Receive a Faster Refund with Direct Deposit
. . . it’s tax time!
This year, do you want your refund faster? Have it deposited directly into your bank account. More taxpayers are choosing direct deposit as the way to receive their federal tax refunds. More than 61 million people had their tax refunds deposited directly into their bank accounts last year. It’s the secure and convenient way to get money in your wallet faster.
- Security. The payment is secure – there is no check to get lost. Each year thousands of refund checks are returned by the US Post Office to the IRS as undeliverable mail. Direct deposit eliminates undeliverable mail and is also the best way to guard against having a tax refund stolen.
- Convenience. There’s no special trip to the bank to deposit a check!
You can also electronically direct your refund to multiple accounts. With the new “split refund” option, taxpayers can divide their refunds among as many as three checking or savings accounts and three different U.S. financial institutions. The split refund option, using Form 8888, is also available for paper returns.
Caution: Some financial institutions do not allow a joint refund to be deposited into an individual account. Check with your bank or other financial institution to make sure your direct deposit will be accepted. Also, make sure you have the correct nine-digit routing number and your account number when selecting direct deposit.
Don’t have a checking account? L & R Tax Preparation ( or your tax Professional) can Still give you the speed and Security of Direct Deposit.
To request direct deposit, ask us at L & R Tax Preparation for information..
A Week in Perspective
THE NEW E-FILE MANDATE – “. . . An individual or couple may engage a tax professional, such as me, to prepare the federal income tax return that he/she/they is/are required to file. While, as is the case with just about every situation where a person or company provides goods or services for compensation, the preparer has certain legal and ethical responsibilities regarding the preparation of the return, the tax pro is hired by the taxpayer to simply prepare the return. . . .”
In the post mentioned above (please read the whole post), my friend asked many a tax bloggers/professionals for our response “I am very sincerely interested in the comments of my fellow tax professionals, and especially my fellow tax bloggers (are you listening Annette, Kay, Kelly, Mary, Trish, Bruce, Dan, Jim, both Joes, Russ, etc.?) on this post.” Of all of us out here and those ask of in particular I was disappointed in the number of us who have responded.
A few even chose to respond by a post on their perspective blogs A Line in the New Jersey Sand and It Depends on What the Meaning of the Word ‘Is’ Is. The rest of the comments can be read here including mine.
In his post I AM RIGHT – BUT A LOT OF GOOD IT WILL DO ME! RDF concludes what we have all said.
Those of the most popular sites or those who have the most readers I was/am ashamed that so many of you did not respond to RDFs inquiry as to what you thought. He asked even with the thought ““on the record” by submitting a comment, or “off the record” by email”. You should have.
This mandate affects all of those who prepare, and I know RDF isn’t the only one who has issue with it. I use software (two different brands actually), and I have issues with it. Are you charging for e-filing your clients returns? If so, are you just sitting there counting the money you might make by being able to charge everyone? Shame on you. This country prides itself on being able to give us the freedom to choose. This mandate takes a peace of that away.
The Recession is Over – The recession lasted 18 months and just as we didn’t know there was a recession until we were well into it, we are now told it ended in June 2009.
Tax Breaks Expiring Soon – No, Not Those Tax Breaks
I found a new blog. I’ll introduce it by saying this is a worthwhile read How important is small business to the US?I have had it on by blog roll for a few days. Add it to yours if you like the way Wray writes.
Another new one I found recently and I have on my blog roll (Is that supposed to be one word? Blogroll, or Blog roll? Hummm, maybe two I think) 21st Century Taxation. The post that took me there is good. Making Work Pay Credit & Economic Stimulus – Need for Better Discussion. As above at this to your RSS feeder/reader if you like the way this blog is written.
Insider Tips to Stop IRS Notice of Deficiency- And Save Your Cash!
As in above I am wondering what has happened to Monica L. The Tax CPA and Confessions of a CPA hasn’t had a post since August 16th at one and August 27th at the other.
Monica, you still out there?
What about Stacie from Stacie’s More Tax Tips, Stacie, are you going to be writing anymore? I have to say you post are missing and we are missing your post.
