Do Taxes Pay Taxes

Do Your Income Taxes Online For FREE.

2012-01-17T04:54:00.000-08:00

Do Taxes Online For Free.

2011-01-13T01:50:00.000-08:00

Free File is the fast, easy, and free way to prepare and e-file your Federal taxes online. The Free File program provides free federal income tax preparation and electronic filing for eligible taxpayers through a partnership between the Internal Revenue Service (IRS) and the Free File Alliance LLC, a group of private sector tax software companies.

How do you want to do your 2011 federal taxes?

Free File supports preparation of Federal tax returns. However, many companies also offer state tax preparation though fees may apply.
Free tax preparation and e-filing if your adjusted gross income is $56,000 or less in 2011.
Asks simple questions, puts your answers on the right forms.
Covers the most commonly filed Federal tax forms and schedules.
Includes Federal e-file - get your refund in as little as 10 days with Direct Deposit.
Does all the math or you.
Receive a quick confirmation within 48 hours that your return was received by the IRS.
Benefit from Free File's checks for accuracy.

With all Free File options you can:

File your taxes any hour of the day or night
Get a faster refund in as little as 10 days with Direct Deposit,
Know that your return is safe and secure.
Save paper - and that helps us all.

Source: www.irs.gov

Will You Prepare Taxes on Your Own or Prefer an Accountant?

2010-01-15T20:41:00.001-08:00

It's really a good question whether you should do taxes by yourself or prefer an accountant for you. For preparing your tax return, you can choose an accountant and have a professional viewpoint for your overall tax situation and get suggestions for decreasing taxes. There are also several advantages of preparing taxes on your own.

If you prepare your tax return on your own, you can do it at your convenience at home and can easily figure out various aspects of your financial conditions that may affect your tax. You can definitely make use of tax preparation software because it is much easier, faster, and safer. Most tax professionals and experts recommend preparing or doing taxes on your own not because cost is a major issue but because it is easy.

You can prepare your return and save in draft mode and review it once or twice so that you have an idea whether something need to be included or deducted. You can also consult a professional tax preparer and show him your tax return prepared by you so that you can make some correction if necessary and complete your return.

Whether you get your tax return done by a professional preparer or you do taxes online on your own using software, it will more or less cost you the same. You can use the paper tax forms for free that can minimize your costs. You can check out whether you are eligible for filing your tax return for free using "Free File" program offered by the IRS.

You can search for tax preparation guidance, filing taxes online, and some related issues at the irs.gov website. If you wish to prepare your tax return on your own, you need to keep updated with the latest income tax related news releases published at the IRS website. Use the best tax software for doing taxes online, make necessary deductions and pay taxes sensibly!

Do Taxes Online and File Your Taxes Electronically.

2010-01-15T20:33:00.001-08:00

There is a hassle for getting taxes prepared during the tax season and everyone is busy how to do taxes. There are basically two options that you can prefer to pay taxes; either you can do taxes on your own or you can have a tax professional to do it for you.

Preparing taxes is basically a difficult and tiresome process but it depends on your tax situations. If you own a business or run a company, then your taxes tend to be much more complex. In such cases, you would better hire an expert tax preparer if you do not want to take any chances. Suppose you've a job with little assets to count, then your tax situation is simple and doing taxes is easy.

If you are good at math and calculations, comfortable with numbers, easily follow written directions then you can do taxes on your own. If you're tax situation is not complicated, then you should consider preparing taxes on your own.

Because of computer technology and the internet facility, you can easily do taxes online using tax preparation software programs available. You can also check out the IRS website irs.gov to learn about the approved free tax preparation services and companies. The IRS also provide Free File program using which you e-file your taxes for free if your adjusted gross income is $56,000 or less in 2008. This means that the Free File program offered by the IRS is basically for those with low income. If your income is much more that deprives you from being qualify for the Free File, then you should really go for online tax software. You should choose those ones which are approved by the IRS.

There are obvious reasons why you should prefer doing taxes online. Preparing tax return online is much easier compared to paper filing. If you file your taxes electronically, the IRS will send you the confirmation note whether your file accepted or not. Moreover, the IRS service center does not have to type your tax data if you've sent the e-file. There is a chance of getting your tax refund fast if you choose filing your taxes online.

Doing Taxes Online

2010-01-07T03:35:00.000-08:00

There are basically two alternatives you have to choose from when it comes to paying taxes; either send your tax return to the IRS electronically or mail it on paper. Filing taxes electronically or e-filing is easy, fast, convenient, and tend to be more accurate than the paper filing.

