Individual Taxes | Dealing with the IRS

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Take the Income Tax Credit for Your Retirement Fund

Details: Category: Individual Taxes; Written by Jonah Sparks; Hits: 713

Saving for your retirement allow you to be automatically will allow you to be automatically eligible for a tax credit worth up to $2,000. If you contribute to an employer-sponsored retirement savings plan, like a 401(k) or to an IRA, you'll be eligible for the Saver’s Credit.

Here are seven points the Internal Revenue Service would love you to understand regarding the Saver’s Credit:

1. The Saver’s Credit is formally called the Retirement Savings Contribution Credit. The credit will be worth up to $2,000 for married couples filing a join income tax return or $1,000 for single taxpayers.

2. Your filing status and therefore the amount of your financial gain have an effect on whether or not you're eligible for the credit. you'll be

The IRS and Forex Trading: A Complex and Uneasy Relationship

Details: Category: Individual Taxes; Written by Jonah Sparks; Hits: 833

To many, the trading on the financial markets represents a distant and idealised dream. High volume markets such as the foreign exchange are particularly appealing to novice traders, primarily because of their margin based returns that can far outweigh an initial investment. When you are not involved in the day to day realities of forex trading, it can seem like an adventurous land of endless opportunity.

In fact, the reality is far removed from this romanticised vision. Aside from the inherent risks associated with forex trading, there are also tax requirements that impact heavily on any profits that you gain in the market place. The IRS has played a key role in regulating financial trading throughout the years, and this is something

Avoid Income Tax with Municipal Bonds

Details: Category: Individual Taxes; Written by Jonah Sparks; Hits: 805

Paying income taxes, for the most part, is a given. You'll be able to lower them, avoid them, and even delay paying them. however eventually you need to write the govt. a check, in an quantity determined by the I.R.S. Tax Code.

But a variety of people aren’t pleased with simply paying less tax. They merely don’t wish to pay any, and have stashed their fortunes in icy Swiss banks or in tropical location.

In the past, bank officers in those countries would keep the depositor’s name a secret, and banking laws in their countries allowed them to try and do thus.

Those days and practices are pretty much gone.

With the recent capitulation of IBS, land banking industry – one in all the most important and most notorious holdouts to

Choosing a Tax Preparer

Details: Category: Individual Taxes; Written by Jonah Sparks; Hits: 783

Many people look for help from professionals when it’s time to file their tax return. If you use a paid tax preparer to file your federal income tax return this year, the IRS urges you to choose that preparer carefully. Even if someone else prepares your return, you are legally responsible for what is on it.

Here are ten tips to keep in mind when choosing a tax return preparer:

Check the preparer’s qualifications. All paid tax return preparers are required to have a Preparer Tax Identification Number. In addition to making sure they have a PTIN, ask if the preparer belongs to a professional organization and attends continuing education classes.
Check on the preparer’s history. Check with the Better Business Bureau

Some Facts about Dependents and Exemptions

Details: Category: Individual Taxes; Written by Madeline Delanni; Hits: 516

While each individual tax return is unique, there are some tax rules that affect every person who files a federal income tax return. These rules involve dependents and exemptions. The IRS has six important facts about dependents and exemptions that will help you file your 2012 tax return.

Exemptions reduce taxable income. There are two types of exemptions: personal exemptions and exemptions for dependents. You can deduct $3,800 for each exemption you claim on your 2012 tax return.
Personal exemptions. You usually may claim one exemption for yourself on your tax return. You also can claim one for your spouse if you are married and file a joint return. If you and your spouse file separate returns, you may claim the

Tax Amnesty

Details: Category: Individual Taxes; Written by Jonah Sparks; Hits: 862

Tax amnesty, although not rule, are the occasional exception. The way it works is simple, for a specified limited time, taxpayers can pay a predefined amount in exchange for forgiveness of a tax debt, including interest and penalties. These are offered without any criminal prosecution. However, harsher penalties for those who qualify but don’t take the amnesty, often accompany the amnesty legislation.

Although bills have been proposed, there are currently no federal tax amnesty programs. The last one was in 2009, under President Bush. The program granted almost 15,000 taxpayers amnesty. The need for federal tax amnesty is apparent, so says many tax experts and legislators. When someone has a tax debt but can’t possibly pay it, the

Can the IRS take my house?

Details: Category: Individual Taxes; Written by Madeline Delanni; Hits: 644

Although highly unlikely, ultimately, yes they can.

Today's IRS is a kinder, gentler government organization. The Taxpayers' Bill of Rights discourages the practice and leans more towards working out a deal, assuming you owe back taxes.Also, the negative publicity of such a thing helps no one.

