I Can't Pay My Taxes - What Should I Do

Image via WikipediaIf this year’s tax filing deadline will be a “pay” day for you and you cannot pay the full amount that you owe, you should still file your return by the due date and pay as much as you can. The IRS may allow you to pay any remaining balance over time in monthly installments through an Installment Agreement or possibly even settle for less than the full amount owed through its Offer in Compromise program.

If you find that you cannot pay the full amount by the filing deadline, you should file your return and pay as much as you can by the due date. To see if you qualify for an installment payment plan, attach a Form 9465, “Installment Agreement Request,” to the front of your tax return. The IRS has streamlined the approval process if the amount owed is not more than $25,000 and can be paid off within a five-year period. Be sure to show the amount of your proposed monthly payment and the date you wish to make your payment each month.

The IRS charges a $43 fee for setting up an installment agreement and you will also be required to pay interest plus a late payment penalty on the unpaid balance. This penalty, usually 0.5 percent of the balance due per month, drops to a 0.25 percent rate when the IRS approves the installment agreement if your return was filed on time and you did not receive a levy notice from the IRS.

Besides possibly qualifying for the reduced late payment penalty, you have another reason for filing your return by the due date — you avoid the late filing penalty, 5 percent per month of the balance due. Paying as much as you can when you file your return will reduce interest and penalty charges.

If you find that you cannot possibly come up with the money to pay your taxes, even through an installment plan, you may apply for an “offer in compromise” to settle your tax debt for less than the full amount owed. The IRS will review your financial situation and future income potential to determine whether your offer is appropriate. Send Form 656, “Offer in Compromise,” and Form 433A, “Collection Information Statement,” to the IRS to determine your eligibility.

The IRS Web site at www.irs.gov has interactive sections to help you determine your eligibility for an installment plan or an offer in compromise. You can also download all the necessary forms from that site. The forms are also available by calling toll free 1-800-TAX-FORM (1-800-829-3676).

How to Amend Your IRS Tax Return

It's great to do your taxes early. All the stress and aggravation is long passed and your enjoying that nice fat refund check. But in the mail today came an additional W-2 income form. You completely forgot about it, what are you going to do now? The I.R.S. has just the solution to your problem. It's called form 1040X. With this form you can amend your incorrect tax return and satisfy your obligation to Uncle Sam.

Here are a few tips to help you with your 1040X:

1. When to amend a return You should file an amended return if your filing status, your dependents, your total income or your deductions or credits were reported incorrectly.
2. When NOT to amend a return In some cases, you do not need to amend your tax return. The IRS usually corrects math errors or requests missing forms – such as W-2s or schedules – when processing an original return. In these instances, do not amend your return.
3. Form to use Use Form 1040X, Amended U.S. Individual Income Tax Return, to amend a previously filed Form 1040, 1040A or 1040EZ. Make sure you check the box for the year of the return you are amending on the Form 1040X. Amended tax returns cannot be filed electronically.
4. Multiple amended returns If you are amending more than one year’s tax return, prepare a 1040X for each return and mail them in separate envelopes to the appropriate IRS processing center.
5. Form 1040X The Form 1040X has three columns. Column A shows original figures from the original return (if however, the return was previously amended or adjusted by IRS, use the adjusted figures). Column C shows the corrected figures. The difference between Column A and C is shown in Column B. There is an area on the back of the form to explain the specific changes and the reason for the change.
6. Other forms or schedules If the changes involve other schedules or forms, attach them to the Form 1040X.
7. Additional refund If you are filing to claim an additional refund, wait until you have received your original refund before filing Form 1040X. You may cash that check while waiting for any additional refund.
8. Additional tax If you owe additional tax, you should file Form 1040X and pay the tax as soon as possible to limit interest and penalty charges.
9. When to file Generally, to claim a refund, you must file Form 1040X within three years from the date you filed your original return or within two years from the date you paid the tax, whichever is later.
10. Processing time Normal processing time for amended returns is 8 to 12 weeks.

Links:

Form 1040X, Amended U.S. Individual Income Tax Return
Instructions for Form 1040X

The Child Tax Credit Explained

Tax (Photo credit: 401K)A very important tax money saver for families is the Child Tax Credit. It's one the most beneficial components on a tax return because it gives an actual credit of $1000 for every child you have under 17. But to be eligible for the credit your child must qualify and there is income restrictions. According to Publication 972 there are 11 things you must consider.

