For tax years beginning after Dec. 31, 2004, nonresident aliens may claim the child tax credit on Form 1040NR, U.S. Nonresident Alien Income Tax Return, for a nondependent child. Attach Form 8901, Information on Qualifying Children Who Are Not Dependents (For Child Tax Credit) to the return. File amended returns for those who were eligible but didn’t claim the credit for 2005 or 2006, and attach Form 8901.
Showing posts with label US tax. Show all posts
Showing posts with label US tax. Show all posts
Monday, April 21, 2008
Monday, March 31, 2008
From IRS: Basic Information on the Stimulus Payments
Updated March 17, 2008 — new 1040A-3 package
You've heard about it. Now find out how to get yours.
What is it? It's an economic stimulus payment that more than 130 million households will receive starting in May. It's not taxable, and it won't reduce your 2007 or 2008 refund or increase the amount you owe when you file your 2008 return.
Are you eligible? The vast majority of people who file a 2007 income tax return qualify, and many who don't regularly file a tax return may qualify as well. You're eligible if you have a valid Social Security Number (SSN), can't be claimed as a dependent on a tax return and have either an income tax liability or "qualifying income" of at least $3,000. Qualifying income includes any combination of earned income and certain benefits from Social Security, Veterans Affairs or Railroad Retirement. Additional information is below, and a full legal description is available in Revenue Procedure 2008-21.
Both people listed on a "married filing jointly" return must have valid SSNs to qualify for the payment — if only one has a valid SSN, neither can receive the payment.
Can you use an ITIN instead of an SSN? Taxpayers with an Individual Taxpayer Identification Number (ITIN) instead of an SSN are not eligible to receive a stimulus payment. Both people listed on a "married filing jointly" return must have valid SSNs to qualify for the payment — if only one has a valid SSN, neither can receive the payment.
Not eligible at the current time? If your circumstances change and you become eligible after you file your 2007 federal tax return, you can always file an amended return using Form 1040X. File the form after April 14, 2008, and allow 8-12 weeks of processing time before making any inquiries about your payment. See a sample with instructions.
If you're not eligible this year but you become eligible next year, you can claim the economic stimulus payment next year on your 2008 tax return.
How do you get it? Just file a a federal tax return for 2007, even if you normally don't have to because your income usually doesn't meet the filing threshhold. You can't get it if you don't file.
How much will you get? The actual amount depends on the information contained on your tax return. Eligible individuals will receive between $300 and $600. Those who are eligible and file a joint return will receive a total of between $600 and $1,200. Those with children will get an additional $300 for each qualifying child. To qualify, a child must be eligible under the Child Tax Credit and have a valid Social Security number. We have various examples for you check out.
The payments phase out at certain income levels, so those with higher incomes may receive a reduced payment or even no payment.
Can you estimate your payment? The IRS has created an online calculator that will allow you to answer a few questions and get a quick estimate of your payment amount.
How will you receive the payment? Be sure to choose direct deposit when you file your tax return, even if you aren't due a regular tax refund on your tax return. That way, the stimulus payment will go right to your bank account. Otherwise, we'll mail you a check.
When will you get your payment? Starting May 2, payments will be electronically transmitted to direct deposit accounts. Paper checks will be mailed starting May 16. The payments are based on the last two-digits of the mail filer's Social Security number. The IRS has issued a schedule for payments as direct deposits or paper checks.
What if some or all of your income consists of Social Security, veterans' or other benefits? The economic stimulus law allows Social Security recipients and recipients of certain veterans' benefits and Railroad Retirement benefits to count those benefits towards the qualifying income requirement of $3,000. Supplemental Security Income (SSI) does not count as qualifying income for the stimulus payment. To get the payment, you have to file a 2007 tax return using either Form 1040 or the short Form 1040A. For more information, see:
- FS-2008-16, Stimulus Payments: Instructions for Low-Income Workers and Recipients of Social Security and Certain Veterans’ Benefits.
Tax Package 1040A-3 and Form 1040A
Those who normally don't have to file a tax return and can use the short form for the stimulus payment can check out tax package 1040A-3 to see information on, and an example of how to fill out, Form 1040A.
