Do you know that all employees who receive tips have to report their tips to the IRS. Tips are also considered to be income. If in any month you receive more than $20 in tips from customers, tips added to credit cards, and any tips you receive under a tip splitting arrangement, you must report your tips to your employer so your employer can withhold the proper federal income tax, social security tax, and Medicare tax. Let me clarify something here. If you make over $20 in tips, you must report it to your employer, however all tips must be reported to the IRS.
You must keep a daily log of all tips received. You employer is automatically going to allot tips received to all employees based on their income received. If you turn in your figures for tips received, your employer will withhold the taxes and it will be reported on your W2. When it's time to file your taxes, you will report your figures (in gross income) and not your employer's tip figures.
Keeping a daily log is important. This shows due diligence in the event of an audit.
Contact me for clarification on this topic or to ask any tax questions.
Now is the time to start your daily log for tax year 2011, if you haven't already.
Always accurate and affordable tax preparation.
Wanda E Green
818.934.1580
Friday, January 21, 2011
Monday, November 29, 2010
Open that letter !
How many of you, right now, have somewhere in your home, that (those) letter(s) that you received from the IRS (Internal Revenue Service) and have been to afraid to open ?
Open that letter !
Some of you know what that letter pertains to, and some of you have no idea. Folks, for those of you that know that you have to file a tax return, and your letter is assessing a crazy looking tax bill...what you need to do is file a return for the year in question. Understand that the IRS just knows that some employer or some entity has reported that they paid you money....and yes, the IRS wants their cut. The IRS does not take into account any credits, that you are entitled to or any dependents you may have or in the case of the business owner any business expenses you may have a right to claim. This is where your tax practitioner comes into play. He or she will prepare a tax return that encompasses any taxes paid, any credits, exemptions, write offs and always your standard deduction...this will bring you to your actual tax liability if there is one at all.
Speculating that you are working with past year returns...make sure that you SIGN YOUR RETURN, before you send it in.
Many folks receive letters just because they haven't signed their tax return.
All letters received from the IRS will have the department that it is coming from and a phone number to call.
Here is an important fact; if you have a tax liability after preparing a tax return and you are sending that return in late, you will be assessed a penalty for not sending your return in on time by tax day.
Please look at all correspondence that you receive from the IRS. Receiving a letter from the Internal Revenue Service doesn't always mean that one is in some kind of trouble or that you owe money.
I offer free telephone consultations. call me with your questions. If you need me to, I can call the IRS for you.
Always affordable and accurate tax preparation....always free e-file and direct deposit.
Wanda E Green
wandaegreen@yahoo.com
818.934.1580
Open that letter !
Some of you know what that letter pertains to, and some of you have no idea. Folks, for those of you that know that you have to file a tax return, and your letter is assessing a crazy looking tax bill...what you need to do is file a return for the year in question. Understand that the IRS just knows that some employer or some entity has reported that they paid you money....and yes, the IRS wants their cut. The IRS does not take into account any credits, that you are entitled to or any dependents you may have or in the case of the business owner any business expenses you may have a right to claim. This is where your tax practitioner comes into play. He or she will prepare a tax return that encompasses any taxes paid, any credits, exemptions, write offs and always your standard deduction...this will bring you to your actual tax liability if there is one at all.
Speculating that you are working with past year returns...make sure that you SIGN YOUR RETURN, before you send it in.
Many folks receive letters just because they haven't signed their tax return.
All letters received from the IRS will have the department that it is coming from and a phone number to call.
Here is an important fact; if you have a tax liability after preparing a tax return and you are sending that return in late, you will be assessed a penalty for not sending your return in on time by tax day.
Please look at all correspondence that you receive from the IRS. Receiving a letter from the Internal Revenue Service doesn't always mean that one is in some kind of trouble or that you owe money.
I offer free telephone consultations. call me with your questions. If you need me to, I can call the IRS for you.
Always affordable and accurate tax preparation....always free e-file and direct deposit.
Wanda E Green
wandaegreen@yahoo.com
818.934.1580
Thursday, March 18, 2010
Avoiding tax errors
The IRS has just sent out a directive (Tip 2010-52) that points out the following errors to avoid during this tax season. Any one of these errors may impede the processing of your tax return and delay the receipt of your refund.