The other side of that, however, is vacation, rental properties or that swanky cabin retreat in the mountains. If you owe considerable taxes (over $5,000 but realistically more like $250,000) and haven't been playing nicely with the IRS, this may be a move that they cold consider. However, your primary residence is probably safe.

Fear not, the tax collectors (agents) don't have the authority to seize your property. This requires a court order

Which IRS Form to File

Details: Category: Individual Taxes; Written by Madeline Delanni; Hits: 515

The IRS's e-file (electronic filing) makes it a lot simpler for taxpayers to choose which IRS tax form to file. For the most part, the e-file software chooses the best form for your particular situation for you. Most folks e-file in this eletronic age but if you prefer the old fationed way, the Iternal Revenue Service has some tips to help you choose the right form.

Those who choose to file a paper tax return should know that the IRS no longer mails paper tax packages. The best way to get forms and instructions is by visiting the IRS website at IRS.gov. You can also order forms and have them mailed to you by calling the IRS forms line at 1-800-TAX-FORM (829-3676). You may also pick up tax forms from a local IRS office, most libraries in

Help for Victims of Hurricane Sandy

Details: Category: Individual Taxes; Written by Jonah Sparks; Hits: 1043

As part of its efforts to support people in the areas hit by Hurricane Sandy, the IRS is expediting the review and approval process for organizations that are applying for tax-exempt status to provide relief for Hurricane Sandy’s victims.

Often, it’s best to use existing charities, including churches and other places of worship, because they tend to have fund-raising and distribution infrastructures already in place and frequently can administer relief programs more efficiently than newly formed organizations.

But those who have decided they would prefer to start their own charity should apply to the IRS for tax-exempt status by filing IRS Form 1023. At the top of the form write, “Disaster Relief, Hurricane Sandy.”

The IRS

Do I Have to Pay Tax on Foreign Earned Income?

Details: Category: Individual Taxes; Written by Jonah Sparks; Hits: 1162

As a citizen of the United States, you are required to pay U.S. income tax any money you earn, even if that money was earned in a foreign country. In fact, we are the only major country that taxes the individual income no matter where they live or earn their income. In most, if not all, other countries, if you move out of the country, you no longer have to pay the taxes imposed by your country. And, in doing so, you don't have to give up your citizenship.

For example, if you were a citizen of Canada or Australia, you could locate to a low tax country like Bermuda and pay no tax. As a U.S. citizen, you can’t do that. Instead, you must give up your citizenship.

However, If your income is from a business that can be operated any where

The Taxpayer Advocate Service Is Your Voice at the IRS!

Details: Category: Individual Taxes; Written by Madeline Delanni; Hits: 1033

The Taxpayer Advocate Service (TAS) is an independent organization within the IRS. We help taxpayers who are experiencing economic harm, such as not being able to provide necessities like housing, transportation, or food; taxpayers who are seeking help in resolving problems with the IRS; and those who believe an IRS system or procedure is not working as it should. Here are ten things every taxpayer should know about TAS:

The Taxpayer Advocate Service is your voice at the IRS.
Our service is free and tailored to meet your needs.
You may be eligible for our help if you have tried to resolve your tax problem through normal IRS channels and have gotten nowhere, or you believe an IRS procedure just isn't working as it should.
The worst

Electronic Federal Tax Payment System (EFTPS)

Details: Category: Individual Taxes; Written by Madeline Delanni; Hits: 1315

EFTPS is a system offered by the U.S. Department of Treasury for paying federal taxes electronically via the internet, over the phone or through special channels designated for tax professionals, payroll services and financial institutions. You can use EFTPS to make all federal tax payments, including income, employment, estimated and excise taxes. Anyone can use it and it’s absolutely free.

You can make payments whenever it’s convenient for you, 24 hours a day, 7 days a week. Businesses can schedule payments up to 120 days in advance and individuals can set up payments up to 365 days in advance. Be aware that payments must be scheduled at least one calendar day prior to the date the taxes are due and the payment must be

Retirement Income and Taxes

Details: Category: Individual Taxes; Written by Jonah Sparks; Hits: 1239

Many things in your life are going to change when you retire but you can count on at least one thing remaining the same. You’ll still have to pay taxes. Let’s face it, taxes are normally the biggest expense in retirement and some of us need every penny of income to make ends meet while ensuring enough of a nest egg to provide income that will last as long as we will.

Consider the types of investments in your portfolio. Not all investments are taxed alike and since cash and bonds are taxed at ordinary income rates, you’ll want to focus on shielding them from taxes in your retirement plans more than others. Similarly, mutual funds with high turnover should be a concern because stocks held for less than a year are also taxed at

Federal Income Tax Calculators

Details: Category: Individual Taxes; Written by Madeline Delanni; Hits: 1540

Like death, taxes are unavoidable. With proper planning you can make things easier on yourself and your family. Your annual tax liability can be very uncertain but there are several online calculators to help determine your estimated tax liability along with your average and marginal tax rates.

