25 Şubat 2013 Pazartesi

Tips for Taxpayers Who Can't Pay Their Taxes on Time

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If you owe tax with your federal tax return, but can't afford to pay it all when you file, the IRS wants you to know your options and help you keep interest and penalties to a minimum.

Here are five tips:
1. File your return on time and pay as much as you can with the return. These steps will eliminate the late filing penalty, reduce the late payment penalty and cut down on interest charges. For electronic and credit card options for paying see www.IRS.gov. You may also mail a check payable to the United States Treasury.

2. Consider obtaining a loan or paying by credit card. The interest rate and fees charged by a bank or credit card company may be lower than interest and penalties imposed by the Internal Revenue Code.

3. Request an installment payment agreement. You do not need to wait for IRS to send you a bill before requesting a payment agreement. Options for requesting an agreement include:
• Using the Online Payment Agreement application and
• Completing and submitting IRS Form 9465-FS, Installment Agreement Request, with your return IRS charges a user fee to set up your payment agreement. See www.irs.gov or the installment agreement request form for fee amounts.

4. Request an extension of time to pay. For tax year 2011, qualifying individuals may request an extension of time to pay and have the late payment penalty waived as part of the IRS Fresh Start Initiative. To see if you qualify visit www.irs.gov and get form 1127-A, Application for Extension of Time for Payment. But hurry, your application must be filed by April 17, 2012.

5. If you receive a bill from the IRS, please contact us immediately to discuss these and other payment options. Ignoring the bill will only compound your problem and could lead to IRS collection action.

If you can’t pay in full and on time, the key to minimizing your penalty and interest charges is to pay as much as possible by the tax deadline and the balance as soon as you can. For more information on the IRS collection process go to or see IRSVideos.gov/OweTaxes.

Start Planning Now for Next Year's Tax Return

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The tax deadline may have just passed but planning for next year can startnow. The IRS reminds taxpayers that being organized and planning ahead can savetime, money and headaches in 2013. Here are eight things you can do now to makenext April 15 easier.

1. Adjust your withholding Why wait another year for a bigrefund? Now is a good time to review your withholding and make adjustments fornext year, especially if you'd prefer more money in each paycheck this year. Ifyou owed at tax time, perhaps you'd like next year's tax payment to be smaller.Use IRS's Withholding Calculator at www.irs.govor Publication 919, How Do I Adjust My Tax Withholding?

2. Store your return in a safe place Put your 2011 taxreturn and supporting documents somewhere secure so you'll know exactly whereto find them if you receive an IRS notice and need to refer to your return. Ifit is easy to find, you can also use it as a helpful guide for next year's return.

3. Organize your recordkeeping Establish a central locationwhere everyone in your household can put tax-related records all year long.Anything from a shoebox to a file cabinet works. Just be consistent to avoid ascramble for misplaced mileage logs or charity receipts come tax time.

4. Review your paycheck Make sure your employer is properlywithholding and reporting retirement account contributions, health insurancepayments, charitable payroll deductions and other items. These payrolladjustments can make a big difference on your bottom line. Fixing an error inyour paycheck now gets you back on track before it becomes a huge hassle.

5. Shop for a tax professional early If you use a taxprofessional to help you strategize, plan and make financial decisionsthroughout the year, then search now. You'll have more time when you're not upagainst a deadline or anxious for your refund. Choose a tax professionalwisely. You are ultimately responsible for the accuracy of your own returnregardless of who prepares it. Find tips for choosing a preparer at www.irs.gov.

6. Prepare to itemize deductions If your expenses typicallyfall just below the amount to make itemizing advantageous, a bit of planning tobundle deductions into 2012 may pay off. An early or extra mortgage payment,pre-deadline property tax payments, planned donations or strategically paidmedical bills could equal some tax savings. See the Schedule A instructions forexpenses you can deduct if you're itemizing and then prepare an approach thatworks best for you.

7. Strategize tuition payments The American Opportunity TaxCredit, which offsets higher education expenses, is set to expire after 2012.It may be beneficial to pay 2013 tuition in 2012 to take full advantage of thistax credit, up to $2,500, before it expires. For more information, see IRSPublication 970, Tax Benefits for Education.

8. Keep up with changes Find out about tax law changes,helpful tips and IRS announcements all year by subscribing to IRS Tax Tipsthrough www.irs.govor IRS2Go, the mobile app from the IRS. The IRS issues tips regularly duringsummer and tax season. Special Edition tips are sent periodically with othertimely updates.

The IRS emphasizes that each household's financial circumstances aredifferent so it's important to fully consider your specific situation and goalsbefore making large financial decisions. 

Please contact us if you have any questions.  801-269-1818


Links:
  • IRS Withholding Calculator
  • Publication 919, How Do I Adjust My Tax Withholding? (PDF)
  • 2011 Form 1040 (Schedule A) (PDF)
  • Publication 970, Tax Benefits for Education (PDF)

Don't Fall for Phony IRS Websites

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The Internal Revenue Service is issuing a warning about a new tax scam thatuses a website that mimics the IRS e-Services online registration page.

The actual IRS e-Services page offers web-based products for tax preparersand payers, not the general public. The phony web page looks almost identical tothe real one.

The IRS gets many reports of fake websites like this. Criminals use thesesites to lure people into providing personal and financial information that maybe used to steal the victim’s money or identity.

The address of the official IRS website is www.irs.gov.Don’t be misled by sites claiming to be the IRS but ending in .com, .net, .orgor other designations instead of .gov.

If you find a suspicious website that claims to be the IRS, send the site’sURL by email to phishing@irs.gov. Use thesubject line, 'Suspicious website'.

Be aware that the IRS does not initiate contact with taxpayers by email torequest personal or financial information. This includes any type of electroniccommunication, such as text messages and social media channels.

If you get an unsolicited email that appears to be from the IRS, report itby sending it to phishing@irs.gov.
The IRS has information at www.irs.govthat can help you protect yourself from tax scams of all kinds. Search the siteusing the term “phishing.”

