If You Don’t Particularly Enjoy Dealing With an IRS Audit

Author: mbc at 9-05-2012, 00:13, Views: 32

The people who are unlucky enough to get a little extra special attention from the IRS – what is it that they do to deserve all the extra love when most tax returns are barely given a glance? What goes on behind a decision at the IRS that there is one particular tax return that must get the special IRS audit treatment?

The thing is, the IRS would happily issue the third degree to every tax return that came in. They make a lot more money this way. The only problem is that they don't have enough people to do the dirty work for them. They are somewhat short-staffed. Only one in a hundred tax return is actually flagged for an IRS audit. But is there some kind of reason why those people get caught instead of everyone else? Well, let's see, shall we?

With only 1% of all taxable public seeing their names come up for an IRS audit, you mustn't really worry about getting caught like it's about to happen tomorrow. If you really, really want to avoid an audit, you need to build a plan to make it happen.

Category: Accounting, Taxes

 

The IRS Allows a Moving Expense Deduction if you Move House for a Job

Author: mbc at 24-04-2012, 07:35, Views: 8

As difficult and as inconvenient as it can be to move to a new town, perhaps the part that bites the most is that you had to pay for it. If you happen to be moving for a new job though, you'll be able to recoup some of that money. The IRS offers you a moving expense deduction if you relocate for a job. All you need to do is to put it down on Form 3903.

The IRS of course doesn't just give your moving expense deduction up just like that. They have strict rules for what qualifies. The first rule is that you can't call it relocating unless the new job requires you to travel at least 50 miles farther than your old job requires you to travel. That means that if your old job was in Manhattan and your new job is in Brooklyn, you don't get a moving expense deduction when you pick up stakes and move from Manhattan to Brooklyn.

But there's an exception to this. If you are in the military, and you've been transferred to a new station, it doesn't have to be 50 miles away.

Category: Finance » Taxes

 

Go to College when you get an Education Tax Deduction

Author: mbc at 24-04-2012, 07:20, Views: 9

There are three ways that you won't have to worry about your college education, usually. You could be rich, or you have exceptional grades that fetch you a scholarship, or you have football kick that could rival that of any professional footballer. But just because college education costs a great deal doesn't mean that you won't get any help at all. To take advantage of an education tax deduction would be one way to lessen your burden.

If you pay your own college expenses or you pay them for a dependent, the American Opportunity Credit Plan gives you a $2500 tax credit every year. You can claim this every year for four years. But there are some rules. You can only do it for one dependent student a year, your modified adjusted gross income must be less than $90,000, and you can't get this tax credit if you are filing as married but filing separately.

The Lifetime Learning Credit gives you $2000 worth of tax credits every year. And there is no limit to how many years you claim it. What is more, unlike the American opportunity credit program, the student doesn't even have to be in a degree program with this tax credit. It can be any kind of program.

Category: Finance » Taxes

 

Last Minute Tax Tips

Author: Rhoden at 5-04-2012, 03:18, Views: 6

When tax season swings around, most people just think of the April 15 deadline. It's as if it never enters their thought process that April 15 (or, as the case is this year, April 17) is the last day and you're not supposed to start calculating your taxes or looking for the form on this day. Actually, to have it all wrapped up and done by the last week of February would be an excellent idea. Do remember – the earlier you get it done, the earlier you’ll be getting that refund. If you're getting ready to put it all down on the form and send it off, these last minute tax tips should help.

Having a good, well-designed tax application to do your work on can be invaluable. A lot of the time, the only reason we keep putting off doing our taxes is that we are not really sure of how exactly to go about it. When you have a well-designed application holding your hand and guiding you through the process, it becomes a no-brainer and practically no effort at all.

Try something really good like Tax Act Online, and you'll get all the tax information you need, all the little suggestions and last minute tax tips you need, all in one place. You will waste no time worrying about the right deductions to make, the right forms to use and so on.

Category: Finance » Taxes

 

Dealing with Unreimbursed Employee Expenses when you're the Hapless Employee

Author: mbc at 4-04-2012, 09:43, Views: 12

Walmart once fired an employee when she reportedly used the office typewriter to type out something she needed for herself. They fired her for "theft of typewriter use". And yet, working for companies like this, employees often find themselves needing to use their own money to get official work done. They often have no way of reporting the expense, because there is no proof. What is anyone supposed to do about these unreimbursed employee expenses?

Often though, there are ways and means. Sometimes, if there's something really important, you may have to take your own car out. You can't even bill the office for using your car because you don't run a rental agency. Sometimes, the employer may actually expect an employee to use their own car to run about but they still won't pay for it.

The first thing to do of course is to talk to your boss about it. He just might see reason a little bit. Just because the employer is a bit dishonest about all this, doesn't mean you have to make do with nothing. You can claim these as deductions if you save all your receipts. You can claim these as job-related deductions on your tax return.

Category: Finance » Taxes

 

Should You Apply for a Tax Refund Anticipation Loan?

