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→TT-2008-01: SEVEN WAYS TO GET A JUMP START ON YOUR TAXES
# Gather your records in advance. Make sure you have all the records you need, including W-2s and 1099s. Don’t forget to save a copy for your files.
# Gather your records in advance. Make sure you have all the records you need, including W-2s and 1099s. Don’t forget to save a copy for your files.
# Get the right forms. They’re available around the clock on the IRS Web site, [http://irs.gov/ IRS.gov].
# Get the right forms. They’re available around the clock on the IRS Web site, [http://irs.gov/ IRS.gov].
# Take your time. Don’t forget to leave room for a coffee break when filling out your tax return as rushing can mean making a mistake.
# Take your time. Don’t forget to leave room for a [http://www.mywikibiz.com/coffee/ coffee] break when filling out your tax return as rushing can mean making a mistake.
# Double-check your math and verify all Social Security numbers. These are among the most common errors found on tax returns. Taking care will reduce your chance of hearing from the IRS and speed up your refund.
# Double-check your math and verify all Social Security numbers. These are among the most common errors found on tax returns. Taking care will reduce your chance of hearing from the IRS and speed up your refund.
# E-filing is easy. E-filing catches math errors and provides confirmation your return has been received and gives you a faster refund.
# E-filing is easy. E-filing catches math errors and provides confirmation your return has been received and gives you a faster refund.
Are you concerned that your efforts to get ready early may be affected by the Alternative Minimum Tax legislation passed by Congress in December? Most individuals will not be impacted, so it is still a good idea to get an early start on your preparations. Even if you are filing one of five forms affected by the recent legislation, the IRS expects to be ready for your return by February 11. You can review a list of the impacted forms and find out the latest news about when the IRS will be ready for your return at [http://irs.gov/ IRS.gov].
Are you concerned that your efforts to get ready early may be affected by the Alternative Minimum Tax legislation passed by Congress in December? Most individuals will not be impacted, so it is still a good idea to get an early start on your preparations. Even if you are filing one of five forms affected by the recent legislation, the IRS expects to be ready for your return by February 11. You can review a list of the impacted forms and find out the latest news about when the IRS will be ready for your return at [http://irs.gov/ IRS.gov].
== TT-2008-02: SHOULD YOU FILE A TAX RETURN? ==
== TT-2008-02: SHOULD YOU FILE A TAX RETURN? ==
• '''Request an Extension of Time to File – But Pay on Time''' If the clock runs out, you can get an automatic six month extension of time to file to October 15. However, this extension of time to file does not give you more time to pay any taxes due. You will owe interest on any amount not paid by the April deadline, plus a late payment penalty if you have not paid at least 90 percent of your total tax by that date. See IRS Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return for a variety of easy ways to apply for an extension. Form 4868 is available at IRS.gov or by calling 800-TAX-FORM (800-829-3676). Taxpayers needing Form 4868 should act soon to be sure they have the item in time to meet the April deadline.
• '''Request an Extension of Time to File – But Pay on Time''' If the clock runs out, you can get an automatic six month extension of time to file to October 15. However, this extension of time to file does not give you more time to pay any taxes due. You will owe interest on any amount not paid by the April deadline, plus a late payment penalty if you have not paid at least 90 percent of your total tax by that date. See IRS Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return for a variety of easy ways to apply for an extension. Form 4868 is available at IRS.gov or by calling 800-TAX-FORM (800-829-3676). Taxpayers needing Form 4868 should act soon to be sure they have the item in time to meet the April deadline.
== TT-2008-51: ITEMIZERS CAN DEDUCT CERTAIN TAXES ==
Did you know that you may be able to deduct certain taxes on your federal income tax return? You can take these deductions if you file Form 1040 and itemize deductions on Schedule A. Deductions decrease the amount of income subject to taxation.
There are several types of deductible non-business taxes:
* '''State and local taxes:''' You can choose to claim a state and local tax deduction for either income taxes or sales taxes on your return. You can deduct any state and local income taxes withheld from your salary in 2007, estimated taxes paid to state or local governments and any prior year's state or local income tax as long as they were paid during the tax year. If deducting general sales taxes instead, you may deduct actual expenses or use the optional tables provided by the IRS to determine your deduction amount, relieving you of the need to save receipts. Sales taxes paid on certain items such as motor vehicles and boats may be added to the table amount, but only up to the amount paid at the general sales tax rate.
* '''Real estate taxes:''' Deductible real estate taxes are usually any state, local or foreign taxes on real property. If a portion of your monthly mortgage payment goes into an escrow account and your lender periodically pays your real estate taxes to local governments out of this account, you can deduct only the amount actually paid during the year to the taxing authorities. Your lender will normally send you a Form 1098, Mortgage Interest Statement, at the end of the tax year with this information
* '''Personal property taxes:''' Personal property taxes are deductible when they are based only on the value of personal property, such as a boat or car. To be deductible, the tax must be charged to you on a yearly basis, even if it is collected more than once a year or less than once a year.
* '''Foreign income taxes:''' Generally, you can take either a deduction or a tax credit for foreign income taxes, but not for taxes paid on income that is excluded from U.S. tax.
For detailed information about the sales tax deduction, consult the instructions for Form 1040, Schedule A, Itemized Deductions, and the interactive State and Local Sales Tax Calculator found on IRS.gov. More information about each of these topics is available at IRS.gov. IRS forms and publications can be downloaded from the Web site or obtained by calling 800-TAX-FORM (800-829-3676).
== TT-2008-52: DEDUCTION FOR EDUCATOR EXPENSES ==
If you are an eligible educator, you may be able to deduct up to $250 of expenses you paid for purchases of books and classroom supplies. These out-of-pocket expenses may lower your 2007 tax bill even if you don’t itemize your deductions.
