Archive for January, 2013

Are You Eligible for the Earned Income Tax Credit???

Friday, January 25th, 2013

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice.

The provisions of this tax benefit were enacted by the U.S, Congress in 1975.    This tax benefit is intended to provide a REFUNDABLE tax credit for those taxpayers whose annual income is below certain thresholds.  “REFUNDABLE” means that it is possible for you to have a $ 0.00 income tax liability, receive a tax refund for all Federal taxes that were withheld, and in addition, receive the full amount of the tax credit to which you are entitled.  While it is primarily intended to benefit individual and couples who are providing a household for their children, there are also other situations for which you may be qualified.  The additional intent of the tax law is to offset the reduction of income associated with social security taxes, and to provide an incentive to work (equals earned income) and to not be reliant on social welfare programs.

 Addtional information regarding the qualifications can be found in IRS Publication 596 (“Earned Income Credit”).  (more…)

Tips For Preparing To File Your 2012 Individual Tax Return

Thursday, January 24th, 2013

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice.

While the earliest time that you can file your 2012 individual tax return (Federal Form 1040) is not until January 30th, there is information that you may need IF you plan to be among the first to file your tax return this year.   If you do not already have sources for the 2012 rules that are applicable, you can use a search engine and the Internet.  Here is a notice from the IRS website at http://www.irs.gov  

Forms & Publications

For taxpayers who can file their individual income tax returns beginning January 30, all forms and instructions needed have been posted to IRS.gov and are accessible by clicking on Current Forms & Pubs below. Some 2012 tax forms that cannot be filed beginning on January 30 are not yet available. We continue to work as quickly as possible on updates and will post them on IRS.gov as updates are completed.

As of today, the 2012 version of Publication 17 (Your Federal Income Tax [For Individuals]) is not yet available.  Many of the tax laws were changed or extended.  Several media sources are also recommending that you also consult with a tax preparer.  You can review pages 15-17 of my 2012 tax return questionnaire, which is available from this website (http://www.billseabrookecpa.com/resources/2012taxreturnquestionnaire.pdf )    

IRS Offers Tips to Help Taxpayers with the January 30  
Tax Season Opening

 The IRS will begin processing most individual income tax returns on Jan. 30 after updating forms and completing programming and testing of its processing systems. The IRS anticipated many of the tax law changes made by Congress under the American Taxpayer Relief Act (ATRA), but the final law requires some changes before the IRS can begin accepting tax returns.

 The IRS will not process paper or electronic tax returns before the Jan. 30 opening date, so there is no advantage to filing on paper before then. Using e-file is the best way to file an accurate tax return, and using e-file with direct deposit is the fastest way to get a refund.

 Many major software providers are accepting tax returns in advance of the Jan. 30 processing date. These software providers will hold onto the returns and then electronically submit them after the IRS systems open. If you use commercial software, check with your provider for specific instructions about when they will accept your return. Software companies and tax professionals send returns to the IRS, but the timing of the refunds is determined by IRS processing, which starts Jan. 30.

 After the IRS starts processing returns, it expects to process refunds within the usual timeframes. Last year, the IRS issued more than nine out of 10 refunds to taxpayers in less than 21 days, and it expects the same results in 2013. Even though the IRS issues most refunds in less than 21 days, some tax returns will require additional review and take longer. To help protect against refund fraud, the IRS has put in place stronger security filters this filing season.

 After taxpayers file a return, they can track the status of the refund with the “Where’s My Refund?” tool available on the IRS.gov website. New this year, instead of an estimated date, Where’s My Refund? will give people an actual personalized refund date after the IRS processes the tax return and approves the refund.

 ”Where’s My Refund?” will be available for use after the IRS starts processing tax returns on Jan. 30. Here are some tips for using “Where’s My Refund?” after it’s available on Jan. 30:  

  • Initial information will generally be available within 24 hours after the IRS receives the taxpayer’s e-filed return or four weeks after mailing a paper return.
  • The system updates every 24 hours, usually overnight. There’s no need to check more than once a day.
  • “Where’s My Refund?” provides the most accurate and complete information that the IRS has about the refund, so there is no need to call the IRS unless the web tool says to do so.
  • To use the “Where’s My Refund?” tool, taxpayers need to have a copy of their tax return for reference. Taxpayers will need their social security number, filing status and the exact dollar amount of the refund they are expecting.   

For the latest information about the Jan. 30 tax season opening, tax law changes and tax refunds, visit http://www.irs.gov     

Additional IRS Resources:   

IRS YouTube Video:   

  • When Will I Get My Refund? – English

(more…)

Where’s My 2012 Federal Tax Refund????

