EACH YEAR THE TREASURY DEPARTMENT - THROUGH A GOVERNMENT AGENCY CALLED THE INTERNAL REVENUE SERVICES KNOWN AS THE IRS - AUDITS THE COUNTRY AND COLLECTS FUNDS THROUGH TAXATION IN ORDER TO SUPPORT THE COLLECTIVE NEED OF THE COUNTRY (ROADS AND INFRASTRUCTURES - PUBLIC HEALTH - PUBLIC SAFETY - EDUCATION - SOCIAL SECURITY - MEDICARE & MEDICAID)
AND TO PROVIDE FOR THE NATIONAL DEFENSE AND SECURITY OF
THE UNITED STATES OF AMERICA
TAX DAY FOR INDIVIDUAL AND SMALL BUSINESS DEADLINE IS APRIL 15
TAX FILING DEADLINE FOR CORPORATIONS AND LLC WAS MARCH 15, 2014
HERE ARE SOME TIPS & STRATEGIES FOR FILLING
YOUR INDIVIDUAL AND BUSINESS TAXES
MILLIONS OF PEOPLE ALREADY RECEIVED THEIR TAX REFUNDS FROM THE IRS - MAKE SURE TO GET YOURS
IF YOUR INCOME IS NON-TAXABLE (TAX-EXEMPT) - YOU DON'T HAVE TO FILE UNLESS YOU STAND TO GAIN A REFUND
FILE YOUR TAXES EVEN IF YOU OWE THE IRS MONEY = IF YOU CANNOT PAY WHAT YOU OWE SEND IN A PORTION OR GO ON IRS.GOV AND YOU CAN MAKE A PAYMENT ARRANGEMENT ONLINE
Remember that you can file your taxes online or off-line. If you are not comfortable with numbers or working with tax software on a computer, go to any tax filing office, or a CPA. If you are a business, a CPA may be your best option.
The tax- filing deadline for individual income tax, those filing as sole-proprietor (individual business owner) and the self-employed is for 2014 is Tuesday April 15, 2014. This includes filing the 1040 or 1040A plus Schedule C. For businesses that are incorporated, thus are considered corporations, and Limited Liability Corporations (LLC), which elects corporate tax treatment the due date for filing was March 15. If a corporation elected to file an extension, the due date is now September 15. For sole proprietors that elect to file and extension the due date will be October 15.
Most people who expect a refund files their taxed very early, typically as soon as the IRS begins accepting taxes, sometimes after January 15. If you intend to mail your taxes and you are a late filer, your taxes must be post-dated by the post office by midnight on April 15, 2014. In cities and town around the countries, at least one or more post offices will remain opened until midnight on April 15. Libraries around the country also continue to carry tax forms for people who prefer to do their taxes themselves manually.
The next thing you need to consider is whether or not you are filing an individual US Income tax, or Married Filing Jointly, or Married Filing Separately, keeping in mind that if one spouse itemizes, the other spouse ‘s standard deduction becomes 0, even though that spouse should itemize as well.
There are as many as 3900 different deductions. Draw down notes as to not forget all the traditional tax breaks.
STANDARD TRADITIONAL TAX BREAK AND DEDUCTIONS FOR INDIVIDUALS
· Personal exemption
· The earned income credit, (Starts at the age of 24)
· Child tax credit
· Dependent Care, such as day care, summer camp, school transportation, babysitting, and parents’ and grant-parents care
· The Life-time Learning America $6500 for some and $3500 for other
· Saver’s Credit (IRA and other contributions to pension funds)
· Medical Deduction for seniors 65 and over can range from $7500 to 100% of medical expenses
· Adoption Credit
· Mortgage Interest Deductions, also real property taxes and insurance deductions.
· Home improvement expenses
· Student loan up to $2500 in interest paid on qualified student loans (This deduction begins to fade out if adjusted gross income (AGI) is $60,000 filing single or $125,000 filing jointly. It faces out completely when AGI reaches $75,000 for filing single and $155,000 filing jointly).
· Charitable Donations (by cash or check)
· First Time Homebuyers
· Manufacturer’s Energy Efficiency Appliance Credit
· Plug-in Electric Drive Vehicle Credit (IRC 30-D
Review each deduction carefully to make sure you qualify and you are not missing out.
BUSINESSES & CORPORATIONS
A business is an organization engaged in the exchange of good and services for money and profit. Self-employment is the employment status of an individual who works for himself or herself in the provision of good or services to others, and not considered an employee of any particular business. A self-employed individual may or may not hire other people to help with projects.
Deductible business expenses must be ORDINARY AND OR NECESSARY to conduct the business, or carry a project in the case of the self-employed.
COMMON DEDUCTIBLE BUSINESS EXPENSES INCLUDE BUT ARE NOT LIMITED TO:
· Employee’s pay – or payments made for services or necessities in the conduct of the business or a project
· Retirement plans
· Rent or mortgage interest, insurance, utilities, repairs, deprecation– if you use part of your home as an office
· Interests paid on money borrowed to fund the business or the activities of self-employment
· Taxes: federal, state, local, or foreign that can be attributed directly to the conduct of the business or the activities of the self-employed
· Insurance paid – If you use your vehicle in the conduct of your business or self-employment activities, you can estimate how much of the insurance, excise taxes, toll fees, and parking fines can attributed to the conduct of your business or your self-employment activities
· Cost of repair, maintenance, and mileage
There may be more deductions in this category. Therefore, log and review your activities to make sure that you are claiming all of the deductions that you may be entitled to.
