Finish Your Taxes

Labels: Electronic Tax Return Filing at best tax filing resources.

Labels: Its time to E-file your return., Tax Filing Season started

Over the last few years, there have been several incentives, or even requirements, provided by the IRS and state governments to encourage tax filers to file their returns electronically. Statistics show the percentage of e-filers is on the rise. With tax return deadlines right around the corner, we want to share our thoughts on the questions we receive most often from clients about e-filing.

Top 5 questions I am asked about e-Filing:

#5 Do I have to e-file?
No. The IRS does not currently require any tax return to be e-filed, however several states have implemented this requirement. In the past, the state has sent a "reminder" notice that future returns should be e-filed, but have warned that paper returns filed in the future will either be rejected or subject to a penalty. This most likely means that e-filing state income tax returns in these states will be mandatory, and we can anticipate that other states will add similar requirements.

#4 Do I have to provide my bank account information?
No. The only time your bank account information needs to be provided is if you would like your refund directly deposited into your bank account, or if you would like your payment directly drafted from your bank account. If you are hesitant to provide your bank account information to government agencies, you can receive your refund by check or if you owe, you can make your payment by mailing in a check.

#3 How long does it take to e-file?
Usually a return is accepted by the IRS or state within a few business days of the return being submitted. The acceptance provides confirmation that the return has been timely filed.

#2 If I owe with my return, is the payment due when my return is e-filed?
E-filing the return before the due date does not accelerate the due date of taxes. Payments can still be remitted separately any time before the due date of the return, even if the e-file is processed earlier.

Consider the following strategy. If you are due a refund on your state return, but owe on your federal return, then e-file both returns early. You could receive your state refund in time to use it towards your federal payment due. The same holds true if you owe on your state return and are due a refund on your federal return.

#1 Why should I e-file?
Here are a few reasons to e-file:
The risk of a return being lost in the mail or misplaced is minimized. Usually a taxpayer is not notified of a missing return until months or even years later. When a return is e-filed, confirmation of acceptance (receipt) by the IRS or state is provided within a few business days.

Paper filed returns are manually entered into the government's system, meaning that an input error could trigger a tax notice.

Part of the e-filing acceptance process used by the IRS and state governments includes a "pre-check" of certain items. In order for an e-filing to be accepted, these items must be correct. This greatly minimizes the chance of receiving a tax notice.

Returns are processed more quickly; if you are due a refund, it will be sent sooner.

Labels: Important questions regarding e-filing tax return online.

If you've never filed your Federal and state income taxes online, you have probably waited too long for your refund and/or missed the opportunity to be certain that you have taken advantage of every available reduction in the amount of taxes you have to pay. That said, I know this firsthand because I've done my own taxes online for the last three years. The results have been very beneficial to me and my family.

First of all, it is a very inexpensive way to get the best information possible about reducing your tax payment. Online Tax Filling can cost you as little as half of what it would cost to go to a tax preparer. In addition, online tax filing programs walk you through the process step-by-step so that you don't miss any opportunities to save money. Last, but not least, you will get your refund check much faster if you do your filing online.

Concerned About Privacy?

Your personal financial information is as private when you file online as it would be if you go to a tax preparer or do it yourself at home and then mail it. Most online tax filing companies offer you details about how they protect your privacy, even to the extent of offering to replace ANY funds taken from your tax account while you are using their service. This means that they will accept liability even if a hacker accesses your account!

Be sure to look for a company that offers this level of security or more. No one can totally guarantee that any transaction you make on the Internet will be completely private. If a company is so committed to serving you that they will replace any funds that are affected, you can pretty much count on them carefully monitoring and working to keep their site as secure as possible.

Worried You Won't Be Able to Do It Right

If you've done your own taxes on paper and know a little about following directions, you will find that it is easier to do your taxes online. As I said above, you will be guided through each step with both questions, options, and detailed instructions. As you make your entries, some companies even question data that looks like it might be unusual. When you finish the process, you will be able to have the company review it for correctness a second time.

