It’s a lot easier to put together and file your tax return on the web, because the software program prompts you for the specific amounts and completes the calculations for you.  If you make a blunder, you simply just correct the problem and the recalculation is carried out in seconds.
 
If you’ve historically used a local tax accountant to perform your return on your behalf, you should be thinking about ceasing that service and doing it yourself.  Because all your tax accountant is most likely doing is making use of the same software program that you could be using to do the work!  Why pay professional fees for a task that’s now potentially well within your own abilities.  If your tax return is quite uncomplicated and your financial affairs are not too complicated, you genuinely should think about giving an online tax return a go.

Should you do make a decision to file your tax return on the internet, you’ll have to have all of one’s relevant tax papers in front of you before you get started.  Although with that stated, if you get half way through the process and discover that you’re lacking a piece of information, all you have to do is click the save button and go off and get it!  You really don’t have to finish the return in one go.  As long as you save your data, you are able to take as long as you choose.

Some of the paperwork you will need are your W2s, your previous year’s tax return, and the receipts for any items you wish to deduct from what you owe.  With this info to hand, the on the web income tax software program should advise you through the process, and prompt you for the relevant numbers as you proceed through the form.  For more income tax help click on the link.

Most income tax software applications are easy to use and user friendly, even for the most inexperienced web user.  In reality, as long as you go through the prompts very carefully, and double check the amounts you type in, it should be very difficult to actually make errors.

A lot of of the tax calculation programs will routinely enable you to file your return online, virtually taking the information you have entered and saved, and exporting it immediately into your actual state return.

So in the event you have not used online services to compute and file your tax return, perhaps it’s time for you to think about doing it in the near future.

Consumers looking for fast cash should use their tax refund wisely. When people get a tax refund, they are getting a refund from the government on the principal of a year long loan. Interest isn’t part of payment and many people pay too much over the year. This is best handled by adjusting withholding upon situation changes, i.e. the purchase of a home, or sale, or a marriage, etc. Taxpayers who end up getting a good tax return should be wise with the extra money and carefully put the funds to good use.

Paying off debts with a tax refund

By far the most important thing to do with a tax refund is to pay down debt. Since the recession led many to debt, more people than ever before were saddled with high interest rates. The accumulating debt needs to be paid down if anyone is to get out from under financial stress. Using a tax refund to pay down debt can be a good idea. That doesn’t just include credit card debt, but also can mean paying down a mortgage, car loan or student loan. For instance, one double mortgage payment per year can take two years off the term of the loan.

Building an emergency fund

Tax refund money can also be used to build up an emergency fund. One lesson learned in the recession was that cash are the best and most reliable asset to depend on. Creditors closed shop when the economy began to tank and it got too difficult to manage. People that had one emergency credit card squirreled away were surprised with lenders closed the cards or slashed their limits.

The lesson to be learned was that liquid assets are crucial for every consumer to have. Tax returns can be used a good way to start a nest egg of sorts. This can guard against emergencies and disasters that need immediate cash. It is suggested that people should have three to six months of expenses in savings as emergency money at all times.

Tax refunds into retirement savings

Fast cash from a tax refund can also be channeled towards retirement savings. Saving for retirement should be a priority for every consumer. As Social Security winds down to oblivion, more people are going to have to take their retirement plan in their own hands. Experts warn other priorities ought not to take primacy. Mark Zandi of Economy.com said, “Too many young parents prioritize their children’s education fund before their own retirement. The bottom line is – education can be funded through loans, grants, scholarships and part-time work. Retirement can’t.”

Fund an education account

On the other hand, if a consumer has their own retirement fund on track, using a tax refund for education may be a wise idea. It’s never too early to start saving for college and the cost is going to rise steadily over the next few decades. There are plenty of savings plans, like ESA plans and 529 plans. The sacrifice of money into the account right away is an option, and it will save money over time and a good education is invaluable.

Tax refund funding

Gone are the days when consumers viewed a tax refund as fast cash to spend frivolously. In today’s market, it’s crucial to manage money wisely. It is essential to manage money that finds its way to people in large amounts. As Zandi added, “Substantial amounts of money don’t come to consumers that often, so a tax refund is something everyone should be ready to take advantage of, and use in the most beneficial way possible.”