1. Amount. With the Child Tax Credit, you may be able to reduce your federal income tax by up to $1,000 for each qualifying child under age 17.
2. Qualification. A qualifying child for this credit is someone who meets the qualifying criteria of seven tests: age, relationship, support, dependent, joint return, citizenship and residence.
3. Age test. To qualify, a child must have been under age 17 – age 16 or younger – at the end of 2011.
4. Relationship test. To claim a child for purposes of the Child Tax Credit, the child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister or a descendant of any of these individuals, which includes your grandchild, niece or nephew. An adopted child is always treated as your own child. An adopted child includes a child lawfully placed with you for legal adoption.
5. Support test. In order to claim a child for this credit, the child must not have provided more than half of his/her own support.
6. Dependent test. You must claim the child as a dependent on your federal tax return.
7. Joint return test. The qualifying child can not file a joint return for the year (or files it only as a claim for refund).
8. Citizenship test. To meet the citizenship test, the child must be a U.S. citizen, U.S. national or U.S. resident alien.
9. Residence test. The child must have lived with you for more than half of 2011. There are some exceptions to the residence test, found in IRS Publication 972, Child Tax Credit.
10. Limitations. The credit is limited if your modified adjusted gross income is above a certain amount. The amount at which this phase-out begins varies by filing status. For married taxpayers filing a joint return, the phase-out begins at $110,000. For married taxpayers filing a separate return, it begins at $55,000. For all other taxpayers, the phase-out begins at $75,000. In addition, the Child Tax Credit is generally limited by the amount of the income tax and any alternative minimum tax you owe.
11. Additional Child Tax Credit. If the amount of your Child Tax Credit is greater than the amount of income tax you owe, you may be able to claim the Additional Child Tax Credit.

For more information go here for a .PDF of Publication 972, Child Tax Credit.

Tax Filing Status Is Not Set In Stone

Tax Preparation (Photo credit: agrilifetoday)

This tax season many people will be changing their tax filing status from single to married. It's all so exciting for the newlyweds new life together. To make it more interesting you and your spouse can now file joint tax returns.

Your filing status is an important part of your tax return because if used incorrectly you could be paying to much in taxes. Many people do not realize that you don't have to continue to use the one filing status, you can change it depending on the tax implications.

“Newlyweds and married taxpayers can choose to file jointly or separately based on their individual situation, but keep in mind that this filing status can change each year,” said Mark Steber, chief tax officer, Jackson Hewitt Tax Service Inc. “Generally, using the ‘married filing jointly’ status provides the lowest tax liability and the highest standard deduction. However, if one of the filers has large deductions or expenses, the ‘married filing separately’ status may be more beneficial.”

Some rules you need to keep in mind.

• The Internal Revenue Service recognizes a couple’s marital status on the last day of the year. Even couples who wed right before midnight on December 31 are considered legally married for the full 2011 tax year;
• Couples should note that certain credits, including the Child and Dependent Care Credit, the Earned Income Tax Credit and certain education credits, are not available under the “married filing separately” status; and,
• Tying the knot often results in a new last name. Names listed in your tax return should match all forms of identification, including social security card, passport, driver’s license and documents from employers, loan holders and investment accounts.

Make sure you seek out professional tax advice when choosing a tax filing status. The money you spend on this counsel will benefit you with only paying the minimum tax owed.

What's $40 Dollars To You?

As usual our employees in Washington D.C. are making a mess of everything. They can't even get it together to give us a meaningless tax break. The bottom line of this whole mess is that the average family will lose their $1000 tax cut if the Congress doesn't act by the end of the year. Why is it they always wait till the last minute to take care of these things? It's like my kid waiting till the last minute to do his homework.

The $1000 tax break comes down to $40 every two weeks. Is that such a big amount to get so worked up for? Well, the White House seems to think it is a big deal and they have set up a web site for you to chime in on what you think: www.whitehouse.gov/40dollars

It seems $40 every two weeks can amount to something over time. In 3 years it turns into $3,531. In 5 years it grows to $6,403. In ten years it grows to $15,951.

It seems $40 is a significant amount. Such a small amount invested every two weeks can have an interesting effect on your retirement needs.

Related Post: Investing 101: Index Funds

Why Does Warren Buffet Want To Pay More In Taxes?

Image via WikipediaWarren Buffet, the "Oracle of Omaha, thinks the rich are not paying their fair share of taxes. He announced that he pays less taxes than the people that work for him, like his secretary.

 "Last year my federal tax bill -- the income tax I paid, as well as payroll taxes paid by me and on my behalf -- was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income -- and that's actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent." says Warren Buffet.

 Some claim that his calculations are off. The money he receives in dividends has already been taxed once at the corporate level. So his personal taxes are the IRS’s second taxing of the income. And that's why he takes his income in dividends only.

