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Tuesday Tax Tip

How to Get What You Need to do Your Taxes

IRS Tax Tip 2015-10, February 2, 2015

It’s easier than ever to get what you need from the IRS. Here are the best ways to get the services and products you need to do your taxes:

  • E-file your return.  The best way to file is joining with nearly 126 million taxpayers who used IRS e-file last year. E-file is the safe, accurate and easier way to file your tax return. If you use IRS Free File, you can prepare and file your taxes for free. Free File is only available on IRS.gov. Go to IRS.gov/filing and review your options.
  • Use IRS.gov.  Get what you need 24 hours a day 7 days a week on IRS.gov. Click on the “Tools”  link on the home page for a number of online tools. You can get answers to your tax questions with the Interactive Tax Assistant and the IRS Tax Map. Use ‘Where’s My Refund?’ to check the status of your refund. Use the EITC Assistant to see if you’re eligible for the Earned Income Tax Credit. To view and download tax products, click on the ‘Forms and Pubs’ tab on the home page. You can often view, download or print the many tax products that appear online before paper versions are available.
  • Get tax products online.  If you e-file your tax return, you don’t need to prepare or mail any paper forms to the IRS. If you still need paper forms or publications you can visit IRS.gov to view, download or print what you need right away. As an alternative, you can go to IRS.gov/orderforms and place an order. If you can’t order online, you can call the IRS at 800-829-3676 to place an order.

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Tuesday Tax Tip #3

As we enter the height of tax season, HR Strategies is pleased to once again bring you relevant information from the IRS on tips on Tuesdays for your tax preparations and planning.

Use the Tax Form That’s Right for You

IRS Tax Tip 2015-04

This tax filing season, get things off to a good start. Make it easy on yourself and let the software you use to e-file select the right form for you. Filing electronically is the easiest way to file a complete and accurate return. The software asks questions that guide you, minimizes errors and helps you get the tax credits and deductions that you are entitled to claim. Brand-name software’s also free when you use IRS Free File on IRS.gov.

If you do file a paper return, here are some tips to help you use the right forms.

  • You can generally use the 1040EZ if:
  • Your taxable income is below $100,000;
  • Your filing status is single or married filing jointly;
  • You don’t claim dependents; and
  • Your interest income is $1,500 or less.

Note: You can’t use Form 1040EZ to claim the new Premium Tax Credit. You also can’t use this form if you received advance payments of this credit in 2014.

The 1040A may be best for you if:

  • Your taxable income is below $100,000;
  • You have capital gain distributions;
  • You claim certain tax credits; and
  • You claim adjustments to income for IRA contributions and student loan interest.

You must use the 1040 if:

  • Your taxable income is $100,000 or more;
  • You claim itemized deductions;
  • You report self-employment income; or
  • You report income from sale of a property.

Remember, if you e-file your tax return you don’t need any paper forms to mail to the IRS. Go to IRS.gov and click on the ‘IRS e-file’ icon to review your options. If you still need a paper form you can visit IRS.gov/Forms to view, download or print what you need right away.

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Tuesday Tax Tip #2

As we enter the height of tax season, HR Strategies is pleased to once again bring you relevant information from the IRS on tips on Tuesdays for your tax preparations and planning.

Ten IRS Tips about Free Tax Preparation

IRS Tax Tip 2015-06

Each year, millions of people have their taxes prepared for free. The IRS’s Volunteer Income Tax Assistance or and Tax Counseling for the Elderly programs have helped people for more than 40 years. Many people know these programs by their initials. Here are 10 tips from the IRS about VITA and TCE:

