IRS offers new Interactive tax assistant, new free search for tax law questions

IRS offers new Interactive Tax Assistant, new free search for Tax Law questions, and offers a down-loadable copy of your research!

The Internal Revenue Website (IRS), has always had an excellent search box, located on the upper right hand corner of the IRS website, within their own site for individuals, tax professionals, and Tax Law practitioners  , The Interactive Tax Assistant is a Tax Law Resource tool that goes beyond a simple How To Search. This is geared more toward the Tax Professional, Tax Lawyer, CPA, Enrolled Agent, and possibly IRS staff could make use of this friendly tool. 

This new toy for the Tax People among us. Us nerds, who wait anxiously, during February to get our ink-stained, paper-cut fingers, on the new Publication 17. (It is easily accessible on the www. IRS.gov website, and down-loadable in PDF format today. The Pub 17 as it is loving called is still available in paper, and on disc too) 

When Congress completes creating Tax Law Changes for the prior and upcoming tax years, it is when Tax Professionals come to life. Like bats in a cave, sleeping during the day, it appears there is not even a heartbeat among them. April 15, hails the end of the tax season. There are the extension filers and trouble cases that go through a good part of the year, but then it settles down to a mere trickle. Then, the second week of February comes, and it is on.


Then, the sounding bell rings through Tax-dom, "Congress has recessed, Congress has recessed, we may begin filing!"


The madness begins, and with many new tax law changes during this historical 2010-2011 session, we are seeing many breaks for businesses who withhold and match FICA for employees. Employees themselves are getting big relief. It is a huge break across the board. 


This year Tax Professionals will be held responsible for collecting and verifying every legal deduction taken. In years past, a CPA, or Tax preparer could have relied on the, "assume they are telling the truth rule", but so many Tax Professionals helped their clients fudge, that new rules came into affect.

The Interactive Tax Assistant tool, from the IRS, offers an easy and reliable source of research, that can take the pressure off of the Tax Pro, while assisting the Taxpayer/Client in having their books, K-1's, LLC's, Estate Tax Changes, and more. There are many US Taxpayers who have been able to bully an accountant, or preparer into doing his will, more than what the Tax Code says. This takes the pressure off. 


Another benefit that can be seen with this tool, are for a client's benefit. While preparing the books of a Company, Partnership, LLC or any other entity, if there are deductions or credits that are "red flags" or often get audited, while the Tax Pro knows this a legitimate expense or claim, this would appear to be a very helpful tool. 

When pre-answering questions that may be asked in an Audit or a Letter from the IRS, requesting more information in a tax matter this could be a time and worry saver all the way around. 


This blog has always been at the basic level, and on a higher professional level there are probably many other ways this tool can be implemented. 


Review of Tool - 

• Search must be by legal language or positioning phrases of Tax code or law.

I had a legal question that I needed to know for a close friend. It was in regards to the taxability of   an insurance settlement of an Estate of a Deceased descendant. 

On my first try, I used the standard Search criteria used for Google searches. 

Q. Is income from an Estate settlement taxable?

A. Came up with the topic of Income types, statuses; the basics of Income definition as they are applied to status, etc.

My next step, was to search closer to the subject, using regular search methods.

Q. Taxable Income from an Estate settlement.

A. Again, I got types of income, and a few other partially related topics.

Then, I asked in the wording used in Tax Code.

Q. Estate, taxes, settlements

A. Estate information came up the first time, When I returned to redo my process for this blog post, only standard information for types of income came up, but it quickly linked me to the information I was seeking.

The IRS has advanced with technology, and is helping taxpayer, take more responsibility in their taxes, while offering more tools for a subject, that makes the standard non-tax-nerd, roll their eyes to the back of their head, and leave. Way to go y'all. Thanks for making it a little easier.

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.

Taxpayers who Itemize must wait until February 15, 2011 to file

There are many people in an uproar over this, here January 18, 2011. So many Americans are in the rut of over withholding all year long, they are desperate to get this big payoff, right in January. This is the same as it always is, except, before Taxpayers could rush in, with partial information, getting large loans on a projected income, that never comes, saying they will just do a 1040X. 


In order to itemize, when you prepare, or pay someone else to file your 2010 taxes, you will be required to produce that evidence to the preparer, or IRS. Tax preparers, will no longer take the risk that the taxpayer has all of the figures needed, and lets file those taxes. It has become a mad game of give and git. The American taxpayers are doing themselves a grave injustice with financing the US Treasury.


