Tag Archives: Tax

United Way Offers Free Tax Preparation To Qualified Earners

Free Tax Preparation To Qualified Earners

It is that time of year again; time to get out your tax documents, records, and W2s and do your taxes.  Some people dread this time of year as they know they will owe the government money.  Other people look forward to it as they know the government will be sending them a check.  Still others just do not like it at all knowing that they will need to take the time to file their taxes.

If you dread this time of year because you are confused about your taxes or need help filing your taxes but cannot afford it, there is good news for you.  The United Way has started a Free Tax Preparation Campaign that is helping lower-income wage earners receive all of the credits and refunds they qualify for, such as the Earned Income Tax Credit.  This service is completely free and comes with no obligation or hidden fees.

If your household earns less than $51,000 annually and your tax filings will not involve business taxes, income from rentals or the sale of stocks or property, you may qualify for help with preparing your taxes.  People whose first language is not English, who are not sure which deductions they may be eligible for or people who have trouble doing their taxes due to other disabilities or challenges will especially benefit from this free tax service.

There are several free tax preparation sites in various cities staffed with volunteers who are IRS certified and are multilingual.  In addition to free tax preparation services, people can also find out more about other forms of public assistance, such as:

• Utility Assistance
• Children’s Health Care
• Food Stamps
• Help with applications for college financial aid
• Receive credit reports
• Many other services

There is a limited capacity at each site.  For more information, including locations, translation services and required documents please visit www.uwkc.org/taxhelp.  If you do not qualify for this free tax preparation service, using a tax software program, such as Turbo Tax 2013, can help you navigate the filing of your taxes in a more concise simpler manner.

Microsoft May Owe Denmark A Billion Dollars

Microsoft May Owe Denmark A Billion Dollars

Throughout its known history, corporate America has not been unfamiliar with the concept of companies seeking to enhance their profits by saving on high taxes. The three giants of American IT – Google, Yahoo and Microsoft have faced the ire of several competitors and governments in their efforts to place billions of dollars in tax havens or through complex, layered acquisitions. Today, Microsoft finds itself in troubled waters with the taxation authority of Denmark who have levied a charge of over $1 billion on the technology giant in back taxes and fines.

The Burden of Back Taxes

Steve-Ballmer-CBI-Annual-Lecture2009

Steve-Ballmer-CBI-Annual-Lecture2009 (Photo credit: The CBI)

According to industry sources, Microsoft acquired the Danish Enterprise Resource Planning (ERP) software company Navision A/S in mid-2002. The taxation authority of Denmark claims that parts of the company were then sold to a small Microsoft subsidiary in Ireland and the company’s profits funneled through tax havens such as the Bahamas, Bermuda and Switzerland.

Navision has been renamed Dynamics NAV and operates in several countries around the world. Microsoft also competes with another American major Intuit who offers a personal and small business finance product TurboTax 2013 that is regarded as a threat to some parts of Microsoft’s ERP software developed by Dynamics NAV. Denmark’s corporate taxes are fairly high — to the tune of 25%, but the government has been proposing a 3% reduction in order to attract foreign investment. With countries such as Ireland and the Czech Republic offering significantly lower tax rates and inexpensive labor, several U.S. and European corporations have moved operations there, while making profits in high-tax nations. However, Microsoft’s use of Caribbean tax havens and subsidiaries to maximize profits has caused significant turbulence in a fragile software and financial market. Although Microsoft may come through relatively unscathed, any penalties paid may encourage other world governments to step up and challenge the American software majors.

Details On Obtaining Prior Year Tax Information From The IRS

Obtaining Prior Year Tax Information

The ability to get prior year tax information from the IRS is virtually a guarantee due to the fact that the IRS is required to keep tax returns on file for seven years. As with most actions related to the IRS there is a form that is required to fill out in order to obtain prior tax information. This is Form 4506 that can be found by completing a simple form search on the IRS website. The IRS will not provide prior tax information without filling out a hard copy of Form 4506.

Seal of the United States Internal Revenue Ser...