Your tax professional should already be aware of the errors and should have already incorporated steps to ward off such errors. None the less we are human, and sometimes errors happen. If you are doing your taxes yourself, please be aware of the following common errors.
1) Incorrect or missing social security numbers. Because of e-filing, the missing social security number is usually never an issue. Without a ss # the return would never be allowed to be transmitted. With an incorrect ss#, the return can be submitted, but would result in a reject, and an additional fee for re-transmittal.
2) Incorrect or misspelling of dependent’s last name. You must review your tax return (if you can) before it is transmitted. If you are with your preparer at the time of processing, they should be asking you to review your return, before the transmitt, or concluding of your appointment.
3) Filing status. Make sure the correct filing status has been used for your situation. You may fall into more than one status, but your preparer should use the filing staus that results in the best benefit for you.
4) Math errors. This usually happens when a preparer or tax payer are processing taxes by hand and not using a professional electronic system; none the less, a math error can and will delay your receipt of a refund if you are due one.
5) Computation errors. Same deal here. If you are manually processing your tax return, or your tax practitioner is, this could be a costly error. A computation error is when one looks at and uses the wrong figures from the tax table, W2s, EIC tables...or any documents, or tables used where figures need to be entered.
6) Incorrect bank account numbers for Direct Deposit. Make sure you and or your practioner are looking at your check while entering your bank account information (that's if the refund is to be deposited into your checking account). Your refund can be deposited into your savings account or money market as well. Transmitting the incorrect information will cause a reject by your banking institution, which delays the receipt of your refund.
7) Forgetting to sign and date the return. Any paper return must be signed by the taxpayers. In the case of married filing jointly, both spouses must sign.
8) Incorrect Adjusted Gross Income information. When an individual (taxpayer) transmits their own return (files electronically), they need to have a pin # (personal identification number), and inorder to sign electronically, you need to know your exact AGI (Adjusted Gross Income), from the prior tax year. This is done to ensure your identity.
9) Claiming the Making Work Pay Tax Credit.....This is the exact wording of the IRS...Taxpayers with earned income should claim the Making Work Pay Tax Credit by attaching a Schedule M, Making Work Pay and Government Retiree Credits to their 2009 Form 1040 or 1040 A. Taxpayers who file Form 1040-EZ will use the worksheet for Line 8 on the back of the 1040-EZ to figure their Making Work Pay Tax Credit. The credit is worth up to $400 for individuals and $800 for married couples filing jointly. Many people who worked during 2009 are slowing down the processing of their tax return by not properly claiming this credit.
As always....
Always affordable tax preparation, always free efile and direct deposit.
I look forward to being your tax professional.
Your questions are always welcomed.
Blessings Always
Wanda E Green (Uigei)
wandaegreen@yahoo.com
323.898.2330
Your tax professional should already be aware of the errors and should have already incorporated steps to ward off such errors. None the less we are human, and sometimes errors happen. If you are doing your taxes yourself, please be aware of the following common errors.
1) Incorrect or missing social security numbers. Because of e-filing, the missing social security number is usually never an issue. Without a ss # the return would never be allowed to be transmitted. With an incorrect ss#, the return can be submitted, but would result in a reject, and an additional fee for re-transmittal.
2) Incorrect or misspelling of dependent’s last name. You must review your tax return (if you can) before it is transmitted. If you are with your preparer at the time of processing, they should be asking you to review your return, before the transmitt, or concluding of your appointment.
3) Filing status. Make sure the correct filing status has been used for your situation. You may fall into more than one status, but your preparer should use the filing staus that results in the best benefit for you.
4) Math errors. This usually happens when a preparer or tax payer are processing taxes by hand and not using a professional electronic system; none the less, a math error can and will delay your receipt of a refund if you are due one.
5) Computation errors. Same deal here. If you are manually processing your tax return, or your tax practitioner is, this could be a costly error. A computation error is when one looks at and uses the wrong figures from the tax table, W2s, EIC tables...or any documents, or tables used where figures need to be entered.
6) Incorrect bank account numbers for Direct Deposit. Make sure you and or your practioner are looking at your check while entering your bank account information (that's if the refund is to be deposited into your checking account). Your refund can be deposited into your savings account or money market as well. Transmitting the incorrect information will cause a reject by your banking institution, which delays the receipt of your refund.