Author: Rhoden at 4-04-2012, 05:34, Views: 17

About one out of two Americans gets a refund of some kind after they file their taxes. And there's an entire cottage industry that's sprung up around helping people make the most of these refunds. Businesses of all kinds out there know that people see their tax refunds as extra discretionary money. Retailers offer people kinds of tempting ways to spend their money. But perhaps the finance industry is the most heavily invested in the simple tax refund. Consider the tax refund anticipation loan, for instance.

This is where a tax-preparation company signs a customer on, tries to work out how much of a refund he can expect, and then gives him a loan for that amount. Why are they doing this nice thing for the tax filer? They get fees, of course. It's a low-risk loan because they know that the tax refund is coming for certain.

There are millions of taxpayers around the country who use the tax refund anticipation loan offer made to them by their tax-preparation service. But consumer advocates believe that these services tend to take advantage of their customers' financial circumstances.

Category: Finance » Taxes

 

Some Good Tax Tips for Gay Couples

Author: mbc at 2-04-2012, 07:57, Views: 9

The federal government won't accept that there such a thing as a married gay couple; but that doesn't mean that the IRS does the same thing. If you're a married gay couple, you can file your taxes together like any regular heterosexual couple does. These tax tips for gay couples should help.

The problem is that the IRS tax code isn't all that clear or even self-consistent when it comes to its rules about how to file for taxes. And this creates all kinds of confusion. The system, as it applies to registered domestic partners and gay couples, can be quite frustrating for those concerned. New federal rules require that if you're a gay couple, you need to combine your income and split it. It's not a bad way to file at all. For all the complexity that's involved, you could take this as compensation by the IRS.

Try these tax tips for gay couples for even better results.

Category: Finance » Taxes

 

The Most Pathetic Tax Evasion Arguments you ever Heard

Author: mbc at 31-03-2012, 00:13, Views: 18

People hate paying their taxes. And some people really take it personally that they have to fork thousands of dollars over to the government every year. In protest, people have opened gunfire on innocent people, they have crashed their planes into the sides of government buildings and so on. Well, not everyone protests in this sort of violent way. Some of them just try simple tax evasion trickery.

When you try some kind of frivolous tax evasion tactic, more often than not, not only does it fail at helping you avoid paying your taxes, it can actually land you in jail. The IRS has jailed people for wasting their time with funny childish tax evasion attempts.

Some of these attempts would certainly be funny if it weren't for the fact that they landed someone in jail. One argument that some people use to get out of paying taxes has to do with claiming that they aren't required by law to pay taxes.

Category: Finance » Taxes

 

Making Sure never to go to anyone other than a Certified Tax Preparer for your Taxes

Author: Rhoden at 30-03-2012, 03:20, Views: 16

A while ago, it was in the news how someone tried to get out of paying his taxes by claiming that the very complicated tax code violated his constitutional right to laws that could be understandable to him. The judge said “nice try”. To look at all the tax software there is a market, you'd think that most Americans filled up their tax forms right at home on their own. Well, they don't. Two out of three Americans hire a certified tax preparer because they just can't deal with how complicated it can be to just file their taxes.

Choosing a tax preparer can be great – you don't have to worry about doing justice to a huge responsibility. It only works out like that so of the higher certified tax preparer who's really qualified. If you just hire anyone who hangs shingle out, you get yourself in enough trouble to last your lifetime.

What kinds of trouble can you land yourself in, you ask?

Category: Finance » Taxes

 

Taking Advantage of the Tax Exemptions there are for 501c3 Organizations

Author: Rhoden at 6-01-2012, 21:19, Views: 88

It must feel like living in the movie Brazil to work for the IRS. What must it be like to be surrounded by forms with names like 1099, 1031 and 501c3 the whole time? Well, that's their way of life there – everything that they know, do or ever want to do is defined by a section of the Internal Revenue Code. With that little philosophical aside aside, let's take a look at how you get a bit of tax exemption when you are a nonprofit – especially what the IRS says about what they call 501c3 organizations.

501c3 organizations. What a way to refer to a nonprofit organization that works for religious, scientific, literary, educational or animal-rights causes. Nevertheless, you probably don't want to waste any time arguing with them about having your life's work reduced to a number. What you want instead is to understand the IRS code so that you can save a little money to use for what really matters.

Category: Book Reviews, Taxes

 

How to Work Charitable Tax Deductions

Author: mbc at 19-12-2011, 23:12, Views: 4

The December holiday season is a great time for charities. It isn't just the spirit of the season that makes people happy to open their wallets up. They also get this way because they know that the April tax season is coming right up and whatever they give to recognized charities, they can claim as a tax deduction very soon. Charitable tax deductions don't even have to be actual cash. You can even donate physical objects and still get a tax break.

But you do need to know what you can deduct, and how you do it.

The first thing you need to take note of is whether an organization you're donating to has a tax exempt status. If you're donating to a small group and you're not so sure as to whether they have such status, you just need to check it out on the IRS website. Do remember though – only American charities qualify for charitable tax deductions.

Category: Finance » Taxes