The program will do ALL of the math for you, too. This means that there won't be any errors in the dollar amounts you enter. I've found that this is very helpful because when I did my taxes on paper, I always had to recheck the math two or three times before I felt comfortable with it.

Wondering What You Have to Do?

Getting all the information together is always the hardest part for most of us. If you've kept all your bills and information together, however, you will be pleased to discover that online tax programs will tell you exactly what you need to have in front of you when you begin the process. You don't have to rush either. If you are moving along through the process and have to stop, you can come back later to continue.

Basically, what you have to do to make online tax filing work for you is to gather your tax information. Have your W2s handy and any tax documents you have received from work, from your bank, from your student loan company, and from any other source that has provided you with information about what you have paid in taxes. Gather your medical receipts, household improvement expenses, and, if you are an independent contractor, gather information about the cost of doing business. You will also need a credit card or checking account number when it comes time to pay for the tax service.

The Good News

If you've followed the instructions carefully, you will find that the process is fairly simple to complete. Once you've used an online tax preparation program, you will have established an account with them that you will be able to access again the following year. That means saving even more time the second time around. You should know that your refund can be direct deposited into your bank account and that it will most likely be deposited within a few days rather than a few weeks!

You don't need to be concerned about how to sign your tax forms. While you will have the choice to print them out and mail them (which may be advantageous in some circumstances), you will get your refund much faster if you use an electronic signature. In some cases, that signature is based on a very specific question about a line from your tax return from the previous year. If you know the correct amount from that line, the IRS will accept the information as evidence that you are the right person submitting the return.

I have had a lot of success and saved time and money by filing my own taxes online, and I wanted to share information about this option with you. One final note: some sites allow you to go all the w ay through the process before you make your payment. This gives you the opportunity to decide how happy you are with what they offer. I strongly recommend that you give online filing a try. It just makes sense.

Labels: Income Tax Filing Online - Best way to do your taxes.

If you are excited at the prospect of doing your taxes, you are one of the few lucky ones. For most of us mere mortals, our taxes are an incredibly intimidating and complex beast.

Needless to say, the U.S. tax code does not make for a light read. Nonetheless, you are still obliged to file and pay your taxes, no matter how daunting the task may be. Fortunately, help may just be a phone call away.

This article will discuss various methods you can use to make filing your taxes as stress-free as possible.

Using professional tax preparation tools (people and software)

What is the most important benefit to having a tax professional prepare your tax return? Not having to prepare your tax return yourself.

It is as simple as that; preparing and filing your own tax return will take up a lot of your valuable time, and could end up causing you a huge amount of stress and annoyance in your life. And no matter what, it is bound to be a perplexing and confusing process. Using a tax professional will take away most of your tax related stress (but not all of the stress, unfortunately you will still have to wait for your tax bill).

You will also have the added benefit of knowing that will be able to rest easy with the knowledge that someone who actually understands the U.S. tax code is preparing your taxes. This is especially important if your tax situations is particularly complex, or if you want to plan an aggressive tax strategy as part of a larger financial plan.

What professional solution is right for you?

You have two main professional solution choices: people or software. If your tax situation is especially complex, or if you are a small business owner, than you should consider getting either an Enrolled Agent (EA) or a Certified Public Accountant (CPA) to prepare your income taxes.

The advantage of using either of these professionals is that you will avail yourself of the services of someone who has been certified to prepare people's taxes, by either the state for CPAs or the IRS for EAs. This is important if you have a complex tax situation and you need to know that it is being handled properly.

If you just cannot take any risks, then hiring a professional is the way to go. If you face a more straightforward tax situation, you could probably get by using one of the many walk in services that fill the airways with advertising come tax time. As a final alternative, if you are more confident in your skills you should considering using tax filing software to finish your taxes off yourself.

With most software, it will just involve answering a series of questions; you will not just be left with an electronic version of the long form to fill out from scratch! And if your adjusted gross income is $52,000 or less, you will be able to find a software package to file your taxes for free under the government's Free File program.

