Taxpayers who itemize, can file on Valentines Day, sweet

Wondering if this will delay kisses and hugs sent on-line on this very romantic holiday?
<3  ~ * ~   <3
There is a one day reprieve. Those who fill out the "long form" or itemize their US Federal Tax return will be able to file one day earlier than previously announced. Perhaps all of those loving and romantic Congresspersons, and Senators, would like to make it home in time to pour out their love and compassion on their Significant Other's. The majority are so loving, and filled with compassion, it would not be a surprise to see a new National Holiday! Don't call it tax day any longer, call it Love Day. Make this a tradition, so this time of tax reckoning will become a giant love fest! Thank you Representatives and Senators for putting the American majority in mind. Thank you for always putting the majority of your constituents first. Wow, I feel like playing the Star Spangled Banner! 

Go to www.irs.gov for the most up to date announcements, or come back anytime.

Free File Forms - 2008 Tax Year

Good morning Taxpayers, [Happy Superbowl 43! Steelers vs Cardinals]
***Here is an update on the new Free File Forms available from the IRS Free File link.

Go to www.irs.gov, in the Search Box, type Free File. You will be directed to a split page. The top portion of the page gives income limitations for Free File using approved Software. The IRS gives two options with Free File with Software; 1). You choose the Company, 2). The IRS will choose for you after you answer a couple of questions. http://www.irs.gov/efile/article/0,,id=118986,00.html

The next option on Free File using Software is that you choose your own. There are different reasons to choose, but find the one who best suits your needs without charging too much.

On the Bottom half of this page, Taxpayers are given the option of choosing their own forms; 1040, 1040A, or 1040EZ.

***** No income limits for using these forms. Some Forms for the more complicated returns will not be available until March of 2009. This is when Congress is done with 2008 Tax Law, and it is final.

***** Five Star rating for any Dependent who needs to file an income tax return. Remember Parents and Guardians; if you claim a dependent on your Tax Return who has earnings, they are required to File a Tax Return. After working for years at one of the big name tax firms, I can tell you the prices charged for a Dependent 1040EZ is too much. By getting your youngster started with Free Forms, this will give them a better understanding of their 'tax life". Oh yeah; It is completely free to file electronically. I have run into a glitch on the start-up, but on Monday I will be in touch with the IRS to find out Whatz up.

My tax return is more complicated because I legally take every penny possible, and I was up to 8 forms & worksheets last night when I realized I could not locate the place to enter W-2, 1099, 1099R [incoming money] forms. Again, I probably missed something on the sign in, but it should not be so hard to locate these areas of entry. Follow-up Monday night if I can get off of Eternal Hold.

~ Software - TaxSlayer is still my favorite. They are user friendly, provide links to information to what you are doing without charge. Under certain income limits; it is Free Fed & Free State = 9.95 E-File.

Many have used the same company for years. If you have had no problems and you are happy with the ease of use; don't change. Keep in mind when you purchase the Software in the stores, you are paying a lot more than 9.95, or 14.95. As they say, if you don't know how to use it correctly it will be problems without measure and you can be barred from the IRS by doing your own taxes.

Records, Records, Records. You must have them compiled before you File!

If you use a tax professional, do not put them in the position of "guessing" close to your numbers. This year more than ever, your Tax "people" will be held accountable for erroneous numbers. Do not let any Tax 'people' convince you to "use a Dependent" that you cannot prove the dependency.

I heard one guy in a school for a certain Large name firm say, "they told us no one ever goes to jail for that..."

Try this, go to the Department of Justice website, search Tax Firms & Preparers. Perhaps print out the 20 - 30 pages of firms that have been closed, the tax pros that have been fined and their punishments.

Ready, Set, GO! They're off and Running today!

Good Morning tax payers, and tax professionals.

Today is the day it all begins. The I.R.S. will begin accepting all those tax returns from all those who have simple tax returns.

The only individuals who should be ready to file today, 1). w-2's are the only source of income, and you have gotten them all. ["forgetting" about that w-2 from that one little part-time job because they take too long is a bad idea]. 2). Your income is under $32,000.00, you own no home, or any other deductions. 3). You didn't have any unemployment, royalties, investment income or were self-employed.

Keep in mind; Congress is still working on Tax Law and Code changes for 2008 Tax Year. For the $28,000.00 income and up, I would advise waiting until February 15th before filling. The 'tax year' is pretty much solid by then.

For the low income individuals and families who are eligible for large sums of Earned Income Credit, please try to avoid getting your money in 1 day. You can wait 9 more days and save 200.00 - 400.00 in "loan fees". If you could wait an entire year, you can wait 10 days. The tax operations like Jackson Hewitt, H & R Block, JPL, Liberty make their biggest profits off of the poorest people.

