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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.
23 Şubat 2013 Cumartesi
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:
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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.
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
To contact us Click HERE
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:
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:
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.
- 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.
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.
See if you qualify for an Offer in Compromise
To contact us Click HERE
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.
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
To contact us Click HERE
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
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
To contact us Click HERE
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:
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.
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.
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
To contact us Click HERE
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:
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:
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.
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.
- 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.
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.
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.
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