Wednesday, April 29, 2009

Is It Finally Here? A Tax Credit For Energy Savors?

The Internal Revenue Service today reminded individual and business taxpayers that many energy-saving steps taken this year may result in bigger tax savings next year

Homeowners can get bigger tax credits for making energy efficiency improvements or installing alternative energy equipment.
The IRS also announced homeowners seeking these tax credits can temporarily rely on existing manufacturer certifications or appropriate Energy Star labels for purchasing qualifying products until updated certification guidelines are announced later this spring.

“These new, expanded credits encourage homeowners to make improvements that will make their homes more energy efficient,” said IRS Commissioner Doug Shulman. “People can improve their homes and save money over the long run.”

ARRA provides for a uniform credit of 30 percent of the cost of qualifying improvements up to $1,500, such as adding insulation, energy-efficient exterior windows, and energy-efficient heating and air conditioning systems. The new law replaces the old law combination available in 2007 of a 10-percent credit for certain property and a credit equal to cost up to a specified amount for other property.

The new law also raised the limit on the amount that can be claimed for improvements placed in service during 2009 and 2010 to $1,500, instead of the $500 lifetime limit under the old law.
In addition, the new law has increased the energy efficiency standards for building insulation, exterior windows, doors, and skylights, certain central air conditioners, and natural gas, propane or oil water heaters placed in service after Feb. 17, 2009.

If you are avid energy savor and need help on the preparation of your return, contact a professional tax rep today.

Monday, April 27, 2009

Can The IRS Take Property Willed To Me ?

I had an interesting conversation with a client today with regards to liens. The question was, after a resolution has been established, and a taxpayer has been willed property, does the IRS have the rights to seize these assets?
I explained to the client that in their case, when the CSED (Collection Statutory Expiration Dates) expires, the Internal Revenue Service legally does not have the rights to any property. The only way the IRS would have the rights to this property (after the CSED date expires), is if a judgment has been placed up the liability; this will extend the CSED dates, given the IRS the ability to collect on this liability.
Consequently a lien would be placed upon this property enabling the IRS the ability to collect on the lien attached to the property. However, if property has not been willed in the name of the taxpayer (or taxpayer's owing the tax if they file married filing joint), there would nothing for the IRS to collect on.
This is all contingent upon whether or not the CSED dates have expired. Obviously, if the property has been willed before the expiration dates expire, then the IRS has full rights to the proceeds administered to the taxpayer where the lien has been filed.

Thursday, April 23, 2009

Did You Miss Out On Your 2008 Stimulus Payout?

If you didn't file for an economic stimulus payment in 2008 because you weren't sure you were eligible, you may be able to file for a payment in 2009

The IRS and Treasury are working closely with the Social Security Administration to ensure that all eligible individuals know what to do to receive a stimulus payment.
Normally, certain Social Security payments are not subject to income tax. However, the economic stimulus law passed in February contains a special provision allowing Social Security recipients to count those benefits toward the qualifying income requirement of $3,000 and thereby qualify for the stimulus payment.

The following are requirements you must meet or there is no need to file for the stimulus:

*You have, or your family has, at least $3,000 in qualifying income from, or in combination with, Social Security benefits, certain Veterans Affairs benefits, Railroad Retirement benefits and earned income. Supplemental Security Income (SSI) does not count as qualifying income for the stimulus payment.
*You and any family members listed on your tax return have valid Social Security numbers.
*You are not a dependent or eligible to be a dependent on someone else’s federal

What is the Stimulus Worth:

Eligible individuals — between $300 and $600
Joint filers — between $600 and $1,200
With eligible children — an additional $300 for each qualifying child

All of the above applies to those who receive social security,veteran affairs,railroad retirement or low-wage workers.

Monday, April 20, 2009

Do You Need Outside Assistance With Your Taxes?Need To See Someone Locally?

Though I feel it is best to contact a reputable tax resolution firm for tax preparation and tax resolution matters, it is not always needed for when you need to visit a tax assistance center in person. If you can't seem to find a reputable tax resolution firm, you may want to contact or personally visit your local Taxpayer Assistance Center.

