This seems to be a popular question this year. Last year's Tax Stimulus Payments are Not Taxable! That's good news, but it has caused some confusion about filing this year's 2008 tax return. Taxpayers that did not receive their stimulus payment last year may qualify for the Recovery Rebate Credit on this year's tax return.
The IRS has received a number of recurring questions involving stimulus payments and the recovery rebate credit. Here are some important tips to keep in mind:
Taxability:
Again, the economic stimulus payment is not taxable and it should not be reported as income on the 2008 Form 1040, 1040A or 1040EZ.
Refund delays:
IRS personnel are aware of reports that errors in claiming the recovery rebate credit could delay tax refunds for as much as eight to 12 weeks. These reports are false. As the IRS detects and corrects return errors concerning the recovery rebate credit, refund delays are currently no longer than about one week.
One payment:
In addition, the IRS notes taxpayers will receive a single refund that includes any recovery rebate credit to which they are entitled. The IRS will not be issuing separate recovery rebate credit payments.
Refund amounts:
The IRS reminds taxpayers they should not use their regular refund from last year in calculating the recovery rebate credit. Some taxpayers may be confusing their regular tax refunds with the economic stimulus payment they received when completing their 2008 tax return.
Please feel free to contact E-File Florida at 954-583-8534 or visit us on the internet at www.efileflorida.com for more great tax tips and articles.
IRS CIRCULAR 230 Required Notice - IRS regulations require that we inform you as follows: Any Federal tax advice contained in this communication (including any attachments) is not intended to be used and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction as tax related matter(s).
Saturday, January 31, 2009
Thursday, January 29, 2009
Are You a Rental Property Owner Facing Foreclosure? Read on.....
I'm getting phone calls every other day from investors facing foreclosure on their rental properties. What are the tax consequences of such an occurence? They can be costly! The Mortgage Forgiveness Debt Relief Act does not cover rental properties. What this means is that when the bank forecloses on your investment property, you may likely be issued a 1099C form. (Your tax liability depends on whether you have a recourse or non-recourse loan. Recourse means you, the borrower, has personal liability for the loan, in addition to the risk of losing your real property. ) The IRS will also recieve a copy of the same form. This form shows the amount of "cancelled debt" that will be considered income to you. In other words, if your mortgage on your rental property was $200,000 and the bank was only able to sell it for $120,000, the difference of $80,000 is now considered cancelled debt income to you. You must add this amount on your tax return and be taxed on an additional $80,000 income. OUCH!
I want to propose an idea if you are an investor who unfortunately finds him/herself in this situation. It's called a Deed in lieu of foreclosure.
A Deed in lieu of foreclosure is a deed instrument in which a mortgagor (i.e. the borrower) conveys all interest in a real property to the mortgagee (i.e. the lender) to satisfy a loan that is in default and avoid foreclosure proceedings.
The deed in lieu of foreclosure offers several advantages to both the borrower and the lender. The principal advantage to the borrower is that it immediately releases him/her from most or all of the personal indebtedness associated with the defaulted loan. The borrower also avoids the public notoriety of a foreclosure proceeding and may receive more generous terms than he/she would in a formal foreclosure. Another benefit to the borrower is that it hurts their credit less than a foreclosure does. Advantages to a lender include a reduction in the time and cost of a repossession, and additional advantages if the borrower subsequently files for bankruptcy.
In order to be considered a deed in lieu of foreclosure, the indebtedness must be secured by the real estate being transferred. Both sides must enter into the transaction voluntarily and in good faith. The settlement agreement must have total consideration that is at least equal to the fair market value of the property being conveyed. Sometimes, the lender will not proceed with a deed in lieu of foreclosure if the outstanding indebtedness of the borrower exceeds the current fair market value of the property. This is an important point. If you have equity in this property, no matter how small, you may want to contact your lender to see if this is something you can work out. Other times, lenders will agree since they will end up with the property anyway and the foreclosure process is costly to the lender. Be sure that the lender agrees, in writing, to forgive any deficiency (the amount of the loan that isn’t covered by the sale proceeds) that remains after the house is sold.
Because of the requirement that the instrument be voluntary, lenders will often not act upon a deed in lieu of foreclosure unless they receive a written offer of such a conveyance from the borrower that specifically states that the offer to enter into negotiations is being made voluntarily. This will enact the parol evidence rule (get it in writing!) and protect the lender from a possible subsequent claim that the lender acted in bad faith or pressured the borrower into the settlement. Both sides may then proceed with settlement negotiations.
Neither the borrower nor the lender is obliged to proceed with the deed in lieu of foreclosure until a final agreement is reached.
For you New Yorkers out there....the Home Equity Theft Prevention Act has created some confusion regarding this frequently-used method of settlement. It is unclear whether HETPA applies to deeds in lieu of foreclosure since there is no clear exclusion as there is for a referee's deed, for example. The 2-year right of recission is not a risk that banks or title insurers are comfortable with, especially given the complexities of compliance, so many banks and title insurers in New York are not willing to work with deeds in lieu.
