Missing Your Form W-2?

Missing Your Form W-2?

IRS TAX TIP 2007-22 You should receive a Form W-2, Wage and Tax Statement, from each of your employers for use in preparing your federal tax return. Employers have until January 31, 2007 to furnish a record of 2006 earnings statement either electronically or in paper form. Allow two weeks for 2006 earning statements mailed from employers via United States Postal Service (USPS). If you do not receive your Form W-2, contact your employer to inquire if and when the W-2 was mailed. If it was mailed, it may have been returned to your employer because of an incorrect or incomplete address. After contacting your employer, allow a reasonable amount of time for your employer to resend or to issue the W-2. If you still do not receive your W-2 by February 14th, contact the IRS for assistance at 800-829-1040. When you call, have the following information: Employer's name, address, city, and state, including zip code. Your name, address, city and state, including zip code, and Social Security number If you misplaced your W-2, contact your employer. Your employer can replace the lost form with a “reissued statement.” Be aware that your employer is allowed to charge you a fee for providing you with a new W-2. You still must file your tax return on time even if you do not receive your Form W-2. If you do not receive the missing information in time to file, you may file you may use Form 4852, Substitute for Form W-2, Wage and Tax Statement. Attach Form 4852 to the return, estimating income and withholding taxes as accurately as possible. There may be a delay in any refund due while the information is verified. If you receive a Form W-2 or W-2C (corrected form) after you have filed your return using Form 4852, and the information differs from what you reported on your return, you must amend your return by filing a Form 1040X, Amended U.S. Individual Income Tax Return. Form 4852, Form 1040X, and instructions are available on the IRS Web site, IRS.gov or by calling 800-TAX-FORM (800-829-3676). Links: Form 4852, Substitute for Form W-2, Wage and Tax Statement (PDF 29K) Form 1040X, Amended U.S. Individual Income Tax Return (PDF 123K) Instructions for Form 1040X (PDF 43K)

Use EFTPS to Pay Your Taxes Electronically

Use EFTPS to Pay Your Taxes Electronically

IRS TAX TIP 2007-21 If you are going to owe taxes when you file your federal tax return, consider paying through the Electronic Federal Tax Payment System. EFTPS is a fast, easy, convenient and secure service provided free by the Department of Treasury. EFTPS is available to both individual and business taxpayers. With EFTPS, you can pay all your federal tax payments through the internet or by telephone. These payments include corporate, excise and employment taxes as well as your 1040 quarterly estimated tax payments. EFTPS is convenient and flexible. It allows individual taxpayers to schedule payments up to 365 days—and businesses up to 120 days—in advance of the payment due date. With the ability to schedule payments in advance, you can avoid missing deadlines and incurring penalties. Scheduled payments can be cancelled up to 48 hours before the scheduled payment due date. EFTPS is available around-the clock. The electronic payment system and a live Customer Service representative are available 24 hours a day, 7 days a week. Other features include an immediate, printable acknowledgement number which acts as a receipt for your payment. After you enroll in EFTPS, you will receive a confirmation package by mail. In a separate mailing you will receive an EFTPS Personal Identification Number (PIN) with instructions for activating your enrollment. Employers who apply for and receive a new Employer Identification Number and have a federal tax obligation are automatically enrolled in EFTPS Express Enrollment to make their Federal Tax Deposits. For more information you can visit IRS.gov. Click on the e-file logo and look for "Electronic Payment Options" and the EFTPS logo. To enroll, visit EFTPS.gov or call EFTPS Customer Service at 800-555-4477. Links: EFTPS Other electronic payment options

Check Out Free File

Check Out Free File

IRS TAX TIP 2007-20 If you have access to a computer and the Internet you may be eligible to prepare and file your 2006 federal tax return electronically—for free. Free File is an easy way to file your taxes and get your refund in half the time. The IRS and the Free File Alliance, a private-sector consortium of tax software companies, continue their partnership to help taxpayers electronically prepare and file their federal tax returns for free. Free File made its debut during the 2003 filing season as a way to provide free services to moderate and low-income taxpayers. For the 2007 filing season 95 million taxpayers will be eligible for these free tax services. Taxpayers access Free File through the IRS Web site at IRS.gov. Each company sets its own criteria for free usage. The criteria varies but often is based on income, state residency and age. Filing electronically is fast, accurate and secure. Last year more than half of all taxpayers filed their tax returns electronically including 3.9 million who used Free File through the IRS website. The benefits of using Free File are identical to those of e-filing, which include: Reduced tax return preparation time Faster refunds Accuracy of return Acknowledgement of return receipt For more information on Free File, check out the IRS Web site at IRS.gov. Link: Free File