One of the easiest ways to find money now is to get a jump on filing income taxes. Many consumers wait until April to start gathering their paperwork together. They bring them to their tax preparer and want a rush job. The problem is that waiting opens you up to mistakes and a return will take longer to get. Anyone wanting to get the jump on filing, here are some tips.

Getting the jump on taxes

The first thing taxpayers need to be aware of is Schedule M. Schedule M is a new document for the “Making Work Pay” credit money received on paychecks. The new payroll tables from last year that put an extra $ 400 in the pockets of single people or $ 800 for married couples filing jointly. Some taxpayers might have paid a bit too much into the fund. To correct the over taxation, consumers have to file a Schedule M.

Secondly, it’s time to organize paperwork. January to the middle of February is usually when your W2 and other tax documents get in. Consumers should create a special place for all tax documents. The needed information on these documents and having them in one place will make it all that much easier to fill out tax paperwork.

Thirdly, you have to double check things like social security numbers. Though it sounds rudimentary, there are a surprising number of tax returns received without the correct numbers. It holds up processing and refunds for thousands of filers. Having the right number is critical because these numbers have so many transactions keyed directly to them. Everything including income statements, retirement plan contributions, are recorded using the social security number.

Fourthly, you need to know what filing package is the best to get. The IRS package is based on the filing history of a taxpayer, but that can change. Most documents can be retrieved online or at the post office or library. For taxpayers who had a major change, like marriage, it’s important to find the right documentation. Married couples looking for money now have to file with the right documents and in the right way.

Fifthly, consider filing electronically. Studies indicate that two thirds of taxpayers filed electronically last year. The IRS processed E filed tax returns 50% faster than paper returns. Many of the software programs have a review function, where the return is double checked for innaccuracies and errors. E filers might actually be able to file for free. Taxpayers this year with adjusted gross income of $ 57,000 or less for 2009, can file for free thanks to a cooperative program between tax software companies and the IRS.

Finally, taxpayers can elect direct deposit. A paper return takes weeks to get to the IRS, get processed, and a check to be cut and then sent. On the other hand, it normally takes between 10 to 14 days for a direct deposit check to reach a bank account. Taxpayers that desire direct deposit have to file Form 8888, but it speeds up the process.

Filing in 2010

Now more than ever, filing tax returns is being made simpler and simpler for taxpayers. Those concerned with receiving their tax return money now should follow the above tips to speed up the process. There are millions of tax returns that have to be reviewed and consumers looking for quick ways to file should use every advantage available.

By using this form regularly as your income changes, you’ll be more aware of whether you need to take steps to reduce your potential tax penalty or you might actually calculate that you’ll receive a return.

This is the ‘long form’ or the more complete version and should be used if you have complicated tax issues to calculate. Things like investment income or loss, capital gain or loss or multiple itemized deductions should be entered individually on your 1040 tax form to help you gain a more accurate idea of the amount of tax you should be paying or withholding.

Although the form could be only 2 main pages, they have 11 different attachments or schedules that follow with it. Each different schedule covers a specific aspect of your tax return, so that you may not need all.

1040A tax form

The 1040A Tax Form is the form that helps you to estimate tax return for the financial year. If you have no complicated tax additions for the year, like capital gains or individual itemized deductions, then the short form will be ideal for you.

1040EZ Tax Form

The 1040EZ tax form is an even more simplified version of the more lengthy 1040 form and is still able to help you determine what your tax bill might amount to at the end of the year very quickly. Once again, this is ideal for those people with no uncomplicated tax issues to account for.

1040NR tax form

The 1040NR tax form designed to facilitate non-resident aliens to calculate the total of IRS tax return. For non-resident alien who has been in the United States for less than five years and has an income on which tax must be paid has to use this form.

This form shows the IRS the original figures you submitted and then highlights what those figures should have been according to your calculations. In some cases the irs help can help you to increase the amount of tax refund you were due or it might even reduce a pending tax penalty you might incur.

The decision on the alternatives is one of the very intricate decisions of a lifecycle financial freedom plan. Many things can decide whether a traditional IRA or tax-advantaged employer plan account contribution versus a “Roth” tax-advantaged employer plan or IRA account contribution choice would be better.

In most circumstances making further investments into an ordinary IRA or tax-advantaged employer plan retirement accounts is the better decision, when those deposits would be deductible against current income taxes.

