An Important Guide On Filing Taxes Online

FILE Rubber Stamp
FILE Rubber Stamp (Photo credit: Enokson)

An agreement between a group of private companies that produce tax filing software,the Free File Alliance, and the IRS has made it very easy to file your taxes. The companies have availed their software to be used at absolutely no charge. This has resulted in over 40 million people turning to filing taxes electronically because of the ease and safety associated with this method. When you file your returns electronically, you also benefit from being able to receive your refund faster than those who have to go through a lot of paperwork.

In order to use the Free File software, you need to visit the IRS website (www.IRS.gov). Here, you will have to choose the preferred program for preparation, printing and filing of your taxes returns.

The free File software employ numerous techniques to help you accomplish the task. The use of questions and answers is a very common technique used in order for the software to determine the tax forms to be use before it goes ahead and computes the required calculations. This way, you can also identify tax breaks and tax credits that can be claimed.

In case your revenue for the previous year was less than $58,000, you can use TurboTax 2014 or Free File forms for anything above that.

When you use Free File, you can easily and freely request for an extension of up to six months in case you are unable to file your taxes by April 15th deadline. Check IRS Publication 17 for details. However, it is advisable to file your taxes by April 15 to avoid penalties and accumulation of interest. You can eliminate the headache and stress associated with filing taxes by choosing to use Free File. It is not only easy but quick. To find out which brand you are eligible for and any other pertinent information, visit IRS.gov/freefile.

On What Day Will I Be Able To File My Taxes?

The IRS has set the date to open up their filing season, for year 2014, on January 31st. They encourage all taxpayers to take advantage of Free File, e-file, or TurboTax 2014, to get the quickest refunds of their 2014 taxes.

This opening date for filing tax returns for 2013 will give the IRS enough time to properly program and test their updated tax processing systems. There were substantial delays in their system back in October, immediately after they experienced that 16-day government shutdown.

The Acting Commissioner for the IRS, Mr. Danny Werfel, encouraged taxpayers with this statement, “Our team of professionals have been hard at work all throughout the fall season, preparing for this upcoming tax time. This late date in January will allow us plenty of time to get everything in order in regard to programming, testing, and validating our systems. The process is a complex one, and we will remain focused on our main goal, which is to provide a smooth filing platform and speedy refund process for the entire nation.”

The government shutdown caused the IRS to move their original opening date. It was first scheduled to be between January 21st and January 31st. This new date in 2014 is an extra day later than last year’s 2013 filing season date, which began on January 30th after Congress had changed the January tax law on the 1st. This change was made under the ATRA (American Taxpayer Relief Act). The tax changes that took place under the ATRA were quite extensive and affected a lot of 2012 returns. That is what led to the decision to hold a late January opening.

The IRS also made note that taxpayers this year will have several options available for getting their refunds as quickly as possible. There has been new ‘year-end’ tax planning information added onto the IRS.gov website this week.

Additionally, there are a lot of software companies who are anticipating accepting tax returns come January. They will hold on to those tax returns until the exact day of the IRS system opening on the new January 31st date. There will be more extensive details available throughout the month of January.
The IRS wants to caution everyone that it will NOT BE processing any tax returns before their stated date of January 31st. You can gain no advantage by doing your filing on paper any time before this opening date. The fastest returns will go to those who utilize Free File, e-file, or TurboTax 2014, and can take advantage of the direct deposit option.

The deadline date of April 15th has been set, and was done by statute, so it will stay in place. However, any taxpayer who is eligible may request an automatic extension of six months for filing their return. To request this extension, simply fill out a Form 4868, either electronically or on paper.

The updates to the IRS applications, databases, and systems, are done every year. This is done to ensure they reflect the current tax law updates, as well as all business process changes and/or programming updates before the time of the filing season begins.

The closure in October took place during a peak period in regard to IRS system preparations for 2014. There is programming and testing to be done, as well as the deployment of over 50 IRS systems. That’s what it takes to handle the processing of around 150 million tax returns. The updating of these core systems can be extremely complex, and is a process that is on-going all year round. The bulk of this work usually kicks off in the Fall every year.

During the government shutdown, around 90% of the operations within the IRS were closed. Some very major streams of work closed down entirely. That threw the IRS behind by almost 3 weeks behind their solid timetable for being in position to begin the filing season for 2014. They are also dealing with additional programming, testing, and training in terms of their new systems this year. This is for providing protection against refund fraud, as well as identity theft prevention and detection.

The IRS Publication 17 And You

IRS Publication 17

IRS publication 17 deals with general instructions and guidance for people using form 1040. Paying income tax can be daunting but reading this publication will aid you in this process. The materials contained in this publication are the interpretation of the Internal Revenue Service of court decisions, treasury regulations, tax laws, and additions to the tax code. It also deals with general rules and reminders to help you file your return.