 Warren Buffet and the wealthy like himself are the exception and not the rule. He has control of a vast amount of wealth and capital. He isn't rich, he is super-rich. His company and many other prosperous companies are sitting on billions of dollars in domestic banks. Add to that the billions kept in overseas banks of American companies profits that will not come back to this country because of high taxation.

 Mr. Buffet is in the position to pay higher taxes. But the so called rich, those making $200,000 - $500,000 range are not being paid in dividends like Mr. Buffet. They are most likely being paid a salary with some bonuses. Are they the rich he is talking about. They are the ones that already pay high taxes and don't want the ideas of Warren Buffet to come into fruition.

 I compare Warren Buffet to the Henry Ford's, J.P. Morgan's, and John D. Rockefeller's of the last century. They were wealthy enough to bailout failing companies and do the right things to help this country before their were bailouts. It was done right at that time when fiscally healthy companies stepped in and bailed out failing companies.

 In 1907, during a vicious stock panic that threatened to engulf the U.S. financial system, J.P. Morgan single-handedly stepped in. "This is the place to stop the trouble, then," he said, while putting his own funds at risk to orchestrate a bank bailout. Amid the panic, John D. Rockefeller loudly deposited money in a troubled bank and pledged to buy stocks. In 1914, at a time of rising labor unrest, Henry Ford shocked his competitors (and the establishment) by announcing he would pay assembly line workers the above-market wage of $5 per day. These moves may not have seemed economically rational at the time. People who commit big sums to equities in the middle of crashes generally lose money, and businesses that intentionally pay unskilled labor above-market wages tend to go out of business. But they were actually very shrewd investments in the system. If U.S. markets ceased to function, J.P. Morgan's firm would have been among the biggest losers. Ford reasoned that his company would prosper if he could turn the automobile from a luxury product into a utility for the working- and middle class. He wanted to pay his workers enough so they could afford to buy his products. It worked out pretty well for Ford and his heirs.

My View:

 Mr. Buffet should forget about his tax ideas and concentrate on what he knows best, building companies and making money. We should of put him in charge of the so called bailouts. He could of done the whole thing in less time and at half the cost. It should of been left to the private sector to heal itself. The government is pathetic at anything financial or business.

 Warren Buffet should use his goodwill and knowledge to lobby the administration to think like a business man.

Tax Tips As Filing Deadline Arrives

Image by wwarby via FlickrWhether you've already filed and are happily awaiting a refund or if you're just getting started with the annual chore, here are some last-minute tax tips.

GOOD NEWS: EXTRA TIME: Thanks to a local holiday in Washington, D.C., the normal April 15 tax filing deadline got moved by three days. This year only, state and federal taxes are due on Monday, April 18. Which means you get an extra weekend to get all that paperwork completed.

NEED HELP? Free tax preparation help is still available for low- and moderate-income individuals and the elderly.

• Those with annual incomes below $49,000 can get free help at Volunteer Income Tax Assistance sites, some of which are open through April 18.
• Free IRS tax help is also available to seniors over 60 through the Tax Counseling for the Elderly program.
• To find the nearest site for either program, call the IRS help line at 800-906-9887 or go to www.irs.gov. The help line is answered by a live IRS staffer, weekdays from 7 a.m. to 10 p.m.
• FASTER REFUNDS: The fastest refund route is to electronically file your tax return and request that refunds be direct-deposited to your bank account. Taxpayers who do so can expect their refund in seven to 10 days; those mailing a paper return can expect a refund by mail in eight weeks.
• To check the status of your IRS refund, call the refund hotline at 800-829-1954 or check online "Where's My Refund?" at www.irs.gov.
• There's also a new smartphone application, IRS2Go, that lets you check your refund status and get IRS tax updates. The app is available for Android or Apple devices.
• NEED AN EXTENSION? If you can't gather your paperwork in time, get a tax-filing extension. But note: You still must pay what you owe by Monday, April 18, or face interest fees and possible penalties.
• For IRS taxes, an extension is not automatic but requires filing a Form 4868. The extension form is easily filed online using the irs.gov "FreeFile" program.
• Those working overseas or serving in the military outside the United States get an automatic two-month extension to file and pay their federal taxes.
• HOW TO PAY: Never, ever send cash.
• If you're paying by check, make it payable to: "U.S. Treasury." On the front, include the tax year, tax form number and the first Social Security number shown on your tax form.
• Do not staple your check to the return.
• If you're paying by credit or debit card, the IRS offers several options through private providers on its website. The IRS does not charge a fee, but the providers do. Generally, the minimum "convenience fee" is about $3.95.
• CAN'T PAY? Taxpayers who owe but don't have the funds to pay should contact the IRS to request an "alternative payment" plan. It can be a one-time short-term extension or a longer installment plan. Generally, installment plans are offered if the tax debt is $25,000 or less and can be repaid within five years. Penalties and interest are charged.
• DON'T MISS OUT: Low-income individuals and families are urged to file for the Earned Income Tax Credit. It's a federal refund, up to a maximum of $5,666, depending on family size.
• The refund phases out at various income levels; for married couples filing jointly, with three or more kids, the maximum is roughly $48,360.
• Even if you don't owe taxes, you need to file a return to claim an EITC refund

