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*
Passing the week
Well, a week of blogging for me and as it goes a week of reading and searching for information you should have, or some just plain good reads. Passing the week is my regular postings of blogs I read and felt a need to pass on to you.
Before I get into all that, I want to mention that last week I said on twitter that I’d be creating a site where tax pros such as myself and other professional tax geeks can gather and all give our two cents about a tax issue. Although as life would have it, life is what happens to you while you’re busy making other plans.
This wasn’t done last week due to a few family situations. One being my son having surgery on an ear. (He is all right.) The plan is still for me to gather up things and get this site up and running, only the time frame has been changed. I am hopeful that time will allow me to get this done this week, preferably in time to be added to “The Buzz”. At some point when it is up and running, I will make a formal announcement here with the necessary link to get there.
And speaking of links I want to introduce everyone to Monica Lawver, she writes The Tax CPA, and Confessions of a CPA. Both are excellently presented and written blogs so please give her a read. She also has an extensive list of tax blogs that if you have time, you should venture though as she has some great bloggers listed both concerning tax and CPA stuff.
With that, there have been a lot of post this past week about Audits, and the first one I’d like to bring up is Monica’s Avoiding the IRS audit. Here she answers a question put to her by TWTP. These questions were sparked by the post “5 Slam Dunk IRS Audit Red Flags” over at the Tax Lawyers Blog. Peters post along with all the comments between us all sparked my post No sure way to avoid an audit.
Also in the IRS Audit department of post, please see:
Assumptions and The Audit Letter – First Action from Trish at Our Taxing Times.
Speaking of the five-slam dunk post, this post is the start of some debating from professionals that well you’d have to have been there. Monica gives a brief run down in here post When tax preparers attack, as it went on this whole thing is about the upcoming and recent conclusions that tax preparers should be regulated. Her post will point you in the right direction of where the debate starts. At some point, I entered into it all. Frustrated by some comments made, I even take in hand that someone was a Pompous Arrogant Ass. On that subject, my mind is still set to that conclusion. Please see my post, Righteousness in Designation?
The person I referred to and I have agreed to continue or “conversation” on it all but we have yet talked about where that might be. In my post Righteousness in Designation? I ask him several questions that haven’t been answered, hopefully when he and I continue we will get those answers.
My friend, The Wondering Tax Pro, hasn’t written much this past week, I am sure he is busy getting Extensions done. Once he is done and or able, I am sure he’ll be back to great posting as usual. With any luck, we’ll be doing likeminded post again as well.
Now is a Good Time to Check Your Withholding to Avoid a Tax Surprise, a post written by Stacie Clifford Kitts, CPA. She has written an e-book book about tax stuff and coauthored another book, and is the author of the blog More Tax Tips. Look through her past post, some good reads.
On Monday Tax Carnival #55: Tax Fireworks was released. A great Carnival of blogs, and of course when you are at a fireworks display, you always enjoy the big explosion that is saved for the end. That would be my post Righteousness in Designation? But since everyone has already read that one, please go to the Tax Carnival #55: Tax Fireworks and read all the other great post.
From the IRS – Hitman two great reads this week IRS Penalties: How do you remove them? and IRS Offer in Compromise, The Facts against the Fiction. The titles speak about the content. If these apply to you please read them, then contact a tax professional in your area.
From Joe K. over at Roth & Company, P.C. Tax Update Blog On vacation some automated post are being generated. All are great reads, yet I’d like to guide everyone to Keeping books and records. As this is what people need a CPA for, keeping exact records is key to an exact tax return. The post is concentrated on business, yet has information for everyone.
Joe also in another post provides a link to a book, “How Business Gets Done: Words of Wisdom by Central Iowa Experts.” If I am not mistaken he had a part in writing.
Although written awhile back, Jim Maule at Mauled Again wrote about the prerequisite qualities of a good tax professional at Why Tax Practitioners Must Be Good With Words, Not Just With Numbers: is a good read considering other things that have been going on. (For those of you not paying attention, Jim or James, not Jack.)
From my reads at PF blogs:
3 Money Reasons to Buy a New Car – Tax Deductions, Used CAR Trade-In Vouchers and Electric-Hybrid Credits From Andy over at $aving to Invest.
How to Manage Your Finances – 8 Tips to Take Control of Your Finances From Susan at
7 Things To Consider When Moving Offices, Debit Card Versus Credit Card – Which Is Better? From Patrick at Cash Money Life.
Worried about inflation? Over at Living Almost Large
10 Seriously Painful Budget Cuts was written and posted last year over at MoneySavingGuide.com but I enjoy going back and re-reading it. Also from them if you link up you’ll receive a free gift. I am very excited.