Self-Employed Folks Get a (Tax) Break
Tax Help For Business Owners Who Owe Unpaid Employment Taxes or Delinquent Payroll Taxes – Are you a small business owner or an independent contractor? If yes, did you know that the IRS is stepping up their enforcement just so that they can go after taxpayers like you more aggressively? The IRS assigns a higher priority to the collection of payroll taxes than personal income taxes.
GOP Pledge to America: No New Taxes (Now Cue the Dancers)
Representing the rich … or not- What all this attention to the impending end of Dubya’s tax cuts really means is there’s been, and will continue to be, all sorts of crazy numbers crunching.
Effect of expiring tax cuts on the rich
You can’t claim the ‘Hope Credit’ just because you hope you qualify for it
Lessons from Tax Reform Act of 1986 – The Senate Finance Committee held hearings today to review and reflect on the important lessons our country learned from its experiences with the Tax Reform Act of 1986 (which Dave Williams talked about in class on Tuesday).
There is a good deal worth reading and pondering in the transcripts of those hearings.
Extended bonus depreciation, $500K Section 179 deduction await President’s signature
Maybe Building Business Credit IS the Answer- The US’s population is a little over 310 million, but 27% of them are under 20. Bottomline – over half of all adults do NOT have good credit.
What do plumbers, politicians, and professors have in common?
The folks over at TaxQueriesblog have once again asked for authors. Seems those of use who want to write about tax stuff want to do so more at our own blogs than others. I joined this group of bloggers at TaxQueriesblog some time ago, when it first came about. Sadly I wasn’t and still am not able to keep up with everything and have little time to contribute to the collection of bloggers and their musings. Here is the list of contributors thus far:
I mention all of this in an effort to maybe get more over there as authors. Please check it out and make contact with those running the show to see if you can join our ranks. Maybe I should write another post for them, I haven’t added anything since. . . It’s been awhile.
A Public Service Announcement – if you text while you drive, this is a must read!
Apologies for not referencing on any PF blogs this week. If you know of other really good ones that I don’t already have in my PF blog roll please send me a note so I can get there.
I’d in closing like to mention, that I have added a few items to help spread the tax word around. You’ll notice at the end of each post there are two buttons. One for tweeting the post on twitter, and another for Google Buzz. I a few folks use these, I am asking that if you enjoy the post or feel someone you know will, please use these to get them the info.
Also I have added at the end of both my columns, some Facebook stuff. Please use these as well. The more people we can reach with our information the more who will be informed about what is. . . .
Thanks, see everyone later.
“A Week in Perspective” what about this title?
Get this fixed. . .
Today I received notices from my local IRS Sr. Stakeholder Liaison. In his bulletin I found attached three documents/fliers on different things. The two that bother me are bulleted below.
- Preparer e-File Mandate: Paid tax return preparers that prepare 100 or more individual or trust returns in 2011 will be required to e-file. That number drops to 10 for 2012. If you not already an Electronic Return Originator, start the the process. Find out more at e-file Made Easy. You can also watch a U-Tube video.
- Return Preparer Regulations: IRS will soon implement new registration, testing, and continuing education requirements for all tax professionals. All {not my emphasis} paid tax return preparers must apply for a Preparer Tax Identification Number (PTIN) and register under a new system, projected to be available in September 2010. Beginning in 2011, there will be new testing and continuing education requirements for any paid tax return preparer who is not an attorney, certified public accountant, or enrolled agent. All paid preparers will come under the rules of Circular 230.
The e-File Mandate I have already made mention of, but would like to point out one more time that this is great for the IRS but assuredly they need to come up with a plan to exclude taxpayers who do not want to e-file. Mandating 100% for us is like telling only our clients, they have to e-file. Not everyone wants to. Not to mention some software providers charge extra for us to offer this service. One scenario is the college student who is also a single mother barely making any money but yet required to file, depending on where she goes is going to be charged additional fees because now she has to e-file. {Preparer to client – “Because our firm prepares more than 100 returns we have to e-file your return and it cost $XX.xx to do this” – Fair?}
Alrighty then. . .