You still have time to get your taxes done. It won't be easy. Good Luck!

Does Cancelled Debt Have To Be Reported On My Income Tax?

Image via WikipediaIt was worth it, you had to jump through a few hoops but that credit card canceled your debt. It was a great feeling not having to worry about that anymore. But you received in the mail a 1099-C that states you you owe taxes on that forgiven debt. Do you have to report it on your tax, you don't have to but expect a stern letter from the IRS if you don't.

Don't even think about ignoring it because Uncle Sam gets a copy of that 1099-C, too. They are going to be looking for it on your tax return. A Form 1099-C is issued when a debt of $600 or more is forgiven or canceled.

The IRS stated that the number of 1099-C's grew from 1 million forms to 1.9 million forms in 2008. Estimates for 2010 go as high as 3 million 1099-C forms. It's strange because people that couldn't pay their debts are now expected to pay taxes. So they will be forced to put the tax bill on their credit card and here we come full circle.

If you have $50,000 in debt forgiven , expect to pay $15,000 in taxes.

But be careful, all forgiven debt is not taxable. If you had a student loan that was forgiven because you worked in an under served community, it's not taxable. But the forgiveness of the remaining student loan balance after 25 years in an income-based repayment program is taxable. Given the complex rules, you should provide the 1099-C to the tax preparer. This applies only to a principal residence — not a second home. And the exclusion applies only if a foreclosure or short sale takes place from 2007 through 2012. The canceled debt must have been incurred to buy, build or improve your main home.

As with all things of this complexity, seek out a competent tax accountant to do it right.

How to File for a Tax Extension

Image via Wikipedia

If you can’t file your federal tax return by the April 18, 2011 deadline, you can file for an extension. It’s important to remember, though, that an extension to file is not an extension to pay any taxes you might owe -- the extension only covers filing of the actual paperwork.



Failure to pay a balance owed to the IRS, regardless of requested extensions, results in penalties for late filing and possibly fees. State tax laws vary, so if you need to learn how to get a state tax extension, you should consult your state's specific tax instructions.

For most taxpayers, to get an extension until Oct. 17, 2011, you’ll need to submit Form 4868 by April 18.

1. Your Social Security number

2. Your spouse's Social Security number, if you’re filing a joint tax return

3. Your complete mailing address

4. Your total tax liability, which can be found on line 60 of Form 1040.

5. Total amount of your tax payments – found on line 71 of Form 1040.

6. Your balance due -- if you don’t owe additional tax, you can enter zero here. Otherwise, you will use the total tax due shown on line 75 of your Form 1040.

If you need help with these numbers, click here for How to File Your Taxes.

If you don’t owe additional taxes, make a copy of the form for your records. If you do have a balance due, you can send a check or money order, (simply include that with your form and be sure to write your social security number on the check), or you can pay electronically via the IRS website.

Tax Tips for the Unemployed

If it's not enough that you have been unemployed for so long, now you have tax season to make you feel worse.  We all could use a little help sorting out the maze of forms and deductions that need to be kept up on to do our taxes correctly. Courtesy of HRBlock.com they have listed 5 helpful tips to get you started.

1. Unemployment Benefits

• Expiration alert: all unemployment benefits in 2010 are taxable. In 2009, the first $2,400 in unemployment benefits were tax free — but this benefit has since expired.
• When claiming your unemployment benefits, you can choose to have 10 percent of your unemployment payment withheld to help pay your federal taxes. You can also withhold your state income taxes.
• Although withholding is voluntary, it is beneficial because it eliminates the need to make estimated tax payments.
• Start on tax withholding unemployment payments by filing Form W-4V, Voluntary Withholding Request, with the payer of the unemployment.