Money Chimp

This calculator from MoneyChimp is straightforward and easy to use. You don’t need to be a CPA to figure this out.

http://www.moneychimp.com/features/tax_brackets.htm

Calc XML

This one is more complicated because you need to know the amounts of your IRA contribution, itemized deductions and personal exemptions. However, because this calculator requires those additional pieces of information, the end result is likely to be more

Buying Real Estate With Your IRA

Details: Category: Individual Taxes; Written by Jonah Sparks; Hits: 1105

Current economic times make it wise to seek out non-traditional methods to save for your retirement. One particular method is increasing in popularity. More and more people are using the self-directed IRA to purchase real estate.

A self-directed IRA is probably the lesser known of IRA options. It requires you to make active investments on behalf of the plan. To open this type of IRA, you must hire a trustee or custodian to hold the IRA assets. This person will also be responsible for administering the account and filing required documents with the IRS.

As with other IRA accounts, you may chose to invest in stocks, bonds and mutual funds. However, you also have the option to invest in things that most investment houses don't offer

Tax Shelters for High Income

Details: Category: Individual Taxes; Written by Jonah Sparks; Hits: 2205

Due to changes in tax laws, strategies for lowering individual income taxes are harder to come by. But they do exist.

Accelerate Capital Losses and Defer Capital Gains

If you have investments on which you have an accumulated loss you should consider selling prior to year-end. Capital losses are deductible up to the amount of your capital gains plus $3,000. If you plan to sell an investment on which you have an accumulated gain, it may be advantageous to wait until after the end of the year to defer payment of the taxes (subject to estimated tax requirements). For most capital assets held more than twelve months the maximum tax is currently 15%. Before you make a decision, consider the investment potential of the asset to determine

How Do Tax Shelters Work?

Details: Category: Individual Taxes; Written by Jonah Sparks; Hits: 1736

Tax shelter. It sounds like a wonderful thing. Be honest, if you’re going to need shelter from things in this life, storms and taxes are probably near the top of your list. But what is a tax shelter and how does it work?

A tax shelter is a type of investment that allows you to reduce your tax liability. Examples include investments in retirement plans and real estate. You can also reduce your taxable income if you have losses on investments.

You may have heard of offshore tax shelters. How do they work?

A company can incorporate in countries with less stringent regulations than those imposed by the IRS. Many countries allow businesses to keep income secret from the government of the country in which the business is

What is a tax-sheltered annuity?

Details: Category: Individual Taxes; Written by Jonah Sparks; Hits: 1261

Are you evaluating annuity options or trying to decipher annuity information? If so, chances are that you'll come across information about the tax-sheltered annuity. What is a tax-sheltered annuity and how does it compare with all of the other annuity options out there?

One of the reasons that tax-sheltered annuities are so attractive is that they allow you to defer your taxes. By contributing an established percentage of your income into an account designed for long-term savings, you are not required to pay taxes on those funds when you earn them. Instead, you are taxed when you withdraw the funds at a later date. The obvious benefit is that you can reduce your current tax liability by reducing your taxable income.

Unfortunately, not

Taxes and Penalties and Interest … Oh My!

Details: Category: Individual Taxes; Written by Wendy Levenfeld; Hits: 1973

Interest, Penalties, Late Payments-Lion, Tiger and Bear

If you think the tax forms themselves are complicated, wait ‘til you see the notices you’ll receive from the IRS if your payments are late! Here are the “lions and tigers and bears” the IRS has just waiting for the attack signal!

The Lion: Interest

You can incur interest expenses for late filing or simply making a mathematical error on your tax return.
nterest is charged on any unpaid taxes from the due date until the tax is paid. The interest rates for unpaid taxes are posted every three months equaling the Federal “short-term” interest rate plus 3%. The kicker of this king of the jungle punishment is the interest is compounded daily.

The Tiger: Penalties

If you file late, penalties will be assessed that are

I Need Help With My Taxes!!!

Details: Category: Individual Taxes; Written by Wendy Levenfeld; Hits: 2244

dealing with the IRS income tax preparation tips

I tried to prepare my own IRS taxes this year and now have no fingernails (on either hand) and several bald spots in my normally full head of hair! While hard to admit…I need help. But how does one pick a good tax preparer? What should I be looking for?

Here are a few tips:

Only consider either a CPA, Tax Lawyer or Enrolled Tax Agent (tax professional recognized by the United States Federal Government)
How long has the office been in the area? (you don’t want a “fly by night operation)
What’s their training and background?
Check out their walls; certificates of professional associations and proof of continuing education is important
Check with the Better Business Bureau and the State Board of Accountancy to see if any