IRS plans Jan 30th Tax Season Opening for 1040 Filers

IRS - 2012Following the January tax law changes made by Congress under the American Taxpayer Relief Act (ATRA), the Internal Revenue Service announced today it plans to open the 2013 filing season and begin processing individual income tax returns on Jan. 30.

The IRS will begin accepting tax returns on that date after updating forms and completing programming and testing of its processing systems. This will reflect the bulk of the late tax law changes enacted Jan. 2. The announcement means that the vast majority of tax filers — more than 120 million households — should be able to start filing tax returns starting Jan 30.

The IRS estimates that remaining households will be able to start filing in late February or into March because of the need for more extensive form and processing systems changes. This group includes people claiming residential energy credits, depreciation of property or general business credits. Most of those in this group file more complex tax returns and typically file closer to the April 15 deadline or obtain an extension.

“We have worked hard to open tax season as soon as possible,” IRS Acting Commissioner Steven T. Miller said. “This date ensures we have the time we need to update and test our processing systems.”

The IRS will not process paper tax returns before the anticipated Jan. 30 opening date. There is no advantage to filing on paper before the opening date, and taxpayers will receive their tax refunds much faster by using e-file with direct deposit.

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IRS Offers Tips for 2012 Year-End Giving

12.19_Contributions

Individuals and businesses making contributions to charity should keep in mind some key tax provisions that have taken effect in recent years, especially those affecting donations of clothing and household items and monetary donations.

Rules for Clothing and Household Items

To be deductible, clothing and household items donated to charity generally must be in good used condition or better. A clothing or household item for which a taxpayer claims a deduction of over $500 does not have to meet this standard if the taxpayer includes a qualified appraisal of the item with the return. Household items include furniture, furnishings, electronics, appliances and linens.

Guidelines for Monetary Donations

To deduct any charitable donation of money, regardless of amount, a taxpayer must have a bank record or a written communication from the charity showing the name of the charity and the date and amount of the contribution. Bank records include canceled checks, bank or credit union statements, and credit card statements. Bank or credit union statements should show the name of the charity, the date, and the amount paid. Credit card statements should show the name of the charity, the date, and the transaction posting date.

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Expanded Tax Credit for Newly Hired Veterans

 

Time is running out for businesses that are planning to claim an expanded tax credit for hiring veterans, according to the IRS. The expanded credit is for businesses that hire qualified veterans who begin work on or after Nov. 22, 2011 but before Jan. 1, 2013. The maximum tax credit is $9,600.00 per worker for for-pofit businesses and $6,240.00 per worker for tax-exempt organizations. The credit amount is based on several factors: the length of the veteran’s unemployment, the number of hours worked, and the wages the veterans receives the first year of employment.

In order to apply, a company needs to file form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, with a state workforce agency within 28 days of the veteran’s employment. Some states accept form 8850 electronically.

 

AMT Changes

What is AMT?

The Alternative Minimum Tax (AMT) is a near flat tax rate imposed on individuals, corporations, estates, and trusts. Getting taxed under AMT usually requires fairly high income levels. The end result ensures that most high income earners have to pay some income tax. Although the AMT exemption amount is not adjusted to inflation, it is usually “patched” by congress at the end of each year with legislation.

Patching

The IRS is currently tentatively waiting for congress to pass the 2013 patch. A patch before year-end could be implemented with minimal delays to most taxpayers. A patch after year-end, according to IRS Commissioner Steven Miller, could have serious repercussions for tax payers. The IRS would have to instruct over 60 million taxpayers that they can’t file or process their tax return until system changes are done.

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Tax Relief for Hurricane Sandy Victims

The Internal Revenue Service announced tax relief to affected individuals and businesses after the destruction that Hurricane Sandy unleashed. Those affected in Connecticut, New Jersey, New York, and other areas may qualify for this tax relief. If the location is deemed a disaster area, then any tax relief is automatically provided and contact with the IRS is not necessary.

Among the tax relief efforts are an extension of various tax filing and payments. The fourth quarter individual estimated tax payments are due February 1, 2013 instead of January 15, 2013. Payroll and excise tax returns and payments are also due now on February 1, 2013. Any late-payment or filing penalties will be abated for those in the affected areas.