2. Job Search Expenses

• Here's some good news: if you are looking for a new job, you may qualify for a number of tax deductions.
• These deductions include travel expenses, cost of printing, mailing, and creating a resume, job placement agency expenses, and more.
• Remember that expenses for a job search in your same line of work are deductible, but you will have to clear several hurdles to reap the benefits.
• If you itemize, job hunting expenses in your same line of work are considered miscellaneous itemized deductions.
• Your total miscellaneous deductions must be greater than 2 percent of your adjusted gross income, and only the amount that exceeds the 2 percent “floor” is deductible.

3. Moving Expenses

• More good news: if you moved for a new job, the expenses associated with that move are deductible, even if you do not itemize.
• To deduct moving expenses, the new job must be at least 50 miles farther from your old home than the old job was. For example, if you commute 20 miles to your old job, your new job must be at least 70 miles from your previous home.
• The deductible amount is the unreimbursed cost of moving you and your belongings to the new location.
• You must stay at the new job at least 39 weeks to qualify for this deduction.

4. Medical Deduction

• If you aren’t working and are paying COBRA premiums, you should track these and other out of pocket medical expenses as they may qualify for a medical expense deduction.
• Unreimbursed medical expenses, which include COBRA premiums, prescription drug costs, dental expenses, and more totaling more than 7.5 percent of your adjusted gross income, are deductible.
• This is one instance where married couples may benefit by filing separately. If one isn't working and has low income/big medical bills, married filing separately may be a good way to go.

5. Health Insurance

• If you are under 27 years old and do not have access to employer-provided insurance, you may be added to your parents' health insurance policies starting in 2011. This benefit is not taxable.

I hope these tips help you get more organized in filing your tax return.



Related Posts:

5 Tax Benefits For Students

Follow the IRS on YouTube and Twitter

The I.R.S. has an App to Track Yor Refund

File Your Tax Return For Free - Here's Where to do it

The New Tax Law: Gifts For All

Related articles

• Should I Itemize Deductions on My Taxes? (turbotax.intuit.com)
• Overlooked Tax Credits, Deductions (abcnews.go.com)
• Unemployed? We've got some tax tips for you (turbotax.intuit.com)
• Unemployed Doesn't Mean Untaxed (turbotax.intuit.com)

5 Tax Benefits For Students

Image by tilitran via Flickr
With college being so expensive you need all the help you can get to save a little money. Our friends over at HRBlock.com have given us 5 tips that apply to the student or the one paying for the students education. 

• American Opportunity Credit: Up to $2,500 in 2010 for qualified education expenses will be paid to each eligible student who is enrolled part-time or full-time. You can claim the credit only for the first four years of higher education, but it doesn't apply to private secondary school or graduate school. This credit is 40 percent refundable and up to $1,000 may be refunded to the taxpayer even if there is no tax liability.
• Lifetime Learning Credit: You can receive up to $2,000 for qualified education expenses. You can claim this credit only once per return, but there is no limit on the number of years you can claim the credit. You're eligible for this if you're a student who takes one or more courses. Qualified expenses for the Lifetime Learning Credit include the cost of courses that aren't part of a degree or certificate program. So if you work and take occasional courses to strengthen your job skills, you are eligible for this credit.
• Tuition and Fees Deduction: You may be eligible for up to 100 percent of qualified higher education expenses with a maximum of either $4,000 or $2,000, depending on the taxpayer's filing status and income level. Like the Lifetime Learning Credit, there is no course load requirement or limit on the number of years the deduction can be taken.
• Student Loan Interest Deduction: If you are paying back student loans used to pay for higher education, you may be eligible to deduct up to $2,500 per return for every year.
• Employer-provided Educational Assistance: If you received educational assistance benefits from your employer you can exclude up to $5,250 of those benefits each year.

Our tax returns are becoming more complicated every year. If you have any doubt to your ability to complete them correctly be sure to hire a competent tax preparer. They always seem to find those pesky deductions we miss. They may be able to keep a little more coin in your pocket and less in Uncle Sam's.

Related articles

• Two Tax Credits for Higher Education (money.usnews.com)
• Students Shouldn't Miss Out on Valuable Tax Deductions (onlinecollege.org)
• The Lowdown on Education Tax Breaks (turbotax.intuit.com)

Follow the IRS on YouTube and Twitter

Image via CrunchBase

I will never accuse the I.R.S. of being behind the times every again. They have been constantly updating their computers and data processing for years. There are new ways to file your taxes like never before. You can do them on computer, online and now on your phone.

Image via CrunchBaseThe I.R.S. has kept up with social media too. You can follow there videos and tweets here.