  1. Trained and Certified. The IRS works with local community groups to train and certify VITA and TCE volunteers.
  2. VITA Program. VITA generally offers free tax return preparation to people who earn $53,000 or less.
  3. TCE Program. TCE is mainly for people age 60 or older. The program specializes in tax issues unique to seniors. AARP participates in the TCE program and helps people with low to moderate incomes.
  4. Free E-file. VITA and TCE provide free electronic filing. E-filing is the safest, most accurate way to file your tax return. Combining e-file with direct deposit is the fastest way to get your refund.
  5. Tax Benefits. Using VITA and TCE can help you get all the tax benefits for which you are eligible. For example, you may qualify for the Earned Income Tax Credit or the Credit for the Elderly. You can also get help with the new Health Care Law tax provisions.
  6. Bilingual Help. Some VITA and TCE sites provide bilingual help for people who speak limited English.
  7. Help for Military. VITA offers free tax assistance to members of the military and their families. Volunteers help with many military tax issues. These may include the special rules and tax benefits that apply to those serving in combat zones.
  8. “Self-Prep” Option. At some VITA sites, you can prepare your own federal and state tax returns using free web-based software. This is an option if you don’t have a home computer or need much help. Volunteers are on site to guide you if you need help. In most cases, this option offers free tax return preparation software and e-filing to people who earn $60,000 or less.
  9. Local Sites. The IRS partners with community organizations to offer free tax services at thousands of sites around the nation. Sites start to open in late January and early February.
  10. Visit IRS.gov. You can visit IRS.gov to find a VITA site near you. Search the word “VITA” and click on “Free Tax Return Preparation for You by Volunteers.” Site information is also available by calling the IRS at 800-906-9887. To locate the nearest AARP Tax-Aide site, visit aarp.org, or call 888-227-7669.

Tax Time

Tuesday Tax Tip #1

As we enter the height of tax season, HR Strategies is pleased to once again bring you relevant information from the IRS on tips on Tuesdays for your tax preparations and planning.

Top 10 Tax Facts about Exemptions & Dependents

IRS Tax Tip 2015-05

Nearly everyone can claim an exemption on their tax return. It usually lowers your taxable income. In most cases, that reduces the amount of tax you owe for the year. Here are the top 10 tax facts about exemptions to help you file your tax return.

  1. E-file your tax return. Filing electronically is the easiest way to file a complete and accurate tax return. The software that you use to e-file will help you determine the number of exemptions that you can claim. E-file options include free Volunteer Assistance, IRS Free File, commercial software and professional assistance.
  1. Exemptions cut income. There are two types of exemptions. The first type is a personal exemption. The second type is an exemption for a dependent. You can usually deduct $3,950 for each exemption you claim on your 2014 tax return.
  1. Personal exemptions. You can usually claim an exemption for yourself. If you’re married and file a joint return, you can claim one for your spouse, too. If you file a separate return, you can claim an exemption for your spouse only if your spouse:
  • Had no gross income,
  • Is not filing a tax return, and
  • Was not the dependent of another taxpayer.
  1. Exemptions for dependents. You can usually claim an exemption for each of your dependents. A dependent is either your child or a relative who meets a set of tests. You can’t claim your spouse as a dependent. You must list the Social Security number of each dependent you claim on your tax return. For more on these rules, see IRS Publication 501, Exemptions, Standard Deduction, and Filing Information. You can get Publication 501 on IRS.gov. Just click on the “Forms & Pubs” tab on the home page.
  1. Report health care coverage. The health care law requires you to report certain health insurance information for you and your family. The individual shared responsibility provision requires you and each member of your family to either:
  • Have qualifying health insurance, called minimum essential coverage, or
  • Have an exemption from this coverage requirement, or
  • Make a shared responsibility payment when you file your 2014 tax return.
  1. Some people don’t qualify. You normally may not claim married persons as dependents if they file a joint return with their spouse. There are some exceptions to this rule.
  1. Dependents may have to file. A person who you can claim as your dependent may have to file their own tax return. This depends on certain factors, like the amount of their income, whether they are married and if they owe certain taxes.
  1. No exemption on dependent’s return. If you can claim a person as a dependent, that person can’t claim a personal exemption on his or her own tax return. This is true even if you don’t actually claim that person on your tax return. This rule applies because you can claim that person is your dependent.
  1. Exemption phase-out. The $3,950 per exemption is subject to income limits. This rule may reduce or eliminate the amount you can claim based on the amount of your income. See Publication 501 for details.
  1. Try the IRS online tool. Use the Interactive Tax Assistant tool on IRS.gov to see if a person qualifies as your dependent.