Links:
  • Suspicious e-Mails and Identity Theft
  • Reporting Phishing
  • Identity Theft resource page
  • Publication 4523, Beware of Phishing Schemes (PDF)
IRS YouTube Videos:
  • Phishing-Malware - English | Spanish | ASL
IRS Podcasts:
  • Protect Yourself From Identity Theft - English | Spanish

Save Money with the Child Tax Credit

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If you have a child under age 17, the Child Tax Credit may save you money attax-time. Here are some facts the IRS wants you to know about the credit.
  • Amount.  The non-refundable Child Tax Credit may help reduce your federal income tax by up to $1,000 for each qualifying child you claim on your return.
  • Qualifications.  For this credit, a qualifying child must pass seven tests:
1. Age test.  The child must have been under age17 at the end of 2012.
2. Relationship test.  The child must be yourson, daughter, stepchild, foster child, brother, sister, stepbrother, orstepsister. A child may also be a descendant of any of these individuals,including your grandchild, niece or nephew. You would always treat an adoptedchild as your own child. An adopted child includes a child lawfully placed withyou for legal adoption.
3. Support test.  The child must not haveprovided more than half of their own support for the year.
4. Dependent test.  You must claim the child as adependent on your federal tax return.
5. Joint return test.  The child cannot file ajoint return for the year, unless the only reason they are filing is to claim arefund.
6. Citizenship test.  The child must be a U.S.citizen, U.S. national or U.S. resident alien.
7. Residence test.  In most cases, the child musthave lived with you for more than half of 2012.
  • Limitations.  The Child Tax Credit is subject to income limitations, and may be reduced or eliminated depending on your filing status and income.
  • Additional Child Tax Credit.  If you qualify and get less than the full Child Tax Credit, you could receive a refund even if you owe no tax with the refundable Additional Child Tax Credit.
  • Schedule 8812.  If you qualify to claim the Child Tax Credit make sure to check whether you must complete and attach the new Schedule 8812, Child Tax Credit, with your return. If you qualify to claim the Additional Child Tax Credit, you must complete and attach Schedule 8812.
IRS Publication 972, Child Tax Credit, can provide you with more details.View it online at IRS.gov or request it by calling 800-TAX-FORM (800-829-3676).You can also use the Interactive Tax Assistant tool on the IRS website to checkif you can claim the credit. The ITA is a resource that can help answer tax lawquestions.

How You Can Get Prior Year Tax Information from the IRS

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The IRS offers several different ways to get tax return information or acopy of your own tax return for prior years. Here are options to help you getthe information you need.
  • Tax Return Transcript.  This shows most line items from your tax return as originally filed, along with any forms and schedules from your return.  This transcript does not reflect any changes made to the return after you filed it. Tax return transcripts are free. After the IRS has processed a return, transcripts are available for the current tax year and the past three tax years.
  • Tax Account Transcript.  This shows any adjustments made by you or the IRS after filing your return. This transcript shows basic data, like marital status, type of return filed, adjusted gross income and taxable income. Tax account transcripts are free, and are available after the IRS has processed the return for the current tax year and the past three tax years.
  • Order a Transcript.  You can request both transcript types online, by phone or by mail. To place your order online, go to IRS.gov and use the “Order a Transcript” tool. Order a transcript by phone at 800-908-9946. A recorded message will guide you through the process. You can also request your tax return transcript by mail by completing Form 4506T-EZ. Use Form 4506T to mail a request for your tax account transcript. You can get both forms online at IRS.gov.
  • Tax Return Copies.  Actual copies of your tax returns are generally available for the current tax year and as far back as six years. The fee for each copy you order is $57. To request a copy of your tax return, complete Form 4506, available on IRS.gov. Mail your request to the IRS office listed on the form for your area.
  • Delivery Times.  The turnaround time for online and phone orders is typically 5 to 10 days from the time the IRS receives the request. Allow 30 calendar days for delivery of a tax account transcript if you order by mail using Form 4506T-EZ or Form 4506T, and allow 60 days when ordering actual copies of your tax return by mail.
  • More Information.  The IRS website can help you decide which form you need. Visit IRS.gov, or call the IRS forms and publications order line at 800-TAX-FORM (800-829-3676).

24 Şubat 2013 Pazar

Lost Your W2, or Didn't Receive Your W2, What to Do

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 If you misplaced your W2  or moved and didn't receive your W2, or your Employer mailed to the wrong address, here is what to do: 

It’s a good idea to have all your tax documents together before preparing your 2012 tax return. You will need your W-2, Wage and Tax Statement, which employers should send by the end of January. Give it two weeks to arrive by mail.

If you have not received your W-2, follow these three steps:

1. Contact your employer first. Ask your employer – or former employer – to send your W-2 if it has not already been sent. Make sure your employer has your correct address. 2. Contact the IRS. After February 14, you may call the IRS at 800-829-1040 if you have not yet received your W-2. Be prepared to provide your name, address, Social Security number and phone number. You should also have the following information when you call: • Your employer’s name, address and phone number;• Your employment dates; and• An estimate of your wages and federal income tax withheld in 2012, based upon your final pay stub or leave-and-earnings statement, if available. 3. File your return on time. You should still file your tax return on or before April 15, 2013, even if you have not yet received your W-2. File Form 4852, Substitute for Form W-2, Wage and Tax Statement, in place of the W-2. Use the form to estimate your income and withholding taxes as accurately as possible. The IRS may delay processing your return while it verifies your information. If you need more time to file you can get a six-month extension of time. File Form 4868, Application for Automatic Extension of Time to File US Individual Income Tax Return. If you are requesting an extension, you must file this form on or before April 15, 2013.

If you receive the missing W-2 after filing your tax return and the information on the W-2 is different from what you reported using Form 4852, then you must correct your tax return. File Form 1040X, Amended U.S. Individual Income Tax Return to amend your tax return.
Forms and instructions are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Additional IRS Resources:
  • Form 4852, Substitute for Form W-2, Wage and Tax Statement
  • Form 1040X, Amended U.S. Individual Income Tax Return

IRS is Hiring?

