Available for a limited time, the credit:

• Applies to home purchases after April 8, 2008, and before July 1, 2009.
• Reduces a taxpayer’s tax bill or increases his or her refund, dollar for dollar.
• Is fully refundable, meaning that the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax that they owe.

The credit operates much like an interest-free loan because it must be repaid in equal installments over a 15-year period. Taxpayers will claim the credit on new IRS Form 5405, First-Time Homebuyer Credit.

Only the purchase of a main home located in the United States qualifies. Vacation homes and rental property are not eligible. For a home that you construct, the purchase date is the first date you occupy the home.

Taxpayers who owned a main home at any time during the three years prior to the date of purchase are not eligible for the credit. This means that first-time homebuyers and those who have not owned a home in the three years prior to a purchase can qualify for the credit.

If you make an eligible purchase in 2008, you claim the first-time homebuyer credit on your 2008 tax return. If you make an eligible purchase in 2009, you can choose to claim the credit on either your original or amended 2008 return, or on your 2009 return.

The credit is 10 percent of the purchase price of the home, with a maximum available credit of $7,500 for either a single taxpayer or a married couple filing jointly. The limit is $3,750 for a married person filing a separate return. In most cases, the maximum credit will be available for homes costing $75,000 or more. The credit normally must be repaid over a 15-year period starting the second year after the year the credit is claimed.

The credit is reduced or eliminated for higher-income taxpayers. The credit is phased out based on your modified adjusted gross income. In general, for a married couple filing a joint return the phase-out begins at $150,000 and is completely phased out at $170,000. For other taxpayers, the phase-out range is between $75,000 and $95,000.

Not everyone will qualify for the credit. There are other rules that may impact your eligibility and decision to claim the First-Time Homebuyer Credit. Get all the information at IRS.gov.

Top Ten Tax Time Tips

2009-08-21T05:10:00.000-07:00

1. Gather your records…now! It’s never too early to start getting together any documents or forms you’ll need when filing your taxes: receipts, canceled checks, and other documents that support an item of income or a deduction you’re taking on your return. Also, be on the lookout for W-2s and 1099s, coming soon from your employer.

2. Find your forms. Whether you file a 1040 or 1040-EZ, you can download all IRS forms and publications on our Web site, IRS.gov.

3. Do a little research. Check out Publication 17 on IRS.gov. It’s a comprehensive collection of information for taxpayers highlighting everything you’ll need to know when filing your return. Review Pub 17 to ensure you’re taking all credits and deductions for which you’re eligible.

4. Think ahead to how you’ll file. Will you prepare your return yourself or go to a preparer? Do you qualify to file at no cost using Free File on IRS.gov? Are you eligible for free help at an IRS office or volunteer site? Will you purchase tax preparation software or file online? There are many things to consider. So, give yourself time to weigh them all and find the option that best suits your needs.

5. Take your time. Rushing to get your return filed increases the chance you will make a mistake and not catch it.

6. Double-check your return. Mistakes will slow down the processing of your return. In particular, make sure all the Social Security Numbers and math calculations are correct as these are the most common errors made by taxpayers.

7. Consider e-file. When you file electronically, the computer will handle the math calculations for you, and you will get your refund in about half the time it takes when you file a paper return.

8. Think about Direct Deposit. If you elect to have your refund directly deposited into your bank account, you’ll receive it faster than waiting for a check by mail.

9. Visit IRS.gov often. The official IRS Web site is a great place to find everything you’ll need to file your tax return: forms, tips, FAQs and updates on tax law changes.

10. Relax. There’s no need to panic. If you run into a problem, remember the IRS is here to help. Try IRS.gov or call our customer service number at 800-829-1040.

