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2019 Calendar

 

Tax Planning
Payment Due Date
1st
April 19th
2nd
June 21st
3rd
Sept 20th
4th
Jan 18th

 

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flag and eagleUseful Tax Informationflag and eagle

Frequently Overlooked Deductions:

School Credit for Teachers & Counselors:    $ 250.00

Home Office Deductions:   

Portion of Health Insurance for the Self-Employed

Out of Pocket Expenses incurred in providing Charitable Services.

The cost of Car and Phone if you are an employee and use the phone for the convenience 
of your employer and it is required as a condition of your employment.


A.C.A. Affordable Care Act Help a click away!

For your convenience, We have provided the following useful links to get you the best plans available:

Under age 65: http://drakehealth.com/site/svc/egateway?sid=191238

65 & Older: http://drakehealth.com/site/svc/egateway?sid=191238&AGE=65


 

Important Information about Advance Payments of the Premium Tax Credit and Your Tax Return


The Affordable Care Act includes financial assistance in the form of the premium tax credit for eligible taxpayers with moderate incomes who purchase coverage through the Health Insurance Marketplace.

When you purchased coverage for 2014 through the Marketplace, you may have chosen to have the government send advance payments of the premium tax credit to your insurer to lower your monthly insurance premiums. At that time, the Marketplace estimated these credits based on information you provided about your expected household income and family size for the year. 

If you chose to have advance credit payments sent to your insurer, you must file a federal income tax return, even if otherwise not required to file. You will need to reconcile these payments with the amount of premium tax credit you’re eligible for on your tax return. Receiving too much or too little in advance can affect your refund or balance due when you file.
For example, if you had certain life changes during the year and notified the Marketplace, the Marketplace should have adjusted the amount of the advance credit payments sent to your insurer accordingly. If you did not notify the Marketplace about these life changes, the advance credit payments may have been either too high or too low.

Advance credit payments that are lower than the amount of premium tax credit on your tax return will reduce your tax bill or increase your refund.
On the other hand, if your advance credit payments are more than the premium tax credit you are eligible for based on your actual income, you will need to repay the excess amount, subject to certain caps. This will result in a smaller refund or a larger bill when you file your return.  The repayment amount is based on your household income and family size. For more information on the repayment if your household income is less than 400 percent of the federal poverty line, the repayment amount is limited. Taxpayers with household incomes of 400 percent or more of the federal poverty line must repay all of the excess amount. See the instructions for Form 8962, Premium Tax Credit (PTC) for more information on the federal poverty line amounts.

Normally, taxpayers may owe certain penalties for late payments or underpayment of estimated tax. However, to help smooth the process for the first year of the Affordable Care Act, the IRS will waive these penalties for eligible taxpayers if they resulted from repayment of excess advance payments of the premium tax credit.  This has no effect on the fee individuals will pay if they chose not to buy affordable health coverage.

You must complete Form 8962 to claim the premium tax credit and reconcile your advance credit payments with the premium tax credit you are eligible to claim on your return. You should receive Form 1095-A, Health Insurance Marketplace Statement from your Marketplace by early February. This form provides information you will need when completing Form 8962. If you have questions about the information on Form 1095-A for 2014, or about receiving Form 1095-A for 2014, you should contact your Marketplace directly.  

Remember that filing electronically is the best and simplest way to file a complete and accurate tax return as it guides individuals and tax preparers through the process and does all the math. Electronic Filing options include free volunteer assistance, IRS Free File for taxpayers who qualify, commercial software, and professional assistance.
 
More Information
Find out more about advanced credit payments and other tax-related provisions of the health care law at IRS.gov/aca.

 

 


IRS Special Edition Tax Tip 2015-13

 

What You Should Know if You Get Tipped at Work


If you get tips on the job, you should know some things about tips and taxes.


Here are a few tips from the IRS to help you file and report your tip income correctly:


• Show all tips on your return.  You must report all tips you receive on your federal tax return. This includes the value of tips that are not in cash. Examples include items such as tickets, passes or other items.


• All tips are taxable.  You must pay tax on all tips you received during the year. This includes tips directly from customers and tips added to credit cards. It also includes 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 tips in any one month, you must report your tips for that month to your employer. You should only include cash, check and credit card tips you received. Do not report the value of any noncash tips on this report. Your employer must withhold federal income, Social Security and Medicare taxes on the reported tips. 


• Keep a daily log of tips.  Use Publication 1244, Employee's Daily Record of Tips and Report to Employer, to record your tips. This will help you report the correct amount of tips on your tax return.


For more on this topic, see Publication 531, Reporting Tip Income. You can get it on IRS.gov.
If you found this Tax Tip helpful, please share it through your social media platforms. A great way to get tax information is to use IRS Social Media. You can also subscribe to IRS Tax Tips or any of our e-news subscriptions.


Additional IRS Resources:

IRS YouTube Videos:

 

 


 

Top 10 Tax Facts about Exemptions and Dependents


Nearly everyone can claim an exemption on their tax return. It usually lowers your taxable income.
In most cases, that reduces the amount of tax you owe for the year.
Here are the top 10 tax facts about exemptions to help you file your tax return.

1. E-file your tax return.  Filing electronically is the easiest way to file a complete and accurate tax return. The software that you use to e-file will help you determine the number of exemptions that you can claim. E-file options include free Volunteer Assistance, IRS Free File, commercial software and professional assistance.


2. Exemptions cut income.  There are two types of exemptions. The first type is a personal exemption. The second type is an exemption for a dependent. You can usually deduct $4,000 for each exemption you claim on your 2015 tax return.


3. Personal exemptions.  You can usually claim an exemption for yourself. If you’re married and file a joint return, you can claim one for your spouse, too. If you file a separate return, you can claim an exemption for your spouse only if your spouse:
• had no gross income,
• is not filing a tax return, and
• was not the dependent of another taxpayer.


4. Exemptions for dependents.  You can usually claim an exemption for each of your dependents. A dependent is either your child or a relative who meets a set of tests. You can’t claim your spouse as a dependent. You must list the Social Security number of each dependent you claim on your tax return. For more on these rules, see IRS Publication 501, Exemptions, Standard Deduction, and Filing Information. You can get Publication 501 on IRS.gov. Just click on the “Forms & Pubs” tab on the home page.


5. Report health care coverage. The health care law requires you to report certain health insurance information for you and your family. The individual shared responsibility provision requires you and each member of your family to either:
• Have qualifying health insurance, called minimum essential coverage, or
• Have an exemption from this coverage requirement, or
• Make a shared responsibility payment when you file your 2014 tax return.
Visit IRS.gov/ACA for more on these rules.


6. Some people don’t qualify.  You normally may not claim married persons as dependents if they file a joint return with their spouse. There are some exceptions to this rule.


7. Dependents may have to file.  A person who you can claim as your dependent may have to file their own tax return. This depends on certain factors, like the amount of their income, whether they are married and if they owe certain taxes.


8. No exemption on dependent’s return.  If you can claim a person as a dependent, that person can’t claim a personal exemption on his or her own tax return. This is true even if you don’t actually claim that person on your tax return. This rule applies because you can claim that person is your dependent.
9. Exemption phase-out.  The $4,000 per exemption is subject to income limits. This rule may reduce or eliminate the amount you can claim based on the amount of your income. See Publication 501 for details.


10. Try the IRS online tool.  Use the Interactive Tax Assistant tool on IRS.gov to see if a person qualifies as your dependent. 
If you found this Tax Tip helpful, please share it through your social media platforms. A great way to get tax information is to use IRS Social Media. You can also subscribe to IRS Tax Tips or any of our e-news subscriptions.
IRS YouTube Videos:

  • Welcome to Free FileEnglish
  • First Time Filing a Tax Return?English
  • Interactive Tax AssistantEnglish| ASL

IRS Podcast:

  • First Time Filing a Tax Return?Spanish

 


 

Ten IRS Tips about Free Tax Preparation


Each year, millions of people have their taxes prepared for free.
The IRS’s Volunteer Income Tax Assistance or and Tax Counseling for the Elderly programs have helped people for more than 40 years.
Many people know these programs by their initials. Here are 10 tips from the IRS about VITA and TCE:


1. Trained and Certified.  The IRS works with local community groups to train and certify VITA and TCE volunteers.


2. VITA Program.  VITA generally offers free tax return preparation to people who earn $53,000 or less.


3. TCE Program.  TCE is mainly for people age 60 or older. The program specializes in tax issues unique to seniors. AARP participates in the TCE program and helps people with low to moderate incomes.

4. Free E-file.  VITA and TCE provide free electronic filing. E-filing is the safest, most accurate way to file your tax return. Combining e-file with direct deposit is the fastest way to get your refund.

5. Tax Benefits.  Using VITA and TCE can help you get all the tax benefits for which you are eligible. For example, you may qualify for the Earned Income Tax Credit or the Credit for the Elderly. You can also get help with the new Health Care Law tax provisions.

6. Bilingual Help.  Some VITA and TCE sites provide bilingual help for people who speak limited English.

7. Help for Military.  VITA offers free tax assistance to members of the military and their families. Volunteers help with many military tax issues. These may include the special rules and tax benefits that apply to those serving in combat zones.

8. “Self-Prep” Option.  At some VITA sites, you can prepare your own federal and state tax returns using free web-based software. This is an option if you don’t have a home computer or need much help. Volunteers are on site to guide you if you need help. In most cases, this option offers free tax return preparation software and e-filing to people who earn $60,000 or less.

9. Local Sites.  The IRS partners with community organizations to offer free tax services at thousands of sites around the nation. Sites start to open in late January and early February.

10. Visit IRS.gov.  You can visit IRS.gov to find a VITA site near you. Search the word “VITA” and click on “Free Tax Return Preparation for You by Volunteers.” Site information is also available by calling the IRS at 800-906-9887. To locate the nearest AARP Tax-Aide site, visit aarp.org, or call 888-227-7669.
If you found this Tax Tip helpful, please share it through your social media platforms.

A great way to get tax information is to use IRS Social Media. You can also subscribe to IRS Tax Tips or any of our e-news subscriptions.

 


 

Choose the Right Filing Status


It’s important that you use the correct filing status when you file your tax return. Your status can affect the amount of tax you owe for the year. It may even affect whether you must file a tax return. Keep in mind that your marital status on Dec. 31 is your status for the whole tax year. Sometimes more than one filing status may apply to you. If that happens, choose the one that allows you to pay the lowest tax.


IRS e-file is the easiest and most accurate way to file your tax return. The tax software you use to e-file helps you choose the right filing status. Remember, most people can use tax software and e-file for free with IRS Free File.

The free service is only available through the IRS.gov website.
Just click on “Free File” on the IRS.gov home page.
Here’s a list of the five filing statuses:

1. Single.  This status normally applies if you aren’t married. It applies if you are divorced or legally separated under state law.

2. Married Filing Jointly.  If you’re married, you and your spouse can file a joint tax return together. If your spouse died in 2014, you often can file a joint return for that year.

3. Married Filing Separately.  A married couple can choose to file two separate tax returns. This may benefit you if it results in less tax than if you file a joint tax return. It’s a good idea for you to prepare your taxes both ways before you choose. You can also use it if you want to be responsible only for your own tax.

4. Head of Household.  In most cases, this status applies if you are not married, but there are some special rules. You also must have paid more than half the cost of keeping up a home for yourself and a qualifying person. Don’t choose this status by mistake. Be sure to check all the rules before you file.

5. Qualifying Widow(er) with Dependent Child.  This status may apply to you if your spouse died during 2012 or 2013 and you have a dependent child. Certain other conditions also apply.

Note for same-sex married couples. In most cases, you and your spouse must use a married filing status on your federal tax return if you were legally married in a state or foreign country that recognizes same-sex marriage. That’s true even if you now live in a state that doesn’t recognize same-sex marriage. Visit IRS.gov for more information.

Visit IRS.gov and click on the “Filing” tab for help with all your federal income tax filing needs. Use the Interactive Tax Assistant tool to help you choose the right filing status. For more on this topic see Publication 501, Exemptions, Standard Deduction, and Filing Information. Go to IRS.gov/forms to view, download or print the tax products you need.

If you found this Tax Tip helpful, please share it through your social media platforms. A great way to get tax information is to use IRS Social Media. You can also subscribe to IRS Tax Tips or any of our e-news subscriptions.


Additional IRS Resources:

IRS YouTube Videos:

IRS Podcasts:

  • First Time Filing a Tax Return?Spanish
  • Tax Information About Same-Sex MarriageEnglish | Spanish
  • Interactive Tax AssistantEnglish

 


 

Top Four Year-End IRA Reminders


Individual Retirement Accounts are an important way to save for retirement. If you have an IRA or may open one soon, there are some key year-end rules that you should know. Here are the top four reminders on IRAs from the IRS:

1. Know the limits.  You can contribute up to a maximum of $5,500 ($6,500 if you are age 50 or older) to a traditional or Roth IRA. If you file a joint return, you and your spouse can each contribute to an IRA even if only one of you has taxable compensation. In some cases, you may need to reduce your deduction for traditional IRA contributions. This rule applies if you or your spouse has a retirement plan at work and your income is above a certain level. You have until April 15, 2015, to make an IRA contribution for 2014.

2. Avoid excess contributions.  If you contribute more than the IRA limits for 2014, you are subject to a six percent tax on the excess amount. The tax applies each year that the excess amounts remain in your account. You can avoid the tax if you withdraw the excess amounts from your account by the due date of your 2014 tax return (including extensions).

3. Take required distributions.  If you’re at least age 70½, you must take a required minimum distribution, or RMD, from your traditional IRA. You are not required to take a RMD from your Roth IRA. You normally must take your RMD by Dec. 31, 2014. That deadline is April 1, 2015, if you turned 70½ in 2014. If you have more than one traditional IRA, you figure the RMD separately for each IRA. However, you can withdraw the total amount from one or more of them. If you don’t take your RMD on time you face a 50 percent excise tax on the RMD amount you failed to take out.