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Here is some news for recent Accounting grads and advanced bookkeepers who need a change.  Or anyone with the necessary qualifications.-------------- Washington, D.C. (February 6, 2013)By Michael Cohn
                                                                                                                                                               The Internal Revenue Service is making progress in the management of its employees but faces continued challenges, according to a new report.
J. Russell Georgereleased Wednesday, by the Treasury Inspector General for Tax Administration, noted that since fiscal year 2002, TIGTA has designated human capital as one of the major management challenges facing the IRS.  TIGTA reviewed the status of actions the IRS has taken in response to recommendations on human capital issues made by TIGTA in a series of audit reports issued since fiscal 2009. TIGTA also reviewed the status of the IRS’s implementation of the recommendations of an IRS-led task force.
TIGTA’s new report found that the IRS has made progress in addressing human capital issues. For example, the IRS developed an agency-wide recruitment strategy that should place it in a better position to identify and attract qualified candidates. IRS documentation shows that it has completed corrective actions for 78 percent of the 46 TIGTA recommendations and 91 percent of the 58 recommendations made by the IRS task force formed to address serious workforce issues.
Despite this progress, however, continued focus by IRS executive management on human capital is important because the IRS’s workforce has decreased by about 10,000 full-time equivalents in the last two fiscal years, the report noted. In addition, many of the IRS’s experienced leaders and employees will be eligible to retire in the next five years.
At the same time, significant Tax Code changes, such as those implementing the Patient Protection and Affordable Care Act, are on the horizon, and the IRS needs to make improvements to stop billions of dollars in fraudulent or improper tax refunds resulting from identity theft and erroneous claims for tax credits.
“The IRS’s continued focus is needed to provide reasonable assurance that the right people will be in the right place at the right time to provide taxpayers with top-quality service and to enforce the law with integrity and fairness to all,” said TIGTA Inspector General J. Russell George in a statement.
TIGTA made no recommendations in this report; however, key IRS management officials reviewed it prior to issuance.

In a related report issued last week, TIGTA found that the IRS is hiring new employees more quickly. While in June 2009, the IRS took more than five months to hire employees from outside the government, some of its divisions, like the Information Technology organization, are now close to meeting the federal government’s goal of 80 calendar days, TIGTA’s auditors found.

At the request of the IRS, TIGTA audited the actions taken by the IRS divisions to monitor and improve the efficiency of hiring new employees. Hiring quality employees quickly is important to the IRS, as it hires a large number of employees each year. For example, the IRS hired approximately 19,000 employees in fiscal year 2011.

TIGTA found that IRS divisions and the Human Capital Office have taken action to reduce hiring timelines, but need to continue to focus on keeping hiring timelines low and making additional improvements. For example, the Information Technology organization has cut the time it takes to hire new employees from 218 calendar days in November 2009 to an average of 90 calendar days at the end of March 2012. As a result, Information Technology is close to meeting the Office of Personnel Management 80-calendar-day hiring goal. Similarly, the Wage and Investment Division has taken action to reduce hiring timelines and is also close to meeting the hiring goal.

However, the Small Business/Self-Employed Division uses a hiring process that is based on bringing large groups of employees on board at the same time for training and orientation purposes. While this may result in efficient training and orientation programs for enforcement personnel, it can take up to 200 calendar days to hire employees, which results in not meeting the hiring goal.

TIGTA made several recommendations for improvement such as deactivating certificates with lists of job applicants that are not used, providing guidance to employment offices for selecting the correct certificates, and correcting computer report-writing programming to ensure the correct date was used in calculating hiring timelines. The IRS agreed with TIGTA’s recommendations and implemented corrective actions.

The Next Industry to Crumble Will Create the Next Big Investment Opportunity

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This was in my inbox and after listening to the video, I decided that it would be best to share this information with clients, associates and friends.  I believe what The Motley Fool information and have advised clients for a couple years of this upcoming change.  Take a listen and see what you think.  Iam not being compensated for sharing this information, I just know that TV aswe know it, will be changing in the future.
Another major industry is about to fall. Hard. And it will happen much sooner than anyone on Wall Street expects. (All signs are pointing to 2014.)Everyone will claim they saw it coming. They'll say they knew all about the experimental project that Google launched in Kansas City. They'll say when they heard Apple's big March announcement, they knew for sure. They'll say that the one last "insurmountable" obstacle was obviously no big deal. And they'll be lying. But that's okay. Because you'll be the one who knew which 3 overlooked stocks to invest in now for max profit... before 57.3 million Americans hit the OFF button.
Click to watch buttonClick here for the new investor alert video!

Filing Your Own Taxes? Here's How to Determine Your Filing Status

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If you are filing your own taxes for the first time, getting your filing incorrect would cause your entire return to be incorrect.  This is NOT how you want to start off your relationship with the IRS.  The IRS sent out an announcement telling taxpayers how to determine their filing status.

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It’s important to use the correct filing status when filing your income tax return. It can impact the tax benefits you receive, the amount of your standard deduction and the amount of taxes you pay. It may even impact whether you must file a federal income tax return.

Are you single, married or the head of your household? There are five filing statuses on a federal tax return. The most common are "Single," "Married Filing Jointly" and "Head of Household." The Head of Household status may be the one most often claimed in error.

The IRS offers these seven facts to help you choose the best filing status for you.

1. Marital Status. Your marital status on the last day of the year is your marital status for the entire year. 2. If You Have a Choice. If more than one filing status fits you, choose the one that allows you to pay the lowest taxes. 3. Single Filing Status. Single filing status generally applies if you are not married, divorced or legally separated according to state law. 4. Married Filing Jointly. A married couple may file a return together using the Married Filing Jointly status. If your spouse died during 2012, you usually may still file a joint return for that year. 5. Married Filing Separately. If a married couple decides to file their returns separately, each person’s filing status would generally be Married Filing Separately. 6. Head of Household. The Head of Household status generally applies if you are not married and have paid more than half the cost of maintaining a home for yourself and a qualifying person. 7. Qualifying Widow(er) with Dependent Child. This status may apply if your spouse died during 2010 or 2011, you have a dependent child and you meet certain other conditions.IRS e-file is the easiest way to file and will help you determine the correct filing status. If you file a paper return, the Interactive Tax Assistant at IRS.gov is a tool that will help you choose your filing status.