7) Forgetting to sign and date the return. Any paper return must be signed by the taxpayers. In the case of married filing jointly, both spouses must sign.
8) Incorrect Adjusted Gross Income information. When an individual (taxpayer) transmits their own return (files electronically), they need to have a pin # (personal identification number), and inorder to sign electronically, you need to know your exact AGI (Adjusted Gross Income), from the prior tax year. This is done to ensure your identity.
9) Claiming the Making Work Pay Tax Credit.....This is the exact wording of the IRS...Taxpayers with earned income should claim the Making Work Pay Tax Credit by attaching a Schedule M, Making Work Pay and Government Retiree Credits to their 2009 Form 1040 or 1040 A. Taxpayers who file Form 1040-EZ will use the worksheet for Line 8 on the back of the 1040-EZ to figure their Making Work Pay Tax Credit. The credit is worth up to $400 for individuals and $800 for married couples filing jointly. Many people who worked during 2009 are slowing down the processing of their tax return by not properly claiming this credit.
As always....
Always affordable tax preparation, always free efile and direct deposit.
I look forward to being your tax professional.
Your questions are always welcomed.
Blessings Always
Wanda E Green (Uigei)
wandaegreen@yahoo.com
323.898.2330
Tuesday, March 2, 2010
Advanced Earned Income Tax Credit
We've already gone over the "Earned Income Tax Credit" (EIC), but now we are going to go yet a step further. Most of us who qualify for the EIC receive it all at one time when we file our taxes. For many, they can qualify to get a portion of this credit during the year in their paychecks...hence the "advanced" in the name.
The first thing is to determine eligibility. You must be expecting to be eligible for EIC, and you must have a qualifying child*. Your earned income must be less than $35,535 (40,545 if you are married filing jointly). Your wages must be subject to federal income tax, social security tax, and medicare tax withholding.
*Qualifying children must meet age, residency, relationship, and joint return test.
If you are married filing jointly, both you and your spouse can receive the advanced credit with the proper document filing with your employers. All rules must still be met. You each would file a W-5 with your employer (HR), for the respective years that you want to receive the advance. If you have more than one employer, only give the W-5 to one employer. The certificate (W-5) is good for one tax year only. You must re-file a W-5 with your employer for each tax year that you want to receive the advance.
Ok...so you've filed, and you've started to receive a little extra with every paycheck; you must file a tax return to declare that you have received that money for that tax season. Your employer will include the advance amount on your W-2 in box 9. You must file a 1040, or a 1040 A....1040EZ is not allowed.
If at anytime during the year your situation changes in regards to household and children and you are no longer eligible to receive the AEIC (Advanced Earned Income Tax Credit), you must file another W-5 and check the appropriate box 1 and turn it in to your employer (HR).
I know this information will help many, many of you. Call for assistance if you need to.
I look forward to being your tax professional. Always affordable tax preparation, always free efile and direct deposit.
Blessings and Prosperity
Wanda E. Green (Uigei)
323.898.2330
wandaegreen@yahoo.com
The first thing is to determine eligibility. You must be expecting to be eligible for EIC, and you must have a qualifying child*. Your earned income must be less than $35,535 (40,545 if you are married filing jointly). Your wages must be subject to federal income tax, social security tax, and medicare tax withholding.
*Qualifying children must meet age, residency, relationship, and joint return test.
If you are married filing jointly, both you and your spouse can receive the advanced credit with the proper document filing with your employers. All rules must still be met. You each would file a W-5 with your employer (HR), for the respective years that you want to receive the advance. If you have more than one employer, only give the W-5 to one employer. The certificate (W-5) is good for one tax year only. You must re-file a W-5 with your employer for each tax year that you want to receive the advance.
Ok...so you've filed, and you've started to receive a little extra with every paycheck; you must file a tax return to declare that you have received that money for that tax season. Your employer will include the advance amount on your W-2 in box 9. You must file a 1040, or a 1040 A....1040EZ is not allowed.
If at anytime during the year your situation changes in regards to household and children and you are no longer eligible to receive the AEIC (Advanced Earned Income Tax Credit), you must file another W-5 and check the appropriate box 1 and turn it in to your employer (HR).
I know this information will help many, many of you. Call for assistance if you need to.
I look forward to being your tax professional. Always affordable tax preparation, always free efile and direct deposit.