Wyoming State Tax Forms

2008-12-29T18:10:00.000-08:00

Wyoming Department of Revenue
Locally Assessed Forms, Veteran's Exemption Forms, State Assessed Forms, Wyoming Property Tax Relief Form, Excise (Sales, Use, Cigarette and Estate Tax), Cigarette Tax Forms, Sales/Use Tax Returns (Forms, Worksheets and Examples), Estate Tax Forms, Contractor Registration and Tax Forms, Motor Vehicle Forms, Taxpayer Education Forms, Sales/Use Tax License Application Forms, Exemption Certificate/Power of Attorney Forms, Minerals: Gross Products and Severance Tax by Mineral, Bentonite, Coal, Gas Sand & Gravel, Trona, Uranium, Miscellaneous Forms, Oil, Miscellaneous Solid Minerals, On-Line Services, Sales & Use Tax, Minerals Tax, Tax help, Tax Tips

Wisconsin State Tax Forms

2008-12-29T18:03:00.000-08:00

Wisconsin Department of Revenue
Income Tax Forms, 2008 Draft Forms, 2008 Income Tax, Corporation | Fiduciary, Estate & Trust | Individual | Partnership, 2009 Income Tax Forms, Prior Year Income Tax Forms, Alcohol Retail License, delinquent Tax, Estate, Inheritance and Gift Tax, Beverage | Cigarette | Cigarette and Tobacco Products Permit Applications, Fuel | Tobacco | Tobacco Master Settlement Agreement (MSA), Assessor Certification | County | Municipal Financial Reports, Property Assessment | Property Tax Bills | Property Tax Exemptions, Property Tax Forms | Real Estate Transfer and Merger/Conversion, State Prescribed Forms | Tax Incremental Financing (TIF) | Town, Village and City, Waiver of Confidentiality (Constituent Tax Information) | Fill-In Form A-270, Tax Refund Inquiry, Requesting Previously Filed Tax Returns, Model Form (IRC 162(h) Election), lottery and Gaming Credit, manufacturing and Telco, Nexus Questionnaires, General Business Activity Questionnaire | Fill-In Form, Questionnaire Regarding Business Activities in Wisconsin | Fill-In Form, real Estate Transfer and, merger /Conversion, Sales and Use Tax, Tax Return Information, Application to Ascertain Wisconsin Net Income Tax Reported as Paid or Payable | Fill-In Form (P-100), Power of Attorney and Instructions | Fill-In Form (A-222), Request For Copy of Tax Return(s) | Fill-In Form (P-521), utility Tax, Ad Valorem | Gross Receipts | Occupational Tax, Withholding Tax, Non-Revenue Forms, Corporation Registration & Annual Reports, Limited Liability Company Registration, Partnership Registration, Unemployment Insurance, Worker's Compensation, Tax help, Tax Tips

West Virginia State Tax Forms

2008-12-29T17:58:00.000-08:00

West Virginia Tax Commission
Beer/Wine Tax, Corporate Net/Business Franchise Tax, Consumer Sales Tax - CST Rate Chart (Effective January 1, 2004), Gross Receipts Tax IFTA/MCRT, Motor Fuel Tax, Motor Fuel Tax Refund Applications, Soft Drink Tax, Tobacco Products Tax, withholding Tax, Withholding Tax on Sale of Real Estate for Nonresidents, Credit Schedules, Miscellaneous Tax Forms, personal Income Tax, FILL-IN FORMS (IT-210, IT-140, IT-140NRS, and Schedule L), Earned Income Tax Credit Information (Are you Eligible?), Income Tax Tables and Rate Schedules 2007 | 2006 | 2005, Low Income / Earned Income Exclusion Worksheet, 2007 | 2006, Tips on Filing Income Tax Return, Office of Tax Appeals (OTA), Petition for Reassessment,Petition for Refund, Tax help, Tax Tips