Receive Your Refund Faster with Direct Deposit

Receive Your Refund Faster with Direct Deposit

IRS TAX TIP 2007-19 Want your refund faster? Have it deposited directly into your bank account. More taxpayers are choosing direct deposit as the way to receive their federal tax refunds. You can also electronically direct your refund to multiple accounts. With the new “split refund” option, taxpayers can divide their refunds among as many as three checking or savings accounts and three different U.S. financial institutions. The split refund option, using Form 8888, is also available for paper returns. Last year, about 56.7 million people had their tax refunds deposited directly into their bank accounts. It’s a secure and convenient way to get your money in your pocket faster. • Security. The payment is secure — there is no check to get lost. Each year thousands of refund checks are returned by the US Post Office to the IRS as undeliverable mail. Direct deposit eliminates undeliverable mail and is also the best way to guard against having a tax refund stolen. • Convenience. There’s no special trip to the bank to deposit a check! To request direct deposit, follow the instructions for “Refund” on your tax return. Want an even faster refund? Try e-file! Taxpayers who file electronically get their refunds in about half the time as those who file paper returns. A word of caution — some financial institutions do not allow a joint refund to be deposited into an individual account. Check with your bank or other financial institution to make sure your direct deposit will be accepted. Also, make sure you have the correct nine-digit routing number and your account number when selecting direct deposit. For more information about direct deposit of your tax refund and the split refund option, check the instructions for your tax form. This and other helpful tips are available in IRS Publication 17, Your Federal Income Tax. To get a copy, visit the Forms and Publications section of the IRS Web site, IRS.gov, or call 800-TAX-FORM (800-829-3676). Links: E-file Publication 17, Your Federal Income Tax (PDF 2,085K) 1040 Central

E-file - A Smart Way to do Your Taxes

E-file - A Smart Way to do Your Taxes

IRS TAX TIP 2007-18 Every year, more taxpayers discover the benefits of filing their tax return electronically. Whether you use a professional tax preparer authorized by the IRS or do it yourself on a home computer, there are many reasons to consider e-filing your tax return this year. • Fast. No more last minute trips to the Post Office - just hit Send! • Accurate. The electronic filing program checks for errors and necessary information, increasing the accuracy of your return and reducing the need for correspondence with the IRS to clarify errors or omissions. • Easy. The computer software leads you step-by-step. You can usually file a state tax return at the same time you electronically file your federal return. • Quicker Refunds. Generally, when you file electronically, your refund will be issued in about half the time it would take if you filed a paper return. Those who choose direct deposit will get their refund in even less time. • Peace of mind. Once the return is accepted for processing, the IRS electronically acknowledges receipt of the return. • Payment options. With electronic filing, you can file your return early but wait to pay any balance due by the April deadline. You can also pay electronically, using a credit card, electronic funds withdrawal or, in some cases, the Electronic Federal Tax Payment System. • Request your Telephone Excise Tax Refund. E-file can be used to request this refund. The IRS is again offering eligible taxpayers the opportunity to electronically prepare and file their tax returns for free through the Free File Alliance, a partnership between the IRS and private-sector software companies. For information on taxpayer eligibility, access the Free File Web page on the IRS Web site at IRS.gov. For more information on e-filing, check the IRS Web site at IRS.gov. You will also find a withholding calculator and worksheet, along with Form W-4, Employee’s Withholding Allowance Certificate, on the Web site. You may also get Form W-4 from your employer or by calling the IRS at 800-TAX-FORM (800-829-3676). Links: Telephone Excise Tax Public Service Announcement -Uncle Sam- E-file Free File Form W-4, Employee's Withholding Allowance Certificate (PDF 31K) Withholding calculator Electronic Federal Tax Payment System

What to do if You Haven't Filed Your 2005 Return

What to do if You Haven't Filed Your 2005 Return

IRS TAX TIP 2007-17 The failure to file a federal tax return can be costly — whether you end up owing more or missing out on a refund. There are several reasons taxpayers don’t file their taxes. Perhaps you didn’t know you were required to file. Maybe, you just kept putting it off and simply forgot. Whatever the reason, it’s best to file your return as soon as possible. If you need help, even with a late return, the IRS is ready to assist you. Here are some things to consider: • Failure to File penalty. If you owe taxes, a delay in filing may result in a "failure to file" penalty, also known as the “late filing” penalty, and interest charges. The longer you delay, the larger these charges grow. • Losing your Refund. There is no penalty for failure to file if you are due a refund. However, you cannot obtain a refund without filing a tax return. If you wait too long to file, you may risk losing the refund altogether. The deadline for claiming refunds is three years after the return due date. For example, the last day for claiming a refund for your 2003 tax return will be April 17, 2007. • EITC. Individuals who are entitled to the Earned Income Tax Credit must file their return to claim the credit even if they are not otherwise required to file. Whether or not you must file a tax return will depend upon a number of factors, including your filing status, age, and gross income. For more information on how to file a tax return for a prior year, visit the IRS Web site at IRS.gov, call the IRS Tax Help Line for Individuals at 800-829-1040 or visit your local IRS office. Links: Earned Income Tax Credit Previous Years' Forms