So, how you will do taxes is important; you can either do taxes online using tax software programs or hire someone to prepare taxes for you. You can visit the IRS website to see whether you are eligible for suing "Free File" program or not. There are many IRS approved tax preparation and e-filing services you can choose from for doing your taxes online.

If you have access to the internet, you can do taxes on your own from you home using tax preparation software. You will get surprised that in 2009 over 32 million returns were e-filed from home. It is important to note that the IRS expects the total number of individual tax returns - both electronic and paper - to total something about 140 million in 2010, and for e-file returns to surpass last year's record high of 95 million!

E-filing tax Return: The Best Way to Pay Taxes Online

Filing taxes electronically is the best way to Pay Taxes online. E-filing tax return to the IRS has certain advantages compared to paper filing:

1. Inbuilt error check feature makes your tax return accurate and error-free.
2. Get notified within 48 hours that your returns have been received.
3. The IRS service center does not have to re-type your tax return documents and this means that your file is ready for being processed soon.
4. Get your refund faster within as few as 10 days using direct deposit feature.
5. Safe & secure: tax forms are protected through encryption process.
6. Nothing to worry about tax return being lost in the mail.
7. Convenient: file your taxes from your home at anytime you think best.

It is very convenient to file taxes online for those who are accustomed to online banking services. Now you can file early and pay later on by scheduling an electronic funds withdrawal anytime through April 15, 2010. You can also pay by credit/debit card when you e-file your returns.

Do your taxes accurately online using the free tax preparation software, file your tax return electronically choosing direct deposit option and get your refunds directly deposited into your bank account within 10 days!

Common Errors Made on Tax Returns

2009-03-31T23:55:00.000-07:00

Errors made on tax returns may delay the processing of your return and the arrival of your refund. Avoiding the common errors below will help ensure your refund arrives on time:

1. Recovery Rebate Credit - Many returns filed in 2009 have errors involving the Recovery Rebate Credit, a credit for people who did not receive a stimulus payment in 2009 or who did not receive the maximum amount. To avoid delays in tax refunds, it is critical that taxpayers know whether they received a payment in 2009 and the correct amount of that stimulus payment. For people using a paper tax return, the stimulus payment amount will be required when completing the related worksheet. For people using tax software, the stimulus payment amount will be needed as part of the return preparation process.

2. Incorrect or missing social security numbers - When entering SSNs for anyone listed on your tax return, be sure they are entered exactly as they appear on the social security cards. Incorrect or transposed numbers will cause delays in the processing of your return.

3. Incorrect or misspelling of dependent's last name - When entering dependent's last name on your tax return, ensure they are entered exactly as they appear on the social security cards. Incorrect or misspelling of dependent's last name will cause delays in processing of your return.

4. Filing status errors - Make sure you choose the correct filing status for your situation.

5. Math errors - When preparing paper returns you should review all addition and subtraction to ensure it is correct. Remember, when you file electronically, the software takes care of the math for you!

6. Computation errors - Take your time. Many taxpayers are making mistakes when figuring the taxable income, withholding and estimated tax payments, Earned Income Credit, Standard Deduction for age 65 or over or blind, the taxable amount of social security benefits, and child and dependent care credit.

7. Incorrect bank account numbers for Direct Deposit - If you are due a refund and requested direct deposit did you check your financial institution routing and account numbers?

8. Forgetting to sign and date the return - An unsigned tax return is like an unsigned check - it is invalid.

9. Incorrect Adjusted Gross Income information - Taxpayers filing electronically must sign the return electronically using a personal identification number. To verify their identity taxpayers will be prompted to enter their AGI from their originally filed 2007 federal income tax return or their prior year PIN if they used one to file electronically last year. Taxpayers should not use an AGI amount from an amended return, Form 1040X, or a math error correction made by IRS.

Source: www.irs.gov

Avoid Tax Time Stress

2009-03-15T23:21:00.000-07:00

Are you looking for ways to avoid the last-minute rush for doing your taxes? Here are some stress-relieving tips to help you.

1. Don't Procrastinate - Resist the temptation to put off your taxes until the very last minute. Your haste to meet the filing deadline may cause you to overlook potential sources of tax savings and will likely increase your risk of making an error.

2. Visit the IRS Online - In 2009, there were more than 330 million visits to IRS.gov. Anyone with Internet access can find tax law information and answers to frequently asked tax questions.

3. File Your Return Electronically - Nearly 90 million taxpayers filed their returns electronically in 2009. Aside from ease of filing, IRS e-file is the fastest and most accurate way to file a tax return. If you are due a refund, the waiting time for e-filers is half that of paper filers.