* '''Eligible Educator:''' The deduction is available if you are an eligible educator in a public or private elementary or secondary school. To be eligible, you must work at least 900 hours during a school year as a kindergarten through grade 12 teacher, instructor, counselor, principal or aide.
* '''Qualifying Expenses:''' You may subtract up to $250 of qualified expenses when figuring your adjusted gross income. Qualified expenses are unreimbursed expenses you paid or incurred for books, supplies, equipment (including computer equipment, software and services) and other materials that you use in the classroom. Supply expenses for courses in health and physical education are qualified only if they are related to athletics.
To be deductible, the qualified expenses must be more than the savings bond interest excluded on Form 8815, any nontaxable distribution from a qualified tuition program, and any tax-free withdrawals from your Coverdell Education savings account.
The deduction for educator expenses can only be claimed on Form 1040, line 23.
For more information about this topic, see IRS Publication 529, Miscellaneous Deductions. The publication can be downloaded at IRS.gov or ordered by calling 800-TAX-FORM (800-829-3676).
== TT-2008-53: HOME OFFICE DEDUCTION ==
If you use a portion of your home for business purposes, you may be able to take a home office deduction whether you are self-employed or an employee. Expenses that you may be able to deduct for business use of the home may include the business portion of real estate taxes, mortgage interest, rent, utilities, insurance, depreciation, painting and repairs.
You can claim this deduction for the business use of a part of your home only if you use that part of your home regularly and exclusively:
* As your principal place of business for any trade or business
* As a place to meet or deal with your patients, clients or customers in the normal course of your trade or business
Generally, the amount you can deduct depends on the percentage of your home that you used for business. Your deduction will be limited if your gross income from your business is less than your total business expenses.
If you use a separate structure not attached to your home for an exclusive and regular part of your business, you can deduct expenses related to it.
There are special rules for qualified daycare providers and for persons storing business inventory or product samples.
If you are self-employed, use Form 8829 to figure your home office deduction and report those deductions on line 30 of Schedule C, Form 1040.
If you are an employee, you have additional requirements to meet. The regular and exclusive business use must be for the convenience of your employer.
For more information see IRS Publication 587, Business Use of Your Home, available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
== TT-2008-54: SALE OF YOUR HOME ==
If you have a gain from the sale or exchange of your main home, you may be able to exclude all or part of the gain from your income.
Individuals may be able to exclude up to $250,000 of capital gain, and married taxpayers filing joint returns may be able to exclude up to $500,000 of gain each time you sell your main home, but generally no more frequently than once every two years.
To qualify for this exclusion of gain, you must meet ownership and use tests.
* Ownership Test: During the 5-year period ending on the date of the sale, you must have owned the home for at least 2 years.
* Use Test: During the 5-year period ending on the date of the sale, you must have lived in the home as your main home at least 2 years.
If you and your spouse file a joint return for the year of the sale, you can exclude the gain if either of you qualify for the exclusion. But both of you would have to meet the use test to claim the $500,000 maximum amount.
If you do not meet the ownership and use tests, you may be allowed to exclude a reduced maximum amount of the gain realized on the sale of your home if you sold your home because of health reasons, a change in place of employment, or certain unforeseen circumstances. Unforeseen circumstances include, for example, divorce or legal separation, natural or man-made disasters resulting in a casualty to your home, or an involuntary conversion of your home.
If you can exclude all the gain from the sale of your home, you do not report the gain on your federal tax return. If you cannot exclude all the gain from the sale of your home, or you choose not to, use Schedule D, Capital Gains and Losses, of the Form 1040 to report it.
For more details and information see IRS Publication 523, Selling Your Home, available at [http://irs.gov/ IRS.gov] or by calling 800-TAX-FORM (800-829-3676).
== TT-2008-55: DEDUCTING COSTS OF REFINANCING YOUR HOME ==
Taxpayers who refinanced their homes may be eligible to deduct some costs associated with their loans.
The term "points" is used to describe certain charges paid to obtain a home mortgage.
Here are some things to remember when deducting points:
* Taxpayers who itemize deductions generally may be able to deduct the points paid to obtain a home mortgage as mortgage interest
* Points paid solely to refinance a home mortgage usually must be deducted over the life of the loan
* Points can be fully deducted in the year paid if certain tests are met
For a refinanced mortgage, the interest deduction for points is determined by dividing the points paid by the number of payments to be made over the life of the loan. This information is usually available from lenders. Taxpayers may deduct points only for those payments made in the tax year.
However, if part of the refinanced mortgage money was used to finance improvements to the home and if the taxpayer meets certain other requirements, the points associated with the home improvements may be fully deductible in the year the points were paid. Also, if a homeowner is refinancing a mortgage for a second time, the balance of points paid for the first refinanced mortgage may be fully deductible in the year it is paid off.
Other closing costs – such as appraisal fees and other non-interest fees – generally are not deductible. Additionally, the amount of Adjusted Gross Income can affect the amount of deductions that can be taken.
For more information on deductions related to refinancing, visit IRS.gov for Tax Topics 504, Home Mortgage Points, and 505, Interest Expenses. You may also review IRS Publication 936, Home Mortgage Interest Deduction, available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
== TT-2008-56: TAX CREDIT FOR HYBRID VEHICLES ==
If you bought a hybrid vehicle in 2007, you may be entitled to a tax credit on your 2007 return. The credit is worth as much as $3,000 for the most fuel-efficient models. The precise amount depends on the make and model of the vehicle and when the vehicle was purchased.
