Wednesday, December 28, 2011

Get a jumpstart on taxes—some tips from the IRS

Plan now and be ready for tax time, the Internal Revenue Service says.
“During the final month of the 2011 tax year, you may want to set aside a moment during the busy holiday season to consider some quick IRS tips that may give you the gift of time and money saved next year,” North Carolina and South Carolina IRS Spokesperson Mark Hanson said.

Get your tax records together
With the current tax year winding down, the Internal Revenue Service is encouraging taxpayers to gather and organize their tax records now to reduce stress at tax time. Generally, tax records should be kept for three years, but some documents—for example, records relating to a home purchase or sale, stock transactions, IRAs and business or rental property—should be kept longer. For more information see IRS Publication 552, Recordkeeping for Individuals.

Get help estimating how much money you should have withheld each pay day
Go to IRS.gov for the IRS Withholding Calculator. This online program will help employees ensure that they don’t have too much or too little income tax withheld from their pay. It’s especially worthwhile to check your withholding if your marital status, number of dependents or employment status changed in 2011.

Get proper documentation for your contributions to charities
To deduct any charitable donation of money, a taxpayer must have a bank record or, in the case of cash contributions, a written communication from the qualifying charity showing the name of the charity and the date and amount of the contribution. A bank record includes canceled checks, bank or credit union statements, and credit card statements.

Get the most out of your retirement accounts
Are you maximizing your contributions to your retirement accounts? This year, you can contribute up to $5,000 in an IRA, as well as another $16,500 to a 401(k) employer plan. If you’re 50 or older, those numbers go up to $6,000 and $22,000, respectively. The Saver’s credit for low- and moderate-income workers helps offset part of the first $2,000 workers voluntarily contribute to IRAs and to 401(k) plans and similar workplace retirement programs.

Get credit for qualifying home improvements
Did you make some energy-efficient home improvements like adding insulation, new windows or an energy-efficient heating or cooling system in 2011? If so, you may qualify for up to a $500 tax credit.
Note: Qualifying improvements must be placed into service to the taxpayer’s principal residence located in the United States before Jan. 1, 2012.
You can learn more at www.irs.gov KEYWORD: “Energy.”

Get your guard up against tax scams
The IRS does not send out unsolicited email messages. Email messages claiming to be from the IRS are probably phishing scams. Recipients of such emails are urged not to open attachments, click on links, reply with personal information or complete any other activity that could compromise their computer’s security and lead to identity theft or worse.
“Remember, if the IRS needs to contact you, we’ll probably do it the good, old-fashioned way by sending you a letter via the U.S. Postal Service. Taxpayers have the right to confirm that any correspondence they receive claiming to be from the IRS is legitimate--just give us a call at 1-800-829-1040” Hanson said.

Get ready to e-file and learn how you can do it for free
E-file is the safe, accurate way taxpayers to quickly complete their taxes and make certain to take advantage of credits and deductions that may apply.
“More than 70 percent of taxpayers in the Carolinas (adjusted gross income less than $58,000) can use free online software to prepare and e-file their return using the Traditional Free File program. All taxpayer, regardless of income, can use Free File Fillable Forms, the other IRS Free File program. For more information, simply go to IRS.gov and click on the ‘Free File’ logo,” Hanson said.

Get information about the Earned Income Tax Credit
Wondering if you might benefit from the Earned Income Tax Credit, which is available to low- and moderate-income workers? Use the “EITC Assistant” at IRS.gov to determine if you are eligible, your filing status and if you have any qualifying children for EITC purposes.
Taxpayers who earn less than $44,000 in 2011 may be eligible for a refundable tax credit of up to $5,751.
Four of five eligible workers claim and get their EITC. The IRS wants to raise that number to five out of five.
“If you qualify, make sure you don’t miss out,” Hanson said.

Get information about the Volunteer Income Tax Assistance program’s free services and volunteer opportunities
If you earn less than $49,000 in 2011, you may be eligible to have IRS-trained volunteers prepare and e-file your tax return free of charge. VITA centers are sponsored by community groups throughout the Carolinas. To learn more, visit www.irs.gov KEYWORD: “VITA” or call 1-800-906-9887.
Interested in helping out in your community by preparing taxes free of charge? The VITA program is seeking volunteers. To help at a VITA location near you, send an email to the IRS at taxvolunteer@irs.gov indicating the city and state where you want to become a volunteer. Training is provided.

Get the services of a reliable tax professional (if necessary)
If you plan to pay someone to do your tax return, choose a tax preparer wisely. You are legally responsible for what’s on your tax returns even if they are prepared by someone else. So, it’s important to find a qualified tax professional.
New regulations effective in 2011 require all paid tax return preparers—including attorneys, CPAs and enrolled agents—to have a Preparer Tax Identification Number (PTIN).
Reputable preparers will ask multiple questions to determine whether expenses, deductions and other items qualify and remind clients that they need to keep careful and complete records in order to substantiate information on their tax return. By doing so, they have your best interest in mind and are trying to help you avoid penalties, interest or additional taxes that could result from later IRS contacts.
The IRS offers other tips for choosing a tax preparer at www.irs.gov KEYWORD: “Choosing a tax preparer.”

Get connected with the IRS using social media sites and smartphone apps
The IRS is on Twitter and YouTube. For IRS news and guidance for the public, the press and practitioners, follow @IRSnews on Twitter. For IRS news and guidance for tax professionals, follow @IRStaxpros on Twitter. To watch videos produced by the IRS on various tax administration topics, visit the IRS YouTube channel at http://www.youtube.com/irsvideos.
Want mobile IRS info? There’s an app for that. Download “IRS2Go” for Android or iPhone. It’s free and you can use it to check your refund status after you file.

Get an email subscription to IRS Tax Tips
During the tax-filing season, the IRS provides daily tax tips. You can sign-up to have these delivered directly to your email inbox. The IRS also provides summertime tax tips and special edition tax tips on important tax topics. To learn more, visit www.irs.gov KEYWORD: “Tax Tips.”

No comments:

Post a Comment

Feel free to send us a comment. Just be sure to keep it clean and respectful. And we reserve the right to not publish anonymous comments.