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Avoiding Phony IRS Websites

Phony IRS Email

 Have you ever received an email from a family member, friend, or a company asking for personal or financial information? You may have been targeted by a growing type of cyber-attack known as phishing. Phishing emails or websites disguise themselves as legitimate ones and try to steal a victim’s money or identity. Even the Internal Revenue Service is subject to impersonators in these kinds of scams.

The IRS is issuing a warning about a new tax scam that uses a website that mimics the IRS e-Services online registration page. The actual IRS e-Services page offers web-based products for tax preparers, not the general public. The phony web page looks almost identical to the real one.

The address of the official IRS website is www.irs.gov. Don’t be misled by sites claiming to be the IRS but ending in .com, .net, .org or other designations instead of .gov.

Be aware that the IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.

 If you find a suspicious website that claims to be the IRS, send the site’s URL by email to phishing@irs.gov. Use the subject line, ‘Suspicious website’. If you get an unsolicited email that appears to be from the IRS, report it by sending it to phishing@irs.gov.

iPad Giveaway!

Make sure you visit the Loggins & Associates booth at the Fayette County Chamber of Commerce Expo on Tuesday, September 18th from 3-7pm to enter to win an iPad!  The Expo will be held at New Hope Baptist Church at 551 New Hope Road, Fayetteville, GA.

Look for the accountants in orange shirts and drop your business card in our fishbowl for a chance to win an iPad!

We have been involved with the Fayette Chamber for many years now, and their Expo is always top notch and lots of fun, so plan on stopping by to say hi!

Back-to-School Tax Tips

Back-to-School Tips for Students and Parents Paying College Expenses

Whether you’re a recent high school graduate going to college for the first time or a returning student, it will soon be time to head to campus, and payment deadlines for tuition and other fees are not far behind.

The IRS offers some tips about education tax benefits that can help offset some college costs for students and parents. Typically, these benefits apply to you, your spouse or a dependent for whom you claim an exemption on your tax return.

  • American Opportunity Credit. This credit, originally created under the American Recovery and Reinvestment Act, is still available for 2012. The credit can be up to $2,500 per eligible student and is available for the first four years of post secondary education at an eligible institution. Forty percent of this credit is refundable, which means that you may be able to receive up to $1,000, even if you don’t owe any taxes. Qualified expenses include tuition and fees, course related books, supplies and equipment.
  • Lifetime Learning Credit. In 2012, you may be able to claim a Lifetime Learning Credit of up to $2,000 for qualified education expenses paid for a student enrolled in eligible educational institutions. There is no limit on the number of years you can claim the Lifetime Learning Credit for an eligible student.

You can claim only one type of education credit per student in the same tax year. However, if you pay college expenses for more than one student in the same year, you can choose to take credits on a per-student, per-year basis. For example, you can claim the American Opportunity Credit for one student and the Lifetime Learning Credit for the other student.

  • Student loan interest deduction. Generally, personal interest you pay, other than certain mortgage interest, is not deductible. However, you may be able to deduct interest paid on a qualified student loan during the year. It can reduce the amount of your income subject to tax by up to $2,500, even if you don’t itemize deductions.

These education benefits are subject to income limitations, and may be reduced or eliminated depending on your income.


What the Affordable Care Act means for your taxes….

Here at Loggins, we know that the Patient Protection and Affordable Care Act (PPACA or ObamaCare) has quite a bit of uncertainty surrounding it.   We are preparing as if the law will go into effect as written.  We’re writing this post because we want to help inform you with some of the basics of the law that we feel will affect the majority of people.  The points below just focus on the taxes in the Act, and even then, we’re only focusing on the taxes that we feel will affect the majority of our clients.  This post doesn’t deal with the health insurance costs or avenues that people can use to find insurance coverage.  For a more complete list of provisions in the act, take a look at this page from the IRS.

 

The Individual Mandate [Read more…]

Act before 6/19 to get tax credit for hiring vets

Employers that hired unemployed veterans during late 2011 and early 2012 have an expanded period to request the required certification for claiming the expanded Work Opportunity Tax Credit (WOTC). That expanded period ends on Tuesday, June 19.

The IRS is reminding employers that for eligible veterans hired on or after Nov. 22, 2011 and before May 22, 2012, they have until June 19 to file certification forms with state workforce agencies.

Here are some important points to know about the credit and upcoming deadline: [Read more…]