Many American Taxpayers do not realize they can be fined for over withholding as easily as under withholding. The IRS does not prefer taxpayers to use the US Treasury as a savings account. Why, would anyone loan out thousands of dollars per year interest free, while paying around 23% interest to use their own purchasing power or money?

For those who think they are benefiting their financial means at all, I must say, NO! You are robbing yourself of Double the money! 


I have heard, listened and given some understanding to the practice, but it is a very harmful financial practice. What has started taxpayers on the road to poverty, are these type of practices, without realizing how much they are shorting themselves. Most Americans live on credit, or they did until 2009.


Millions of Americans loan thousands of dollars per year to the US Treasury, interest free. The thing that is strange, is that these same individuals pay around 23% interest to use their own money, all year long.

Paying tax on income, means you do your best to break even, or be very close. A taxpayer who has worked in the same income for more than one tax year, knows what he/she was required to pay in taxes. Or what their taxable income was for the prior year. This means, that the next year, you must pay in at least 90% of the taxes you paid the previous year. No more, no less.


There are reasons why one year can change drastically from the next. By keeping up with how much income tax, social security and Medicare, is being paid in through the year, one may stay within dollars of what they will owe, or be refunded when it comes time to divvy up at the tax table.


The IRS website, located at www.irs.gov has all the tools a taxpayer, or prospective taxpayer would need to keep up with how to optimize their entire financial outlook. The one tool that is rarely used, is the IRS Withholding Calculator. When using the IRS Withholding Calculator, found under the Individual Tab, and about 5 paragraphs down, you will know how much you have paid in, and how much is required, depending on your projected income. Projected is important, because you may like to do the majority of your withholding from day one of the new tax year. Something can happen, where your income increases, or decreases greatly. When this happens, it is time to adjust withholding correctly. At the end of each session of the IRS Withholding Calculator, you are offered an opportunity or chance to print off and download a new W-4. 

It is important that the taxpayer keep up with their own withholding throughout the year. If an employer under withheld, or did not pay in the Social Security, and/or Medicare, the individual taxpayer will be held responsible.


I understand it is not prestigious to live within ones means. It seems an illusive image American taxpayers have created for themselves. Somehow it is more fab, more popular, more 'with it' to charge purchases, living on credit, until someone else pulls the plug.


The average refund of those getting money back is about $3,000.00 per year. That is about $57.00 per week, $250.00 per month extra each taxpayer could have throughout their year. The only thing is, it isn't flashy, or doesn't carry with it some kind of image Americans think they must fit. Double your money, stop over withholding, and cut up those credit cards. They are NOT for Emergencies.

Tax Tips For Small Business, Small Tax-Exempt, TAA and PBGC Recipients.

(link)Small Tax-Exempt Have until October 15th! One Time Offer If your tax-exempt or non-profit has not filed this simple informational form with the IRS, you stand a chance of losing your status. This is a One Time offer by the IRS, to help you get what is needed done for compliance.



(LINK) e-postcard - FORM 990 - Organizational - Don't lose your status.


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(link) Health Coverage Tax Credit Program - TAA or PBGC Recipients Eligible


(link) IRS - HCTC: Health Coverage Tax Credit - June 2010



(link) What the HCTC is... = Health Coverage Tax Credit


(link) HCTC: Eligibility & Benefits - Monthly & Annually - How it Works

        


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(link) IRS - YouTube - Sm Business Tax Credit 2010 - April 2010, As a Small Employer, or Tax-Exempt Group -  (less than 25 employees) that pays at least HALF of employees health Insurance premiums for your employees. For profit, will get up to a 35% credit. [Small Business General Tax Credit].


 For tax exempt employers, the IRS will give you more information on how to claim an up to 25% credit of premiums paid for your staff. 


(link) IRS - YouTube - Sign Language of Small Business Tax Credit



Small Business Tax Credit - More Explanation by the IRS - YouTube - Starting 2010 Through 2013

(link) Phasing In & Out of Employer Contribution to Employees Health Care Premiums
by Cook, Martin, Poulson

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(link) Health Care Choices You May Make in 2011 - HSA


This is a Hub I wrote regarding a lot of hype and untruth meant to scare individuals into not taking advantage of the changes in how Health Care Plans will be charged and managed. There are links to the new website


 (LINK) WWW. HEALTHCARE . GOV - find your State and General Information

When Free File is Really Free - Federal Only

(link) Free File Instruction Page - at www.irs.gov

Hello fellow Tax Payers! It will not be long until Tax Time is upon us. In today's blog post, my goal is to help you by-pass the horribly expensive route of filing your Taxes at a tax Firm...Paying $300.00 - $?00.00 in Bank and Preparation Fees.