Please feel free to contact E-File Florida at 954-583-8534 or visit us on the internet at http://www.efileflorida.com/ for more great tax tips and articles.
IRS CIRCULAR 230 Required Notice - IRS regulations require that we inform you as follows: Any Federal tax advice contained in this communication (including any attachments) is not intended to be used and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction as tax related matter(s).
I want to propose an idea if you are an investor who unfortunately finds him/herself in this situation. It's called a Deed in lieu of foreclosure.
A Deed in lieu of foreclosure is a deed instrument in which a mortgagor (i.e. the borrower) conveys all interest in a real property to the mortgagee (i.e. the lender) to satisfy a loan that is in default and avoid foreclosure proceedings.
The deed in lieu of foreclosure offers several advantages to both the borrower and the lender. The principal advantage to the borrower is that it immediately releases him/her from most or all of the personal indebtedness associated with the defaulted loan. The borrower also avoids the public notoriety of a foreclosure proceeding and may receive more generous terms than he/she would in a formal foreclosure. Another benefit to the borrower is that it hurts their credit less than a foreclosure does. Advantages to a lender include a reduction in the time and cost of a repossession, and additional advantages if the borrower subsequently files for bankruptcy.
In order to be considered a deed in lieu of foreclosure, the indebtedness must be secured by the real estate being transferred. Both sides must enter into the transaction voluntarily and in good faith. The settlement agreement must have total consideration that is at least equal to the fair market value of the property being conveyed. Sometimes, the lender will not proceed with a deed in lieu of foreclosure if the outstanding indebtedness of the borrower exceeds the current fair market value of the property. This is an important point. If you have equity in this property, no matter how small, you may want to contact your lender to see if this is something you can work out. Other times, lenders will agree since they will end up with the property anyway and the foreclosure process is costly to the lender. Be sure that the lender agrees, in writing, to forgive any deficiency (the amount of the loan that isn’t covered by the sale proceeds) that remains after the house is sold.
Because of the requirement that the instrument be voluntary, lenders will often not act upon a deed in lieu of foreclosure unless they receive a written offer of such a conveyance from the borrower that specifically states that the offer to enter into negotiations is being made voluntarily. This will enact the parol evidence rule (get it in writing!) and protect the lender from a possible subsequent claim that the lender acted in bad faith or pressured the borrower into the settlement. Both sides may then proceed with settlement negotiations.
Neither the borrower nor the lender is obliged to proceed with the deed in lieu of foreclosure until a final agreement is reached.
For you New Yorkers out there....the Home Equity Theft Prevention Act has created some confusion regarding this frequently-used method of settlement. It is unclear whether HETPA applies to deeds in lieu of foreclosure since there is no clear exclusion as there is for a referee's deed, for example. The 2-year right of recission is not a risk that banks or title insurers are comfortable with, especially given the complexities of compliance, so many banks and title insurers in New York are not willing to work with deeds in lieu.
Please feel free to contact E-File Florida at 954-583-8534 or visit us on the internet at http://www.efileflorida.com/ for more great tax tips and articles.
IRS CIRCULAR 230 Required Notice - IRS regulations require that we inform you as follows: Any Federal tax advice contained in this communication (including any attachments) is not intended to be used and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction as tax related matter(s).
Thursday, January 15, 2009
How Much Should You Pay For Your Tax Preparation?
The price you will pay for tax preparation services depends upon one thing: How complex your tax return is. The more complicated your return, the higher the price will be.
This is true whether your preparer charges a flat-rate, an hourly rate, or has a price for each tax form.For a relatively straightforward tax return (for income such as wages, interest, and dividends, and no itemization), expect to pay between $125 and $200. If you are self-employed, a landlord, or have brokerage trades to report, expect to pay between $200 and $450. If you claim the Earned Income Credit, expect to pay between $150 and $200 due to the complexity of the EIC tax form.
In my experience, retail and independent tax offices tend to charge about the same for tax preparation. It is advisable and wise to seek the services of either a CPA or an Enrolled Agent. Enrolled Agents are Federally licensed by the IRS in the specific area of taxation.
Your tax preparation fee should include electronic filing of your return, or extra copies of the return to file on paper, as well as a brief consultation before or after your taxes are prepared to discuss any concerns you have.
Feel free to visit our website at www.efileflorida.com for more informative articles and tax tips.
This is true whether your preparer charges a flat-rate, an hourly rate, or has a price for each tax form.For a relatively straightforward tax return (for income such as wages, interest, and dividends, and no itemization), expect to pay between $125 and $200. If you are self-employed, a landlord, or have brokerage trades to report, expect to pay between $200 and $450. If you claim the Earned Income Credit, expect to pay between $150 and $200 due to the complexity of the EIC tax form.
In my experience, retail and independent tax offices tend to charge about the same for tax preparation. It is advisable and wise to seek the services of either a CPA or an Enrolled Agent. Enrolled Agents are Federally licensed by the IRS in the specific area of taxation.
