Over nine hundred million dollars in tax refund money went unclaimed in one year. The Internal Revenue Service reported this notable statistic, and you may wonder how this could happen. There are two main circumstances that lead to unclaimed tax refunds.
You may end up creating an unclaimed tax refund situation if you have taxes withheld from your pay but earn less than needed for filing a refund. You will end up adding to the unclaimed refund pool if you choose not to file a tax refund. You should verify whether you qualify for an Earned Income Tax Credit, and the www.turbotax.com free edition can help you determine your eligibility.
The second reason for most cases of unclaimed tax refunds involves mailing errors. You may not receive tax filing confirmation if you have moved, changed your name, gotten divorced, or been effected by errors that originated with your post office or postal carrier.
There is no monetary penalty to pay if you do decide to claim your tax refund, but there is a time limit on how long you can wait prior to filing your tax return. You have a time limit of three years from when your tax refund was originally due, so you would have to request your 2011 tax refund by April 15th, 2014.
You can avoid an unclaimed refund scenario by filing your return on time. Filing as early as possible may be helpful as well.
Direct deposit is an ideal way to avoid an unclaimed refund scenario. Electronic deposits eliminate the potential for postal delivery errors, and you may get your refund if you choose direct deposit.
Filing your income tax return is an important financial activity. TurboTax has helped millions of people file their taxes, and you can learn about tax refunds by visiting www.turbotax.com.
On December 20, 2007, the IRS released a redesigned Form 990, Return of Organization Exempt from Income Tax, for tax year 2008 (to be filed in 2009 and later years). The new form incorporates comments and suggestions from the over 650 e-mails and letters received during the comment period, which closed on September 14, 2007.
Preparing and filing taxes are rarely activities most people look forward to. Whether you need to prepare an individual or business tax return, you may be looking for an easier way to simplify this process. While one option available is for you to prepare your tax return on your own, the fact is that many people will find the process easier to complete when they use either tax software or the services of an accountant. While both options are preferred by many over completing a tax return on your own, there are clear benefits associated with using the services of a tax accountant.
Finding All Deductions For most individuals and businesses, it is not enough to simply prepare and file a return. The goal also is to minimise the amount of taxes owed and even to maximize a refund. Tax software is designed to help taxpayers identify common tax deductions, but the fact is that you may qualify for additional deductions that are less common. In some cases, you may not be clear about if you qualify for certain deductions or not. Tax software may help you to identify some of these deductions, but you simply cannot beat the benefit associating with having a live professional assist you with the identification of deductions.
Getting Questions Answered Most tax software programs are designed to be user-friendly, and they have a helpful hints or frequently asked questions section that may assist you if you have questions. However, many questions that taxpayers have are unique. They may fall into what can be perceived as a gray area, or the situation may be unusual and may require expert assistance. The fact is that you need to file your return accurately to avoid penalties. Therefore, working with a live tax expert can be useful to you.
A Look Toward the Future Furthermore, a tax accountant can help you to plan for the future. When a tax accountant reviews your finances now, he or she may be able to identify different steps that you can take to minimize your tax liability next year or for several years in the future. You may be planning to purchase a new home, to buy office equipment or to make some other change, and there may be tax consequences associated with this. By working with a tax accountant, you will be able to better plan for the future and avoid paying more than necessary on your tax return.
As tax day approaches, one of the best steps that you can take to ensure that your tax return is filed accurately and on time and to ensure that your tax liability is minimized is to work with a professional tax accountant. The best tax accountant to use is one who is experienced and knowledgeable and who has the desire to communicate openly with you about your taxes. Take time today to locate a tax accountant to work with, and you can rest easy knowing that your tax return will receive the personal attention it deserves.
Individuals who wish to use a tax service may wish to try TurboTax 2013. This is the option that they may need to easily pay their taxes, and be able to get the tax help they can use. One of the items that the individuals can take advantage of is that they can use an earned income credit when they are filing their taxes. An earned income credit allows individual to get money back from child care expenses they may have paid over time. The Earned Income Tax Credit was designed to help low to moderate income people get a refund of some of the expenses they may have paid over the course of the year.
