by admin | Mar 27, 2012 | IRS Tax Advice, Representation, Tax Returns, Uncategorized
After being an IRS Agent for over 10 years and in private practice for over 29 years I have found a consistency in tax preparation errors.
If you need quality income tax preparation call us today.
The same errors happen over and over. The following are tax tips that may help you file your tax return trouble free.
Common tax errors to avoid:
1. Social Security – Incorrect or missing Social Security numbers.
When you enter social security numbers for anyone listed on your tax return, be sure to enter them exactly as they appear on the Social Security cards. IRS will kick out an error letter or notice to you if they do not match.
2. Incorrect or misspelling of dependent’s last name.
When entering a dependent’s last name on your tax return, make sure to enter it exactly as it appears on their Social Security card. Once again, IRS computers are exact matches.
3. Filing status errors.
The most common mistakes. Choose the correct filing status for your situation. About 40% of all errors occur with these mistakes.
There are five filing statuses:
1. Single,
2. Married Filing Jointly,
3. Married Filing Separately,
4. Head of Household
5. Qualifying Widow(er) With Dependent Child.
4. Math errors are very common. When preparing paper returns, review all math for accuracy. If you file electronically the software does the math for you!
5. Computation errors. Electronic filing basically eliminates this.
Take your time. Have someone review the tax return. Many taxpayers make mistakes when figuring their taxable income, withholding and estimated tax payments, Earned Income Tax Credit, Standard Deduction for age 65 or over or blind, the taxable amount of Social Security benefits and the Child and Dependent Care Credit.
6. Incorrect bank account numbers for direct deposit. Bad Mistake!!!
Double check your bank routing and account numbers if you are using direct deposit for your refund.
7. Sign and date the return.
An unsigned tax return is like an unsigned check. Also, both spouses must sign a joint return. Both spouses should not only sign but fully review the tax return.
8. Incorrect adjusted gross income.
If you file electronically, you must sign the return electronically using a Personal Identification Number. To verify your identity, the software will prompt you to enter your Adjusted Gross Income from your originally filed 2010 federal income tax return or last year’s PIN if you e-filed. Taxpayers should not use an Adjusted Gross Income amount from an amended return, Form 1040X, or a math-error correction made by IRS.
by admin | Mar 19, 2012 | IRS Tax Advice, IRS Tax Problem, Tax Help, Tax News, Tax Settlements, Uncategorized
Tax Masters Bankruptcy – Help for Former Clients – 1-866-700-1040
Get real professional tax help or tax resolution from a “A” Rated Tax Firm with over 205 years of professional tax experience and over 60 years with the IRS in the local, district and regional offices of the IRS.
So what is the real story about Tax Masters – Deception, False Advertising, preying of the needs of false hope.
We see it so many times. I am the co-owner and founder of Fresh Start Tax L.L.C. About one half of all our incoming calls are from from taxpayers who have been ripped off by other tax firms claiming impossible of unachievable results.
I see it so many times it is sickening. Taxpayers have been ripped off for thousands of dollars from salespeople claiming to be IRS specialists. In reality these people are no more than hucksters or ripped off artists. Many of these taxpayers have lost everything including their savings and still owe the IRS a boat load of money.
Many of these taxpayers will have a bank levy, wage levy or wage garnishment placed on their wages or bank accounts because of the false and deceptive business practices of the likes of Tax Masters, J.K. Harris and the Tax Lady Roni Deutsche.
The claims Tax Masters were making were just to good to be true but desperate people bought into to this fraudulent advertising practice on settling for pennies on a dollar. While pennies on a dollars can happen you must have your case evaluated to even thinking about a tax debt settlement. There are specific rules for tax settlement. I should know, I was a former IRS Agents and Offer in Compromise specialist.
The Tax Masters television commercials featured CEO Patrick Cox, who claims his company’s staff of former IRS agents and tax professionals have helped countless thousands of taxpayers just like you.
The Tax Masters ad blitz has been a driving force in the company’s soaring corporate revenues. The company, which went public brought in $45.7 million in 2010, a three-fold increase in two years, according to filings with the Securities and Exchange Commission. This was all due to the voluminous advertising budget filled with false hope
Part of the Problem – On the Tax Masters website they were looking for salespeople and not true tax practitioners. There website posts included this verbiage, “Are you a talented closer ready to move into the next income bracket?” call us.
“Previous tax knowledge is not required,” stated the employment ad, which Tax Masters says has since been modified.
