More and more people are filing their tax returns with turbo tax and other software so they can try tricking the system. I have never been a person to take a chance as far as tax deductions are concerned. However, some people will gladly take the risk boldly going where most of us would only dare.
The Minnesota Society of Certified Accountants has compiled a list of odd tax deductions according to a survey given to its members. Of course, these were thwarted by their accountants.
Chairwoman Sara Portner says there is a high profitability they would get sent an angry letter from the IRS if a professional had not interfered. If they use turbo tax, the software can not distinguish unusual tax deductions.
Children may get on your nerves but that is off-set by the tax deduction you can claim each year. The deduction can not be claimed for the year unless they are actually born. One woman thought she could claim an unborn baby during the times she was expecting although she put the child up for adoption. Another client thought he should be able to claim a city official because they the salaries.
Someone tried to claim a former spouse.You cannot claim a spouse even if they are not working. According to turbo tax, you may get an exemption that is equal to the you would get for a dependent. Do not try to increase charitable donations. One person believed you could use donated blood as a deduction. Keep in mind you may get audited by the IRS if they are suspicious of your tax deductions.
If you opted to e-file this year, hoping for a quick return, it might take a little longer. The IRS is taking longer to process returns in 2012.
Take the case of Levi Prine, who filed his taxes on February 20th. His return was accepted readily, and it said his refund should be available on March 5th.
The next week, he checked the date again, and it said it was “delayed” until February 28. A delay like that would puzzle anybody, and Prine decided to talk to a real person.
After waiting on the phone dealing with electronic messages and prompts Prine eventually got a real person, who said the IRS was experieincing issues with their processing software.
The problem is being caused because of new security measures aimed at stopping fraud.
The IRS would like to remind everyone that the majority of refunds are given within three weeks. Refunds dates are never an absolute. Many things can come into play that can affect when you get your money.
Money-we don’t take that
When using Gaddie Cleaners, Oscar Lerma was upset when the business refused to take his $20 bill as payment.
Apparently the business had been having trouble with robberies, and having cash on hand was a liability.
It is somewhat unusual, but perfectly within their legal rights to do so.
The store apparently warned most of their regular customers ahead of time. They do accept most major credit credit and debit cards in addition to money orders.
The Possible Tax Impacts Of Early Distribution From Retirement Plans
Quite a number of people do not realize the effects of an early withdrawal of money from their retirement funds. They do not actually feel the impact immediately, but it always shows when a tax return if filed.
If you want to know what the IRS perceives about this kind of situation, here are 10 truths.
1. If you receive any modes of payment from your retirement plans before you are 59 ½ years it will be reflected as early distribution.
2. A further 10 percent tax will be subjected against this kind of withdrawal.
3. Any time you make a withdrawal from your early retirement plan you are required to inform the IRS about it.
4. If you roll over to a different IRA or another certified retirement plan, you must complete it within 60 days in order for you to avoid the extra 10 percent tax.
5. You can only be taxed when the new plan sends the distribution to either you or your recipient.
6. Your nondeductible contribution put into an IRA will not be taxed, even if you decide to distribute any amount of that nondeductible contribution.
7. An early distribution from a Roth IRA that is featured in your previous contributions is not taxable.
8. An after-tax employee contribution made to the plan is the only thing that, will exempt you from taxation of early distribution receivable from any other certified retirement plans.
9. If you make a withdrawal from any of your retirement plans for purposes of purchasing a first home costing up to $10,000, for medical and educational expenses then the 10 percent tax will not apply to the distribution. Furthermore this rule applies to a totally and permanently disabled individual.
10. If you need any more assistance or information regarding the above listed things, you may purchase the 575th IRS publication or the Individual Retirement Arrangements. You can also do so through the Pension and Annuity Income and Publication 590. Additionally, visit www.irs.gov or just make a phone call to 800-TAX-FORM (800-829-3676).
The IRS regards almost every asset you use or own for business or personal reasons as a capital asset. Such items include your personal residence in addition to any furniture or stocks and bonds held in your own name. Net profit or loss from the sale of such commodities is either a capital gain or loss.
All capital gains must be accurately and fully reported on federal tax returns.
Deductible capital losses are limited to investment property.
Capital gains and losses may be categorized as either “short-term” or “long-term.”