Tips for Recently Married or Divorced Taxpayers

Tips for Recently Married or Divorced Taxpayers

IRS TAX TIP 2007-16 Newlyweds and the recently divorced should ensure the name on their tax return matches the name registered with the Social Security Administration. A mismatch could unexpectedly increase a tax bill or reduce the size of any refund. • For recently married taxpayers, the tax scenario begins when the bride says "I do." If she takes her husband's last name, but doesn't tell the SSA about the name change, a complication may result. If the couple files a joint tax return with her new name, the IRS computers will not be able to match the new name with the Social Security Number. • After a divorce, a woman who had taken her husband’s name and made that change known to the SSA should contact the SSA if she reassumes a previous name. It's easy to inform the SSA of a name change by filing Form SS-5 at a local SSA office. It usually takes two weeks to have the change verified. The form is available on the agency's Web site, www.socialsecurity.gov, by calling 800-772-1213 and at local offices. The SSA Web site provides the addresses of local offices. Generally, taxpayers must provide SSNs for each dependent claimed on the tax return. For adopted children without SSNs, the parents can apply for an adoption taxpayer identification number, or ATIN, by filing Form W-7A with the IRS. The ATIN is used in place of the SSN on the tax return. The form is available on the IRS Web site, IRS.gov, or by calling 800-TAX-FORM (800-829-3676). Links: Form SS-5, Application for a Social Security Card Social Security Administration Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions (PDF 42K)

Moving Soon? Let the IRS Know

Moving Soon? Let the IRS Know

IRS TAX TIP 2007-15 If you changed your home or business address, notify the IRS to ensure that you receive any refunds or correspondence. While the IRS uses the Postal Service’s change of address files to update taxpayer addresses, notifying the IRS directly is still a good idea. There are several ways to do this. • On your tax return: You may correct the address legibly on the mailing label that comes with your tax package or write the new address in the appropriate boxes on your tax return when you file. • Form 8822: You may use Form 8822, Change of Address, to submit an address change at any time during the year. • Verbal Notification: If an IRS employee contacts you about your account, you may verbally provide a change of address. • Written Notification: Write to the IRS center where you file your return and provide your new address. The mailing addresses for the IRS centers are in the tax instruction booklet. In order to process your address change, you will need to provide your full name, old and new addresses, your social security number or employer identification number, and signatures. If you filed a joint return, you should provide the same information for both spouses. If you filed a joint return and have since established separate residences, you should each notify the IRS of your new addresses. In addition to notifying the IRS directly you should notify the U.S. Postal Service. You may file a change of address with your local post office in person or via the internet at www.usps.com. The USPS-United States Official Change of Address Form via the website is safe and secured. It's a good idea to notify your employer of your new address so that you can get your W-2 forms on time. If you change your address after filing your return, don't forget to notify the post office at your old address so your mail can be forwarded. You should also notify the IRS if you make estimated tax payments and you change your address during the year. You should mail a completed Form 8822, Change of Address, or write the IRS center where you file your return. You can continue to use your old pre-printed payment vouchers until the IRS sends you new ones. Do not correct the address on the old voucher. You can download Form 8822, Change of Address at the IRS Web site, IRS.gov, or order by calling 800-TAX-FORM (800-829-3676). Links: Form 8822, Change of Address (PDF 60K) Tax Topic 157, Change of Address — How to Notify IRS