The tax credit for hybrid vehicles, called the Alternative Motor Vehicle Credit, applies to vehicles purchased or placed in service on or after January 1, 2006.
Hybrid vehicles have drive trains powered by both an internal combustion engine and a rechargeable battery. Many currently available hybrid vehicles may qualify for the credit. Taxpayers may claim the credit on their 2007 tax returns only if they placed a qualified hybrid vehicle in service in 2007. As of March 2007, more than 40 different models of hybrids were/are eligible for the credit.
The credit is available only to the original purchaser of a new qualifying vehicle. If the qualifying vehicle is leased the credit is available only to the leasing company.
If 60,000 hybrid or advance lean burn technology vehicles of a particular manufacturer are sold, the tax credit is reduced and eventually eliminated. The full credit can be claimed up to the end of the third month after the quarter in which the manufacturer sells its 60,000th hybrid vehicle.
The credit for qualified Toyota and Lexus vehicles was eliminated for purchases on or after Oct. 1, 2007. The full credit for qualified Honda vehicles was available for all purchases in 2007, but has been reduced for purchases on or after Jan. 1, 2008.
To find out whether your car qualifies for the hybrid tax credit and the maximum amount of that credit, you can go to the IRS.gov website and search for “qualified hybrid vehicles.”
== TT-2008-57: TIPS FOR DEDUCTING CHARITABLE CONTRIBUTIONS ==
When preparing to file your federal tax return, don’t forget your contributions to charitable organizations. Your donations could add up to a sizeable tax deduction if you itemize on IRS Form 1040, Schedule A.
Starting in 2007 to deduct any charitable donation of money, taxpayers must have a bank record or a written communication from the recipient showing the name of the organization and the date and amount of the contribution. Though taxpayers are already required to keep records to support their contribution deductions, this new provision is designed to provide greater certainty, both to taxpayers and the government, in determining what may be deducted as a charitable contribution.
Here are a few tips to ensure your contributions pay off on your tax return:
* You cannot deduct contributions made to specific individuals, political organizations and candidates. Nor can you deduct the value of your time or services and the cost of raffles, bingo or other games of chance.
* Contributions must be made to qualified organizations to be deductible.
* Only contributions actually made during the tax year are deductible.
* If your contributions entitle you to merchandise, goods or services, including admission to a charity ball, banquet, theatrical performance or sporting event, you can deduct only the amount that exceeds the fair market value of the benefit received.
* Donations of stock or other property are usually valued at the fair market value of the property.
* Clothing and household items donated must be in good used condition or better to be deductible.
* Special rules apply to donation of vehicles.
* You can claim a deduction for individual contributions of $250 or more only if you obtain a written acknowledgment from the qualified organization.
* If you claim a deduction of more than $500 for all contributed property, you must attach IRS Form 8283, Noncash Charitable Contributions, to your return.
* Taxpayers donating an item or a group of similar items valued at more than $5,000 must also complete Section B of Form 8283, which requires an appraisal by a qualified appraiser.
For more information, check out Publication 526, Charitable Contributions, which is available at [http://irs.gov/ IRS.gov] or by calling 800-TAX-FORM (800-829-3676).
== TT-2008-58: DEDUCTING VEHICLE DONATIONS ==
If you donated a car or other vehicle to a qualified charitable organization in 2007 and intend to claim a deduction you should review the special rules that apply to vehicle donations. You can deduct contributions to a charity only if you itemize deductions on Schedule A of Form 1040.
Generally, the amount you may deduct for a vehicle contribution depends upon what the charity does with the vehicle. Charities typically sell donated vehicles. If the vehicle is sold by the charitable organization, the deduction claimed by the donor usually may not exceed the gross proceeds from the sale.
If your deduction is $250 or more you must obtain written acknowledgement of the donation from the charity. If your deduction is more than $500, this written acknowledgment or Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, must be attached to your return. Among other things, the acknowledgment generally must include the gross proceeds of the sale, the vehicle identification number, and a statement certifying the vehicle was sold in an arm's length transaction between unrelated parties.
If the organization intends to make significant intervening use of the vehicle or material improvements to the vehicle, the acknowledgment must include certain certifications. If the organization intends to sell the vehicle to a needy individual at a price significantly below fair market value, or gratuitously transfers the vehicle to a needy individual, the acknowledgment must also include certain certifications.
In addition, for deductions greater than $500, Form 8283, Noncash Charitable Contributions, must be attached to the return.
You can generally deduct the vehicle’s fair market value instead of the amount of gross proceeds from the sale if any of the following situations apply:
* The organization makes significant intervening use of or materially improves the vehicle
* The organization gives or sells the vehicle to a needy individual at a price significantly below fair market value in direct furtherance of its charitable purpose of relieving the poor and distressed or underprivileged who are in need of a means of transportation
* The claimed deduction is $500 or less
The fair market value cannot exceed the private party sales price listed in a used vehicle pricing guide.
For more information see Publication 526, Charitable Contributions, Publication 561, Determining the Value of Donated Property, and Publication 4303, A Donor’s Guide to Car Donations, available on [http://irs.gov/ IRS.gov] or by calling 800-TAX-FORM (800-829-3676).
== TT-2008-59: COVERDELL EDUCATION SAVINGS ACCOUNTS ==
A Coverdell Education Savings Account (ESA) is an account created as an incentive to help parents and students save for education expenses.
The total contributions for the beneficiary of this account cannot be more than $2,000 in any year, no matter how many accounts have been established. A beneficiary is someone who is under age 18 or is a special needs beneficiary.