Applicable net capital gain taxes are typically lower than other taxable income rates. Maximum 2001 tax year tax rates for most individuals is 15%. Low-income individuals’ tax liability may be as low as 0 % on all or part of net gain. Special capital gains categories may attract tax liabilities of 25 to 28 percent.
Capital losses which exceed capital gains are deductible to offset other income such as salaries or wages. Annual deductible amounts are limited to $1,500 and $3,000, depending on your filing status.
If net capital losses exceed the allowable annual deductible amounts, you may rollover part of the unclaimed sum by deducting it on the next year’s tax return. The IRS will then regard it as though it was actually incurred during that tax year.
Form 8949 – Sales and Other Capital Asset Dispositions will be required to compute capital losses and gains. Taxpayers must list all details of capital asset disposition on this form and transfer the net figure to Form 1040 Schedule D.
Once again it’s the most boring and stressful season of all: tax season. When you’re preparing your own taxes, it can be quite tedious, but it must be done. Kudos to those of you who don’t rely on a tax professional and attempt to DIY. But everyone might benefit from a little help, and you don’t have to go it alone. If you have an iPhone, there are lots of great apps that will help you through the process so you can get your taxes done quickly and correctly (the first time). Here are the best iPhone apps to help you with your taxes.
TurboTax SnapTax If you have a very simple tax return to file, this app will help you do it quickly and easily from your iPhone. There’s never been a better way to file if you have no dependents, don’t own a home, have only one form of income, and made less than $100,000 last year. If you fit those qualifications, download this app and be done with your taxes in minutes. Just take a picture of your W-2, answer a few simple questions, and e-file instantly. E-filing costs just $19.99, but downloading the app is free.
TaxCaster by TurboTax Another excellent, free app from TurboTax, the TaxCaster will help you predict the amount of your refund. You’ll enter information about yourself and your income, such as your filing status, dependents, withholding, compensation, donations, your home, and more. When you’re finished, it will provide you with a dollar-amount estimate of your refund. While it won’t do your taxes for you and isn’t guaranteed to be exact, it’s a great way to get an idea of what you can expect from your taxes this year.
MyTaxRefund by TurboTax The third awesome tax app from TurboTax is MyTaxRefund. If you e-filed your taxes this year, it will help you track the status of your return. It’s free, and you’re not required to have e-filed through TurboTax to be able to use it. You can check on the progress of your Federal and State e-filed returns with ease, anytime and anywhere.
Dictionary of Tax Terms When you’re preparing your own taxes, you’re bound to run into a few mystery terms that you just don’t fully understand. This app costs $0.99, and it will define for you more than 600 tax terms. It’s searchable, you can save the entries you need to remember, and it works entirely offline.
Calculator There are lots of calculator apps, but the 99-cent “Calculator” is the best way to go. It has an attractive interface, and it’s easy to use. It includes a variety of scientific functions for all your calculating needs. As you do your taxes this year, it’s essential to have a good calculator on hand, and this is one for you.
EITC Calculator Did you know you could earn up to $5,751 back with the Earned Income Tax Credit (EITC)? This free app will help you determine if you qualify for an EITC. You’ll simply answer a few basic questions, such as your marital status and income, and this app will estimate how much you might qualify for.
Carl Schmidt is an experienced tax professional who shares his personal finance tips with you as a hobby. To keep his writing clear, he uses the world’s number one grammar checker.
With tax season approaching rapidly, many people have begun thinking about using software programs like TurboTax to help them prepare their taxes. With the April 17 deadline rapidly approaching, now is the time to begin planning how you want to file your taxes this year.
TurboTax is one of the most popular programs in the country, and this year’s free edition is a great way to find out whether the software is right for you. TurboTax software walks you through each step of the filing process, turning tricky tax topics into easy to understand questions that you can complete in just a few hours.
One of the major concerns that many people have when buying tax software is the cost of the program. That’s one of the reasons that the free edition has become so popular. The program helps you complete a basic federal tax return, although you will still need to file a state return.
If you need to complete a more complicated return that what the free edition can handle, there are a number of different products that can help. Different versions are created for small business owners, those with significant investments, and people who have more complicated tax situations.
Whether you plan to take advantage of the free edition or you have used TurboTax before, this year’s program offers a number of features that make filing easier than ever before. Don’t forget that TurboTax can import information from programs like Quicken or Microsoft Money to make filing even faster. TurboTax can make the process of filing just a little less stressful.