4. Claim the saver’s credit.  The formal name of the saver’s credit is the retirement savings contributions credit. You may qualify for this credit if you contribute to an IRA or retirement plan. The saver’s credit can increase your refund or reduce the tax you owe. The maximum credit is $1,000, or $2,000 for married couples. The credit you receive is often much less, due in part because of the deductions and other credits you may claim.

If you found this Tax Tip helpful, please share it through your social media platforms. A great way to get tax information is to use IRS Social Media. Subscribe to IRS Tax Tips or any of our e-news subscriptions.

Additional IRS Resources:

  • Publication 590, Individual Retirement Arrangements (IRAs)
  • Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts

IRS YouTube Videos:

IRS Podcasts:


 


Still Time to Act to Avoid Surprises at Tax-Time
Even though only a few months remain in 2014, you still have time to act so you aren’t surprised at tax-time next year. You should take steps now to avoid owing more taxes or getting a larger refund than you expect.  Here are some actions you can take to bring the taxes you pay in advance closer to what you’ll owe when you file your tax return:

  • Adjust your withholding.  If you’re an employee and you think that your tax withholding will fall short of your total 2014 tax liability, you may be able to avoid an unexpected tax bill by increasing your withholding. If you are having too much tax withheld, you may get a larger refund than you expect. In either case, you can complete a new Form W-4, Employee's Withholding Allowance Certificate and give it to your employer. Enter the added amount you want withheld from each paycheck until the end of the year on Line 6 of the W-4 form. You usually can have less tax withheld by increasing your withholding allowances on line 5. Use the IRS Withholding Calculator tool on IRS.gov to help you fill out the form.
  • Report changes in circumstances.  If you purchase health insurance coverage through the Health Insurance Marketplace, you may receive advance payments of the premium tax credit in 2014. It is important that you report changes in circumstances to your Marketplace so you get the proper type and amount of premium assistance. Some of the changes that you should report include changes in your income, employment, or family size. Advance credit payments help you pay for the insurance you buy through the Marketplace. Reporting changes will help you avoid getting too much or too little premium assistance in advance.
  • Change taxes with life events.  You may need to change the taxes you pay when certain life events take place. A change in your marital status or the birth of a child can change the amount of taxes you owe. When they happen you can submit a new Form W–4 at work or change your estimated tax payment.
  • Be accurate on your W-4.  When you start a new job you fill out a Form W-4. It’s important for you to accurately complete the form. For example, special rules apply if you work two jobs or you claim tax credits on your tax return. Your employer will use the form to figure the amount of federal income tax to withhold from your pay.
  • Pay estimated tax if required.  If you get income that’s not subject to withholding you may need to pay estimated tax. This may include income such as self-employment, interest, or rent. If you expect to owe a thousand dollars or more in tax, and meet other conditions, you may need to pay this tax. You normally pay the tax four times a year. Use Form 1040-ES, Estimated Tax for Individuals, to figure and pay the tax.

For more see Publication 505, Tax Withholding and Estimated Tax. You can get it and IRS forms on IRS.gov, or call 800-TAX-FORM (800-829-3676) to get them by mail.
If you found this Tax Tip helpful, please share it through your social media platforms. A great way to get tax information is to use IRS Social Media and subscribe to IRS Tax Tips or any of our e-news subscriptions.
Additional IRS Resources:

  • Publication 5152: Report changes to the Marketplace as they happen  English | Spanish

IRS YouTube Videos:

IRS Podcasts:

 


 

IRS Special Tax Tip 2014-43

  1. IRS Announces 2015 Pension Plan Limitations; Taxpayers May Contribute up to $18,000 to their 401(k) plans in 2015
  2. Disregard Oct. 23 Email about e-Services Products
  3. YouTube: Form 5500-EZ Pilot Penalty Relief Program
  4. Technical Guidance

1.  IRS Announces 2015 Pension Plan Limitations; Taxpayers May Contribute up to $18,000 to their 401(k) plans in 2015


The Internal Revenue Service announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2015. Many of the pension plan limitations will change for 2015 because the increase in the cost-of-living index met the statutory thresholds that trigger adjustments.
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2.  Disregard Oct. 23 Email about e-Services Products


If you received an Oct. 23 email stating you are eligible for IRS e-Services Incentive Products (TDS, DA, EAR), please disregard as this email was sent in error.  The IRS apologizes for any inconvenience this may have caused.
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3.  YouTube: Form 5500-EZ Pilot Penalty Relief Program


Learn about the pilot penalty relief program for late filed Form 5500-EZs by watching this new YouTube video. For more information, go to www.IRS.gov and type "form 5500 corner" in the search box.
Watch this and other videos on the IRS YouTube Channel.
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4.  Technical Guidance


Notice 2014-66 provides a special rule that enables qualified defined contribution plans to provide lifetime income by offering, as investment options, a series of target date funds (TDFs) that include deferred annuities among their assets, even if some of the TDFs within the series are available only to older participants. This special rule provides that, if certain conditions are satisfied, a series of TDFs in a defined contribution plan is treated as a single right or feature for purposes of the nondiscrimination requirements of Section 401(a)(4) of the Internal Revenue Code. This permits the TDFs to satisfy those nondiscrimination requirements as they apply to rights or features even if one or more of the TDFs considered on its own would not satisfy those requirements.


 

New Tips For the Coming Year

 

1.  Renew Your 2015 PTIN before Dec. 31


It is now Preparer Tax Identification Number (PTIN) renewal season.
All PTINs expire on Dec. 31 and must be renewed annually. You must have a valid PTIN if you plan to prepare any federal tax returns for compensation or you are an enrolled agent.
For more information visit the IRS Tax Professional PTIN System homepage.
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2.  Tax Tip Offers Information on Employer Responsibilities under the Affordable Care Act


If you are an employer, the number of employees in your business will affect what you need to know about the Affordable Care Act (ACA), according to a new IRS Tax Tip. The Tax Tip offers information on applicable large employers, employer shared responsibility provisions of the healthcare law, the small business health care tax credit and business reporting requirements.
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3.  Technical Guidance


Revenue Ruling 2014-28 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, the adjusted federal long-term tax-exempt rate. These rates are determined as prescribed by Section 1274.

 

 


 

New Helpful Information

Affordable Care Act – Individuals  

    
New IRS Publication Helps You Find out if You Qualify for a Health Coverage Exemption
Taxpayers who might qualify for an exemption from having qualifying health coverage and making a payment should review a new IRS publication for information about these exemptions. Publication 5172, Health Coverage Exemptions, which includes information about how you get an exemption, is available on IRS.gov/aca.

The Affordable Care Act calls for each individual to have qualifying health insurance coverage for each month of the year, have an exemption, or make an individual shared responsibility payment when filing his or her federal income tax return.
You may be exempt if you:

  • Have no affordable coverage options because the minimum amount you must pay for the annual premiums is more than eight percent of your household income,
  • Have a gap in coverage for less than three consecutive months, or
  • Qualify for an exemption for one of several other reasons, including having a hardship that prevents you from obtaining coverage or belonging to a group explicitly exempt from the requirement.

On IRS.gov/ACA, you can find a comprehensive list of the coverage exemptions.
How you get an exemption depends upon the type of exemption. You can obtain some exemptions only from the Marketplace in the area where you live, others only from the IRS when you file your income tax return, and others from either the Marketplace or the IRS.
Additional information about exemptions is available on the Individual Shared Responsibility Provision web page on IRS.gov. The page includes a link to a chart that shows the types of exemptions available and how to claim them. For additional information about how to get exemptions that may be granted by the Marketplace, visit HealthCare.gov/exemptions.

 


Other Helpful Information

To check the status of a refund:

1-800-829-4477 or www.irs.gov and click on “Where’s My Refund”

To find any corporation: www.sunbiz.org

To pay taxes by credit card: Call or Visit

Link 2Gov Corporation at:

1-888-PAY-1040 (1-800-729-1040), toll free

www.PAY1040.com  Customer Service 1-888-658-5465, toll free

Official Payments Corporation at:

1-800-2PAYTAX (1-800-272-9829), toll free

www.officialpayments.com Customer Service 1-877-754-4413


AMENDED TAX RETURNS

RETURNS FILE ON OR BEFORE APRIL 17TH, (DEADLINE TO AMEND IS APRIL 17TH 2017) MUST BE FILED WITHIN "THRE YEARS"

IN ORDER TO RECEIVE A REFUND!

THE RETURN MUST BE FILED WITHIN 'TWO YEARS"


IRS Summertime Tax Tip 2014-23


Back-to-School Tax Credits
Are you, your spouse or a dependent heading off to college? If so, here’s a quick tip from the IRS: some of the costs you pay for higher education can save you money at tax time. Here are several important facts you should know about education tax credits:   

  • American Opportunity Tax Credit.  The AOTC can be up to $2,500 annually for an eligible student. This credit applies for the first four years of higher education. Forty percent of the AOTC is refundable. That means that you may be able to get up to $1,000 of the credit as a refund, even if you don’t owe any taxes.
  • Lifetime Learning Credit.  With the LLC, you may be able to claim a tax credit of up to $2,000 on your federal tax return. There is no limit on the number of years you can claim this credit for an eligible student.
  • One credit per student.  You can claim only one type of education credit per student on your federal tax return each year. If more than one student qualifies for a credit in the same year, you can claim a different credit for each student.  For example, you can claim the AOTC for one student and claim the LLC for the other student.
  • Qualified expenses.  You may include qualified expenses to figure your credit.  This may include amounts you pay for tuition, fees and other related expenses for an eligible student. Refer to IRS.gov for more about the additional rules that apply to each credit.
  • Eligible educational institutions.  Eligible schools are those that offer education beyond high school. This includes most colleges and universities. Vocational schools or other postsecondary schools may also qualify.
  • Form 1098-T.  In most cases, you should receive Form 1098-T, Tuition Statement, from your school. This form reports your qualified expenses to the IRS and to you. You may notice that the amount shown on the form is different than the amount you actually paid. That’s because some of your related costs may not appear on Form 1098-T. For example, the cost of your textbooks may not appear on the form, but you still may be able to claim your textbook costs as part of the credit. Remember, you can only claim an education credit for the qualified expenses that you paid in that same tax year.
  • Nonresident alien.  If you are in the U.S. on an F-1 student visa, you usually file your federal tax return as a nonresident alien. You can’t claim an education credit if you were a nonresident alien for any part of the tax year unless you elect to be treated as a resident alien for federal tax purposes. To learn more about these rules see Publication 519, U.S. Tax Guide for Aliens.
  • Income limits. These credits are subject to income limitations and may be reduced or eliminated, based on your income.

For more information, visit the Tax Benefits for Education Information Center on IRS.gov. Also, check Publication 970, Tax Benefits for Education. You can get it on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Additional IRS Resources:

IRS YouTube Videos:

IRS Podcasts:

 


IRS Special Edition Tax Tip 2014-17


IRS Updates Phone Scams Warning


The IRS is again warning the public about phone scams that continue to claim victims all across the country. In these scams, thieves make unsolicited phone calls to their intended victims. Callers fraudulently claim to be from the IRS and demand immediate payment of taxes by a prepaid debit card or wire transfer. The callers are often hostile and abusive.

The Treasury Inspector General for Tax Administration has received 90,000 complaints about these scams. TIGTA estimates that thieves have stolen an estimated $5 million from about 1,100 victims. To avoid becoming a victim of these scams, you should know:

  • The IRS will first contact you by mail if you owe taxes, not by phone.
  • The IRS never asks for credit, debit or prepaid card information over the phone.
  • The IRS never insists that you use a specific payment method to pay your tax.
  • The IRS never requests immediate payment over the telephone.
  • The IRS will always treat you professionally and courteously. 

Scammers may tell would-be victims that they owe money and that they must pay what they owe immediately. They may also tell them that they are entitled to a large refund. Other characteristics of these scams include:

  • Scammers use fake names and IRS badge numbers to identify themselves.
  • Scammers may know the last four digits of your Social Security number.
  • Scammers spoof caller ID to make the phone number appear as if the IRS is calling.
  • Scammers may send bogus IRS emails to victims to support their bogus calls.
  • Victims hear background noise of other calls to mimic a call site.
  • After threatening victims with jail time or driver’s license revocation, scammers hang up. Others soon call back pretending to be from the local police or DMV, and caller ID again supports their claim.

If you get a phone call from someone claiming to be from the IRS, here’s what you should do:

  • If you know you owe taxes or you think you might owe taxes, call the IRS at 800-829-1040. IRS employees can help you with a payment issue if you owe taxes.
  • If you know you don’t owe taxes or don’t think that you owe any taxes, then call and report the incident to TIGTA at 800-366-4484.
  • If scammers have tried this scam on you, you should also contact the Federal Trade Commission and use their “FTC Complaint Assistant” at FTC.gov. Please add "IRS Telephone Scam" to the comments of your complaint.

The IRS encourages you to be vigilant against phone and email scams that use the IRS as a lure. Visit the genuine IRS website, IRS.gov, to learn how to report tax fraud and for more information on what you can do to avoid becoming a victim.

 

 


IRS Summertime Tax Tip 2014-19
 


Miscellaneous Deductions Can Cut Taxes

You may be able to deduct certain miscellaneous costs you pay during the year. Examples include employee expenses and fees you pay for tax advice. If you itemize, these deductions could lower your tax bill. 

Here are some things the IRS wants you to know about miscellaneous deductions:

Deductions Subject to the Two Percent Limit.  You can deduct most miscellaneous costs only if their total is more than two percent of your adjusted gross income. These include expenses such as:

  • Unreimbursed employee expenses.
  • Expenses related to searching for a new job in the same line of work.
  • Certain work clothes and uniforms.
  • Tools needed for your job.
  • Union dues.
  • Work-related travel and transportation.


Deductions Not Subject to the Two Percent Limit.  Some deductions are not subject to the two percent limit. They include:

  • Certain casualty and theft losses. Generally, this applies to damaged or stolen property that you held for investment. This includes items such as stocks, bonds and works of art.
  • Gambling losses up to the amount of your gambling winnings.
  • Losses from Ponzi-type investment schemes.