Learn More about the Economic Stimulus Payments
For more information, check out our:
Warning — Scam Artists Are Calling Taxpayers about the Stimulus Payments
Monday, March 24, 2008
IRS released the 2008 Filing Season Stats
| 2008 FILING SEASON STATISTICS | |||||
| Cumulative through the weeks ending 3/16/07 and 3/14/08 | |||||
| Individual Income Tax Returns | 2007 | 2008 | % Change | ||
| Total Receipts | 67,705,000 | 71,028,000 | 4.9% | ||
| Total Processed | 63,799,000 | 66,656,000 | 4.5% | ||
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| E-filing Receipts: |
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| TOTAL | 49,401,000 | 53,359,000 | 8.0% | ||
| Tax Professionals | 35,105,000 | 36,771,000 | 4.7% | ||
| Self-prepared | 14,296,000 | 16,588,000 | 16.0% | ||
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| Web Usage: |
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| Visits to IRS.gov | 88,834,000 | 100,660,000 | 13.3% | ||
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| Total Refunds: |
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| Number | 57,434,000 | 59,199,000 | 3.1% | ||
| Amount | $141.680 | Billion | $149.621 | Billion | 5.6% |
| Average refund | $2,467 | $2,527 | 2.5% | ||
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| Direct Deposit Refunds: |
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| Number | 42,057,000 | 45,023,000 | 7.1% | ||
| Amount | $117.429 | Billion | $126.127 | Billion | 7.4% |
| Average refund | $2,792 | $2,801 | 0.3% | ||
IRS has $1.2 Billion in Unclaimed Refund
WASHINGTON — Unclaimed refunds totaling approximately $1.2 billion are awaiting about 1.3 million people who failed to file a federal income tax return for 2004, the Internal Revenue Service announced today. However, to collect the money, a return for 2004 must be filed with an IRS office no later than Tuesday, April 15, 2008.
Those due a refund who did not file a 2004 tax return could collect even more money by also filing a 2007 tax return to claim the economic stimulus payment. To receive a payment, taxpayers must have a valid Social Security number, $3,000 of qualifying income and file a 2007 federal tax return. Millions of retirees, disabled veterans and low-wage workers who usually are exempt from filing a tax return must do so this year in order to receive the stimulus payment. Eligible people will receive up to $600 ($1,200 for married couples), and parents will receive an additional $300 for each eligible child younger than 17.
Tuesday, January 22, 2008
US 2008 Presidential Candidates On Tax Issues
TAXES:
Clinton: Raise income taxes on wealthiest and keep estate tax on them. Higher tax breaks for college.
Edwards: Raise income taxes on wealthiest and their capital gains tax. $25 billion a year in tax cuts for non-wealthy, including tripling the Earned Income Tax Credit for singles and $500 tax credit for families making up to $75,000.
Obama: Raise income taxes on wealthiest and their capital gains and dividends taxes. Raise corporate taxes. $80 billion in tax breaks mainly for poor workers and elderly, including tripling Earned Income Tax Credit for minimum-wage workers and higher credit for larger families.
Giuliani: Cut corporate tax rate to 25 percent from 35 percent, eliminate estate tax, establish a permanent child tax credit.
Huckabee: Replace income and investment taxes with 23 percent national sales tax, with help for poor and rebates for essential purchases.
McCain: Opposed some of Bush's tax cuts because they were not tied to spending cuts, now says the tax cuts should be permanent.
Romney: Tax breaks to those earning less than $200,000, eliminating capital gains, interest and dividend taxes for most.
HEALTH INSURANCE:
Clinton: $110 billion a year for mandatory universal coverage in first term. Tax credits to make insurance more affordable. Raise taxes on wealthy.
Edwards: Up to $120 billion a year for mandatory universal coverage in first term. Tax credits for affordability. Raise taxes on wealthy.
Obama: No universal coverage mandate for adults but one for children. More than $65 billion a year to make universal coverage affordable. Raise taxes on wealthy.
Giuliani: Income tax deduction of $7,500 per taxpayer to defray insurance costs.
Huckabee: Spend more on prevention, let market and states expand insurance.
McCain: $2,500 tax credit per taxpayer to help pay for insurance.
Romney: Incentives for states to expand affordable coverage. As governor, signed law aimed at ensuring universal coverage.