Long-Distance Telephone Excise Tax Refund

Long-Distance Telephone Excise Tax Refund

IRS TAX TIP 2007-14 You may be eligible for a one-time tax refund! This one-time refund of previously collected federal telephone excise taxes may be requested on your 2006 federal income tax return. Anyone who paid long-distance excise taxes on landline, cell phone, Voice over Internet Protocol (VoIP), or bundled service that was billed for the period after Feb 28, 2003 and before Aug 1, 2006 is eligible for this refund. (Bundled service is local and long-distance service provided under a plan that does not separately list the charge for local service.) You can request a refund of the actual federal excise tax you paid based upon your telephone bills for this period. Or you can request the standard refund amount ranging from $30-$60 based upon the number of exemptions you claim on your individual income tax return. Choosing the standard amount is optional. Using this option is the easiest way to get your refund and avoid gathering 41 months of old phone records. By choosing the standard amount you will only need to fill out one line on your tax return. The standard amount is based on actual telephone usage data and reflects the long-distance phone tax paid by similarly sized families or households. Choosing to request the actual amount paid may be more beneficial for some taxpayers. To request a refund based upon the actual amount you paid, you must determine the amounts paid based on your phone bills. Figure the refund on Form 8913 and attach this form to your 2006 income tax return. If you are not normally required to file a tax return, there is a new form (Form 1040EZ-T) that you can use to request this refund. Form 1040EZ-T can be mailed to the IRS or it can be prepared and filed electronically at no cost by using Free File at IRS.gov. Businesses and tax-exempt organizations are also eligible for the telephone excise tax refund. These organizations must use Form 8913, Credit for Federal Telephone Excise Tax Paid. Businesses and tax-exempt organizations may report the actual amount of refundable phone taxes they paid for the 41-month billing period from March 2003 through July 2006. Or they may use a formula established to estimate the refund. Businesses should attach Form 8913 to their regular 2006 income tax returns. Tax-exempt organizations must attach it to Form 990-T. For more information as well as answers to the most commonly asked questions, go to the IRS Web site at IRS.gov and select the link for the Telephone Excise Tax Refund. Links: Telephone Excise Tax Refund Telephone Excise Tax Refund Public Service Announcement- Uncle Sam

Quick and Easy Access to IRS Forms and Publications

Quick and Easy Access to IRS Forms and Publications

IRS TAX TIP 2007-13 The Internal Revenue Service has many forms and free publications on a wide variety of topics to help you understand and meet tax filing requirements. If you need IRS materials try one of these easy options: Internet: You can access forms and publications on the IRS website 24 hours a day, 7 days a week, at IRS.gov. Phone: Call 800-TAX-FORM (800-829-3676) to order current year forms, instructions and publications and prior year forms and instructions. You should receive your order within 10 days. Walk-in: During the tax-filing season, many libraries and post offices offer free tax forms to taxpayers. Some libraries also have copies of commonly-requested publications. Braille materials are also available. Many large grocery stores, copy centers, and office supply stores have forms you can photocopy or print from a CD. Mail: Send your order for tax forms and publications to National Distribution Center, P.O. Box 8903, Bloomington, IL 61702-8903. You should receive your products within 10 days after we receive your order. Links: Publication 910, Guide to Free Tax Services (PDF 636K) Publication 2053A, Quick and Easy Access to IRS Tax Help and Forms (PDF 40K) Order Publication 1796, Federal Tax Products on CD-ROM, from NTIS — the National Technical Information Service. State tax forms

How to Get a Copy of Your Tax Return Information

How to Get a Copy of Your Tax Return Information

IRS TAX TIP 2007-12 There are two easy and convenient options for obtaining copies of your federal tax return information — tax return transcripts and tax account transcripts — by phone or by mail. A tax return transcript shows most line items from the tax return (Form 1040, 1040A or 1040EZ) as it was originally filed, including any accompanying forms and schedules. It does not reflect any changes you, your representative or the IRS made after the return was filed. In many cases, a return transcript will meet the requirements of lending institutions such as those offering mortgages and student loans. A tax account transcript shows any later adjustments either you or the IRS made after the tax return was filed. This transcript shows basic data, including marital status, type of return filed, adjusted gross income and taxable income. The IRS does not charge a fee for transcripts, which are available for the current and three prior calendar years. Allow two weeks for delivery. To request either transcript: • Phone: Call 800-829-1040 and follow the prompts in the recorded message • Mail: Complete IRS Form 4506-T, Request for Transcript of Tax Return. If you need a photocopy of a previously processed tax return and attachments, complete Form 4506, Request for Copy of Tax Form, and mail it to the IRS address listed on the form for your area. There is a fee of $39.00 for each tax period requested. Copies are generally available for the current and past 6 years. Forms 4506-T and 4506 can be found on the IRS Web site at IRS.gov or by calling the IRS forms and publications order line at 800-TAX-FORM (800-829-3676). Links: Form 4506-T, Request for Transcript of Tax Return (PDF 45.3K) Form 4506, Request for Copy of Tax Form (PDF 42.3K)