Your tax preparation fee should include electronic filing of your return, or extra copies of the return to file on paper, as well as a brief consultation before or after your taxes are prepared to discuss any concerns you have.
Feel free to visit our website at www.efileflorida.com for more informative articles and tax tips.
Wednesday, January 14, 2009
Pay Stub Loans/Tax Returns
OK. Every year around this time I undoubtedly receive several phone calls that goes something like this: " Hi. I have my last paycheck stub of the year and I'd like to go ahead and file my tax return. I really need the money. My company probably wont give me my W2 until the very last minute (Jan 31st). When can I come in and get that done?" My typical response is, we're not allowed to submit your tax return without your official W2. "Well, that 'other big chain tax store' (we won't mention any names, but you know who they are) will do it, OR, the guy down the street at such and such company did it for my co-worker."
I want to say it loud and clear. You must have a valid and current W2 in order to file your income tax return. If, by Feb 15th, after exhausting every effort to get your W2 from your employer has failed, then and only then can we submit a "Substitute W2" form based on that last paycheck stub.
I want to help clarify some of the confusion out there. We all know that certain companies have huge advertising budgets. You may hear something on TV that sounds something like this: "Bring in your last pay stub and let us see if you qualify for up to $1000." The only reason they ask for the paystub is for proof of income. What you are applying for has nothing to do with a tax return! It is merely a line of credit! PERIOD! If you have a decent credit score and proof of income, they will open up a line of credit (aka- A Loan) for UP TO $1000. It may not be the full $1000. You may only qualify for $400, for example. Just depends. They will pre-load these funds on a Debit Mastercard for you and say, "Have a nice day."
There is an initial cost associated with this line of credit and that does not include the high interest that you will pay when the loan needs to be repaid by the Feb 15th due date!
Don't take my word for it. Call these companies and ask the right questi0ns. These are NOT BASED on your anticipated tax refund!!! It's just kind of easy for it to sound that way in the advertisements, if you're not paying close attention.
I hope that this helps clear up some of the confusion.
As licensed tax professionals, we must adhere to a code of ethics. We are not allowed to submit a tax return without a W2, if you were an employee.
Feel free to call us with any questions at 954-583-8534. You may also visit our website at www.efileflorida.com for more informative tips and articles.
I want to say it loud and clear. You must have a valid and current W2 in order to file your income tax return. If, by Feb 15th, after exhausting every effort to get your W2 from your employer has failed, then and only then can we submit a "Substitute W2" form based on that last paycheck stub.
I want to help clarify some of the confusion out there. We all know that certain companies have huge advertising budgets. You may hear something on TV that sounds something like this: "Bring in your last pay stub and let us see if you qualify for up to $1000." The only reason they ask for the paystub is for proof of income. What you are applying for has nothing to do with a tax return! It is merely a line of credit! PERIOD! If you have a decent credit score and proof of income, they will open up a line of credit (aka- A Loan) for UP TO $1000. It may not be the full $1000. You may only qualify for $400, for example. Just depends. They will pre-load these funds on a Debit Mastercard for you and say, "Have a nice day."
There is an initial cost associated with this line of credit and that does not include the high interest that you will pay when the loan needs to be repaid by the Feb 15th due date!
Don't take my word for it. Call these companies and ask the right questi0ns. These are NOT BASED on your anticipated tax refund!!! It's just kind of easy for it to sound that way in the advertisements, if you're not paying close attention.
I hope that this helps clear up some of the confusion.
As licensed tax professionals, we must adhere to a code of ethics. We are not allowed to submit a tax return without a W2, if you were an employee.
Feel free to call us with any questions at 954-583-8534. You may also visit our website at www.efileflorida.com for more informative tips and articles.
Friday, January 9, 2009
IRS Mileage Rates Adjusted for 2008
The standard mileage rate for business use of a car, van, pick-up or panel truck is 50.5 cents per mile from Jan. 1, 2008, to June 30, 2008, up 2 cents from 2007. The rate is 58.5 cents for each mile driven during the rest of 2008.
From Jan. 1, 2008, to June 30, 2008, the standard mileage rate for the cost of operating a vehicle for medical reasons or as part of a deductible move is 19 cents per mile, down a penny from 2007. The rate is 27 cents from July 1 to Dec. 31.
The standard mileage rate for using a car to provide services to charitable organizations is set by law and remains at 14 cents a mile. Special rates apply to the Midwest disaster area.
Visit our website at www.efileflorida.com for more up to the minute informative tips and articles. If you would like to schedule and appointment for professional income tax preparation, call us at 954-583-8534. New customers, mention this blog and recieve a $25 discount!
From Jan. 1, 2008, to June 30, 2008, the standard mileage rate for the cost of operating a vehicle for medical reasons or as part of a deductible move is 19 cents per mile, down a penny from 2007. The rate is 27 cents from July 1 to Dec. 31.
The standard mileage rate for using a car to provide services to charitable organizations is set by law and remains at 14 cents a mile. Special rates apply to the Midwest disaster area.
