• If you are late on filing your taxes, or haven’t filed your prior year taxes, you are not alone.
• Thousands of people neglect to file tax returns in time. If you have not filed for the past 5 years ie.  2004, 2005, 2006, 2007 or 2008 taxes, you will still be able to file your prior year returns this year.
• The IRS allows you to file your prior year taxes providing your taxes are current through 2009.
• For example- If you didn’t file your tax return for income earned in 2007. The original deadline for that was April 15th, 2008. To be eligible for a refund you must file your 2008 tax return by April 15th, 2010.

To file a prior year tax return you would need to find the prior years tax forms. Unfortunately this is not very easy to find, even on the irs site. However there is some relief. A few tax websites are now offering preparation of prior year taxes online!

Preparing Your Prior Year Taxes Online

• Filing your prior year taxes online is easy. You do not need to locate prior year tax forms or go to a tax preparer and pay hundreds of dollars.
• Secondly, when you file your prior year taxes online, you get an immediate confirmation from the IRS.
• You can file your back taxes from past years with minimal effort using online tax sites. In fact there are only a couple of tax websites which can do your prior year taxes online.

• Employers are required to mail out the W2s for their employees by Jan 31st.
• It is likely that some people will not get the W2 in time due to various reasons - lost in mail, company closed down etc.
• Here are a few tips you can use if you did not receive your W2 after the second week in February.
• First call the employer and ask them to send you a replacement W2. If the employer does not respond, or if the employer has shut down you can contact the IRS.
• Call the IRS at 1-800-829-1040. The IRS will contact the employer on your behalf and request the missing form.
• IRS will also send you a Form 4852 (PDF), Substitute for Form W-2 or Form 1099-R.
• You can also estimate your W2 based on paychecks and you can report this as ‘income not reported on a W2′. Usually the last paycheck of the year has Year to date  (YTD) information eg. YTD Gross, YTD Federal tax etc.

Get a Preview of Your Tax Refund Use an Online Tax Refund Calculator

W2 Not received

Once you get your W2 from your employer. Most people would like to get a quick estimate of the Tax Refund. It would take several hours to calculate your tax refund if you were to do it with pen and paper.

However

Or, will you end up owing money to the IRS. If you knew in advance, you could plan for it.

Tax Refund Calculator

Is there a quick way to do a quick calculation of  your tax refund situation in less than 5 minutes ?

Yes. There is.

Its called a Tax Refund Calculator. Its a powerful litle tool that you can use to get an immediate estimate of your taxes.

Not only can you use it to calculate your tax refund, but you can also use it to estimate next years taxes, so you can plan on increasing your W4 exemptions and increase or decrease your take home pay.

Punch in some easy numbers and facts like your income, dependents and other basic info, hit the calculate button, and presto, you have an estimate of your tax refund. No personal information is required.

Try the Tax Refund Calculator for Free!

By Sandor Lenner

The Making Work Pay Credit has substantial impact on Americans and is targeted towards lower and middle income taxpayers. This credit is one of many tax changes resulting from the American Recovery and Reinvestment Act of 2009. According to a report from the Tax Inspector General for the Tax Administration dated November 27, 2009, the Making Work Pay Credit is expected to impact 116 million taxpayers.

Basically the credit was designed to provide tax relief for working people. Although the credit is technically claimed by taxpayers when they file their 2009 and 2010 tax returns, most taxpayers have already received the benefit of this credit by reduced payroll withholdings (and larger net paychecks) that went into effect during 2009. Unlike last year’s stimulus payment taxpayers did not receive a check. Taxpayers received this credit almost immediately, through a reduction in taxpayer’s payroll withholdings. Furthermore, this credit is also computed and reflected in the taxpayer’s 2009 tax return. The credit is basically $400 for single taxpayers and $800 for married couples filing joint returns. It is calculated as the lesser of 6.2% of the taxpayers earned income or $400 for single taxpayers and $800 for married couples filing a joint return.

Credit limitations - Income taxpayers with higher incomes are not eligible for the credit. This credit is reduced by 2% of a single individual’s modified adjusted gross income that exceeds $75,000. For married couples filing jointly, the threshold amount is $150,000. The Making Work Pay tax credit, is also subject to a reduction by the amount of any Economic Recovery Payment($250 per eligible recipient of Social Security, Supplemental Security Income, Railroad Retirement or Veteran’s benefits) or Special Credit for Certain Government Retirees($250 per eligible federal or state retiree) that you may have received.