Tax Information Available in Spanish - Información Tributaria en Español

Tax Information Available in Spanish - Información Tributaria en Español

IRS TAX TIP 2007-11 If you need federal tax information, the IRS provides a wide range of free Spanish-language products and services. El IRS en Español at IRS.GOV: Our Spanish webpage (IRS.gov/Espanol) offers tax information for individuals and small businesses. For individuals, the webpage contains forms, publications and brochures that provide detailed tax information. Interactive applications are also available to assist you in determining eligibility for the Earned Income Tax Credit, calculating withholding, and learning the status of your refund. The EITC Assistant (Crédito por Ingreso del Trabajo (EITC) - ¿Debo Solicitarlo?) helps you accurately determine your eligibility for EITC. The Withholding Calculator (Calculadora Para La Retención de Impuestos) helps you ensure that you do not have too much or too little income tax withheld from your pay. New this filing season is the link to Where’s My Refund? (Donde esta Mi Reembolso?)an application that allows you to determine when your refund will be sent to you. Businesses can access forms, publications and other tax information by clicking on the Small Business link (Recursos Para Pequenas Impresas). Toll-Free Telephone Assistance is available on pre-recorded hotlines and from Spanish-speaking IRS representatives. The TeleTax line at 800-829-4477 has recorded messages in Spanish that are available around the clock, covering more than 100 tax topics. The Refund Hotline provides information in Spanish at 800-829-1954. You will need to know your filing status and the exact whole-dollar amount of the expected refund in order to learn your refund status. For further assistance you can also talk with a Spanish-speaking IRS representative by calling the toll-free customer service line at 800-829-1040. Frequently requested publications available in Spanish: Publication 1(SP), Your Rights as a Taxpayer, Derechos del Contribuyente, and Publication 579(SP), How to Prepare the Federal Tax Return, Cómo Preparar su Declaración de Impuesto Federal. New online this year: Publication 4445, Spanish Practitioner Toolkit, and Publication 4636, Opening the Door to the Spanish-speaking Customer, Abriéndole la Puerta al Cliente de Habla Hispana. Also available in Spanish are educational audio CDs covering basic tax responsibilities and a DVD entitled “Novela de los Impuestos Federales”, which realistically portrays an immigrant’s journey to understand his responsibility. For more information check IRS.gov/Espanol. Links: El IRS en Espanol IRS Services and Products Provided in Spanish/Espanol Publication 1SP, Derechos del Contribuyente (Your Rights as a Taxpayer) (PDF 26K)

IRS Publication 17 — Free Tax Guide for Individuals

IRS Publication 17 — Free Tax Guide for Individuals

IRS TAX TIP 2007-10 Are you facing a lot of different tax questions this year? IRS experts have pulled together an overview of common tax issues in one convenient place — Publication 17, Your Federal Income Tax. This updated publication, available on the IRS Web site, IRS.gov, contains a vast array of helpful information for individual taxpayers. From stock sales to student loans, this nearly 300-page publication holds the answers to many of your questions: Need help deciphering the mysteries of the Roth IRA? Try Chapter 17 for retirement accounts. Do you have a new child in the house? See Chapter 34 for the Child Tax Credit. Are you selling stock for the first time? Check Chapter 16 for capital gains. If you’re unloading losers, capital losses are there, too. Do you need to report the profit on your home sale? See Chapter 15 for some good news. Generally, you only need to report the sale of your home if your gain is more than $250,000 ($500,000 if married filing a joint return). And the best part about Publication 17? It’s free. To get a copy, visit the IRS Web site at IRS.gov or call 800-TAX-FORM (800-829-3676). Links: Publication 17, Your Federal Income Tax Publication 17, Your Federal Income Tax (PDF 2085K)

IRS Has Free Publications on Every Topic You Need

IRS Has Free Publications on Every Topic You Need

IRS TAX TIP 2007-09 The IRS has a free publication that answers any tax question you have. Publications on a variety of tax-related topics are available by phone or the Internet at IRS.gov. From students to seniors, first-time home buyers to landlords…everyone can find useful information in IRS forms and publications. To find what you’re looking for, follow any one of these easy steps: Access the IRS Web site. Click on the Forms and Publications resource page to find what you need. There’s a search feature you can use if you know the topic but not the number of the form or publication. Read Publication 910. The Guide to Free Tax Services identifies the many IRS tax materials and services available. You’ll also find information about accessing tax materials, filing options, tax publications, tax education and assistance programs. Call Toll-free. If you know the name or number of the form or publication you need, call the toll-free Forms and Publications telephone line at 1-800-TAX-FORM (1-800-829-3676) to place your order. If you still can’t find the information you need, visit IRS.gov or call the IRS toll-free customer service line at 1-800-829-1040. Link: Forms and Publications

