by Fresh Start Tax | Aug 21, 2012 | Tax News
Yes, IRS can help the process for FAFSA applications through the automated IRS system.
Many college or university bound students and their parents sometimes face last minute requests to complete or provide additional information for financial aid applications. We did and boy are they a mess. It takes hours to complete the forms and we never looked forward to FAFSA time.
The Internal Revenue intends to help by minimizing time spent ( thank God ) on the completion of the Department of Education’s Free Application for Federal Student Aid (FAFSA).
By using the IRS Data Retrieval Tool, applicants can automatically transfer required tax data from their federal tax returns directly to their FAFSA form.
This IRS tax tool is a free, easy and secure way to access and transfer tax return information onto the FAFSA form.
Using the IRS tool saves time, improves accuracy and may reduce the likelihood of the school’s financial aid office requesting that you verify the information.
Here are some tax tips on using the IRS DRT:
Eligibility Criteria To use the IRS DRT to complete their 2012 -2013 FAFSA form, taxpayers must:
1. have filed a federal 2011 tax return,
2. possess a valid Social Security Number,
3. have a Federal Student Aid PIN (individuals who don’t have a PIN will be given the option to apply for one through the FAFSA application process), and
4. have not changed marital status since Dec. 31, 2011.
Exceptions to the rule:
If any of the following conditions apply to the student or parents, the IRS Data Retrieval Tool cannot be used for the 2012 FAFSA application:
a. an amended tax return was filed for 2011,
b. no federal tax return was filed for 2011,
c. the federal tax filing status on the 2011 return is married filing separately or
d. a Puerto Rican or other foreign tax return has been filed.
Applicants who cannot use the IRS DRT to meet college requests for verification, may need to obtain an official transcript from the IRS.
Tax transcripts are not available until the IRS has processed the related tax return. To order tax return or tax account transcripts, visit IRS.gov and select “Order a Transcript” or call the toll-free Transcript line at 1-800-908-9946.
by Fresh Start Tax | Aug 20, 2012 | Tax Help, Tax News
Charitable contributions can play an important role in decreasing your tax liability.Know the tax law before taking these deductions.
It is important you know the tax law to get the very most out of the possible tax savings for charitable contributions.
Contributing money and property are ways that you can support a charitable cause, and in order for your donation to be tax-deductible, certain conditions must be met.
Top Tax Tips:
1. Tax-exempt status.
Tax contributions must be made to qualified charitable organizations to be deductible. Ask the charity about its tax-exempt status, or look for it on IRS.gov in the Exempt Organizations Select Check, an online search tool that allows users to select an exempt organization and check certain information about its federal tax status as well as information about tax forms an organization may file that are available for public review.
This particular search tool can also be used to find which charities have had their exempt status automatically revoked.
2. Itemizing charitable contributions.
IMPORTANT _ Charitable contributions are deductible only if you itemize deductions using Form 1040, Schedule A.
3. Fair market value. ( tax audit potential )
Cash contributions and the fair market value of most property you donate to a qualified organization are usually deductible. Special rules apply to several types of donated property, including cars, boats, clothing and household items.
If you receive something in return for your donation, such as merchandise, goods, services, admission to a charity banquet or sporting event only the amount exceeding the fair market value of the benefit received can be deducted.
4. Records to keep for tax deductions.
You should keep good records of any donation you make, regardless of the amount. All cash contributions must be documented to be deductible even donations of small amounts.
A cancelled check, bank or credit card statement, payroll deduction record or a written statement from the charity that includes the charity’s name, contribution date and amount usually fulfill this record-keeping requirement. IRS can go back three years on most tax returns.
5. Large donations.
All contributions valued at $250 and above require additional documentation to be deductible. For these, you should receive a written statement from the charity acknowledging your donation.
The statement should specify the amount of cash donated and/or provide a description and fair market value of the property donated.
It should also say whether the charity provided any goods or services in exchange for your donation. If you donate non-cash items valued at $500 or more, you must also complete a Form 8283, Non-cash Charitable Contributions, and attach the form to your return.
If you claim a contribution of non-cash property worth more than $5,000, you typically must obtain a property appraisal and attach it to your return along with Form 8283.
6. Timing.
If you pledge to donate to a qualified charity, keep in mind that for most taxpayers contributions are only deductible in the tax year they are actually made. For example, if you pledged $500 in September but paid the charity just $200 by Dec. 31 of that same year, only $200 of the pledged amount may qualify as tax-deductible for that tax year.
End-of-year donations by check or credit card usually qualify as tax-deductible for that tax year, even though you may not pay the credit card bill or have your bank account debited until after Dec. 31.
Bottom line.
Support of a qualified charitable organization may provide you with a money-saving tax deduction, but conditions do apply.
For more information, see IRS Publication 526, Charitable Contributions, and for information on determining value, refer to Publication 561, Determining the Value of Donated Property.
These publications are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
by Fresh Start Tax | Jul 21, 2012 | Tax News
Job searches can bring you may tax deductions you may be completely unaware of.
