Tag: TAXPAYER

  • Tax Deductions for Your New Addition

    Did you have a baby this year? If so, congratulations on the little tax deduction!
    Just kidding – congratulations on the addition to your family!
    While you’re probably a little groggy still, kudos to you for thinking about your taxes when most can barely think at all.
    Fortunately, along with your new baby, your family is now eligible for new tax deductions as well. Don’t overlook the tax advantages that come when you add a new member to your family.
    Tax Benefits for Having Children
    First, you receive another exemption when you have a child. Each exemption you have represents a deduction of $3,900 for 2013.
    So, a new child means that your income is reduced by the exemption amount. While this isn’t as valuable as a tax credit, it is still worthwhile, since a smaller income means a smaller tax liability.
    You might also be eligible to claim the Earned Income Tax Credit. Parents that meet certain income requirements and have children can claim the EITC, which is a tax refundable credit.
    Another possible tax benefit is the Child Tax Credit. This is a credit worth up to $1,000 for each child under the age of 17. Because it’s a credit, it represents a dollar for dollar reduction of your tax bill.
    Not everyone is eligible for the Child Tax Credit and eligibility is based on adjusted gross income. For 2013, the phaseout for the credit begins at $110,000 for those filing jointly and $75,000 for those filing as single (married filing separately begin phasing out at $55,000).
    It’s also possible to claim the Child and Dependent Care Tax Credit. This credit allows you to claim qualified child care costs as deductions.
    There is still a phaseout with this credit too, so you might not be eligible if your income is above a threshold. You can also check to see if there is a Dependent Care Account offered by your employer. Money contributed to this account is tax deductible, and it can be used to pay child care expenses.
    If you adopted, there is a generous tax credit for those who wish to adopt. The Adoption Tax Credit is refundable, and it can help offset the costs incurred as you adopted your new addition.
    There are phaseouts for this credit as well, but they are much higher than the phaseouts for the other tax deductions and credits. If you adopted, you must look into this credit.
    Finally, remember to get a Social Security Number. In order to claim any of these tax advantages as a result of adding a child to your family, you will need a Social Security number.
    If your baby is new, you need to apply for a Social Security Number. If you are taking over the care of a child and are eligible to claim the exemption or the Dependent Care Credit, you need to make sure you know his or her Social Security number.
    Bringing a child into your family is a big step — and one that is very rewarding on an emotional level. However, your new bundle of joy also comes with some financial advantages to go with the financial costs.
    While most of them simply offset some of your costs, others can actually be extremely beneficial so it’s important to look into them.
    And get some sleep!

    Taken from Turbo Tax Blog

  • Tax Tips for Extension Filers

    Autumn is upon us, and if you chose to file a tax extension this year, October 15 is your target date…your zero hour…your deadline. Your six-month grace period is coming to an end.
    If it feels as though the past few months have flown by, don’t fret, there is still time to submit your tax return without incurring any additional penalties or interest. We’ve compiled a short list of last-minute tax tips for you extension filers needing to get your returns filed with the IRS by October 15th.

    Electronic vs. Paper
    It may come as a small surprise, but October 15th is the tax deadline for electronically filing your tax return. You are still eligible to file a paper tax return after October 15th, but you will incur those nasty interest charges and late penalties.
    The best decision you could make at this point is to go ahead and e-file your tax return by the 15th. By doing so you will remain within your six-month grace period. There’s no sense in giving the IRS a reason to take more than you owe.

    Double Check Personal Information
    This is it – your last chance to make sure everything contained within your tax return is true and accurate. There are no additional extensions after October 15th.
    Don’t panic, but don’t forget to review your personal information. Make sure your name, birthday, address, and social security information is correct. Also include all W-2s and 1099s, when entering your information.

    IRAs
    October 15th is also the final deadline to fund your SEP-IRA if you requested an automatic extension. If you’ve forgotten about this little deadline, you still have time to make some deposits. Just remember to update your tax paperwork after you’ve funded these accounts, because, although it’s 2013, you’re actually funding your accounts for the 2012 tax year.

    Preparing for the Future
    It’s easy to get stuck in a rut, especially when that rut is filing for a tax extension year after year. Let’s face it, when you file your taxes in October, the last thing you want to think about is preparing for next year’s taxes. But no matter how much you want to forget about taxes, April is always right around the corner.
    Let this be an encouragement for you to get organized this year. The middle of November is a great time to begin gathering your thoughts and your records for the upcoming tax season. And if you would like to save more on your 2013 taxes, use this time to make some year-end financial maneuvers to get yourself in a better position for next year.