1040 Central — One Click Away

1040 Central — One Click Away

IRS TAX TIP 2007-08 Don’t wait in line, go on-line. The IRS Web site is home to a great resource for answers to tax questions that arise during the filing season. Access 1040 Central at IRS.gov under the “Individuals” tab and discover user-friendly tools that will make completing your 2006 tax return quick and easy. No matter which form you use, 1040 Central has the links you’ll need to file your tax year 2006 federal income tax return: Filing Options. 1040 Central links you to information about IRS e-file and Free File. Join the millions of people who already file their tax returns electronically. IRS e-file is the easiest and most accurate way to file and the fastest way to get your refund. You can even split your refund under among up to three accounts with Direct Deposit. Check on your refund. Track your refund by clicking on the “Where’s My Refund?” link on 1040 Central. Tax law changes. 1040 Central highlights changes in the tax law that directly affect taxpayers Current News. Access the latest IRS News Releases, Tax Tips and customer alerts. Forms and Publications. 1040 Central also has quick links to the most commonly used the tax forms and all other tax forms, instructions and publications you may need. Access convenient tools. Determine if the Alternative Minimum Tax (AMT) might apply to you. Calculate the proper amount of income tax that should be withheld from your paychecks in 2007. Details about important tax credits. Find information about special tax credits like the Earned Income Tax Credit. Answers to important questions. 1040 Central includes Frequently Asked Questions on a broad range of tax issues. Links: 1040 Central Where’s My Refund?

Sales Tax, Higher Education, Educator Expense Deductions

Sales Tax, Higher Education, Educator Expense Deductions

IRS TAX TIP 2007-07 You may be able to take advantage of certain tax breaks enacted in the final days of 2006. Claiming deductions for state and local sales tax, higher education tuition and fees, and educator expenses will require special handling if you file a paper income tax return for 2006. IRS E-file and Free File tax software is being updated to include the provisions of the new tax law. E-file software automatically places your tax information in the correct locations on the return; so you will not have to worry about making any special notations on your e-filed return in order to claim these deductions. But if you choose to file a paper income tax return you must use Form 1040 rather than Form 1040A. Because the tax forms were printed before the new law was signed, there will not be separate lines for these deductions and you will have to follow a few special instructions. State and Local General Sales Tax Deduction: The deduction for state and local general sales taxes can be claimed on Schedule A (Form 1040), line 5, “State and local income taxes.” Enter "ST" on the dotted line to the left of line 5 to indicate you are claiming the general sales tax deduction instead of the deduction for state and local income tax. Higher Education Tuition and Fees Deduction: The deduction for tuition and fees can be claimed on Form 1040, line 35, “Domestic production activities deduction.” Enter "T" in the space to the left of that line entry if claiming the tuition and fees deduction, or "B" if claiming both a deduction for domestic production activities and the deduction for tuition and fees. For those entering "B," taxpayers must attach a breakdown showing the amounts claimed for each deduction. Educator Expense Adjustment to Income: Teachers and other educators (including classroom aides, counselors, and principals) can deduct as much as $250 that they spent to purchase classroom supplies last year. The deduction for educator expenses can be claimed on Form 1040, line 23, “Archer MSA Deduction.” Enter "E" on the dotted line to the left of that line entry if claiming educator expenses, or "B" if claiming both an Archer MSA deduction and the deduction for educator expenses on Form 1040. If entering "B," taxpayers must attach a breakdown showing the amounts claimed for each deduction. For more information about these and other tax law changes visit the IRS Web site at IRS.gov. For detailed information about the sales tax deduction consult IRS Publication 600. Links: Recently Enacted Tax Law Extends State Sales Tax Deduction Special Steps Needed for Paper 1040 Filers to Claim Late Tax Changes State and local sales tax deduction on Schedule A, line 5 Higher education tuition and fees deduction on Form 1040, line 35 Educator expense deduction on Form 1040, line 23 IRS Publication 600 (PDF 328.3K) What's Hot in Tax Forms and Publications