Due to the rate of failure of small businesses in the first five years, the IRS does allow for a loss on filing at least for the first five years. Therefore, as a business or a self-employed individual, you may show a refund on your tax filing, break even, or owe the IRS money.
FILING AN EXTENSION Image:mymoneycounselor.com
File an extension. If you are not ready to file your taxes on April 15 you can obtain an automatic six-month extension. Use the Free File program to e-file your extension request. You can also get an extension using Form 4868, Application for Automatic Extension of Time. To File and extension request for the Individual US Income Tax Return, you can e-file, as indicated above or mail Form 4868 with any tax amount due by April 15.
WHAT IF YOU HAVE NOT FILED YOUR TAXES IN SEVERAL YEARS
If you earn less than $10,000, expect a refund from the IRS, or simply do not owe the IRS back taxes, you can file three or more years of taxes without the fear of interest and penalty from the IRS. Even if you have not filed your taxes in several years, but owe the IRS money, it is still right and prudent to file your past years to bring your tax filing status up-to-date. Consult with a tax preparer or a CPA if you are concerned that you may owe back taxes from several years and had not file. With the IRS, like with many else, the time to make right and correct any oversight or error in judgment in now. At a minimum, by filing now, the IRS will consider your good faith effort and will more readily work with you to arrange a payment plan that you can manage. But if you don’t owe the agency money, and are only behind in your taxes, then file all back years and there will be nothing to worry about.
AMENDING YOUR TAX RETURN
According to the IRS, if you realize that you made a mistake or discover errors in your tax filing, you can correct those mistakes by filing an AMENDED TAX RETURN. There is no need to file an amendment to correct math errors that you may discover later on your tax forms, as the IRS will automatically correct those errors for you. As in the case of math errors, the IRS recommends that you not file an amendment to your taxes for forgetting to attach, for example, a W-2 or a 1099. In such cases, the IRS will simply send you a request to obtain those forms and mail them to the IRS.
Use Form 1040X Amended U.S. Individual Income Tax Return, to correct errors on your tax return. Amended returns cannot be e-filed; they must be done on paper.
1. File an amended tax return if you made an error claiming your filing status, income, deductions or credits on your original return.
2. The IRS allows 3 years from the date you filed your original tax return to file Form 1040X to claim a refund. You can file it within two years from the date you paid the tax, if that date is later.
3. If you are amending more than one tax return, prepare a 1040X for each year. You should mail each year in separate envelopes. Note the tax year of the return you are amending at the top of Form 1040X. Check the form’s instructions for where to mail your return.
4. If you use other IRS forms or schedules to make changes, make sure to attach them to your Form 1040X.
5. If you are due a refund from your original return, wait to receive that refund before filing Form 1040X to claim an additional refund. Amended returns take up to 12 weeks to process. You may spend your original refund while you wait for any additional refund.
6. If you owe more tax, file your Form 1040X and pay the tax as soon as possible. This will reduce any interest and penalties.
7. Contact the IRS any time for more information, to ask questions, or to get clarification on any matter relating to your taxes. The agency is there for you. Their telephone number is 866-464-2050 and they have the capacity to communicate in English and in Spanish.
WHAT IF YOU OWE THE IRS MONEY AND YOU CANNOT PAY OR NEED MORE TIME TO FILE
Whether you are an individual, or a business entity, follow these tips from the IRS:
· “File on time even if you can’t pay. If you complete your tax return but can’t pay the taxes you owe, do not request an extension. Instead, file your return on time and pay as much as you can.” Apply for a payment plan using the Online Payment Agreement tool on IRS.gov. You can also file Form 9465, Installment Agreement Request, with your tax return. If you are unable to make payments because of a financial hardship, the IRS will work with you.
· An extension to file will give you six more months to file your taxes, until Oct. 15. It does not give you extra time to pay your taxes. You still must estimate and pay what you owe by April 15. You will be charged interest on any amount not paid by the deadline. You may also owe a penalty for not paying on time.
· Use IRS Free File to request an extension. You can use IRS Free File to e-file your extension request. Free File is only available through the IRS.gov website. You must e-file the request by midnight on April 15. If you e-file your extension request, the IRS will acknowledge receipt. You also can return to Free File any time by Oct. 15 to prepare and e-file your tax return for free.
· Use Form 4868. You can also request an extension by mailing a Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. You must submit this form to the IRS by April 15. Form 4868 is available on IRS.gov.
You don’t need to submit a paper Form 4868 if you make a payment using an IRS electronic payment option. The IRS will automatically process your extension when you pay electronically. You can pay online or by phone.
· Electronic funds withdrawal. If you e-file an extension request, you can also pay any balance due by authorizing an electronic funds withdrawal from your checking or savings account. To do this you will need your bank routing and account numbers.
Visit IRS.gov for more information about filing an extension and other options they make available for you to pay your taxes.
Hrblock.com Get answers to your tax questions
For examples: You can use Form 2106 line 22 to claim gas mileage, but first you must deduct any mileage paid by your company if you did not include those payments your total income.
You can use their online tax calculator to estimate your withholding, deductions,and see how the new healthcare law may affect your taxes.
You can browse articles to find answers to even more tax questions.
Did you remember to deduct the costs of:
Visit IRS.gov to get the tax forms you need. You can also call 800-TAX-FORM (800-829-3676) to have them mailed to you. Allow at least 10 days for mailing.
Additional IRS Resources:
IRS YouTube Videos:
· Welcome to Free File – English