Income tax

Tax

Point and Click for a Trouble-Free Tax Season

Need a tax form? Have a question about changes to tax law? Want to find the nearest IRS taxpayer assistance center? Now anyone with a personal computer and Internet access can point and click their way to trouble-free tax filing at www.irs.gov.The IRS Web site offers a wealth of resources for making tax time, well, a little less taxing. A user-friendly format allows even novice Web surfers to quickly find the information they need.
Tax

Record Keeping

You can avoid headaches at tax time by keeping track of your receipts and other records throughout the year, the IRS advises. Good record keeping will help you remember the various transactions you made during the year, which may help you out on your taxes.Records help you document the deductions you've claimed on your return. You'll need this documentation should the IRS select your return for examination.
Tax

Should I Itemize?

Whether to itemize deductions on your tax return depends on how much you spent on certain expenses last year. According to the IRS, money paid for medical care, mortgage interest, taxes, contributions, casualty losses, and miscellaneous deductions can reduce your taxes. If the total amount spent on those categories is more than the standard deduction, you can usually benefit by itemizing.The standard deduction amounts are based on your filing status and are subject to inflation adjustments each year.
Tax

Which Form - 1040, 1040A or 1040EZ?

If you are filing a federal income tax return on paper, use the simplest form you can, the IRS advises. The simpler the form, the less chance of an error that may cost you money or delay the processing of your return. The simplest is Form 1040EZ. Form 1040A covers several additional items not addressed by the EZ. Form 1040 should be used when itemizing deductions and reporting more complex investments and other income.
Tax

What is Your Filing Status?

Your filing status on your federal ax return is a category that identifies you based on your marital and family situation, according to the IRS. It is an important factor in determining whether you must file a return, the amount of your standard deduction and your correct amount of tax. If more than one filing status applies to you, you may choose the one that gives you the lowest tax obligation.There are five possible filing statuses: Single, Married Filing Jointly, Married Filing Separately, Head of Household and Qualifying Widow(er) with Dependent Child.
Tax

Who Must File a Tax Return

There are some instances when you may not be required to file a federal income tax return. But keep this in mind - more than 70 percent of those who file are due a refund, so it may be to your advantage to file even if you are not required to. The law does require you to file a tax return if your income is above a certain level. Check the instructions for Form 1040, 1040A or 1040EZ (under "filing requirements") for specific details that may affect your need to file a tax return with IRS this year.Here are some general guidelines for anyone under age 65.
Tax

Avoid Headaches: Prepare Taxes Early

Earlier 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 also get a faster refund.There are seven easy ways to get a good jump on your taxes long before the April 15 deadline rolls around: 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.
Tax

Tax Deduction Available for Items Donated to Charity

One of the more creative things you can do with tax return preparation is donate household items to charity. Donating your used belongings is a total feel-good procedure.First, you feel good about emptying your closets and drawers of items you no longer use - the house is cleaner and less cluttered. Also, you feel good about providing useful items to needy people.
Tax

Tax Tip: Credit For the Elderly Or the Disabled

You may be able to take the Credit for the Elderly or the Disabled if you are age 65 or older, or if you are retired on permanent and total disability, according to the IRS. Like any other tax credit, it's a dollar-for-dollar reduction of your tax bill.
Tax

Tax Tips for Last Minute Filers

With the tax filing deadline close at hand, the Internal Revenue Service offered some tips for those still working on their tax forms:Put your social security number on the return - it's not on the label. Double-check your figures. Sign your form.Attach all required schedules.Send your return or request a filing extension by April 16 -- April 17 for those in New England and New York State north of Westchester and Rockland counties.
Tax

Tax Tip: Capital Gains and Losses

Almost everything you own and use for personal purposes, pleasure or investment is a capital asset. When you sell a capital asset, the difference between the amount you sell it for and your basis, which is usually what you paid for it, is a capital gain or a capital loss. While you must report all capital gains, you may subtract only your capital losses on investment property, not personal property.Capital gains and losses are classified as long-term or short-term, depending on how long you hold the property before you sell it.
Tax