YouTube

The IRS has short and informative YouTube videos on tax related topics in English, American Sign Language (ASL) and a variety of foreign languages:

IRS Videos – http://www.youtube.com/irsvideos

ASL Videos – http://www.youtube.com/IRSvideosASL

Multilingual Videos – http://www.youtube.com/IRSvideosMultilingua

Twitter

IRS tweets include various tax-related announcements, news for tax professionals and hiring initiatives:

@IRSnews – http://twitter.com/irsnews

IRS news and helpful information for the public, the press and practitioners

@IRStaxpros – http://twitter.com/irstaxpros

IRS news and guidance for tax professionals

@IRSenEspanol – http://twitter.com/irsenespanol

Información, Comunicados de Prensa y Noticias en Español del IRS

News and information in Spanish from IRS

@RecruitmentIRS – http://twitter.com/recruitmentirs

IRS Human Capital Office

@YourVoiceatIRS – http://twitter.com/yourvoiceatirs

Taxpayer Advocate Service

Audio Files for Podcasts

The IRS creates audio files for use as podcasts. Each short audio recording provides information on one tax related topic. The audio files and their transcripts can be found in the Multimedia Center on IRS.gov. These files are also available as podcasts on iTunes.

Widgets

Widgets are tools that can be placed on websites, blogs or social media networks to direct others to IRS.gov for information. The IRS has developed a variety of widgets that feature the latest tax initiatives and programs. These widgets can be found on Marketing Express, the marketing site that allows IRS partners and tax preparers to customize their IRS communications products.

The I.R.S. has an App to Track Yor Refund

The I.R.S. is trying to make itself more helpful by giving us an app for our phones. The most disliked department in our government is keeping up with modern times. This new app will not help you to avoid taxes, but it will at least keep track of your refund.

The IRS2Go app, introduced on Monday, lets filers check on the status of their refund from their phone and get daily tax tips. The free app is available for the iPhone and phones on the Android system.

I think it's great the stogy old I.R.S. is taking advantage of modern technology to be a little helpful to us. The app is pretty slick with a nice interface. I checked out the iPhone version and it's pretty easy to use. It has 4 buttons consisting of a Get your refund status, Get tax updates, Follow online, and Contact us.

To check the status of their refund through the app, users enter their Social Security number, which is encrypted for security. They then select the filing status they used along with the amount they expect to receive in their refund.

People who file online can check the status of their refund 72 hours after they receive an e-mail from the I.R.S. confirming that it has received their tax return. Those who file paper returns must wait up to four weeks.

Additionally, users of the app can sign up to receive tax tips it promises will be in “plain English,” about topics like child tax credits and education credits. They can also sign up to follow the I.R.S. Twitter feed.

Isn't that special, the I.R.S. is on twitter. I hope they go on Facebook because I can't wait to add them to my friend list.

At the present time there is not an app to file your return by the I.R.S. Though Intuit does have such an app, but only if your using the 1040EZ form.

I can't wait to see what they come up with next. Maybe a tax audit app.

More helpful links for tax help:

File Your Tax Return For Free - Here's Where to do it

The New Tax Law: Gifts For All

Related articles

• An I.R.S. App Lets You Track Your Tax Refund (textually.org)
• IRS2Go Tracks Your Tax Return from Your Phone [Downloads] (lifehacker.com)
• Official IRS App for iOS and Android (slashgear.com)

File Your Tax Return For Free - Here's Where to do it

It's time to get busy on your tax return. There are several ways you can accomplish this. You can have a professional do it, I have my accountant do mine because it's quite lengthy and I don't mind paying someone to. If yours is very complicated I recommend you do the same. Some people buy a piece of software and do it that way. But the newest way to do it is online.

For simple to average complexity tax returns the online process is the way to go. Best part is that it could at no charge. There are requirements of course. Firstly you can't have an adjusted gross income of more than $58,000. There are other requirements which the individual website will state.

If you have never tried to file your taxes online, don't worry because during the whole process they make it so easy and the price is free, what do you have to lose. Give it a try.

I have compiled a list of the IRS’s Free File Alliance providers. These are providers that have met rigid standards to participate.

As you use the service of these websites you will be asked many times to upgrade to the paying side of the service. For simple to average tax returns this is not necessary. But if you have some out of the ordinary tax deductions you may have to. 

Being that these sites are free you can try more than one or if you have trouble with on there is always another to go to. Don't worry your data during the process is incrypted and safe.

Here's the list:

Free TaxACT: Free federal online tax return preparation and e-file if your adjusted gross income (AGI) is $58,000 or less and you are age 19 through 55. This federal offer is valid in all states. Free extensions.