Contributions to a Coverdell ESA are not deductible, but amounts deposited in the account grow tax free until distributed. The beneficiary will not owe tax on the distributions if they are less than a beneficiary’s qualified education expenses at an eligible institution. This benefit applies to qualified higher education expenses as well as to qualified elementary and secondary education expenses.
Here are some things to remember about Distributions from Coverdell Accounts:
* Distributions are tax-free as long as they are used for qualified education expenses, such as tuition and fees, required books, supplies and equipment and qualified expenses for room and board.
* There is no tax on distributions if they are for enrollment or attendance at an eligible educational institution. This includes any public, private or religious school that provides elementary or secondary education as determined under state law. Eligible institutions also include any college, university, vocational school or other postsecondary educational institution eligible to participate in a student aid program administered by the Department of Education. Virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions are eligible.
* The Hope and lifetime learning credits can be claimed in the same year the beneficiary takes a tax-free distribution from a Coverdell ESA, as long as the same expenses are not used for both benefits.
* If the distribution exceeds qualified education expenses, a portion will be taxable to the beneficiary and will usually be subject to an additional 10% tax. Exceptions to the additional 10% tax include the death or disability of the beneficiary or if the beneficiary receives a qualified scholarship.
There are contribution limits for taxpayers based on the contributor’s Modified Adjusted Gross Income. Contributions to a Coverdell ESA may be made until the due date of the contributor’s return, without extensions.
If there is a balance in the Coverdell ESA when the beneficiary reaches age 30, it must generally be distributed within 30 days. The portion representing earnings on the account will be taxable and subject to the additional 10% tax. The beneficiary may avoid these taxes by rolling over the full balance to another Coverdell ESA for another family member. For more details, see IRS Publication 970, Tax Benefits for Higher Education (at IRS.gov) or call 800-TAX-FORM (800-829-3676).
== TT-2008-60: HOW TO CHECK ON YOUR TAX REFUND ==
If you already filed your federal tax return and are due a refund, you have several options for checking on the status of your refund.
One way is to use "''Where’s My Refund''?" an interactive tool on the IRS Web site at [http://irs.gov/ IRS.gov]. Simple online instructions guide taxpayers through a process that checks the status of their refund after they provide identifying information shown on their tax return. Once the information is processed, you could get several responses, including:
* Acknowledgement that your return was received and is in processing.
* The mailing date or direct deposit date of your refund.
* Notice that the IRS could not deliver your refund due to an incorrect address. In this instance, you can change or correct your address online.
''Where’s My Refund''? is a very flexible tool. Whether you split your refund among several accounts, opt for direct deposit into one account, or ask IRS to mail you a check, ''Where’s My Refund''? gives you online access to your refund information.
''Where’s My Refund''? also include links to customized information based on the taxpayer’s specific situation. The links guide taxpayers through the steps they need to take to resolve any issues that may be affecting their refund. For example, if you do not get the refund within 28 days from the original IRS mailing date shown on ''Where’s My Refund''?, you can start a refund trace online.
The "''Where’s My Refund''?" service meets stringent IRS security and privacy certifications. Taxpayers enter identifying information that includes their Social Security number, filing status and the exact amount of the refund shown on the return. This specific information verifies that the person is authorized to access that account.
"''Where’s My Refund''?" is accessible to visually impaired taxpayers who use the Job Access with Speech screen reader used with a Braille display and is compatible with different JAWS modes.
Another option for checking the status of your refund is by calling the IRS TeleTax System at 800-829-4477 or the IRS Refund Hotline at 800-829-1954. When calling, you must provide the first Social Security number shown on the return, your filing status and the amount of the refund. If the IRS processed your return, the system will tell you the date your refund will be sent. The TeleTax refund information is updated each weekend. If you do not get a date for your refund, please wait until the next week before calling back.
* [http://www.irs.gov/individuals/article/0,,id=96596,00.html Where’s My Refund?]
== TT-2008-61: YOU CAN STILL MAKE A 2007 IRA CONTRIBUTION ==
If you haven’t contributed funds to an Individual Retirement Arrangement for tax year 2007, or if you’ve put in less than the maximum allowed, you still have time to do so. You can contribute to either a traditional or Roth IRA until the April due date for filing your tax return for 2007, not including extensions.
Be sure to tell the IRA trustee that the contribution is for 2007. Otherwise, the trustee may report the contribution as being for 2008 when they get your funds.
Generally, you can contribute up to $4,000 of your earnings for 2007 or up to $5,000 if you are age 50 or older in 2007. You can fund a traditional IRA, a Roth IRA (if you qualify), or both, but your total contributions cannot be more than these amounts.
* '''Traditional IRA:''' You may be able to take a tax deduction for the contributions to a traditional IRA, depending on your income and whether you — or your spouse, if filing jointly — are covered by an employer’s pension plan.
* '''Roth IRA: '''You cannot deduct Roth IRA contributions, but the earnings on a Roth IRA may be tax-free if you meet the conditions for a qualified distribution.
You can file your tax return claiming a traditional IRA contribution before the contribution is actually made. However, the contribution must be made by the due date of your return, not including extensions. If you report a contribution to a traditional IRA on your return, but fail to contribute by the deadline, you must file an amended tax return by using Form 1040X, Amended U.S. Individual Income Tax Return. You must add the amount you deducted to your income on the amended return and pay the additional tax accordingly.
For more information get IRS Publication 590, Individual Retirement Arrangements (IRAs), available on the IRS Web site at IRS.gov or by calling 800-TAX-FORM (800-829-3676). Taxpayers who need to have any IRS publication mailed to them should act soon to be sure they have the item in time to meet the April due date.
