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If you are employed and make at least $3,000 in earned income a check may be in your mailbox by May 2008.. Check the NEWS section or click here. Beware of tax scams. Reports have been received from taxpayers that have been approached about receiving the Economic stimulus check early. Checks will not be mailed until May 2008 at the earliest. Don't be fooled by claims of earlier distribution of these checks. |
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IRS NewsIf Congress finalizes the economic aid plan a check may be in your mailbox as early as May. All taxpayers currently employed and making at least $3,000 in earned income are eligible. Click here for further information or by calling our office.Check your stimulus check amount here. Be sure to have a copy of your 2007 tax return handy before you begin. 2007 FILING SEASON MAY BE DELAYED. Click here for details.Home Mortgage InsuranceFor Tax Year 2007 this now is deductible. Restrictions do apply. For more information click here. Long Term Care Premiums paid during 2007
AdoptionMaximum credit for 2006 is $10,960 per adopted child. Credit will start to phase out when the modified adjusted gross income reaches $164,410 The credit will be $11,390 for 2007 with a phase out beginning at $170,820. Child and dependent Care CreditThe maximum child and dependent care credit is 35 percent. reduced credits begin at an AGI of $15,000. The amount of eligible expenses is $3,000 for one child and $6,000 for two or more children. Telephone Excise Tax Refund
Residential Energy CreditsNon Business Energy property credit expires for property placed in service after December 31, 2007. Six Month Extension Available to most TaxpayersFiling Form 4868 will now get you a 6 month extension as opposed to the previous 4 months. No signature or explanation is needed to obtain this extension. Changes in Car Donation DeductionsYou are no longer allowed to claim the deduction based on "fair market value". In most cases you must wait until the organization sells the vehicle at which time they will provide you with the amount it was sold. This is the amount that may be claimed. You may still use the "fair market value" if you donate the vehicle to an organization that uses the vehicle itself to further its specific purpose. In the case of 1-800-Charity Cars, they refurbish the vehicles and provides them directly to the disadvantaged. In this case the charity must estimate the fair market value at the time of the donation. Energy Incentives Act passedFair number of tax breaks available for taxpayers who own certain energy-efficient property installed in their personal residence. This property must have been installed after December 31, 2005 and before January 1, 2008. Tax credit can not exceed $500. Purchase of Hybrid vehicles are included under this act. Sales Tax DeductionSales tax is now deductible on Schedule A. Taxpayers may elect to deduct State and Local general Sales Tax instead of State and Local income taxes. You may not deduct both. The Sales Tax may be deducted based on actual receipts or using the tables available on the IRS web site or you may view a copy of Publication 600. Beware for 2006 the deduction is done differently due to the late extension of this deduction. Self Employed Health InsuranceIf you are self employed, you will be allowed to deduct 100% of the cost of your health insurance and qualified long term care insurance for you and your family and long as neither you or your spouse are eligible to participate in another employer's health plan. Disaster Area DesignationsTo find out if your area qualifies go to the FEMA website at http://www.fema.com/. Gift and Estate TaxesThe annual gift tax exclusion for 2004 is $11,000 per donee, per year. The lifetime exclusion for gifts remains $1,000,000. IRS Provides information on NoticesHope you never get one of those pesky IRS notices but if you do here is some information that could make it easier to understand. File your Extension Form ElectronicallyFiling for an extension (Form 4868) will never be easier. The IRS will allow Extensions to be filed through the mail, Tele File (Telephone) and in some cases through Efile. Check with your tax preparer for details. The IRS has set up a special toll free number. Click Here for more details. Make your federal tax payments online from anywhere.You may now make your federal tax payments online using the free Electronic Federal Tax Payment System (EFTPS). You can use the EFTPS to make all your Federal tax payments, including income, employment, estimated and excise taxes. Businesses can schedule payments up to 120 days in advance of their due dates, and individuals can schedule up to 365 days in advance of their due dates. This means an individual can schedule all four estimated tax payments (Form 1040ES) for the year at once. EFTPSOnline is popular. You can use it to make or cancel a payment, review payment history, change bank account information and print confirmation of your payment instructions. To sign up, visit www.eftps.gov, or call toll-free 1-800-555-4477 or 1-800-945-8400. Did you know?....Family day care providers can choose a standard rate for meals provided to children in their care instead of keeping detailed records and receipts Rates are:
Weight Loss Program can be taken as a Medical ExpenseIf prescribed by your Doctor and part of a treatment for a specific disease or ailment, including obesity. Visa acceptedYou may use your Visa card to make your tax payments. This is in addition to MasterCard, American Express and Discover. Contractor or EmployeeOften asked and debated question. Three factors to consider: 1. Behavioral Controls. Who provides the training, etc for how a task is performed? 2. Financial Controls, How is the worked paid? Are the workers expenses reimbursed? Can the worker make a profit or report a loss? 3. Relationship of the parties. Is the worker eligible for benefits? Relationship permanent or temporary in nature? Stock Option reporting SimplerA stock broker will no longer need to issue a 1099-B for same day exercise and sale. Certain conditions will need to be met. Deduction for EducatorsIn the past educators could deduct any expenses, such as buying school supplies, attending seminars, etc. These deductions were taken on Schedule A and were subject to an AGI (Adjusted Gross Income) limitation of 2%. No more. Beginning with 2002 taxes, this deduction may be taken without a limitation. Taxpayers may subtract up to $250 of qualified expenses. You will need to itemize deductions to receive this benefit. This deduction has been extended for 2006. Publication is now available for Terrorist Victims..The IRS has released a new publication explaining how to file claims under the Victims of Terrorism Tax Relief Act of 2001. This new law applies to victims of Sept 11, 2001, Anthrax Attacks and the April 1995 Oklahoma City bombing. IRS Publication 3920 is now available and contains worksheets to figure the amount of tax forgiven and for claiming the minimum tax relief of $10,000. As of October 7, the taxpayer assistance phone number (800) 829-1040 will be available from 7 am to 10 pm, Monday through Friday. IRS To collect overdue tax obligations through SS benefit reductions..If you are collecting Social Security benefits and have outstanding federal tax bills you will need to call the IRS at (800) 829-7650 to make arrangements to pay that debt. Starting in February of next year, benefit payments could be reduced by 15%. If you are affected by this federal Payment Levy Program you should have begun to be notified in October. No deductions will be taken from children's, lump sum death or Proudly benefits. And no deductions will be taken from Supplemental Security Income payments or benefits undergoing partial withholding to repay a debt owed Social Security. The specifics of this program can be found in the fact sheet at www.ssa.gov/enews/irsoverdue.htm. Dependents Allowed Benefit of 10% Tax Bracket..The advance refund was not available to certain taxpayers, including taxpayers who were claimed as dependents on someone else's 2000 income tax return. This was NOT what Congress had in mind when they drafted the Economic Growth Act of 2001. As a result, the IRS has written the instructions to Form 1040, line 40 permitting dependents to claim the credit. New Information for Obtaining EINSome Service Centers will only accept a fax, while others only require a phone call. There is now a new hotline that will standardize this process. The official word from the IRS is that the toll-free number for obtaining EINs will be fully functional January 2, 2002. The new toll-free number is (866) 816-2065 and will operate Monday through Friday from 7:30am to 5:30pm local time. Requests will continue to be received by fax or mail at these three locations: Brookhaven, NY (631) 447-4991 Cincinnati, OH (859) 669-5760, and Philadelphia, PA (215) 516-3990 Employers are required to withhold FICA on ISO ExerciseThe amount subject to FICA is the fair market value of the shares, less any amount paid for the shares. Saver's CreditQualified individuals are allowed a nonrefundable of up to $1,000 ($2,00 for MFJ) for eligible contributions to an IRA or 401K. This credit is available to you if you:
For more information on this tax credit ask your Tax Preparer or visit the IRS Web Site. Refer to IRS announcement 2001-106. or IRS Publication 590. Electronic Payment OptionsThere are two ways to pay taxes electronically. Taxpayers can use an electronic funds withdrawal from a checking or savings account, or use a credit card. MasterCard, American Express, Discover and now Visa are acceptable forms of Credit Card payments. E-Payments can be used to pay a balance due on a 2005 income tax return, pay a projected tax due, when requesting an automatic extension of time to file, and to pay an estimated tax payment for tax year 2006 when e-filing a return. Electronic funds withdrawal is free and you decide when the tax payment is withdrawn from your account. Electronic funds withdrawal is only available to those who e-file, either by computer or phone. This allows you to file your return early and schedule the withdrawal as late as April 15, 2006. A 2006 estimated tax payment can be made through electronic funds withdrawal only when filing a 2003 tax return via a computer. The estimated payment may be the one due in April, June or September. Only one estimated tax payment can be made through electronic funds withdrawal. Estimated tax payments cannot be made by phone. |
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