There are many expenses that you can’t deduct. For example, you can’t deduct personal living or family expenses. You claim allowable miscellaneous deductions on Schedule A, Itemized Deductions.

For more about this topic see Publication 529, Miscellaneous Deductions. You can get it on IRS.gov or by calling 800-TAX-FORM (800-829-3676).


Additional IRS Resources:


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IRS Summer Tax Tip 2014-11

Request a Transcript or Copy of a Prior Year Tax Return

You may need copies of your filed tax returns for many reasons. For example, they can help you prepare future tax returns. You’ll need them if you have to amend a prior year tax return. You often need them when you apply for a loan to buy a home or to start a business. You may need them if you apply for student aid. If you can’t find your copies, the IRS can give you a transcript of the information you need, or a copy of your tax return. Here’s how to get your federal tax return information from the IRS:

• Transcripts are free and you can get them for the current year and the past three years. In most cases, a transcript includes the tax information you need.

• A tax return transcript shows most line items from the tax return that you filed. It also includes items from any accompanying forms and schedules that you filed. It doesn’t reflect any changes you or the IRS made after you filed your original return.

• A tax account transcript includes your marital status, the type of return you filed, your adjusted gross income and taxable income. It does include any changes that you or the IRS made to your tax return after you filed it.

• You can get your free transcripts immediately online. You can also get them by phone, by mail or by fax within five to 10 days from the time IRS receives your request.

- To view and print your transcripts online, go to IRS.gov and use the Get Transcript tool.
- To order by phone, call 800-908-9946 and follow the prompts. You can also request your transcript using your smartphone with the IRS2Go mobile phone app.
- To request an individual tax return transcript by mail or fax, complete Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript. Businesses and individuals who need a tax account transcript should use Form 4506-T, Request for Transcript of Tax Return.

• If you need a copy of your filed and processed tax return, it will cost $50 for each tax year. You should complete Form 4506, Request for Copy of Tax Return, to make the request. Mail it to the IRS address listed on the form for your area. Copies are generally available for the current year and past six years. You should allow 75 days for delivery. 

• If you live in a federally declared disaster area, you can get a free copy of your tax return. Visit IRS.gov for more disaster relief information.

Tax forms are available 24/7 on IRS.gov. You can also call 800-TAX-FORM (800-829-3676) to get them by mail.


Additional IRS Resources:

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Issue Number:    HCTT-2014-14
IRS.gov has information about the health care law and its effect on your taxes

There is a lot of information in the news and online about the health care law and its effect on your taxes. For the most current answers to questions you may have, visit IRS.gov/aca. http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions-Home

From the individual shared responsibility provision to the definition of minimum essential coverage, the IRS website covers a wide range of health care topics and how they relate to your taxes.

The IRS knows that many taxpayers want to know how the health care law will affect them when filing their taxes next year. When questions come up, IRS.gov is a great place for taxpayers to begin finding the answers they need – when they need them.

This information is especially important for individuals because several provisions of the law went into effect this year, such as the premium tax credit and the requirement for individuals to have minimum essential coverage. The IRS will continue to post information that is relevant and helpful to you as you get ready to prepare and file your 2014 tax return.

At IRS.gov/aca, you’ll find frequently asked questions, legal guidance, and links to other useful sites. You can also access valuable information about specific topics, including the premium tax credit for individuals, rules and responsibilities for employers, as well as tax provisions for insurers, tax-exempt organizations and other businesses.

Aside from IRS.gov, we also post new guidance and information about the health care law on the official IRS TwitterTumblr   and Facebook  accounts. You can also access a Web-based IRS flyer, Health Care Law Online Resources,  for links to other federal agencies that also have a role in the health care law.

More Information

Find out more about the tax-related provisions of the health care law at IRS.gov/aca
 
Find out more about the health care law at HealthCare.gov 
 
Subscribe to IRS Tax Tips to get easy-to-read tips via e-mail from the IRS.

 


IRS Summertime Tax Tip 2014-07

Special Tax Benefits for Members of the Armed Forces


Special tax benefits apply to members of the U. S. Armed Forces. For example, some types of pay are not taxable. And special rules may apply to some tax deductions, credits and deadlines. Here are ten of those benefits:


1. Deadline Extensions.  Some members of the military, such as those who serve in a combat zone, can postpone some tax deadlines. If this applies to you, you can get automatic extensions of time to file your tax return and to pay your taxes.

2. Combat Pay Exclusion.  If you serve in a combat zone, certain combat pay you get is not taxable. You won’t need to show the pay on your tax return because combat pay isn’t included in the wages reported on your Form W-2, Wage and Tax Statement. Service in support of a combat zone may qualify for this exclusion.

3. Earned Income Tax Credit.  If you get nontaxable combat pay, you may choose to include it to figure your EITC. You would make this choice if it increases your credit. Even if you do, the combat pay stays nontaxable.

4. Moving Expense Deduction.  You may be able to deduct some of your unreimbursed moving costs. This applies if the move is due to a permanent change of station,

5. Uniform Deduction.  You can deduct the costs of certain uniforms that regulations prohibit you from wearing while off duty. This includes the costs of purchase and upkeep. You must reduce your deduction by any allowance you get for these costs.

6. Signing Joint Returns.  Both spouses normally must sign a joint income tax return. If your spouse is absent due to certain military duty or conditions, you may be able to sign for your spouse. In other cases when your spouse is absent, you may need a power of attorney to file a joint return.

7. Reservists’ Travel Deduction.  If you’re a member of the U.S. Armed Forces Reserves, you may deduct certain costs of travel on your tax return. This applies to the unreimbursed costs of travel to perform your reserve duties that are more than 100 miles away from home.

8. Nontaxable ROTC Allowances.  Active duty ROTC pay, such as pay for summer advanced camp, is taxable. But some amounts paid to ROTC students in advanced training are not taxable. This applies to educational and subsistence allowances.

9. Civilian Life.  If you leave the military and look for work, you may be able to deduct some job hunting expenses. You may be able to include the costs of travel, preparing a resume and job placement agency fees. Moving expenses may also qualify for a tax deduction.

10. Tax Help.  Most military bases offer free tax preparation and filing assistance during the tax filing season. Some also offer free tax help after April 15.
For more on this topic, refer to Publication 3, Armed Forces’ Tax Guide. It’s available on IRS.gov, or call 800-TAX-FORM (800-829-3676) to get it by mail.

Additional IRS Resources:

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Issue Number:    HCTT-2014-15

 

IRS: Now is the Time for a Mid-Year Premium Tax Credit Checkup


If you have insurance through the Health Insurance Marketplace, you may be getting advance payments of the premium tax credit. These are paid directly to your insurance company to lower your monthly premium. Changes in your income or family size may affect your premium tax credit. If your circumstances have changed, the time is right for a mid-year checkup to see if you need to adjust the premium assistance you are receiving. You should report changes that hav e occurred since you signed up for your health insurance plan to your Marketplace as they occur.

Changes in circumstances that you should report to the Marketplace include, but are not limited to:

  • an increase or decrease in your income
  • marriage or divorce
  • the birth or adoption of a child
  • starting a job with health insurance
  • gaining or losing your eligibility for other health care coverage
  • changing your residence

Reporting the changes will help you avoid getting too much or too little advance payment of the premium tax credit. Getting too much means you may owe additional money or get a smaller refund when you file your taxes. Getting too little could mean missing out on premium assistance to reduce your monthly premiums.

Repayments of excess premium assistance may be limited to an amount between $400 and $2,500 depending on your income and filing status. However, if advance payment of the premium tax credit was made but your income for the year turns out to be too high to receive the premium tax credit, you will have to repay all of the payments that were made on your behalf, with no limitation. Therefore, it is important that you report changes in circumstances that may have occurred since you signed up for your plan.

Changes in circumstances also may qualify you for a special enrollment period to change or get insurance through the Marketplace. In most cases, if you qualify for the special enrollment period, you will have sixty days to enroll following the change in circumstances. You can find Information about special enrollment at HealthCare.gov.
More Information
Find out more about the premium tax credit and other tax-related provisions of the health care law at IRS.gov/aca.
Subscribe to IRS Tax Tips to get easy-to-read tips via e-mail from the IRS.

 


 

IRS Summertime Tax Tip 2014-08

Top Ten Tax Facts if You Sell Your Home


Do you know that if you sell your home and make a profit, the gain may not be taxable? That’s just one key tax rule that you should know. Here are ten facts to keep in mind if you sell your home this year.

1. If you have a capital gain on the sale of your home, you may be able to exclude your gain from tax. This rule may apply if you owned and used it as your main home for at least two out of the five years before the date of sale.

2. There are exceptions to the ownership and use rules. Some exceptions apply to persons with a disability. Some apply to certain members of the military and certain government and Peace Corps workers. For details see Publication 523, Selling Your Home.

3. The most gain you can exclude is $250,000. This limit is $500,000 for joint returns. The Net Investment Income Tax will not apply to the excluded gain.

4. If the gain is not taxable, you may not need to report the sale to the IRS on your tax return.

5. You must report the sale on your tax return if you can’t exclude all or part of the gain. And you must report the sale if you choose not to claim the exclusion. That’s also true if you get Form 1099-S, Proceeds From Real Estate Transactions. If you report the sale you should review the Questions and Answers on the Net Investment Income Tax on IRS.gov.

6. Generally, you can exclude the gain from the sale of your main home only once every two years.

7. If you own more than one home, you may only exclude the gain on the sale of your main home. Your main home usually is the home that you live in most of the time.

8. If you claimed the first-time homebuyer credit when you bought the home, special rules apply to the sale. For more on those rules see Publication 523.

9. If you sell your main home at a loss, you can’t deduct it.

10. After you sell your home and move, be sure to give your new address to the IRS. You can send the IRS a completed Form 8822, Change of Address, to do this.

Important note about the Premium Tax Credit. If you receive advance payment of the Premium Tax Credit in 2014 it is important that you report changes in circumstances, such as changes in your income or family size, to your Health Insurance Marketplace. You should also notify the Marketplace when you move out of the area covered by your current Marketplace plan. Advance payments of the premium tax credit provide financial assistance to help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes will help you get the proper type and amount of financial assistance so you can avoid getting too much or too little in advance.

If you still need to do your 2013 taxes, use IRS e-file to prepare and file your tax return. The tax software will do most of the hard work for you. You can use IRS e-file through Oct. 15. If you file a paper return, you may use the worksheets in Publication 523 to help you file.

For more on the sale of a home see Publication 523 on IRS.gov. You can call 800-TAX-FORM (800-829-3676) to get it by mail.

Additional IRS Resources:

  • Publication 5152: Report changes to the Marketplace as they happen  English | Spanish

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IRS Summertime Tax Tip 2014-04
 

Avoid Summertime Tax Scams


Ah, summertime! Warm days, rest and recreation and…tax scams. Thieves don’t stop victimizing unsuspecting taxpayers with their scams after April 15. Identity theft, phone and phishing scams happen year-round. Those three top the IRS’s ‘Dirty Dozen’ list of tax scams this year. Here’s some important information you should know about these common tax scams:


1. Identity Theft.  Identity thieves steal personal and financial information to commit fraud or other crimes. This can include your Social Security number or bank information. An identity thief may file a phony tax return to claim a fraudulent refund.

The IRS has a special identity protection page on IRS.gov. It has many resources you can use to reduce your risk of becoming a victim. The page can also tell you what steps to take if you are a victim of identity theft and need help. This includes how and when you should contact the IRS Identity Protection Specialized Unit.

2. Phone Scams.  In these scams, thieves pose as the IRS and call would-be victims with one goal in mind: to steal their money. Callers will tell you that you owe taxes and demand immediate payment. They will tell you that you must pay the bogus tax bill with a pre-loaded debit card or wire transfer. The callers are often abusive and threaten arrest or deportation. They may know the last four digits of your Social Security number. They also rig caller ID to falsely show that the call is from the IRS.

Keep in mind that if a person owes taxes, the IRS will first contact them by mail, not by phone. The IRS doesn’t ask for payment with a pre-paid debit card or wire transfer. If you owe, or think you might owe federal taxes and you get one of these calls, hang up.

Call the IRS at 800-829-1040. The IRS will work with you to pay what you owe. If you don’t owe taxes, call and report the incident to the Treasury Inspector General for Tax Administration at 800-366-4484.

3. Phishing Scams.  Criminals use the IRS as bait in a phishing scam. Scammers typically send emails that purport to come from the IRS. They often lure their targets with a false promise of a refund or the threat of an audit. They may also set up a phony website that looks like the real IRS.gov. These phony sites often have the IRS seal and other graphics to make them appear official. Their goal is to get their victim to reveal personal and financial information. They use the information they get to steal identities and commit fraud.

The IRS doesn’t contact people by email about their tax account. Nor does the agency use email, social media, texting or fax to initiate contact or ask for personal or financial information. If you get an email like this, do not click on a link or open any attachments. You should instead forward it to the IRS at phishing@irs.gov. For more on this topic visit IRS.gov and select the ‘Reporting Phishing’ link at the bottom of the page.

Don’t let tax scams take the fun out of your summer. Be alert to phone and phishing email scams that use the IRS as a lure. Visit the genuine IRS website, IRS.gov, for more on what you can do to avoid becoming a victim and how to report tax fraud.

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IRS Summertime Tax Tip 2014-02

 Summer Weddings Mean Tax Changes


Taxes may not be high on your summer wedding plan checklist. But you should be aware of the tax issues that come along with marriage. Here are some basic tips that can help keep those issues to a minimum:

Name change. The names and Social Security numbers on your tax return must match your Social Security Administration records. If you change your name, report it to the SSA. To do that, file Form SS-5, Application for a Social Security Card. You can get the form on SSA.gov, by calling 800-772-1213 or from your local SSA office.

Change tax withholding.  A change in your marital status means you must give your employer a new Form W-4, Employee's Withholding Allowance Certificate. If you and your spouse both work, your combined incomes may move you into a higher tax bracket. Use the IRS Withholding Calculator tool at IRS.gov to help you complete a new Form W-4. See Publication 505, Tax Withholding and Estimated Tax, for more information.