== TT-2008-62: TIPS FOR LAST-MINUTE FILERS ==
With the tax filing deadline close at hand, the IRS offers some tips for those still working on their paper tax forms:
* Consider filing electronically instead of using paper tax forms
* Put all required Social Security numbers on the return
* Double-check your figures
* Sign your form
* Attach all required schedules
* Send your return or request an extension by the April filing deadline
Choosing to e-file your tax return instead of preparing a paper tax form is the best step you can take to ensure that your return is accurate and complete.
When you file a paper return, the numbers to check most carefully on the tax return are the identification numbers — usually Social Security numbers — for each person listed. This includes the taxpayer, spouse, dependents and persons listed in relation to claims for the Child and Dependent Care Credit or Earned Income Tax Credit. Missing, incorrect or illegible Social Security Numbers can delay or reduce a tax refund.
Taxpayers filing paper returns should also double-check that they have correctly figured the refund or balance due and have used the right figure from the tax table.
Taxpayers must sign and date their returns. Both spouses must sign a joint return, even if only one had income. Anyone paid to prepare a return must also sign it.
People sending a payment should make the check out to “United States Treasury” and should enclose it with, but not attach it to the tax return or the Form 1040-V, Payment Voucher, if used. The check should include the taxpayer’s Social Security number, daytime phone number, the tax year and the type of form filed.
By the April due date, taxpayers should either file a return or request an extension of time to file. Remember, the extension of time to file is not an extension of time to pay.
Forms and publications and helpful information on a variety of tax subjects are available around the clock on the IRS Web site at IRS.gov.
== TT-2008-63: AVOID COMMON ERRORS ==
The IRS recommends reviewing your entire tax return to be sure it is accurate and complete. Even a simple mistake can cause problems which might lead to delays in processing your return and receiving your refund.
Here are some ways to avoid common tax return errors:
* '''File electronically'''. If you choose to e-file, many common errors are avoided or corrected by the computer software. If your income is under $54,000 you may be able to e-file for free using IRS Free File.
* '''Use the peel-off label''' if you choose to mail a paper return. You may line through and make necessary corrections right on the label. Be sure to fill in your Social Security number in the box provided on the return. If you do not have a peel-off label, fill in all requested information clearly, including the Social Security numbers.
* '''Check only one filing status''' on the tax return and check the appropriate exemption boxes. Enter the correct Social Security numbers for each of those exemptions.
* '''Use the correct Tax Table column''' for your filing status.
* '''Double check''' all figures on the return. Math errors are common mistakes.
* '''Make sure''' that the financial institution routing and account numbers you have entered on the return for a direct deposit of your refund are accurate. Incorrect numbers can cause the refund to be delayed or misdirected.
* '''Sign and date the return'''. If filing a joint return, both spouses must sign and date the return.
* '''Attach''' all Forms W-2, Wage and Tax Statement, and other forms that reflect tax withheld to the front of the return. Attach all other necessary forms and schedules.
* '''Do you owe tax?''' If so, enclose a check or money order made payable to the "United States Treasury" and Form 1040-V, Payment Voucher, if used. Or, you may choose to pay by credit card by contacting one of the credit card service providers.
For a complete checklist and a listing of some of the most common errors, see Tax Topic 303, Checklist of Common Errors When Preparing Your Tax Return, at IRS.gov, or call our TeleTax number, 800-829-4477. For more information about IRS e-file and Free File visit the IRS Web site at IRS.gov.
== TT-2008-64: PREPARING YOUR TAX RETURN FOR MAILING ==
If you are mailing a paper return to the IRS, take a few minutes to make certain that all information is complete and accurate before sealing the envelope. This simple precaution could help you avoid mistakes that can delay your refund or result in correspondence from the IRS.
Here are just a few items to complete prior to mailing your tax return:
* Sign your return Your federal tax return is not considered a valid return unless it is signed. If you are filing a joint return, your spouse also must sign.
* Provide a daytime phone number. This may help speed the processing of your return if the IRS has questions about items on your return.
* Assemble any schedules and forms behind your Form 1040/1040A in the order of the "Attachment Sequence No." shown in the upper right hand corner of the schedule or form. Arrange any supporting statements in the same order as the schedules or forms they support and attach them last.
* Attach all copies of Forms W-2, W-2G and 2439 to the front of Form 1040. Also attach Form 1099-R if federal tax was withheld.
* Use the coded envelope included with your tax package to mail your return. If you did not receive an envelope, check the section called "Where Do You File?" in the tax instruction booklet. Don’t forget the stamp!
* If you are due a refund, consider direct deposit to receive your refund in the quickest and safest manner. Then make sure that the financial institution routing and account numbers you have entered are accurate. Incorrect numbers can cause the refund to be delayed or misdirected.
* Do you owe tax? If so, enclose a check or money order made payable to the “United States Treasury” and Form 1040-V, Payment Voucher, if used. Make sure you include your correct name, address, the Social Security number that is listed first on the tax form, daytime telephone number, tax year and form number (i.e. Form 1040). Or, you may choose to pay by credit card by contacting one of the credit card service providers.
For more information, refer to your tax instruction booklet or visit the IRS Web site at IRS.gov.
== TT-2008-65: FILING YOUR FEDERAL TAX RETURN ==
Once you complete your 2007 federal tax return, you can either file it electronically or mail it to the IRS.
More than one-half of all taxpayers file electronically because they know that IRS e-file provides a fast, easy, accurate, secure and convenient way to file. Taxpayers who file electronically receive an acknowledgement that their return has been received and accepted for processing.
Electronic options include:
* Computer filing using an authorized IRS e-file tax professional
* Using your personal computer to file
* Free File is available at IRS.gov for many taxpayers as an option for filing their returns with no charge
If you choose to mail your return, you will find directions on where to send it on the back cover of your instruction booklet.