Sunday, January 13th, 2013
The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice.

Note:  The Internal Revenue Service has recently announced that Federal individual tax return filings will not be accepted before January 30, 2013.  It is reasonable to anticipate that there will be a “tsunami” of individual tax returns being filed on that date.   It is also reasonable to assume that tax refunds will take somewhat longer to be received compared to last year.  The information below is provided verbatim from the IRS website, http://irs.gov : 

2012 Tax Season Refund Frequently Asked Questions

 

How quickly will taxpayers get refunds?

  • Following technology improvements, the IRS will issue refunds to more taxpayers in as few as 10 days this year. But taxpayers should keep in mind that many variables can affect the speed of a tax refund.
  • The IRS issues more than 90 percent of refunds within 21 days

Why can’t the IRS tell me the exact date I will get my refund?

  • The IRS reminds taxpayers that refund time frames provided by the “Where’s My Refund?“ IRS2Go smartphone application (app) and tax providers are projected time frames and are subject to revision. Many different factors can affect the timing of the refund after the IRS receives the return for processing.
  • Also, keep in mind that the date “Where’s My Refund“ provides is the estimated date the IRS will issue the refund, not the date the taxpayer will get the refund. It may take up to five additional days for the financial institution to post the refund to your account, or for mail delivery.

Why did my refund date on “Where’s My Refund”change?

Refund dates change in “Where’s My Refund” as a tax return moves through IRS processing. A date change is not a sign of a problem for a person’s tax return. No action is needed by the taxpayer, unless “Where’s My Refund” specifically indicates that an action is needed.

The estimated refund date initially provided via “Where’s My Refund” is just that, an estimate based on a best-case scenario in which the tax return was filed accurately and there are no corrections or reviews required. However, there are many factors that could affect the processing of a taxpayer’s return that may also change the estimated date the refund will be issued. These could include:

  • The IRS balances customer service and tax compliance by reviewing tax returns to prevent fraudulent and erroneous refunds. These critical reviews could add time to refund processing, even for some legitimate returns.
  • The IRS may need time to fix a simple error, like a math error.
  • Refund timeframes can also be affected by such factors as bankruptcy, an open audit or a balance due on a related account such as a different tax year.

If a tax return is affected by one of these factors or by an IRS processing system delay, “Where’s My Refund” will generally provide updated information as that return is processed and/or an updated estimate as the actual refund date becomes more clear.

The date “Where’s My Refund” provided is different than the date my tax preparer or tax software provided. What should I do?

  • The IRS reminds taxpayers that refund time frames provided by “Where’s My Refund” and tax providers are projected time frames and are subject to change. Many different factors can affect the timing of the refund after the IRS receives the return for processing.
  • The IRS issues the vast majority of refunds in 21 days or less so even though the issue date provided to you may have changed, it’s very likely that your refund is on its way.
  • There is no need to call unless you get a specific message indicating that you should. If the IRS needs more information to process your return, they will contact you by mail. The telephone assistors do not process refunds and will not be able to provide additional information.

Will calling the IRS give me additional information or speed my refund?

  • No, calling the IRS won’t do anything to speed your refund. The IRS processes more than 140 million tax returns each year, and our telephone assistors are not the people who actually process tax returns.
  • The best option for taxpayers is to check “Where’s My Refund” or IRS2Go and remember the vast majority of tax refunds will be issued within 21 days.
  • More information about the refund process is available in our YouTube video, When Will I Get My Refund?, and an IRS fact sheet.

Is the estimated date provided by my tax preparer, tax software or “Where’s My Refund” a guarantee of when I will get my refund?

Unfortunately, the IRS cannot guarantee a taxpayer will get their refund on a certain date. While estimates are provided as the return is processed, the IRS emphasizes these are “best-case scenarios” where tax returns are filed accurately and no corrections or review are required.

What might cause a taxpayer’s return to take longer to process?

  • Common errors can delay processing and extend refund timelines. Ensure your refund arrives as expected by submitting an error-free return. Use the correct Social Security or taxpayer identification numbers, address, and bank and routing numbers if electing direct deposit.
  • To balance taxpayer service, quick refunds and tax compliance, the IRS must review refunds to prevent fraudulent and erroneous refunds. These critical reviews can add time to refund processing, even for some legitimate tax returns.
  • The IRS also periodically adjusts its technology systems during the filing season, which can also factor into short refund delays.

What is the best way to file for an accurate return and a fast refund?

