by steve | Feb 16, 2010 | Tax Help, Uncategorized
Tips from the IRS NEWSWIRE SERVICE. Fresh Start will always keep you informed regarding all new development regarding important tax issues.
Some taxpayers may have needed to take an early distribution from their retirement plan last year. The IRS wants individuals who took an early distribution to know that there can be a tax impact to tapping your retirement fund. Here are ten facts about early distributions.
Payments you receive from your Individual Retirement Arrangement before you reach age 59 ½ are generally considered early or premature distributions.
Early distributions are usually subject to an additional 10 percent tax.
Early distributions must also be reported to the IRS.
Distributions you rollover to another IRA or qualified retirement plan are not subject to the additional 10 percent tax. You must complete the rollover within 60 days after the day you received the distribution.
The amount you roll over is generally taxed when the new plan makes a distribution to you or your beneficiary.
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.
If you received an early distribution from a Roth IRA, the distribution attributable to your prior contributions is not taxed.
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.
There are several exceptions to the additional 10 percent early distribution tax, such as when the distributions are used for the purchase of a first home, for certain medical or educational expenses, or if you are disabled.
For more information about early distributions from retirement plans, the additional 10 percent tax and all the exceptions see IRS Publication 575, Pension and Annuity Income and Publication 590, Individual Retirement Arrangements (IRAs). Both publications are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
by steve | Feb 16, 2010 | Tax Help, Uncategorized
Fresh Start Tax like to keep our readers current on any and all news wire item from the IRS regarding relative issues. From today’s news wire, excellent information regarding Social Security
If you received Social Security benefits in 2009, you need to know whether or not these benefits are taxable. Here are seven facts the Internal Revenue Service wants you to know about Social Security benefits so you can determine whether or not they are taxable to you.
1. How much ? if any ? of your Social Security benefits are taxable depends on your total income and marital status.
2. Generally, if Social Security benefits were your only income for 2009, your benefits are not taxable and you probably do not need to file a federal income tax return.
3. If you received income from other sources, your benefits will not be taxed unless your modified adjusted gross income is more than the base amount for your filing status.
4. Your taxable benefits and modified adjusted gross income are figured on a worksheet in the Form 1040A or Form 1040 Instruction booklet.
5. You can do the following quick computation to determine whether some of your benefits may be taxable:
First, add one-half of the total Social Security benefits you received to all your other income, including any tax exempt interest and other exclusions from income.
Then, compare this total to the base amount for your filing status. If the total is more than your base amount, some of your benefits may be taxable.
6. The 2009 base amounts are:
$32,000 for married couples filing jointly.
$25,000 for single, head of household, qualifying widow/widower with a dependent child, or married individuals filing separately who did not live with their spouses at any time during the year.
$0 for married persons filing separately who lived together during the year.
7. For additional information on the tax ability of Social Security benefits, see IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits. Publication 915 is available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Should you have any questions, please fell free to email us today. Thanks
by steve | Feb 12, 2010 | Tax Help, Uncategorized
Fresh Start Tax always wants to keep you posted on the latest updates that are relative to our audience. this blog entry is taken from the NEWSWIRE site from UNCLE.
College can be very expensive. To help students and their parents, the IRS offers the following five ways to offset education costs.
The American Opportunity Credit This credit can help parents and students pay part of the cost of the first four years of college. The American Recovery and Reinvestment Act modifies the existing Hope Credit for tax years 2009 and 2010, making it available to a broader range of taxpayers. Eligible taxpayers may qualify for the maximum annual credit of $2,500 per student. Generally, 40 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.
The Hope Credit The credit can help students and parents pay part of the cost of the first two years of college. This credit generally applies to 2008 and earlier tax years. However, for tax year 2009 a special expanded Hope Credit of up to $3,600 may be claimed for a student attending college in a Midwestern disaster area as long as you do not claim an American Opportunity Tax Credit for any other student in 2009.
The Lifetime Learning Credit This credit can help pay for undergraduate, graduate and professional degree courses ? including courses to improve job skills ? regardless of the number of years in the program. Eligible taxpayers may qualify for up to $2,000 ? $4,000 if a student in a Midwestern disaster area ? per tax return.
Enhanced benefits for 529 college savings plans Certain computer technology purchases are now added to the list of college expenses that can be paid for by a qualified tuition program, commonly referred to as a 529 plan. For 2009 and 2010, the law expands the definition of qualified higher education expenses to include expenses for computer technology and equipment or Internet access and related services.
Tuition and fees deduction Students and their parents may be able to deduct qualified college tuition and related expenses of up to $4,000. This deduction is an adjustment to income, which means the deduction will reduce the amount of your income subject to tax. The Tuition and Fees Deduction may be beneficial to you if you do not qualify for the American opportunity, Hope, or lifetime learning credits.