When mailing your return, whether enclosing a payment or not, use the envelope and the appropriate mailing label that came with your tax instruction booklet. If you moved during the year, check the tax package to find the mailing address of the appropriate IRS Center. The appropriate address depends on where you live and whether or not you are enclosing a check or money order. Checks or money orders should be payable to the “United States Treasury.”
For more information on where to file your tax return, check out the 1040 Central page on the IRS Web site at IRS.gov. Use the 1040 Central page as your one-stop guide to filing your 2007 federal income tax return.
== TT-2008-66: LAST MINUTE PAYMENT AND FILING TIPS ==
If you’re trying to beat the tax deadline, there are several options for last-minute help:
* Receive a six-month extension of time to file using Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return.
* Payment options are available to taxpayers having trouble paying their tax bill.
* Download forms and publications at IRS.gov.
Filing an extension will give you extra time to get the paperwork to the IRS and avoids the late-filing penalty, but it does not extend the time you have to pay any tax due. You must estimate your tax liability when you apply for an extension.
You will owe interest on any amounts not paid by the April deadline, and you also will be charged a penalty for late payment unless at least 90 percent of your tax liability is paid by the regular due date of your tax return.
You can also e-file an extension request using tax preparation software on your own computer or by going to a tax preparer.
If your return is completed but you are unable to pay the tax due, do not request an extension. File your return on time and pay as much as you can. The IRS will send you a bill or notice for the balance due and will charge interest and penalties only on the unpaid balance.
If you cannot pay the full amount due with your return, you can ask to make monthly installment payments for the full or a partial amount. You can apply for an IRS installment agreement using our Web-based Online Payment Agreement application on IRS.gov. The Web-based application allows eligible taxpayers or their authorized representatives to self-qualify, apply for, and receive immediate notification of approval. You can also request an installment agreement by submitting a completed Form 9465, Installment Agreement Request, either when you file the return or when you later get a bill from the IRS.
For more information regarding extensions of time to file or installment agreements, including options for requesting an installment agreement online, visit the IRS Web site at IRS.gov and click on 1040 Central.
== TT-2008-67: MAKING TAX PAYMENTS CORRECTLY ==
If you have a balance due when filing your 2007 income tax return, remember to make sure your tax payment check or money order is payable to the "United States Treasury." Complete and include Form 1040-V, Payment Voucher, when sending your payment and tax return to the IRS. This will help the IRS process your payment more accurately and efficiently.
Whether you are filing your current year’s return (2007), a prior year’s return or an amended return, always provide your correct name, address, the Social Security number that is listed first on the tax form, daytime telephone number, tax year and form number on the front of your check or money order. Enclose your payment with your return, but do not staple it to the form. Do not mail cash with your tax return.
If you are e-filing you have the option of paying by electronic debit of your bank account using Electronic Funds Withdrawal. You will need to know your account number and your financial institution’s routing number. You can check with your financial institution to make sure that an electronic withdrawal is allowed and to get the correct routing and account numbers.
If you are paying by credit card, call or visit the Web site of either service provider listed below and follow the instructions:
* Link2Gov Corporation: 888-PAY-1040 (888-729-1040), pay1040.com.
* Official Payments Corporation: 800-2PAY-TAX (800-272-9829), officialpayments.com.
The service providers charge a convenience fee which may vary between the providers. You will be told what the fee is during the transaction and you will have the option to either continue or cancel the transaction. You can also find out what the fee will be by calling the provider’s automated customer service number or visiting the provider’s website. You will be given a confirmation number for your payment at the end of the call.
For more information, call 800-829-4477 to check out TeleTax Topic 158, "Ensuring Proper Credit of Payments.” This information is also contained in Publication 17, Your Federal Income Tax, available at IRS.gov, as is Form 1040-V.
== TT-2008-68: PAYMENT OPTIONS ==
If you cannot pay the full amount of taxes you owe by the April deadline, you should still file your return by the deadline and pay as much as you can to avoid penalties and interest. There are also alternative payment options to consider:
* Pay by Credit Card You can charge your taxes on your American Express, MasterCard, Visa or Discover cards. To pay by credit card, contact one of the service providers at its telephone number or Web site listed below and follow the instructions. The service providers charge a convenience fee based on the amount you are paying. Do not add the convenience fee to your tax payment.
** Link2Gov Corporation: 888-PAY-1040 (888-729-1040), [http://www.pay1040.com/ www.pay1040.com]
** Official Payments Corporation: 800-2PAY-TAX (800-272-9829), [http://www.officialpayments.com/ www.officialpayments.com]
* Extension of Time to Pay Based on the circumstances, a taxpayer could qualify for an extension of time to pay. The IRS is willing to allow extensions of time to pay in order to assist in tax debt repayment. A short term extension of time to pay can be requested through the Online Payment Agreement application at IRS.gov or by calling 800-829-1040. Taxpayers qualifying for an extension of time to pay of 30 -120 days generally will pay less in penalties and interest than if the debt were repaid through an installment agreement.
* Installment Agreement The IRS may allow you to pay any remaining balance in monthly installments through an installment agreement. You can apply for an IRS installment agreement using our Web-based Online Payment Agreement application on IRS.gov. Another alternative is to attach a Form 9465, Installment Agreement Request, to the front of your tax return. The IRS charges a $105 fee for setting up an installment agreement. The fee is only $52 if you pay via direct debit. If your income is below a certain level (see Form 13844), you may qualify for a $43 fee. You will also be required to pay interest plus a late payment penalty on the unpaid taxes for each month or part of a month, after the due date that the tax is not paid. If you do not file your return by the due date -- including extensions -- you may have to pay a failure-to-file penalty.