Who can benefit from the credit? The credit is applicable only for taxpayers who have earned income. This means taxpayers must have been gainfully employed and received taxable compensation from wages, salaries and tips. Net earnings from self-employment is considered earned income.

In addition, earned income does not include the following:

• Pension and annuity payments
• Non-taxable compensation
• Parsonage allowance

The following individuals are not entitled to the credit:

• Tax filers without valid Social Security numbers
• Taxpayers who could be claimed as another taxpayer’s dependent
• Nonresident aliens
• Estates and trusts

You may have a potential problem when filing your 2009 tax returns, if you had two jobs during the year and both employers reduced your withholdings. As a result of having improper withholdings from two jobs, you may receive a smaller tax refund or you may have to pay taxes as a result of the reduced withholding that was deducted during the year. Since most employers applied the new withholding tables assuming the income from that employer was the only source of the taxpayer’s income. In this connection, insufficient withholding may result of up to $400 per employer in excess of one for taxpayers who do not file jointly, or $800 per employer in excess of one for joint filers. A potential problem, could occur for taxpayers who had other income in addition to their W-2 wages. The other income could put you into the total or partial phase-out category of the credit, and could result in under-withholding of up to $400 ($800 for joint filers). And finally, this is a new tax credit and may be an easy for taxpayers who prepare their own taxes to miss.

How to report to the Internal Revenue Service ? If you receive less than the full amount of the anticipated credit through decreased withholding, then you may be entitled to the full credit on your return. For 2009, taxpayers are required to use Schedule M to report the tax credit. If you use Form 1040EZ instead of schedule M, there is a worksheet on page 2 of the Form 1040EZ that allows you to compute the credit amount.

To learn more about how we can help you prepare your income tax returns, please visit http://www.sl-cpa.net/form1040taxes.php and register in our secured portal for the 2009 tax season and you will lock into our special pre tax season 1040 pricing, a monthly tax and accounting newsletter and over 50 financial web based calculators at no additional charge.

Sandor Lenner,CPA/MBA has over 35 years of accounting experience and is also a Certified QuickBooks ProAdvisor.He works part-time with Susan Missal Lenner, P.A. http://www.sl-cpa.net

Article Source: http://EzineArticles.com/?expert=Sandor_Lenner

]]> http://www.tax-easy.com/what-is-making-work-pay-credit/feed http://www.tax-easy.com/making-work-pay-tax-credit-another-form-to-fill http://www.tax-easy.com/making-work-pay-tax-credit-another-form-to-fill#comments Tue, 02 Feb 2010 15:30:51 +0000 admin http://www.tax-easy.com/?p=1290 The    “Making Work Pay credit”   was part of the American Recovery and Reinvestment Act whereby working taxpayers could get up to a $400 benefit. In addition,  retirees could also get up to a $250 tax benefit. Its important to report for this credit on your 2009 tax return or you will essentially be giving it back.  Read more about this credit on the IRS wesbite.

The good news is, if you use a  TaxPreparation software it should fill in the form appropriately.

Here’s a checklist to help in tax preparation. Pick those categories that apply to you and get the information available organized to save time when preparing your income tax return.  Print a report of your financial transactions for the tax year if you maintain your data in a personal finance software program. This will help as you gather all the information needed.

Your Personal Information

• Your personal information like social security numbers - yours, your spouse’s and dependents.
• Copy of the IRS notice announcing the amount of your advance child tax credit payment and amount you received.
• Child care costs with checks, invoices, provider name and provider’s tax ID and SSN
• Education Costs: tuition receipts for post high school education, Form 1098-T.
• Any adoption costs including legal fees, transportation and any other costs. Also SSN or ID number of adopted child/children.

Your Income Tax Information

Income from jobs :Forms W-2 for all employers for whom you and your spouse worked during the year . If you worked in multiple states, you might get additional W2 copies containing the state tax witheld.