Knowing the Tax Law can save you valuable tax dollars.
Job search expenses can be tax deductible if you know them.
What you should know about deducting costs related to your job search:
1. To qualify for a job search deduction, your expenses must be spent on a job search in your current occupationn. Highlight this if not, this could be a potential IRS audit issue. You may not deduct expenses you incur while looking for a job in a new occupation.
2. You can deduct employment and outplacement agency fees you pay while looking for a job in your present occupation. Keep all receipts.
If your employer pays you back in a later year for employment agency fees, you must include the amount you received in your gross income, up to the amount of your tax benefit in the earlier year.
3. You can deduct amounts you spend for preparing and mailing copies of your resume to prospective employers as long as you are looking for a new job in your present occupation.
4. If you travel to look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area to which you traveled.Keep a travel log.
You may only deduct the travel expenses if the trip is primarily to look for a new job. The amount of time you spend on personal activity unrelated to your job search compared to the amount of time you spend looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job.
5. You cannot deduct your job search expenses if there was a substantial break between the end of your last job and the time you begin looking for a new one. Another key hot point with the IRS. What is substantial break?, up to the IRS
6. You cannot deduct job search expenses if you are looking for a job for the first time.
7. The amount of job search expenses that you can claim is limited.
To determine your deduction, use Schedule A, Itemized Deductions.
Job search expenses are claimed as a miscellaneous itemized deduction and the total of all miscellaneous deductions must be more than two percent of your adjusted gross income.
by Fresh Start Tax | Jul 16, 2012 | Tax News
Just how stupid can you possibly be.
It is amazing to me these NFL players thought they were not going to get caught. Stupid is a stupid does
Three former NFL players – Louis Gachelin,William Joseph, and Michael Bennett are in trouble with the IRS for tax fraud. Next time they play football is when they face the prison guards.
Gachelin, 31, of Miramar, pleaded guilty in federal court in Miami to theft of government money and aggravated identity theft.
U.S. District Judge Robert Scola Jr. ordered Louis Gachelin be detained until his sentencing on Sept. 21. 2012. The maximum punishment for the crime is 12 years in prison.
Louis Gachelin was caught in an FBI sting that targeted a financial crime in South Florida.
Undercover FBI agents and the IRS set up a financial services store in North Miami, wired for audio and video surveillance, and made several arrests of people charged with cashing fraudulently obtained refund checks.
The IRS and the Justice Departments are very serious about the volume and frequency of these tax crimes and have dedicated special groups to enforce criminal justice.
South Florida is a high target area for these crimes. The two most prominent people arrested were former first-round draft picks, and former Oakland Raiders players William Joseph and Michael Bennett.
Both men have pleaded not guilty to the criminal charges.
Gachelin admitted that he brought several federal tax refund checks, in several people’s names, to cash at the store in March and April. Come on dude, your on camera.
Prosecutors said that Gachelin agreed he would receive 60 percent and the store would keep 40 percent of the value of the checks.
This is the game being played.
Both the tax preparer and a check cashing store are usually both involved. In some cases, the names and social security numbers are paid for. The person obtaining the names and social security number sell these leads. Going price, anywhere from $25- $100 . The names are given to the preparer and the checks given to a third party to cash. Many times the store will get a kick back percentage for cashing the checks. In the end, they all go down.
Gachelin was not authorized to cash the checks but provided the undercover agents with handwritten names, dates of birth and Social Security numbers, prosecutors said.
by Fresh Start Tax | Jul 16, 2012 | Tax News
There are certain requirements for Residents and Non-Residents Aliens when it comes to travel.
The Document you need.
You will need a tax clearance document, commonly called a “Departure Permit” or “Sailing Permit” from the Internal Revenue Service.
The following IRS Tax Rules apply for both residents and non-residents.
Tax Clearances – Residents, Non-Residents Aliens – Traveling Abroad
If you are either a resident or a nonresident alien departing the United States, you will usually have to show that you have complied with the U.S. income tax laws before departing from the United States.
You can do this by obtaining a tax clearance document, commonly called a “Departure Permit” or “Sailing Permit” from the Internal Revenue Service.
Exemptions.
Certain foreign diplomats, employees of foreign governments, students, trainees and exchange visitors do not need a departure permit.
Non Resident Aliens.
Nonresident aliens who did not have taxable income for the past year and who do not have taxable income for the tax year up to and including the date of departure, may use Form 2063 (PDF), U.S. Departing Alien Income Tax Statement, to apply for a departure permit. Nonresident aliens who have any U.S. taxable income must complete Form 1040-C (PDF), U.S. Departing Alien Income Tax Return, and pay your U.S. tax liability as shown on the Form 1040-C in order to receive a departure permit.
In certain cases, you may furnish a bond guaranteeing payment of tax, but you must pay your tax liability when your final income tax return is due.
Any tax you pay counts as a payment on your final return that you must file after the end of your tax year.
Resident Aliens.