SOCIAL SECURITY:
Clinton: Noncommittal on raising $97,500 income cap on payroll taxes. Proposes a federal match of up to $1,000 to help set up 401(k) plans.
Edwards: Subject the portion of income over about $200,000 to Social Security taxes.
Obama: Raising cap with unspecified "small adjustment" that would subject a portion of higher incomes to Social Security taxes.
Giuliani: Rules out tax increase to save Social Security.
McCain: Would consider "almost anything" in a compromise to save Social Security, yet rules out higher payroll taxes for now.
Huckabee: Higher benefits for people who delay retirement past 70. Let retirees choose to get benefits or a payment at death for heirs.
Romney: Higher taxes are "wrong way to go."
Who is your favorite candidate? Do you agree with where they stand on the tax issues? Who will lead the lost country in the time of uncertainties?
Tuesday, October 9, 2007
US Tax Payer Tax-filling Extension deadline: Oct 15
Just a reminder that Oct. 15 is the US tax-filling extension deadline. Please consult your accountant if you haven't done your tax yet.
Sunday, September 30, 2007
US Internet Tax debates
US consumers may have to pay an Internet access tax if the US decides on Nov 1 to lift the federal ban.
Currently the lines that provide Internet access in the US are virtually tax-free but this could change soon if local government has anything to say about it.
Within the industry the idea of imposing additional taxes on Internet access is extremely unpopular and organizations like Google, AT&T and Timer Warner have banded together to form a group called “Don’t Tax our Internet”.
Changing Internet usage has complicated the issue, threatening to derail an extension and raising the specter of local officials engaging in a land-rush-like race to enact new taxes for surfing the Web.
In the forthcoming weeks it will be interesting to see how this matter plays in the US and who will win out – US government or the industry players
Monday, September 24, 2007
Foreclosure Tax Relief Available to Many
The IRS unveiled a new section of their website today that is dedicated to Foreclosure Tax Planning those who have lost their homes due to foreclosure. They are also reassuring homeowners that there are special relief provisions which can often reduce or eliminate the tax bite for financially strapped borrowers who lose their home. As you may be aware of, some mortgage workouts and foreclosures can have tax consequences and these provisions will help keep the burden to a minimum.
The section includes a worksheet designed to help borrowers determine whether or not any foreclosure related relief provisions apply to them. If a homeowner finds they owe additional tax, it also includes a form they can use to request a payment agreement with the IRS or even settle their tax debt for pennies on the dollar using an offer-in-compromise.
Under tax law, any debt that is wiped out through foreclosure (or a short sale) that exceeds the value of the property, the difference in considered taxable income. The IRS urges homeowners to consider their options carefully before giving up their homes.
There is a special rule that allows insolvent borrowers to offset income to the extent their liabilities exceed their assets. However, under tax law, relief may be limited or unavailable due in some situations such as using part or all of a home for business or rented out.
Homeowners who have debt reduced or eliminated will receive a From 1099-C from their lender. By law, the form will show the amount of debt forgiven and the fair market value of the property. Keep in mind that the winning bid at a foreclosure auction may not reflect the true value of the property.
If you receive a 1099-C, review it carefully and notify the lender immediately of any incorrect information. Pat particular attention to Boxes 2 and 7 as they are the amounts forgiven and fair market value.
Also, if you are facing foreclosure or have already been foreclosed upon, don't wait until the end of the year to start tax planning. Visit the www.irs.gov now or consult an accounting professional and start researching your options.
Wednesday, September 12, 2007
Donations and Tax-Exempt Organizations: US version
Taxpayers who make donations to tax-exempt organizations, such as charities and churches, have some new rules to follow regarding the deductibility of their donations. And, tax-exempt organizations themselves are faced with sweeping changes that affect donations as well as filing and record-keeping requirements. Here is some information to help you learn more about how the new rules may affect you:
Q. What do I need to do in order to claim a deduction for money I donate to charity?
A. For any cash contribution – which includes donations made via cash, check, electronic fund transfer or credit card – you must obtain and keep either a written communication from the charity or a bank record (such as a bank statement, cancelled check or credit card statement) that includes the date, the amount of the donation, and the name of the charity.
Q. How about donations of used clothing or household goods? How do I make sure I can claim a deduction when I donate these items?