• Investment income : Form 1099-INT, Form 1099-DIV, Form 1099-B, confirmation slips or brokers’ statements for all stocks, etc., that you sold in the tax year, Schedule(s) K-1 (Form 1065), Schedule(s) K-1 (Form 1120S), income from foreign investments, Income from stock option exercises and sales with Form 1099-B for proceeds from stock sales
• Local and state tax refunds, Form 1099-G.
• Statements for alimony received.
• Business or Farming Income : Books/accounting records for your business, or Invoices, Bank statements, Cancelled checks for expenses, Payroll records  along with Invoices for purchases of machinery, equipment, furniture, Logs or records listing vehicle mileage and Inventory records if any.
• For home business : Square footage of home office area and home, rent paid if rented, Form 1098 for Mortgage interest, property tax payments, Home owners insurance payments, invoices for repairs and maintenance on house.
• Form 1099-R for payments from IRAs or retirement plans, Deposit receipts and contribution records to IRAs, the most-recently filed Form 8606.
• Rental property income : Form 1099-MISC or other records for rental income, Form 1098, Property tax payments, prior years record of suspended rental losses, any other expenses.
• Form 1099-G or  unemployment check stubs and deposit records
• Form SSA-1099
• Income from sales of property. Bill of sale, escrow statement, closing statement or other records. Invoices receipts etc to show cost of the sold property. Invoices etc for improvements made to the property
• Miscellaneous incomes like jury duty pay records, Form(s) W-2G, receipts for all gambling purchases, Form 1099-MISC, Form 1099-MSA, Scholarship records, director’s fees receipts for money received for serving on a corporate board of directors.

Your Itemized Tax Deductions

• Form 1098, or your mortgage statement.
• Form 1098 if you purchased a home in previous tax year, and prior tax return if you refinanced in prior year and are deducting points on that loan over its life,
• Investment interest expense: Brokers’ statements showing any margin interest paid  and loan statements for loans taken out to purchase investments
• Losses due to theft etc. with description of property and insurance reports showing reimbursement or any cancelled checks showing value of property.
• Charitable donations: bills receipts or cancelled checks for cash donations, mileage records for charitable purposes, receipts from charitable agency with estimated value in the case of property donations, prior years’ tax returns for any unused charitable contributions.
• All work related expenses :  Reimbursement check stubs or reports from employer, union dues, receipts bills or invoices  for supplies, gifts to clients, any uniforms or special clothing, seminars attended, professional publications and books. Travel information including invoices receipts etc for transportation, lodging, restaurants, parking etc. Any job search expenses and job related educational expenses.
• Misc. deductions like Tax preparation fees, cost of income tax return preparation software and books, Safe deposit box rental fees from bank. IRA custodial fees, investment advice costs.
• Last year’s state income tax return, Forms W-2 and any cancelled checks for state estimates you’ve paid.
• Medical and dental expenses including Form SSA-1099, year-end pay stub for premiums paid through your after tax wages Mileage records for trips to the doctor, clinics, etc.
• Real estate tax collector bills or cancelled checks and Form 1098 or closing statement if you bought, sold, or refinanced property in the tax year.
• Any tax bills or cancelled checks for personal property tax like automobiles etc.
• Employee SSN and wages paid during tax year to any household employees.
• Records showing any estimated tax payments or overpayments for prior years.
• If you want your refund to be deposited into your bank account you need the Routing number and Bank account number.
• Any foreign bank account information with name, location account number and account value.

Your Adjustments

• Invoices etc. for moving expenses if any. Also include paycheck stub for any moving expense reimbursed.
• Insurance premium bills, or cancelled checks for self-employed health insurance.
• Year-end account summary, or cancelled checks for, SEP, SIMPLE, Keogh and Other Self-employed Pension Plans
• Cancelled checks for alimony paid.
• Cancelled checks for classroom supplies etc if you’re an educator.
• End of year account summary or bank statements for IRA contributions
• Form 1098-E showing interest paid, or Loan statements for Student Loans.
• Account statements for medical savings account contributions.

Estimate your taxes before you go through the details of preparing your tax return. Use this Free Online Tax Refund Calculator

1. The person is a US citizen or resident of the US, Canada or Mexico.

2. The person is not the Qualifying Child of another taxpayer.

3. The person does not file a joint return with another taxpayer.

4. The person lived in your home for the entire tax year.

5. The person had less than the personal exemption amount ($3,650 for 2009 & 2010) in gross income (excluding only non-taxable Social Security) for the entire year. Gross income includes all income from all sources before any deductions whatsoever, including normal business expense deductions.

6. The person received more than 50% of their total support from you for the entire year.

7. There is no state law or local law or ordinance that prohibits cohabitation. Any such law or ordinance, even if unenforced, kills the exemption. Mississippi, Virginia, West Virginia, Florida, North Dakota and Michigan still have laws that prohibit cohabitation as do a number of cities, towns and counties throughout the country.

The IRS publication 501 gives you detailed information about the rules for claiming dependents on your tax return.

source:yahooanswers

Estimate your taxes before filing - use a Tax Refund Calculator

Each line on the tax form has additional help embedded in it. Once you install a speech software, the speech synthesizer will read out these additional help text.