I worked for a major Preparation Firm for 6 years seasonally. Each year, at the November Holiday, they begin sending out mailings and spend millions in advertising to get tax payers into their greedy hands. This begins the process of attaching high interest loans to your Anticipated tax refund. Please do not take this to mean that many, many people do not need a Tax Professional to assist and prepare taxes for them, but the lower income Individuals and Families often Do Not. It is the Low Income, and Earned Income Credit folks that are the Cream and Butter of Tax Prep Firms. 

During the first part of Tax Season, the lower income people pour in, getting Loans that are usually 95% interest, all the way up to 300%+. This is so the Poor families can Get Their Money ASAP! It is a trend that many "loyal tax customers" have been locked into for 8 years. If you do not get anything else I write, get this: You can File your own taxes on-line, Free. If you have it Directly Deposited into a bank or even mailed, you will have your money (if your information is correct, your return is not rejected for errors, and no other weird delays occur) in less than 2 Weeks. Usually 8 - 10 days. 

In our State and many surrounding States the average Tax Payer does Not "net" (bring  home) more than $300.00 per week. On average in the Southern U.S., tax payers who make $50,000.00 per year do not "net" more than $700.00  per week. Having Federal, State (unless your State does not collect Income Tax), Social Security/Medicare (FICA), Insurance, Union Fees, HSA and any other deductions taken from your check or direct deposit before you get it does not leave much available income.

If your tax return is simply Earned Income, you can probably file your own taxes without paying an extra dime. If it is too hard for you to understand how to fill out a US Tax Return without assistance, You can use Tax Software through the IRS website for a low upfront price, and sometimes Free.

I want to help you navigate the Free File Website Provided by the IRS. I want to help you keep more money for your precious family and home. Earlier, the Fees I mentioned were only the Bank Fees on each Tax Return, this was not even what you are charged for Preparation Fees, and the Insurance that is quickly added to your return, as a practice, and only brought to your attention at "signing" time, where the Preparer is sticking form after form in your face, telling you to "sign here". They will say something like, "and we have included _________ guarantee, or _________ assurance / insurance, that if there are any errors on your return, it will pay any extra taxes .... " Preparers are strongly trained to include the guarantee on every return, they are often given extra bonuses for including it on every return. They are scolded and terminated if there are a big lack of Insurance Fees included. 

The extra guarantee is around $29.00.  Here again, Please get what I am saying - This is Important information. If your return is "simple", meaning Only, that your return is W-2 income only, any errors on that type of return would be on the Tax Firm. They still would not be responsible to pay the possible extra tax liability, if you owed any extra taxes. On a simple return, the possibility of a greater tax liability is rare. It does not pay for fraud, or omission (not including all information), of income by the tax payer. The Tax Payer is always responsible for their taxes and tax return. That also goes for withholding on your payroll checks. The employee is responsible to make sure enough taxes are being withheld from their return. It is the tax payer who is responsible.

Most W-2 only returns, do not need the extra insurance, guarantee, or assurance. BUT - if your tax return is complicated, it will be the best $29.00 you ever paid. There were many returns I prepared, that I refused to complete without the Guarantee, because mistakes on that level usually take the IRS a year or two to find, and on the complicated returns, chances are there will be extra Tax Liability. One more note, many tax payers who approached me would attempt to get pricing on their return, I would ask, How complicated is it?, the person would answer; not too complicated...9 times out of 10, it was complicated enough it would take them 4 - 14 hours or more to prepare it themselves.

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I am going to attempt to navigate you through the Free File page at the IRS Website (link at top of page), and help you find the best product for you. Once you have made the decision to Free File, I would advise you to ALWAYS enter your product through the IRS Website. This will prevent some of the scandalous practices of Tax Software providers. (TaxSlayer used to be a company I recommended highly, but No More. I first filed, using their software through the IRS Website, and it was Free, then the next year it was more expensive, because I used their Links emailed to me, instead of the IRS website. This year, when I filed using their software, their software did not catch an error on my State Return...it should not have let me file any of my return. An error message should have stopped the process. It did not. My Federal went through. They charged me the highest price ever. They charged me for State filing, a product I did not receive. 
Over the course of several years, I had referred several customers to them. I contacted them, which was not easy. And, I was never able to speak to a live person. I will not use, or recommend TaxSlayer again. 