A. In order to qualify for a tax deduction, the clothing or household goods you donate to a tax-exempt organization must be in good used condition. The exception to this rule is an item for which a deduction of more than $500 is claimed if you submit a qualified appraisal of the item along with your tax return.
Q. When do I need a “qualified appraisal” for an item I donate?
A. For a contribution of property with a claimed value over $5,000, a qualified appraisal is required. Under the new tax laws, a qualified appraisal must be conducted in accordance with generally accepted appraisal standards, by a qualified appraiser who has either earned an appraisal designation from a recognized professional appraisal organization or has minimum education experience. The appraiser must also have experience in appraising the type of property in question.
Q. I am responsible for a small charity run by a handful of volunteers. In past years, we had no federal filing requirement. Has that changed?
A. Yes. Now, all tax-exempt organizations except churches are required to file some version of Form 990 annually. Small charities may only have to file the e-postcard version of this form. Keep in mind that the penalty for non-filing can be serious: a tax-exempt organization that fails to file for three years can have its tax-exempt status revoked.
Remember, a professional accountant can help you with this and other tax issues you may encounter. Just give us a call or email us at tax@yyconsulting.com.
Tuesday, September 4, 2007
The Role of Appeals in Resolving Federal Tax Disputes
Internal Revenue Service (IRS) provides a formal process – Appeals – to help resolve tax disputes without proceeding to court. Appeals officials will review all available information, viewpoints and perspectives to come to a resolution on which the IRS and the taxpayer agree.
Q. I disagree with the action the IRS is taking on my case. If I go to Appeals, will I really get a fair review?
A. Yes, you will. The Appeals Division of the IRS is designed as an independent forum that provides a fresh look at your tax dispute.
Q. Are there any advantages to going to Appeals, or is it better to just go to court?
A. The Appeals Division is charged with reviewing your case in a way that is impartial and fair. And, unlike a judge, the Appeals Division has a more flexible viewpoint and can offer compromises instead of simply ruling on the point of law. Appeals can recognize that there are gray areas.
Q. I have a case currently in Appeals, but I think that the Appeals official has been communicating with the IRS’ examination division behind my back. Is that allowed? What can I do?
A. By law, Appeals cannot conduct “ex parte communication,” or communication with other parts of the IRS about your Appeals case, without your knowledge. The ex parte rule is intended to help maintain the integrity of the Appeals process. If you believe that the ex parte rule has been violated, you need to bring it to the attention of the Appeals officer’s supervisor. If ex parte communication has occurred, you will receive complete information on the communication that took place, and your case may be reassigned.
Q. If I take my case to court, can I change my mind and go to Appeals instead?
A. No. Once your case is in the courts, Appeals cannot help you. In most instances, you should exhaust all of your other options before proceeding with a court case.
Q. Is the standard Appeals process my only option for resolution of my dispute, other than court?
A. Other than the standard Appeals process, other options for dispute resolution are available. These include fast-track settlements, post-appeals mediation and arbitration.
Q. What are my options for authorizing other people to represent me with the IRS?
A. There is a wide range of third-party authorizations available to help you with representation in all sorts of federal tax issues. To highlight just a few of these options, you can authorize your tax practitioner in writing using the Power of Attorney, Tax Information Authorization or Third-Party Designation, or via telephone using the Oral Tax Information Authorization or Oral Disclosure Consent. Each authorization has its own unique requirements and limitations, and several publications are available for more complete information. Check out the IRS Web site at www.IRS.gov for details, or talk to your tax practitioner.
Monday, August 27, 2007
US State Tax Websites
[Alabama] [Alaska] [Arizona] [Arkansas] [California - BOE] [California - EDD] [California - FTB] [California] [Colorado] [Connecticut] [Delaware] [District of Columbia] [Florida] [Georgia] [Hawaii] [Idaho] [Illinois] [Indiana] [Iowa] [Kansas] [Kentucky] [Louisiana] [Maine] [Maryland] [Massachusetts] [Michigan] [Minnesota] [Mississippi] [Missouri] [Montana] [Nebraska] [Nevada] [New Hampshire][New Jersey- Taxation] [New Jersey - Revenue][New Mexico] [New York State] [New York City] [North Carolina] [North Dakota] [Ohio] [Oklahoma] [Oregon] [Pennsylvania] [Puerto Rico] [Rhode Island] [South Carolina] [South Dakota] [Tennessee] [Texas] [Utah] [Vermont] [Virginia] [Washington] [West Virginia] [Wisconsin] [Wyoming]
Please contact us if you need help on filing your state return.