Blessings and Prosperity
Wanda E. Green (Uigei)
323.898.2330
wandaegreen@yahoo.com
Sunday, February 7, 2010
So your going to receive a refund
Once getting through the harrowing act of filing one's taxes, the reward...is the refund. With the proper withholdings and the receipt of any refundable credits, one could end up with a very rather large sum of money.
This year for the first time in many years, as I've mentioned in an earlier post, you can purchase US savings bonds in $50 increments, with all of your refund or some of it. In order to participate, you must use the direct deposit option. The funds not used for bond purchase will be directly deposited into your banking account, credit union, or other financial institution. The bonds will be received by mail.
Do you know that you can apply any refund you are to receive to next year's taxes. If you know that your income is going to change, taking you into a higher tax bracket granting you a higher tax liability; any refund you are to receive, can be applied to next year's estimated taxes. You can apply all, or a portion of.
Just in case you didn't know. Any tax liability owed from a prior tax year, will be recaptured by any refund you are to receive. If there is any refund left, it will be surrendered to you.
Of course you can receive your check by snail mail; however it takes longer; 21-28 days (sometimes 6-8 weeks. Some situations call for that amount of time). With direct deposit, you could receive your refund in as fast as 10-14 days.
I look forward to being your tax professional. Always affordable tax preparation, and always free e-file and direct deposit. Call or e-mail me your tax questions.
Blessings
Wanda (Ui)
323.898.2330 Cell
818.763.7813 Business
wandaegreen@yahoo.com
This year for the first time in many years, as I've mentioned in an earlier post, you can purchase US savings bonds in $50 increments, with all of your refund or some of it. In order to participate, you must use the direct deposit option. The funds not used for bond purchase will be directly deposited into your banking account, credit union, or other financial institution. The bonds will be received by mail.
Do you know that you can apply any refund you are to receive to next year's taxes. If you know that your income is going to change, taking you into a higher tax bracket granting you a higher tax liability; any refund you are to receive, can be applied to next year's estimated taxes. You can apply all, or a portion of.
Just in case you didn't know. Any tax liability owed from a prior tax year, will be recaptured by any refund you are to receive. If there is any refund left, it will be surrendered to you.
Of course you can receive your check by snail mail; however it takes longer; 21-28 days (sometimes 6-8 weeks. Some situations call for that amount of time). With direct deposit, you could receive your refund in as fast as 10-14 days.
I look forward to being your tax professional. Always affordable tax preparation, and always free e-file and direct deposit. Call or e-mail me your tax questions.
Blessings
Wanda (Ui)
323.898.2330 Cell
818.763.7813 Business
wandaegreen@yahoo.com
Tuesday, February 2, 2010
The First Time Homebuyers Credit
The Worker, Homeownership and Business Assistance Act of 2009, signed into law on Nov. 6, 2009, extends and expands the first-time homebuyer credit allowed by previous Acts.
The above is also known as "The First Time Homebuyer's Credit". Citizens were able to first take advantage of this credit in 2008. Taxpayers who purchased a home before April 8, 2008 were able to take the credit. All they had to do was answer some questons at the time they had their taxes prepared; and based on income, and the price of the home, they could possibly receive a credit of up to $7500.
Technically this was not a true refundable credit, but in actuality a no interest loan. The recapture (payback) for folks who received the credit will start with the processing of their 2010 tax return. If they sold the home (or was foreclosed upon), it was due and payable at that time, and definitely with this tax season.
The initial credit did not require the taxpayer to supply any documentation; hence, the fraud turned out to be tremendous!
Under the new law, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return.
The "First Time Homebuyers Credit " has been extended, but with a few restrictions.
- Anyone applying must supply their Hud-I, Settlement Statement. showing all parties' names and signatures, property address, sales price and date of purchase.
- For purchasers of mobile homes who are unable to get a settlement statement, a copy of the executed retail sales contract showing all parties' names and signatures, property address, purchase price and date of purchase.
- For a newly constructed home where a settlement statement is not available, a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.
Meaning, you must send the document(s) in with the tax return. You must file a paper return. If approved, the credit could take from 5 - 8 weeks (or longer) for you to receive the refund. It has been suggested that the documents along with your tax return be sent via certified mail.
The credit is now valued at up to $8000, and as long as you do not sell your home within the first 36 months of ownership, you may not have to pay it back.