In the end, no matter what option you select, just be sure to plan ahead and file on time!

Labels: Does Filing Taxes would tax your brain as well as your wallet?

With the ever changing tax laws, which are difficult to understand, we have put together 9 helpful hints to help you to be better organized and make your tax filing run more smoothly.

1. Don't procrastinate:

You will want to gather your information and began reviewing it as soon as possible. Also, by reviewing last year’s return for changes in things such as; deductions, dependant's status, and income. In doing this step it will refresh your memory, so that important deduction are not forgotten on this year’s return.

2. Gathering your deductions:

You want to review your current year's expenses and gather anything you might consider to be a deduction. Also, going through your checkbook, credit card statements, and receipts will help you better locate those all important deductions. Let’s face it the more deductions you have the better. Here are some examples of expenses to look for that you may have: Medical expenses, Mortgage interest, Real estate taxes, donations, work related expenses, union dues, personal property taxes and any other items that you think might be deductible.

3. Income Documentation:

Gather all the income documents you have received during the year such as: Form W-2 (Statement of Wages), Form W-2 F (Gambling winnings), Form 1099-B ( Stocks and Bonds), Form 1099-R (Distributions from pensions, Annuities, Retirement or profit-sharing plans, IRAs, and Insurance contracts), Form 1099 (Interest, dividends, royalties), Form 1099-G ( State and Local income tax refunds), Form 1099-B and Brokerage statements (Sales of securities), and K-1s (Income and Deductions from Partnerships, S Corporations, Trusts, Estates). Review all these documents to make sure they are correct. If you notice any discrepancies contact the issuer of the form immediately to get a correct form. If you are unable to get the correction made you will be required to attach a letter of explanation with your return.

4. Non Taxable Income:

When gathering your above income information do not forget your non taxable income. Here are a few examples of these: Child Support payments, Welfare benefits, Life Insurance proceeds received due to the death of an individual.

5. Personal information:

You will need to gather some personal information that will be required to file your return such as; security numbers and birth dates for any dependents you will be claiming.

6. Children's income:

While gathering your information to file your tax return, take a moment to review this information for your children to see if they have any filing requirements.

7. Scheduling your appointment:

You will want to schedule your appointment with your tax preparer as soon as possible to allow ample time for any corrections or documents you will need to track down before the filing deadline and to avoid the last minute rush of filers.

8. Making tax payments:

When making payments to the IRS you will want to make sure that your payment is properly identified with the following information: Your name, Address, Social Security Number or your business ID number. Also, include what the payment is for including what tax year. Make individual payments; do not combine more than one payment in the same check.

9. Keeping records:

It is recommended that should keep your records including bank statements, canceled checks, income and deductions for at least 3 years from the date of filing your return. That is the statute of limitation set by the IRS for audits. By doing so that will help you be better prepared in the event that your return is selected for an audit.

Labels: Ways to helps you to improve and makes your tax filing smooth.

The Tax Save 2008 Open Enrollment period beqins on October 1, 2007 and ends on October 31, 2007. TaxSave Opero Enrollment is y'our opportunity to save tax dollars in the 2008 tax year with the Premium Option Plan and the two Flexible Spending Accounts (FSAs) - the Unreimbursed Medical Spending Account and the Dependent Care Spending Account

Enrollment in the Premiun Option Plan component of TaxSave is automatic every year. The Flexible Spending Accounts require active enrollment each year. There are a variety ot easy ways to enroll.
You may enroll over the phone by calling Horizon BCBSNJ's automated voice response system at 1-800-2244426 (October 1 - October 31, 2007).
You may enroll overthe Internet during the same time period at: www.state.nj.us/treasury/pensions/taxsave.htm and follow the link to the Horizon BCBSNJ Web site.
You ean enroll by obtaining an enrollment kit from your benetits administrator. These forms must ba postmarked by October 31 , 2007, in order to enroll for the 2008 plan year.