Changes in circumstances.  If you receive advance payment of the premium tax credit in 2014, it is important that you report changes in circumstances, such a s changes in your income or family size, to your Health Insurance Marketplace. You should also notify the Marketplace when you move out of the area covered by your current Marketplace plan. Advance payments of the premium tax credit provide financial assistance to help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes will help you get the proper type and amount of financial assistance so you can avoid getting too much or too little in advance.

Address change.  Let the IRS know if your address changes. To do that, file Form 8822, Change of Address, with the IRS. You should also notify the U.S. Postal Service. You can ask them online at USPS.com t o forward your mail. You may also report the change at your local post office.

Change in filing status.  If you’re married as of Dec. 31, that’s your marital status for the whole year for tax purposes. You and your spouse can choose to file your federal income tax return either jointly or separately each year. You may want to figure the tax both ways to find out which status results in the lowest tax.
Note for same-sex married couples: If you are legally married in a state or country that recognizes same-sex marriage, you generally must file as married on your federal tax return. This is true even if you and your spouse later live in a state or country that does not recognize same-sex marriage. See irs.gov for more information on this topic.
For more information, visit IRS.gov. You can also get IRS forms and publications on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

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IRS Summertime Tax Tip 2014-01 


What to do if You Get a Notice from the IRS


Each year the IRS mails millions of notices. Here’s what you should do if you receive a notice from the IRS:
1. Don’t ignore it. You can respond to most IRS notices quickly and easily. And it’s important that you reply promptly. 
2. IRS notices usually deal with a specific issue about your tax return or tax account. For example, it may say the IRS has corrected an error on your tax return. Or it may ask you for more information.
3. Read it carefully and follow the instructions about what you need to do.
4. If it says that the IRS corrected your tax return, review the information in the notice and compare it to your tax return.
If you agree, you don’t need to reply unless a payment is due.
If you don’t agree, it’s important that you respond to the IRS. Write a letter that explains why you don’t agree. Make sure to include information and any documents you want the IRS to consider. Include the bottom tear-off portion of the notice with your letter. Mail your reply to the IRS at the address shown in the lower left part of the notice. Allow at least 30 days for a response from the IRS.
5. You can handle most notices without calling or visiting the IRS. If you do have questions, call the phone number in the upper right corner of the notice. Make sure you have a copy of your tax return and the notice with you when you call.
6. Keep copies of any notices you get from the IRS.
7. Don’t fall for phone and phishing email scams that use the IRS as a lure. The IRS first contacts people about unpaid taxes by mail – not by phone. The IRS does not contact taxpayer s by email, text or social media about their tax return or tax account.
For more on this topic visit IRS.gov. Click on ‘Responding to a Notice’ at the bottom left of the home page. Also see Publication 594, The IRS Collection Process. You can get it on IRS.gov or call 800-TAX-F ORM (800-829-3676) to get it by mail.

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IRS Special Edition Tax Tip 2014-02

IRS Warns of Tax-time Scams
It’s true: tax scams proliferate during the income tax filing season. This year’s season opens on Jan. 31. The IRS provides the following scam warnings so you can protect yourself and avoid becoming a victim of these crimes:

  • Be vigilant of any unexpected communication purportedly from the IRS at the start of tax season.
  • Don’t fall for phone and phishing email scams that use the IRS as a lure. Thieves often pose as the IRS using a bogus refund scheme or warnings to pay past-due taxes.
  • The IRS doesn’t initiate contact with taxpayers by email to request personal or financial information. This includes any type of e-communication, such as text messages and social media channels.
  • The IRS doesn’t ask for PINs, passwords or similar confidential information for credit card, bank or other accounts.
  • If you get an unexpected email, don’t open any attachments or click on any links contained in the message. Instead, forward the email to phishing@irs.gov. For more about how to report phishing scams involving the IRS visit the genuine IRS website, IRS.gov.

Here are several steps you can take to help protect yourself against scams and identity theft:

  • Don’t carry your Social Security card or any documents that include your Social Security number or Individual Taxpayer Identification Number.
  • Don’t give a business your SSN or ITIN just because they ask. Give it only when required.
  • Protect your financial information.
  • Check your credit report every 12 months.
  • Secure personal information in your home.
  • Protect your personal computers by using firewalls and anti-spam/virus software, updating security patches and changing passwords for Internet accounts.
  • Don’t give personal information over the phone, through the mail or on the Internet unless you have initiated the contact and are sure of the recipient.
  • Be careful when you choose a tax preparer. Most preparers provide excellent service, but there are a few who are unscrupulous. Refer to Tips to Help you Choose a Tax Preparer for more details.

For more on this topic, see the special identity theft section on IRS.gov. Also check out IRS Fact Sheet 2014-1, IRS Combats Identity Theft and Refund Fraud on Many Fronts.
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    IRS Special Edition Tax Tip 2014-03

    Which Tax Form Should You File?
    Which form should you use to file your federal income taxes? These days, most people use a computer to prepare and e-file their tax forms. It’s easy, because tax software selects the right form for you. If you file on paper, you’ll need to pick the right form to use.
    Before you decide, check out IRS Free File on IRS.gov. It has free tax software or a Fillable Forms option that allows you to fill in your tax forms using a computer. You can e-file the completed forms for free!
    If you still prefer paper and pen, here are some tips on how to choose the best form for your situation.
    You can generally use the 1040EZ if:

    • Your taxable income is below $100,000;
    • Your filing status is single or married filing jointly;
    • You are not claiming any dependents; and
    • Your interest income is $1,500 or less.

    The 1040A may be best for you if:

    • Your taxable income is below $100,000;
    • You have capital gain distributions;
    • You claim certain tax credits; and
    • You claim adjustments to income for IRA contributions and student loan interest.

    However, reasons you must use the 1040 include:

    • Your taxable income is $100,000 or more;
    • You claim itemized deductions;
    • You are reporting self-employment income; or
    • You are reporting income from sale of a property.

    Read more about which form to use in IRS Publication 17, Your Federal Income Tax. The quickest way to get tax forms and instructions is to visit IRS.gov and click on the ‘Forms & Pubs’ tab. New tax forms often appear online well before the printed forms are available.
    You can also have forms mailed to you by calling the IRS at 800-TAX-FORM (800-829-3676), or you can pick them up at a local IRS office. Some libraries and post offices also have tax forms.
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      IRS Tax Tip 2014-07

      Top Ten Tips to Help You Choose a Tax Preparer


      Many people hire a professional when it’s time to file their tax return. If you pay someone to prepare your federal income tax return, the IRS urges you to choose that person wisely. Even if you don’t prepare your own return, you’re still legally responsible for what is on it.

      Here are ten tips to keep in mind when choosing a tax preparer:

      1. Check the preparer’s qualifications.  All paid tax preparers are required to have a Preparer Tax Identification Number or PTIN. In addition to making sure they have a PTIN, ask the preparer if they belong to a professional organization and attend continuing education classes. 

      2. Check the preparer’s history.  Check with the Better Business Bureau to see if the preparer has a questionable history. Check for disciplinary actions and for the status of their licenses. For certified public accountants, check with the state board of accountancy. For attorneys, check with the state bar association. For enrolled agents, check with the IRS Office of Enrollment.

      3. Ask about service fees.  Avoid preparers who base their fee on a percentage of your refund or those who say they can get larger refunds than others can. Always make sure any refund due is sent to you or deposited into your bank account. Taxpayers should not deposit their refund into a preparer’s bank account.

      4. Ask to e-file your return.  Make sure your preparer offers IRS e-file. Any paid preparer who prepares and files more than 10 returns for clients generally must file the returns electronically. IRS has safely processed more than 1.2 billion e-filed tax returns.

      5. Make sure the preparer is available.  Make sure you’ll be able to contact the tax preparer after you file your return - even after the April 15 due date. This may be helpful in the event questions come up about your tax return.

      6. Provide records and receipts.  Good preparers will ask to see your records and receipts. They’ll ask you questions to determine your total income, deductions, tax credits and other items. Do not use a preparer who is willing to e-file your return using your last pay stub instead of your Form W-2. This is against IRS e-file rules.

      7. Never sign a blank return.  Don’t use a tax preparer that asks you to sign a blank tax form.

      8. Review your return before signing.  Before you sign your tax return, review it and ask questions if something is not clear. Make sure you’re comfortable with the accuracy of the return before you sign it.

      9. Ensure the preparer signs and includes their PTIN.  Paid preparers must sign returns and include their PTIN as required by law. The preparer must also give you a copy of the return.

      10. Report abusive tax preparers to the IRS.  You can report abusive tax preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If you suspect a return preparer filed or changed the return without your consent, you should also file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit. You can get these forms at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

      Additional IRS Resources:


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        IRS Summertime Tax Tip 2013-01

        Tax Tips for Newlyweds
        Late spring and early summer are popular times for weddings. Whatever the season, a change in your marital status can affect your taxes. Here are several tips from the IRS for newlyweds.

        • It’s important that the names and Social Security numbers that you put on your tax return match your Social Security Administration records. If you’ve changed your name, report the change to the SSA. To do that, file Form SS-5, Application for a Social Security Card. You can get this form on their website at SSA.gov, by calling 800-772-1213 or by visiting your local SSA office.
        • If your address has changed, file Form 8822, Change of Address to notify the IRS. You should also notify the U.S. Postal Service if your address has changed. You can ask to have your mail forwarded online at USPS.com or report the change at your local post office.
        • If you work, report your name or address change to your employer. This will help to ensure that you receive your Form W-2, Wage and Tax Statement, after the end of the year.
        • If you and your spouse both work, you should check the amount of federal income tax withheld from your pay. Your combined incomes may move you into a higher tax bracket. Use the IRS Withholding Calculator tool at IRS.gov to help you complete a new Form W-4, Employee's Withholding Allowance Certificate. See Publication 505, Tax Withholding and Estimated Tax, for more information.
        • If you didn’t qualify to itemize deductions before you were married, that may have changed. You and your spouse may save money by itemizing rather than taking the standard deduction on your tax return. You’ll need to use Form 1040 with Schedule A, Itemized Deductions. You can’t use Form 1040A or 1040EZ when you itemize.
        • If you are married as of Dec. 31, that’s your marital status for the entire year for tax purposes. You and your spouse usually may choose to file your federal income tax return either jointly or separately in any given year. You may want to figure the tax both ways to determine which filing status results in the lowest tax. In most cases, it’s beneficial to file jointly.

        For more information about these topics, visit IRS.gov. You can also get IRS forms and publications at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

        Additional IRS Resources:

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        IRS Special Edition Tax Tip 2013-03

        Job Search Expenses May Lower Your Taxes

        Summer is often a time when people make major life decisions. Common events include buying a home, getting married or changing jobs. If you’re looking for a new job in your same line of work, you may be able to claim a tax deduction for some of your job hunting expenses.

        Here are seven things the IRS wants you to know about deducting these costs:

        1. Your expenses must be for a job search in your current occupation. You may not deduct expenses related to a search for a job in a new occupation. If your employer or another party reimburses you for an expense, you may not deduct it.

        2. You can deduct employment and job placement agency fees you pay while looking for a job.

        3. You can deduct the cost of preparing and mailing copies of your résumé to prospective employers. 

        4. If you travel to look for a new job, you may be able to deduct your travel expenses. However, you can only deduct them if the trip is primarily to look for a new job.

        5. You can’t deduct job search expenses if there was a substantial break between the end of your last job and the time you began looking for a new one.

        6. You can’t deduct job search expenses if you’re looking for a job for the first time.

        7. You usually will claim job search expenses as a miscellaneous itemized deduction. You can deduct only the amount of your total miscellaneous deductions that exceed two percent of your adjusted gross income.

        For more information, see Publication 529, Miscellaneous Deductions. This booklet is available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).


        Additional IRS Resources:

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        IRS Special Edition Tax Tip 2013-08

        Protect Yourself from the Dirty Dozen Tax Scams
        The IRS’s annual ‘Dirty Dozen’ list includes common tax scams that often peak during the tax filing season. The IRS recommends that taxpayers be aware so they can protect themselves against claims that sound too good to be true. Taxpayers who buy into illegal tax scams can end up facing significant penalties and interest and even criminal prosecution.

        The tax scams that made the Dirty Dozen list this filing season are:

        Identity Theft. Tax fraud through the use of identity theft tops this year’s Dirty Dozen list. Combating identity theft and refund fraud is a top priority for the IRS. The IRS’s ID theft strategy focuses on prevention, detection and victim assistance. During 2012, the IRS protected $20 billion of fraudulent refunds, including those related to identity theft. This compares to $14 billion in 2011. Taxpayers who believe they are at risk of identity theft due to lost or stolen personal information should immediately contact the IRS so the agency can take action to secure their tax account. If you have received a notice from the IRS, call the phone number on the notice. You may also call the IRS’s Identity Protection Specialized Unit at 800-908-4490. Find more information on the identity protection page on IRS.gov.

        Phishing. Phishing typically involves an unsolicited email or a fake website that seems legitimate but lures victims into providing personal and financial information. Once scammers obtain that information, they can commit identity theft or financial theft. The IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. If you receive an unsolicited email that appears to be from the IRS, send it to phishing@irs.gov.

        Return Preparer Fraud. Although most return preparers are reputable and provide good service, you should choose carefully when hiring someone to prepare your tax return. Only use a preparer who signs the return they prepare for you and enters their IRS Preparer Tax Identification Number (PTIN). For tips about choosing a preparer, visit www.irs.gov/chooseataxpro.

        Hiding Income Offshore. One form of tax evasion is hiding income in offshore accounts. This includes using debit cards, credit cards or wire transfers to access those funds. While there are legitimate reasons for maintaining financial accounts abroad, there are reporting requirements taxpayers need to fulfill. Failing to comply can lead to penalties or criminal prosecution. Visit IRS.gov for more information on the Voluntary Disclosure Program.

