The Missouri "taxguy"

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Posts Tagged tax return

Two or More States

Jul 6

Posted by Bruce Mc in Information, State/s, Tax Preparation | 3 Comments

If you work in two different states, you will file a tax return in both the states. One state is your Home Tax State with the other state being where you were/are a  part year resident. Or as I get a lot of  here in Kansas City, You live in one state and work in another. In some cases, you may have even more states.  

 Last year I had a client (new) that lived in one state and worked in five states.   

  • (Interestingly enough that particular client had one W-2 and the employer withheld for all five states – Self-filers, would you know how to work that out?)

In the state that is not your tax home, you are part year resident or a non-resident; you report income you earned while in that state, to that state. If you have received only one W-2 from your employer, then use simple arithmetic based on number of days spent in the state to figure out the income that you should report to that state.   

  • (Of course, that in itself brings up a really interesting taxing issue. You paid your home state taxes that should have gone to the other.)
In the state that is your tax home, report your worldwide income for the full year. Also in this state, claim credit for the taxes paid to the other state/s. Hopefully, you did this or your employer did it through withholdings.
   
States with no income tax 
 
The states that do not have individual income taxes are Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. In New Hampshire, you only pay income tax on Dividend and Interest income at flat rate of 5%. Tennessee does have tax on income (at a 6% rate) received from stocks and bonds not taxed ad valorem.
   
Alaska, Florida, and South Dakota have corporate income tax. Washington has a corporate tax called the “Business and Occupation Tax (B&O)”, which is a gross receipts tax. Texas has a franchise tax on businesses (sole proprietorships and some partnerships are exempt). 
 
States with a flat rate personal income tax 
Most states (34) have a progressive income tax, where the rate rises as an income gets larger. The following states have flat rate income tax:    

  • Colorado - 4.63% 
  • Illinois – 3% 
  • Indiana – 3.4% 
  • Massachusetts – 5.3% 
  • Michigan – 4.35% 
  • Pennsylvania - 3.07% 
  • Utah – 5%. 

(The above rates may have changed) 

 Moving After Retirement 

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Tags: individual income taxes, kansas city, state taxes, tax return

IRS on Publication 17

Jan 27

Posted by Bruce Mc in Form 1040 Information, Information, Tax Preparation, Things forgotten | No Comments

Five Facts about IRS Publication 17 

While the Internal Revenue Service provides publications about a wide range of topics, there is one publication every taxpayer should have with them when they are preparing their federal tax return. Publication 17, Your Federal Income Tax is available at IRS.gov and contains a wealth of information for individual taxpayers.

Here are the top five things the IRS wants you to know about Publication 17 and how it will come in handy when you prepare your taxes.

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Tags: Income tax, Information, internal revenue service, irs publication 17, publication 17, tax filing, tax law changes, tax publication, tax return

What Tax Form Do You Need To Use?

Jan 11

Posted by Bruce Mc in Form 1040 Information, Information, Tax Preparation | No Comments

         To file your 2009 individual tax return, you’ll have to decide which form to use…unless you e-file (Highly recommended). If you file electronically, the software should automatically select the simplest and best form for you.

           Whether you use e-file or prepare on paper, using the simplest form will help avoid costly errors or processing delays. And remember, if you file electronically, it speeds up the processing of your tax return and the delivery of your refund.

Here are things to consider when deciding which IRS form to file.

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Tags: Filing, Form, irs, return, tax planning, tax return

Five Important Facts about Dependents and Exemptions

Jan 7

Posted by Bruce Mc in Deductions, Exemptions, Filling Status, Form 1040 Information, Information | No Comments

          When you prepare to file your 2009 tax return, there are two things that will factor into your tax situation: dependents and exemptions. Here, the IRS gives you five important facts that you should know about dependents and exemptions before you file your 2009 tax return.

  1. If someone else claims you as a dependent, you may still be required to file your own tax return. Whether or not you must file a return depends on several factors, including the amount of your unearned, earned or gross income, your marital status, any special taxes you owe and, any advance Earned Income Tax Credit payments you received.
  2. Exemptions reduce your taxable income. There are two types of exemptions: personal exemptions and exemptions for dependents. For each exemption you can deduct $3,650 on your 2009 tax return. Exemption amounts are reduced for taxpayers whose adjusted gross income is above certain levels, depending on your filing status.
  3. If you are a dependent, you may not claim an exemption. If someone else – such as your parent – claims you as a dependent, you may not claim your personal exemption on your own tax return.
  4. Your spouse is never considered your dependent. On a joint return, you may claim one exemption for yourself and one for your spouse. If you’re filing a separate return, you may claim the exemption for your spouse only if they had no gross income, are not filing a joint return, and were not the dependent of another taxpayer.
  5. Some people cannot be claimed as your dependent. Generally, you may not claim a married person as a dependent if they file a joint return with their spouse. Also, to claim someone as a dependent, that person must be a U.S. citizen, U.S. resident alien, U.S. national or resident of Canada or Mexico for some part of the year. There is an exception to this rule for certain adopted children. See IRS Publication 501, Exemptions, Standard Deduction, and Filing Information for additional tests to determine who can be claimed as a dependent.

         For more information on exemptions, dependents and whether or not you or your dependent needs to file a tax return, see IRS Publication 501. The publication is available on IRS.gov or can be ordered by calling 800-TAX-FORM (800-829-3676).

 
Links:

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Tags: exemption, Exemptions, Filing Status, Information, irs, return, status, tax, tax planning, tax return

Benefits of e-File

Jul 24

Posted by Bruce Mc in Information, e file | No Comments

{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:

IRS e-File for Individuals

Federal/State e-File for Taxpayers

Authorized IRS e-File Providers for Individuals

E-File Using a Computer

Free File Home

Filing your taxes was never easier! 

The Electronic IRS

Tags: irs e file, tax preparation software, tax return

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