At the Taxpayer's Assistance Center, you will find no appointment necessary, just walk in for assistance. If you find yourself culturally challenged with language barriers, don't be alarmed because they are multilingual services in over 150 languages. The Taxpayer Assistance Center will also help you prepare your tax return for free for those whose income is less than $42 k. The center is also a place for those who are currently in an installment agreement or who would just like to make voluntary payments. The only information you need present with you is the tax period and the type of payment it is for.

If you have received an IRS notice, please bring it to the center as well, as they can see what tax years and the current tax liability owing, as well as assessment issues and auditing purposes.The center will also have tax returns and account transcripts as well as tax forms for those that may (say for instance) want to prepare their return themselves, or file for extensions on tax returns.

Thursday, April 16, 2009

Do You Want More $$ In Your Pocket On Your Tax Returns?

If you just filed your 2008 1040 Federal Tax Return and six months dowu cnn the road you need yo make some changes, you can amend a return by filing out a form 1040X. If you need to make changes to your filing status, dependants, total income, deduction or credits. Below are some facts you need to know when amending a return:

*Generally, you do not need to file an amended return for math errors as the IRS will be ale to make the correction for you.
*You also do not usually need to file an amended return because you forgot to include forms – such as W-2s or schedules – when you filed; the IRS normally requests those forms from you.
*Be sure to enter the year of the return you are amending at the top of Form 1040X. Generally, you must file Form 1040X within three years from the date you filed your original return or within two years from the date you paid the tax, whichever is later.
*If you are amending more than one tax return, prepare a 1040X for each return and mail them in separate envelopes to the IRS processing center for the area in which you live. The 1040X instructions list the addresses for the centers.
*If the changes involve another schedule or form, attach it to the 1040X.
*If you are filing to claim an additional refund, wait until you have received your original refund before filing Form 1040X. You may cash that check while waiting for any additional refund.
*If you owe additional tax for 2008, you should file Form 1040X and pay the tax as soon as possible to limit interest and penalty charges.
Interest is charged on any tax not paid by the due date of the original return, without regard to extensions.

If there are changes that need to be made to your return, don't neglect to make those changes when they could mean more tax deductions or more of a refund !

Wednesday, April 15, 2009

Who Else Wants Their Levy Released ?

A levy, is a mandatory garnishment against a taxpayers bank,social security,wage sources. There are a series of collection notices, elevem to be exact that are sent before a levy is even put into action. Where bank levies are one time, wage levies are continuous and will not be released until either the tax is paid in full, a resoliution has been made (i.e. installment agreement, Offer In Compromise,Currently Non Collectible ) or it prevents a hardship on the taxpayer,

Internal Revenue Service requires levies to be released in the following circumstances.
*The liability is satisfied by full payment, i.e., is no longer owed
*The statutory collection period has run out

*Generally, a levy served prior to the expiration of the collection period is good and should not be released. In addition, a levy served after reducing a tax liability to a judgment is valid.


*One week before the statutory collection period runs out, a notice of levy is served at the taxpayer's bank. The bank does not have to send the levy proceeds until the 21 day holding period on bank levies expires, and this will be after the period for collection runs out. This levy does not have to be released when the collection period runs out, because it was served timely.

*A continuous wage levy served before the expiration of the collection statute must be released after the expiration of the collection statute.


*When a notice of levy is served on a taxpayer's right to property, sometimes that includes the right to receive future payments, e.g., pension benefits. If there is a fixed and determinable right to receive those future payments, the levy will attach them when they would have been paid to the taxpayer, even though it is not actually a "continuous" levy. As long as the right to property has been levied before the period for collection runs out, the notice of levy does not have to be released.

Sunday, April 12, 2009

How Does Filing Late for 2008 Affect My Current IRS Resolution?

If you are currently in an Installment Agreement with the Internal Revenue Service, and you have not filed your 2008 return, then this will default your agreement if you owe. The best advice I can give you ( if this is the case for you), is to borrow the money to pay this off. If you can't borrow from a lender, then I would apply it to a credit card or borrow from friends or family.