IRS's Tool, "Where's My Refund

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Not to worry the IRS is on time with refunds.  And if you are a little worried you can read their statement on using the "Where's My Refund" Ninety percent of all taxpayers are receiving a refund within 21 days when they file electronically using the direct deposit option.  Below are some special tips to help lower your blood pressure:
----------

The IRS alerted taxpayers and the tax community it is experiencing high traffic on Where's My Refund as more tax returns come in. The heavy volume of refund inquiries means that the IRS anticipates both "Where's My Refund?" on IRS.gov and the refund feature on the IRS2go phone app will have limited availability during busier periods.

Due to the large number of inquiries and to avoid service disruptions, the IRS strongly urges taxpayers to only check on their refunds once a day. IRS systems are only updated once a day, usually overnight, and the same information is available whether on the internet, IRS2go smartphone app or on IRS toll-free lines. While "Where's My Refund" is updated nightly, your account will not change that frequently.

The IRS is seeing a good start to the filing season, and tax refunds are being issued timely. Nine out of 10 taxpayers typically receive refunds in less than 21 days when they use e-file with direct deposit.
The IRS expects to see the number of tax returns -- and related refund inquiries --steadily increase around the President's Day holiday week.

Here are some tips to help taxpayers with their refund questions:

• Have the right tax information ready before using any of the IRS refund tools. This includes Social Security number, filing status and refund amount.

• You don't need to check Where's My Refund more than once a day as your information will not change.

• To avoid system delays, the best time to check on refunds is evening and weekends.

• There is no need to call the IRS about your refund; the telephone service has the same information that is available on Where’s My Refund.

23 Şubat 2013 Cumartesi

Filing Your Own Taxes? Here's How to Determine Your Filing Status

To contact us Click HERE
 
If you are filing your own taxes for the first time, getting your filing incorrect would cause your entire return to be incorrect.  This is NOT how you want to start off your relationship with the IRS.  The IRS sent out an announcement telling taxpayers how to determine their filing status.

--------

It’s important to use the correct filing status when filing your income tax return. It can impact the tax benefits you receive, the amount of your standard deduction and the amount of taxes you pay. It may even impact whether you must file a federal income tax return.

Are you single, married or the head of your household? There are five filing statuses on a federal tax return. The most common are "Single," "Married Filing Jointly" and "Head of Household." The Head of Household status may be the one most often claimed in error.

The IRS offers these seven facts to help you choose the best filing status for you.

1. Marital Status. Your marital status on the last day of the year is your marital status for the entire year. 2. If You Have a Choice. If more than one filing status fits you, choose the one that allows you to pay the lowest taxes. 3. Single Filing Status. Single filing status generally applies if you are not married, divorced or legally separated according to state law. 4. Married Filing Jointly. A married couple may file a return together using the Married Filing Jointly status. If your spouse died during 2012, you usually may still file a joint return for that year. 5. Married Filing Separately. If a married couple decides to file their returns separately, each person’s filing status would generally be Married Filing Separately. 6. Head of Household. The Head of Household status generally applies if you are not married and have paid more than half the cost of maintaining a home for yourself and a qualifying person. 7. Qualifying Widow(er) with Dependent Child. This status may apply if your spouse died during 2010 or 2011, you have a dependent child and you meet certain other conditions.IRS e-file is the easiest way to file and will help you determine the correct filing status. If you file a paper return, the Interactive Tax Assistant at IRS.gov is a tool that will help you choose your filing status.

IRS's Tool, "Where's My Refund

To contact us Click HERE
 
Not to worry the IRS is on time with refunds.  And if you are a little worried you can read their statement on using the "Where's My Refund" Ninety percent of all taxpayers are receiving a refund within 21 days when they file electronically using the direct deposit option.  Below are some special tips to help lower your blood pressure:
----------

The IRS alerted taxpayers and the tax community it is experiencing high traffic on Where's My Refund as more tax returns come in. The heavy volume of refund inquiries means that the IRS anticipates both "Where's My Refund?" on IRS.gov and the refund feature on the IRS2go phone app will have limited availability during busier periods.

Due to the large number of inquiries and to avoid service disruptions, the IRS strongly urges taxpayers to only check on their refunds once a day. IRS systems are only updated once a day, usually overnight, and the same information is available whether on the internet, IRS2go smartphone app or on IRS toll-free lines. While "Where's My Refund" is updated nightly, your account will not change that frequently.

The IRS is seeing a good start to the filing season, and tax refunds are being issued timely. Nine out of 10 taxpayers typically receive refunds in less than 21 days when they use e-file with direct deposit.
The IRS expects to see the number of tax returns -- and related refund inquiries --steadily increase around the President's Day holiday week.

Here are some tips to help taxpayers with their refund questions:

• Have the right tax information ready before using any of the IRS refund tools. This includes Social Security number, filing status and refund amount.

• You don't need to check Where's My Refund more than once a day as your information will not change.

• To avoid system delays, the best time to check on refunds is evening and weekends.

• There is no need to call the IRS about your refund; the telephone service has the same information that is available on Where’s My Refund.

Tax Credits, Benefits Education for Parents and Students, form 1098-T, EIC

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Be sure to read the complete  article.  You will learn that parents may be able to claim the EIC credit for children up to the age of 24.-------------- Parents and Students: Check Out College Tax Benefits for 2012 and Years Ahead WASHINGTON — The Internal Revenue Service today reminded parents and students that now is a good time to see if they qualify for either of two college education tax credits or any of several other education-related tax benefits.