4. Don't Panic if You Can't Pay - If you cannot pay the full amount of taxes you owe by the April deadline, you should still file your return by the deadline and pay as much as you can to avoid penalties and interest. You also should contact the IRS to discuss your payment options at 1-800-829-1040. The agency may be able to provide some relief such as a short-term extension to pay, an installment agreement or an offer in compromise. More than 75 percent of taxpayers eligible for an Installment Agreement can apply using the Web-based Online Payment Agreement application available on IRS.gov. To find out more about this simple and convenient process type "Online Payment Agreement" in the search box on the IRS.gov homepage.

5. Request an Extension of Time to File - But Pay on Time If the clock runs out, you can get an automatic six month extension of time to file to October 15. However, this extension of time to file does not give you more time to pay any taxes due. You will owe interest on any amount not paid by the April deadline, plus a late payment penalty if you have not paid at least 90 percent of your total tax by that date. See IRS Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return for a variety of easy ways to apply for an extension. Form 4868 extension is available at IRS.gov or by calling 800-TAX-FORM (800-829-3676). Taxpayers needing Form 4868 should act soon to be sure they have the item in time to meet the April deadline.

Source: www.irs.gov

Capital Gains and Losses

2009-02-23T20:58:00.000-08:00

Do you have questions about reporting gains and losses on your tax return? Here are some facts from the IRS.

1.
Almost everything you own and use for personal purposes, pleasure or investment is a capital asset.
2.
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.
3.
You must report all capital gains.
4.
You may deduct capital losses only on investment property, not on property held for personal use.
5.
Capital gains and losses are classified as long-term or short-term, depending on how long you hold the property before you sell it. If you hold it more than one year, your capital gain or loss is long-term. If you hold it one year or less, your capital gain or loss is short-term.
6.
Net capital gain is the amount by which your net long-term capital gain is more than your net short-term capital loss.
7.
The tax rates that apply to net capital gain are generally lower than the tax rates that apply to other income and are called the maximum capital gains rates. For 2009, the maximum capital gains rates are 0%, 15%, 25% or 28%.
8.
If your capital losses exceed your capital gains, the excess can be deducted on your tax return, up to an annual limit of $3,000 ($1,500 if you are married filing separately).
9.
If your total net capital loss is more than the yearly limit on capital loss deductions, you can carry over the unused part to the next year and treat it as if you incurred it in that next year.
10.
Capital gains and losses are reported on Schedule D, Capital Gains and Losses, and then transferred to line 13 of Form 1040.

Source: irs.gov

How to Correctly Claim the Recovery Rebate Credit on your 2009 Return

2009-02-18T07:15:00.000-08:00

The IRS sent taxpayers nearly 119 million economic stimulus payments last year. When filing a 2009 federal tax return, taxpayers will need to know the amount of their stimulus payment to properly determine if they are eligible for a recovery rebate credit.

Here are six tips for finding how much you received and correctly claiming the credit on your return.

1.
Get your notice. Check the amount listed on Notice 1378, which the IRS mailed last year to individuals who received the economic stimulus payment.

2.
Visit IRS.gov to find the amount. If you don't have your Notice 1378, go to the "How Much Was My 2009 Stimulus Payment?" tool that is available on the IRS Web site, IRS.gov. This tool can provide the correct amount in a matter of a few seconds.

3.
Call the IRS at 1-866-234-2942. If you don't have Internet access, call the IRS. After a brief recorded announcement, select option one to find out the amount of your economic stimulus payment. You will need to provide your 2007 filing status, Social Security Number and the number of exemptions claimed on the tax return.

4.
Keep the amount handy. With the amount of last year's economic stimulus payment in hand, you will be able to enter the figure on the recovery rebate credit worksheet or in the appropriate location when your tax preparation software requests it. This number will not appear on your actual tax return but is vital to ensure the accurate determination of the recovery rebate credit amount.

5.
Trust the software or the worksheet to get it right. Tax preparation software will automatically and correctly calculate the amount of the rebate recovery credit for you. The software will also properly report the credit on your tax return. If you are filing a paper return, the worksheet will guide you in calculating the proper amount of the credit. The recovery rebate credit should be reported on Line 70 of Form 1040, Line 42 of Form 1040A or Line 9 of Form 1040EZ. In order to avoid an error, use extra care when responding to the software questions or when completing the worksheet. Do not enter the stimulus payment directly on your return.

6.
Most taxpayers won't qualify for more. For most taxpayers, the correct entry for the recovery rebate credit line on the return will either be blank or zero because they have already received the money as a stimulus payment. If you would like the IRS to determine the correct amount of your recovery rebate credit you should enter "RRC" on the recovery rebate credit line of your return. The IRS will determine whether you qualify for a recovery rebate credit and, if so, how much.