Washington State Tax Forms

2008-12-29T17:49:00.000-08:00

Washington State Department of Revenue
Tax forms include: Business Excise Tax, Addendums, Alternative Power Generation Credit, Fish Tax, Local Sales & Use Tax, Lodging, Public Utility Tax, Rental Car Tax, Credit Forms, deferral Forms, Electronic Filing (E-file), Exemption Forms, Bad Debt Tax Credit Schedule B, Multiple Activities Tax Credit (MATC) Schedule C (Fill-In), Small Business B&O Tax Credit Tables: Monthly Quarterly Annual, Business Registration: Master Business Application, Temporary Business Information, cigarette Tax, estate Tax, Forest (Timber) Excise Taxes, leasehold Excise Tax, Local Sales & Use Tax:i information and Rates, Natural Gas Use Tax, oil Spill Tax, Property Tax, Property Tax Forms, Public Utility Annual Reports, real Estate Excise Tax, unclaimed Property, Application for Refund of Use Tax (Fill-In), Certification of Use and/or Deferred Sales Tax Paid (Fill-In), Use Tax Return (for Consumers) (Fill-In) Businesses should report use tax on their excise tax return, vehicle Sales, Watercraft/Vessel Tax, Miscellaneous Tax Forms, Returns and Instructions, Tax help, Tax Tips

Virginia State Tax Forms

2008-12-29T17:38:00.000-08:00

Virginia Department of Taxation
Tax Forms Include: Individual Tax Forms, Bank Franchise, Business credits, cigarette and tobacco products, commodity and excise tax, communications taxes, registration, sales and use tax, withholding tax, Tax help, Tax Tips

Vermont State Tax Forms

2008-12-29T17:28:00.000-08:00

Vermont Tax and Insurance forms
B-2a - Notice of Change, - BA-402 - Apportionment & Allocation Schedule, BA-402 Instructions, BA-403 - Extension of Time Application, BA-404 - Tax Credits Earned, Applied, Expired, and Carried Forward, BA-405 - Expired VEPC Credit: Annual Activity Report, BA-410 - Corporate Income Tax Affiliation Schedule, BI-471 - Business Income Tax Return, Business Income Tax Return Instructions, BI-472 - S Corporation Schedule,BI-473 - Partnership/Limited Liability Company Schedule, CO-411 - Corporate Income Tax Return, Corporate Income Tax Return Instructions, CO-414 - Corporate Estimated Tax Payment Voucher, CO-417 - Interest Calculated for Underpayment of Estimated Corporate Income Tax, CO-419 - Apportionment of Foreign Income, CO-420 - Foreign Dividend Factor Increments, K-1VT - Shareholder's, Partner's, or Member's Information, Power of Attorney – Business, S1 - App. & Instructions for Business Tax Account, SMWA-1 - Refund of S&U, M&R and Withholding Tax, SU-452 - Use Tax Return, W-4VT - Employee Withholding Certificate, WH-435 - Est. Income Tax Payments for Non-Res. Shareholders, Members or Partners, WH-435SH - Safe Harbor Worksheet, Sales Tax Exemption Certificates, S-3 - Resale and Exempt Organizations, S-3A - Agricultural Fertilizers, Pesticides, Machinery & Equip., S-3C - Contractors, S-3F - Fuel or Electricity, S-3M - Manufacturing, Publishing, Research & Dev., or Packaging, S-3V - Registerable Motor Vehicle other than Cars and Trucks, 5922 - C-Corporation Financial Services Development Credit Schedule, 5922 - Pass-through to Shareholders - Financial Services Development Credit Worksheet, 5930 - Economic Advancement Tax Incentive Calculation Forms,BT-4 - Statement of Malt Beverages Sold to a Vermont Dealer, Form 31 - Statement of Vinous Beverages Sold to a Vermont Dealer, FI-161 - Fiduciary Return of Income, WF-1- Franchise Tax on Waste Facilities & Commercial Haulers of Solid Waste, Cigarette and Tobacco, CT-1- Wholesale, cigarette Dealer Report, CT-3 - Cigarette Tax Stamp Order Form, CT-10W - WHOLESALE, Cigarette Dealers VT Floor Stock Tax Return, CT-10PV - VT Floor Stock Tax Payment Voucher, TB1 - Wholesale Tobacco Dealer Report, NPM-1 - Licensed Distributor Report for Non-Participating Manufacturers, IP-1 - Insurance Premium Tax Return, IP-2 - Captive Insurance Premium Tax Return, IPE-2 - Estimate of Insurance Premium Tax, Malt and Vinous Beverages, MB-1 - Malt Beverage Tax Return, MB-2 - Purchase inventory of Malt Beverages, MB-3 - Statement of Malt Beverages Sold to a Vermont Dealer, VB-1 - Vinous Beverage Tax Return, VB-2 - Purchase Inventory of Vinous Beverages, VB-3 - Statement of Vinous Beverages Sold to a Vermont Dealer, Tax help, Tax Tips