Over a lifetime the analysis is quite complicated. Back-of-the-envelope calculations are not sufficient to analyze all the critical tradeoffs. The decision is not only about whether tax rates might be higher or lower. Instead, the decision requires a fully personalized personal finance projection and valuation of an investor’s life cycle income, taxes, and assets.

(Here is where you can find a comprehensive Roth IRA comparison calculator that makes automatic this regular tax-advantaged employer plan or IRA personal account versus investing in “Roth” IRA or tax-advantaged employer plan account financial projection.)

Whether or not a family will consume less and save enough to invest carefully over their lives dominates the Roth retirement account versus the “currently tax deductible” regular retirement account additional investment choice.

If an investor cannot earn a sufficiently high income, does not save aggressively, does not strictly control investment costs, and/or does not grow a large enough retirement nest egg, then that person will not have to worry about being in high tax brackets in retirement — whether or not federal and state tax have changed in the interim. If a family does not have sufficiently large income and assets in old age, then the current tax advantage an investor can get from deciding on a traditional retirement plan contribution will tend to be more financially favorable over a life cycle.

Note: This article ONLY talks about personal financial circumstances where an investor can choose between a “currently tax deductible” traditional IRA or 401k additional investment versus a currently “not tax deductible” Roth IRA or 401k additional investment. If you cannot get the current tax deduction but have available a Roth contribution, then the Roth contribution is more desirable.

A fully automated, do-it-yourself financial planner with a Roth retirement planner calculator is recommended to generate a fully personalized long-term money management strategy

Also, to develop a thorough family financial strategy requires that you use a high quality financial planning calculator with the best investing calculator and an excellent financial planning calculators.

Get the best comprehensive financial planning software program home PC program with the top retirement planning calculator program, high quality personal budget spreadsheet planner, and excellent investment planners for your self-directed life time financial planning.

The vast majority of American taxpayers are honest when it comes to filing and paying their taxes. The huge tax cheats are rare. Instead of taking advantage, the opposite is in fact the case - most US taxpayers don’t take advantage of deductions and overpay. The IRS reports that taxpayers usually make the same mistakes every year. The number one mistake on returns every year is forgetting to include a social security number on the return. Luckily, this will only cost the taxpayer time and not money.

Convenience can be costly

Approximately 85 million taxpayers choose to take standard deductions as opposed to itemizing their tax returns. Only 46 million people itemize their returns. The smaller group of taxpayers claims twice the deductions of the larger group. Itemized returns account for one trillion dollars worth of deductions while standard deductions only account for a half trillion dollars in deductions. Only legitimate deductions are included in these numbers from the IRS, so the itemizers are not cheating. Sadly, most people admit they file the standard form out of convenience and a lack of documentation. This convenience and lack of proper record keeping could be costing some taxpayers to pay four times their rightful tax obligation.

State sales tax most overlooked

Everyone is entitled to claim state sales tax they paid during the course of a tax year. The IRS has tables that show how much can be deducted, depending on the state you live in and your income. The biggest advantage is for those people living in states that do not have a state income tax, but everyone can benefit from this deduction. In addition, there are items that can give a tax payer a bigger deduction than what the tables show. For example, if a boat, car, or airplane was purchased, that sales tax can be added to the amount shown in the table. State sales tax paid on home building supplies are also added to the table.

Giving could get you a deduction

Most tax payers already take the appropriate deductions for contributing to charitable organizations in the form of money. Taxpayers deduct contributions to religious organizations, homeless shelters, and so forth. However, most taxpayers overlook the out-of-pocket deductions available for doing good works. For instance, a cake baked for a church fundraiser is a charitable contribution, and thus the cost of ingredients is deductible. The taxpayer can also claim 14 cents per mile for delivering the item.

Children benefit from Mom and Dad’s help

Interest paid is a common deduction. Most people know to deduct interest paid on mortgages and student loans. College students and graduates, that aren’t claimed as dependents, can benefit from help from the parentals. The IRS treats interest paid on a student loan by a parent as money given to the student who then paid the debt. As long as the child isn’t claimed as a dependent, the child deduct the interest on their return.