It requires a speech software to be installed on your computer. Per the IRS website, the forms have been tested using Windows 9 and JAWS.  Its also compatible with Dragon Naturally Speaking software (probably the most popular speech program out there today.

Once the basic software requirements are met, the software will read the contents of each line on the tax form.

Read more about the talking  forms on the irs website.

Read more about Dragon speech software here.

© Tax-easy.com

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Preview your tax refund before you file your taxes. Use a Tax Refund Calculator

TaxAct Online - TaxAct is the low price leader The clean, easy to use navigation is great for anyone new to Online TaxFiling. Click to Learn More

If you ever worried about the fact  you do not have a choice when it come to online tax preparation sites worry no more. Very few companies have been providing consistent, quality service at a great prices to the tax paying population as TaxAct.  If  have heard only about the 2 big online tax companies, then you haven’t seen TaxAct!

The totally revamped TaxAct site for 2009 is really outstanding. If you crave simplicity of using a site, this is where you need to start.

TaxAct Usability

Navigation: One of the easiest navigation themes that we have seen - even surpassing Turbotax online and TaxCut online. On the right hand corner is the “Refund Meter” which shows the refund (or money you owe) in real time. Real time means that if you make a change on any part of your tax return the refund is immediately calculated.

The Forms Menu in Taxact allows you to access individual taxforms directly

Direct access to forms: If you are a bit savvy with tax forms, you will absolutely love the direct access to tax forms. You can directly go to any tax form from the “Forms List” menu in TaxAct. The forms are neatly categorized and displayed in a hierarchy making it easy to find a specific form.

Refund Meter: This one feature beats the trip to any CPA. This is the one key feature we use to distinguish between ordinary tax software and high end software. TaxAct has the refund meter which instantly recalculates your tax refund when you make any change to any data within your tax return.

Tax Calculation Process:

Taxact guides you through a very detailed interview process. The sections are divided into the following :

Basic Info, Life Events, Federal QA, State QA, Review, Filing

Starting with basic questions like your personal information and W2 information. Then it gets into the life changes section - and asks very specific questions about the changes in your life which impacts your tax situation - events like marriage, new born, divorce etc.  The Federal QA and State QA gets into the details of your tax deductions, credits, investment income and capital gains etc.

TaxAct Features:

TaxAct comes in 3 different flavors -  Standard, Deluxe and Ultimate. The standard version has free Federal e-file. The TaxAct Deluxe and TaxAct Ultimate versions come loaded with help, including J.K.Lassers Tax Manual and several proactive deduction maximizing features.

Help And Support

Software Help: JK Lasser has been providing tax help books for a while. In the dark ages when there was no internet and no online filin, JK Lassers books were the ultimate guide. For 2009, TaxAct contains the entire JK Lasser tax help guide available at your fingertips.

Live Help:

TaxAct offers live support 8 am to 9 pm M-F, 8am-5pm Sat, and 12pm-5pm Sun. Knowing that you have an actual person to talk to when you do your taxes online should give you some peace of mind.

TaxAct Pricing:.

TaxAct beats almost everyone else when it comes to online State Tax Filing. So here is great tip.. If you are eligible to Free File at the IRS site, you can complete your Federal filing and then head over to TaxAct to do your State Tax Filing. See prices for Online State Tax Filing at TaxAct.

Federal and State combinations are packaged at very reasonable fees. The TaxAct Standard package is FREE, the TaxAct Deluxe and TaxAct Ultimate package is priced at $10 and $17.  Both these packages are the lowest prices for online tax filing.

Lets face it. You are not ready to file your taxes.  Not yet. But you want to get a quick idea of what your tax situation is - and you want to know it right now!

Are you getting a big fat refund. A refund that you could use for a vacation on a nice warm beach  or payoff some of those bills that have been piling up.

Or, will you end up owing money to the IRS. If you knew in advance, you could plan for it.

Tax Refund Estimator

Is there a quick way to find out your tax refund situation in less than 5 minutes ?

Yes. There is.

Its called a Tax Estimator.  Its a powerful litle tool that you can use to get an immediate estimate of your taxes.

Use it to get an advance look at your taxes. A rough estimate to start you off.  Then you can take a bit of time to gather up the documents to prepare and file your tax return.

Punch in some easy numbers and facts like your income, dependents and other basic info, hit the calculate button, and presto, you have an estimate of your tax refund. No personal information is required.

Try the Tax Refund Estimator for Free!