Long Term Resident Credit
How wonderful is this? Do you know that if you have lived in your home...your primary residence for any 5 consecutive years of the last eight years you may be able to claim up to $6500 of the credit.
For long-time residents claiming the credit, the IRS recommends attaching, in addition to the documents described above, any of the following documentation of the five-consecutive-year period:
- Form 1098, Mortgage Interest Statement, or substitute mortgage interest statements
- Property tax records or
- Homeowner’s insurance records
Here's where good recordkeeping comes into play. You must have 5 years of these documents !
You know my closing. Affordable, Virtual tax preparation. Always free e-file and direct deposit.
Call me or e-mail me your tax questions, and I will answer them on the blog.
I look forward to being your tax professional !
Blessings and Wisdom and Prosperity
Wanda E Green (Uigei)
323.898.2330
818.763.7813
Sunday, January 31, 2010
Earned Income Tax Credit - EITC
The earned income tax credit aka EITC is a tax credit for people who work and have less than 48,279 of earned income. The EITC is a refundable credit. That means anything left over after your tax liability has been eliminated, you may receive as a part of your refund.
There are 7 rules that everyone must meet in order to qualify for the credit:
1. Your adjusted gross income must be less than $43,279 ($48,279 for married filing jointly)if you have three or more qualifying children.
* $40,295 ($45,295 for married filing jointly) if you have two qualifying children.
* $35,463 ($40,463 for married filing jointly) if you have one qualifying child.
* $13,440 ($18,440 for married filing jointly) if you do not have a qualifying child.
2. You must have a valid social security number.
3. Your filing status cannot be Married Filing Separately.
4. You must be a U.S. citizen, or a resident alien all year.
5. You cannot file form 2555 or form 2555-ez (relating to foreign earned income)
6. Your investment income must be $3,100 or less.
7. You must have earned income.
The above seven points must be met. If not you will not qualify.
There is really nothing that you need to do except have all proper information in regards to your children, or dependents that will qualify you for the credit. IE: social security numbers and full birth date information...month, day and year.
This is a fantastic credit. For instance if your AGI (adjusted gross income) is at least $27,450 but less than $27,500 and you have one child, you may be able to receive up to $1,276 and if you have two children up to $2,700 and three children up to $3,328.
****Disclaimer****All tax situations are unique. Information offered here is for general knowledge, and should not be used to apply to any one's personal tax story. The outcome of your tax situation can only be determined with the proper input and analysis by a tax professional, or even by yourself if that is your choice****
Contact me for affordable tax preparation. Virtual preparation is easy and secure.
I look forward to being your tax professional. Always affordable, and always free efile.
Peace
Wanda E Green
323.898.2330
818.763.7813
wandaegreen@yahoo.com
There are 7 rules that everyone must meet in order to qualify for the credit:
1. Your adjusted gross income must be less than $43,279 ($48,279 for married filing jointly)if you have three or more qualifying children.
* $40,295 ($45,295 for married filing jointly) if you have two qualifying children.
* $35,463 ($40,463 for married filing jointly) if you have one qualifying child.
* $13,440 ($18,440 for married filing jointly) if you do not have a qualifying child.
2. You must have a valid social security number.
3. Your filing status cannot be Married Filing Separately.
4. You must be a U.S. citizen, or a resident alien all year.
5. You cannot file form 2555 or form 2555-ez (relating to foreign earned income)
6. Your investment income must be $3,100 or less.
7. You must have earned income.
The above seven points must be met. If not you will not qualify.
There is really nothing that you need to do except have all proper information in regards to your children, or dependents that will qualify you for the credit. IE: social security numbers and full birth date information...month, day and year.
This is a fantastic credit. For instance if your AGI (adjusted gross income) is at least $27,450 but less than $27,500 and you have one child, you may be able to receive up to $1,276 and if you have two children up to $2,700 and three children up to $3,328.
****Disclaimer****All tax situations are unique. Information offered here is for general knowledge, and should not be used to apply to any one's personal tax story. The outcome of your tax situation can only be determined with the proper input and analysis by a tax professional, or even by yourself if that is your choice****
Contact me for affordable tax preparation. Virtual preparation is easy and secure.
I look forward to being your tax professional. Always affordable, and always free efile.
Peace
Wanda E Green
323.898.2330
818.763.7813
wandaegreen@yahoo.com
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