If you are a resident alien and you did not have taxable income for the prior year and do not have taxable income for the tax year up to and including the date of departure, or you are a resident alien who is leaving only temporarily, use Form 2063 (PDF) to apply for a departure permit.
Resident aliens who have taxable income may still use Form 2063 to apply for a departure permit if the IRS is satisfied that your departure will not hinder the collection of tax.
If you are a resident alien leaving the United States with no definite plans to return for the year, you will have to complete Form 1040-C (PDF), and pay your tax liability as shown on the Form 1040-C in order to get a departure permit. In certain cases, you may furnish a bond guaranteeing payment of tax, but you must pay your tax liability when your final income tax return is due.
Any tax you pay counts as a payment on your final return that you must file after the end of your tax year.
IMPORTANT APPLICATION PROCESS – When and How to Apply for a Departure Permit
You must obtain your departure permit before you leave the United States.
You should apply for the departure permit no earlier than 30 days before you plan to leave, but at least two weeks in advance of your departure.
Where to get the permit.
To get your departure permit, visit your nearest Taxpayer Assistance Center (walk-in IRS office). If you are married to an alien who is leaving the country with you, both of you must go to the IRS office.
For information on the location of the Taxpayer Assistance Center (walk-in IRS office) nearest to you, call 800-829-1040, or visit www.irs.gov. or call our offices.
You must bring with you all the following records and information for the current year that apply to you:
1.A valid passport and your alien registration card or visa,
2.Copies of the last two years’ U.S. income tax returns with proof of payment of any balances due,
3.Proof of any payments of estimated tax for the past year and this year,
4.Substantiation of deductions for business expenses and itemized deductions claimed,
5.Documentation for dependents claimed.
6. A statement from each employer showing the wages paid and tax withheld from January 1st to the date of departure (For this statement you can use a payroll deduction slip for your last paycheck if it shows this information),
7.If you are self-employed, you must bring a profit and loss statement for the current year up to the date of departure,
8.Documents showing any gain or loss from the sale of personal and/or real property, including capital assets and merchandise,
9.Documents concerning scholarships or fellowship grants,
10.Documents indicating that you qualify for any special tax treaty benefits,
11.Document verifying your date of departure from the United States, such as an airline ticket, and
12.Document verifying your U.S. taxpayer identification number, such as a social security card or an IRS issued CP 565 showing your individual taxpayer identification (ITIN) number.
by Fresh Start Tax | Jul 3, 2012 | Expatriate Tax, FBAR, Representation, Tax Lawyer, Tax News, Tax Returns
We are Ex- Pat and FBAR tax specialists. We are tax experts. As Former IRS agents we taught Tax Law at the IRS.
We have successful handled a great deal of both Ex- Pat and FBAR cases.
You can call today for a no cost professional confidential consultation.
We are comprised of Board Certified Tax Attorneys, Lawyers, CPA’s and Former IRS Agents.
We have over 205 years of professional tax experience and over 60 years of direct work experience with the IRS. We worked in the local, district and regional offices of the Internal Revenue Service.
Do you need to file a tax return for the IRS?
Under the new health care plan IRS is coming. The current tax appropriations under the new law is about to let the IRS loose.
Among the various new requirements of the IRS that are contained in IRC 877 and 877A, individuals that renounced their U.S. citizenship or terminated their long-term resident status for tax purposes after June 3, 2004 are required to certify to the IRS that they have satisfied all federal tax requirements for the 5 years prior to expatriation.
If all your federal tax requirements have not been satisfied for the 5 years prior to expatriation, even if the individual does not meet the monetary thresholds in IRC 877 or 877A, the individual taxpayer will be subject to the IRC 877 and 877A expatriation tax provisions.
Individual(s) that have expatriated should file all tax returns that are due, regardless of whether or not full payment can be made with the return.
Depending on an individual’s circumstances, a taxpayer filing late may qualify for a payment plan.
All payment plans to the IRS require continued compliance with all filing and payment responsibilities after the plan is approved and throughout the course of the plan.
IRS imposes a $10,000 penalty may be imposed for failure to file Form 8854 when required.
IRS is sending notices to expatriates that have not complied with the Form 8854 requirements, including the imposition of the $10,000 penalty where appropriate.
IRS is acquiring lists through tax treaties with and through various countries.
Failure to file or not including all the information required by the form or including incorrect information will result in large penalties.
FBAR REQUIREMENTS
If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR).
The FBAR is required because foreign financial institutions may not be subject to the same reporting requirements as domestic financial institutions. You should call us if you have questions.
Federal Tax Investigators with the IRS use FBARs to help identify or trace funds used for illicit purposes or to identify unreported income maintained or generated abroad.
It is important to know that the IRS is receiving $500 million dollars in funding under the new health care plan, yes, the new health care plan.
A lot of that budget will be at the expense of Ex-Pats and FBAR
We are EXPAT, FBAR Tax Specialists. Comprised of Tax Attorneys, Lawyers and Former IRS. We are affordable, experienced and will tell you the truth about your case.