Those Rapid or Instant refunds are not refunds. They are loans at 32% - 383.% interest. I have a few words to say about that, but I am keeping this family friendly.

Have Questions? Worried that the tax person you hired is not giving to you straight? Is it better to go "long form" or short? Can I claim my baby momma baby? Please Post your Questions here. If you can get that Let's talk to work, send me your Questions. Normally you would be paying good money for this service, but this is The Year. I am offering these services for Free. The only source of income would be if I get enough traffic coming to this site. My ultimate goal is to build good karma and open my offices next tax season.

I will be offering TaxSlayer, because as a professional, and a tax payer it is the simplest Free File ware out there. When/If you choose Free File, always approach these tax firms through the IRS website. It is safer.

Do not hesitate to let me know if I can be of any assistance to you: WoodSmoke - Lori

Getting Ready for Tax Time - Tips to Help You Optimize Your Legal Deductions

In less than a week, Congress and the Executive Branch will begin to put the 2008 Tax Year together.

One thing I cannot stress enough is, contact your Senators & Congresspeople regarding the Alternative Minimum Tax (AMT). Last year because so many tax pros got the word out to their clients, and those clients also contacted their Washington representatives, the AMT had a 'bandage' applied, but it wasn't fixed. This year so many other things have the attention of the American Public, this BIG PROBLEM is being ignored. It ain't over until the Fat Lady sings, and the Fat Lady in this case are the Citizens of the U.S. If the AMT is not done away with, it will crush the middle class ($36,000.00 - $195,000.00) We have lost on our Personal Deduction amount this year as well. When you consider all the losses by the middle class in the past 4 years, it is crushing.

Many taxpayers (workers) come to January - April, and want the process to be painless and quick. Sometimes by taking a little time and work, their tax burden can be reduced even by a few dollars.

If you use Jackson Hewitt, they can perform a tax optimization for you for free. They can prepare your taxes "short form" (a regular 1040A with no deductions), and then with your legal and documented deductions, can show you the difference. If you are better off taking itemization's you will pay a bit more for your Preparation Fees, but it may be worth it. It is always worth a look-see.

I. Medical Deductions: If you are insured through an employer, most Insurance is taken out pre-tax. This means instead of getting a tax deduction at the end of the year, your employer and you are given a benefit of a "deduction" off of your total taxed income. This causes many taxpayers to think they are all tapped out on Medical Deductions, and it isn't worth it to consider possible Medical Deductions. This is not always the case.

Remember: You get to count the total dollar amount paid on legitimate medical expenses, (you don't get another deduction on that pre-tax amount) toward your 7.5% required to receive a deduction for Medical Expenses paid.

States: Some States allow Itemization for tax payers who may not be eligible to Itemize on their Federal Return. If you do your own taxes, make sure to include all legal deductions in the body of your Federal Return, so possible legal State deductions will roll down. I use TaxSlayer through IRS Free File. As a tax pro, I highly recommend it.

Your W-2 Should show these amounts in the boxes on 12 or 13, sometimes they don't. If you are Self-Employed, unless you have set up a pre-tax account, you can deduct all unreimbursed, out-of-pocket paid, medical expenses. If you claimed the self-employed health insurance deduction on the 1040 line 29~be careful not to give yourself a double deduction - reduce the amount of premiums paid from the amount on line 29.

• Medical Mileage: for 2008 we lost 1 cent. It is now .19 per Medical Mile. Depending on where you live, those miles can add up. (Some Flex-Plans and Health Savings Accounts, also allow you to claim your mileage throughout the year as well, and if you have elected to do this, you probably won't have reason to file for a Medical Deduction). You can claim forms of Transportation to get Medical Care; Ambulance, Taxi, Plane, or a personal vehicle. Parking and Tolls are included. [Only deduct one time per tax return for the year].
• Prescription medicines or insulin. (if you have a Flex-Plan, or HSA, you have received the 'deduction' pre-tax, you will be counting it toward total medical expenses paid in.)
• X-rays, Labs, Doctor ordered treatments such as whirlpool baths
• Nursing Help - You can include the deduction for Employment taxes paid here. [Again, be careful not to double-dip].
• Hospital Care- Includes Meals, lodging [no pleasure expenses: limit of $50], clinic costs (If the care is critical, and a family member is paying for parking, etc) - Doctor Verified.
• A Portion of Qualified Long-Term Care Services [Pub 502]
• The Supplemental part of Medicare Part B & Premiums for Part D
• Smoking Cessation Program
• Weight Loss to treat Obesity diagnosed by a Dr.
• Medical Treatment for Drug & Alcohol addiction
• Aids - Glasses, Contacts, Hearing Aids, Braces, Crutches, Wheelchairs, Guide Dogs (Including the cost of taking care of the service Animal)
• Laser Eye Surgery or Radial Keratotomy
• Certain Med Expenses paid out of a deceased taxpayers Estate, can be claimed on the deceased taxpayer's final return.