Seal of the United States Internal Revenue Service. The design is the same as the Treasury seal with an IRS inscription. (Photo credit: Wikipedia)

The form is self explanatory and should be filled out to include the exact information from the tax return of the prior year. At the very least, the name and social security number should match as well as the spousal information if the return was filed jointly. Additional information should include the prior year tax form such as Form 1040, 1040A, or 1040EZ. Form 4506 can be completed regardless of a recent divorce without spousal consent.  One of the final requests on the form is to fill out the prior year tax information being requested such as 12/31/2012.

The required fee for Form 4506 as of 2012 is $57 in the form of check or money order payable to the US Treasury that is required when mailing the form to the appropriate IRS office. However, tax filers that used Turbo Tax 2013 have the distinct advantage of obtaining prior year tax information at no cost. This free service is included with the use of Turbo Tax 2013 Basic, Deluxe, Premier, Home & Business, or Freedom Edition. Even greater is the use of the online edition of Turbo Tax 2013 that will automatically look up prior year tax information for a user to view or print.

How To Organize Your Tax Records

How To Organize Your Tax Records

Learning how to organize your tax records can save you stress and time when it is time to file your taxes.  Start the year with an organization system so you know where all of your records are when it is time to file your taxes.  If you aren’t sure what records you need, here is a general guide that is suitable for most people.

Income

Your employer will issue a W-2 with your income and tax information for the year.  You should also include interest statements from investment accounts and any 1099s that you may receive for work done the previous year.

English: Same as :File:2010 Receipts & Expendi...

English: Same as :File:2010 Receipts & Expenditures.PNG, but slightly improved. Bar chart comparing estimates for United States federal government total receipts and expenditures in fiscal year 2010. (Photo credit: Wikipedia)

Medical Expenses

File receipts for all medical expenses and your out-of-pocket health expenses.

Donations

Keep all receipts for cash donations made from the previous year.  You can also deduct non-cash donations made to a charitable organization.

Real Estate

If you own your home or other real estate, keep all interest statements and tax assessments.

Child Care

If your children are in day care for all or part of the year, keep a copy of your receipts for payment.

Student Loans

The interest you pay monthly on a federal student loans is tax deductible.

Letters from the IRS

If you receive any letters from the IRS, keep these in your file.

Previous Tax Forms

Keep all previous tax forms for future years.

Other Receipts

Keep all receipts that you may need for a deduction.  You may not need them, but it is better to have them in case you do. If you plan on itemizing your deductions, keep all receipts for taxes you paid, medical expenses, interest you paid, charitable donations, loss due to theft, job expenses and other receipts you think may qualify for a deduction.

If you plan to itemize your deductions, it will be a lot easier for you if you keep these receipts organized throughout the year.

If you do not have a lot of paperwork each year, you can store them in one file.  However, if you have a lot of receipts or other tax papers, you should organize them by type to make your free tax filing 2012 easier and quicker.

For most people, a simple paper organizer that holds several files is sufficient to organize tax information.  Use a separate file for each type of paperwork, and file receipts and information as soon as you get them.  Keeping paperwork organized and not letting it pile up is important to stay organized, so file your paperwork as soon as your get it or once a month as needed.

How To Free File Online Using The IRS Website

How To Free File Online Using The IRS Website

Many taxpayers are using free file online programs that are based on popular tax software programs like the TurboTax 2013 programs. The free file online program is offered directly by the IRS on their website. It is available to all taxpayers, but different taxpayers can access different portions of the program based on their income and other factors.

The IRS free file online program connects taxpayers with participating software companies like TurboTax 2013. Taxpayers can choose between a range of software programs including the TurboTax 2013 Freedom edition. Once the taxpayer has selected a software company, they can get started on their returns.

English: YOU ARE FREE TO USE THIS FILE

English: YOU ARE FREE TO USE THIS FILE (Photo credit: Wikipedia)

Taxpayers who have an adjusted gross income of $57,000 or less can file using the free program. Taxpayers who earn more than that amount cannot use the free software programs. However, they can download free file online forms. These forms are primarily for people who enjoy doing their own taxes. Using these forms, these taxpayers can prepare and file their own taxes online. However, these taxpayers do not get the extra assistance that is offered to people who can take advantage of programs like the TurboTax 2013 software programs.

