Social Media Tools the IRS Uses Help You with Your Taxes
When we think of the IRS, few of us think about social media. However, the IRS does recognize that many taxpayers use social media regularly. As a result, you can get answers to tax questions, and get helpful tips year-round by taking advantage of the social media tools offered by the IRS.
Taxpayer Advocate Service: Can the IRS Help You?
Many of us don't think of the IRS as a helpful entity when it comes to resolving problems. However, the IRS does have an independent organization aimed at helping taxpayers figure out what went wrong - and how they can fix it.
3 Tips for Organizing Your Taxes Throughout the Year
Many of us think of tax time only once year for a few weeks or months as we frantically try to gather all of the documentation needed to file taxes. If you stress out during tax season, you can make things easier going forward by organizing your tax information year round.
How to Figure Quarterly Estimated Tax Payments
If you have income from sources other than a "traditional" job, chances are that you need to make quarterly estimated tax payments. Estimated quarterly Federal tax payments for 2012 is April 17th, June 15th, September 17th, and Jan 15 of 2013). If you are a regular W-2 employee, then your taxes are automatically taken out of your paycheck. However, if you make money in another way - even if it's "only" on the side - you might need to pay quarterly estimated taxes.
You might need to make estimated tax payments if any of the following apply (realize for farmers and fisherman the rules are generally different):
- You have your own business: When you have your own business, normally you make estimated payments. Even if it is a side business or a full-time gig, you will most likely need to pay estimated payments.
- You receive investment income: In some cases, your income investments might mean that you need to pay quarterly estimated taxes.
Tax Deductions That Can Be Taken Without Itemizing Your Return
An itemized tax deduction is a qualified expense by which a US taxpayer can claim on their Federal tax returns in order to lower their taxable income. Many tax deductions are subject to the 2% limit, which means you can only claim the amount of total expenses that is 2% above your adjusted gross income (AGI). However, there are tax deductions that can be taken without itemizing your return, called above-the-line tax deductions, and can help you save money even if you take the standard deduction.
Some of these deductions are considered temporary, but the majority of above-the-line tax deductions are the same from one year to the next. Many of the below above line tax deductions have income restrictions, or other restrictions you need to know. When in doubt, reach out to a tax professional or read IRS publication 17.
When to Consider Hiring an Accountant to Prepare Your Taxes
Many of us take pride in being able to prepare our own taxes. After all, there is a measure of satisfaction to be gained when you can say that you filled out all of the forms and took care of all of your own deductions and credits. Besides, if you get stuck, there are plenty of software programs that can guide you in your efforts to prepare your own taxes.
As fulfilling as it can be to do your own taxes, however, it’s important to realize that sometimes it is not in your best interest to take the time to do your own paperwork. In some cases, it’s worth spending the money to hire an accountant to prepare your taxes for you.
I, unfortunately, only discovered the true benefits of this after years of doing taxes on my own. Here are some suggestions to help you avoid making the same mistakes that I did:
Tax Liens, Levies and Seizures Grew Drastically in the Last 10 Years
The IRS has been stepping up enforcement recently, with an increase in audits. Indeed, one in eight millionaires was audited during fiscal year 2011, according to the IRS. The IRS has also reported that it is increasing its efforts to catch tax evaders who move their money offshore.
It’s not just auditing that has increased over the years, though. There has been an increase in liens, levies and seizures during the last 10 years. From 2001 to 2011, the IRS has been more active in making sure that it receives the revenue it feels is due. The increase has been huge, far eclipsing the gains made by tax returns over the same period.
What are Your Options When You Can’t Pay Taxes?
When tax time rolls around, it is not uncommon for many to become worried because they don’t have the money to pay what they owe. This is a reality for many taxpayers.
When it comes to paying what you owe in taxes, you do have options. However, you must be careful about what you choose.
Updates to the IRS Fresh Start Program Helps Taxpayers In Need
One of the most discouraging financial situations to be in has to do with being unable to pay your tax obligation. Thousands of Americans feel this sensation every year. However, the IRS has a program designed to ease some of the burden.
Since a great deal of the burden associated with an inability to pay taxes has to do with failure to pay penalties, the IRS offers the Fresh Start Penalty Relief program to those who qualify.
When Can the Government Take Your Tax Refund?
So, you’ve got a tax refund coming. At least you think you do. If you owe money to the federal government, though, that tax refund might never make it to your bank account. Indeed, the government might decide to seize it in order to offset what you owe. Often, you won’t know that your tax refund isn’t coming until you receive a notice of seizure. This letter comes in the mail, instead of your tax refund, and informs you that your tax refund has been taken by the IRS to pay some debt that you owe to the government.
