Need more time to file?
Today is the day, or the last day I should say.
If you can’t meet the April filing deadline to file your tax return, you can get an automatic six month extension of time to file from the IRS.
Some things you need to know about filing for an extension:
- An extension will give you extra time to get your paperwork to the IRS, but it does not extend the time you have to pay any tax due. You will owe interest on any amount not paid by todays April 15th midnight deadline, plus a late payment penalty if you have not paid at least 90% of your total tax.
- If your return is completed but you are unable to pay the full amount of tax due, do not request an extension. File your return on time and pay as much as you can. The IRS will send you a bill or notice for the balance due. To apply online for a payment agreement, go to IRS.gov and use the pull-down menu under “I need to …” and select “Set Up a Payment Plan.”
- Request an extension to file by submitting Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, with the IRS by the April 15, 2009, or make an extension-related electronic credit card payment. (For more information about extension-related credit card payments, see Form 4868.)
- You can e-file an extension request using tax preparation software on your own computer or by going to a tax preparer that has the software. The IRS will acknowledge receipt of the extension request if you file by computer.
- You can use Free File Fill-able Forms to file for an extension. You can access Free File Fill-able Forms via the IRS Web site.
- If you ask for an extension via computer, you can also choose to pay any expected balance due by authorizing an electronic funds withdrawal from a checking or savings account. You will need the appropriate bank routing and account numbers and must also have available the adjusted gross income from your 2008 federal income tax return to verify your identity.
Related Links:
- Form 4868, Application for Extension of Time to File U.S. Individual Income Tax Return
- Form 9465, Installment Agreement Request
- Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad
- Official Payments Corporation
- Link2 Gov Corporation
What to Do If You Are Missing a W-2
What to Do If You Are Missing a W-2
Okay I can’t take credit for below in red, but figured it needed to be out for all to see. This is IRS TT-2009-28. Word for word. I am putting it here because not everyone will use the IRS for info.
I could have just wrote this little bit but did the copy paste so readers wouldn’t have to go to IRS site.
“taxguys” first book giveaway,
Win a copy of Kay Bells The Truth About Paying Fewer Taxes.
I’ll be posting my review and contest entry info on February 28th.
Did you get your W-2? These documents are essential to filling out most individual tax returns. You should receive a Form W-2, Wage and Tax Statement, from each of your employers each year. Employers have until February 2, 2009 to provide or send you a 2008 W-2 earnings statement either electronically or in paper form. If you haven’t received your W-2, follow these steps:
1. Contact your employer. If you have not received your Form W-2, contact your employer to inquire if and when the W-2 was mailed. If it was mailed, it may have been returned to the employer because of an incorrect or incomplete address. After contacting the employer, allow a reasonable amount of time for them to resend or to issue the W-2.
2. Contact the IRS. If you still do not receive your W-2 by February 17th, contact the IRS for assistance at 800-829-1040. When you call, have the following information:
ü Employer’s name, address, city, and state, including zip code;
ü Your name, address, city and state, including zip code, and Social Security number; and
ü An estimate of the wages you earned, the federal income tax withheld, and the period you worked for that employer. The estimate should be based on year-to-date information from your final pay stub or leave-and-earnings statement, if possible.
3. File your return. You still must file your tax return on time even if you do not receive your Form W-2. If you have not received your Form W-2 by February 17th, and have completed steps 1 and 2 above, you may use Form 4852, Substitute for Form W-2, Wage and Tax Statement. Attach Form 4852 to the return, estimating income and withholding taxes as accurately as possible. There may be a delay in any refund due while the information is verified.
4. File a Form 1040X. On occasion, you may receive your missing documents at a later date and some may have conflicting information. You may receive a Form W-2 or W-2C (corrected form) after you filed your return using Form 4852, and the information differs from what you reported on your return. If this happens, you must amend your return by filing a Form 1040X, Amended U.S. Individual Income Tax Return.