Advice for Choosing a Tax Return Preparer

Advice for Choosing a Tax Return Preparer

IRS TAX TIP 2007-06 Taxpayers who pay someone to do their taxes should choose a preparer wisely. If you choose to use a paid tax preparer, it is important that you find a qualified tax professional. Taxpayers are ultimately responsible for everything on their return even when it’s prepared by someone else The most reputable preparers will request to see your records and receipts and will ask you multiple questions to determine your total income and your qualifications for expenses, deductions, and other items. By doing so, they have your best interest in mind and are trying to help you avoid penalties, interest, or additional taxes that could result from later IRS contacts. While most tax return preparers are professional and honest, taxpayers can use the following tips to choose a preparer who will offer the best service for their tax preparation needs. Ask about service fees. Avoid preparers who claim they can obtain larger refunds than other preparers, or those who guarantee results or base fees on a percentage of the amount of the refund. Plan Ahead. Choose a preparer you will be able to contact after the return is filed and one that will be responsive to your needs. Get References. Ask questions and get references from clients who have used the tax professional before. Were they satisfied with the service received? Research. Check to see if the preparer has any questionable history with the Better Business Bureau, the state’s board of accountancy for CPAs or the state’s bar association for attorneys. Find out if the preparer belongs to a professional organization that requires its members to pursue continuing education and also holds them accountable to a code of ethics. Determine if the preparer’s credentials meet your needs. Are they an Enrolled Agent, Certified Public Accountant or Tax Attorney? Only attorneys, CPAs and enrolled agents can represent taxpayers before the IRS in all matters including audits, collection actions and appeals. Other return preparers may represent taxpayers only in audits regarding a return they signed as a preparer. Report suspected tax fraud and abusive tax preparers to the IRS on Form 3949-A, Information Referral, or by sending a letter to Internal Revenue Service, Fresno, CA 93888. Download Form 3949-A from IRS.gov or order by mail at 1-800-829-3676. Links: Form 3949-A Information Referral (PDF 94K) Where Do You Report Suspected Fraud Activity?

Should You Itemize?

Should You Itemize?

IRS TAX TIP 2007-05 Whether to itemize deductions on your tax return depends on how much you spent on certain expenses last year. Money paid for medical care, mortgage interest, taxes, charitable contributions, casualty losses, and miscellaneous deductions can reduce your taxes. If the total amount spent on those categories is more than the standard deduction, you can usually benefit by itemizing. The standard deduction amounts are based on your filing status and are subject to inflation adjustments each year. For 2006, they are: Single $5,150 Married Filing Jointly $10,300 Head of Household $7,550 Married Filing Separately $5,150 Some taxpayers have different standard deductions. The standard deduction is more for taxpayers age 65 or older and for those who are blind. It is generally less for those who can be claimed as a dependent on some other taxpayer’s return. Limited itemized deductions. Your itemized deductions may be limited if your adjusted gross income is more than $150,500 or $75,250 for Married Filing Separately. This limit applies to all itemized deductions except medical and dental expenses, casualty and theft losses, gambling losses, and investment interest. Stipulations for Married Filing Separately. When a married couple files separate returns and one spouse itemizes deductions, the other spouse must also itemize and cannot claim the standard deduction. Some taxpayers are not eligible for the standard deduction. They include nonresident aliens, dual-status aliens, and individuals who file returns for periods of less than 12 months. Forms to use. To itemize your deductions, use Form 1040, U.S. Individual Income Tax Return, and Schedule A, Itemized Deductions. Links: Publication 17, Your Federal Income Tax (PDF 2.3MB) Instructions for Schedule A, Itemized Deductions (PDF 77K)

Choose the Simplest Federal Tax Form for Your Needs

Choose the Simplest Federal Tax Form for Your Needs

IRS TAX TIP 2007-04 The three forms used for filing individual federal income tax returns are Form 1040EZ, Form 1040A, and Form 1040. If you are filing a federal income tax return on paper, use the simplest form you can. Using the simplest allowable form will reduce the chance of an error that may cost you money or delay the processing of your return. 1040EZ You may qualify to use Form 1040EZ, the simplest form, if: • Your taxable income is below $100,000 • Your filing status is Single or Married Filing Jointly • You are under age 65 • You are not claiming any dependents • Your interest income is $1,500 or less 1040A You may be able to use Form 1040A if: • Your taxable income is below $100,000 • You have capital gain distributions • You claim certain tax credits • You claim deductions for IRA contributions or student loan interest 1040 If you cannot use either a 1040EZ or 1040A, you probably need to use Form 1040. You must file form 1040 if: • Your taxable income is $100,000 or more • You claim itemized deductions • You are reporting self-employment income • You are reporting income from sale of property • You are claiming the educator expense or higher education tuition and fees Choosing the correct tax form could mean money in your pocket. Check your tax instructions carefully. Publication 17, Your Federal Income Tax (For Individuals), is a helpful guide to preparing your federal tax forms. It is available on the IRS Web site at IRS.gov or by calling 1-800-TAX-FORM (1-800-829-3676). . Links: Form 1040EZ, Individual Income Tax Return (PDF 105K ) Form 1040A, Individual Income Tax Return (PDF 138K) Form 1040, Individual Income Tax Return (PDF 181K) Publication 17, Your Federal Income Tax Publication 17, Your Federal Income Tax (PDF 2.3MB)