Utah State Tax Forms

2008-12-29T17:16:00.000-08:00

Utah State Tax Commission
Forms include: Individual Income and Withholding Tax, Auto Industry and Dealer Forms, License Plate Request form, Title and Registration forms, Motor vehicle sales Related forms, beer tax, business and corporate income tax, fiduciary and inheritance tax, fuel tax, motor fuel forms, aviation fuel forms, special fuel forms, IFTA and IRP forms, miscellaneous tax appeals, property tax, sales tax, Tax help, Tax Tips

Texas State Tax Forms

2008-12-29T17:08:00.000-08:00

Texas Tax Forms
Forms include: Occasional Use Tax, Franchise Tax, Fuels Tax, IFTA and Interstate Truckers, 9-1-1 Emergency Communications Forms, Applications for Tax Exemption, Bond Forms, CAPCO Forms, Cigarette, Cigar, and Tobacco Products Forms, City and County Government Forms, Clean Vehicle Incentive Program (CVIP) Forms, Coin-Operated Machine Forms, Crude Oil Tax Forms, Fireworks Tax, Hotel Occupancy Tax, Inheritance Tax, insurance Tax, Miscellaneous Tax Forms, Mixed Beverage Gross Receipts Tax Reports, Motor Vehicle Tax, Natural Gas Tax Forms, Oyster Sales Fee, Property Tax, Refund Forms, Sexually Oriented Business Fee Forms, Telecommunications Assessment Reports, Underage Smoking Regulatory Forms, Tax help, Tax Tips

Tennessee State Tax Forms

2008-12-29T07:21:00.000-08:00

Tennessee Department of Revenue
Tax forms include: Alcoholic Beverage Taxes, Automobile Rental Surcharge Tax, Bail Bond Tax, Beer Taxes, Business Tax, Coin-operated Amusement Tax, Franchise and Excise Taxes, Gift Tax, Gross Receipts Taxes, Individual Income Tax, Inheritance Tax, Liquor-by-the-drink Tax, Mixing Bar Tax, Motor Fuel Taxes,Oil and Tire Taxes, Professional Privilege Tax, Sales and Use Tax, Severance Taxes, Television and Telecommunications Tax, Tobacco Taxes, Tax help, Tax Tips