Visit our website at www.efileflorida.com for more up to the minute informative tips and articles. If you would like to schedule and appointment for professional income tax preparation, call us at 954-583-8534. New customers, mention this blog and recieve a $25 discount!
Expiring Tax Breaks Renewed
Several popular tax breaks that expired at the end of 2007 were renewed for tax-years 2008 and 2009. As a result, eligible taxpayers can claim:
The deduction for state and local sales taxes on Form 1040 Schedule A , Line 5
The educator expense deduction on Form 1040, Line 23 or Form 1040A, Line 16
The tuition and fees deduction on Form 8917 and
The District of Columbia first-time homebuyer credit on Form 8859
In addition, the residential energy-efficient property credit is extended through 2016. In general, solar electric, solar water heating and fuel cell property qualify for this credit. Starting in 2008, small wind energy and geothermal heat pump property also qualify.
The non-business energy property credit for insulation, exterior windows, exterior doors, furnaces, water heaters and other energy-saving improvements to a main home is not available in 2008 but will return in 2009.
Visit our website at www.efileflorida.com for more up to the minute informative tips and articles. If you would like to schedule and appointment for professional income tax preparation, call us at 954-583-8534. New customers, mention our blog and recieve a $25 discount!
The deduction for state and local sales taxes on Form 1040 Schedule A , Line 5
The educator expense deduction on Form 1040, Line 23 or Form 1040A, Line 16
The tuition and fees deduction on Form 8917 and
The District of Columbia first-time homebuyer credit on Form 8859
In addition, the residential energy-efficient property credit is extended through 2016. In general, solar electric, solar water heating and fuel cell property qualify for this credit. Starting in 2008, small wind energy and geothermal heat pump property also qualify.
The non-business energy property credit for insulation, exterior windows, exterior doors, furnaces, water heaters and other energy-saving improvements to a main home is not available in 2008 but will return in 2009.
Visit our website at www.efileflorida.com for more up to the minute informative tips and articles. If you would like to schedule and appointment for professional income tax preparation, call us at 954-583-8534. New customers, mention our blog and recieve a $25 discount!
Economic Stimulus Payments Tax Free
Economic stimulus payments are not taxable, and they are not reported on 2008 tax returns. However, the stimulus payment does affect whether a taxpayer can claim the Recovery Rebate Credit and how much credit he or she can get. The credit is figured like last year's economic stimulus payment except that the amounts are based on tax year 2008 instead of 2007. A taxpayer may qualify for the Recovery Rebate Credit if, for example, she did not get an economic-stimulus payment or had a child in 2008.
Visit our website at www.efileflorida.com for more informative articles and tips. Feel free to call us at 954-583-8534 if you would like to schedule an appointment for professional tax preparation.
Visit our website at www.efileflorida.com for more informative articles and tips. Feel free to call us at 954-583-8534 if you would like to schedule an appointment for professional tax preparation.
Thursday, January 8, 2009
Earned Income Credit
Earned Income Credit (EIC) January, 2009
There are a few changes that have been made to the qualifications for the Earned Income Credit. This credit helps those taxpayers whose income is under a certain amount (listed below) and typically have dependant children living with them. Some single people may qualify as well.
The following paragraphs explain the changes to the credit for 2008.
The amount of credit increased. The maximum amount of the credit has increased. The most you can get is:
$2,917 if you have one qualifying child,
$4,824 if you have more than one qualifying child, or
$438 if you do not have a qualifying child.
The earned income amount increased. The maximum amount of income you can earn and still get the credit has increased for 2008. You may be able to take the credit if:
You have more than one qualifying child and you earn less than $38,646 ($41,646 if married filing jointly), You have one qualifying child and you earn less than $33,995 ($36,995 if married filing jointly), or You do not have a qualifying child and you earn less than $12,880 ($15,880 if married filing jointly).
The maximum amount of AGI you can have and still get the credit also has increased. You may be able to take the credit if your AGI is less than the amount in the above list that applies to you.
Feel Free to visit our website for more great tips and articles at www.efileflorida.com. If you have a question regarding the Earned Income Credit, call us at 954-583-8534.
There are a few changes that have been made to the qualifications for the Earned Income Credit. This credit helps those taxpayers whose income is under a certain amount (listed below) and typically have dependant children living with them. Some single people may qualify as well.
The following paragraphs explain the changes to the credit for 2008.
The amount of credit increased. The maximum amount of the credit has increased. The most you can get is:
$2,917 if you have one qualifying child,
$4,824 if you have more than one qualifying child, or
$438 if you do not have a qualifying child.
The earned income amount increased. The maximum amount of income you can earn and still get the credit has increased for 2008. You may be able to take the credit if:
You have more than one qualifying child and you earn less than $38,646 ($41,646 if married filing jointly), You have one qualifying child and you earn less than $33,995 ($36,995 if married filing jointly), or You do not have a qualifying child and you earn less than $12,880 ($15,880 if married filing jointly).