Form 4852, Form 1040X, and instructions are available on the IRS Web site, IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Links:
ü Form 4852, Substitute for Form W-2, Wage and Tax Statement (PDF 29K)
ü Form 1040X, Amended U.S. Individual Income Tax Return (PDF 123K)
ü Instructions for Form 1040X (PDF 43K)
If you find you need to use 4852 please read the instructions carefully or
have your tax preparer do this for you.
Forms, Schedules and Worksheets
Forms, Schedules and Worksheets – A very special offer for tax professionals, a taxguy review.
From the desk of Robert D. Flach of TAXPRO SERVICES CORPORATION and ROBERT D. FLACH, LLC tax preparers are given a great offer. Robert is also THE WANDERING TAX PRO.
If you are not a professional tax preparer I say so what, you’ll find the majority of these very useful to you as well.
All professional preparers have forms and worksheets we use for various reasons. What store did you buy yours from? Mine are a mix from Greatland and the NATP store. I have a few of my own and have been working on my own client questionnaire for a few years now. Still mine has many bugs to fix as it has far too many pages.
What Robert has created here is more.
Robert has these forms, schedules and worksheets designed wonderfully for their purposes.
The Cell phone log is perfect for taxpayers to log the cost of their business use of their phone. I don’t know about you but I have several clients that send me the years bills and pay to have me sort this out. With the cell phone log, they won’t be paying me for an hour or two, as they’ll have the expense at hand and all I will need to enter the amount. They have a reference form in case of an audit.
Ever need to add a supplement to Schedule A? In this collection there is one made out perfectly.
The Medical Expense Worksheet has lines for insurance premiums, long-term care insurance, doctors, dentist, therapist, nurses, hospital bills, Lab Test, prescription and just everything that sure you could run across including breakdowns of your mileages and other medical traveling expenses.
The Charitable Contribution Listing worksheet is exactly what taxpayers need to document their donation/s. Including instructions as to what is and what isn’t deductable. As there are several types of deductions, there are several types of worksheet for taxpayers to use in this package.
Do you have continuing education expenses? Do you file Schedule C? Need a mileage log? A business travel record? What about an employee time card? Do you need or have a comprehensive worksheet for clients who have a home office? Need a worksheet to have cost basis lined up? Do you own rentals – A multi-family building? How well is your worksheet for figuring AMT?
The point?
Robert Flach has been preparing taxes for a great many years (over 35) and is very knowledgeable in his profession proven time and time again in the articles he writes for his blogs/websites as well as others including here. The TAX PROFESSIONAL FORMS, SCHEDULES AND WORKSHEETS that are being offered are a great resource for preparers and taxpayers alike.
These documents are in MS Word format and thus cannot only be used as much as you need, but can be edited to best fit your practice and/or needs. I will be using several as is, and making slight changes several others. $5.00 is very gracious considering the time these will save everyone. Not to mention the time that was put into creating them. Every reader of TWTP needs a copy of these, even if just to check yourself and/or your practice.
Yes everyone. Robert advertises them for tax professionals, but it is my opinion those taxpayers who are busy doing their own will benefit as much as any tax preparer.
For information to get yours now, go to A VERY SPECIAL OFFER FOR TAX PROFESSIONALS. The information for getting your copy is there.
Are You sure you are Having Enough Withheld?
How are you supposed to know? This is a re-post for your tax planning needs. A few easy steps and some light planning can help you figure this out.
What you need to know:
If you fail to estimate your federal income tax withholding properly, it may cost you in a variety of ways. If you receive an income tax refund, it essentially means that you provided the IRS with an interest-free loan during the year. By comparison, if you owe taxes when you file your return, you may have to scramble for cash at tax time–and possibly owe interest and penalties to the IRS as well.
When determining the correct withholding amount for your salary or wages, your objective should be to have just enough taxes withheld to prevent you from incurring penalties when your tax return is due. (You may owe some money at the time you file your return, but it shouldn’t be much.) You can accomplish this by reading and understanding IRS Publication 505 and IRS Publication 919, properly completing Form W-4 (and accompanying worksheets), and providing an updated Form W-4 to your employer when your circumstances change significantly.