The second bullet, Return Preparer Regulations, this one, this one burns my hind cheeks. Now don’t get me wrong I am all for preparer regulation, yet who’s making this up? The people? By the people, for the people? Really? Examine then this situation. . . .
Now this is a great idea, but when one says all, shouldn’t that mean all? The Lawyer who has passed the bar is qualified to prepare and represent clients in tax matters. Yet Lawyers are exempt from the new testing and continuing education requirements. Because they passed the bar? What is his/her tax knowledge? Is he being tested for his competency in tax law? Not by the IRS. CPA’s, same question. What is your tax background? Are you keeping up with the preparers regulations on testing and education? You don’t have to.
As a taxpayer, who do you want doing your taxes? Someone who is being regulated and tested by the IRS, who has proven their skills as a preparer to the IRS. Or do you want someone whose specialty is divorce law and litigation, or someone who is certified at preparing and analyzing financial reports such as balance sheets, income and loss statements, or setting up an accounting system for large corps.
Now maybe I am getting this all wrong but when we say, “all return preparers” lets mean all of us. CPA’s, Lawyers, EA’s and the soon to be “enrolled” and regerstared preparers. That would be all.
So Mr. Doug, fix this. “All paid tax return preparers must apply for a Preparer Tax Identification Number (PTIN) and register under a new system. New testing and continuing education requirements for any paid tax return preparer. All paid preparers will come under the rules of Circular 230.”
IRS TAX TIP 2010-19
Get Your Refund Faster – Choose Direct Deposit
If you want to get your refund as quickly as possible, just tell the IRS to deposit your refund directly into your bank account. By choosing Direct Deposit, you can get your refund much sooner than if you chose to have a paper check mailed to you.
Here are the main reasons 73 million taxpayers chose Direct Deposit in 2009:
- Security Thousands of paper checks are returned to the IRS by the U.S. Post Office every year as undeliverable mail. Direct Deposit eliminates the possibility you won’t receive your check and prevents your refund from being stolen.
- Convenience The money goes directly into your bank account. You won’t have to make a special trip to the bank to deposit the money yourself.
- Ease When you’re preparing your return, simply follow the instructions on your return. Make sure you enter the correct bank account and bank routing numbers on your tax form and you’ll receive your refund quicker than ever.
- Options You can also deposit your refund into multiple accounts. With the split refund option, taxpayers can divide their refunds among as many as three checking or savings accounts and up to three different U.S. financial institutions. Use IRS Form 8888, Direct Deposit of Refund to More Than One Account, to divide your refund among different accounts. A word of caution: some financial institutions do not allow a joint refund to be deposited into an individual account. Check with your bank or other financial institution to make sure your Direct Deposit will be accepted.
For more information about direct deposit of your tax refund and the split refund option, check the instructions for your tax form. Helpful tips are also available in IRS Publication 17, Your Federal Income Tax. To get a copy of Publication 17 or Form 8888, visit the Forms and Publications section of IRS.gov, or call 800-TAX-FORM (800-829-3676).
Links:
- E-file
- Publication 17, Your Federal Income Tax (PDF 2,085K)
Top Ten Tax Time Tips
The following is copy and pasted from the IRS Tax tips. This is Issue Number: IRS TAX TIP 2010-01
While the tax filing deadline is more than three months away, it always seems to be here before you know it. Here are the Internal Revenue Service’s top 10 tips that will help your tax filing process run smoother than ever this year.
- Start gathering your records Round up any documents or forms you’ll need when filing your taxes: receipts, canceled checks and other documents that support an item of income or a deduction you’re taking on your return.
- Be on the lookout W-2s and 1099s will be coming soon from your employer; you’ll need these to file your tax return.
- Try e-file When you file electronically, the software will handle the math calculations for you. If you use direct deposit, you will get your refund in about half the time it takes when you file a paper return. E-file is now the way the majority of returns are filed. In fact, last year, 2 out of 3 taxpayers used e-file.
- Check out Free File If your income is $57,000 or less you may be eligible for free tax preparation software and free electronic filing. The IRS partners with 20 tax software companies to create this free service. Free File is for the cost conscious taxpayer who wants reliable question-and-answer software to help them prepare a return. Visit IRS.gov to learn more.