You cannot claim the American Opportunity and the Hope and Lifetime Learning Credits for the same student in the same year. You also cannot claim any of the credits if you claim a tuition and fees deduction for the same student in the same year. To qualify for an education credit, you must pay post-secondary tuition and certain related expenses for yourself, your spouse or your dependent. The credit may be claimed by the parent or the student, but not by both. Students who are claimed as a dependent cannot claim the credit.
Should you have any questions, please feel free to email us. thanks
by steve | Feb 11, 2010 | Tax Help, Uncategorized
IRS WEBSITE HAS COME OUT WITH SOME INFORMATION ABOUT UNEMPLOYMENT BENIFITS. FACT FROM THEIR SITE.
Taxpayers who received unemployment benefits in 2009 are entitled to a special tax break when they file their 2009 federal tax returns. This tax break is part of the American Recovery and Reinvestment Act of 2009.
Here are five important facts the Internal Revenue Service wants you to know about your unemployment benefits.
Unemployment compensation generally includes any amounts received under the unemployment compensation laws of the United States or of a specific state. It includes state unemployment insurance benefits, railroad unemployment compensation benefits and benefits paid to you by a state or the District of Columbia from the Federal Unemployment Trust Fund. It does not include worker’s compensation.
Normally, unemployment benefits are taxable; however, under the Recovery Act, every person who receives unemployment benefits during 2009 is eligible to exclude the first $2,400 of these benefits when they file their federal tax return.
For a married couple, if each spouse received unemployment compensation then each is eligible to exclude the first $2,400 of benefits.
You should receive a Form 1099-G, Certain Government Payments, which shows the total unemployment compensation paid to you in 2009 in box 1.
You must subtract $2,400 from the amount in box 1 of Form 1099-G to figure how much of your unemployment compensation is taxable and must be reported on your federal tax return. Do not enter less than zero.
SHOULD YOU HAVE ANY QUESTIONS PLEASE CALL
by steve | Feb 10, 2010 | Tax Help, Uncategorized
Getting ready to file your tax return? Make sure you have all your documents before you start. You should receive a Form W-2, Wage and Tax Statement from each of your employers. Employers have until February 1, 2010 to send you a 2009 Form W-2 earnings statement. If you haven?t received your W-2, follow these four steps:
1. Contact your employer If you have not received your 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 the employer because of an incorrect or incomplete address. After contacting the employer, allow a reasonable amount of time for them to resend or to issue the W-2.
2. Contact the IRS If you do not receive your W-2 by February 16th, contact the IRS for assistance at 800-829-1040. When you call, you must provide your name, address, city and state, including zip code, Social Security number, phone number and have the following information:
Employer’s name, address, city and state, including zip code and phone number
Dates of employment
An estimate of the wages you earned, the federal income tax withheld, and when you worked for that employer during 2009. The estimate should be based on year-to-date information from your final pay stub or leave-and-earnings statement, if possible.
3. File your return You still must file your tax return or request an extension to file by April 15, even if you do not receive your Form W-2. If you have not received your Form W-2 by April 15th, and have completed steps 1 and 2, 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.
4. File a Form 1040X On occasion, you may receive your missing W-2 after you filed your return using Form 4852, and the information may be different from what you reported on your return. If this happens, 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).
This message is brought to you on behalf of the IRS.GOV The information is taken directly from their site. With more and more businesses belly up more people will not get there W-2’s. This is great information to have.
by steve | Feb 8, 2010 | Tax Help, Uncategorized
The Obama administration Feb. 1 released its fiscal year 2011 budget requests, asking for more than $12.6 billion for the Internal Revenue Service to implement programs to meet its key strategic goals.
The IRS budget request?an increase over Obama’s fiscal 2010 request for $12.147 billion?includes an allocation increase of $293 million to IRS’s enforcement program to continue work to close the tax gap, which the administration called an investment in a strong compliance program.
The administration requested $386.9 million for IRS’s business systems modernization program to finish the new taxpayer account database and maintain investment in electronic filing systems. Completion of the database will expedite refunds to 140 million individual taxpayers and will allow IRS to broaden its online services to manage growing taxpayer service demands, according to the budget.
The administration’s budget proposes an increase of more than $43 million to IRS’s taxpayer services account, providing more resources for ?high-quality phone service? and technological enhancements that will boost electronic filing capabilities by making more electronic forms available. Presumably, this will help address the pesky situation where the IRS is unable to even answer ?much less respond to?30% of the telephone calls it receives.
If only the people answering the telephones would be happy-priceless
