Tax Incentives for Higher
EducationThe tax code provides a variety of tax incentives for families who are paying higher education cost or are repairing student loans. You may be able to claim an American Opportunity Credit or Lifetime Learning Credit for the qualified tuition and related expenses of the students in the family who are enrolled in eligible education institutions.
Check Withholdings to Avoid a Tax Surprise
If you owed tax last year or received a large refund you may want to adjust your tax withholding. Owing tax at the end of the year could result in penalties being assessed.
Early Preparation
Early is better when it comes to working on your taxes. The IRS encourages everyone to get a head start on tax preparation. Not only do you avoid the last-minute rush, early filers get a faster refund.
Amended Returns
Oops! You’ve discovered an error after your tax return has been filed. What should you do? You may need to amend your return. Filing an ExtensionIf you can’t meet the April 15th deadline to file your tax return, you can get an automatic six-month extension of time to file from the IRS. The extension will give you extra time to get the paperwork in to the IRS, but does not extend the time you have to pay any tax due. You will owe interest on any amount 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.
Car Donations
The IRS reminds taxpayers that specific rules apply for taking a tax deduction for donating a car to charities. When preparing to file your federal tax return don’t forget your contributions to charitable organizations. Your donations can add up to a nice tax deduction if you itemize on IRS Forms 1040, Schedule A.
Earn Income Tax Credit for Certain Workers
Millions of Americans forgo critical tax relief each year by failing to claim the Earn Income Tax Credit (EITC), a federal tax credit for individuals who work but do not earn high incomes. Taxpayers who qualify and claim the credit could pay less federal tax, pay no tax or even get a refund.
Refinancing Your Home
Taxpayers who refinance their homes may be eligible to deduct some cost associated with their loans. Whether credit for the Elderly or Disable, you may be able to take the Credit for the Elderly or the Disabled if you were age 65 or older at the end of the year, or if you retired on permanent and total disability, according to the IRS. If you sold your main home, you may be able to exclude up to $250,00 of gain ($500,000 for married taxpayer filing jointly) from federal tax return.
Deductible Taxes
Did you know that you may be able to deduct certain taxes on your federal income tax return? The IRS says you can if you file Form 1040 and itemize deductions on Schedule A. Deductions decrease the amount of income subject to taxation.
Gift Giving
If you gave any one-person gift valued at more than $14,000, it is necessary to report the total gift to the Internal Revenue Service. You may even have to pay tax on the gift.
Marriage or Divorce
Newlyweds and recently divorced should make sure that names on their tax return match those registered with the Social Security Administration (SSA). A mismatch between a name on the tax return and a Social Security Number (SSN) could unexpectedly increase a tax bill or reduce the size of any refund.
Affordable Care Act
The individual shared responsibility provision requires that you and each member of your family have qualifying health insurance, a health coverage exemption, or make a payment when you file. If you, your spouse and dependents had health insurance coverage all year, you will indicate this by simply checking a box on your return.
Tips and Taxes
Do you work at a hair salon, barbershop, casino, golf course, hotel or restaurant or drive a taxicab? The tip income you receive as an employee from those services is taxable income, advises the IRS.
Refund, Where’s My 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 in about six to eight weeks from the date the IRS receives your return. If you file your return electronically, your refund should be issued in about half the time it would take if you file paper return even faster when you choose direct deposit (about 7-10 business days).
Domestic Production Deduction
If your business is engaged in qualifying production activity you may be able to take a tax deduction for your U.S. based business activities.
Organizational and Start Up Cost
Have you just started a new business? Did you know expenses incurred before a business begins operations are not allowed as current deductions?
Business or Hobby?
It is generally accepted that people prefer to make a living doing something you like. A hobby is an activity for which you do not expect to make a profit. If you do not carry on your business or investment activity to make a profit, there is a limit on deductions you can take.
Business Eligibility for Schedule C-EZ
Your business may have become eligible to use the abbreviated Schedule C-EZ instead of the longer Schedule C when reporting business profit and loss on your federal income tax return, according to the IRS.
Deductible Home Offices
Whether you are self-employed or a employee, if you use a portion of your home exclusively and regularly for business purpose, you may be able to take a home office deduction.
Filing Deadline and Payment Options
If you’re trying to beat tax deadline, there are several options for last-minute help. If you need a form or publication, you can download copies from the IRS Form page under the IRS website. If you find you need more time to finish your return, you can get a five or six month extension of time to file using Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns. And if you have trouble paying your tax bill, the IRS has several payment options available.
Your Appeal Rights
Are you in the middle of a disagreement with the IRS? One of the guaranteed rights for taxpayers is the right to appeal. If you disagree with the IRS about the amount of tax your tax liability or about proposed collection actions, you have the right to ask the IRS Appeal Office to review your case.
Information About IRS Notice
It’s a moment any taxpayer dreads. An envelope arrives from the IRS and it’s not a refund check. But don’t panic. Many IRS letters can be dealt simply a painlessly.
Charitable Contribution
When preparing to file your federal tax return, don’t forget your contribution to charitable organizations. Your donations (up to 10% of taxable income) can add up to a nice tax deduction for your corporation.