In working for a tax resolution firm, I have recently seen the impact having 2008 tax liability has on the current resolution agreements. Whether its currently non collectible, or partial pay installment agreements, the IRS will not have empathy if you file your return late and you owe. The Internal Revenue Service wants to see that you are in compliance and not continuing to be habitual late filers. Furthermore, the IRS can sometimes send your employer lock in letter requiring the change to be made on your withholdings (W-4); this change will be for "0" instead of the number of dependants you legitimately qualify to take as exemptions.

Consequently, once your installment agreement has been defaulted, it is very difficult to get yourself back in an agreement with the same terms. Therefore, I encourage you to keep yourself compliant and pay the tax owed at the time of filing to prevent such action from taking place !

Times Running Out To File Your 2008 Return? Are You Prepared

Well if you have not done so already, your 2008 federal tax return is due by April 15. If you are unable to have it Time Date Stamped with the Internal Revenue Service by April 15, then you will need to file a Form 4868, which is an Extension To File form.

This form will prevent you from paying a failure to file penalty, but not a failure to pay penalty (if you owe). However, if you do not owe, you should not have a penalty either way because you do not owe tax. This is something to keep in mind as a taxpayer, but not make habitual in case you were to owe. It is always a good practice to go ahead and file on time to prevent yourself from any unwarranted penalties.

Secondly, if you owe for 2008 as well as other years, and you are entering in an installment agreement, keep in mind that this will default your current IA if you do not file your return on time and pay the tax owed. This is common among many accredited tax resolution firms that work diligently to get a favorable resolution for taxpayers, only to wind up in a defaulted status due to perpetual negligence.

If you have not taken care of your 2008 tax return, you still have time to find an acredible tax representative to help you ! Or if you are not prepared, then file the Extension To File form by April 15, and this will give you until October 15 to file.

It's better to be late than never !

Thursday, April 2, 2009

Get Rid Of Your Tax Debt Once And For All

Its frustrating with owing tax debt and carrying this burden around not knowing which route to take. However,its worse negating the next steps in getting this behind of you . The average taxpayer is not well versed in knowing how to negotiate with the IRS. One thing, a taxpayer can count on when having tax liability is that there is a light at the end of the tunnel and you may not have to satisfy the entire liability.

You may not know it, but the Internal Revenue Service only has ten years to collect on your tax liability. There is an acronym called CSED (Collection Statutory Expiration Date), which tells the IRS and other tax specialist just how long the IRS has to collect on your tax debt.

If your liability falls under $ 25,000, the IRS will accept an Installment Agreement based on the liability owed. The IRS will take the amount you owe divided 50 (months) t0 get the amount required to pay until the debt is satisfied. In case like this you will always pay the debt in full. However, with a partial pay installment agreement you will not satisfy the debt in full.

This is why they call it a partial pay installment agreement because you will not have to pay the liability in full. What a relief this would be of a tax professional could negotiate this kind of settlement with this IRS. Question is, do you qualify? Partial pays are not normally granted unless the IRS deems this liability never being paid in full. Therefore they will negotiate a payment that will satisfy some of the debt allowing the rest of the debt to fall off when the CSED dates run out.

This is why handling an extensive issue own your own may not your best option. There are trained Enrolled Agents that have prior experience with the IRS that can help negotiate a resolution like this if you qualify. If you have a large tax liability and the IRS does not see much future income potential, then you might be a good candidate for Partial Pay Installment Agreement.

Who Else Wants A Tax Credit ?

So who would of thought that Washington DC would allow taxpayers who buy a new vehicle this year are entitled to a tax credit. Yes this is true, any taxpayer is entitled to deduct, state & local sales & excise taxes paid on the purchase on their 2009 return next year.

Yes this will give those taxpayers more incentive to buy now and get cash back later on their returns. Therefore the taxpayers can afford to purchase ahead of time to make their purchase this year. However, there is a limitation to the state & local sales and excise tax. These tax credit's do not apply to those purchasing over a $49,500 car, light truck, motor home or motorcycle.

The amount of the deduction does not apply to those making an Adjusted Gross Income between $125,000 and $135,000 for individual filers and between #250,000 & $260,000 filing joint. One point the IRS made also alerts taxpayers that the vehicle must be purchased after February 16,2009 and before January 1, 2010 to qualify for the deduction.

Although the deduction can't be taken on their 2008 tax returns, the deduction is available regardless of whether you itemize deductions (schedule A).