Choose Your Correct Filing Status

Choose Your Correct Filing Status

IRS TAX TIP 2007-03 Your federal tax filing status is based on your marital and family situation. It is an important factor in determining whether you must file a return, your standard deduction and your correct amount of tax. Your marital status on the last day of the year determines your status for the entire year. If more than one filing status applies to you, you may choose the one that gives you the lowest tax obligation. There are five filing status options: 1. Single. Generally, if you are unmarried, divorced or legally separated according to your state law, your filing status is Single. 2. Married Filing Jointly. If you are married, you and your spouse may file a joint return. If your spouse died during the year and you did not remarry, you may still file a joint return with that spouse for the year of death. 3. Married Filing Separately. Married taxpayers may elect to file separate returns. 4. Head of Household. You must be unmarried and paid more than half the cost of maintaining a home for you and a qualifying person. 5. Qualifying Widow(er) with Dependent Child. If your spouse died during 2004 or 2005, you have a qualifying child and meet certain other conditions; you may be able to choose this filing status. For more information about filing status see publication 501, Exemptions, Standard Deduction, and Filing Information available on the IRS website at IRS.gov or by calling 1-800-TAXFORM (1-800-829-3676).

Should You File a Tax Return?

Should You File a Tax Return?

IRS TAX TIP 2007-02 You must file a tax return if your income is above a certain level. The amount varies depending on filing status, age and the type of income you receive. For example, a married couple under age 65 generally is not required to file until their joint income reaches $16,900. However self-employed individuals generally must file a tax return if their net income from self employment exceeds $400. Check the “individuals” section of the IRS Web site at IRS.gov or consult the instructions for form 1040, 1040A or 1040EZ for specific details that may affect your need to file a tax return with IRS this year. Even if you do not have to file, you should file to get money back if Federal Income Tax was withheld from your pay, or you qualify for any of the following: • Earned Income Tax Credit. The Earned Income Tax Credit is a federal income tax credit for eligible low-income workers. The credit reduces the amount of tax an individual owes, and may be returned in the form of a refund. • Telephone Tax Refund. The telephone tax refund is a one-time payment available on your 2006 federal income tax return, designed to refund previously collected long-distance federal excise taxes. It is available to anyone who paid long-distance taxes on landline, cell phone or Voice over Internet Protocol (VoIP) service. • Additional Child Tax Credit. This credit may be available to you if you have three or more qualifying children or if you have one or two qualifying children and earned income that exceeds $11,300. The Additional Child Tax Credit may give you a refund even if you do not owe any tax. • Health Coverage Tax Credit. Limited to certain individuals who are receiving certain Trade Adjustment Assistance, Alternative Trade Adjustment Assistance, or pension benefit payments from the Pension Benefit Guaranty Corporation. For more information about filing requirements and your eligibility to receive tax credits, visit the IRS Web site at IRS.gov. Links: Forms and Publications Earned Income Tax Credit Telephone Tax Refund

Seven Ways to Get a Jump Start on Your Taxes

Seven Ways to Get a Jump Start on Your Taxes

IRS Tax Tip 2007-01; January 2, 2007 Earlier is better when it comes to working on your taxes. Taxpayers are encouraged to get a head start on tax preparation, especially since early filers avoid the last minute rush and get their refunds sooner. Here are seven easy ways to get a good jump on your taxes long before the April deadline is here: 1. Gather your records in advance. Make sure you have all the records you need, including W-2s and 1099s. Don’t forget to save a copy for your files. 2. Get the right forms. They’re available around the clock on the IRS Web site, IRS.gov. 3. Take your time. Don’t forget to leave room for a coffee break when filling out your tax return as rushing can mean making a mistake. 4. Double-check your math and verify all Social Security numbers. These are among the most common errors found on tax returns. Taking care will reduce your chance of hearing from the IRS and speed up your refund. 5. Get the fastest refund. When you file early, you receive your refund faster. When you choose direct deposit, you receive your refund sooner than waiting for a check. 6. E-filing is easy. E-filing catches math problems, provides confirmation your return has been received and gives you a faster refund. 7. Don’t panic. If you have a problem or a question, remember the IRS is there to help. Try the IRS Web site at IRS.gov or call the IRS customer service number at 1-800-829-1040. Links: Forms and Publications E-filing 1040 Central