Taxes Must Go Up Eventually From Kevin at No Debt Plan is a good read for everyone. I may even expand on this topic with a post of my own or even the site not yet created. Great post Kevin!
In the Personal Finance Blogging area, I started with Ashley over at Wide Open Wallet. When I Left my regular writings at “taxguy”, I also stopped reading as many blogs as I used to. (those listed above are only a fraction of all of them I do read). Sadly, on my return to normal activity (reading and writing being a part of this so called ‘normalcy’), I find that Ashely is no longer writing. I am very happy that life is doing her well and she has found her path. However, I am personally sad that her blog isn’t a part of her path. I will miss your writings Ashely. You and one other are the push and guide behind my start out here and I will be forever grateful. Thank you for your blog, I will miss you. As I am sure, we all will.
Back to tax stuff:
Lastly, Peter P. of The Tax Lawyer’s Blog on Friday announced his 5 Best Tax Nerd Blogs: The Second Annual Rick Moranis Awards. I am not on the list, and rightfully so. His list is indeed compiled of some great blogs/bloggers. Well done.
I’m Back with “Who is”
Okay, things have settled and for the most part organized. Taking up this blogging thing again as before; Monday, Wednesday, Friday, with a recap of the past week on Sunday’s. I have missed being active regularly and I have been missed, but things are going strong again.
For my readers who have hung with me thank you. I apologize in advance for the repost below but given everything, I find it necessary.
So much talk about hiring a tax professional and so much debate about who is a professional I want this out again.
The biggest point I want to make is that just because someone is a CPA, doesn’t automatically make them a tax professional.
Tax professionals are hard to find because as you may have heard, there is no accreditation from the AICPA (American Institute of Certified Public Accountants) that says “Tax Professional”.
Hope you enjoy my return to active blogging.
Repost of Who is. . .
As a tax preparer I am often asked what is the difference between a tax attorney, an accountant/CPA, a bookkeeper, an Enrolled Agent, and a tax preparer.
A Tax Attorney is not the same as an accountant. The accountant can work with the financial issues and has a general knowledge of tax laws; however a tax attorney is a specialist in all aspects of tax law. Although they often work closely together, they are two complete different services. Typically large and even small businesses will meet with a tax attorney once every quarter or once a year to ensure that they are making the best possible business choices with regards to investments and tax issues. Since the taxation laws change constantly, this is an important step.
A Bookkeeper is responsible for keeping accurate, up-to-date business records for proper cash flow management, balance sheet preparation, and developing expansion and investment plans. A bookkeeper also assists in filing tax returns with updated tax records. Accurate bookkeeping is a legal requirement and should be kept well within the standards that are set by local and federal tax agencies. A bookkeeper accurately records all of the financial transactions. It is the responsibility of bookkeeper to note all monetary transactions that are received and paid out. The records also include outstanding balances that the company owes to other parties and others who owe to the business. Business bookkeeping takes a lot of time and cannot be done in a hurry. At small businesses, bookkeepers also double as company accountants. Perhaps bookkeepers have the biggest responsibilities in the company as business planning, payroll management, and tax return preparations are dependent on accurate bookkeeping. Bookkeepers often do not have the qualifications or certifications of accountants, but the responsibility is not any less. Bookkeepers that have a great deal of experience can market themselves as accountants or managers. For that, they also need to supplement their profession with certificate courses, seminar attendance, and on-job training. All types of businesses require bookkeepers who are experienced in their specific business functions.
Accountants keep track of a company’s money. The company’s managers and people outside the company read their reports. Managers look at the accountants’ reports to see how well their companies are doing. There are four kinds of accountants:
Public accountants work for public accounting companies. They do accounting, auditing, tax, and consulting work. Some have their own businesses. They do many different kinds of accounting for people outside the company.
Management accountants keep track of the money spent and made by the companies for which they work.
Accountants generally work a standard 40-hour week, but some work 50 hours a week or more. Tax accountants often work long hours during the tax season, from January to April. Most accountants have a college degree in accounting. Public accountants have to take a special test as well, resulting in a certification. Public accountants also must have a special license from the State in which they live. Accountants are generally good mathematicians, and have good analytical skills.
An Enrolled Agent (EA) is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals. “Enrolled” means to be licensed to practice by the federal government, and “Agent” means authorized to appear in the place of the taxpayer at the IRS. Only Enrolled Agents, attorneys, and CPAs may represent taxpayers before the IRS. The Enrolled Agent profession dates back to 1884 when, after questionable claims had been presented for Civil War losses, Congress acted to regulate persons who represented citizens in their dealings with the U.S. Treasury Department.