Before they get started with the program, taxpayers need to prepare themselves. They will need to have copies of their last year’s tax return, copies of their W-2s, 1099s, and any other information that they will need for their taxes. For instance, taxpayers who plan to itemize their deductions may want copies of their charitable deductions or information on how much interest they have paid to their mortgage company throughout the year.

Before starting, taxpayers should also estimate their adjusted gross income. If you have not had any significant changes to your income over the last year, you should be able to estimate your adjustable gross income using last year’s tax return. Once you have determined whether or not your adjusted gross income is more or less than $57,000, you will know which program you are allowed to use. About 70% of all taxpayers have adjusted gross incomes of less than $57,000 so the chances are high that you will qualify to file free online.

Once you have completed the tax preparation work, you can submit your return electronically with the click of a few buttons. If you qualify for a tax refund, you can elect to have it mailed to you in a paper check, or you can have it electronically deposited into your bank account. Electronic deposits are typically the fastest way to get your returns, and you may see your refund within three weeks or less of your filing date. If you owe taxes, you can also make your payments electronically.

The free file online program is perfect for many taxpayers. However, taxpayers with unique situations may simply want to use some of the low cost software offered by a company like TurboTax 2013. This is especially true for people who own their own businesses or who need to file an extension.

Free Online Options To File Your Taxes

Free Online Options To File Your Taxes

Filing your taxes on time can be a very long and time consuming process if you do not have a clue of what you are doing. However, you can make this process as easy as possible by simply choosing to file online with TurboTax or TaxAct. If neither of these tax filing options is ideal based on your personal needs, you should consider using H&R Block Home edition which also receives good reviews.

TaxACT Logo (Photo credit: Wikipedia)

It is important that you consider your free online options to file your taxes prior to deciding which would be able to best meet your needs. There is no one solution that is going to work for every person, you may find one service to be very useful, but your brother may enjoy the layout of another service. Typically, this decision is very much about personal preference and the company that you are most comfortable with. However, they are very different when it comes to guiding you through the process of filing. TurboTax makes the tax filing process easy by guiding your every step through a return, they make the steps easy by providing simple explanations that you can understand. As a result of this approach, TurboTax is great for those that want to save time, it is a quick solution that can help you get your taxes completed easily.

When it comes to time involved with filing your taxes, the H&R Block solution would be the slowest. There are no in depth explanations and this can mean that you would spend a lot more time to get through the filing process. The TaxAct solution is going to fall in the middle, it will save you money and make your taxes easier to do while limiting your stress.

Businesses and Phil Mickelson Consider Bailing On California

Phil Mickelson State Taxes

Thanks to California’s new state income tax, there are a lot of high earning citizens who are considering moving to a new state. One such citizen is Phil Mickelson, a top-ranked golfer. This week he suggested that the new state taxes may force him to move out of the state. Later Phil Mickelson went on to say that he shouldn’t have spoken out as he did but there are others who are saying the same thing.

Leader Phil Mickelson teeing off on the 18th h...

Leader Phil Mickelson teeing off on the 18th hole at TPC at Sawgrass during the final round of the 2007 Players Championship. Mickelson bogeyed the hole but still won the title by two shots. (Photo credit: Wikipedia)

Many of those who will be taxed feel as though it will be excessive. They are also feeling that California is slowly becoming unfriendly to businesses. This is seemingly something that has been going on for quite a while and thus they are starting to think that there will be no end to it. In fact, some of them have even said that this can be traced as far back as Proposition 30, saying this is what changed everyone’s mindset.

Most of the wealthy businessmen who are thinking of relocating are merely thinking and talking about it right now. However, tax analysts expect that they will see the occurrence by 2014. It will take the wealthy this long to figure out how to relocate to avoid paying state taxes without actually moving out of the state. Some of these people are thinking of moving to Texas where the personal income-tax rate is zero, whereas it’s 13.3% in California. Of course, this is just one of the many states to which they may relocate as there are others who also don’t charge individual taxes.