  • Using e-file with direct deposit remains the fastest option for taxpayers.
  • E-file remains the best way to ensure an error-free return. However, certain taxpayers, like those claiming the adoption credit, must file paper tax returns so that they can submit required documentation. Paper returns take longer to process.
  • Ensure your refund arrives as expected by submitting an error free return. Use the correct Social Security or taxpayer identification numbers, address, and bank and routing numbers if electing direct deposit.

What’s the best way for taxpayers to check on the status of their refund?

  • You don’t need to call and wait on the telephone. The fastest and best way to check the status of your refund is through the “Where’s My Refund” tool on IRS.gov and the IRS2Go smartphone app.
  • Generally, information about refund status is available about three days after the IRS acknowledges receipt of your e-filed return, or four weeks after you mailed a paper return.
  • The IRS works hard to issue refunds as quickly as possible. But the IRS cautions taxpayers not to tie major financial decisions to the receipt of their tax refund by a specific date.

How does the IRS’s Refund Cycle Chart used by tax professionals differ from general refund timelines?

  • The IRS Refund Cycle Chart is a tool provided to help tax professionals provide a best-case estimate when the IRS may issue a refund based on when the return is accepted by the IRS. The refund time frames provided by the Refund Cycle Chart are best-case estimates and subject to revision as many different factors can affect the timing of the refund after the IRS receives the return for processing.
  • The times listed on the Refund Cycle Chart are the best-case scenarios for refunds. These refund times routinely differ from those listed on Where’s My Refund and the IRS2Go smartphone app.
  • It’s important to note that the chart is only for electronically filed returns, but it does show timelines for both direct deposit and mailed checks. The dates on the Refund Cycle Chart are the best-case estimate date the IRS will issue the refund, not the date the taxpayer will receive it. Also, remember many factors can extend refund receipt timelines, including IRS reviews, banking practices and speed of mail delivery.

2012 Tax Return Filing Season Begins January 30th For Individual Taxpayers

Wednesday, January 9th, 2013

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice.

 IRS Plans January 30th Tax Season Opening For 1040 Filers

Following the January tax law changes made by Congress under the American Taxpayer Relief Act (ATRA), the Internal Revenue Service announced today it plans to open the 2013 filing season and begin processing individual income tax returns on January  30th.

The IRS will begin accepting tax returns on that date after updating forms and completing programming and testing of its processing systems. This will reflect the bulk of the late tax law changes enacted January 2nd.  The announcement means that the vast majority of tax filers — more than 120 million households — should be able to start filing tax returns starting January 30th.

The IRS estimates that remaining households will be able to start filing in late February or into March because of the need for more extensive form and processing systems changes. This group includes people claiming residential energy credits, depreciation of property or general business credits. Most of those in this group file more complex tax returns and typically file closer to the April 15th deadline or obtain an extension. (Important Note:  This is an extension of the time to file your tax return, which does not provide an extension of the time to pay all of your 2012 income taxes).

“We have worked hard to open tax season as soon as possible,” IRS Acting Commissioner Steven T. Miller said. “This date ensures we have the time we need to update and test our processing systems.”

The IRS will not process paper tax returns before the anticipated January 30th opening date. There is no advantage to filing on paper before the opening date, and taxpayers will receive their tax refunds much faster by using e-file with direct deposit.

“The best option for taxpayers is to file electronically,” Miller said.

The opening of the filing season follows passage by Congress of an extensive set of tax changes in ATRA on January 1, 2013, with many affecting tax returns for 2012. ‬While the IRS worked to anticipate the late tax law changes as much as possible, the final law required that the IRS update forms and instructions as well as make critical processing system adjustments before it can begin accepting tax returns.

The IRS originally planned to open electronic filing this year on January 22nd; more than 80 percent of taxpayers filed electronically last year.

Who Can File Starting January 30th?

The IRS anticipates that the vast majority of all taxpayers can file starting January 30th, regardless of whether they file electronically or on paper. The IRS will be able to accept tax returns affected by the late Alternative Minimum Tax (AMT) patch as well as the three major “extender” provisions for people claiming the state and local sales tax deduction, higher education tuition and fees deduction and educator expenses deduction.

Who Can’t File Until Later?

There are several forms affected by the late legislation that require more extensive programming and testing of IRS systems. The IRS hopes to begin accepting tax returns including these tax forms between late February and into March; a specific date will be announced in the near future.

The key forms that require more extensive programming changes include Form 5695 (Residential Energy Credits), Form 4562 (Depreciation and Amortization) and Form 3800 (General Business Credit). A full listing of the forms that won’t be accepted until later is available from http://www.IRS.gov.

As part of this effort, the IRS will be working closely with the tax software industry and tax professional community to minimize delays and ensure as smooth a tax season as possible under the circumstances.

Updated information will be posted on http://www.IRS.gov.