Free Tax Tips: You must have receipts, your books, or other Documentation at the time you sit down with your Tax Pro. This year more than before, tax pros are under the gun to make sure their clients have legit deductions.
Q. What if I haven't kept a record of all Medical Mileage?

A. [Don't dump a load of receipts on your Tax Pro, unless you like paying big bucks. Don't think it is funny to dump a giant box of receipts during an IRS audit, you will not be smiling when it is all said and done].
1. Contact each Medical Provider you had throughout the Year. Ask them for a Print-out of all visits. Put in this request at the first of 2009, because the longer you wait, the more backed up Medical Provider's will get with these type of requests. Because of HIPPA, it is not as quick and easy as it used to be.

2. For each visit, go to Google Maps, Yahoo Maps, an atlas, or any other legit method of finding mileage to and from your home, to your provider. If it is the same one each month, it will be quite simple. If you have had a heartbreak year, it may take you a lot of time and work. From now on, you can keep a log as you go. You can use Excel, Access or several other software programs to keep track of all of your expenses through the year. Even a cheap notebook kept in your vehicle or home office will suffice. If you are Self-Employed, you are in violation if you are not keeping records and books on expenses and payments.

3. Use bank statements that are clearly marked as to the nature and payee of an expense. You can make these part of your records. Keep in mind, during an audit there can be questions about any and all expenditures and receivables included in those statements.

Using your personal vehicle -
A. You need to know the type of car, truck, suv - ie; 2008 Toyota Tundra.
B. You need to know the total price paid [sticker incl financing], or lease amount.
C. You need to know the first date you used this ride for medical purposes (this goes for other vehicle use expenses too)
D. You need to know ALL of the miles put on the vehicle for the Entire Tax Year. (If you are using actual expenses, you must have record of everything claimed.
E. You need to know Business Miles put on the car, truck, suv.
F. You need to know Charitable Miles put on the ride.
G. You need to know Commuting Miles (non-deductible)
H. You need to know the mileage for any other use - vacation, store, mother-in-law...
I. You need to have any amounts that were reimbursed.

Hoping this will help. Although it does put a glazed look in your eyes. :8 - >

My next post will be concerning Charitable Mileage,
Then, Business Mileage. Stay tuned little deer...

While Congress is in Session...

~ Part of Lesson One: If you don't know 'how' you get taxes, then you cannot understand that as a Citizen, you have more influence than you realize when it comes to Tax Code, and Tax Law & Rule Changes.

The reason Tax Payers and Tax Services have to wait until the middle of January to start the Tax Filing Season is because the Congress, the House of Representatives and the Executive Branch (President and Crew) have to finalize and agree with what your 1040 is going to say, what Exemptions will be given, any Credits, Changes of Tax Rates etc.

One thing I will ask those who are able: Contact your State & Federal Representatives and voice your loud Concern over the Alternative Minimum Tax (AMT). If it is not repealed, or another "fix" put on it, for the Tax Year of 2008, it will be the final straw for many Middle Class Taxpayers.

Incomes from $19,000.00 - $155,000.00 are paying an inordinate rate of their entire income in Taxes. [Remember the tax paid on everything; utilities, state & local, goods, bonuses, fuel, phones, license, registrations, etc].

If the AMT goes on without attention, many of those in the income brackets listed previously will have their usual deductions partly or completely phased out - in other words...Your Mortgage Interest, College Tuition etc will no longer be a deduction for you. For those who will have a huge loss on Schedule D this year, the final straw will be how much tax you will still have to pay.

At present, those making over $200,000.00 pay less as it goes up. Please talk to your Tax Professional, CPA or Accountant about the AMT, then your Congressional Representatives. We are the People and we have a voice, we just don't remember how to use it.

Lesson 1

January 15, 2009 is approaching quickly.

The first two weeks of the new year is when the IRS opens its doors [electronic] to tax payers; (workers who have a portion of their earnings removed from a paycheck). All payers have chance to pay in more taxes, or receive an Income Tax Refund for over payment of taxes.

People have little information about how the Tax Code is applied. Most citizens don't have a clue as to why their Bottom Line is what it is. Mostly, it is that "deer caught in the headlights" phenomenon that happens when a tax expert speaks to a regular person.

The goal is to break it down to where anyone can understand how to file their taxes; or get the legitimate Tax Help needed.

Dept of Treasury - $

IRS
l
Congress l Executive Branch Judicial Branch
I l I I
State Can Veto - (Say No)
Reps -- or,
I Pass
People
[Voters - Taxpayers]

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