TaxSimple: Free federal online tax return preparation and e-file if your adjusted gross income (AGI) is $58,000 or less and you are age 66 or younger and you live in one of the following states: AL, AR, AZ, CA, CO, CT, DC, DE, HI, GA, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MI, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NM, NY, OH, OK, OR, PA, RI, SC, SD, TN, UT, VA, VT, WI, WV or WY. Free extensions.

OnlineTaxPros.com: Free federal online tax return preparation and e-file if your adjusted gross income (AGI) is between $4,000 and $58,000 and you live in one of the following states: AL, AR, AZ, CA, CO, CT, DE, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MI, MN, MO, MS, MT, NC, ND, NE, NJ, NM, NY, OH, OK, OR, PA, RI, SC, UT, VA, VT, WI or WV. Free extensions.

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Before you begin...

• Free File companies have their own eligibility criteria, but none offer Free File to taxpayers with an adjusted gross income of more than $58,000.
• Other eligibility criteria may include your: age, state, eligibility for the Earned Income Tax Credit, and military status.
• Check the company's website for details because the companies' offers may differ. For example, some companies charge a fee for state tax returns and some may not support a particular form you need to file.
• Remember to begin your Free File return on IRS.gov or you may be charged a fee or asked to buy additional products and services.

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The New Tax Law: Gifts For All

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The Congress has prepared for us a nice Christmas gift. The new tax law is ready to go the president for signing. He will add the ribbon and bow to it. The label will say To: The US Taxpayer, From: The Gang up in D.C. When we open it up we will see it has a little bit of everything in it. Also it will be the gift that keeps on giving all year.

The gift will be a 2 percent cut in Social Security payroll tax.  If you make $50,000, for instance, you'll get an additional $1,000 in your paycheck. Weekly, that's about $19.23. If your household takes in $75,000, you'll get an additional $1,500, or about $28.85 a week.

There is something even if your unemployed. You will receive an additional 13 months of benefits.

The other changes are basically a continuation of current law.Federal income and capital-gains tax rates will remain the same as they have been, at least for the next two years. The standard deduction for married couples will remain the same for that period, too. Credits such as the Child Tax Credit, the Earned Income Tax Credit, the Dependent Care Credit, Studen Loan Interest Deduction, and the American Opportunty Tax Credit for higher-education expenses also remain the same.

The deductions that were going to expire in 2011 will continue through 2012. They are deductions for state and local sales taxes, higher education tuition and qualifying teacher's classroom expenses. Retirees can also use the proceeds from their IRA's to make charitable contributions. For the next two years, the rules and limits for all of these deductions remain the same.

We are going to lose some tax breaks also. A tax credit of up to $1,500 for installing energy-efficient home improvements is reverting to a limit of just $500. And the Making Work Pay tax credit has been eliminated; under the new law focusing on a 2-percent payroll tax reduction, an estimated 51 million households will actually bring home less in 2011 next year.

Again the Congress has done it's work in the usual way. Spend more money and not address the underlying problem. Reducing Social Security payments is a kind of stimulus. Continuing unemployment benefits is also a kind of stimulus. Congress has put a bandage on the problem as usual. They need to get together and see that that the other way to address budget problems is to reduce spending. They never can do that. When you or I have budget problems we cut our spending. The government can do that to.

Related articles

• What does the tax deal mean to you? (usatoday.com)
• New law means big savings for millions of taxpayers - Tampabay.com (news.google.com)
• The 11 Most Overlooked Tax Deductions (turbotax.intuit.com)

Save Money: Appeal Your Property Tax Bill

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I just recently received my property tax bill in the mail. I was hoping it had gone down, no luck it went up. Examining the statement revealed my assessed value had gone down. Why did it go up then? The answer was the millage had increased. With property values dropping, so does tax revenue. To compensate they raise the tax rate, keeping the flow of revenue the same.

What do you do if you disagree with the tax assessors opinion on your homes accessed value? You believe your home has a value lower than the accessed value. Most people think they are just stuck with the assessment. But you are not, you have recourse in appealing the assessment.

There are companies that will do the work to fight for your reassessment.  They charge a fee of 10% of the amount they save for you. But it is possible to do this yourself. I have done it both ways and it is possible to do it your self and succeed. 

But before you proceed get the pertinent facts.