In general, the American opportunity tax credit, lifetime learning credit and tuition and fees deduction are available to taxpayers who pay qualifying expenses for an eligible student. Eligible students include the primary taxpayer, the taxpayer’s spouse or a dependent of the taxpayer.

Though a taxpayer often qualifies for more than one of these benefits, he or she can only claim one of them for a particular student in a particular year. The benefits are available to all taxpayers – both those who itemize their deductions on Schedule A and those who claim a standard deduction. The credits are claimed on Form 8863 and the tuition and fees deduction is claimed on Form 8917.

The American Taxpayer Relief Act, enacted Jan. 2, 2013, extended the American opportunity tax credit for another five years until the end of 2017. The new law also retroactively extended the tuition and fees deduction, which had expired at the end of 2011, through 2013. The lifetime learning credit did not need to be extended because it was already a permanent part of the tax code.

For those eligible, including most undergraduate students, the American opportunity tax credit will yield the greatest tax savings. Alternatively, the lifetime learning credit should be considered by part-time students and those attending graduate school. For others, especially those who don’t qualify for either credit, the tuition and fees deduction may be the right choice.

All three benefits are available for students enrolled in an eligible college, university or vocational school, including both nonprofit and for-profit institutions. None of them can be claimed by a nonresident alien or married person filing a separate return. In most cases, dependents cannot claim these education benefits.

Normally, a student will receive a Form 1098-T from their institution by the end of January of the following year. This form will show information about tuition paid or billed along with other information. However, amounts shown on this form may differ from amounts taxpayers are eligible to claim for these tax benefits. Taxpayers should see the instructions to Forms 8863 and 8917 and Publication 970 for details on properly figuring allowable tax benefits.

Many of those eligible for the American opportunity tax credit qualify for the maximum annual credit of $2,500 per student. Here are some key features of the credit:
  • The credit targets the first four years of post-secondary education, and a student must be enrolled at least half time. This means that expenses paid for a student who, as of the beginning of the tax year, has already completed the first four years of college do not qualify. Any student with a felony drug conviction also does not qualify.
  • Tuition, required enrollment fees, books and other required course materials generally qualify. Other expenses, such as room and board, do not.
  • The credit equals 100 percent of the first $2,000 spent and 25 percent of the next $2,000. That means the full $2,500 credit may be available to a taxpayer who pays $4,000 or more in qualified expenses for an eligible student.
  • The full credit can only be claimed by taxpayers whose modified adjusted gross income (MAGI) is $80,000 or less. For married couples filing a joint return, the limit is $160,000. The credit is phased out for taxpayers with incomes above these levels. No credit can be claimed by joint filers whose MAGI is $180,000 or more and singles, heads of household and some widows and widowers whose MAGI is $90,000 or more.
  • Forty percent of the American opportunity tax credit is refundable. This means that even people who owe no tax can get an annual payment of up to $1,000 for each eligible student. Other education-related credits and deductions do not provide a benefit to people who owe no tax.
The lifetime learning credit of up to $2,000 per tax return is available for both graduate and undergraduate students. Unlike the American opportunity tax credit, the limit on the lifetime learning credit applies to each tax return, rather than to each student. Though the half-time student requirement does not apply, the course of study must be either part of a post-secondary degree program or taken by the student to maintain or improve job skills. Other features of the credit include:
  • Tuition and fees required for enrollment or attendance qualify as do other fees required for the course. Additional expenses do not.
  • The credit equals 20 percent of the amount spent on eligible expenses across all students on the return. That means the full $2,000 credit is only available to a taxpayer who pays $10,000 or more in qualifying tuition and fees and has sufficient tax liability.
  • Income limits are lower than under the American opportunity tax credit. For 2012, the full credit can be claimed by taxpayers whose MAGI is $52,000 or less. For married couples filing a joint return, the limit is $104,000. The credit is phased out for taxpayers with incomes above these levels. No credit can be claimed by joint filers whose MAGI is $124,000 or more and singles, heads of household and some widows and widowers whose MAGI is $62,000 or more.
Like the lifetime learning credit, the tuition and fees deduction is available for all levels of post-secondary education, and the cost of one or more courses can qualify. The annual deduction limit is $4,000 for joint filers whose MAGI is $130,000 or less and other taxpayers whose MAGI is $65,000 or less. The deduction limit drops to $2,000 for couples whose MAGI exceeds $130,000 but is no more than $160,000, and other taxpayers whose MAGI exceeds $65,000 but is no more than $80,000.

Eligible parents and students can get the benefit of these provisions during the year by having less tax taken out of their paychecks. They can do this by filling out a new Form W-4, claiming additional withholding allowances, and giving it to their employer.

There are a variety of other education-related tax benefits that can help many taxpayers. They include:
  • Scholarship and fellowship grants—generally tax-free if used to pay for tuition, required enrollment fees, books and other course materials, but taxable if used for room, board, research, travel or other expenses.
  • Student loan interest deduction of up to $2,500 per year.
  • Savings bonds used to pay for college—though income limits apply, interest is usually tax-free if bonds were purchased after 1989 by a taxpayer who, at time of purchase, was at least 24 years old.
  • Qualified tuition programs, also called 529 plans, used by many families to prepay or save for a child’s college education.
Taxpayers with qualifying children who are students up to age 24 may be able to claim a dependent exemption and the earned income tax credit.

See if you qualify for an Offer in Compromise

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This information is for tax professionals, however, if you don't tell, I won't either.  See if you qualify for an Offer in Compromise.

New Offer in Compromise Pre-Qualifier Available

An item in a previous edition of e-News announcing the IRS Offer in Compromise (OIC) Pre-Qualifier tool contained the wrong URL to access the Pre-Qualifier. Here is the correct link.
The OIC Pre-Qualifier can help you determine a client’s OIC eligibility and calculate a preliminary offer amount.

Eleven things I wish I knew before starting my first startup

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Article by Neil Patel

Although I’ve co-founded a handful of companies, I didn’t really create my first startup till 7 years ago. The first one was Crazy Egg, which helps make websites more useable. And it wasn’t till 4.5 years ago till I co-founded my first venture-backed startup, KISSmetrics.