Wednesday, August 1, 2007
DO YOU OWE MONEY TO THE IRS?
The vast majority of Americans get a tax refund from the IRS each spring, but what do you do if you are one of those who have received a tax bill? What do you do if you owe money to the IRS and can’t pay?
The IRS encourages you to pay the full amount of your tax liability on time. If you get a bill for late taxes you are expected to promptly pay the tax owed including any additional penalties and interest. It is often in your best interest to get a loan to pay the bill in full rather than to make installment payments to the IRS. You can also pay the bill with your credit card. The interest rate on a credit card or bank loan may be lower than the combination of interest and penalties imposed by the Internal Revenue Cod
e.
You can pay the balance owed by credit card, electronic funds transfer, check, money order, cashier’s check, or cash. To pay by credit card contact either Official Payments Corporation at 800-2PAYTAX (also www.officialpayments.com) or Link2Gov at 888-729-1040 (also www.pay1040.com). To pay using electronic funds transfer you can take advantage of the Electronic Federal Tax Payment System (EFTPS) by calling 800-555-4477 or 800-945-8400 (also www.eftps.gov).
An installment agreement may be requested if you cannot pay the liability in full. This is an agreement between you and the IRS for the collection of the amount due in monthly installment payments. To be eligible for an installment agreement you must first file all returns that are required and be current with estimated tax payments. If you are an employer you must be current with your federal tax deposits.
If you owe $25,000 or less in combined tax, penalties, and interest, you can request an installment agreement using the web-based application, Online Payment Agreement (OPA), found on the Internet at IRS.gov. Or, you can complete and mail an IRS Form 9465, Installment Agreement Request, along with your bill in the envelope that you have received from the IRS. The IRS will inform you within 30 days whether your request is approved, denied, or if additional information is needed.
You may still qualify for an installment agreement if you owe more than $25,000, but a Form 433F, Collection Information Statement, may need to be completed.
If an agreement is approved, a one-time user fee will be charged. The user fee for a new agreement is $105 or $52 for agreements where payments are deducted directly from your bank account. For eligible individuals with incomes at or below certain levels, a reduced fee of $43 will be charged.
For more information about installment agreements and other payment options visit the IRS Web site at IRS.gov or consult your accountant.Friday, June 22, 2007
Deadline Extended until July 2 for Reporting on Foreign Bank and Financial Accounts
WASHINGTON — Taxpayers have an additional two days this year, until July 2, 2007, to file the Report of Foreign Bank and Financial Accounts (FBAR), Form TD F 90-22.1, the Internal Revenue Service announced today.
The deadline for FBAR forms is June 30, 2007. But because June 30 falls on a Saturday, the IRS is allowing taxpayers to file by July 2.
FBAR information returns for the 2006 calendar year must be filed with the U.S. Department of Treasury, P.O. Box 32621, Detroit, Mich., 48232-0621. The address for commercial delivery is: U.S. Department of Treasury, Currency Transaction Reporting, 985 Michigan Avenue, Detroit, Mich., 48226.
The FBAR form is not available for electronic filing, but many income tax software packages can prepare a printed copy. FBAR forms and instructions are also available on this Web site or FinCEN Web site and from the IRS via telephone at 1-800-829-3676.
The FBAR form is required for each U.S. person who has a financial interest in, or signature authority, or other authority, over any financial accounts, including bank, securities or other types of financial accounts, in a foreign country, if the aggregate value of these financial accounts exceeds $10,000 at any time during the calendar year.
Taxpayers who need assistance completing Form TD F 90-22.1 can contact the IRS by telephone at 1-800-800-2877, option 2, or via email at FBARquestions@irs.gov.
Tuesday, April 17, 2007
US Tax Day is Today!
You have until 11:59 p.m. on Tuesday, April 17, to file your 2006 federal tax return. That's true in most states as well, although five --Delaware, Hawaii, Iowa, Louisiana and Virginia -- actually have a later filing deadline.
If getting your tax return done on time just isn't feasible, file for an extension.
Contact us for details.
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