In most circumstances, the Online Payment Agreement application provides immediate notification regarding the approval of your request. There may be times when you will need to mail paperwork or speak with us before we can determine your eligibility for an installment agreement or short term extension to pay. If that is the case, the online application will provide an address and telephone number that can be used to reach the appropriate IRS office.
For more information about filing and paying your taxes, visit the IRS Web site at IRS.gov and choose “1040 Central” or refer to the Form 1040 Instructions or IRS Publication 17, Your Federal Income Tax. You can download forms and publications at IRS.gov or request a free copy by calling toll free 800-TAX-FORM (800-829-3676).
== TT-2008-69: NEED MORE TIME TO FILE? ==
If you can't meet the April filing deadline to file your tax return, you can get an automatic six month extension of time to file from the IRS.
Here are some things to remember about filing extensions:
* File Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, with the IRS by the April deadline, or make an extension-related electronic credit card payment.
* The extension will give you extra time to get your paperwork to the IRS, but it does not extend the time you have to pay any tax due.
* You will owe interest on any amounts not paid by the April deadline, plus a late payment penalty if you have paid less than 90 percent of your total tax by that date.
* You can e-file an extension request using tax preparation software on your own computer or by going to a tax preparer that has the software. The IRS will acknowledge receipt of the extension request if you file by computer.
* You can use Free File to file for an extension. Many private-sector companies in the IRS Free File Alliance offer extensions for no charge. You can access Free File via the IRS Web site at IRS.gov. Taxpayers with adjusted gross incomes of $54,000 or less may file their 2007 Federal Income Tax Returns electronically through Free File.
If you ask for an extension via computer, you can also choose to pay any expected balance due by authorizing an electronic funds withdrawal from a checking or savings account. You will need the appropriate bank routing and account numbers and must also have available the adjusted gross income from your 2006 federal income tax return to verify your identity. For information on these and other methods of payment, visit the IRS.gov Web site or call 800-TAX-1040 (800-829-1040).
If your return is completed but you are unable to pay the full amount of tax due, do not request an extension. File your return on time and pay as much as you can. The IRS will send you a bill or notice for the balance due. To apply online for a payment agreement, go to IRS.gov, use the pull-down menu under “I need to …” and select “Set Up a Payment Plan.”
To obtain a copy of Form 4868 or other forms and publications use E-file tax preparation software, download them from IRS.gov or visit your local IRS office. Note that forms and publications can be ordered by calling 800-TAX-Form (800-829-3676). However, telephone requests normally take 10 days to fill and may not arrive before the tax deadline of April 15.
== TT-2008-70: HOW LONG SHOULD IT TAKE TO RECEIVE YOUR TAX REFUND? ==
Are you expecting a tax refund from the Internal Revenue Service this year? If you file a complete and accurate paper tax return, your refund should be issued about six to eight weeks after the IRS receives your return. If you file your return electronically, your refund is issued in about half that time — even faster if you choose direct deposit.
You can check on the status of your refund 72 hours after you e-filed your return or four weeks after mailing your return. There are several ways to check the status of your refund. You will need your Social Security number, filing status and the exact whole dollar amount of your refund to use these applications.
* '''Where's My Refund:''' The fastest, easiest way to find out about your current year refund is to go to the IRS.gov Web site and click on the “Where’s My Refund” link available from the home page.
* '''Refund Hotline:''' Call the IRS Refund Hotline at 800-829–1954.
* '''TeleTax: ''' Call the IRS TeleTax System at 800-829-4477.
If you do not get a date for your refund, wait until the next week before calling back.
In some circumstances, you may not receive your refund as quickly as you expected. Refund delays can be caused by a variety of reasons. For example, a name and Social Security number listed on the tax return may not match the IRS records. You may have failed to sign the return or include a necessary attachment, such as Form W-2, Wage and Tax Statement. Or you may have made math errors that require extra time for the IRS to correct.
For more information on how long it may take the IRS to process your federal tax refund, visit Frequently Asked Questions at IRS.gov.
== TT-2008-71: AMENDING YOUR TAX RETURN ==
Oops! You’ve discovered an error after your tax return has been filed or maybe you need to adjust your 2007 return to include certain non-taxable benefits to reach the $3000 qualifying income level to qualify for an economic stimulus payment. What should you do? You may need to amend your return.
(Note: Generally, the payment of economic stimulus payments is based on the information from your original 2007 federal tax return. However, the only item on an amended return that will affect the economic stimulus payment is when including certain non-taxable benefits not included on the original return. This must be the only reason you were not eligible for the economic stimulus payment on the original 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. However, you should file an amended return if any of the following were reported incorrectly:
* Your filing status
* Your dependents
* Your total income
* Your deductions or credits
Use Form 1040X, Amended U.S. Individual Income Tax Return, to correct a previously filed Form 1040, 1040A, 1040EZ or electronically-filed return. Be sure to enter the year of the return you are amending at the top of Form 1040X. If you are amending more than one tax return, prepare a 1040X for each return and mail them in separate envelopes to the IRS processing center for the area in which you live. The 1040X instructions list the addresses for the centers.
The Form 1040X has three columns. Column A is used to show original or adjusted figures from the original return. Column C is used to show the corrected figures. The difference between the figures in Columns A and C is shown in Column B. There is an area on the back of the form where you explain the specific changes being made on the return and the reason for each change.
If the changes involve another schedule or form, attach it to the 1040X. For example, if you are filing a 1040X because you have a qualifying child and now want to claim the Earned Income Credit, you must attach a Form 1040 Schedule EIC to show the qualifying person's name, year of birth and Social Security number.