A professional Tax Preparer is an individual who prepares tax returns. A professional tax preparer can be a Tax Attorney, an Accountant/CPA, a Bookkeeper, an Enrolled Agent, or anyone who professionally prepares tax returns for clients. Most return preparers are professional, honest and provide excellent service to their clients.
So there you have it.
How do you choose the right one to prepare your taxes? There is no one factor to use in determining this. I suggest you read the IRS Tips for Choosing a Tax Preparer. Or my website page Finding a Qualified Tax Preparer. I would also hope you to read 5 Biggest Mistakes most taxpayers make when choosing a tax professional!
The Truth About Paying Fewer Taxes.
I read a lot about the taxing world. Often I am searchingto find books to recommend to my clients to give them a better understanding how a tax return works and what is needed to make it work best and what they can do to minimize their liability. The Truth About Paying Fewer Taxes is by far the best book I have ever come across to accomplish just that.
The Truth About Paying Fewer Taxes is a book with “52 Truths” about taxes. It plainly answers questions like ”do you have to file?”, to “when?”, to figuring out just what is taxable all the way through to retirement. Also covering Compliance, Audits, and Special Tax Situations The Truth About Paying Fewer Taxes will give you a better understanding of taxes, thus giving you what you need to cut your taxes.
The Truth About Paying Fewer Taxes, is a book written by Kay Bell. Kay is a fellow tax blogger (Don’t Mess With Taxes, Taxes: Eye on the IRS), She helped create Bankrate.com’s tax channel and continues to be a major contributor to Bankrate’s Tax Guide. I have had occasion to talk with Kay on the phone, and I communicate regularly with her via Twitter.
Kay’s writing is beautiful and gentile, like reading a great novel.
You can see a full list of the 52 truths just by looking at Barnes and Nobel’s Feature tab for The Truth About Paying Fewer Taxes Each one of the truths is explained in detail and in plain language, so you can save money and understand why you’re saving money.
I have been recommending this book to every one of my clients, and will continue to do so from now on.
I have a signed copy (yes, signed by Kay Bell the author) of The Truth About Paying Fewer Taxes and will be giving it away here.
How to enter:
Each of the following will count as one entry for a chance to win.
Please read the Contest Terms below.
ü Leave a comment on this post stating how you prepared or will prepare your taxe return. (self, fast-food chain, CPA, software, free-file, Other-please describe)
ü Subscribe to my RSS feed and leave a comment below to let me know you did so, or
ü Subscribe to my email feed leave a comment here using the same email address with which you subscribed. (this will gain you two entries for the drawing)
ü Blog about this contest and link back here from your blog. (Leave me a comment and link to your blog post here to let me know.)
ü Follow me on twitter – @bruce_taxguy. Leave a comment here with your twitter username.
ü Tweet about this contest and leave a comment to let me know you did so.
Bonus Entries: Leave comments on other posts on this blog. If you’re new to taxguy, visit earlier posts. The comment(s) must show some thought and not just “I agree” or “Great idea.” Come back to this post and let me know which post(s) you commented on. Each approved comment will gain you an additional entry.
Contest Terms
Ø The contest begins now and ends at 11:59PM EST on March 17th, 2009. Comments to this post will be closed at that time.
Ø 1 winner will be randomly selected using a random integer generator at random.org.
Ø I will contact the winner via the email address used to comment here.
Ø The winner will have 3 days to respond with necessary contact information for mailing prize. (I will send a 2nd notification email after 2 days if we have not heard back.)
Ø If the winner does not respond after 4 days, a new winner will be selected from remaining entrants.
Prize Terms
While I will do my best to ensure proper delivery of the winners autographed copy of The Truth About Paying Fewer Taxes, I am not liable for non-delivery due to:
v Incorrect mailing and contact information provided by the winner
v Loss or error on the part of the postal service or delivery personnel
v Any other matter beyond my control
Week ending . . .
Wow! What a week this has been. Not just in my world but around the world. As much as I’d like to talk about what is going on “everywhere”, I think I had better just stick with the taxing world and the world of taxguy.
Nine days ago I transmitted the first e-file return. Following that transmitted return, I started to complete a few other returns as the official start of tax season began. (Are you ready?) With it being officially the filing season, I thought I’d throw some info out there for you to help you get going.
We have a new president and he is off and running. The neatest thing so far that I have noticed, is President Obama created WhiteHouse.gov. “WhiteHouse.gov will be a central part of
President Obama’s pledge to make his the most transparent and accountable
administration in American history.” If you want to follow along with what is happening this is a very interesting site, along with a blog. Follow our government in a new and unique way.
