by Fresh Start Tax | Feb 11, 2014 | Tax Help
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Eight Tax Savers for Parents
Your children may help you qualify for valuable tax benefits.
Here are eight tax benefits parents should look out for when filing your federal income tax returns this year.
1. Dependents.
In most cases, you can claim your child as a dependent.
This applies even if your child was born anytime in 2013.
2. Child Tax Credit.
You may be able to claim the Child Tax Credit for each of your qualifying children under the age of 17 at the end of 2013.
The maximum tax credit is $1,000 per child.
If you get less than the full amount of the credit, you may be eligible for the Additional Child Tax Credit.
3. Child and Dependent Care Credit.
You may be able to claim this credit if you paid someone to care for one or more qualifying persons.
Your dependent child or children under age 13 are among those who are qualified. You must have paid for care so you could work or look for work.
4. Earned Income Tax Credit.
If you worked but earned less than $51,567 last year, you may qualify for EITC.
If you have three qualifying children, you may get up to $6,044 as EITC when you file and claim it on your tax return.
5. Adoption Credit.
You may be able to claim a tax credit for certain expenses you paid to adopt a child.
6. Higher education credits.
If you paid for higher education for yourself or an immediate family member, you may qualify for either of two education tax credits.
Both the American Opportunity Credit and the Lifetime Learning Credit may reduce the amount of tax you owe.
If the American Opportunity Credit is more than the tax you owe, you could be eligible for a refund of up to $1,000.
7. Student loan interest.
You may be able to deduct interest you paid on a qualified student loan, even if you don’t itemize deductions on your tax return.
8. Self-employed health insurance deduction.
If you were self-employed and paid for health insurance, you may be able to deduct premiums you paid to cover your child under the Affordable Care Act.
It applies to children under age 27 at the end of the year, even if not your dependent.
IRS Top Tax Tips for Parents – Former IRS Agents, Tax Preparation Experts – Save
by Fresh Start Tax | Feb 3, 2014 | Tax Help
EITC – Earned Income Tax Credit – Former IRS Agents Tax Preparation
What is EITC, Earned Income Tax Credit?
EITC, Earned Income Tax Credit, is a benefit for working people who have low to moderate income.
A tax credit means more money in your pocket. It reduces the amount of tax you owe and may also give you a refund.
EITC is also called EIC or Earned Income Credit.
Who can claim the credit and if I qualify, how do I get it?
- To claim EITC on your tax return, you must meet all the following rules:
- You, your spouse (if you file a joint return), and all others listed on Schedule EIC, must have a Social Security number that is valid for employment
- You must have earned income from working for someone else or running or operating a farm or business
- Your filing status cannot be married filing separately
- You must be a U.S. citizen or resident alien all year, or a nonresident alien married to a U.S. citizen or resident alien and filing a joint return
- You cannot be a qualifying child of another person
- You cannot file Form 2555 or Form 2555 EZ (related to foreign earned income)
- You must meet the earned income, AGI and investment income limits (income limits change each year), see EITC Income Limits for the tax year amounts
You also must be:
- Have a qualifying child (see who is a qualifying child below)
- If you do not have a qualifying child, you must:
- be age 25 but under 65 at the end of the year,
- live in the United States for more than half the year, and
- not qualify as a dependent of another person.Although an estimated four out of five eligible workers and families get this key work incentive, one in five miss out on EITC.
That’s because either they don’t claim it when filing or they don’t file a tax return at all because their income is below the filing threshold.
One-third of the population eligible for EITC shifts each year as their personal circumstances, such as work status or family situation, change and can affect eligibility.
EITC – Earned Income Tax Credit – Former IRS Agents Tax Preparation – Affordable
by Fresh Start Tax | Feb 3, 2014 | Tax Help
The Internal Revenue Service today opened the 2014 filing season by highlighting a growing array of online services and encouraging taxpayers to check out a variety of tax benefits, such as the often-overlooked Earned Income Tax Credit.
Taxpayers have until Tuesday, April 15, 2014 to file their 2013 tax returns and pay any tax due.
Facts and Figures of Tax Returns
- The IRS expects to receive more than 148 million individual tax returns this year, and more than four out of five returns are now filed electronically.
- About three out of four filers typically get refunds, and the IRS issues more than nine in ten of these refunds in less than 21 days.