        “Free Money” from the IRS & Tax Scams Involving Social Security. Beware of scammers who prey on people with low income, the elderly and church members around the country. Scammers use flyers and ads with bogus promises of refunds that don’t exist. The schemes target people who have little or no income and normally don’t have to file a tax return. In some cases, a victim may be due a legitimate tax credit or refund but scammers fraudulently inflate income or use other false information to file a return to obtain a larger refund. By the time people find out the IRS has rejected their claim, the promoters are long gone.

        Impersonation of Charitable Organizations. Following major disasters, it’s common for scam artists to impersonate charities to get money or personal information from well-intentioned people. They may even directly contact disaster victims and claim to be working for or on behalf of the IRS to help the victims file casualty loss claims and get tax refunds. Taxpayers need to be sure they donate to recognized charities.

        False/Inflated Income and Expenses. Falsely claiming income you did not earn or expenses you did not pay in order to get larger refundable tax credits is tax fraud. This includes false claims for the Earned Income Tax Credit. In many cases the taxpayer ends up repaying the refund, including penalties and interest. In some cases the taxpayer faces criminal prosecution. In one particular scam, taxpayers file excessive claims for the fuel tax credit. Fraud involving the fuel tax credit is a frivolous claim and can result in a penalty of $5,000.

        False Form 1099 Refund Claims. In this scam, the perpetrator files a fake information return, such as a Form 1099-OID, to justify a false refund claim.

        Frivolous Arguments. Promoters of frivolous schemes advise taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe. These are false arguments that the courts have consistently thrown out. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law.

        Falsely Claiming Zero Wages. Filing a phony information return is an illegal way to lower the amount of taxes an individual owes. Typically, scammers use a Form 4852 (Substitute Form W-2) or a “corrected” Form 1099 to improperly reduce taxable income to zero. Filing this type of return can result in a $5,000 penalty.

        Disguised Corporate Ownership. Scammers improperly use third parties form corporations that hide the true ownership of the business. They help dishonest individuals underreport income, claim fake deductions and avoid filing tax returns. They also facilitate money laundering and other financial crimes.

        Misuse of Trusts. There are legitimate uses of trusts in tax and estate planning. But some questionable transactions promise to reduce the amount of income that is subject to tax, offer deductions for personal expenses and reduced estate or gift taxes. Such trusts rarely deliver the promised tax benefits. They primarily help avoid taxes and hide assets from creditors, including the IRS.

        For more on the Dirty Dozen, see IRS news release IR-2013-33.


        Additional IRS Resources:


        IRS YouTube Videos:

        Dirty Dozen - English | Spanish | ASL

         


        IRS Special Edition Tax Tip 2013-09

         

        IRS Warns Donors about Charity Scams

        Following Recent Tragedies in Boston and Texas

        It’s sad but true. Following major disasters and tragedies, scam artists impersonate
        charities to steal money or get private information from well-intentioned taxpayers.
        Fraudulent schemes involve solicitations by phone, social media, email or in-person.
        Scam artists use a variety of tactics. Some operate bogus charities that contact people by telephone to solicit money or financial information.

        Others use emails to steer people to bogus websites to solicit funds, allegedly for the benefit of tragedy victims.
        The fraudulent websites often mimic the sites of legitimate charities or use names similar to legitimate charities.

        They may claim affiliation with legitimate charities to persuade members of the public to send money or
        provide personal financial information. Scammers then use that information to steal the identities or money of their victims.

        The IRS offers the following tips to help taxpayers who wish to donate to victims of the recent tragedies at the Boston Marathon and a Texas fertilizer plant:

        • Donate to qualified charities. Use the Exempt Organizations Select Check tool at IRS.gov to find qualified charities. Only donations to qualified charitable organizations are tax-deductible. You can also find legitimate charities on the Federal Emergency Management Agency (FEMA) Web site at fema.gov.
        • Be wary of charities with similar names. Some phony charities use names that are similar to familiar or nationally known organizations. They may use names or websites that sound or look like those of legitimate organizations.
        • Don’t give out personal financial information. Do not give your Social Security number, credit card and bank account numbers and passwords to anyone who solicits a contribution from you. Scam artists use this information to steal your identity and money.
        • Don’t give or send cash. For security and tax record purposes, contribute by check or credit card or another way that provides documentation of the donation.
        • Report suspected fraud. Taxpayers suspecting tax or charity-related fraud should visit IRS.gov and perform a search using the keywords “Report Phishing.”

        More information about tax scams and schemes is available at IRS.gov using the keywords “scams and schemes.”

        Additional IRS Resources:

        IRS YouTube Videos:

        IRS Podcasts

         


        IRS Tax Tip 2013-10

        SUMMER JOB TAX INFORMATION FOR STUDENTS

        When summer vacation begins, classroom learning ends for most students. Even so, summer doesn’t have to mean a complete break from learning. Students starting summer jobs have the opportunity to learn some important life lessons. Summer jobs offer students the opportunity to learn about the working world – and taxes.

        Here are six things about summer jobs that the IRS wants students to know.

        1. As a new employee, you’ll need to fill out a Form W-4, Employee’s Withholding Allowance Certificate. Employers use this form to figure how much federal income tax to withhold from workers’ paychecks. It is important to complete your W-4 form correctly so your employer withholds the right amount of taxes. You can use the IRS Withholding Calculator tool at IRS.gov to help you fill out the form.
        2. If you’ll receive tips as part of your income, remember that all tips you receive are taxable. Keep a daily log to record your tips. If you receive $20 or more in cash tips in any one month, you must report your tips for that month to your employer.
        3. Maybe you’ll earn money doing odd jobs this summer. If so, keep in mind that earnings you receive from self-employment are subject to income tax. Self-employment can include pay you get from jobs like baby-sitting and lawn mowing.  
        4. You may not earn enough money from your summer job to owe income tax, but you will probably have to pay Social Security and Medicare taxes. Your employer usually must withhold these taxes from your paycheck. Or, if you’re self-employed, you may have to pay self-employment taxes. Your payment of these taxes contributes to your coverage under the Social Security system.
        5. If you’re in ROTC, your active duty pay, such as pay received during summer camp, is taxable. However, the food and lodging allowances you receive in advanced training are not.
        6. If you’re a newspaper carrier or distributor, special rules apply to your income. Whatever your age, you are treated as self-employed for federal tax purposes if:
          • You are in the business of delivering newspapers.
          • Substantially all your pay for these services directly relates to sales rather than to the number of hours worked.
          • You work under a written contract that states the employer will not treat you as an employee for federal tax purposes.

        If you do not meet these conditions and you are under age 18, then you are usually exempt from Social Security and Medicare tax.
        Visit IRS.gov, the official IRS website, for more information about income tax withholding and employment taxes.

        Additional IRS Resources:

        IRS YouTube Videos:

        IRS Podcasts:

        IRS Withholding Calculator - English | Spanish



        IRS SummertimeTax Tip 2013-11

        Get Free Tax Help Using IRS Social Media Tools

        You can get free tax help from the Internal Revenue Service through various forms of social media. Here are some ways the IRS uses social media to share information on tax law changes, programs and services.

        1. IRS2Go.  Use this free Smartphone app to check your refund status, get tax updates and follow the IRS via Twitter. If you have an Apple iPhone or iTouch, download it from the iTunes app store. If you use an Android device, visit the Google Play Store to download IRS2Go for free.

        2. YouTube.  Tune in to IRS YouTube Channels for short, instructional videos on a variety of tax subjects. Videos are available in English, American Sign Language and other languages, such as Spanish.

        3. Twitter.  Follow IRS tweets for tax-related tips, news for tax professionals and job announcements. Follow us @IRSnews, @IRStaxpros and @IRSenEspanol.

        4. Tumblr.  Follow the IRS Tumblr blog for the most up-to-date tax news.

        5. Facebook.  Check the IRS Return Preparer Facebook page for useful posts for tax professionals.

        6. Podcasts.  Listen to short IRS podcasts to get useful facts on many tax topics. The audio files (along with transcripts) are available on iTunes or from the Multimedia Center page on IRS.gov.

        Protecting your privacy is a top priority at the IRS. The IRS uses social media tools to share public information, not to answer personal tax or account questions. You should never post your Social Security number or any other confidential information on social media sites.

        Get connected and stay connected to the IRS with social media. For more about IRS social media tools, visit IRS.gov and click on “Social Media.”


        Additional IRS Resources:

        IRS YouTube Videos:

        IRS Podcasts:

         


        IRS SummertimeTax Tip 2013-12

        Simplified Option for Home Office Deduction

        Do you work from home? If so, you may be familiar with the home office deduction, available for taxpayers who use their home for business. Beginning this year, there is a new, simpler option to figure the business use of your home.

        This simplified option does not change the rules for who may claim a home office deduction. It merely simplifies the calculation and recordkeeping requirements. The new option can save you a lot of time and will require less paperwork and recordkeeping. 

        Here are six facts the IRS wants you to know about the new, simplified method to claim the home office deduction.

        1. You may use the simplified method when you file your 2013 tax return next year. If you use this method to claim the home office deduction, you will not need to calculate your deduction based on actual expenses. You may instead multiply the square footage of your home office by a prescribed rate.

        2. The rate is $5 per square foot of the part of your home used for business. The maximum footage allowed is 300 square feet. This means the most you can deduct using the new method is $1,500 per year.

        3. You may choose either the simplified method or the actual expense method for any tax year. Once you use a method for a specific tax year, you cannot later change to the other method for that same year.

        4. If you use the simplified method and you own your home, you cannot depreciate your home office. You can still deduct other qualified home expenses, such as mortgage interest and real estate taxes. You will not need to allocate these expenses between personal and business use. This allocation is required if you use the actual expense method. You’ll claim these deductions on Schedule A, Itemized Deductions.

        5. You can still fully deduct business expenses that are unrelated to the home if you use the simplified method. These may include costs such as advertising, supplies and wages paid to employees.

        6. If you use more than one home with a qualified home office in the same year, you can use the simplified method for only one in that year. However, you may use the simplified method for one and actual expenses for any others in that year.

        Visit IRS.gov for more about this easier way to deduct your home office.


        Additional IRS Resources:

        IRS YouTube Videos:

        IRS Podcasts:

         

         


        IRS Tax Tip 2013-15

        SAFEGUARD YOUR REFUND - CHOOSE DIRECT DEPOSIT!

        Direct Deposit is the fast, easy way to receive your Tax Refund.

        Whether you file electronically or on paper, Direct Deposit gives you access to you refund faster than a paper check.

        Here are four reasons more than 80 million taxpayers chose Direct Deposit in 2012:

        1. Security: Every year the U.S. Postal Service returns thousands of paper checks to the IRS as undeliverable.
          Direct Deposit eliminates the possibility of a lost, stolen or undeliverable refund check.

        2. Convenience: With Direct Deposits, the money goes directly into your bank account.
          You will not have to make a special trip to the bank to deposit the money yourself!

        3. Ease: It's easy to choose Direct Depoit. When you are preparing your tax return, simply follow the instructions on the tax return or in the tax software.
          Make sure you enter the correct bank account and bank routing transit numbers.

        4. Options: You can deposit your refund into more than one account. With the Split Refund Option, taxpayers can divide their refunds among as many as three checking or savings accounts and up to three different U.S. Financial Institutions, Use IRS Form 8888, Allocation of Refund (Including Savings Bond Purchases), to divide your refund. If you are designating part of your refund to pay your tax preparer, you should NOT use Form 8888. You should only deposit your refund directly into accounts that are in your own name, your spouse's name or both if it's a joint account.

        Some banks require both spouse's names on the accounts to deposit a tax return refund from a joint return.
        Check with your bank for their direct deposit requirements.

        Check the instructions in your tax form for more information about Direct Deposit and the Split Refund Option.

        Helpful Tips on both are also available in IRS Publication 17.

        Your Federal Income Tax Publication 17 and IRS Form 8888 are available on IRS.gov or by calling the IRS at 1-800-TAX-FORM (1-800-829-3676)

        Additional IRS Resources:

        • Form 8888. Allocation of Refund (Including Savings Bonds Purchases)
        • Publication 17, Your Federal Income Tax
        • What to Expect for Refunds in 2013

        IRS You Tube Videos:

        When Will I get My refund? English / ASL


        IRS Summertime Tax Tip 2013-16

        Helpful Tax Tips if You’re Moving this Summer

        If you make a work-related move this summer, you may be able to deduct the costs of the move. This may apply if you move to start a new job or to work at the same job in a new job location. The IRS offers the following tips on moving expenses you may be able to deduct on your tax return.

        In order to deduct moving expenses, you must meet these three requirements:

        1. Your move closely relates to the start of work.  Generally, you can consider moving expenses within one year of the date you first report to work at a new job location. Additional rules apply to this requirement.

        2. You meet the distance test.  Your new main job location must be at least 50 miles farther from your former home than your previous main job location was. For example, if your old main job location was three miles from your former home, your new main job location must be at least 53 miles from that former home.

        3. You meet the time test.  After you move, you must work full time at your new job location for at least 39 weeks during the first year. Self-employed individuals must meet this test and also work full time for a total of at least 78 weeks during the first 24 months upon arriving in the general area of their new job location. If your income tax return is due before you have satisfied this requirement, you can still deduct your allowable moving expenses if you expect to meet the time test.

        See Publication 521, Moving Expenses, for more information about these rules. If you can claim this deduction, here are a few more tips from the IRS:

        • Travel.  You can deduct transportation and lodging expenses for yourself and household members while moving from your former home to your new home. You cannot deduct the cost of meals during the travel.
        • Household goods.  You can deduct the cost of packing, crating and transporting your household goods and personal property. You may be able to include the cost of storing and insuring these items while in transit.
        • Utilities.  You can deduct the costs of connecting or disconnecting utilities.
        • Nondeductible expenses.  You cannot deduct as moving expenses any part of the purchase price of your new home, the costs of buying or selling a home, or the cost of entering into or breaking a lease. See Publication 521 for a complete list.
        • Reimbursed expenses.  If your employer reimburses you for the costs of a move for which you took a deduction, you may have to include the reimbursement as income on your tax return.
        • Update your address.  When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you receive mail from the IRS. File Form 8822, Change of Address, to notify the IRS.
        • Tax form to file.  To figure the amount of your deduction for moving expenses, use Form 3903, Moving Expenses. 