At the heart of the problem, says Attorney General Swanson, is a requirement that customers pay an upfront fee ranging between $2000 and $8000. for false promises of salespeople.
If you are looking for a professional tax firm to help with your IRS problem look for the following:
1. The BBB rating of the company
2. Talk directly to the person that will be working your case.
3. Ask for the credentials of the person working your case.
4. Find out how long the company has been in business
5. Find out how many IRS agents they have on staff.
If you are looking for a free tax consultation call us today and hear the truth. 1-866-700-1040
by steve | Mar 2, 2012 | IRS Tax Advice, IRS Tax Problem
If you are a Adoptive Parent you may find these IRS tax tips very helpful.
We are former IRS agents that can help and assist you in IRS tax filing and tax representation.
These tax tips are for our clients of Fresh Start Tax LLC.
Tax Tips for Adoptive Parents
If you have paid expenses to adopt an eligible child in 2011, you may be eligible to claim a tax credit of up to $13,360. Not a bad tax credit.
The expanded adoption credit.
The Affordable Care Act increased the amount of the credit and made it refundable, which means you can get the credit as a tax refund even after your tax liability has been reduced to zero. This can offer you a large tax refund.
For tax year 2011, you must file a paper tax return, Form 8839, Qualified Adoption Expenses, and attach documents supporting the adoption.
Taxpayers that are claiming the tax credit will still be able to use IRS Free File or other software to prepare their returns, but the returns must be printed and mailed to the IRS, along with all required documentation.
Documents can include a final adoption decree, placement agreement from an authorized agency, court documents or the State’s determination for special needs children. The documentation is an absolute must.
The Qualified Adoption expenses are reasonable and necessary expenses directly related to the legal adoption of the child. These expenses may include but are not limited adoption fees, court costs, attorney fees and necessary travel expenses.
The eligible child must be under 18 years old, or physically or mentally incapable of caring for himself or herself. Make sure your adoption qualifies for the tax credit
If your modified adjusted gross income is more than $185,210, your credit is reduced. If your modified AGI is $225,210 or more, you cannot take the credit.
Should you have any question regarding this credit or need professional tax prep call to hear more today.
by steve | Feb 27, 2012 | Income Tax Preparation, IRS Tax Advice
Fresh Start Tax LLC wants to keep all of our clients aware of different tax credits offered by the IRS. Here are some valuable tax tips regarding Education Credits.
Education Tax Credits can help pay higher education costs
Two Federal Tax Credits are available.
This may help you offset the costs of higher education for yourself or your dependents.
These are the American Opportunity Credit and the Lifetime Learning Credits.
To qualify for either tax credit, you must pay post secondary tuition and fees for yourself, your spouse or your dependent.
The tax credit may be claimed by either the parent or the student, but not both. If the student was claimed as a dependent, the student cannot file for the credit.
For each student, you may claim only one of the credits in a single tax year. You cannot claim the American Opportunity Credit to pay for part of your daughter’s tuition charges and then claim the Lifetime Learning Credit for $2,000 more of her school costs.
If you pay college expenses for two or more students in the same year, you can choose to take credits on a per-student, per-year basis.
You may claim the American Opportunity Credit, AOC, for your sophomore daughter and the Lifetime Learning Credit for your spouse’s graduate school tuition.
Here are some facts the IRS and Fresh Start Tax LLC wants you to know about these valuable education credits:
1. The American Opportunity Credit
a. The credit can be up to $2,500 per eligible student.
b. It is available for the first four years of post secondary education.
c. Forty percent of the credit is refundable, which means that you may be able to receive up to $1,000, even if you owe no taxes.
d. The student must be pursuing an undergraduate degree or other recognized educational credential.
e.The student must be enrolled at least half time for at least one academic period.
f. Qualified expenses include tuition and fees, coursed related books supplies and equipment.
The full credit is generally available to eligible taxpayers whose modified adjusted gross income is less than $80,000 or $160,000 for married couples filing a joint return.
2. Lifetime Learning Credit
a. The credit can be up to $2,000 per eligible student.
b. It is available for all years of post secondary education and for courses to acquire or improve job skills.
c. The maximum credited is limited to the amount of tax you must pay on your return.
d. The student does not need to be pursuing a degree or other recognized education credential.
e. Qualified expenses include tuition and fees, course related books, supplies and equipment.
f. The full credit is generally available to eligible taxpayers whose modified adjusted gross income is less than $60,000 or $120,000 for married couples filing a joint return.
g. If you don’t qualify for these education credits, you may qualify for the tuition and fees deduction, which can reduce the amount of your income subject to tax by up to $4,000. However, you cannot claim the tuition and fees tax deduction in the same year that you claim the American Opportunity Tax Credit or the Lifetime Learning Credit.