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. If you owe additional tax for 2007, you should file Form 1040X and pay the tax by the April due date to avoid any penalty and interest.
Generally, 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, to claim a refund.
Form 1040X and instructions are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
== TT-2008-72: WHAT TO DO IF YOU RECEIVE AN IRS NOTICE ==
It’s a moment many taxpayers dread. A letter arrives from the IRS — and it’s not a refund check. Don’t panic; many of these letters can be dealt with simply and painlessly.
Each year, the IRS sends millions of letters and notices to taxpayers to request payment of taxes, notify them of a change to their account or request additional information. The notice you receive normally covers a very specific issue about your account or tax return. Each letter and notice offers specific instructions on what you are asked to do to satisfy the inquiry.
If you receive a correction notice, you should review the correspondence and compare it with the information on your return.
* Agree? If you agree with the correction to your account, usually no reply is necessary unless a payment is due.
* Disagree? If you do not agree with the correction the IRS made, it is important that you respond as requested. Write to explain why you disagree. Include any documents and information you wish the IRS to consider, along with the bottom tear-off portion of the notice. Mail the information to the IRS address shown in the upper left-hand corner of the notice. Allow at least 30 days for a response.
Most correspondence can be handled without calling or visiting an IRS office. However, if you have questions, call the telephone number in the upper right-hand corner of the notice. Have a copy of your tax return and the correspondence available when you call to help us respond to your inquiry.
Be sure to keep copies of any correspondence with your records.
For more information about IRS notices and bills, see Publication 594, What You Should Know about the IRS Collection Process. Information about penalties and interest charges is available in Publication 17, Your Federal Income Tax. Both publications are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
== TT-2008-73: APPEAL RIGHTS ==
Are you in the middle of a disagreement with the IRS? If you disagree with the IRS about the amount of your tax liability or about proposed collection actions, you have the right to ask the IRS Appeals Office to review your case.
IRS Publication 1, Your Rights as a Taxpayer, explains some of your most important taxpayer rights. During their contact with taxpayers, IRS employees are required to explain and protect these taxpayer rights, including the right to appeal.
The Appeals Office, which is independent of the IRS office that proposed the disputed action, can work with taxpayers by correspondence, telephone, or informal conferences.
Through Appeals procedures, taxpayers can settle most differences without expensive and time-consuming court trials. However, if you and the Appeals Officer or Settlement Officer cannot reach agreement, or if you prefer not to appeal within the IRS, in most cases, you may take your disagreement to federal court.
For more information about Appeals and its processes, go to the IRS Web site at IRS.gov and select the link to “Appeal a Tax Dispute”, which is found at the bottom of the home page. The Appeals Web page provides links to assist you in determining if you are ready for Appeals, how to request an appeal, and what you can expect from Appeals.
This page also provides a link to easy-to-use online self-help tools to help you focus on your area of dispute and determine if you will benefit from filing an appeal. You can also link to “Online Videos of the Appeals Process” containing informative online video streams entitled “The Appeals Process (Examination)” and “The Appeals Process (Collection).”
Information is also available in IRS Publication 5, Your Appeal Rights and How to Prepare a Protest If You Don't Agree; Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund; and Publication 1660, Collection Appeal Rights (for Liens, Levies, and Seizures). To get copies of IRS publications, visit the IRS Web site at IRS.gov or call 800-TAX-FORM (800-829-3676).
== TT-2008-74: HELP FROM THE TAXPAYER ADVOCATE SERVICE ==
If you have tried to resolve tax problems with the IRS and are still having problems or facing economic harm, you have somewhere to turn: seek the free assistance of the Taxpayer Advocate Service.
The Taxpayer Advocate Service is an independent organization within the IRS whose employees assist taxpayers in these circumstances or those who believe that an IRS system or procedure is not working as it should.
The service is free, confidential, tailored to meet your needs, and available for businesses as well as individuals. You may be eligible for assistance if:
* You are experiencing economic harm or significant cost (including fees for professional representation),
* You have experienced a delay of more than 30 days to resolve your tax issue, or
* You have not received a response or resolution to the problem by the date promised by the IRS.
For individuals, examples of economic harm as a result of an IRS action might include an inability to provide for basic necessities such as housing, transportation or food; or for businesses, an inability to meet payroll expenses.
There is at least one local taxpayer advocate in each state, the District of Columbia, and Puerto Rico. Because advocates are part of the IRS, they know the tax system and how to navigate it. If you qualify, you will receive personalized service from a knowledgeable advocate who will:
* Listen to your problem,
* Help you understand what needs to be done to resolve it, and
* <div align="left">Stay with you every step of the way until your problem is resolved.</div>
You can contact the Taxpayer Advocate Service by:
* Calling the TAS case intake line at 877-777-4778 (TTY/TTD 800-829-4059),
* Writing or calling your local taxpayer advocate, whose address and phone number are listed in the government listings in your local telephone directory and in Publication 1546, The Taxpayer Advocate Service of the IRS – How to Get Help With Unresolved Tax Problems,
* Filing Form 911, Application for Taxpayer Assistance Order, with the Taxpayer Advocate Service, or
* Asking an IRS employee to complete Form 911 on your behalf.
To get a copy of Form 911 or to learn more about the Taxpayer Advocate Service, visit the Web site at IRS.gov and select the link for the Taxpayer Advocate. You can download Form 911 and Publication 1546 from the IRS Web site Forms and Publications section, or order a copy by calling 800-TAX-FORM (800-829-3676).
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[[Category:IRS Tax Tips]]
[[Category:IRS Tax Tips]] [[Category:Taxation]]