The maximum amount of AGI you can have and still get the credit also has increased. You may be able to take the credit if your AGI is less than the amount in the above list that applies to you.
Feel Free to visit our website for more great tips and articles at www.efileflorida.com. If you have a question regarding the Earned Income Credit, call us at 954-583-8534.
Tuesday, January 6, 2009
First-Time Homebuyers Tax Credit
Buying Your First Home?
Take Advantage of the New Tax Credit
Now may be a good time to purchase a home, since there are alot of good deals awaiting those with a down payment to facilitate a purchase. Congress has come up with a novel way to help first-time homebuyers afford the down payment on a home.
For home purchases made after April 8, 2008 and before July 1, 2009, a first-time homebuyer can receive a refundable tax credit equal to 10% of the purchase price of the home. This credit is capped at $7500 ($3750 for married taxpayers filing separately).
But, before you get too excited, you should know that the credit is essentially an interest-free loan that must be paid back over a 15 year period. Payments will be made in the form of additional tax on the homeowner’s federal tax return for the next 15 years. If the home is sold or no longer used as a primary residence before the 15 year period, the balance of the credit must be repaid in the year that the home is no longer the taxpayer’s primary residence. However, the credit repayment amount cannot exceed the gain from the sale of the residence to an unrelated person, and no repayment is required in a year after the death of the taxpayer.
A first-time homebuyer is a taxpayer (or spouse if married) who had no present ownership interest in a principal residence in the U.S.A. during the 3-year period before the purchase of the home to which the credit applies.
This credit is phased out for individuals with incomes between $75,000 and $95,000. Married taxpayers filing a joint return are phased out with incomes between $150,000 and $170,000.
The credit is not allowed for nonresident alien taxpayers, homes that are financed with tax exempt mortgage bonds, or property purchased from a related party (relative). There are also special rules to deal with divorce, casualty losses, involuntary conversions, etc.
If you would like to take advantage of this opportunity and see how this credit will help your situation, E-File Florida is uniquely qualified. Not only can we handle the tax aspects of this scenario, but we can also help you as real estate agents and help you to qualify for a mortgage. Feel free to contact us at 954-583-8534 or visit our website at www.efileflorida.com.
For home purchases made after April 8, 2008 and before July 1, 2009, a first-time homebuyer can receive a refundable tax credit equal to 10% of the purchase price of the home. This credit is capped at $7500 ($3750 for married taxpayers filing separately).
But, before you get too excited, you should know that the credit is essentially an interest-free loan that must be paid back over a 15 year period. Payments will be made in the form of additional tax on the homeowner’s federal tax return for the next 15 years. If the home is sold or no longer used as a primary residence before the 15 year period, the balance of the credit must be repaid in the year that the home is no longer the taxpayer’s primary residence. However, the credit repayment amount cannot exceed the gain from the sale of the residence to an unrelated person, and no repayment is required in a year after the death of the taxpayer.
A first-time homebuyer is a taxpayer (or spouse if married) who had no present ownership interest in a principal residence in the U.S.A. during the 3-year period before the purchase of the home to which the credit applies.
This credit is phased out for individuals with incomes between $75,000 and $95,000. Married taxpayers filing a joint return are phased out with incomes between $150,000 and $170,000.
The credit is not allowed for nonresident alien taxpayers, homes that are financed with tax exempt mortgage bonds, or property purchased from a related party (relative). There are also special rules to deal with divorce, casualty losses, involuntary conversions, etc.
If you would like to take advantage of this opportunity and see how this credit will help your situation, E-File Florida is uniquely qualified. Not only can we handle the tax aspects of this scenario, but we can also help you as real estate agents and help you to qualify for a mortgage. Feel free to contact us at 954-583-8534 or visit our website at www.efileflorida.com.
Monday, January 5, 2009
PROPERTY TAX DEDUCTIONS
New for 2008 and 2009, taxpayers who do not itemize can add to their standard deduction the cost of their real property taxes, not to exceed $500 ($1000 for taxpayers filing jointly).
Those who stand to benefit from this provision are taxpayers who pay property taxes but whose itemized deductions are less than the standard deduction.
Take for example, a retired married couple, both over age 65, who paid $2500 in property taxes and have no other significant itemized deductions. Prior to this law change, their 2008 standard deduction would have been $13000 (the $10,900 basic amount for joint filers plus $2100 as an additional amount for married couples both over 65). With the added real property tax deduction, the couple’s standard deduction is increased by the lesser of their property taxes or $1000. Therefore, for 2008, their standard deduction will be $14000. Assuming that they are in the 15% tax bracket, this will save them $150 of federal income tax.
Feel free to visit our website at www.EfileFlorida.com for additional tax tips and articles.
Those who stand to benefit from this provision are taxpayers who pay property taxes but whose itemized deductions are less than the standard deduction.