You must choose to either take the credit or the deduction and should consider which is more beneficial for you.
For professional tax help and to audit proof your tax return call Fresh Start Tax LLC today.
by steve | Feb 24, 2012 | IRS Tax Advice, Tax News
Early Distributions from Retirement Plans can have a tax impact so you should plan carefully because it can significantly impact your available income.
Many taxpayers may sometimes find themselves in situations when they need to withdraw money from their retirement plan early. What they may not realize is that that transaction may mean a tax impact when they file their return. This will hurt.
Therefore Tax Planning is important.
Here are some facts from the IRS about the tax implications of an early distribution from your retirement plan or pension plan.
1. Payments you receive from your Individual Retirement Arrangement before you reach age 59 ½ are generally considered early or premature distributions.
2. Early distributions are usually subject to an additional 10 percent tax. This is a killer!
3. Early distributions must also be reported to the IRS. The benefit provider will report this to the IRS.
4. Income distributions that roll over to another IRA or qualified retirement plan are not subject to the additional 10 percent tax. You have to complete the rollover within 60 days after the day you received the distribution.
5. The amount you roll over is generally taxed when your new plan makes a distribution to you or your beneficiary.
6. If you made nondeductible contributions to an IRA and later take early distributions from your IRA, the portion of the distribution attributable to those nondeductible contributions is not taxed.
7. If you received an early distribution from a Roth IRA, the distribution attributable to your prior contributions is not taxed.
8. If you received a distribution from any other qualified retirement plan, generally the entire distribution is taxable unless you made after-tax employee contributions to the plan.
9. There are many exceptions to the additional 10 percent early distribution tax, such as when the distributions are used for the purchase of a first home (up to $10,000), for certain medical or educational expenses, or if you are totally and permanently disabled.
Call us should you have any questions.
by steve | Feb 23, 2012 | Income Tax Preparation, IRS Tax Advice
Questions about Capital Gains come up every year at tax time.
Here are the top tax tips regarding Capital Gains for 2011.
This presentation is to aid and assist all our clients of Fresh Start Tax LLC.
Capital Gains and Losses from Tax Experts:
Capital Assets
Capital assets include a home, household furnishings and stocks and bonds held in a personal account. When you sell a capital asset, the difference between the amount you paid for the asset and its sales price is a capital gain or capital loss.It is the net equity or profit IRS is concerned about.
Facts from the IRS about how gains and losses can affect your Federal Income Tax Return or 1040.
1. Almost everything you own and use for personal purposes, pleasure or investment is a capital asset. Bet you did not know that!
2. When you sell a capital asset, the difference between the amount you sell it for and your basis is usually what you paid for it. That is called a capital gain or a capital loss for income tax purposes.
3. You the taxpayer must report all capital gains.
4. You may only deduct capital losses on investment property, not on personal-use property.
5. Capital gains and losses are classified as long-term or short-term. If you hold the property more than one year, your capital gain or loss is long-term. If you hold it one year or less, the gain or loss is short-term.
6. If you have long-term gains in excess of your long-term losses, the difference is normally a net capital gain. Subtract any short-term losses from the net capital gain to calculate the net capital gain you must report.
7. The tax rates that apply to net capital gain are generally lower than the tax rates that apply to other income. For 2011, the maximum capital gains rate for most taxpayers is 15 percent.
For lower-income individuals, the rate may be 0 percent on some or all of the net capital gain. Rates of 25 or 28 percent may apply to special types of net capital gain.
8. If your capital losses exceed your capital gains, you can deduct the excess on your tax return to reduce other income, such as wages, up to an annual limit of $3,000, or $1,500 if you are married filing separately.
9. If your total net capital loss is more than the yearly limit on capital loss deductions, you can carry over the unused part to the next year and treat it as if you incurred it in that next year. A Break!
10. This year 2012, a new form, Form 8949, Sales and Other Dispositions of Capital Assets, will be used to calculate capital gains and losses.
You should use IRS Form 8949 to list all capital gain and loss transactions. The subtotals from this form will then be carried over to Schedule D (Form 1040), where gain or loss will be calculated.
Should you have any question or need professional tax representation call us today.