1.Check to see if the description of your property on your bill is correct. The legal description must be accurate or you could be paying someone else's bill. The square footage, incorrect number of bedrooms or bathrooms.
2. Find out what compatible homes in your area have sold for recently. This will determine a market value for your home. You should get at least 3, more would be better. Remember you are trying to backup your opinion with facts. The tax assessor will only act favorably if you have proof.
3. Check the assessments of your neighbors homes and see if their property values are more accurate than yours. This will give you more evidence to prove your that your assessment is wrong.
4. If your home has any problems like easement, zoning, heavy traffic, nearby highways, railroads or industry it does impact on the value of your home; the homes age, condition and defects do impact on the value.
5. Remember the price you paid for your home is not necessarily the assessed value. You could of purchased the home at the top of the market artificially inflating the price.
6. Also check to see if your county has a yearly cap on the percentage that the tax can go up within one year.

After getting all the necessary information proceed to your tax assessors office and fill out the necessary documents and present the necessary backup documents. The assessors office will process your claim. You may get turned down the first time but you can appeal. If you think your assessment is wrong keep at it.  

Remember to keep in mind that your goal to reduce your taxes could backfire, resulting in your taxes going up. The taxing authority may determine that your bill is to low and adjust it up. Personal experience has proved this correct.

Taxes Going Up As The Bush Tax Cuts Go Down

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There were two major tax cutting bills enacted during President Bush's administration. They were the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003. These two pieces of legislation are what we call the "Bush Tax Cuts". The bills included across the board tax relief for American taxpayers. They will expire as of December 31, 2010. 
 
Exactly what will the loss of these tax cuts mean to you and me? 
 
Tax Brackets 

Tax brackets that are currently 10%, 15%, 25%, 28%, 33% and 35% will go up to 15%, 28%, 31%, 36% and 39.6%. This means that if you are in the 10% bracket your taxes will increase by half to 15%. What happened to helping the lower and middle class? 
 
Marriage Penalty 
 
Remember when the marriage penalty was such a hot topic in the news, well the Bush Tax Cuts fixed it. But now it's going back to the way it was, when a couple living together was paying less taxes. Married couples will have to pay more than single couples. 
 
Child Tax Credit 
 
The current child tax credit is $1000. This will fall back to $500 in 2011. Also eligible families will decline. 
 
Dividends and Capital Gains 
 
The tax rate on dividends is currently 15%. It will climb to a range of 15% to 39.6%. Capital gains top rate will climb from 15% to 20%. 
 
Estate Tax 
 
In 2010 there is no estate tax. But in 2011 it returns with a exemption of $1,000,000 and a tax bracket of 55% 
 
The Tax Foundation estimated that the median family of four saved about $2,200 in taxes under the present plan. These cuts will vanish with the next tax year. 
 
I can't reconcile any of these tax cuts as unnecessary. They effect all tax payers of every age. I can't see giving the government more of our money when the budget is out of control. When our money is wasted at every turn it unconscionable to allow them more money. Cut the budget 10% and leave us alone. 
 
Not making these tax cuts permanent will be the final nail in the Obama Administration. The damage done will echo for years to come. 

The Bush Tax Cuts

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There is alot of rumbling about the Bush Tax Cuts coming to an end this year. President Obama has been saying he wants the tax cuts to end for the rich but stay for the middle class. 
 
Senate Democrats don't have the votes to pass the Obama tax increases, according to the web site money.cnn.com. Even Democrats know it's a bad time to raise taxes in a faltering economy. 
 
They claim they'd favor a temporary extension for a year or 18 months. Some democrats even want to make the tax cuts permanant. Their theory is that second quarter GDP expanded at only 1.6 percent annual rate for the second quarter. So its not the right time yet.
 
In the Senate the votes are just not there to pass the Obama tax increase. But in the House Obama has the votes to pass his bill. September 13 the Senates recess is over and debate will start over the Obama tax bill. The senate has more deficit hawks than the House and with the Republicans it will be hard to make any quick progress. 
 
Senate Budget Chairman Kent Conrad, D-N.D. said last month he would be reluctant to let anyone's tax cuts expire just yet. He went on to say,"In a perfect world, I would not be cutting spending or raising taxes for the next 18 months to two years. " also that "The downturn is still very much with us". 
 
I disagree with the raising of taxes. Our representatives still don't have a clue how their spending and over taxation is one of our greatest problems. Having stability of the tax rates is important to business and personal planning. Also the Estate tax being brought back is unfair to family's. A lifetime of work has to be double taxed and family wealth has to be stolen from heirs is a disgrace. 
 
Further, I would like to see an across the board 10% reduction in the Federal budget. Just like my budget spending has been reduced in these recessionary times. I have had to increase my work extra to fill some income shortfalls. The government should be run like we run our home finances.