Take for example, a retired married couple, both over age 65, who paid $2500 in property taxes and have no other significant itemized deductions. Prior to this law change, their 2008 standard deduction would have been $13000 (the $10,900 basic amount for joint filers plus $2100 as an additional amount for married couples both over 65). With the added real property tax deduction, the couple’s standard deduction is increased by the lesser of their property taxes or $1000. Therefore, for 2008, their standard deduction will be $14000. Assuming that they are in the 15% tax bracket, this will save them $150 of federal income tax.
Feel free to visit our website at www.EfileFlorida.com for additional tax tips and articles.
Tax Tips for 2009
Tax Tips for 2009 January, 2009
Hello again. Here we are, January 5th, 2009. It won't be long before your focus will be shifting to getting your tax return filed in hopes of a much needed refund! Below are just a few tips to act as a guide for you, in anticipation of preparing that 08 tax return:
1. Gather your records…now! It’s never too early to start getting together any documents or forms you’ll need when filing your taxes: receipts, canceled checks, and other documents that support an item of income or a deduction you’re taking on your return. Also, be on the lookout for W-2s and 1099s, coming soon from your employer.
2. Find your forms. Whether you file a 1040 or 1040-EZ, you can download all IRS forms and publications on the official IRS Web site at, IRS.gov or contact our office by visiting our website at www.efileflorida.com and/or calling 954-583-8534 for an appointment to have your tax return professionally prepared.
3. Do a little research. Check out Publication 17 on IRS.gov. It’s a comprehensive collection of information for taxpayers highlighting everything you’ll need to know when filing your return. Review Pub 17 to ensure you’re taking all credits and deductions for which you’re eligible.
4. Think ahead to how you will file. Will you prepare your return yourself or go to a preparer? Do you qualify to file at no cost using Free File on IRS.gov? Are you eligible for free help at an IRS office or volunteer site? Will you purchase tax preparation software or file online? There are many things to consider. So, give yourself time to weigh them all and find the option that best suits your needs.
5. Take your time. Rushing to get your return filed increases the chance you will make a mistake and not catch it.
6. Double-check your return. Mistakes will slow down the processing of your return. In particular, make sure all the Social Security Numbers and math calculations are correct. These are the most common errors made by taxpayers.
7. Consider e-file. When you file electronically, the computer will handle the math calculations for you, and you will get your refund in about half the time it takes when you file a paper return.
8. Think about Direct Deposit. If you elect to have your refund directly deposited into your bank account, you will receive it faster than waiting for a check by mail.
9.. The official IRS Web site is a great place to find everything you may need to file your tax return: forms, tips, FAQs and updates on tax law changes. You can also visit our website at www.efileflorida.com for great tips and articles or to ask a question.
10. Relax. There is no need to panic. If you run into a problem, remember E File Florida is here to help you.
Hello again. Here we are, January 5th, 2009. It won't be long before your focus will be shifting to getting your tax return filed in hopes of a much needed refund! Below are just a few tips to act as a guide for you, in anticipation of preparing that 08 tax return:
1. Gather your records…now! It’s never too early to start getting together any documents or forms you’ll need when filing your taxes: receipts, canceled checks, and other documents that support an item of income or a deduction you’re taking on your return. Also, be on the lookout for W-2s and 1099s, coming soon from your employer.
2. Find your forms. Whether you file a 1040 or 1040-EZ, you can download all IRS forms and publications on the official IRS Web site at, IRS.gov or contact our office by visiting our website at www.efileflorida.com and/or calling 954-583-8534 for an appointment to have your tax return professionally prepared.
3. Do a little research. Check out Publication 17 on IRS.gov. It’s a comprehensive collection of information for taxpayers highlighting everything you’ll need to know when filing your return. Review Pub 17 to ensure you’re taking all credits and deductions for which you’re eligible.
4. Think ahead to how you will file. Will you prepare your return yourself or go to a preparer? Do you qualify to file at no cost using Free File on IRS.gov? Are you eligible for free help at an IRS office or volunteer site? Will you purchase tax preparation software or file online? There are many things to consider. So, give yourself time to weigh them all and find the option that best suits your needs.
5. Take your time. Rushing to get your return filed increases the chance you will make a mistake and not catch it.
6. Double-check your return. Mistakes will slow down the processing of your return. In particular, make sure all the Social Security Numbers and math calculations are correct. These are the most common errors made by taxpayers.
7. Consider e-file. When you file electronically, the computer will handle the math calculations for you, and you will get your refund in about half the time it takes when you file a paper return.
8. Think about Direct Deposit. If you elect to have your refund directly deposited into your bank account, you will receive it faster than waiting for a check by mail.
9.. The official IRS Web site is a great place to find everything you may need to file your tax return: forms, tips, FAQs and updates on tax law changes. You can also visit our website at www.efileflorida.com for great tips and articles or to ask a question.
10. Relax. There is no need to panic. If you run into a problem, remember E File Florida is here to help you.
Friday, January 2, 2009
Tips For The Recently Married or Divorced
Newlyweds and the recently divorced should ensure the name on their tax return matches the name registered with the Social Security Administration (SSA). A mismatch could unexpectedly delay a tax refund.