Tax Tip: E-File Helps Refunds, Payments

Are you one of the more than 90 million taxpayers who will receive a refund this year? Requesting direct deposit, and filing your tax return electronically with e-file will put that money in your pocket faster and easier, according to the IRS.Every year more taxpayers are finding out how safe and easy it is to have their tax refund direct deposited into their checking or savings account. This option is available for both e-filers and paper return filers.With e-file your refund will be issued in half the time it would take if you filed a paper return.
Tax

Tax Tip: Ten Ways to Avoid Problems at Tax Time

Looking for ways to avoid the last-minute rush for doing your taxes? The IRS offers these tips: ORGANIZE YOUR TAX RECORDS. Tax preparation time can be significantly reduced if you develop a system for organizing your records and receipts. Start with the income, deduction or tax credit items that were on last year's return.DON'T PROCRASTINATE. Resist the temptation to put off your taxes until the last minute.
Tax

Tax Tip: Extensions of Time To File Your Tax Return

If you can't meet the April deadline to file your tax return you can get a four-month extension of time from the IRS. The extension will give you extra time to get the paperwork in to the IRS, but it does not extend the time you have to pay any tax due.
Tax

Tax Tip: Where To File Your Tax Return

Once you complete your 2000 federal tax return, you can either file it electronically or mail it to the IRS. If you choose to mail your return, be sure to read your tax instruction booklet carefully to find the address of the IRS center for your area.For this year, the IRS has changed its filing locations for individual taxpayers in 12 states - Alaska, Colorado, Delaware, Idaho, Indiana, Kansas, Kentucky, Montana, Nebraska, Oregon, West Virginia, and Wyoming. This is part of a redistribution of work among the 10 IRS centers that will be completed in 2002.
Tax

Tax Tip: Obtain a Copy of a Prior Year Tax Return

There are times when you may need a copy of your prior year federal tax return, a transcript of a return or tax account information. A phone call to the IRS at 1-800-829-1040 or a visit to the IRS Web site may easily solve your problem. There are several different options available depending on how quickly you need the information. If you need a photocopy of a previously processed tax return, complete Form 4506, "Request for Copy or Transcript of Tax Form," and mail it to the IRS address listed on the form for your area.
Tax

Tax Tip: Forms and Publications - How To Order

The Internal Revenue Service has many forms and free publications on a wide variety of topics to help you understand and meet your tax filing requirements. These forms and publications are available on the Internet, on CD-ROM, through fax on demand, over the telephone, through the mail, at local IRS offices, at some banks, post offices, and libraries, and even at some grocery stores, copy centers and office supply stores. If you know what form or publication you need, call the IRS toll-free forms number at 1-800-TAX-FORM (1-800-829-3676).
Tax

Tax Tip: Education IRAs Make College Costs Less Taxing

The Education IRA is an incentive to help parents and students save for higher education. Up to $500 may be contributed to a child's Education IRA each year, according to the IRS. Earnings on contributions will be distributed tax free provided that they are used to pay the beneficiary's post-secondary education expenses. Any individual who meets adjusted gross income (AGI) requirements can make a non-deductible contribution on behalf of a child under the age of 18. The AGI requirements are $95,000 for single taxpayers and $150,000 for married taxpayers.
Tax

Tax Tip: Roth IRAs

Confused about whether you can contribute to a Roth IRA? The IRS suggests checking these simple rules:Income To contribute to a Roth IRA, you must have compensation (i.e. wages, salary, tips, professional fees, bonuses). Your modified adjusted gross income must be less than:$160,000 - Married filing jointly. $10,000 - Married filing separately (and you lived with your spouse at any time during the year).
Tax

Tax Tip: IRA Contributions Can Be Made Until April 16

If you haven't put any money into an Individual Retirement Arrangement (IRA) for tax year 2000, or if you've put in less than the maximum allowed, you still have time, according to the IRS. You can contribute to either a traditional or Roth IRA until the April due date of your tax return.If you make a contribution for the previous tax year, tell the IRA trustee which year the contribution is for. Otherwise, the trustee may report the contribution as being for the year in which it was received.You may contribute up to $2,000 of your earnings each year to an IRA.

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