As they say, the startup life is a roller coaster with ups and downs. So if you are looking to start one, hopefully this blog post will help you

Here are 11 things I wish I knew before starting my first startup: read the entire article by Neil Patel

22 Şubat 2013 Cuma

Beware of Bogus IRS Emails

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The IRS receives thousands of reports every year from taxpayers who receiveemails out-of-the-blue claiming to be from the IRS. Scammers use the IRS nameor logo to make the message appear authentic so you will respond to it. Inreality, it’s a scam known as “phishing,” attempting to trick you intorevealing your personal and financial information. The criminals then use thisinformation to commit identity theft or steal your money.
The IRS has this advice for anyone who receives an email claiming to be fromthe IRS or directing you to an IRS site:
  • Do not reply to the message;
  • Do not open any attachments. Attachments may contain malicious code that will infect your computer; and
  • Do not click on any links in a suspicious email or phishing website and do not enter confidential information. Visit the IRS website and click on 'Identity Theft' at the bottom of the page for more information.
Here are five other key points the IRS wants you to know about phishingscams.
1. The IRS does not initiate contact with taxpayers by email or socialmedia channels to request personal or financial information;
2. The IRS never asks for detailed personal and financial informationlike PIN numbers, passwords or similar secret access information for creditcard, bank or other financial accounts;
3. The address of the official IRS website is www.irs.gov.Do not be misled by sites claiming to be the IRS but ending in .com, .net, .orgor anything other than .gov. If you discover a website that claims to be theIRS but you suspect it is bogus, do not provide any personal information ontheir site and report it to the IRS;
4. If you receive a phone call, fax or letter in the mail from anindividual claiming to be from the IRS but you suspect they are not an IRSemployee, contact the IRS at 1-800-829-1040 to determine if the IRS has alegitimate need to contact you. Report any bogus correspondence. Forward asuspicious email to phishing@irs.gov;
5. You can help the IRS and other law enforcement agencies shut downthese schemes. Visit the IRS.gov website to get details on how to report scamsand helpful resources if you are the victim of a scam. Click on "ReportingPhishing" at the bottom of the page.

Parents and Students: Check Out College Tax Benefits for 2012 and Years Ahead

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WASHINGTON — The Internal Revenue Service today reminded parents and studentsthat now is a good time to see if they qualify for either of two collegeeducation tax credits or any of several other education-related tax benefits.
In general, the American opportunity tax credit, lifetime learning creditand tuition and fees deduction are available to taxpayers who pay qualifyingexpenses for an eligible student. Eligible students include the primarytaxpayer, the taxpayer’s spouse or a dependent of the taxpayer.
Though a taxpayer often qualifies for more than one of these benefits, he orshe can only claim one of them for a particular student in a particular year.The benefits are available to all taxpayers – both those who itemize theirdeductions on ScheduleA and those who claim a standard deduction. The credits are claimed on Form8863 and the tuition and fees deduction is claimed on Form8917.
The American Taxpayer Relief Act, enacted Jan. 2, 2013, extended theAmerican opportunity tax credit for another five years until the end of 2017.The new law also retroactively extended the tuition and fees deduction, whichhad expired at the end of 2011, through 2013. The lifetime learning credit didnot need to be extended because it was already a permanent part of the taxcode.
For those eligible, including most undergraduate students, the Americanopportunity tax credit will yield the greatest tax savings. Alternatively, the lifetime learning credit should be considered by part-timestudents and those attending graduate school. For others, especially those whodon’t qualify for either credit, the tuition and fees deduction may be theright choice.
All three benefits are available for students enrolled in an eligiblecollege, university or vocational school, including both nonprofit andfor-profit institutions. None of them can be claimed by a nonresidentalien or married person filing a separate return. In most cases, dependentscannot claim these education benefits.
Normally, a student will receive a Form1098-T from their institution by the end of January of the following year.This form will show information about tuition paid or billed along with otherinformation. However, amounts shown on this form may differ from amountstaxpayers are eligible to claim for these tax benefits. Taxpayers should seethe instructions to Forms 8863 and 8917 and Publication970 for details on properly figuring allowable tax benefits.
Many of those eligible for the American opportunity tax credit qualify forthe maximum annual credit of $2,500 per student. Here are some key features ofthe credit:
  • The credit targets the first four years of post-secondary education, and a student must be enrolled at least half time. This means that expenses paid for a student who, as of the beginning of the tax year, has already completed the first four years of college do not qualify. Any student with a felony drug conviction also does not qualify.
  • Tuition, required enrollment fees, books and other required course materials generally qualify. Other expenses, such as room and board, do not.
  • The credit equals 100 percent of the first $2,000 spent and 25 percent of the next $2,000. That means the full $2,500 credit may be available to a taxpayer who pays $4,000 or more in qualified expenses for an eligible student.
  • The full credit can only be claimed by taxpayers whose modified adjusted gross income (MAGI) is $80,000 or less. For married couples filing a joint return, the limit is $160,000. The credit is phased out for taxpayers with incomes above these levels. No credit can be claimed by joint filers whose MAGI is $180,000 or more and singles, heads of household and some widows and widowers whose MAGI is $90,000 or more.
  • Forty percent of the American opportunity tax credit is refundable. This means that even people who owe no tax can get an annual payment of up to $1,000 for each eligible student. Other education-related credits and deductions do not provide a benefit to people who owe no tax.
The lifetime learning credit of up to $2,000 per tax return is available forboth graduate and undergraduate students. Unlike the American opportunity taxcredit, the limit on the lifetime learning credit applies to each tax return,rather than to each student. Though the half-time student requirement does notapply, the course of study must be either part of a post-secondary degreeprogram or taken by the student to maintain or improve job skills. Otherfeatures of the credit include:
  • Tuition and fees required for enrollment or attendance qualify as do other fees required for the course. Additional expenses do not.
  • The credit equals 20 percent of the amount spent on eligible expenses across all students on the return. That means the full $2,000 credit is only available to a taxpayer who pays $10,000 or more in qualifying tuition and fees and has sufficient tax liability.
  • Income limits are lower than under the American opportunity tax credit. For 2012, the full credit can be claimed by taxpayers whose MAGI is $52,000 or less. For married couples filing a joint return, the limit is $104,000. The credit is phased out for taxpayers with incomes above these levels. No credit can be claimed by joint filers whose MAGI is $124,000 or more and singles, heads of household and some widows and widowers whose MAGI is $62,000 or more.
Like the lifetime learning credit, the tuition and fees deduction isavailable for all levels of post-secondary education, and the cost of one ormore courses can qualify. The annual deduction limit is $4,000 for joint filerswhose MAGI is $130,000 or less and other taxpayers whose MAGI is $65,000 orless. The deduction limit drops to $2,000 for couples whose MAGI exceeds$130,000 but is no more than $160,000, and other taxpayers whose MAGI exceeds$65,000 but is no more than $80,000.
Eligible parents and students can get the benefit of these provisions duringthe year by having less tax taken out of their paychecks. They can do this byfilling out a new FormW-4, claiming additional withholding allowances, and giving it to theiremployer.
There are a variety of other education-related tax benefits that can helpmany taxpayers. They include:
  • Scholarship and fellowship grants—generally tax-free if used to pay for tuition, required enrollment fees, books and other course materials, but taxable if used for room, board, research, travel or other expenses.
  • Student loan interest deduction of up to $2,500 per year.
  • Savings bonds used to pay for college—though income limits apply, interest is usually tax-free if bonds were purchased after 1989 by a taxpayer who, at time of purchase, was at least 24 years old.
  • Qualified tuition programs, also called 529 plans, used by many families to prepay or save for a child’s college education.
Taxpayers with qualifying children who are students up to age 24 may be ableto claim a dependent exemption and the earned income tax credit.
The general comparison table in Publication970 can be a useful guide to taxpayers in determining eligibility for thesebenefits. Details can also be found in the TaxBenefits for Education Information Center on IRS.gov.