- For recently married taxpayers, the tax scenario begins when the bride says "I do." If she takes her husband's last name, but doesn't tell the SSA about the name change, a complication may result. If the couple files a joint tax return with her new name, the IRS computers will not be able to match the new name with the Social Security Number (SSN).
After a divorce, a woman who had taken her husband’s name and made that change known to the SSA should contact the SSA if she reassumes a previous name.
It's easy to inform the SSA of a name change by filing Form SS-5 at a local SSA office. It usually takes two weeks to have the change verified. The form is available on the agency's Web site, www.socialsecurity.gov, by calling 800-772-1213 and at local offices. The SSA Web site provides the addresses of local offices.
Generally, taxpayers must provide SSNs for each dependent claimed on the tax return. For adopted children without SSNs, the parents can apply for an Adoption Taxpayer Identification Number, or ATIN, by filing Form W-7A with the IRS. The ATIN is a temporary number used in place of the SSN on the tax return. The form is available on the IRS Web site, IRS.gov, or by calling 800-TAX-FORM (800-829-3676).
Feel free to visit our website at: www.efileflorida.com for more great tax tips and articles.
Social Security Administration
Form SS-5, Application for a Social Security Card (PDF)
Beware of Tax Scammers!
January 2009
Millions of taxpayers go online for tax forms, publications and other tax information intending to find this, the official IRS Web site, but not everyone ends up here.
Some people mistakenly find Web sites that are not connected to the IRS at all.
The official Web site for the IRS is IRS.gov, and all IRS.gov Web page addresses begin with http://www.irs.gov.
There are numerous phony Internet sites that impersonate federal or state tax agency sites. Scammers normally operate these sites to trick visitors into revealing personal and financial information that can be used to steal the visitors’ identity and access their bank accounts, credit cards and more.
Identity Theft:
Identity theft can happen in a number of ways.
It can start with an Internet search for the IRS or tax-related information that results in links to Web sites run by scam artists. It can also start with an e-mail. Some taxpayers have received bogus e-mail that claims to come from the IRS. These often direct the taxpayer to click on a link to a phony Web site resembling IRS.gov that asks for personal and financial information that can be used to steal the taxpayer’s identity. Such phony e-mail has been received by individuals, businesses and even charities.
As a rule, the IRS doesn’t send unsolicited e-mail and doesn’t use e-mail to discuss tax account information with, or request personal or financial information from taxpayers. Additionally, the IRS never asks people for PIN numbers or passwords for credit card, bank or other financial accounts, as the phony e-mails and Web sites often do.
In addition to Web sites run by scammers, there are commercial Internet sites that often resemble the real IRS site or contain some form of the IRS name in the address but end with a .com, .net, .org or other designation instead of .gov. These sites have no connection to the IRS.
To make sure you find the real IRS Web site, just type www.irs.gov into your Internet browser address box.
Feel free to visit our website at: www.efileflorida.com for more great tax tips and articles.
Related Items:
· How to Report and Identify Phishing, E-mail Scams and Bogus IRS Web Sites
· Suspicious e-Mails and Identity Theft
Millions of taxpayers go online for tax forms, publications and other tax information intending to find this, the official IRS Web site, but not everyone ends up here.
Some people mistakenly find Web sites that are not connected to the IRS at all.
The official Web site for the IRS is IRS.gov, and all IRS.gov Web page addresses begin with http://www.irs.gov.
There are numerous phony Internet sites that impersonate federal or state tax agency sites. Scammers normally operate these sites to trick visitors into revealing personal and financial information that can be used to steal the visitors’ identity and access their bank accounts, credit cards and more.
Identity Theft:
Identity theft can happen in a number of ways.
It can start with an Internet search for the IRS or tax-related information that results in links to Web sites run by scam artists. It can also start with an e-mail. Some taxpayers have received bogus e-mail that claims to come from the IRS. These often direct the taxpayer to click on a link to a phony Web site resembling IRS.gov that asks for personal and financial information that can be used to steal the taxpayer’s identity. Such phony e-mail has been received by individuals, businesses and even charities.
As a rule, the IRS doesn’t send unsolicited e-mail and doesn’t use e-mail to discuss tax account information with, or request personal or financial information from taxpayers. Additionally, the IRS never asks people for PIN numbers or passwords for credit card, bank or other financial accounts, as the phony e-mails and Web sites often do.
In addition to Web sites run by scammers, there are commercial Internet sites that often resemble the real IRS site or contain some form of the IRS name in the address but end with a .com, .net, .org or other designation instead of .gov. These sites have no connection to the IRS.
To make sure you find the real IRS Web site, just type www.irs.gov into your Internet browser address box.
Feel free to visit our website at: www.efileflorida.com for more great tax tips and articles.
Related Items:
· How to Report and Identify Phishing, E-mail Scams and Bogus IRS Web Sites
· Suspicious e-Mails and Identity Theft
Valuable Tax Credits
January 2009 Tax credits can help you pay the cost of raising a family, going to college, saving for retirement or getting daycare so you can work or go to school. Credits cut your tax bill or boost your refund. Review your records now and see if you can get one of these popular but often overlooked credits.