You can use TurboTax 2013 to try to get an EITC that will help to get the refund that may be needed. Make sure to get this program as part of a plan to get the tax credits that you may need. TurboTax 2013 is an option individuals can take advantage of and use. Some of the Things to know about this credit
Earned Income Tax Credit (Photo credit: LendingMemo)
Make sure that you understand the factors concerning the EITC. The IRS has guidelines set up to help taxpayers determine if they are eligible for the EITC credit. Those who have a qualifying child are likely to be eligible for the credit. The child in question needs to meet certain qualifications. They must be under age 19, be a full time student under age 24, or be permanently disabled. Your son or daughter, or qualifying foster child must pass the residency test.
Other things to be aware of when qualifying for the EITC credit is that you must have a valid social security number in order to file. You must also make sure that the spouse signs off on the credit if you are filing a joint return. Taxpayers must also fall between the ages of 25 and 65 in order to be Earned Income Tax Credit eligible. Income must be generally be earned from working for someone else, you may also be eligible for the credit if you have a small business or run a farm. It is also necessary to have lived in the United States for at least 6 months. Turbotax 2013 can help individuals figure their Earned Income Tax Credit. The alternative would be to have the IRS figure the credit when filing. Make sure you the individual, can find the help that is needed from TurboTax2013 to get the Earned Income Tax Credit.
According to experts from the nonprofit sector, charitable tax deduction laws will likely remain unscathed from Congress in the near future. However lawmakers are still dealing with several charitable tax break issues that expired in 2013 and there is uncertainty on whether such tax breaks for charities will continue to exist.
President Barack Obama has consistently tried to limit the amount of tax savings the rich get for itemized deductions and will likely mention this issue is his upcoming proposed budget. However individual adjustments in tax policy typically don’t stand a chance in getting passed unless they’re grouped together
Ron Wyden and Nancy Bass Wyden by David Shankbone (Photo credit: Wikipedia)
with other tax items. Experts say creating such a large tax bill likely won’t happen before midterm election in November.
Adding to the difficulty of altering charitable tax deduction policy is the probable change in Congress. Democrat of Montana and chairman of the Senate Finance Committee, Sen. Max Baucus, is soon leaving Washington to become the ambassador to China and his likely replacement, Sen. Ron Wyden, is a strong supporter of charitable deduction. Baucus was expected to pass a broad tax overhaul before his retirement at the end of the year, but now people think it’s unlikely to happen because Wyden is expected to work at a slower pace.
According to Andrew Schulz, executive vice president of Foundation Source (a group that advises private foundations), “There’s zero percent chance any significant tax reform will happen this year.” Others who work with charities and nonprofits feel the same way.
Steve Tyler, senior vice president for public policy at United Way Worldwide, says 1,000 United Way leaders will be “vigilant” when talking with lawmakers if charitable tax deductions are discussed when they’re in Washington in May.
Documenting Donations for 2014
As long as proper documentation is provided, both individuals and businesses can deduct donations from taxable income. It is always best to check with the Internal Revenue Service (IRS) if you’re wondering what documentation is required. The IRS has strict guidelines for submitting charitable contributions as a write-off, which is an expense that gets deducted from your taxable income. You can learn more about tax smart contributions here.
If you want a donation to be seen by the IRS as a write-off, you’ll need proper documentation. This can be a cancelled check, credit card statement, bank records, or a receipt. The receipt must have the charity’s name on it as well as the amount you donated.
If you plan on donating to a charity and wish to submit it to the IRS as a tax write-off, you need to make sure the charity you’re supporting is approved by the IRS. Charities approved by the IRS are usually those that offer some kind of relief or are associated with religious and educational organizations. In a lot of cases local volunteer organizations such as animal rescue groups are approved by the IRS.