Understandably, it is a work in progress but the information it is making available so far is really interesting. You’re able to find out about the Agenda of the new administration as well as read short bio’s on them. History of the White House, and other great informational places. I haven’t searched it all, but what I have read and seen, I think this is really interesting.
Second chance for economic stimulus check is a great informational tip from Bankrate.com. Every weekday until the end of tax season, Bankrate.com will be providing these tips. I strongly recommend to everyone to check these out.
I was lucky enough to take part in Second chance for economic stimulus check. Myself with fellow tax blogger Robert The Wondering Tax Pro have been included in the observations and insights of this article wonderfully written by Kay Bell. Thank you Kay for allowing me to provide my input.
Along those lines, I was also given the honor to join the ranks of tax professionals who were able to “vent” about a few client aggravations. As Kay Bell writes in her post Are you a good or bad tax client?, “. . . the truth is if you and I were better clients, we’d not only make our tax advisors’ jobs easier, we’d likely end up with a better tax result. That adage “garbage in, garbage out” applies here; even the best tax professional can only work with what he or she gets from the taxpayer.” The post is great, from a prepares point of view.
Finally, while I seem to be focusing on the writings of Kay Bell, the author of Don’t Mess With Taxes, Kay as also written a book that is now available. The Truth About Paying Fewer Taxes was released last week. I haven’t received my copy as of yet (UPS tracking says I’ll have it Tuesday).
February, I will be posting a book review of The Truth About Paying Fewer Taxes, and I will be having my first giving away, a signed copy by its author. So you’ll need to stay tuned for more information.
Okay, what else has been going on around the blog-o-sphere?
Grocery Store Mind Games form Wide Open Wallet is a real eye opener. “. . . according to studies as much as 60 to 70 percent of all purchases at the grocery store are unplanned.”
The Contest at Pecuniarities ended last night. Still waiting to hear who won. Also from Pecuniarities, Carnival of Personal Finance No. 188: The Jane Austen Edition has some great reading. You have to click the links.
File Your Income Taxes Online for Free is a post from No Debt Plan. The IRS has a list of all the places that offer e-file, most of which you have to click the link from within the IRS website. OF them all which is best? Well neither I or anyone else can answer for you without knowing your situation, but “. . .there is a pretty simple weeding out process you can do. Check the websites of the companies listed.”
This week Living Almost large reviews the book Coming Up Short – The challenge of the 401k plans. It’s a book talking about the challenges facing 401ks and what has happened since their inception in 1981. I love the history. But this isn’t just about the history. Read the review, get the book.
Guesstimating take-home pay from a job is a great bit of info for those trying to figure out their take home pay.
There are two post of interest at A Personal Finance Guide. “Becoming smart about money and thriving requires more than a basic financial plan. Knowing how much you need to put away for retirement or college is all very well but to achieve your goals and dreams you need a lot more than mere time-value-of-money calculations. There are many more aspects to being successful. . .” They are discussed in part here. Money and Success – Become Smart About Money and Thrive in Three Basic Steps. And Learning to Save Money Isn’t As Hard As You May Think, it may be a “. . . challenge at first, but the more you do it the easier it gets.”
Filing your taxes: D-I-Y Taxation Software or a Professional Preparer is a great post from Andy. (Even though I thought a small bit of info was miss-communicated.)
The Certified Financial Planner Board of Standards recently provided ten tips on selecting a financial planner as reported and linked to at Tick Marks in the post Planning to Choose a Financial Planner–10 Questions to Consider.
KEEPING TRACK OF BUSINESS MILEAGE and BRIDE OF KEEPING TRACK OF BUSINESS MILEAGE are both great pieces on keeping track of well, yes, your business milage from The Wondering Tax Pro.
Peter over at The Tax Lawyer’s Blog has a real look at on a few things in his post Repeal the Corporate Income Tax and Bring Those Jobs Back Home.
Kelly from Taxgirl reports Google ate Feedburner.
California Tax Refunds Delayed as reported by Russ Fox at Taxable Talk. Have you considered what you would do if this happened in your state?
Being from Oklahoma I always find interesting some of the things I hear from down there. The Tax Foundation Oklahoma’s Budget is ######## is just more interesting info from there.
Joe Kristan from Roth & Company, P.C. Tax Update Blog, reports Ways and Means passes stimulus bill, but weakens 5-year NOL carryback. Hummm.
He also looks at IRS guidance on reporting K-1 percentages.
Next post scheduled for 02/01/2009
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.
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