Is Juice a Problem for Children's teeth?

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By Dr. Scott Thompson, DDS - Winning With SmilesFor over 2 generations now juice has been espoused as a health food. Though dentists have been aware for decades this is not really true, it has not been until very recently that the health industry and the medical establishment has taken a closer look at juice. It is definitely not a health food. The question arises if it is even healthy!

Juice now sits on the top of the list as a probable causative agent for the medical chronic disease pandemic facing our children; namely diabetes, obesity, high blood pressure, and osteoporosis, among others. The journals of the American Medical Association and the American Academy of Pediatrics have in recent years recommended that juice be avoided in an infant’s diet. They also recommend that if it is introduced to a toddler that it be limited to 6 oz. daily (a small glass) and consumed with a meal.

Juice is at the top of the list of causative agents for dental disease for our children and youth. For that matter, in today’s culture it probably is equally at cause for adult dental decay.

Juice is worse than soda! That doesn’t mean soda is good; it is also terrible for teeth and health. But, juice is worse. If you look at nutrition data for foods and compare juice with whole fruit, you quickly see what is lost when juice is squeezed from fruit. A couple highlights:

You do get water and calories; i.e., an 8 oz glass of orange juice has the calories squeezed from about 5 oranges. Who ever heard of eating 5 oranges in one sitting? And today we often do this at breakfast and again in the afternoon. Yikes… all those empty calories!

Lost with the fruit when we make juice is a) nearly all the vitamins except some of the water soluble vitamin C, b) insoluble fiber, roughage, c) soluble fiber, unique to fruit and an important aid in digestion, d) and minerals, key components to our enzyme systems that process our body functions. Without the minerals the enzymes cannot use the calories we consume so the calories get stored as fat.

Rarely mentioned about juice is the acid. Acid that will dissolve your teeth. Those of us that took analytical and organic chemistry in college know the issue here. Though organic acids are often called “weak” acids, they are far more effective in organic systems like mouths because of their sustaining power. They don’t register in the pH scale as strong (lower number) as inorganic acids because they hold their acid potential in “reserve.” As the acid is used (dissolving calcium out of teeth) the reserve releases more acid out of solution. This is part of the steady state (homeostasis) systems that sustain organic (life supporting) systems. When misused (juice rather than fruit) the power released can be devastating. It turns out the acid potential (titrateable acid) of juice is nearly twice that of colas!

So put juice at the very top of the destructive beverage list that includes: juice, sports drinks like Gatorade, sodas, juicers and sweet energy teas.

Practice Giving: It's Good for Your Health

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By Ashlei Jackson, Qlixite

The definition of “charity” is the practice of benevolent giving, giving without payment or expectation of a direct return. In light of the efforts being made all around the world to help the people of Haiti, the word charity is everywhere. We often find ourselves helpless or listing reasons why we have nothing to give. However, the act of giving to others is actually healthy for you and it is the one thing you can do that will always benefit you and the ones you love. Best of all you don’t need to put a monetary value to your charity. Small acts of giving go a long way. Since the definition said that we should “practice” charity...and we all resolved to get healthier in 2010...let’s start!

Cultivate Your Mind: You will need to set aside time for yourself on a regular basis. By taking time out of every day to focus on your own needs, you will be more prepared and able to give more to others. In order to continue learning and entertain your brain on a daily basis, you should make a list of all the things you would like learn more about. Sit down and list it all at once or gradually add to the lis throughout the year. Either way, you can continue checking off items on the list as you complete them and it will give you a sense of accomplishment. Ideas: Read one book a month. Schedule time for conversations with your spouse or friend on a current topics. Help your kids with their homework...even that subject you despise. Or better yet ask them about what they learned that day. You’ll connect and possibly learn something new.

