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
Thursday, March 18, 2010
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
Wednesday, January 27, 2010
Buy a bond with part of your refund
Do you know that with your tax refund you can purchase up to $5000 in US Series I savings bonds, in multiples of $50? You must have direct deposit. Once the election for bonds have been made, the remaining amount will be deposited in the banking institutions of your choice. You can split your refunds into up to three accounts. This is not a bad deal at all. The return on the bonds is 5.64%. The bonds MUST be held for 1 full year before redemption can take place. If redeemed anytime between 1 and 5 years of holding you will lose 3 months of interest as a penalty. At this point you can only purchase the bonds in your name. At a later date you will be able to purchase bonds for others.
At the time of tax preparation, you will tell me (your preparer) that you would like to purchase bonds with your refund. I advise you that you must direct deposit the refund, and I will get your bank information from you, ie: routing number, account number. Within 7 to 10 days your remaining refund will be deposited into your designated account. The bonds will come to you in the mail, and it could take up to 5 weeks (or less).
Call or email me with your questions.
Virtual Tax Preparation, always at an affordable rate. Credit card and cash accepted.
I look forward to being your tax professional.
Blessings
Wanda (Uigei)
818.763.7813
323.898.2330
wandaegreen@yahoo.com
http://wandastaxtipsblogspot.com/
At the time of tax preparation, you will tell me (your preparer) that you would like to purchase bonds with your refund. I advise you that you must direct deposit the refund, and I will get your bank information from you, ie: routing number, account number. Within 7 to 10 days your remaining refund will be deposited into your designated account. The bonds will come to you in the mail, and it could take up to 5 weeks (or less).
Call or email me with your questions.
Virtual Tax Preparation, always at an affordable rate. Credit card and cash accepted.
I look forward to being your tax professional.
Blessings
Wanda (Uigei)
818.763.7813
323.898.2330
wandaegreen@yahoo.com
http://wandastaxtipsblogspot.com/
Monday, January 25, 2010
Business use of your vehicle
The question is : Can you deduct part of your car note payment for a vehicle used mostly for business? If so how much of it?
Disclaimer : All advice is limited and general. Individual and in depth answers come with a detailed and in depth interview with a client.
Answer : Remembering that the key to self-employment expenses is recordkeeping. The extent of deduction for business, is the extent that the car is used for business. "Mostly for business", means that you are using the car for other reasons as well. If you use the car for 50% of business, then you can deduct up to 50% of the car note and insurance and tags, and repair and maintenance etc. for business.
Recordkeeping : You must keep accurate records. Period ! In the event of an audit, "that's what's gone' save yo' behind" ! That is as long as you have legitimate expenses.
Your journal or log does not have to be anything fancy, but it does have to and must show consistancy. That means that you should have daily entries. For the vehicle you must have a starting date entry for miles....Jan 1 thru Dec 31...Business Miles Commuter Miles Other Miles.
When you leave your home, and make your way to your permanent, or first job site, you cannot add those miles....when you leave that site to go to another job site, those are the miles that you can count...as well, from your last job site to your home, you cannot count those miles. You log the miles, but they will not be included in business miles. To work, and back home are commuter miles. Since this vehicle in question is being used for "other than business as well"...those would be considered as other miles.
This year the standard mileage rate you will receive for operating your car for business use is 55 cents per mile. So if you are a truck driver, this could turn into a great deal of credit.
I'll make sure that you receive all the credits you are entitled to. Virtual tax prepartion is a specialty of mine. Secure, accurate and affordable. Call me for additional information.
Deep discount goin' on over here !
Keep the questions coming.
Blessings
Wanda E Green (Uigei)
818.763.7813
323.898.2330
wandaegreen@yahoo.com
Disclaimer : All advice is limited and general. Individual and in depth answers come with a detailed and in depth interview with a client.
Answer : Remembering that the key to self-employment expenses is recordkeeping. The extent of deduction for business, is the extent that the car is used for business. "Mostly for business", means that you are using the car for other reasons as well. If you use the car for 50% of business, then you can deduct up to 50% of the car note and insurance and tags, and repair and maintenance etc. for business.
Recordkeeping : You must keep accurate records. Period ! In the event of an audit, "that's what's gone' save yo' behind" ! That is as long as you have legitimate expenses.
Your journal or log does not have to be anything fancy, but it does have to and must show consistancy. That means that you should have daily entries. For the vehicle you must have a starting date entry for miles....Jan 1 thru Dec 31...Business Miles Commuter Miles Other Miles.
When you leave your home, and make your way to your permanent, or first job site, you cannot add those miles....when you leave that site to go to another job site, those are the miles that you can count...as well, from your last job site to your home, you cannot count those miles. You log the miles, but they will not be included in business miles. To work, and back home are commuter miles. Since this vehicle in question is being used for "other than business as well"...those would be considered as other miles.
This year the standard mileage rate you will receive for operating your car for business use is 55 cents per mile. So if you are a truck driver, this could turn into a great deal of credit.
I'll make sure that you receive all the credits you are entitled to. Virtual tax prepartion is a specialty of mine. Secure, accurate and affordable. Call me for additional information.
Deep discount goin' on over here !
Keep the questions coming.
Blessings
Wanda E Green (Uigei)
818.763.7813
323.898.2330
wandaegreen@yahoo.com
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