Form W-4 helps you determine the proper withholding amount
Two factors determine the amount of income tax that your employer withholds from your regular pay:
1) the amount you earn
2) the information you provide on Form W-4.
This form asks you for three pieces of information:
1) The number of withholding allowances you want to claim: You can claim up to the maximum number you’re entitled to, claim less than you’re entitled to, or claim zero.
2) Whether you want taxes to be withheld at the single or married rate: The married status, which is associated with a lower withholding rate, should generally be selected only by those taxpayers who are married and file a joint return. Other people (including those who are married and file separately) should generally have taxes withheld at the higher, single rate.
3) The additional amount (if any) you want withheld from your paycheck: This is optional; you can specify any additional amount of money you want withheld.
When both spouses work and have taxes withheld at the married rate, they sometimes end up with insufficient taxes withheld. If this happens to you, remember that you can always choose to withhold at the single rate. In addition, you can determine the proper withholding amount by completing Form W-4’s two-earner/two-job worksheet.
Complete the worksheets to claim the correct number of allowances
To understand Form W-4, you must understand allowances.
Think of allowances as cash in your pocket at the time that you receive your paycheck. The more allowances you claim, the less taxes are taken from your paycheck (and the more cash ends up in your pocket on payday).
The following factors determine your number of allowances:
1. The number of personal and dependency exemptions that you claim on your federal income tax return
2. The number of jobs that you work
3. The deductions, adjustments to income, and credits that you expect to take during the year
4. Your filing status
5. Whether your spouse works
To claim the correct number of allowances, you should complete Form W-4’s worksheets. These include a personal allowances worksheet, a deductions and adjustments worksheet, and a two-earner/two-job worksheet. IRS Publication 505 (Tax Withholding and Estimated Tax) explains these worksheets.
Check your withholding
To avoid surprises at tax time, it’s a good idea to periodically check your withholding. If you accurately complete all Form W-4 worksheets and don’t have significant non-wage income (e.g., interest and dividends), it’s likely that your employer will withhold an amount close to the tax you’ll owe on your return. But in the following cases, accurate completion of the Form W-4 worksheets alone won’t guarantee that you’ll have the correct amount of tax withheld:
1) When you’re married and both spouses work,
2) If either of you start or stop working
3) When you or your spouse are working more than one job
4) When you have significant non-wage income, such as interest, dividends, alimony, unemployment compensation, or self-employment income, or the amount of your non-wage income changes
5) When you’ll owe other taxes on your return, such as self-employment tax or household employment tax
6) When you have a lifestyle change (e.g., marriage, divorce, birth or adoption of a child, new home, retirement) that affects the tax deductions or credits you may claim
7) When there are tax law changes that affect the amount of tax you’ll owe
In these cases, IRS Publication 919 (How Do I Adjust My Tax Withholding?) can help you compare the total tax that you’ll withhold for the year with the tax that you expect to owe on your return. It can also help you determine any additional amount you may need to withhold from each paycheck to avoid owing taxes when you file your return. Alternatively, it may help you identify if you’re having too much tax withheld. If you find that you need to make changes to your withholding, you can do so at any time simply by submitting a new Form W-4 to your employer.
Guest Post Gina L. Gwozdz, CPA
Mistakes Made When Choosing A Paid Tax Preparer
This is another addition to the series “Mistakes made when choosing a paid tax preparer”.
I regularly review the prior tax return of a new client that I receive. From reviewing these tax returns it is obvious to me that the most common mistake taxpayers make when selecting a tax preparer is failing to determine the qualifications of the preparer. I have seen several errors on prior year returns that appear to be due to the tax preparer’s lack of knowledge with the tax laws and/or lack of knowledge regarding how to complete a form or what attachments need to be made or how to construct the attachments. The sad part is that most of these clients never had the slightest idea that their tax return may have been prepared incorrectly. Every taxpayer always assumes their return is easy and just like everyone else’s.