TaxSave and Domestic Partners and Dependents Age 23 to 30

State employees are able to add a same-sex domestic partner to their SHBP medical and dental insurance coverage, and New for the 2008 plan year, Chapter 375, PL 2005, permits continued SHBP medical plan coverage for certain dependents unti! their 30th birthday

However, before any premiums that the employee pays for the domestic partner or over-age dependent coverage can be made on a pre-tax basis under the Turbo Tax Save Premium Option Plan, the domestic partner or over-age dependent must be able to qualify as a "tax dependenf' of the employee for federal tax filing purposes - under Internal Revenue Code Section 152.

Similarly, the domestic partner or over-age dependent must qualify as the employee's tax dependent before an out-ofpocket medical expense incurred by the domestic partner or dependent can be reimbursed under the Unreimbursed Medlcal Spendlng Account. See IRS Tax Topie 354 - Dependentsfor addjtional information on the requirements for establishjng dependent status for federal tax purposes.

If the domestic partner or over-age dependent is not a "qualified tax dependent" of the employee, any premium deductions made for the domestic partner's coverage must be made on an after-tax basjs and funds in the Unreimbursed Medical Spending Account cannot be used to cover the domestic partner's medical expenses

The big news about Intuit's TurboTax line this year is the development of specialized versions. In addition to Basic, Deluxe, Premier, and Home & Business, there are now versions for serious investors, retirement planners, and Spanish speakers. All of these programs' features (minus the Spanish version, which is most similar to Basic) appear in Turbo Tax Premier ($59.95 list), which we review here.

A new feature called My Tax History brings more data in from your previous year's return to help save you time (though you still need to review it for accuracy). In the interview mode, you can select a split screen, with the current form showing below. Questions and explanations appear in the main interview window, with fields or check boxes for your responses. FAQs appear in the right pane, and your current tax score (amount of refund or obligation) appears above.

Labels: Helpful Tax Filing News

It's safe to say that most taxpayers prefer to keep their relationship with the IRS from getting personal. If you agree, your best strategy is to prepare and submit a tax return that is free from ambiguities and red flags. But not making waves doesn't mean paying more in taxes than you have to. Minimize your tax liability and keep the IRS happy by avoiding these common filing mistakes.

• Overlooked tax credits and above-the-line deductions
  Each year, the taxman collects millions of dollars in overpaid taxes thanks to taxpayers who don't claim all of the deductions and credits available to them. Many of these opportunities are available for everyone, even those who don't itemize. The so-called 'above-the-line' deductions include student loan interest, tuition expenses, moving expenses, and alimony paid. Tax credits are available for child and dependent care expenses, education expenses, and IRA contributions made before April 15th of the following tax year.


• The standard deduction
  Itemizing your deductions may be more complicated, but it will often save you money. By itemizing, you can reap tax benefits for your mortgage interest, charitable contributions, non-reimbursed employee expenses, and qualified medical and dental costs. You should also pay attention to the extended deductions, which are easy to overlook: state sales taxes paid, educators' out-of-pocket expenses, and tuition and fees. Extended deductions aren't mentioned on your tax forms, because they were approved after the 2006 forms went to print. Most professional tax preparers and the major brands of tax software have adjusted their forms to provide tax help on these deductions.


• Incomplete documentation
  A complete set of supporting documents is vital to the efficient processing of your return. If the IRS cannot verify the information that you provide, it may decide to make its own adjustments. This might mean smaller tax refunds for you or, worse, larger tax bills. Avoid these unpleasant surprises by including all required income and deduction documentation.


• Typos and calculation errors
  Once you have your deductions and credits sorted out, you might feel the urge to get that return in the mail as soon as possible. But wait-typos and calculation errors can cause mass confusion and processing delays. If you input your bank account number incorrectly, for example, your direct deposit refund could end up somewhere else, or nowhere at all. More common mistakes include incorrect social security numbers and inaccurate arithmetic. Double-check your return for math and typos before you take it to the post office.