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Small Business & Self-Employed Tax Center Provide Online Tools & Resources

Taking-a-Second-Look-at-Your-Small-Business-Taxes-Daniel-Stoica-Accounting-Professionall1You don’t need to be a tax expert when you’re running a business, but you may need to know the basics so your business can run smoothly. The IRS.gov Small Business and Self-Employed Tax Center has useful tax information and services for business owners.

The tax center can help whether you are starting, operating or closing a business. You can apply for an Employer Identification Number online or get the form you need. If you want employment tax information, the center has it. It also offers tools and resources:

  • IRS Video Portal.  Watch helpful videos and webinars on a variety of topics from filing and paying your taxes to understanding the IRS audit process.
  • Online Tools.  The Tax Calendar for Small Businesses and Self-Employed features e-filing and e-paying options, alerts for important filing dates and tax tips. You can order a wall calendar or install the IRS CalendarConnector and access important tax dates for small businesses right from your desktop.
  • Small Business Events and Educational Products.  The online Virtual Small Business Tax Workshop has nine interactive lessons designed to help you understand and meet your federal tax obligations. You can also find free IRS small business workshops and other events planned in your state.

Go to the Small Business and Self-Employed Tax Center and use the A-Z index to find whatever you need.

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Best Ways to Get Free Tax Help

tax help

Many of us need information when preparing our federal tax returns. We have questions about dependents, which forms to use and how to claim a credit.

Here are the best ways to get free help from the IRS:

  • Visit the IRS on the Web.  The IRS.gov website is your one-stop tax shop. Start at ‘1040 Central.’ Before you go anywhere else, look here for tips and information that will help you file your federal tax return. This page has links to information about filing options, the latest news and frequently asked questions.You will also find links to a number of online tools like the Interactive Tax Assistant and the IRS Tax Map for answers to your tax questions. Use ’Where’s My Refund?’ to check on your refund or use the EITC Assistant to see if you’re eligible for the Earned Income Tax Credit. You can also get all the forms and publications you need 24×7.
  • Use IRS Free File to do your taxes.  Everyone can use IRS Free File to prepare and electronically file their federal tax return for free. IRS Free File is available exclusively on IRS.gov. The fastest way to get your refund is to combine e-file with direct deposit.If you made $58,000 or less, you can use Free File tax software to e-file your tax return. The software is easy to use and will guide you through the steps of filing your taxes. If your income is more than $58,000 and you’re comfortable doing your own taxes, you can use Free File Fillable Forms. This program is the electronic version of IRS paper forms.
  • Get tax help in your community.  The Volunteer Income Tax Assistance program helps people who make $52,000 or less prepare and file their tax returns for free. The Tax Counseling for the Elderly program offers help mainly to people 60 or older. AARP is part of the TCE program and helps taxpayers with low-to-moderate incomes.

Source IRS Tax Tip 2014-20, February 25, 2014

Taxable & Nontaxable Income

tax question markMost types of income are taxable, but some are not. Income can include money, property or services that you receive. Here are some examples of income that are usually not taxable:

  • Child support payments
  • Gifts, bequests and inheritances
  • Welfare benefits
  • Damage awards for physical injury or sickness
  • Cash rebates from a dealer or manufacturer for an item you buy
  • Reimbursements for qualified adoption expenses

Some income is not taxable except under certain conditions. Examples include:

  • Life insurance proceeds paid to you because of an insured person’s death are usually not taxable. However, if you redeem a life insurance policy for cash, any amount that is more than the cost of the policy is taxable.
  • Income you get from a qualified scholarship is normally not taxable. Amounts you use for certain costs, such as tuition and required course books, are not taxable. However, amounts used for room and board are taxable.

All income, such as wages and tips, is taxable unless the law specifically excludes it. This includes non-cash income from bartering – the exchange of property or services. Both parties must include the fair market value of goods or services received as income on their tax return.

If you received a refund, credit or offset of state or local income taxes in 2012, you may be required to report this amount. If you did not receive a 2012 Form 1099-G, check with the government agency that made the payments to you. That agency may have made the form available only in an electronic format. You will need to get instructions from the agency to retrieve this document. Report any taxable refund you received even if you did not receive Form 1099-G.

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