When I bring a taxpayer’s attention to the fact that their prior year return contains errors they are usually shocked. I asked them what the preparer told them when they reviewed the return and the answer is always the same, “My prior preparer never reviewed my return with me. They just told me where to sign.”
When I ask why they selected the person to be their tax preparer, the answers are usually:
- They were the cheapest preparer they could find (and since their return is easy it’s appropriate to pay the least amount possible to have their return prepared).
- A friend/relative recommended them or they are a friend or relative (because this qualifies them to be a good preparer).
- Someone (either a friend/relative or the tax preparer) told them that they could save them a lot of money.
- They were the only preparer who would prepare their return because they waited until the last minute to try and find someone.
Thus, I have determined the biggest mistakes taxpayers make when choosing a preparer includes the following:
- They do not even try to find out the credentials of the person who will be preparing their return.
- They do not interview the preparer prior to selecting them to determine if they are familiar with the type of items on their return.
- They are too focused on the price of the return instead of the quality of return they will be receiving.
- They are too focused on the amount of their refund (or amount that they may owe) instead of on details of their return to see if it was prepared properly.
- They wait too long to find a tax preparer.
Thanks Gina. For more from Gina please visit her blog (Tax Tips Blog) http://glgcpa.com/blog
Again, I want to invite any and all guest post on this subject. I want to hear from all bloggers or just readers with their own input. Let’s see what you see I am missing. If you have some words of wisdom on this subject please let us share it with everyone, if it is something that has already been covered, so what, I am looking for others to tell what they know or have learned about finding a paid preparer. Repetition drives the point home.
LET UNCLE SAM SUBSIDIZE YOUR RETIREMENT SAVINGS
{OOPPPs! Didn’t tell you, The Wondering Tax Pro and I have decided to switch our compatible/complimentary posts spots. Meaning TWTP’s discussion of the Credit for Qualified Retirement Savings Contribution appears here at taxguy and my post on this, appears over at TWTP titled ANOTHER CREDIT – FORM 8880.- This is a small break from my series. Enjoy.}
LET UNCLE SAM SUBSIDIZE YOUR RETIREMENT SAVINGS
by Robert D Flach – The Wandering Tax Pro
TAX GUY Bruce has provided a good overview of the Retirement Savings Contributions Credit, aka “Saver’s Credit” in his post “Another Credit – Form 8880″ which appears today over at THE WANDERING TAX PRO.
The recent Ninth Annual Transamerica Retirement Survey revealed that only 17 percent of full-time American workers with annual household incomes of less than $50,000 are even aware that the credit exists.
Recent surveys report that nearly half of American households are not saving at all for retirement and two thirds are not saving enough. This credit, which was first introduced in the Economic Growth and Tax Relief Reconciliation Act of 2001 and made permanent by the Pension Protection Act of 2006, is an excellent way to get low income individuals and those just starting out in the workplace to save for their retirement.
Under this credit a lower-earning individual can get the federal government to subsidize from 10% up to over 80% of his/her retirement savings, depending on the individuals AGI and tax situation.
For 2008 the Modified AGI amounts for determining the Retirement Savings Contribution s Credit are:
SINGLE, MARRIED SEPARATE, QUALIFYING WIDOW(ER)
$ 0 – $16,000 = 50%
$16,000 – $17,250 = 20%
$17,250 – $26,500 = 10%
HEAD OF HOUSEHOLD
$ 0 – $24,000 = 50%
$ 24,000 – $25,875 = 20%
$ 25,875 – $39,750 = 10%
MARRIED FILING JOINT
$ 0 – $32,000 = 50%
$ 32,000 – $34,500 = 20%
$ 34,500 – $53,000 = 10%
To determine “Modified” AGI for purposes of this credit you start with AGI and add back any exclusion or deduction for foreign earned income, foreign housing cost, and income from American Samoa or Puerto Rico.