Stretch Your Body: One of the best ways to spend the time you have set aside for yourself is to improve your physical health through exercise. You don’t need to do strenuous exercise every day, but you should stretch and get your heart rate moving. This will help reduce stress, keep your body in good shape and even help you sleep better at night. Ideas: Take a walk outside, the view is better than on the treadmill. Take a yoga or couples dance class. Stop at points during your day and just take 5-10 deep breaths. Use the stairs or park in the farthest point of the lot. The more you move, the better you’ll feel.

Give of Your Soul: The most rewarding way to work on your overall health and happiness is to do things that are good for your soul. These are the types of activities that require you set aside time to focus on and give to others - but remember; giving is healthy for you too. It helps you grow your relationships with others, feel fulfilled and show how much you care. One of the easiest ways to give to others is to spend time with them. It often doesn’t cost anything but it can be more rewarding and appreciated than anything you do. And the receivers can be anyone from your kids or parents to the homeless and needy. Ideas: Volunteer. This is a broad concept. Get involved with local organizations and share your ideas. You have skills that can help people around you. Organize a family reunion or special event that brings people together. Get involved with a Church or Spiritual group. Foster a pet. It doesn’t matter if you’re 5, 50 or 85 years old, you always have something to give. Let your mind wander on how you can help others and the opportunities will appear.

Expand your Heart: Mother Theresa is quoted saying “We cannot do great things on this Earth, only small things with great love.” We’re always too busy or too broke to do things on a grand scale so keep it small. Expand the amount of love you have for the people in your life and your problems will seem smaller and less tragic. Ideas: Write a small note to each of the people you work with telling them how much you appreciate them. Look people in the eye and thank them. Smiles are contagious (apparently so are butterfly stickers in this town) so spread them. Valentines Day is coming so follow the youth example and buy a silly box of valentines for everyone you know.
      There is a reason the definition of charity is the “practice” of giving versus the “act” of giving. It was Aristotle who said, “We are what we repeatedly do, excellence, then, is not an act but a habit.”

Sleep - It's Good For Your Health!

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By Dr. Randall Hensley, D.C., Hensley Chiropractic


Do you sleep like a baby?...awake every two hours, hungry and needing to use the bathroom? Or are you blessed with the ability to fall asleep the minute your head hits the pillow, sleep all night, and wake up feeling refreshed and ready to go? If you are in the later group, good for you. And I mean, good for you! Sleep is very important in maintaining your health and recovering from illness. Sleep allows your body the down time it needs to replenish, rebuild, and remove stress from your systems. If you are not sleeping well consider the following recommendations for a good night's rest. Remember everyone's sleep solutions differ so finding your perfect remedy is unique to you. Try one or all of them!

In addition to the typical remedies such as avoiding caffeine, sipping chamomile tea, or counting sheep, there are many other factors that can affect your sleep quality and duration. For example having a mattress and pillow that suits your particular preference is very important. If you wake up less than “bright-eyed and bushy-tailed” check your bed. As a rule of thumb if you sleep better at a hotel, your in-laws, or when camping...it's likely your bed. You should also be sure to go to bed and wake up at the same time, even on weekends. This builds consistency in your sleep-wake cycle. This “circadian rhythm” is set by your pituitary gland deep in your brain and is triggered by light entering your eyes. Therefore, be sure to sleep in a dark room and then let bright light or better yet let sunshine greet you in the morning.

Other hints include:

  • making your room colder and avoiding hot baths just prior to retiring. (for some overheating the body delays sleep),
  • take a daily “power nap” for 20 minutes just after lunch,
  • participate in moderate exercise earlier in the day to promote physical tiredness,
  • eat healthy, drink plenty of water, cut back on late night snacks such as ice cream,
  • don't play video games or watch overly stimulating or stressful television (news/horror/etc),
  • quit smoking, and don't drink alcohol before bed.
  • use a “white-noise” machine to block out sleep-disturbing noises.
  • Always try to find ways to lower your emotional stress and learn the not-so-simple act of relaxing.
  • If your brain is racing, keep a paper and pen next to your bed to write down those “must-remember-to-do-tomorrow” notes or “must-not-forget-brilliant-ideas” so your subconscious brain can rest easy.
More advanced relaxation techniques include abdominal breathing, progressive muscle relaxation, massage, visual imagery, or cognitive behavioral therapy. You should also visit your favorite chiropractor, acupuncturist, or health care provider to investigate and treat the cause of your insomnia. Chiropractic adjustments for example can decrease pain and increase the secretion of serotonin and melatonin facilitating better sleep. Lastly, keep a “sleep diary” and record how well you slept, what time you went to bed, what you ate or did the night before, etc. This information can help you and your health care providers identify your sleep issues.

Overall, once you find your “perfect” combination of bedding, environment, preparation, timing, mental attitude toward sleep, and professional help, be consistent and don't give up. Soon that biological clock will chime in rhythm with the clock on the nightstand. Sweet dreams and sleep well. 

21 Şubat 2013 Perşembe

Important Info on tip income, especially if you are doing your own taxes

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Be very sure to include your tip income if you receive tips on your job.  Being a waiter or waitress who earns minimum wage and show NO tip income year after year, is begging to be audited.  You could easily be selected as a random audit.  Include your tip income and eliminate the possibility of the IRS asking questions, or not.

If your pay from your job includes tips, the IRS has a few important reminders about tip income:
  • Tips are taxable. Individuals must pay federal income tax on any tips they receive. The value of non-cash tips, such as tickets, passes or other items of value are also subject to income tax.
  • Include all tips on your return. You must include all tips that you receive during the year on your income tax return. This includes tips you received directly from customers, tips added to credit cards and your share of tips received under a tip-splitting agreement with other employees.
  • Report tips to your employer. If you receive $20 or more in cash tips in any one month, you must report your tips for that month to your employer. Your employer is required to withhold federal income, Social Security and Medicare taxes on the reported tips.
  • Keep a daily log of tips. You can use IRS Publication 1244, Employee's Daily Record of Tips and Report to Employer, to record your tips.
For more information, see IRS Publication 1244 or Publication 531, Reporting Tip Income. Both are available at IRS.gov or by calling 800-TAX-FORM
(800-829-3676).