I am a tax professional, I could have done it on paper and mailed it in, but I know the importance of having a record of tax filings, and being low-income that first year, it was Free. If I would have used the IRS links to their website this year (2009 taxes), it would have been Free. If this can happen to a person who has prepared Taxes for over 30 years. I feel for the uninformed tax software customer.

1. Go to http://www.irs.gov/ - there is a link at the top of this page, but only use this for information...when you are ready to really file, go to the IRS website directly.
2. This page is in two halves. The top of the page: is the "traditional free file - I want tax software with step-by-step help. There are two "push buttons" a). "I will choose a Free File Company", and b). "Help Me Find a Free File Company"
3. On this top of the page, there are many companies with different products. By letting the IRS help you choose, you will get the best product for your income level. Keep in mind, until your return is actually "filed", you can change software companies.
4. If you choose the "I will choose..." push-button on the top half of this page, will issue you a warning, "You are about to leave the IRS website, do you want to continue?" Say Yes.
5. If you let the IRS help you choose, you will come to another IRS page, (link) Information about what to look for and steps to take income limits, and possible charges to watch for.
6. There are 6 Questions to answer so the IRS software finder can best assist you. You will need to know your filing status. Your approximate adjusted gross income, your State, if you are possibly eligible for Earned Income Credit, and if you and/or your spouse is Military.
7. On each question (except State), there is a link you can click on for further definition. The links will help you find the answer or approximate answer to the question. Remeber, you can always go back.
8. When you have completed that, you will then get a message that says, "you are about to leave the IRS website. Just say yes. [At this time the IRS is giving an error, I have sent them a message and finish] - There should be a listing from the best match first of the companies that can best help you.
9. Keep in mind, the more help you request from Tax Software companies, the more they can charge. Keep track of your time and what they are charging you.
10. August 14, 2010 - This is a time of transition as far as the IRS is concerned, many tax rules and codes are being adjusted according to what Congress does...so this will be updated accordingly.

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The Second Half of the Free File Page

"Free File Fillable Forms - I want to fill in the tax forms and file them online without tax software"

There are Two Push Buttons here as well:

• Start my Free File Fillable Forms
• Finish my Free File Fillable Forms

You may want to bookmark this page, unless the computer you are using is used by more persons than you. You can always return to http://www.irs.gov/, and link to the Individuals/Free File page, and return here. I am going to save this second half for the next blog.

FFFF (Free File Fillable Forms) is just like old school filling out paper forms, except it is on-line, and you can link directly to the IRS for further information. This is completely free, no matter the income limits, and complexity. This is Federal only. Who knows, perhaps they will develop links to the States soon.

Coming Soon...FFFF (no, not the Fabulous Furry Freak Brothers! - Free File Fillable Forms!)

Closing deadline extended to September 30, 2010 - For Eligible Homebuyers Credit

(Link) Instructions at IRS for deadline extension - Must've "Contracted" by April deadline

Okay everybody, calm down. Breathe.

This July 2, 2010, announcement by the IRS states that if a Qualified Buyer, contracted to purchase a Qualified home on or by April 30, 2010. The first extension that was supposed to expire in June. Has been pushed up to September 30th 2010. 

Closing on a home is a big deal and takes a lot of time. Hopefully, buyers and sellers are working together to help the economy. This will allow eligible people who were near closing to go ahead and get their homes, and First Time Home buyers Credit. 

The smartest thing to do is pretend like it expires at the end of August, because this will leave room for that last minute thing that can pop up to keep you from getting your home, and the $8,000.00 credit. It isn't too late, you can still get it done. Good Luck! 

Tax Relief for Small Non-Profits! Your Organization may be at Risk at Losing Your Status

(Link) IRS Announcement - For Small Charities

(Link) One Time Relief for Small Organizations that Failed to File the last 3 Years - Do not delay!

July 26, 2010 - The IRS Announced a Special One Time Filing for Small Charities required to file a yearly 990 for their organization. The rule requiring such filing was enacted in 2005, exempting Churches and other Religious Organizations.

Non-Profits who have not filed in 2007, 2008, and / or 2009 may be in danger of losing their tax-exempt status, rendering contributors unable to claim a tax-deductible donation. Charities who have acquired at least $1,000.00 are required to file.

Those required to file will have two choices; File a 990-N (This is only if you do not have all of your paperwork). For those who do, you may file the 990-EZ

A Toll-Free Help number is established to assist Small Charities in filing out the 990 forms. Phone Help - If you have questions and/or need help completing Form 990, please call 1-877-829-5500. This toll-free telephone service is available Monday through Friday.

(Link) 990 PDF from the IRS