Income tax

Tax

Tax Tip: 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. The IRS usually corrects math errors or requests forms (such as W-2s) or schedules left out. In these instances, do not amend your return. However, do file an amended return if any of the following were reported incorrectly: your filing status your total income your deductions or credits Use
Tax

Tax Tip: Volunteer Income Tax Assistance (VITA)

Are you puzzled by the tax law and which credits and deductions you can take? If so, then why not take advantage of the IRS Volunteer Income Tax Assistance (VITA) Program and the Tax Counseling for the Elderly (TCE) Program, both of which offer free tax help. VITA and TCE sites are located at convenient community locations. These sites provide free basic income tax return preparation to individuals with low to moderate incomes, individuals with disabilities, non-English speaking taxpayers, and the elderly.
Tax

Tax Tip: Refunds - How Long Should They Take?

Are you expecting a tax refund from the IRS 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 IRS receives your return. If you file your return electronically, your refund should be issued in less than three weeks, even faster when you choose direct deposit.You can have a refund check mailed to you, or you may be able to have your refund deposited directly into your bank account. Direct Deposit into a bank account is more secure because there is no check to get lost. And it takes the U.S.
Tax

Tax Tip: Changing Your Address? Notify the IRS

Have you changed your home or business address? If so, you may want to notify the Internal Revenue Service to ensure that you receive any IRS refunds or correspondence. The IRS is now using the Postal Service's change of address files to update taxpayer addresses, but you may want to notify the IRS directly.There are several ways to do this. You may correct the address legibly on the mailing label that comes with your tax package or write the new address in the appropriate boxes on your tax return when you file.
Tax

Tax Tip: IRS Has Plenty of Free Publications

From aardvark to zyzzyva, the IRS has a publication that covers it - free for the asking. The IRS has numerous publications on a variety of tax-related topics available by phone, fax, or the Internet at www.irs.gov. Are you a student seeking knowledge on the lifetime learning credit? Check out Publication 970. Are you a first-time home buyer?
Tax

Tax Tip: Form W-4 - The Key to Tax Withholding

When you start a new job, you must complete Form W-4, "Employee's Withholding Allowance Certificate," so your employer can withhold the correct federal income tax from your pay. Detailed instructions on the form and its worksheet can help you figure your correct withholding amount, according to the IRS.
Tax

Tax Tip: Tax Changes For Business Owners

At tax time, many business owners want to make sure they are aware of the latest changes that could affect their taxes. If you are one of these owners, a good source of information is IRS Publication 334, "Tax Guide for Small Business." It includes a listing of tax changes for 2000 returns, plus explanations of the changes. It also includes some of the changes for 2001.
Tax

Tax Tip: Tax Materials and Assistance In Spanish

If you need federal tax information in Spanish, you can find it in the form of recorded tax topics, free tax publications and toll-free telephone assistance from the Internal Revenue Service. TeleTax is a toll-free automated service, in English and Spanish, providing helpful tax topics and refund information. You can find a list of the 151 TeleTax topics in the instructions for Form 1040, 1040A or 1040EZ. TeleTax can also help you if it's been at least four weeks since you filed your return and you want to check on the status of your federal refund.
Tax

Tax Tip: IRS Notices - What To Do

It's a moment any taxpayer dreads. A letter arrives from the IRS - and it's not a refund check. But 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 for 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.
Tax

Tax Tip: What's New for 2000 Taxes?

Do you want to learn about the principal tax law changes that could affect your 2000 tax return? IRS Publication 553 highlights the tax changes in these areas: Interest on student loans. Individual Retirement Arrangements (IRAs) - including traditional IRA income limits, and returned contributions and recharacterizations. Capital gain distributions. Foreign earned income exclusion. Standard mileage rate.
Tax

Tax Tip: Do You Have a Deductible Home Office?

Whether you are self-employed or an employee, if you use a portion of your home for business purposes, you may be able to take a home office deduction. You can deduct certain expenses if your home is the principal place where your trade or business is conducted. You can also take a deduction for business use of the home if that is where you meet and deal with clients or patients in the course of your business.
Tax

Tax Tip: Selling Your Home

If you sold your main home, you may be able to exclude up to $250,000 of gain ($500,000 for married taxpayers filing a joint return), according to the IRS. This exclusion is allowed each time that you sell your main home, but generally no more frequently than once every two years. To be eligible for this exclusion, your home must have been owned by you and used as your main home for a period of at least two years out of the five years prior to its sale. 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.
Tax

Tax Tip: Faster Refunds Through Direct Deposit

Want a faster refund? More taxpayers are choosing direct deposit as the way to get their tax refunds. The payment is more secure -- there is no check to get lost. And, it's more convenient -- no special trip to the bank to deposit a check. To request direct deposit, follow the instructions for "Refund" on your tax return.Nearly 30 million people had their tax refunds deposited directly into their bank accounts during the 2000 filing season, a 25 percent increase from the year before.
Tax

Tax Tip: Don't Be Taken In by Tax Scams

The IRS reminds taxpayers not to fall victim to a variety of tax scams. These schemes take several shapes, ranging from promises of special tax refunds to illegal ways of "untaxing" yourself. If people think something may be unscrupulous, they can report suspected tax fraud to the IRS at 1-800-829-0433.The IRS urges people to avoid these common schemes:No taxes being withheld from your wages. Illegal schemes are being promoted that instruct employers not to withhold federal income tax or employment taxes from wages paid to their employees.
Tax

Tax Tip: Toll-Free Telephone Service

Free tax help from the IRS is just a phone call away. The IRS provides various services through its toll-free telephone numbers. You can order forms, listen to prerecorded tax information, check on the status of your refund, ask questions about your tax return or inquire about a letter or notice you may have received.
Tax

Tax Tip: Tax on Child's Investment Income

Part or all of a child's investment income may be taxed at the parent's rate rather than the child's rate, according to the IRS. Because a parent's taxable income is usually higher than a child's income, the parent's top tax rate will often be higher as well. This special method of figuring the federal income tax only applies to children who are under the age of 14. For 2000, it applies if the child's total investment income for the year was more than $1,400.
Tax

Tax Tip: Child and Dependent Care Credit

If you paid someone to care for a child or a dependent so you could work, you may be able to reduce your tax by claiming the credit for child and dependent care expenses on your tax return, according to the IRS. This credit is available to people who, in order to work or to look for work, have to pay for child care services for dependents under age 13.
Tax

Tax Tip: Deductible Taxes

Did you know that you may be able to deduct certain taxes on your federal income tax return? You can if you file IRS Form 1040 and itemize deductions on Schedule A. There are three types of deductible non-business taxes:State, local and foreign income taxes; Real estate taxes; and Personal property taxes.You can deduct any 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.
Tax

Tax Tip: What To Do If You Can't Pay Your Taxes

If this year's tax filing deadline will be a pay day for you and you cannot pay the full amount that you owe, you should still file your return by the due date and pay as much as you can. The IRS may allow you to pay any remaining balance over time in monthly installments through an Installment Agreement or possibly even settle for less than the full amount owed through its Offer in Compromise program.If you find that you cannot pay the full amount by the filing deadline, you should file your return and pay as much as you can by the due date.
Tax

Tax Tip: Education IRAs Can 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. Earnings on contributions will be distributed tax free provided that they are used to pay the beneficiary's postsecondary 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.

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