- Last year, taxpayers received an average refund of $2,744. E-file, when combined with direct deposit, is the fastest way to get a refund.
- More than three out of four refund recipients now choose direct deposit.
The IRS began accepting and processing individual tax returns today after updating tax forms and completing programming and testing of its systems. The IRS also has updated and strengthened its systems to help protect against refund fraud and identity theft. his annual updating process saw delays in October following the 16-day federal government closure.
EITC Awareness Day Highlighted
Although an estimated four out of five eligible workers and families get this key work incentive, one in five miss out on EITC.
That’s because either they don’t claim it when filing or they don’t file a tax return at all because their income is below the filing threshold.
One-third of the population eligible for EITC shifts each year as their personal circumstances, such as work status or family situation, change and can affect eligibility. “The IRS is working hard to educate people about EITC while also putting in place processes that identify and prevent improper payments.”
Aimed at individuals and families who made $51,567 or less last year, the EITC varies by income, family size and filing status.wing array of online and automated IRS services that can help taxpayers get the information they need to file their returns and get their refunds quickly.
Tele-Tax, for example, help taxpayers see if they qualify for various tax benefits, such as the Child Tax Credit and Additional Child Tax Credit for eligible families, the American Opportunity Tax Credit for parents and college students, the saver’s credit for low-and moderate-income workers saving for retirement and energy credits for homeowners making qualifying energy-saving home improvements.
Office in the Home
The automated IRS services can also help home-based businesses check out the new simplified option for claiming the home office deduction, a straightforward computation that allows eligible taxpayers to claim $5 per square foot, up to a maximum of $1,500, instead of filling out a 43-line form (Form 8829) with often complex calculations.
For taxpayers whose concern isn’t a refund, but rather, a tax bill they can’t pay, the Online Payment Agreement tool can help them determine whether they qualify for an installment agreement with the IRS.
And those whose tax obligation is even more serious, the Offer in Compromise Pre-Qualifier can help them determine if they qualify for an offer in compromise, an agreement with the IRS that settles their tax liability for less than the full amount owed.
Another useful year-round tool, the IRS Withholding Calculator, helps employees make sure the amount of income tax taken out of their pay is neither too high nor too low.
This tool can be particularly useful to taxpayers who, after filling out their tax returns, find that the refund or balance due was higher than expected.
IRS Filing Season 2014 – Tax Preparation By Former IRS Agent Managers
by Fresh Start Tax | Feb 3, 2014 | Tax Help
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Some Facts about IRS Audits
The Internal Revenue Service audits 1% of all tax returns.
The more money you make the higher chance of an IRS tax audit.
The IRS conducts over 359,000 field and office audits every year.
The IRS sends out over $1.1 million worth of mail correspondence audits each year.
Sales Tax Audits
Why Are Taxpayers Audited?
The State of Florida audits taxpayers to:
1. Enforce Florida tax laws uniformly.
2. Deter tax evasion.
3. Promote voluntary compliance.
4. Educate taxpayers.
While the State accepts most tax returns as filed, we audit some returns to verify accuracy and evaluate compliance.
Audits do not always result in the taxpayer owing additional tax, penalty or interest.
The auditor may adjust a credit carryover or correct distribution without assessing additional tax. The auditor may even determine that a refund is due.
How Are Taxpayers Selected for a Sales tax Audit?
The methods for selecting a business or individual to audit vary from tax to tax. Here are some examples of sources we use to identify a potential audit candidate:
- Internal Revenue Service information.
- Information sharing programs with other states and state agencies.
- Computer-based random selection.
- Analysis of Florida tax return information.
- Business publications, periodicals, journals, and directories.
IRS Information re: IRS Tax Audits – Minimum Requirements For Examination of Income
All examiners will consider gross income during the examination of all income tax returns.
Minimum income probes will be completed regardless of the type of return filed by the taxpayer.
The minimum income probes are designed as a set of analytical tests intended to determine whether the taxpayer accurately reported income.
If the taxpayer is under reporting income, the probes should result in the identification of at least a portion of the understatement.
The minimum income probes vary depending upon the type of return (non business or business) and the method of the examination (office audit or field examination).
Internet use and e-commerce activities will be audited as part of the minimum income probes for all business returns.
All minimum income probes will be completed regardless of whether or not the taxpayer maintains a double-entry set of books.
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by Fresh Start Tax | Feb 3, 2014 | Tax Help
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