        Get more details about this topic in Publication 521 and Form 3903. Both are available at IRS.gov or by calling 800-829-3676.


        Additional IRS Resources:

        IRS YouTube Videos:

        IRS Podcasts:

         

         


        IRS Tax Tip 2013-17

        Ten Tips to Help You Choose a Tax Preparer

        Many people look for help from professionals when it's time to file their tax return.

        If you use a paid tax preparer to file your federal income tax return this year, the IRS urges you to choose that preparer carefully.

        Even if someone else prepares your return, you are legally responsible for what is on it.

         

        Here are ten tips to keek in mind when choosing a tax return preparer:

        1. Check the preparer's qualifications: All paid tax return preparers are required to have a Preaprer TAx Identification Number.
          In addition to making sure they have a PTIN, ask if the preparer belongs to a professional organizationamd attends continuing education classes.

        2. Check on the Preparer's History: Check with the Better Bsiness Bureau to see if the preparer has a questionable history. Also check for any disciplinry actions anf for the status of their licenses. For Certified Public Accountants, check with the State Bar Associations. For Enrolled Agents, check with the IRS Office of Enrollment.

        3. Ask about Service Fees: Avoid preparers who base their fee on a percentge of your refund or who claim they can obtain larger refuns than other preparers can. Also always make sure any refund due is sent to you or deposited into an account in your name. taxpayers should not deposit their refund into a preparer's bank account.

        4. Ask to e-file your return: Make sure your preparer offers IRS e-file. Any paid preparer who prepares the files more than 1o returns for clients must file the returns electronically, unless the client opts to file a paper return. IRS has safely and securely processed more than one billion individual tax returns since the debut of electronic filing in 1990.

        5. Make sure the preparer is accessible: Make sure you will be able to contact the tax preparer after you file your return, even after the April 15 due date. This may be helpful in the event questions arise about your tax return.

        6. Provide records and receipts: Reputable preparers will request to see your records and receipts, They will ask you questions to determine your total income and your qualifications for deductions, credits and other items. Do NOT use a perparer who is willing to e-file your return by using your last pay stub before you receive your Form W-2. This is against IRS e-file rules.

        7. Never sign a Blank Return: Avoid tax preparers that ask you to sign a blank tax return.

        8. Review the entire return before signing: Before you sign your tax return, review it and ask questions. MAke sure you understand everything and are comfortable with the accuracy of the return before you sign it.

        9. Make sure the preparer signs and includes their PTIN: A paid preparer must sign the return and include their PTIN as required by law. The preparer must also give you a copy of the return.

        10. Report abusive tax preparers to the IRS: You can report abusive tax preparers and suspected tax fraud to the IRS on Form 14157. Complaint: Tax Return Preparer. If you suspect a return preparer filed or altered a return without your consent, you should also file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit.

        Download the forms on the IRS.gov website or order them by mail at 800-TAX-FORM (1-800-829-3676).

        Additional IRS Resources:

        • How to make a Complaint About a Tax Return Preparer
        • How to Report Suspected tax Fraud Activity
        • Form 14157, Complaint : Tax Return Preparer (PDF)
        • Form 14157-A, Return Fraud or Misconduct Affidavit.

        IRS Summertime Tax Tip 2013-22

        If You Receive an IRS Notice, Here’s What to Do

        Each year the IRS sends millions of letters and notices to taxpayers. Although some people may feel anxious when they receive one, many are easy to resolve. Here’s what to do if you receive a letter or notice from the IRS:

        1. Don’t panic. Follow the instructions in the letter.

        2. There are many reasons the IRS sends notices to taxpayers. The notice usually covers a specific issue about your account or tax return. It may request payment of taxes, notify you of a change to your account or ask for additional information.

        3. If you receive a notice about a correction to your tax return, you should review it carefully. You usually will need to compare the information in the notice to the entries on your tax return.

        • If you agree with the correction, you usually don’t need to reply unless a payment is due.
        • If you don’t agree with the correction the IRS made, it’s important that you respond as requested. Respond to the IRS in writing to explain why you disagree. Include any documents and information you wish the IRS to consider, along with the bottom tear-off portion of the notice. Mail the information to the IRS address shown in the lower left corner of the notice. Allow at least 30 days for a response from the IRS.

        4. There is no need for you to call or visit an IRS office to answer most IRS notices. If you have questions, call the telephone number in the upper right corner of the notice. When you call, have a copy of your tax return and the notice available.

        5. Keep copies of any correspondence with your tax records.

        For more information about IRS notices and requests for payment, see Publication 594, The IRS Collection Process. For information about penalties and interest charges, see Publication 17, Your Federal Income Tax for Individuals. Both are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).


        Additional IRS Resources:
        Understanding Your IRS Notice or Letter  

        Publication 594, The IRS Collection Process  

        Publication 17, Your Federal Income Tax for Individuals  

        IRS YouTube Videos:
        Received a Letter from the IRS? – English  | Spanish  | ASL    

         


        IRS Summertime Tax Tip 2013-23

         

        Give Tax Records a Mid-Year Tune-up this Summer

        During the summer, you may not think about doing your taxes, but maybe you should. Some of the expenses you’ve paid over the past few months might qualify for money-saving tax credits or deductions come tax time. If you organize your tax records now, you’ll make tax filing easier and faster when you do them next year. It also helps reduce the chance that you’ll lose a receipt or statement that you need.

        Here are some tips from the IRS on tax recordkeeping.

        • You should keep copies of your filed tax returns as part of your tax records. They can help you prepare future tax returns. You’ll also need them if you need to file an amended return.
        • You must keep records to support items reported on your tax return. You should keep basic records that relate to your federal tax return for at least three years. Basic records are documents that prove your income and expenses. This includes income information such as Forms W-2 and 1099. It also includes information that supports tax credits or deductions you claimed. This might include sales slips, credit card receipts and other proofs of payment, invoices, cancelled checks, bank statements and mileage logs.
        • If you own a home or investment property, you should keep records of your purchases and other records related to those items. You should typically keep these records, including home improvements, at least three years after you have sold or disposed of the property.
        • If you own a business, you should keep records that show total receipts, proof of purchases of business expenses and assets. These may include cash register tapes, bank deposit slips, receipt books, purchase and sales invoices. Also include credit card receipts, sales slips, canceled checks, account statements and petty cash slips. Electronic records can include databases, saved files, emails, instant messages, faxes and voice messages.
        • If you own a business with employees, you should generally keep all employment-related tax records for at least four years after the tax is due, or after the tax is paid, whichever is later.
        • The IRS doesn’t require any special method to keep records, but it’s a good idea to keep them organized and in one place. This will make it easier for you to prepare and file a complete and accurate return. You’ll also be better able to respond if there are questions about your tax return after you file.

        You’ll find more information about recordkeeping for individuals in Publication 17, Your Federal Income Tax. Business owners should check Publication 583, Starting a Business and Keeping Records. Both are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676). Video and audio files explaining recordkeeping requirements are also available on our IRS video portal at www.irsvideos.gov.

        Additional IRS Resources:
        • Publication 17, Your Federal Income Tax 
        • Tax Topic 305 – Recordkeeping
        • Publication 583, Starting a Business and Keeping Records IRS YouTube Videos:
        • Record Keeping – English   | Spanish   | ASL   

         


        IRS Summertime Tax Tip 2013-24

         

         Ten Tax Tips for Individuals Selling Their Home

        If you’re selling your main home this summer or sometime this year, the IRS has some helpful tips for you. Even if you make a profit from the sale of your home, you may not have to report it as income.

        Here are 10 tips from the IRS to keep in mind when selling your home.

        1. If you sell your home at a gain, you may be able to exclude part or all of the profit from your income. This rule generally applies if you’ve owned and used the property as your main home for at least two out of the five years before the date of sale.


        2. You normally can exclude up to $250,000 of the gain from your income ($500,000 on a joint return). This excluded gain is also not subject to the new Net Investment Income Tax, which is effective in 2013.


        3. If you can exclude all of the gain, you probably don’t need to report the sale of your home on your tax return.


        4. If you can’t exclude all of the gain, or you choose not to exclude it, you’ll need to report the sale of your home on your tax return. You’ll also have to report the sale if you received a Form 1099-S, Proceeds From Real Estate Transactions.


        5. Use IRS e-file to prepare and file your 2013 tax return next year. E-file software will do most of the work for you. If you prepare a paper return, use the worksheets in Publication 523, Selling Your Home, to figure the gain (or loss) on the sale. The booklet also will help you determine how much of the gain you can exclude.


        6. Generally, you can exclude a gain from the sale of only one main home per two-year period.


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


        8. Special rules may apply when you sell a home for which you received the first-time homebuyer credit. See Publication 523 for details.


        9. You cannot deduct a loss from the sale of your main home.


        10. When you sell your home and move, be sure to update your address with the IRS and the U.S. Postal Service. File Form 8822, Change of Address, to notify the IRS.

        For more information on this topic, see Publication 523. It’s available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).


        Additional IRS Resources:
        • Publication 523, Selling Your Home
        • Questions and Answers on the Net Investment Income Tax
        • Form 8822, Change of Address 
        • U.S. Postal Service

        IRS YouTube Videos:
        • Selling Your Home – English | Spanish | ASL

        IRS Podcasts:
        • Selling Your Home – English | Spanish

         

         


        IRS Tax Tip 2013-28

        Ten Facts about Capital Gains and Losses

        The term "capital Asset" for tax purposes applies to almost everything you own and use for personal or investment purposes.

        A Capital Gain or Loss occurs when you sell a capital asset.

        Here are ten facts from the IRS on capital gains and Losses:

        1. Almost everything you own and use for personal purposes, pleasure or investment is a Capita Asset. Capital Assets include your home, household furnishings, and stocks and bonds that you hold as investments.

        2. A Capital Gain or Loss is the difference between your basis of an asset and the amount you receive when you sell it. Your basis is usually what you paid for the asset.

        3. You must include all Capital Gains in your income.

        4. You may deduct Capital Losses on the sale of investment property. You cannot deduct lossses on the sale of personal-use property.

        5. Capital Gains and Losses are Long-Term or Short-Term, depending on how long you hold on to the property.
          If you hold the property more than one year, your Capital Gain or Loss is Long-Term.
          If you hold it one year or less, the Gain or Loss is Short-Term.

        6. If your Long-Term gains exceed your Long-Term losses, the difference between the two is a Net Long-Term Capital Gain. If your Net Long-Term Capital Gain is more than your Net Short-Term Capital Loss, you have a "Net Capital Gain".

        7. The tax rates that apply to Net Capitall Gains are generally lower than the tax rates that apply to other types of income. The maximum Capital Gains rate for most people in 2012 is 15 percent. For Lower-Income individuals, the rate may be "0" percent on some or all of their NEt capital gains. RRates of 25 or 28 percent can also apply to pecial types of Net Capital Gains.

        8. If your Capital Losses are greater than your Capital Gains, you can deduct the difference between the two on your tar return.
          The annual limit on this deduction is $3000 or $1500 if you are married filing separately.

        9. If your total Net Capital Loss is more than the limit you can deduct, you can carry over the losses you are not able to deduct to next year's tax return. You will treat those losses as if they occurred that year.

        10. Form 8949, Sales and Other Dispositions of Capital Assets, will help you calculate Capital Gains and Losses. You will carry over subtotals from this form to Schedule D, Capital Gains and losses. If you e-file your tax return, the software will do this for you..

        For more information about Capital Gains and Losses, see the Schedule D instructions or Publication 550, Investment Income and Expenses.

        They are both available at IRS.gov or by calling 1-800-TAX-FORM (1-800-829-3676).


        IRS Tax Tip 2013-38

        Tax Rules for Children Who Have Investment Income

        Some children receive investment income and are required to file a federal tax return. If a child cannot file his or her own tax return for any reson, such as age, the child's parent or gurdian is responsible for filing a return on the child's behalf. there are special tax rules that affrect how parents report a childs investment income. Some parents can include ther child's investment income on their tax return. Other children my have to file their own tas return.

        Here are four facts from the IRS about the taxability of your child's investment income:

        1. Investment income normally includes interest, dividends, capital gains and other unearned income, such as from a trust.

        2. Special rules apply if your child's total investment income is more than $ 1,900. The parents's tax rate may apply to part of that income insetad of the child's tax rate.

        3. If your childs total interest and dividend income is less than $ 9,500, you may be able to include the income on your tax return, See Form 8814, Parent's Election to Report Child's Interest and Dividends. If you make this choice, the child doss not file a return.

        4. Your child must file their own tax return if they receive investment income of $ 9,500 or more. File Form 8615, Tax for Certain Childen Who Have Investment Income of More than $ 1,900, with the childs federal tax return.

         

        For more information on this topic, see Publication 929, Tax Rules for Children and Dependents.

        This booklet and Forms 8615 and 8814 are available at IRS.gov.

        You may also have them mailed to you by calling 800-TAX-FORMS (800-829-3676)

        Additional IRS Resources:

        • Publication 929, Tax Rules for Children nd Dependents.
        • Form 8814, Parents Election to Report Child's Interest and Dividends,
        • Form 8615, Tax for Certain Children Who Have Investment Income of More than $ 1,900.

        IRS Tax Tip 2013-40

        IRS Offers Top 10 Tax Time Tips


        The end of the tax filing season is almost here. Even though your tax return is not due until April 15, you can make tax time easier on yourself by starting now.

        Here are 10 important tips to ensure a smooth process.


        1. Gather your records. Round up any documents you will need when filing your taxes, including receipts, canceled checks and other documents that support income or deductions you will be claiming on your tax return. Store them in a safe place.

        2. Report all your income. You will need all your Forms W-2, Wage and Tax Statements, and 1099 income statements to report your income when you file your tax return. To ensure you don’t misplace them, add them to your other records.

        3. Get answers to questions. Use the Interactive Tax Assistant tool available on the IRS website to find answers to your questions about tax credits and deductions.

