Save Twice with the Saver’s Credit

12.26_SaveIf you are a low-to-moderate income taxpayer, you can take steps to save two ways for the same amount. With the saver’s credit you can save for your retirement and save on your taxes with a special tax credit. Here are six tips you should know about this credit: [Read more…]

Special Tax Benefits for Armed Forces Personnel

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If you’re a member of the U.S. Armed Forces, the IRS wants you to know about the many tax benefits that may apply to you. Special tax rules apply to military members on active duty, including those serving in combat zones. These rules can help lower your federal taxes and make it easier to file your tax return.

Here are ten of those benefits: [Read more…]

Tips for Taxpayers Who Travel for Charity Work

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Do you plan to travel while doing charity work this summer? Some travel expenses may help lower your taxes if you itemize deductions when you file next year. Here are five tax tips the IRS wants you to know about travel while serving a charity.

  1. You must volunteer to work for a qualified organization. Ask the charity about its tax-exempt status. You can also visit IRS.gov and use the Select Check tool to see if the group is qualified. [Read more…]

Tax Tips for Newlyweds

 

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Late spring and early summer are popular times for weddings. Whatever the season, a change in your marital status can affect your taxes. Here are several tips from the IRS for newlyweds.

  • It’s important that the names and Social Security numbers that you put on your tax return match your Social Security Administration records. If you’ve changed your name, report the change to the SSA. To do that, file Form SS-5, Application for a Social Security Card. You can get this form on their website at SSA.gov, by calling 800-772-1213 or by visiting your local SSA office. [Read more…]

Keep the Child Care Credit in Mind for Summer

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If you are a working parent or look for work this summer, you may need to pay for the care of your child or children. These expenses may qualify for a tax credit that can reduce your federal income taxes. The Child and Dependent Care Tax Credit is available not only while school’s out for summer, but also throughout the year. Here are eight key points the IRS wants you to know about this credit.

1. You must pay for care so you – and your spouse if filing jointly – can work or actively look for work. Your spouse meets this test during any month they are full-time student, or physically or mentally incapable of self-care. [Read more…]

Who Should File a 2012 Tax Return?

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If you received income during 2012, you may need to file a tax return in 2013. The amount of your income, your filing status, your age and the type of income you received will determine whether you’re required to file. Even if you’ve determined that you don’t need to file a tax return this year, you may still want to file. Here are five reasons why:

  1. Federal Income Tax Withheld.  If your employer withheld federal income tax from your pay, if you made estimated tax payments, or if you had a prior year overpayment applied to this year’s tax, you could be due a refund. File a return to claim any excess tax you paid during the year.
  2. Earned Income Tax Credit.  If you worked but earned less than $50,270 last year, you may qualify for EITC. EITC is a refundable tax credit; which means if you qualify you could receive EITC as a tax refund. Families with qualifying children may qualify to get up to $5,891 dollars. You can’t get the credit unless you file a return and claim it. Use the EITC Assistant to find out if you qualify.
  3. Additional Child Tax Credit.  If you have at least one qualifying child and you don’t get the full amount of the Child Tax Credit, you may qualify for this additional refundable credit. You must file and use new Schedule 8812, Child Tax Credit, to claim the credit.
  4. American Opportunity Credit.  If you or someone you support is a student, you might be eligible for this credit. Students in their first four years of postsecondary education may qualify for as much as $2,500 through this partially refundable credit. Even those who owe no tax can get up to $1,000 of the credit as cash back for each eligible student. You must file Form 8863, Education Credits, and submit it with your tax return to claim the credit.
  5. Health Coverage Tax Credit.  If you’re receiving Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, Alternative Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty Corporation, you may be eligible for a 2012 Health Coverage Tax Credit. Spouses and dependents may also be eligible. If you’re eligible, you can receive a 72.5 percent tax credit on payments you made for qualified health insurance premiums.

Still confused? Feel free to give us a call at 770-478-7424 whether or not you are in the Atlanta area.

Plan Now to Get Full Benefit of Saver’s Credit

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Low- and moderate-income workers can take steps now to save for retirement and earn a special tax credit in 2012 and the years ahead, according to the Internal Revenue Service.

The saver’s credit helps offset part of the first $2,000 workers voluntarily contribute to IRAs and to 401(k) plans and similar workplace retirement programs. Also known as the retirement savings contributions credit, the saver’s credit is available in addition to any other tax savings that apply.

Eligible workers still have time to make qualifying retirement contributions and get the saver’s credit on their 2012 tax return. People have until April 15, 2013, to set up a new individual retirement arrangement or add money to an existing IRA and still get credit for 2012. However, elective deferrals (contributions) must be made by the end of the year to a 401(k) plan or similar workplace program, such as a 403(b) plan for employees of public schools and certain tax-exempt organizations, a governmental 457 plan for state or local government employees, and the Thrift Savings Plan for federal employees. Employees who are unable to set aside money for this year may want to schedule their 2013 contributions soon so their employer can begin withholding them in January.

[Read more…]

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.

[Read more…]

Form W-9 and 1099 Basics

 

Tax season is coming soon. Why not get a head start?

A vendor providing goods or services to your company that is not incorporated may require additional tax forms for the IRS called the W-9 and 1099. Generally, this occurs when hiring independent contractors to whom your business has paid over $600 to during the tax year. Failing to file these forms may lead to large penalties or a backup withholdings of 28% of reportable payments. It is important to understand and file the correct forms in order to avoid these penalties as the IRS is aggressively enforcing these rules.

Form W-9

W-9 is the IRS’ “Request for Taxpayer Identification Number and Certification”. It identifies the entity’s name, address, type of entity, and taxpayer identification number. This is either the employer identification number (company) or social security number (individual). All vendors should complete a W-9 form if over the $600 threshold. Payments to corporations as vendors generally do not require a W-9 form with the exception of attorneys and law firms.

[Read more…]

Avoiding Phony IRS Websites

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 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.