- Consider other filing options There are many different options for filing your tax return. You can prepare it yourself or go to a tax preparer. You may be eligible for free face-to-face help at an IRS office or volunteer site. Give yourself time to weigh all the different options and find the one that best suits your needs.
- Consider Direct Deposit If you elect to have your refund directly deposited into your bank account, you’ll receive it faster than waiting for a paper check. -(This is cheaper than RALs and is only about 14 days)-
- Visit IRS.gov again and again The official IRS Web site is a great place to find everything you’ll need to file your tax return: forms, tips, answers to frequently asked questions and updates on tax law changes.
- Remember this number: 17 Check out Publication 17, Your Federal Income Tax on IRS.gov. It’s a comprehensive collection of information for taxpayers highlighting everything you’ll need to know when filing your return.
- Review! Review! Review! Don’t rush. We all make mistakes when we rush. Mistakes will slow down the processing of your return. Be sure to double-check all the Social Security Numbers and math calculations on your return as these are the most common errors made by taxpayers.
- Don’t panic! If you run into a problem, remember the IRS is here to help. Try IRS.gov or call our customer service number at 800-829-1040.
Links:
*the red comments are of my own and not from the IRS or any of their representatives*
An IRS reminder.
The IRS (as stated below) says they had 107,831 refund checks returned to them because of incorrect addresses. {Is yours one of them?} This resulting in over 123 mil. Due to taxpayers who over paid. [okay 123.5 million divided by 107,831, equals and average refund amount per check of $1,1453.31] Are you one of them? If you had e-filed and used direct deposit, you’d already have your refund. The other thing I ask, of those, I wonder how many if not wonder if all of these are self prepared returns?
Please read the below IRS notice…
IRS Seeks to return $123.5 Million in Undeliverable Refunds to Taxpayers
IRS Reminds Taxpayers to Use E-file and Direct Deposit
WASHINGTON — The Internal Revenue Service is looking for taxpayers who are due to receive a combined $123.5 million in the form of 107,831 refund checks that were returned to the IRS by the U.S. Postal Service due to mailing address errors.
“We are eager to get this money into the hands of taxpayers, so don’t delay if you think you are missing a refund,” said IRS Commissioner Doug Shulman. “The sooner you update your address information, the quicker you can get your refund.”
All a taxpayer has to do is update his or her address once. The IRS will then send out all checks due. Undeliverable refund checks average $1,148 this year, compared to $990 last year. Some taxpayers are due more than one check.
Average undeliverable refunds rose by 16 percent this year, which is in line with the 16 percent rise in average refunds for all tax returns in the latest filing season. Several changes in tax law likely played a role in boosting refunds, including the First-Time Homebuyer’s Credit and the Recovery Rebate Credit, among others.
The vast majority of checks mailed out by the IRS each year reach their rightful owner. Only a very small percent are returned by the U.S. Postal Service as undeliverable.
If a refund check is returned to the IRS as undeliverable, taxpayers can generally update their addresses with the “Where’s My Refund?” tool on IRS.gov. The tool enables taxpayers to check the status of their refunds. A taxpayer must submit his or her social security number, filing status and amount of refund shown on their 2008 return. The tool will provide the status of their refund and in some cases provide instructions on how to resolve delivery problems.
Taxpayers checking on a refund over the phone will be given instructions on how to update their addresses. Taxpayers can access a telephone version of “Where’s My Refund?” by calling 1-800-829-1954.
The IRS encourages taxpayers to choose direct deposit when they file their returns because it puts an end to lost, stolen or undeliverable checks. Taxpayers can receive refunds directly into personal checking or savings accounts. Direct deposit is available for filers of both paper and electronic returns.
The IRS also encourages taxpayers to file their tax returns electronically because e-file eliminates the risk of lost paper returns. E-file also reduces errors on tax returns and speeds up refunds.