Paying taxes is required for both citizens and...
Paying taxes is required for both citizens and non-citizens. (Photo credit: Wikipedia)

IRS publication 17 can be extremely helpful for filing your tax returns.  If you are new to the workforce, it can tell you whether you have to file a return and if you do which form to use. It also gives you guidelines as to which records to keep, information on dependents, what is a filing status, and what exactly income is. E filing, how to check the status of a refund, and what to do if you make a mistake are also covered in this publication.

There are many flowcharts, everyday illustrations, and various scenarios of how the tax laws apply to real-life situations. For example IRS publication 17 illustrates tax questions; such as can you claim medical expenses you paid for a deceased spouse if you remarry and file jointly with your new spouse.  The answer is yes; you may claim these expenses. It also clarifies charitable donations with an example of a donated coat that originally cost $300 but the charity thrift store sold the coat for $50; the fair market value of the coat would be $50, which could be shown as a charitable contribution. However, if you are self-employed IRS publication 17 is useful but not all-inclusive; there are other publications that will give you further information on various tax laws and forms for business tax filing.

If you have questions about how to file, where to file, or how to determine income or expenses for IRS form 1040, IRS publication 17 should be the first place you look for information.

Last Minute Tax Tips When Using Turbo Tax

Last Minute Tax Tips

Are you going to use Turbo Tax 2013 to file your taxes this year? Before you head to TurboTax.com, take a moment to read through these tips. With the deadline approaching, you need to know what to do at the last minute to make the filing process successful.

files
files (Photo credit: cali.org)

1. File the Paperwork Electronically

Did you know that Turbo Tax 2013 allows you to e-file your paperwork when you are done? This can save you a lot of time; it really only takes a few minutes. You will instantly submit your tax files so that you do not miss the deadline; you can even do this just hours before the cutoff time.

2. See if You Can Get an Extension

If you’ve been on TurboTax.com and you think you’re going to miss the deadline, you might want to file for an extension. The government will give you – if you are approved, of course – an addition six-month period to file your taxes. Wouldn’t you like to take care of them in October instead of April?

3. Know the Penalties

There are two main penalties that you can get if you use Turbo Tax 2013 or TurboTax.com and you do not get the tax documents in on time. The first is for failure to file, and the second is for failure to pay. Both could cost you up to an additional 25 percent of the total amount that you already owe. However, the IRS often gives extensions for people who have filed and not paid. You should at least get the paperwork in by the deadline, and you could end up avoiding both penalties, even if you don’t have the money to pay the taxes right now.

With these three tips and Turbo Tax 2013, you can reduce what you owe, avoid penalties, and make tax season a lot less stressful than it would be otherwise. The tools at TurboTax.com give you the power to file your taxes successfully without a Certified Public Accountant (CPA), so you’ll actually be able to keep all of the return that you get this year.

Tips For Maximizing Your Return

With The Free Turbo Tax 2013 Software

When you use free Turbo Tax 2013, it is important to make sure that you maximize your return. The free TurboTax software makes this easier than it has ever been before since you will be asked a series of questions about your finances; these questions are much clearer than the labels on the tax documents, so you will really understand what you are being asked and what you need to say. The software will then plug your answers into the right boxes so that you have fully official tax documents with all of the right information in the right boxes.

English: To do to migrate to free software?
English: To do to migrate to free software? (Photo credit: Wikipedia)

Declare Your New Home
One of the best ways to increase your return if you just bought a new home is to list it as your primary residence with the free Turbo Tax 2013 software. You can then get the Homestead Deduction, which can save you hundreds on your state taxes. The free TurboTax program may also be able to help you determine if you deserve a Federal First Time Home Buyer Credit for the year, which can be applied to your Federal taxes, making your one home save you money twice.

Itemize Your Deductions
The free Turbo Tax 2013 software makes it very easy to make a list of your itemized deductions. You should always do this to check and see if the itemized deductions are going to be more than your standard deduction. By using the free TurboTax software to make the list, you can make a wise decision about which deduction will be larger.

Use the Correct Forms
One of the nicest things about the free Turbo Tax 2013 software is that it can help you check to see which form you are using when you enter information. This can make a huge difference. For example, a 1099-MISC form will not include taxes that have already been paid out, so you will be taxed on the totals. A W-2 form, though, will include those taxes that were already deducted, so you may get money back. Use the free TurboTax software to select the type of form that you have so that you do not pay your taxes twice. This way, you actually get all of the money that is owed to you.

Erase the Fees
Finally, the free Turbo Tax 2013 software helps you maximize your return simply because you do not have to pay any fees to a CPA. You can do everything yourself, even if you have never studied accounting or tax law. The free TurboTax software is very easy to use, even for those who are doing their taxes for the first time. By erasing the extra fees, you get to keep all of your return.