        4. Use Free File. There is at least one option available for everyone to prepare and e-file a tax return at no cost. Let IRS Free File do the work for you with brand-name tax software or online fillable forms. It's available exclusively at IRS.gov. If your income was $57,000 or less, you qualify to use free tax software. If your income was higher, or you are comfortable preparing your own tax return, there's Free File Fillable Forms, the electronic version of IRS paper forms. Visit IRS.gov/freefile to review your options.

        5. Try IRS e-file.
        IRS e-file is the best way to file an accurate tax return. It’s safe, easy and the way most taxpayers file their return. Last year, more than 80 percent of taxpayers used IRS e-file. Many tax preparers are now required to use e-file. If you owe taxes, you have the option to file early and pay by April 15.

        6. Weigh your filing options.
        You have several options for filing your tax return. You can prepare it yourself or go to a tax preparer. You may be eligible for free, face-to-face help at a volunteer site. Weigh your options and choose the one that works best for you.

        7. Use direct deposit.
        Combining e-file with direct deposit is the fastest and safest way for you to get your refund.

        8. Visit the IRS website.
        The IRS website at IRS.gov is a great place to find everything you need to file your tax return. This includes many online tools, filing tips, answers to frequently asked questions, the latest tax law changes, forms and publications.

        9. Remember number 17.
        Check out Publication 17, Your Federal Income Tax, on the IRS website. It’s a complete tax resource that includes information such as whether you need to file or how to choose your filing status.

        10. Review your return.
        Don’t rush. We all make mistakes when we rush. Mistakes slow down the processing of your return. Be sure to double check all Social Security numbers and math calculations on your return as these are the most common errors. If you run into a problem, remember the IRS is here to help. Start with IRS.gov.

        Additional IRS Resources:

        IRS YouTube Videos:

        IRS Podcasts:


        IRS Tax Tip 2013-42

        Seven Tips for Taxpayers with Foreign Income


        The IRS reminds U.S. citizens and residents who lived or worked abroad in 2012 that they may need to file a federal income tax return.
        If you are living or working outside the United States, you generally must file and pay your tax in the same way as people living in the U.S.
        This includes people with dual citizenship.


        Here are seven tips taxpayers with foreign income should know:


        1. Report Worldwide Income. The law requires U.S. citizens and resident aliens to report any worldwide income. This includes income from foreign trusts, and foreign bank and securities accounts.

        2. File Required Tax Forms. In most cases, affected taxpayers need to file Schedule B, Interest and Ordinary Dividends, with their tax returns. Some taxpayers may need to file additional forms. For example, some may need to file Form 8938, Statement of Specified Foreign Financial Assets, while others may need to file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts, with the Treasury Department. See Publication 4261, Do You Have a Foreign Financial Account?, for more information.

        3. Consider the Automatic Extension. U.S. citizens and resident aliens living abroad on April 15, 2013, may qualify for an automatic two-month extension to file their 2012 federal income tax returns. The extension of time to file until June 17, 2013, also applies to those serving in the military outside the U.S. Taxpayers must attach a statement to their returns explaining why they qualify for the extension.

        4. Review the Foreign Earned Income Exclusion. Many Americans who live and work abroad qualify for the foreign earned income exclusion. This means taxpayers who qualify will not pay taxes on up to $95,100 of their wages and other foreign earned income they received in 2012. See Forms 2555, Foreign Earned Income, or 2555-EZ, Foreign Earned Income Exclusion, for more information.

        5. Don’t Overlook Credits and Deductions. Taxpayers may be able to take either a credit or a deduction for income taxes paid to a foreign country. This benefit reduces the taxes these taxpayers pay in situations where both the U.S. and another country tax the same income.

        6. Use IRS Free File. Taxpayers who live abroad can prepare and e-file their federal tax return for free by using IRS Free File. People who make $57,000 or less can use Free File’s brand-name software. People who earn more can use Free File Fillable Forms, an electronic version of IRS paper forms. Free File is available exclusively through the IRS.gov website.

        7. Get Tax Help Outside the U.S. Taxpayers living abroad can get IRS help in four U.S. embassies and consulates. IRS staff at these offices can help with tax filing issues and answer questions about IRS notices and tax bills. The offices also have tax forms and publications. To find the nearest foreign IRS office, visit the IRS.gov website. At the bottom of the home page click on the link labeled ‘Contact Your Local IRS Office.’ Then click on ‘International.’
        More information is available in Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad. IRS forms and publications are available at IRS.gov or by calling 1-800-829-3676.

        Additional IRS Resources:

        IRS YouTube Videos:

         


        IRS Tax Tip 2013-43

        Don’t Miss the Health Insurance Deduction if You’re Self-Employed

        If you are self-employed, the IRS wants you to know about a tax deduction generally available to people who are self-employed.

        The deduction is for medical, dental or long-term care insurance premiums that self-employed people often pay for themselves, their spouse and their dependents. The insurance can also cover your child who was under age 27 at the end of 2012, even if the child was not your dependent.

        You may be able to take this deduction if one of the following applies to you:

        • You had a net profit from self-employment. You would report this on a Schedule C, Profit or Loss From Business, Schedule C-EZ, Net Profit From Business, or Schedule F, Profit or Loss From Farming.

        • You had self-employment earnings as a partner reported to you on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc.

        • You used an optional method to figure your net earnings from self-employment on Schedule SE, Self-Employment Tax.

        • You were paid wages reported on Form W-2, Wage and Tax Statement, as a shareholder who owns more than two percent of the outstanding stock of an S corporation.

        There are also some rules that apply to how the insurance plan is established. Follow these guidelines to make sure the plan qualifies:

        • If you’re self-employed and file Schedule C, C-EZ, or F, the policy can be in your name or in your business’ name.

        • If you’re a partner, the policy can be in your name or the partnership’s name and either of you can pay the premiums.

        • If the policy is in your name and you pay the premiums, the partnership must reimburse you and include the premiums as income on your Schedule K-1.

        • If you’re an S corporation shareholder, the policy can be in your name or the S corporation’s name and either of you can pay the premiums.

        • If the policy is in your name and you pay the premiums, the S corporation must reimburse you and include the premiums as wage income on your Form W-2.

        For more information, see Publication 535, Business Expenses. It’s available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

        Additional IRS Resources:

        • Publication 535, Business Expenses
        • Publication 225, Farmer’s Tax Guide
        • Schedule C, Profit or Loss From Business
        • Schedule C-EZ, Net Profit From Business
        • Schedule F, Profit or Loss From Farming

        IRS Tax Tip 2013-44

        Two Education Credits Help Pay Higher Education Costs


        The American Opportunity Credit and the Lifetime Learning Credit may help you pay for the costs of higher education. If you pay tuition and fees for yourself, your spouse or your dependent you may qualify for these credits.


        Here are some facts the IRS wants you to know about these important credits:

        The American Opportunity Credit

        • The AOTC is worth up to $2,500 per eligible student.
        • The credit is available for the first four years of higher education at an eligible college, university or vocational school.
        • The credit lowers your taxes and is partially refundable. This means you could get a refund of up to $1,000 even if you owe zero tax.
        • An eligible student must be working toward a degree, certificate or other recognized credential.
        • The student must be enrolled at least half time for at least one academic period that began during the year.
        • You generally can claim the costs of tuition and required fees, books and other required course materials. Other expenses, such as room and board, do not qualify.

        The Lifetime Learning Credit

        • The credit is worth up to $2,000 per tax return per year. The yearly limit applies no matter how many students are eligible for the credit.
        • The credit is nonrefundable. This means the amount you can claim is limited to the amount of tax you owe.
        • The credit is available for all years of higher education. This includes courses taken to acquire or improve job skills.
        • You can claim the costs of tuition and fees required for enrollment or attendance. This includes amounts you were required to pay to the institution for course-related books, supplies and equipment.

        You cannot claim either of these credits if someone else claims you as a dependent on his or her tax return. Both credits are subject to income limitations and may be reduced or eliminated depending on your income.
        Keep in mind that you can’t claim both credits for the same student in the same year. You may not claim both credits for the same expense. Parents or students claiming either credit should receive a Form 1098-T, Tuition Statement, from their educational institution. You should make sure it is complete and correct.
        Find out more details about these credits and other college tax benefits in Publication 970, Tax Benefits for Education. You can get the booklet at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

        Additional IRS Resources:

        Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits)

         


        IRS Tax Tip 2013-47

        Get Connected to the IRS with Social Media


        The April 15 tax deadline will soon be here. Those who wait until the last minute to file may be rushing to find the tax information they need. Tax preparers, businesses, news media and web masters may also be looking for creative ways to help their clients find IRS tax information and tools.

        Consider using these IRS social media tools to help you or your website visitors navigate the tax deadline.

        • IRS2Go. IRS's free mobile app gives you your refund status, tax news updates, IRS You Tube videos and also lets you request your tax records. IRS2Go is available for the iPhone, iTouch or Android mobile devices.
        • YouTube. IRS offers video tax tips on a variety of topics in English, Spanish and American Sign Language.
        • Twitter. Tweets from @IRSnews provide tax-related announcements and daily tax tips. Tweets from @IRStaxpros offer news and guidance for tax professionals. Tweets from @IRSenEspanol have news and information in Spanish, and @RecruitmentIRS provides updates for job seekers.
        • Podcasts IRS has short audio recordings that offer one tax-related topic per podcast. They are available on iTunes or through the Multimedia Center. Transcripts of the Podcasts are also available.
        • Tumblr. IRS Tumblr is a microblogging platform where users can access IRS tax tips, videos, and podcasts. The IRS uses Tumblr to share information about important programs. Tumblr can be accessed from your browser, smartphone, tablet or desktop.

        Protecting your privacy is a top priority at the IRS. The IRS uses social media tools to share public information, not to answer personal tax or account questions. You should never post your Social Security number or any other confidential information on social media sites.
        Get connected and stay connected to the IRS with social media.

        Additional IRS Resources:

        IRS YouTube Video:

        IRS Social Media - English

         


        IRS Tax Tip 2013-48

        Get Credit for Making Your Home Energy-Efficient


        If you made your home more energy efficient last year, you may qualify for a tax credit on your 2012 federal income tax return.
        Here is some basic information about home energy credits that you should know.


        Non-Business Energy Property Credit

        • You may claim a credit of 10 percent of the cost of certain energy saving property that you added to your main home. This includes the cost of qualified insulation, windows, doors and roofs.
        • In some cases, you may be able to claim the actual cost of certain qualified energy-efficient property. Each type of property has a different dollar limit. Examples include the cost of qualified water heaters and qualified heating and air conditioning systems.
        • This credit has a maximum lifetime limit of $500. You may only use $200 of this limit for windows.
        • Your main home must be located in the U.S. to qualify for the credit.
        • Not all energy-efficient improvements qualify, so be sure you have the manufacturer’s credit certification statement. It is usually available on the manufacturer’s website or with the product’s packaging.
        • The credit was to expire at the end of 2011. A recent law extended it for two years through the end of 2013.

        Residential Energy Efficient Property Credit

        • This tax credit is 30 percent of the cost of alternative energy equipment that you installed on or in your home.
        • Qualified equipment includes solar hot water heaters, solar electric equipment and wind turbines.
        • There is no limit on the amount of credit available for most types of property. If your credit is more than the tax you owe, you can carry forward the unused portion of this credit to next year’s tax return.
        • You must install qualifying equipment in connection with your home located in the United States. It does not have to be your main home.
        • The credit is available through 2016.

        Use Form 5695, Residential Energy Credits, to claim these credits. You can get Form 5695 at IRS.gov or order it by calling 1-800-TAX-FORM (800-829-3676).

        Additional IRS Resources:

         


        IRS Tax Tip 2013-49

        Six Tips on Making Estimated Tax Payments


        Some taxpayers may need to make estimated tax payments during the year. The type of income you receive determines whether you must pay estimated taxes.

        Here are six tips from the IRS about making estimated tax payments.

        1. If you do not have taxes withheld from your income, you may need to make estimated tax payments. This may apply if you have income such as self-employment, interest, dividends or capital gains. It could also apply if you do not have enough taxes withheld from your wages. If you are required to pay estimated taxes during the year, you should make these payments to avoid a penalty.

        2. Generally, you may need to pay estimated taxes in 2013 if you expect to owe $1,000 or more in taxes when you file your federal tax return. Other rules apply, and special rules apply to farmers and fishermen.

        3. When figuring the amount of your estimated taxes, you should estimate the amount of income you expect to receive for the year. You should also include any tax deductions and credits that you will be eligible to claim. Be aware that life changes, such as a change in marital status or a child born during the year can affect your taxes. Try to make your estimates as accurate as possible.

        4. You normally make estimated tax payments four times a year. The dates that apply to most people are April 15, June 17 and Sept. 16 in 2013, and Jan. 15, 2014.

        5. You should use Form 1040-ES, Estimated Tax for Individuals, to figure your estimated tax.

        6. You may pay online or by phone. You may also pay by check or money order, or by credit or debit card. You’ll find more information about your payment options in the Form 1040-ES instructions. Also, check out the Electronic Payment Options Home Page at IRS.gov. If you mail your payments to the IRS, you should use the payment vouchers that come with Form 1040-ES.

        For more information about estimated taxes, see Publication 505, Tax Withholding and Estimated Tax. Forms and publications are available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

        Additional IRS Resources:

        IRS YouTube Videos:

        IRS Podcast:

         


        IRS Tax Tip 2013-51

        Eight Tax-Time Errors to Avoid


        If you make a mistake on your tax return, it usually takes the IRS longer to process it.
        The IRS may have to contact you about that mistake before your return is processed. This will delay the receipt of your tax refund.
        The IRS reminds filers that e-filing their tax return greatly lowers the chance of errors.
        In fact, taxpayers are about twenty times more likely to make a mistake on their return if they file a paper return instead of e-filing their return.

        Here are eight common errors to avoid.


        1. Wrong or missing Social Security numbers. Be sure you enter SSNs for yourself and others on your tax return exactly as they are on the Social Security cards.