Somewhere, an IRS employee is breathing a sigh of relief, because there'll be one less tax return flagged for an incorrect social security number. And when the IRS is happy, you're happy too.

Labels: Major Tax Filing Mistakes

The month of January rolls around and most of America is getting ready to prepare their income tax filing. Every year everyone who made an income are required to report income to the federal and state governments by income tax filing. Taxpayers must file two separate income tax returns. One income tax return goes to the federal government and the other goes to the state government that the taxpayer lives in. Most of taxpaying Americans are able to fill out a Form 1040A: U.S. Individual Income Tax Return. People that do not have any children or qualified dependents are able to file a federal 1040EZ form. This form is also known as the Income Tax Return for Single and Joint Filers With No Dependents. The 1040EZ is basically a shorter version of the 1040A form; however, taxpayers must meet certain requirements before filing a 1040EZ form.

IRS e-file is fast becoming extremely popular with taxpayers as well. Find everything electronic in one place at irs.gov. This includes tax filing information, how to pay electronically, and more. According to the website of the Internal Revenue Service (IRS) which is found at irs.gov. Seventy percent of the nation's taxpayers are eligible for free tax preparation software and free electronic filing. See if you are eligible, by visiting their site. Most of taxpayers will have the income tax forms they need mailed to their home address. This option, to have federal income tax forms mailed to a taxpayer is given on the previous year’s tax forms. People who do not wish to receive federal income tax forms but do need them can get the forms from a number of sources. Many paper forms are available for pickup at many local post offices, banks, and libraries. Taxpayers can also visit the website of the Internal Revenue Service (IRS) which is found at irs.gov. The Internal Revenue Service has a collection of federal income tax forms that can be downloaded and printed at their web-site.
In some states a taxpayer reports their income earned to their state government. They will also have to fill out a separate state tax return form. Each state has their own income tax return forms, and Laws. The form numbers will all be different because they vary from state to state; however, some forms will have the same heading. It is not uncommon for a state income tax form to be known as the Resident Income Tax Return. As with federal income tax returns, the majority of states have a long income tax return form and a short one. Taxpayers who are able to fill out and file a short state income tax return are encouraged to do so because it saves many taxpayers a large amount of tax preparation time. As with most federal income tax forms, state tax return individuals are likely to have a packet of state income tax forms mailed directly to their home. It is also possible for taxpayers to find their state tax forms at their local post office, financial institution, or library. Check your own State Laws for the details.
In addition to the regular taxpaying individual, there are several others who have to report and possibly pay an income tax. All businesses and estate properties of an individual who has passed on are subject to an income tax. A small business owner or the executor of an estate property will have to file different federal and state income tax forms than the traditional taxpayer. These forms can be obtained at the same places where standard federal and state forms are available.

Labels: Income Tax Filing Guide

The IRS e-file system has never had a security breach. In fact, over 400 million returns have been electronically filed since 1986 without a security incident.

FACTS

• The IRS e-file System is not done over e-mail
• The IRS e-file System has many built-in security features
• The IRS e-file System employs multiple firewalls
• The IRS e-file System uses state of the art virus and worm detection
• The IRS e-file System meets or exceeds all government security standards
• The IRS e-file System is constantly tested for weaknesses by penetration testing
• The IRS e-file System has never had a security breach
• All Internet transmissions will use SSL (Secure Sockets Layer) encrypted security measures.

IRS e-file transmissions are very secure because the IRS has been extremely diligent in the design, development, analysis and testing of the current infrastructure and system. IRS e-file meets or exceeds all government security standards and includes multiple firewalls.

Most e-filed online tax returns are transmitted over phone lines from the return preparer to a third-party transmitter. From there, the returns are forwarded over secured lines to the IRS. Intercepting telephone transmissions is quite difficult and requires access to phone company major transmission lines. Also, to transmit data like tax returns over telecommunications lines means that the information gets converted into digital format which could not be easily read even if it were intercepted.

Source: irs.gov

Labels: IRS e-file: Secure Online Tax Filing