Listen to an Audio File for Podcast
Watch Video: Undelivered Refunds
Watch Video: Track Your Refund
Benefits of e-File
{More info directly from the IRS}
Taxpayers who use e-file and who choose direct deposit can receive their refund in as few as 10 days. That’s because with e-file, there’s no paper return going to the IRS. And with direct deposit, there’s no paper refund going to the taxpayer. So it’s all electronic and much faster than paper.tax preparers (This link takes you to a search engine to find an e-file provider near you.), or with a computer using tax preparation software. This software is available on the Internet for on line use or for download. Many retail stores sell the software for offline use. The IRS does not charge taxpayers to e-file their completed returns, but some tax preparers and software manufactures may charge a fee. However, this year a number of large software companies are waiving this additional fee.
IRS e-file allows taxpayers to file their returns now and pay later if they owe taxes. It allows taxpayers to file both federal and most state returns at the same time.
Taxpayers may use IRS e-file through their
To get all the benefits of electronic filing, taxpayers must make sure that when they are done with their returns, they take the final step of e-filing them. Taxpayers who use a paid preparer should make sure their preparers are taking this final step, too. In addition to error checks contained in the return-preparation software, additional checks are done during the e-file transmission process. That’s why the error rate is so low for e-filed returns. In fact, the error rate is significantly reduced from 20 percent with paper returns to about 1 percent with e-filed returns.
E-filed tax return information is protected through encryption. Also, taxpayers receive an acknowledgment within 48 hours that the IRS has accepted their return.
IRS e-file meets the needs of nearly all taxpayers, no matter how complicated or simple their returns are. E-file helps taxpayers take advantage of the tax credits available to them to maximize their refunds during these tough economic times.
A variety of tax software products are available commercially that offer e-file. This year, several of them will not charge additional fees for e-filing for the first time.
In addition, most taxpayers qualify for free tax preparation offered through Free File on IRS.gov. Regardless of income level, taxpayers who are comfortable with filling out paper tax forms and who don’t need extra assistance can use the IRS’s new Free File Fillable Forms. These new on line versions of paper tax forms that can be e-filed are available for the first time by visiting the IRS.gov Free File site.Free File, which is a form of e-file, is a free federal tax preparation and electronic filing program for eligible taxpayers developed through a partnership between the IRS and the Free File Alliance LLC. The Alliance is a group of private-sector tax software companies. Since Free File’s debut in 2003, a total of more than 24 million returns have been prepared and e-filed through the program.
Free File
Free File offers 20 different software options that can assist taxpayers with an Adjusted Gross Income (AGI) of $56,000 or less in 2008 to e-file their federal tax returns for free. That means 70 percent of all taxpayers – 98 million taxpayers – can take advantage of tax software that will help them complete their returns through the Free File program.
This year, the IRS and its partners are offering a new option, Free File Fillable Forms, which opens up Free File to virtually everyone, even those whose incomes exceed $56,000.
Free File Fillable Forms allow taxpayers to fill out and file their tax forms electronically, just as they would on paper. This option does not include an “interview” process like the other Free File offerings, but it does allow taxpayers to enter their tax data, perform basic math calculations, sign electronically, print their returns for record keeping and e-file their returns. This “self-service” option may be right for those who are comfortable with the tax law, know what forms they want to use or don’t need assistance to complete their returns.
Both the fillable-forms option and the previously available “full service” Free File offerings are available only through the IRS.gov Web site. Both new and returning taxpayers must access Free File through IRS.gov. Otherwise, the e-file provider may charge them a fee.
Look for details on IRS.gov beginning Jan. 16.
Almost 4.8 million tax returns were filed through Free File last year, an increase of 24 percent over the previous year’s total of nearly 3.9 million returns.
A Brief History of IRS e-File
The IRS began the e-file program in 1986 as a pilot project in three cities: Cincinnati, Phoenix and Raleigh-Durham, N.C. That year, there were 25,000 tax returns filed electronically. The e-file program expanded nationwide in 1990 and 4.2 million tax returns were filed. IRS e-file has undergone tremendous growth each year, with nearly 90 million tax returns e-filed last year.
Related Items:
Federal/State e-File for Taxpayers
Authorized IRS e-File Providers for Individuals
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