        2. Names wrong or misspelled. Be sure you enter names of all individuals on your tax return exactly as they are on their Social Security cards.

        3. Filing status errors.
        Choose the right filing status. There are five filing statuses: Single, Married Filing Jointly, Married Filing Separately, Head of Household and Qualifying Widow(er) With Dependent Child. See Publication 501, Exemptions, Standard Deduction and Filing Information, to help you choose the right one. E-filing your tax return will also help you choose the right filing status.

        4. Math mistakes.
        If you file a paper tax return, double check the math. If you e-file, the software does the math for you. For example, if your Social Security benefits are taxable, check to ensure you figured the taxable portion correctly.

        5. Errors in figuring credits, deductions.
        Take your time and read the instructions in your tax booklet carefully. Many filers make mistakes figuring their Earned Income Tax Credit, Child and Dependent Care Credit and the standard deduction. For example, if you are age 65 or older or blind check to make sure you claim the correct, larger standard deduction amount.

        6. Wrong bank account numbers.
        Direct deposit is the fast, easy and safe way to receive your tax refund. Make sure you enter your bank routing and account numbers correctly.

        7. Forms not signed, dated.
        An unsigned tax return is like an unsigned check – it’s invalid. Remember both spouses must sign a joint return.

        8. Electronic signature errors.
        If you e-file your tax return, you will sign the return electronically using a Personal Identification Number. For security purposes, the software will ask you to enter the Adjusted Gross Income from your originally-filed 2011 federal tax return. Do not use the AGI amount from an amended 2011 return or an AGI provided to you if the IRS corrected your return. You may also use last year's PIN if you e-filed last year and remember your PIN.

        Additional IRS Resources:

        IRS YouTube Videos:

        IRS Podcasts:

         

         


        IRS Tax Tip 2013-53

         

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

        If you find you owe tax after completing your federal tax return but can't pay it all when you file, the IRS wants you to know your options.

        Here are four tips that can help you lower the amount of interest and penalties when you don’t pay the full amount on time.

        1. File on time and pay as much as you can. Filing on time ensures that you will avoid the late filing penalty. Paying as much as you can reduces the late payment penalty and interest charges. For electronic payment options, see IRS.gov. If you pay by check, make it payable to the United States Treasury and include it with your return.

        2. Consider getting a loan or paying by credit card. The interest and fees charged by a bank or credit card company may be lower than IRS interest and penalties. For credit card options, see IRS.gov.

        3. Request a payment agreement. You do not need to wait for IRS to send you a bill before requesting a payment plan. You can:

        •  
          • Use the Online Payment Agreement tool at IRS.gov, or
          • Complete and submit Form 9465, Installment Agreement Request, with your tax return. Find out about payment agreement user fees at IRS.gov or on Form 9465.

        4. Don’t ignore a tax bill. If you get a bill from the IRS, contact them right away to talk about payment options. The IRS may take collection action if you ignore the bill, which will only make things worse.

        In short, it is always best to file on time, pay as much as you can by the tax deadline and pay the balance as soon as you can. For more information on the IRS collection process go to IRS.gov or see IRSVideos.gov/OweTaxes.

        Additional IRS Resources:

        IRS YouTube Video:

         


        IRS Tax Tip 2013-55

         

        Ten Helpful Tips for Paying Your Taxes

        Are you making a payment with your federal tax return this year?

        If so, here are 10 important things the IRS wants you to know about correctly paying your federal income taxes.

        1. Never send cash.

        2. If you file electronically, you can file and pay in a single step with an electronic funds withdrawal. If you e-file by yourself you can use your tax preparation software to make the withdrawal. If you use a tax preparer to e-file, you can ask the preparer to make your tax payment electronically.

        3. Whether you file a paper return or e-file your return, you can pay by phone or online with a credit or debit card. The company that processes your payment will charge a processing fee.

        4. If you file Schedule A, Itemized Deductions, you may be able to deduct the credit or debit card processing fee on next year’s return. This is a miscellaneous itemized deduction subject to the 2 percent limit.

        5. Electronic payment options provide another way to pay taxes by check or money order. You can make payments 24 hours a day, seven days a week. Visit IRS.gov and click on the ‘Payments’ tab near the top left of the home page for more details.

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

        7. Be sure to write your name, address and daytime phone number on the front of your payment. Also, write the tax year, form number you are filing and the first Social Security number listed on your tax return.

        8. Complete Form 1040-V, Payment Voucher, and include it with your tax return and payment when mailing it to the IRS. Double-check the IRS mailing address. This will help the IRS process your payment accurately and efficiently. Go to IRS.gov to download and print this form.

        9. Remember to enclose your payment with your return but do not staple it to any tax form.

        10. For more information, call 800-829-4477 and select TeleTax Topic 158, Ensuring Proper Credit of Payments. You can also find out more in the Form 1040-V instructions available at IRS.gov.

        Additional IRS Resources:

        IRS YouTube Videos:

        IRS Podcasts:

         


         

        IRS Tax Tip 2013-56

         

        IRS Offers Tips for Taxpayers Who Missed the Tax Deadline


        The IRS has some advice for taxpayers who missed the tax filing deadline.

        • File as soon as possible. If you owe federal income tax, you should file and pay as soon as you can to minimize any penalty and interest charges. There is no penalty for filing a late return if you are due a refund.
        • Penalties and interest may be due. If you missed the April 15 deadline, you may have to pay penalties and interest. The IRS may charge penalties for late filing and for late payment. The law generally does not allow a waiver of interest charges. However, the IRS will consider a reduction of these penalties if you can show a reasonable cause for being late.
        • E-file is your best option. IRS e-file programs are available through Oct. 15. E-file is the easiest, safest and most accurate way to file. With e-file, you will receive confirmation that the IRS has received your tax return. If you e-file and are due a refund, the IRS will normally issue it within 21 days.
        • Free File is still available. Everyone can use IRS Free File. If your income is $57,000 or less, you qualify to e-file your return using free brand-name software. If you made more than $57,000 and are comfortable preparing your own tax return, use Free File Fillable Forms to e-file. This program uses the electronic versions of paper IRS forms. IRS Free File is available only through IRS.gov.
        • Pay as much as you can. If you owe tax but can’t pay it all at once, you should pay as much as you can when you file your tax return. Pay the remaining balance due as soon as possible to minimize penalties and interest charges.
        • Installment Agreements are available. If you need more time to pay your federal income taxes, you can request a payment agreement with the IRS. Apply online using the IRS Online Payment Agreement Application tool or file Form 9465, Installment Agreement Request.
        • Refunds may be waiting. If you’re due a refund, you should file as soon as possible to get it. Even if you are not required to file, you may be entitled to a refund. This could apply if you had taxes withheld from your wages, or you qualify for certain tax credits. If you don’t file your return within three years, you could forfeit your right to the refund.

        For more information, visit IRS.gov.

        Additional IRS Resources:

        IRS YouTube Videos:

        IRS Podcasts:

        • Online Payment Agreement - English

         


        IRS Tax Tip 2013-60

        Six Facts on Tax Refunds and Offsets

        Certain financial debts from your past may affect your current federal tax refund. The law allows the use of part or all of your federal tax refund to pay other federal or state debts that you owe.
        Here are six facts from the IRS that you should know about tax refund ‘offsets.’

        1. A tax refund offset generally means the U.S. Treasury has reduced your federal tax refund to pay for certain unpaid debts.
        2. The Treasury Department’s Financial Management Service is the agency that issues tax refunds and conducts the Treasury Offset Program.
        3. If you have unpaid debts, such as overdue child support, state income tax or student loans, FMS may apply part or all of your tax refund to pay that debt.
        4. You will receive a notice from FMS if an offset occurs. The notice will include the original tax refund amount and your offset amount. It will also include the agency receiving the offset payment and that agency’s contact information.
        5. If you believe you do not owe the debt or you want to dispute the amount taken from your refund, you should contact the agency that received the offset amount, not the IRS or FMS.
        6. If you filed a joint tax return, you may be entitled to part or all of the refund offset. This rule applies if your spouse is solely responsible for the debt. To request your part of the refund, file Form 8379, Injured Spouse Allocation. Form 8379 is available on IRS.gov or by calling 1-800-829-3676.

        Additional IRS Resources:

        IRS YouTube Videos:

        IRS Podcasts:

         

         


         

        IRS Tax Tip 2013-61

        IRS Offers Tips for Dealing with Notices


        Each year, the IRS sends millions of letters and notices to taxpayers for a variety of reasons.

        Here are ten things you should know about IRS notices in case one shows up in your mailbox.


        1. Don’t panic. Many of these letters require a simple response.
        2. There are many reasons why the IRS sends correspondence. If you receive an IRS notice, it will typically cover a very specific issue about your account or tax return. Notices may require payment, notify you of changes to your account or ask you to provide more information.
        3. Each notice offers specific instructions on what you need to do to satisfy the inquiry.
        4. If you receive a notice advising you that the IRS has corrected your tax return, you should review the correspondence and compare it with the information on your return.
        5. If you agree with the correction to your account, then usually no reply is necessary unless a payment is due or the notice directs otherwise.
        6. If you do not agree with the correction the IRS made, it is important that you respond as requested. You should send a written explanation of why you disagree. Include any information and documents you want the IRS to consider with your response. Mail your reply with the bottom tear-off portion of the IRS letter to the address shown in the upper left-hand corner of the notice. Allow at least 30 days for a response.
        7. You should be able to resolve most notices that you receive without calling or visiting an IRS office. If you do have questions, call the telephone number in the upper right-hand corner of the notice. Have a copy of your tax return and the notice with you when you call. This will help the IRS answer your inquiry.
        8. Remember to keep copies of any notices you receive with your other income tax records.
        9. The IRS sends notices and letters by mail. The agency never contacts taxpayers about their tax account or tax return by email.
        10. For more information about IRS notices and bills, visit IRS.gov. Click on the link ‘Responding to a Notice’ at the bottom left of the home page. Also, see Publication 594, The IRS Collection Process. The publication is available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

        Additional IRS Resources:


        IRS YouTube Videos:

         

         


         

        IRS Tax Tip 2013-62

        Tips to Start Planning Next Year's Tax Return


        For most taxpayers, the tax deadline has passed. But planning for next year can start now.

        The IRS reminds taxpayers that being organized and planning ahead can save time and money in 2014. Here are six things you can do now to make next April 15 easier.


        1. Adjust your withholding. Each year, millions of American workers have far more taxes withheld from their pay than is required. Now is a good time to review your withholding to make the taxes withheld from your pay closer to the taxes you’ll owe for this year. This is especially true if you normally get a large refund and you would like more money in your paycheck. If you owed tax when you filed, you may need to increase the federal income tax withheld from your wages. Use the IRS Withholding Calculator at IRS.gov to complete a new Form W-4, Employee's Withholding Allowance Certificate.
        2. Store your return in a safe place. Put your 2012 tax return and supporting documents somewhere safe. If you need to refer to your return in the future, you’ll know where to find it. For example, you may need a copy of your return when applying for a home loan or financial aid. You can also use it as a helpful guide for next year's return.
        3. Organize your records. Establish one location where everyone in your household can put tax-related records during the year. This will avoid a scramble for misplaced mileage logs or charity receipts come tax time.
        4. Shop for a tax professional. If you use a tax professional to help you with tax planning, start your search now. You’ll have more time when you're not up against a deadline or anxious to receive your tax refund. Choose a tax professional wisely. You’re ultimately responsible for the accuracy of your own return regardless of who prepares it. Find tips for choosing a preparer at IRS.gov.
        5. Consider itemizing deductions. If you usually claim a standard deduction, you may be able to reduce your taxes if you itemize deductions instead. If your itemized deductions typically fall just below your standard deduction, you can ‘bundle’ your deductions. For example, an early or extra mortgage payment or property tax payment, or a planned donation to charity could equal some tax savings. See the Schedule A, Itemized Deductions, instructions for the list of items you can deduct. Planning an approach now that works best for you can pay off at tax time next year.
        6. Keep up with changes. Find out about tax law changes, helpful tips and IRS announcements all year by subscribing to IRS Tax Tips through IRS.gov or IRS2Go, the mobile app from the IRS. The IRS issues tips regularly during the summer and tax filing season.
        You can find forms and publications at IRS.gov or order them by calling 800-TAX-FORM (800-829-3676).

        Additional IRS Resources:

        IRS YouTube Videos:

        IRS Podcasts:

         


        Rockets Check back with us soon for the NEXT Tax Tip ! Rockets

         

         


        Very Important!

         

        If you receive a telephone call from an individual identifying himself as an AT&T Service Technician or any other
        Telephone Service Technician,conducting a test on the telephone lines and asks that to complete the test
        you must press the digits (9) then (0) then (#), (90#).
        DO NOT DO THIS!

        As confirmed by AT&T, verizon, GTE, Snopes and truthorfiction.com, this is a SCAM which enables them
        to place long distance calls billed to your account or home phone number.
        It was further informed that this SCAM has been originating from many local jails/prisons!

         


        Forms and publications are freely available on the IRS web site: www.irs.gov.

        The phone number for ordering forms is: 1-800-829-3976.

        You may call IRS @ 1-800-829-1040 for other information.


        If you received a letter from IRS: 

        Use the phone information contained within,

        it takes you directly to the right agent. 


        starsIRS Saysstars

        How Long To keep Your Records

        Individual Tax Returns
         
        5 Years
        Payroll Records
         
        7 Years
        Business Income & Expenses
         
        6 Years after Tax Return Is Filed

         

        Sue Says: Be Safe! ...............10 Years


        GBTS provides additional TAX TIPS through:

        IRS TAX TIPS NEWSROOM  


        To Contact Any of The Three Credit Agencies

        Equifax
        1-800-525-6285
        Experian
        1-800-397-3742
        TransUnion
        1-800-680-7289

         

        ** Remember the I. R. S. does not send E-Mail **

         


        Griffin Bookkeeping & Tax Service, Inc.,

        "GBTS"

        Since 1985

        Welcomes YOU to our Organization! We are continuously striving to 

        serve you better.


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