“25.3.3.5.2  (08-28-2006)
“Evaluation of a Claim for Damages Under IRC § 7433″

“1.  Date stamp the claim upon receipt. Advisory should complete the initial review of the claim within 30 days of receipt.”

Would you look at that! No wonder I have several stories of people who sent in a notice of intent to sue based on my Calling Off the Dogs package because of an IRS levy that got a check for the full amount the next month. It seems that those reports came in like that because somebody in the IRS did their job and completed the initial review in 30 days like the IRM says too and took some action on their behalf.

When no response is received from the IRS by those who send a claim resulting from damages caused by an IRS levy it may be evidence that somebody at the IRS is messing up. Or, it could be that whoever was attempting to exhaust administrative remedies with a damage claim didn’t do a very good job. Reading further in IRM 25.3.3.5.2:

“2. Open an OI on ICS under 101 - Claim Other. Review the closed files for any prior claims.”

Keep this in mind when you send in an administrative claim for damages under § 7433; they are going to be reviewing your history. Continuing in IRM 25.3.3.5.2:

“3. The statutory elements contained in IRC § 7433 must be applied to each processable claim.”

Simply put; you must address each and every aspect of both § 7433 and the regulation 26 CFR 301.7433-1 in your administrative claim. You have to treat it like you would a jury instruction or a civil complaint. They are trying to find out if you know how to sue. Continuing from IRM 25.3.3.5.2(3):

“In determining whether a claim is administratively allowable the reviewer must determine whether:

“A. an officer or employee of the IRS intentionally, negligently, or recklessly disregarded any legal or regulatory provision of the Internal Revenue Code in connection with the collection of any federal tax ; and

“B. the taxpayer sustained direct, economic damages as a result.”

As the old saying goes, to be forewarned is to be forearmed. Here they are breaking down what the elements of a 26 USC § 7433 claim are for you. Address the above issues and you should be good to go. Continuing in IRM 25.3.3.5.2:

“4. The facts and circumstances of each case must be evaluated. The reviewer must determine if the alleged infraction did, in fact, take place.”

If you are lazy respecting point 4 above you will make it harder for the one doing the evaluation to determine whether there really are facts that warrant the claim. If you make it harder to evaluate the factual basis of the claim, you are just making it easier for the evaluator to rule against you. Another view, if you pay attention to 26 CFR 301.7433-1(e)(2)(ii) & (iii), included in my Calling Off the Dogs package, then you will have included the grounds, in reasonable detail, for the claim and you will have included copies of any available substantiating documentation or correspondence with the Internal Revenue Service; and, you will have included a description of the injuries incurred by you when you filed the claim. Since you are the one seeking damages, it would seem that it would be best if you help the reviewer by including photo copies of any available substantiating documentation or evidence. When you do this you make it easy for the evaluator to do the next part of IRM 25.3.3.5.2(4):

“… determine whether or not the infraction was a reckless, intentional, or negligent disregard of the law.”

Reading on in IRM 25.3.3.5.2 (with my emphasis added):

“5. The reviewer must also ascertain when, in time, the taxpayer became aware of the violation or should have become aware of the violation. Claims filed more than two years after the violation must receive special scrutiny. The taxpayer’s two year limitation to bring suit begins at the point when the taxpayer has had a reasonable opportunity to discover all essential elements in a possible cause of action. The reviewer must determine when the taxpayer knew or should have known of the violation. Claims filed outside the two year limitation will be rejected.”

Don’t be a dunderhead! This is telling us to address in our administrative claim the statute of limitation. We need to just do it and do it in an intelligent manner. If the statute of limitations is about to run out, you need to come up with an element of the claim that you can assert was discovered later that would extend the two year statute of limitations. If you are unwilling to do this, maybe better not to waste your time writing a claim. Better we put this info away in the back of our heads and make up our minds to get our claims in timely.

“6. Certain criteria guide the amount of an administrative settlement, under this section. For example:

“A. the amount of the award is to be reduced by the damages that reasonably could have been avoided by the taxpayer;

“B. only actual, direct economic damages are recoverable in an administrative claim. No litigation or administrative costs are recoverable in an administrative claim. To the extent that any costs are recoverable under § 7433, such costs are recoverable only in a court proceeding; and

“C. the actual, direct economic damage reimbursement cannot exceed $1,000,000 ($100,000 in the case of negligence).”