South Dakota State Tax Forms

2008-12-29T06:58:00.000-08:00

South Dakota Tax Forms
Tax forms include: Accounting or Reporting Firm Authorization Form/Responsible Party: Power of Attorney, Application for Change in Accounting Method, Application for Sales and Contractors' Excise Tax License, Authorization Agreement for Electronic Tax Filing and Payment, Change in Partnership Application, Change of Address Form, Church Use Tax Return Form, Consolidated Filing Permit Application, Construction Tax Refund or Delay Application, Contractors' Excise Tax Bid Factor Calculator, Contractors' Excise Tax Return, Contractors' Excise Tax Return Worksheet/Instructions, Delay in Sales/Use Tax on Equipment, Direct Payment Permit Application, Equipment List, Exemption Certificate, Fabricators Sales and Use Tax Refund for Contractors and Subcontractors, Information Release Authorization, Interstate Telecommunications Exemption Application for Call Centers, Municipal/Reservation Tax Schedule, Nexus Business Activity Questionnaire, Prime Contractor's Exemption Certificate, Prime Contractors' Exemption Certificate - Multiple, Sales and Use Tax Return, Sales Tax Exempt Status Application, Sales Tax Rate Charts, Sales Tax Return, worksheet/ Instructions, Sales, Use and Contractors' Excise Tax Returns: Summary for Amending, South Dakota Sturgis Motorcycle Classic Tax Report, Sturgis Rally Sales Tax application, Surety Bond, Telecommunication Relay Services - Remittance Coupon, Telecommunications Gross Receipts Tax Application, Update of Corporate Officers, Use Tax Form: Sales Tax Fact Sheet # 316, TAXES:Central Assessor Reports, Annual Report to South Dakota: Airline Companies, Annual Report to South Dakota: Electric Companies,Annual Report to South Dakota: Natural Gas Companies, Annual Report to South Dakota: Oil Pipeline Companies (carriers by pipeline), Annual Report to South Dakota: Railroads, Annual Report to South Dakota: Rural Electric Cooperatives, Annual Report to South Dakota: Rural Telephone Companies, Annual Report to South Dakota: Telecommunication Companies, Annual Report to South Dakota: Water Companies TAXES:Property Tax, Application for Continuing Tax Exempt Status of a Private Organization, Application for Disabled Veteran Property Tax Exemptions, Application for Freeze on Assessments of Dwellings of Disabled and Senior Citizens, Application for Future AG Status (for Na-Z properties), Application for Paraplegic Property Tax Reduction, Application for Paraplegic Veteran Property Tax Exemptions, Application for Property Tax Exempt Status, Application for Property Tax Homestead Exemption, Application for Property Tax Reduction From Municipal Taxes for the Elderly and Disabled, Certificate of Real Estate Value, Certificate of Review Board of Equalization, Certification of Owner-Occupied Dwelling (county level), Claim for Property Tax Credit on Renewable Resource Energy System, Consolidated Board of Equalization Member Oath, county Board of Equalization Member Oath, County Budget Forms: Provisional or Annual Budget (county use), County Budget: Department Budget Request (county use worksheets), Information for Tax Relief Programs, Notice of Intention to Add Omitted Property or Valuation to the Assessment Rolls of County, Notice of Intention to Appeal Decision of Board of Equalization, Notice of Intention to Raise Valuation, Notice of Meeting of Consolidated Equalization Board, Notice of Meeting of County Equalization Board, Notice of Meeting of Local Review Board, Objection to Real Property Assessment, Objection to Real Property Assessment of Bare Agricultural Land Only, real Estate Assessment Notice, South Dakota Mobile Home Listing Form and Assessment Record, TAXES:Special Tax—Alcohol, Alcohol Beverage Brand-Label Registration Application, Alcohol Beverage: Report of Alcohol Beverage Violation and Notice of Conviction, Alcoholic Beverage Excise Tax Monthly Payment Form, Alcoholic Beverage Gallonage Report of Monthly Sales to Ellsworth Air Force Base (AFB) Military Messes, Alcoholic Beverage License: Affidavit for Transfer, Alcoholic Beverage: Notice of Delinquent Retailer or Paid Delinquency (from wholesaler),Brewers Monthly Report of Sales of High Point Beer and Low Point Beer (3.2) Sold to South Dakota Wholesale Licensees, Distilled Spirits and Wine Tax Report (occupational liquor tax report), Farm Winery Excise Tax Report, Malt Beverage Tax Report, Malt Beverage Tax Report—Manufacturer's, Monthly Personal Activity Report: Wholesale Management Personnel and Solicitors, Price Filing Amendment Form, Solicitor License Application - Alcoholic Beverage, South Dakota Alcoholic Beverage Carrier License Application, south Dakota Alcoholic Beverage Transporter License Application, Uniform Alcoholic Beverage License Application: Liquor, Wine, Malt Beverage, and Other, tAXES:Special Tax—Estates, Estate Tax Return, Inheritance Tax Lien Waiver and Consent to Transfer Property, Inheritance Tax Report and Information for Judicial Determination of Inheritance Tax, tAXES: Special Tax—Gaming, Amusement Machines, Special: Application to Register (antique machines or machines used only at fairs), Amusement Machines: Application to Register Bingo/Lottery Distributors: Gross Receipts Tax Return, Gaming License—Distributor: Application for License to Distribute Bingo and Lottery Equipment and Supplies, Gaming License—Manufacturer: Application for License to Manufacture Bingo and Lottery Equipment and Supplies, tAXES:Special Tax—Miscellaneous, Application for Trading Stamp Redemption License, Bank Franchise Tax on Financial Institutions, Coin Operated Washer and Dryer License Application, Energy Minerals Severance Tax and Conservation Tax: Quarterly Report (Oil, Natural Gas, Coal, Uranium), Financial Institution Franchise Tax: Quarterly Estimate Payment Form, Financial Institution Franchise Tax: Yearly Return, Precious Metals Tax: Annual Return, Precious Metals Tax: Quarterly Estimate, Sales or Property Tax Refunds for Senior Citizens and Citizens With Disabilities, TAXES:Special Tax—Tobacco, Cigarette Distributors Monthly Report, Cigarette Excise Tax Stamp Credit Application, Cigarette Sales: Monthly Report (for Standing Rock, Santee, Rosebud, Pine Ridge, and Cheyenne River Sioux Tribes), Cigarette Stamp Order Blank and Receipt Form, Cigarette Tax Amnesty, Cigarette Tax Amnesty 2007, Distributors Quarterly Tobacco Shipment Report, Manufacturers Certification Form, Oglala Sioux Tribe OTP, other Tobacco Products Tax Amnesty, OTP Cheyenne River Reservation, OTP Monthly Tax Return, Retailer Tobacco Shipment Report, Sisseton Wahpeton OTP, Tobacco Distributor License Application, Tobacco Retailer Registration, Tobacco Wholesaler License Application, Wholesalers Quarterly Tobacco Shipment Report, Tax help, Tax Tips