Earned Income Tax Credit (EITC) — If you’re trying to make ends meet on about $41,000 or less, you may be eligible. The EITC helps low- and moderate-income workers and working families.
Child Tax Credit — If you have a dependent under 17, you probably qualify. This credit is in addition to the regular exemption you can claim for each dependent.
Credit for Child and Dependent Care Expenses — If you pay someone to care for your child so you can work or look for work, you probably qualify. Care for a spouse or dependent who cannot care for himself or herself also qualifies.
Education Credits — The Hope credit and the lifetime learning credit help parents and students pay for post-secondary education.
Saver’s Credit — This credit helps low-and moderate-income workers save for retirement. Put money in an IRA or 401(k) and you may be able to get this credit.
Feel free to visit our website at: www.efileflorida.com for more great tax tips and articles.
Keeping Good Tax Records
In a tax emergency, would you be ready? Well organized records not only help you prepare your tax return, but they also help you answer questions if your return is selected for examination or prepare a response if you are billed for additional tax.
Fortunately, you don’t have to keep all tax records around forever. Normally, tax records should be kept for three years, but some documents — such as records relating to a home purchase or sale, stock transactions, IRA and business or rental property — should be kept longer.
If you are an employer, you must keep all your employment tax records for at least 4 years after the tax becomes due or is paid, whichever is later.
If you are in business, there is no particular method of bookkeeping you must use. However, you must clearly and accurately show your gross income and expenses.
The records should substantiate both your income and expenses.Publication 552, Recordkeeping for Individuals, provides more detailed information on individual record keeping requirements.
Publication 583, Starting a Business and Keeping Records, and Publication 463, Travel, Entertainment, Gift, and Car Expenses, provide additional information on required documentation for taxpayers with business expenses.
These publications can be downloaded from IRS.gov or ordered by calling 800-TAX-FORM (800-829-3676).
Feel free to visit our website at: www.efileflorida.com for more great tax tips and articles.
Fortunately, you don’t have to keep all tax records around forever. Normally, tax records should be kept for three years, but some documents — such as records relating to a home purchase or sale, stock transactions, IRA and business or rental property — should be kept longer.
If you are an employer, you must keep all your employment tax records for at least 4 years after the tax becomes due or is paid, whichever is later.
If you are in business, there is no particular method of bookkeeping you must use. However, you must clearly and accurately show your gross income and expenses.
The records should substantiate both your income and expenses.Publication 552, Recordkeeping for Individuals, provides more detailed information on individual record keeping requirements.
Publication 583, Starting a Business and Keeping Records, and Publication 463, Travel, Entertainment, Gift, and Car Expenses, provide additional information on required documentation for taxpayers with business expenses.
These publications can be downloaded from IRS.gov or ordered by calling 800-TAX-FORM (800-829-3676).
Feel free to visit our website at: www.efileflorida.com for more great tax tips and articles.
Choose Your Tax Preparer Wisely!
January 2009
Many people use a professional tax return preparer to help them with their tax returns. If you plan to use a return preparer this year, be careful when you choose one –– as careful as you would be choosing a doctor or lawyer.
Even when someone else prepares your tax return, you, the taxpayer, are ultimately responsible for all the information on the return. For that reason, you should thoroughly review the completed return before signing it and ask questions on entries you don't understand. Never sign a blank tax form.
Feel free to visit our website at: www.efileflorida.com for more great tax tips and articles.
Many people use a professional tax return preparer to help them with their tax returns. If you plan to use a return preparer this year, be careful when you choose one –– as careful as you would be choosing a doctor or lawyer.
Even when someone else prepares your tax return, you, the taxpayer, are ultimately responsible for all the information on the return. For that reason, you should thoroughly review the completed return before signing it and ask questions on entries you don't understand. Never sign a blank tax form.
Most tax return preparers provide honest service to their clients. But it’s always a good idea to be careful. When seeking someone to prepare your tax returns:
Be cautious of tax preparers who claim they can obtain larger refunds than other preparers.
Avoid preparers who base their fee on a percentage of the refund.
Use a tax professional who signs the completed tax return and provides you a copy.
Consider whether the individual or firm will be around to answer questions months, or even years, after the return has been filed.
Check credentials. Only attorneys, certified public accountants (CPAs) and enrolled agents can represent taxpayers before the IRS in all matters, including audits, collection and appeals. Other return preparers may only represent taxpayers for audits of returns they actually prepared.
Find out if the preparer is affiliated with a professional organization that provides its members with continuing education and holds them to a code of ethics.
Ask friends and family whether they know anyone who has used the tax professional and whether they were satisfied with the service they received.
Reputable preparers will ask to see receipts and other documentation and will ask numerous questions to determine whether expenses, deductions and other items qualify. By doing so they are trying to help you avoid penalties, interest or additional taxes that could result from an IRS audit.
Feel free to visit our website at: www.efileflorida.com for more great tax tips and articles.
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