I’ve been telling people all along that it is possible to get a check for damages without going to court. I have never heard of anyone getting a check, but, there it is in black and white! I suspect that in the entire history of the existence of 26 USC § 7433 that no one has ever gotten a check for damages; that is, unless a relative or close friend to an IRS agent got one. Why not do a super job of writing an administrative claim and be the first one to get a check for damages on an administrative basis? Reading further in IRM 25.3.3.5.2:

“7. Acceptance or rejection of each claim will be reviewed by Area Counsel for agreement. Include the Advisory administrative file and all related information.

“8. After concurrence by Area Counsel, submit the file to the Advisory Territory Manager for approval.”

See, if you do your job and write a good administrative claim; and they do their job and review and approve your claim, there are going to be some highly educated eyeballs examining your work of art administrative claim. This is why it is a good idea to get my Calling Off the Dogs package and study up on the use of 26 USC § 7433 before writing your administrative claim and attempting to exhaust your administrative remedies.

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You probably already know that if you make a lot of money or have complicated taxes you won’t be able to file your taxes for free. Usually, for people with high incomes or a lot of assets, it makes sense, and it’s worth it, to pay someone to do your taxes. But, if you’re like me, filing your taxes is just a matter of plugging the right numbers into the right places.

The Turbo Tax Free Edition is a great for people in this situation. You can download this program from www.turbotax.com. If you’re worried that you need extra help to avoid tax debt, there are several different programs that you can pay for to e-file your taxes through Turbo Tax. Also, H&R Block has a free online program at www.hrblock.com.

2. IRS Free File

This program is a partnership between the IRS and private tax-preparation companies. You can only file for free if you made less than $ 57,000 for 2009. This program is only for filing federal taxes, so if you live in a state that has income tax, you’ll need to file those separately. The IRS free file page is located at www.irs.gov/efile.

IRS Free File lets you use tax software with help on every step. You can also choose to fill in the tax forms and file them online without tax software.

3. TaxAct Free Federal

This program is actually the one I used last year. There is an option on TaxAct for filing state taxes as well, making it easier for people who have to file both and don’t have complex taxes. TaxAct is simple to use, and really quick.

The address for TaxAct is www.taxact.com, simply enough. One of the benefits of e-filing taxes is that it gets your return back to you quicker, if you get one, and they indeed have direct deposit.

Raleigh NC Tax Preparation

A few days ago in a email news post I made the distinction that the natural disaster that occurred in Haiti is now a qualified disaster says the IRS (http://www.irs.gov/newsroom/article/0,,id=218615,00.html).

I said in the email that there are rumors that said people are able to make a deduction for donations to Haiti on the current year’s (2009) tax return - instead of having to wait until you file your 2010 tax return. Certainly this could be a huge reason to donate for people who desired to give money to the people of Haiti to help them get back on their feet! Are you feeling the pressure of today’s taxes? Right now you can get $100 off your tax return for Cary NC Tax Preparation needs!

Well, the suggestions I heard and that you may have heard are TRUE! On January 22nd, the IRS created a certain tax relief policy that allows donations for the Haiti disaster made after January 11, 2010 and before March 1, 2010, will be taken from your 2009 tax return. Or, you can choose to take the deduction to your 2010 tax return instead, on the chance that in case you did not want to take advantage of the wonderful incentive to assist those in need.

The inhabitants of Haiti are hurting quite a bit. These kinds of disasters are totally unavoidable, and are well, devastating. Earthquakes and other forms of natural disaster create vast levels of destruction and widespread loss of homes. Entire families do not have access to food or clean water. In many cases these families do not even have any sort of stable living environment without the assistance of relief organizations (funded by donators like you!). Do your part right now and donate whatever you can to help the people of Haiti. I would greatly appreciate the extended effort, and I’m sure every one of the struggling people in Haiti would appreciate it to!