However don’t assume you’ll receive a tax break from the IRS without checking to see if the charity is approved. Just because the IRS’ list of approved charities is long doesn’t mean the organization you’re donating to will be on it.
Brett Doubikin, a 43 year-old Morrow County contractor, received a phone message informing him that the IRS was investigating him. Fear made him return the call while he tried to remember if he missed something when he filed his taxes.
Internal Revenue Service (Photo credit: LendingMemo)
What Doubikin later realized is that the call was part of a sophisticated phone scam involving fake IRS employees who present fraudulent claims in order to get money from people with little or no tax knowledge. The charlatans posing as IRS employees are known to threaten people with either jail or deportation if these victims fail to deliver the declared debt amount. Part of these scammers’ scheme was to inform victims that their taxes were not paid, which must hence be settled through wire transfer or by using a pre-paid debit card. To make things appear legitimate, the callers use false IRS badge numbers, acquire the last four digits in the Social Security numbers of target victims, utilize technology that labels caller IDs as the IRS, and make follow-up calls as well as bogus emails.
The IRS has officially stated that this intricately structured phone scam was often directed at immigrants. A nationwide alert about the scam was already issued last fall by the IRS.
To help avoid this kind of scam when filing your 2014 taxes, there are free software downloads that will assist you in calculating your tax returns, recording your financial data, and checking it with updated tax laws and regulations. Turbo Tax 2013 does all these and more to help cover whatever unique situation you’re in. At $23.95, you get a basic fed and Efile download, a step-by-step guidance and a Deduction Maximizer to aid you in filing a 1040EZ or other simple tax return.
Taxes in 2014 are set to undergo various adjustments, affecting more than 40 tax provisions. The Revenue Procedure 2013-35, published on 18 November 2013, provides detailed information of each adjustment.
A tax rate of 39.6% will affect singles whose annual income exceeds $406,750 and married couples with joint returns exceeding $457,600. This is up from the current amounts of $400,000 and $450,000 respectively. The Revenue Procedure describes the rates that apply to other thresholds.
In terms of standard deductions for singles or married couples filing separate returns, the amount rises from $6,100 to $6,200. For married couples filing joint returns, it rises from $12,200 to $12,400. On the other hand, the standard deduction that applied for heads-of-households has risen from $8,950 to $9,100.
Both the personal exemption and the alternative minimum tax exemption will also rise. Couples who file jointly and have three or more qualifying children will qualify for a maximum earned credit of $6,143, which is up by $99 from the 2013 amount. Among the amounts that remain unchanged, include the annual exclusion for gifts, which stands at $14,000, and the annual dollar limit for contribution to an employer–sponsored healthcare FSA, standing at $2,500.
If you were unable to pay your taxes earlier in the year, you might have been dreading the October 15th deadline for your deadline extension. Now that the 15th has come and gone, you might realize that you still have not filed – and that major problems may soon occur. Your first impulse should be to file as quickly as possible.
English: Wooden File Cabinet with drawer open. Taken by me. (Photo credit: Wikipedia)
Luckily, even those who forget to file can still go through the process of filing taxes in 2013. Unfortunately, though, you will be without quite a few of the tools that you would normally use. Most of the web-based providers like TurboTax or TaxAct have shut down for the year as they prepare to transition from taxes 2013 to taxes 2014. E-filing has also been suspended in preparation for the 2014 tax season, meaning that you will not only have to prepare your taxes by hand (or with a desktop-based application), but you will actually have to send in the physical forms yourself.
Once you send in the forms, you will find yourself dealing with penalties. You will owe an additional five percent on top of any money you owe once the deadline passes, along with an additional five percent for each additional month that passes. If you fail to pay on time, you will owe .5% interest on your balance for each month that the balance goes unpaid, further increasing your debt. Added to all of this is a general 3% interest rate on the balance, which might leave you owing far more than you originally thought if you cannot file soon.