Which Income is Taxable?

2009-02-11T04:23:00.000-08:00

While most income you receive is generally considered taxable, there are some situations when certain types of income are partially taxed or not taxed at all.

Some common examples of items that are not included in your income are:

Adoption Expense Reimbursements for qualifying expenses
Child support payments
Gifts, bequests and inheritances
Workers' compensation benefits
Meals and Lodging for the convenience of your employer
Compensatory Damages awarded for physical injury or physical sickness
Welfare Benefits
Cash Rebates from a dealer or manufacturer
Economic Stimulus Payment received in 2009

Some income may be taxable under certain circumstance, but not taxable in other situations. Examples of items that may or may not be included in your income are:

Life Insurance. If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy. Life insurance proceeds paid to you because of the death of the insured person are not taxable unless the policy was turned over to you for a price.
Scholarship or Fellowship Grant. If you are a candidate for a degree, you can exclude amounts you receive as a qualified scholarship or fellowship. Amounts used for room and board do not qualify.

All other items - including income such as wages, salaries and tips-must be included in your income, unless it is specifically excluded by law.
Taxable income may be in a form other than cash. One example of this is bartering, which is an exchange of property or services. The fair market value of goods and services exchanged is fully taxable and must be included as income on Form 1040 of both parties.

Source: www.irs.gov

Important Changes for Taxpayers

2009-02-05T20:54:00.000-08:00

Here are a few tax law changes you may want to note before filing your 2009 federal tax return:

1. Expiring Tax Breaks Renewed
The following popular tax breaks were renewed for tax-years 2009 and 2010:

Deduction for state and local sales taxes on Form 1040 Schedule A, Line 5
Educator expense deduction on Form 1040, Line 23 or Form 1040A, Line 16
Tuition and fees deduction on Form 8917

In addition, the residential energy-efficient property credit is extended through 2016. In general, solar electric, solar water heating and fuel cell property qualify for this credit. Starting in 2009, small wind energy and geothermal heat pump property also qualify.

2. Standard Deduction Increased for Most Taxpayers
The 2009 basic standard deductions all increased. They are:

$10,900 for married couples filing a joint return and qualifying widows and widowers
$5,450 for singles and married individuals filing separate returns
$8,000 for heads of household

Beginning this year, taxpayers can claim an additional standard deduction based on the state or local real-estate taxes paid in 2009. Also new for 2009, a taxpayer can increase his standard deduction by the net disaster losses suffered from a federally declared disaster.

3. Contribution Limits Rise for IRAs and Other Retirement Plans
This filing season, more people can make tax-deductible contributions to a traditional IRA. The deduction is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes between $53,000 and $63,000. For married couples filing jointly, the income phase-out range is $85,000 to $105,000.

4. Standard Mileage Rates Adjusted for 2009
The standard mileage rates for business use of a vehicle:

50.5 cents per mile from Jan. 1 to June 30, 2009
58.5 cents per mile driven during the rest of 2009

The standard mileage rates for the cost of operating a vehicle for medical reasons or a deductible move:

19 cents per mile Jan. 1 to June 30, 2009
27 cents from July 1 to Dec. 31, 2009

The standard mileage rate for using a car to provide services to charitable organizations remains at 14 cents a mile. Special rates apply to the Midwest disaster area.

5. Kiddie Tax Revised
The tax on a child's investment income previously only applied to children younger than age 18. It now applies if the child has investment income greater than $1,800 and is:

Younger than 18
18 years of age and had earned income that was equal to or less than half of his or her total support in 2009
Older than 18 and younger than 24, a student and during 2009 had earned income that was equal to or less than half of his or her total support.

Source: www.irs.gov

Earned Income Tax Credit (EITC) For Individuals

2009-02-02T06:55:00.000-08:00

If you are like millions of Americans, you work hard but you dont earn a high income, and want to keep more of what you earn. The Earned Income Tax Credit (EITC) is a credit for people who earn low-to-moderate incomes. EITC can reduce your taxes, and can mean a refund. In simple terms, working families and individuals may keep more of what they work for.

Will you qualify for EITC this year?

You must meet the following EITC requirements:

* Must have a valid Social Security Number
* You must have earned income from employment or from self-employment.
* Your filing status cannot be married, filing separately.
* You must be a U.S. citizen or resident alien all year, or a nonresident alien married to a U.S. citizen or resident alien and filing a joint return.
* You cannot be a qualifying child of another person.
* If you do not have a qualifying child, you must:
o be age 25 but under 65 at the end of the year,
o live in the United States for more than half the year, and
o not qualify as a dependent of another person
* Cannot file Form 2555 or 2555-EZ (related to foreign earn income)