Stay tuned for more articles and information regarding tax season, taxes, and Haiti!

http://www.marccpa.com

“(e)  Suspension of collections and statute of limitations
“(1) In general
“… if a hearing is requested under subsection (a)(3)(B), the levy actions which are the subject of the requested hearing…shall be suspended for the period during which such hearing, and appeals therein, are pending…”

The suspension of collection activities by timely requesting a Collection Due Process Hearing (CDPH) is a highly useful approach to bring to an end an IRS (Internal Revenue Service) levy on a financial institution such as a bank or credit union or paycheck. I’ve availed myself of this provision to end an IRS (Internal Revenue Service)  levy in as little as two days. A short time ago I put a statement in my shopping cart that even a dancing bear could block an IRS  levy by a well-timed request for a CDPH hearing as Congress provided in 26 U.S.C. § 6330(b)(1).

Then again, a dancing bear would not be able to keep Internal Revenue Service collection activity put off and most likely neither would most of us. In spite of all the holdups while appeals are pending; and in spite of being able to retrieve whatever funds you had in the bank when the Notice of Levy arrived from the IRS; and despite the fact of receiving full paychecks during those delays; in the long run, the end of the line will take place and the  IRS will proceed with collection activities as they were before the hearing was applied for. At the point this happens almost all the people will be right back where they began; dealing with collection activity by the Internal Revenue Service. It is because of this unpleasant actuality that I placed nine, free videos, 4-10 minutes in length at www.irsterminator.com discussing strategies I have researched out that make keeping IRS (Internal Revenue Service) collection activities suspended indefinitely a very real possibility.

There are two aspects to winning a CDPH hearing: 1) Taking affirmative strategic action with the object being too prevail in the hearing as I talk about in the videos mentioned above; 2) Avoiding raising issues that would bring about the loss of the hearing. Keeping away from losing issues is a matter of doing a little study and reviewing what issues have been raised in the past that lost.

Rohner v. U.S., 91 A.F.T.R.2d 2003-2425 (N.D.Ohio 2003) is the appeal ruling that I will take up in part in this article. Rohner lost hisCDPH hearing and appealed to the Federal District Court. I was able to hit upon his issues by using the search feature at the District Court data base at www.versuslaw.com. I made an hour and forty minute video about how to use Versuslaw to do legal research and that video tutorial is accessible for you to understand online legal research too at www.bearscart.com in the “law study” category.

In the section of the Court’s decision entitled “Factual and Procedural Background” the Court recounted:

“Although Plaintiff submitted Forms 1040 to the Internal Revenue Service (IRS) along with copies of Forms W-2 indicating his wage income for the years 1996 and 1998, he reported no income on the returns and attached statements containing frivolous arguments as to why he was not liable for an income tax for those two years…With regards to the 1998 tax return, the IRS then sent Plaintiff a letter dated May 24, 1999, advising him that a frivolous return penalty of $500 under 26 U.S.C. § 6702 would be assessed against him unless he corrected his position within 30 days…Plaintiff failed to correct the Form 1040 and the IRS assessed § 6702 penalty against him on September 13, 1999, with respect to the 1998 Form 1040…The IRS also accessed Plaintiff a § 6702 penalty on November 13, 2000, with respect to the 1996 Form 1040, because he submitted a Form 1040 for tax year 1996 showing no income with an attached statement containing frivolous arguments on July 21, 2000.”

Thus, it seems like Rohner may have been using an early Cracking the Code approach; or maybe, something taught by Irwin Schiff. He seems to be using the hearing to persuade the hearing officer to agree with  his opinion on why he had no taxable income and to get out of having to pay frivolous return penalties. The IRS sent Rohner a Notice of Intent to Levy that educated him of his entitlement to a CDP Hearing and he requested the hearing. After losing in the CDPH hearing, Rohner lost on appeal to the Federal District Court:

1) It is recounted in the published determination, the Court held that Rohner maintained that he had the right to record the collection due process hearing or have a court reporter transcribe the hearing. The Court held that Rohner misstated the law and held that he did not have the right to have the collection due process hearing recorded or to have a court reporter transcribe the hearing.

2) According to the published result, the Court said that Rohner claimed that the hearing officer denied  him a separate hearing with respect to the frivolous return penalties for each of the two different tax years. The Court held that collection due process hearings are comprised of more than simply theface-to-face meeting between the taxpayer and the officer. It held that written statements, telephone discussions and face-to-face meetings all are adequate for an acceptable hearing.

The Court ended up holding that the Internal Revenue Service’s administrative determination was to be upheld. In the videos at www.irsterminator.com I discuss how to use Rohner’s losing issues above to your own advantage. Check them out.

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