Let us look at an example of how this credit works –
Jane Q Taxpayer, a single parent with one dependent child, will earn $24,963 in taxable W-2 wages for 2008. This is her only taxable income for 2008. She does not contribute to a 401(k) or other pension plan at work.
If Jane were to contribute $1,000 to a traditional IRA for 2008 she would be able to claim a deduction for the contribution on her 1040A. This $1,000 would reduce her AGI to $23,963. As a Head of Household with a “Modified” AGI of less than $24,000 she is eligible for a full 50% Retirement Savings Contributions Credit on her $1,000 IRA contribution.
By making a deductible contribution to an IRA Jane saves $100 in federal income tax (10% tax bracket) and gets a credit of $500 – a total savings of $600. So “Sam” has paid 60% of the IRA contribution.
Jane could file her return early in the season so that her refund would arrive before April 15th and she could use part of her tax refund to fund the IRA contribution.
If instead of an IRA contribution Jane participated in her employer’s 401(k) plan and made a total of $1,000 in employee contributions to the plan she would realize an additional $160 savings from an increased Earned Income Credit (the EIC is based on taxable W-2 wages, which would be reduced by her $1,000 contribution to the company plan). Now 76% of her retirement savings has been “subsidized” by “Sam”.
If Jane had two dependent children the EIC savings from a $1,000 contribution to her 401(k) would save $211 – bringing the government subsidy up to 81.1%.
Jane could revise her W-4 withholding so that the 401(k) contributions did not reduce her take-home pay. On her limited income she could not afford to lose $1,000 in income, but she could handle $189.00.
In the above cases Jane would recognize the tax savings as an increase in her refundable Child Tax Credit.
Unfortunately if your standard or itemized deduction(s) or dependents wipe out the tax liability you get no benefit from the Savers’ Credit. It is not a refundable credit (we have enough of those already) and cannot be carried forward.
The most difficult year to start a retirement savings account is the first year you begin work. This is also the best time to begin. If you can discipline yourself to do it as soon as you start to work it will be easier to continue each year thereafter. The Retirement Savings Contributions Credit can help to reduce the actual cost of your first year’s contribution.
Here is another example –
John Q Taxpayer (who is over age 17) graduated from school in 2007. He started a full-time job in 2008 and will receive taxable wages of $17,350 for the year. He will also have $25 in bank interest for 2008. His tax liability would be $863.
If John Q contributes $1,406 to a deductible IRA his AGI would now be $15,969 and he would be eligible for a 50% credit. His tax liability would be “0″. John Q is “out of pocket” only $543. “Sam” has paid for over 61% of his retirement savings. As in the earlier example, John Q can use all or part of his resulting tax refund to fund the contribution if he files his return early enough in the season.
Of course John Q could contribute more than $1,406 to an IRA. He could contribute $2,000 and treat $594 as a nondeductible contribution on Form 8606. Or he could contribute $1,406 to a traditional IRA and up to $3,594 to a ROTH IRA.
Here is another idea. John Q’s parents and/or grandparents could gift to him an IRA of $1406 or more. In addition to giving him a start on a retirement account for the future they are also putting an additional $863 in his pocket, which he could contribute to his IRA for 2009.
TTFN
{The series I started will continue on Friday with a Guest post from Gina please visit her blog (Tax Tips Blog) http://glgcpa.com/blog}
Again, I want to invite any and all guest post on this subject. I want to hear from all bloggers or just readers with their own input. Let’s see what you see I am missing. If you have some words of wisdom on this subject please let us share it with everyone, if it is something that has already been covered, so what, I am looking for others to tell what they know or have learned about finding a paid preparer. Repetition drives the point home.
Prepare your taxes on-line With L & R Tax Preparation
L & R Tax Preparation
Tax Preparation, Payroll, and Accounting,
Including online services.
E=MC2 or use QuickBooks