    Blog taken from Turbotax

  • The Government Shutdown and Your Taxes

    The Government Shutdown and Your Taxes IRS Update:

    The government shutdown that took place on October 1 left everyone with questions about how the shutdown will impact them.
    If you are one of the taxpayers that filed an extension, you may be wondering if the shutdown impacts filing your taxes.
    Don’t worry. We have you covered and have answers to your burning questions:

    Should I still file my extended tax return in light of the shutdown?
    Yes, you still need to file your tax return by the October 15th extended deadline. E-filing your return is the fastest way to have your tax return processed. Returns filed by mail will not be processed until after the shutdown is over. Acknowledgements will be issued by the IRS for e-filed accepted tax returns.

    You said paper filed returns will not be processed, but I have to mail mine. Will it be considered timely filed?
    Yes, although paper tax returns will not be processed until after the shut down is over, the postal service will still post mark your paper filed return. Any tax return postmarked by the due date will be considered filed on time by the IRS.

    Will the IRS shutdown exclude me from late filing penalties if I don’t file by October 15?
    No, the IRS still requires that you file your tax return by the extended deadline.

    I owe money on my 2012 taxes, what should I do?
    You should submit the balance owed electronically when you e-file your taxes. Payments received will still be posted to your account.
    If you have a previous balance due, you should submit the payment as you normally do.

    Will the government shutdown affect my tax refund?
    If you e-file your tax return, the IRS will still process your tax return as it normally would. If you are due a tax refund, it will be issued when the shutdown is over.

    Can I still check the status of my tax refund?
    If your tax return was processed before the shutdown, you can use “IRS Where’s My Refund?” to check the status of your tax refund. If you e-filed your tax return after the shutdown your e-filed tax return will be processed, however you will not be able to check the status of your refund until after the shutdown is over.

    Article by Turbo Tax Lisa Lewis
    @TURBOTAX

  • 1099-K Reporting Requirements

    1099-K Reporting Requirements for Payment Settlement Entities
    Beginning in January, 2012, payment settlement entities (PSEs) are required by the Housing Assistance Tax Act of 2008 to report on Form 1099-K the following transactions:
    All payments made in settlement of payment card transactions (e.g., credit card);
    Payments in settlement of third party network transactions IF:
    -Gross payments to a participating payee exceed $20,000; AND
    -There are more than 200 transactions with the participating payee.
    Filing Deadlines & Procedures
    Your 1099-Ks are due to merchants by January 31, 2013. Electronically filed 1099-Ks are due to the IRS April 1, 2013 (normally March 31), while paper 1099-Ks are due February 28, 2013.
    File your 1099-K electronically through the FIRE (Filing Information Returns Electronically) option. For information, review Publication 1220 (PDF). If you are considering filing on paper, review General Instructions for Certain Information Returns.
    Verification Processes
    We verify that tax returns are correct and complete using the following processes:
    TIN Matching Program
    Use the IRS Taxpayer Identification Number (TIN) Matching Program to ensure the Forms 1099-K you submit have the correct TIN. The program permits you to verify the TIN furnished by the taxpayer before you file the Forms 1099-K.
    Name Control
    The name control (a sequence of characters derived from a taxpayer’s name) and TIN on an electronically filed return must match our records. Refer to Reasonable Cause Regulations and Requirements for Missing and Incorrect Name/TINs for more.1099-K Requisitos de información para las entidades de liquidación de pago
    A partir de enero de 2012, las entidades de liquidación de pagos (PSE) están obligados por la Ley del Impuesto de Asistencia de Vivienda de 2008 para informar sobre el Formulario 1099-K de las siguientes operaciones:
    Todos los pagos realizados en la liquidación de las transacciones de tarjetas de pago (por ejemplo, tarjeta de crédito);
    Los pagos en la liquidación de operaciones de red de terceras partes si:
    Pagos brutos a un beneficiario participante superan los $ 20.000, Y
    -Hay más de 200 operaciones con el beneficiario participante.
    Plazos de presentación y procedimientos
    Su 1099-K se debe a los comerciantes el 31 de enero de 2013. Electrónicamente presentada 1099-K se deben a que el IRS 1 Abril 2013 (normalmente el 31 de marzo), mientras que el papel 1099-K se deben 28 de febrero 2013.
    Presente su 1099-K por vía electrónica a través de la opción de FIRE (Filing Information Returns Electronically). Para obtener información, revisar la Publicación 1220 (PDF). Si usted está considerando declararse en papel, revise las instrucciones generales para la Información ciertas declaraciones.
    Procesos de Verificación
    Verificamos que las declaraciones de impuestos son correctos y completos con los siguientes procesos:
    Programa Matching TIN
    Utilice el Número de Identificación de Contribuyente del IRS (TIN) Matching Program para asegurar los Formularios 1099-K que tiene presentar el NIF correcto. El programa permite a verificar el TIN proporcionada por el contribuyente antes de presentar los formularios 1099-K.
    Nombre del control
    El control del nombre (una secuencia de caracteres derivados del nombre del contribuyente) y el TIN en una declaración presentada electrónicamente deben coincidir con nuestros registros. Consulte el Reglamento causa razonable y Requisitos para Menores Desaparecidos y incorrecto Nombre / TIN para más.