Before you begin counting on receiving a big refund check, make sure that you truly have that money coming. Here are some times when the federal government can collect your tax refund:
How to Itemize Miscellaneous Tax Deductions
Many of us wonder, as we prepare our taxes, whether or not some of our expenses are deductible. A tax deduction offers you the chance to offset some of your income, reducing your taxable income and what you owe in taxes. However, some tax deductions are harder to categorize than others.
As you fill out your tax form, especially if you itemize using Schedule A, it is possible for you to take deductions for expenses that are considered “miscellaneous.” Some of these expenses can be taken, no matter how big or small. Other expenses, though, are subject to the 2% rule. There are some miscellaneous deductions that you can only take if they exceed 2% of your adjusted gross income.
When Do You Need to File a Schedule B?
As you prepare your taxes, it becomes fairly evident that there are many different forms and schedules to fill out. Which forms you fill out depends on your financial situation, especially where you are getting your money.
Most people are familiar with filling out a Schedule A, which helps you itemize your tax deductions. Several people are even aware of the Schedule C, which is filled out to help you determine profits or losses from a business. But what about the schedule “between” A and C? If you meet certain conditions, you will need to file a Schedule B.
Required Minimum Distribution (RMD) Taxes on Retirement Accounts
One of the realities of tax-advantaged retirement plans is that you eventually have to start withdrawing money from them. With the exception of Roth IRAs, you are required to receive distributions from your accounts each year once you reach a certain age – whether you need the money or not. That can have an impact on your tax bill, and you need to be ready for it.
Does Your Roommate Qualify As a Tax Deduction?
The current economy is changing the makeup of our households. With unemployment high, many are finding that they are supporting relatives and non-relatives alike by allowing them houseroom.
While you might be allowing someone in need of help to live with you out of the goodness of your heart, it is worth considering that your roommate just might be a dependent – and tax-deductible.
How Long Should You Keep Tax Records & Documents?
Do you have a stack of old tax records that you don’t know what to do with? Are you trying to decide what it is you need to keep and what you can throw out? It can certainly be a confusing and daunting task when it comes to deciding what you need to keep and what no longer needs to clutter your home. Your best bet is to hang on to your tax records until the period of limitations is up.
The IRS recommends retaining tax records for the following timeframes:
Should You Adjust Your Tax Withholding for 2012?
As you consider your tax liability this year, it’s a good idea to consider your withholding. When you decide how many exemptions to claim, and how much extra to have withheld from your paycheck, you should do so with consideration toward your needs and your financial situation.
Consider whether it might be time to adjust your tax withholding, and by how much you should change it.
2012 Deadlines & Due Dates for Filing 2011 Income Tax Returns
Your 2011 Federal and state tax returns are due on April 17, 2012. The traditional due date for income tax filings is April 15th each year, but since April 15th falls on a Sunday this year - and with a Federal holiday on April 16th - the tax filing deadline is 4/17/12.
If you cannot file your 2011 federal income tax return and/or your 2011 state income tax return on or before April 17th, 2012, you must request an income tax filing extension by that date.
1099 MISC Reporting Requirements and Deadlines for 2011
When you hire contract workers or outsource work to businesses or individuals who are not employees of your company, you may be required to prepare and send them a 1099-MISC at tax time.
If you pay a company or individual $600 or more in a calendar year, you will need to send a 1099-MISC form to report that income to the IRS, and also give the service provider a document to file with his or her own income taxes.
File an Annual Information Return or Risk Losing Tax Exempt Status
It seems logical: Your charitable organization doesn’t have to pay taxes, so there is no reason to file a tax return. Unfortunately, many tax exempt organizations fall into this line of reasoning – and it’s one that could cost you. Even if your organization doesn’t pay taxes, you still need to file a return. These returns are usually made public, and many people use them as they decide which charities to donate to.
The IRS expects 501(c)(3) organizations to file information returns that offers information on the money that came into the organization, and where the money was used.
How to Get Your Tax Refund Faster
As tax season gets underway, many filers wonder what steps they can take to receive their tax refunds faster. After all, the sooner you have that money, the sooner you can use it for your own purposes.
Thanks to the digital age, and efforts by the IRS to stay on top of technology, it is possible for you to get your tax refund fairly quickly. In fact, it’s possible to receive your tax refund in as little as seven days if you use the most efficient means of filing your tax return.