South Carolina State Tax Forms

2008-12-29T06:52:00.000-08:00

South Carolina Department of Revenue
Tax forms include: Tax Forms include: Corporate Tax Returns, Bingo Forms, Fiduciary and Partnership Tax Returns, Estate Tax Returns, Individual Income Tax Returns, Tax Credits Forms, License Tax Returns, Motor Fuel Returns, Alcoholic Beverage Licensing, Property Tax Returns, Sales and Use Tax Returns, Withholding Tax Returns, Miscellaneous Forms, Tax help, tax tips

Rhode Island State Tax Forms

2008-12-29T06:46:00.000-08:00

Rhode Island Division of Taxation
Tax forms available: BAR Business Application and Registration, TX-10 Application for Extension of Coverage to Exempt Workers (Religious Organizations Only), TX-13 Termination of Employment Security Registration, TX-16 Claim for Refund of Temporary Disability Insurance Tax with Instructions, TX-17-06 Quarterly Tax & Wage Report for Year 2006, TX-17-07 Quarterly Tax & Wage Report for Year 2007 (Quarters 1,2 and 3 only), X-17-07 Quarterly Tax & Wage Report for Year 2007 (Beginning Fourth Quarter, TX-17-08 Quarterly Tax & Wage Report for Year 2008, TX-17-09 Quarterly Tax & Wage Report for Year 2009, TX-36 Employer's Election to Cover Multi-State Workers, TX-68B Notice of Election of Reimbursement/Contribution Method, TX-139 Form for Reporting Federal Identification Number, Tax help, tax tips