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.

Surviving An IRS Audit

Surviving An IRS Audit

An IRS tax audit is requested when the tax filer submits tax information that doesn’t match with that submitted by employers, brokerage firms, banks and other institutions. This document-matching is only one means of identifying tax returns to be audited. The Discriminant Function System (DIF) is a point system the IRS gives each return rating it on its possibility of containing fraudulent information. Informants are still a popular means to detecting who has filed a fraudulent tax return and finally, self-employed persons and persons earning $200,000-1 million are often pursued when their returns appear suspicious.

Any of these circumstances could trigger an IRS audit. IRS Publication 17 is a guide for the individual tax payer that could help them stay off the IRS suspect list. The publication goes over the basics of filing a return. It covers every type of income, adjustments to income, profit gains and losses and deductions. It evaluates deductions and taxes and tax credits. Lastly, it provides a tax table and tax computation worksheet.

By following the IRS Publication 17 closely, the likelihood that you would encounter problems with your taxes dwindles significantly. An audit may still occur if mistakes are made or if you persist in being less than honest about your income. Keep in mind, that anything that can be verified will be verified.

If you are confronted with an IRS audit, the first step you should take is to contact your tax preparer, a good tax lawyer and review your returns before the actual audit. Avoid the IRS discovering improprieties in your returns. Point them out before they are brought to your attention and make compromises where ever possible to mitigate your cost.

How To Choose An Arizona Tax Attorney

Tax
Tax (Photo credit: 401(K) 2013)

If you have a tax related dispute with the state tax bureau, you need an Arizona tax attorney to help you. They will advocate on your behalf and help you come up with a reasonable payment plan.

Get in touch with previous clients who have dealt with the advocate. Inquire from them if they were content with the legal service that they were rendered. A good advocate will have a great impact on your case in regard to the amount of money you are going to save or recover.

Evaluate the qualification of the attorney by getting in touch with the bar association. Ask the duration the advocate has worked in tax law. It is important to check all their qualifications to be sure that you are dealing with someone knowledgeable in their field.

Plan a consultation with the advocate. Meet the prospective advocate to discuss with them the details of your case. Choose an attorney who suits your budget and your requirements as well.

It is required to have a contract that stipulates all the fees that you will be required to pay. The agreement should state the number of hours that your case will require. Make sure you read all the terms of the agreement before signing it.

Electronic Version Of Pub 17: Getting Cozy With The IRS

Electronic Version Of Pub 17

The electronic version of pub 17 is in PDF format. It contains valuable information about filing your federal tax return. The precise link from which to download the PDF is http://www.irs.gov/pub/irs-pdf/p17.pdf. The easiest way to work with it is to save the document on your computer hard drive. That way, you won’t need Internet access if you have to refer to the file again in the future.

Seal of the United States Internal Revenue Ser...
Seal of the United States Internal Revenue Service. The design is the same as the Treasury seal with an IRS inscription. (Photo credit: Wikipedia)

Most likely, you’ll need to look into it more than once, especially at crunch time, when the tax deadline is near. If you have enough time, you may want to familiarize yourself with the document so you know everything important. Doing this will help you compute your federal tax return accurately and avoid mistakes that can cost you come tax assessment time.

Be careful out there, you can fall prey to a joke complicated tax return if you end up in a phishing site. To avoid this from happening, look closely at the URL to make sure that you are going to the authentic IRS website. Becoming a victim of a joke complicated tax return can make the process of filing your income tax difficult when it should be rather easy and straightforward.

The best way to really learn to do it is to do it by hand, that is, without depending on tax software that automate the process of computing your taxes. The idea is simple, you just need to ascertain your true income, declare your deductions and claim you tax credits.

Tax Carnival Ecstasy – October 11, 2011

Welcome to the October 11, 2011 edition of Tax Carnival Ecstasy. In this issue we have three top stories for this edition of the Tax Carnival. Gregory Stokes takes a look at the Child Tax Credit with a basic guide. Gemma Flannery has a nice post on Tax Codes and your Personal Allowance. Finally Jessica Bird writes about why the UK is the world’s third most expensive place to purchase petrol. Hope you enjoy the stories, bookmark, share, tweet, like on Facebook and come back soon.

credits

Gregory Stokes presents Your Basic Guide to Child Tax Credit posted at Tax Credit Calculator, saying, “If you have children under the age of 16 you may be able to claim child tax credits. This post is a guide on how to make claim.”

filing

Gemma Flannery presents Tax Codes and your Personal Allowance posted at Tax Codes, saying, “Each year you can earn a certain amount tax free. This post shows how your tax code is affected by your tax code.”

taxes

Jessica Bird presents UK is the world’s third most expensive place to buy petrol | posted at CarTaxBands.org, saying, “If you thought the price of gas was high in the US you should be glad that you are not living in the UK. The UK has the third highest price of gas in the world.”

That concludes this edition. Submit your blog article to the next edition of tax carnival ecstasy using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

 

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Little Deductions You May Miss

You need to know what deductions may be possible even when you hire someone else to do your taxes. A quick look over the tax codes on the IRS.gov website will help you determine all of the deductions you need to be considering.

Top Deductions that are Missed

1.     Expenses that are NOT reimbursable by the company. Any expenses that are incurred during the tax year and that are considered ordinary and necessary for your industry can be used as a deduction on your taxes (at least a portion).

a.     Depreciation on work computers

b.     Dues paid to professional societies

c.     Chamber of commerce membership

d.     License fees for your business or occupation

e.     Tools and supplies used in work

f.      Work related education

g.     Union dues or other related expenses

2.     Most people overlook the potential of the deducting expenses associated with working at home. The Business Use of Home deduction can be applicable when your home is your principle place of business or when the space is used EXCLUSIVELY for business purposes. A portion of home expenses can be deducted when these criteria are met. The amount deductible will be determined by the percentage of home space used for business purposes.

a.     Real estate taxes

b.     Deductible mortgage interest

c.     Utilities

d.     Insurance

e.     Repairs

3.     Mileage on a vehicle can be deducted for a number of different reasons. The amount that is allowed will be determined by the activities, but the numbers can add up to substantial savings. Be sure to keep a written record of all mileage you intend to claim on your taxes.

a.      Business mileage – keep up with the trips you take for meetings, events or supply runs. Any time that you use your vehicle for business related purposes you can add that mileage to your totals. The business mileage has the highest allotment by the IRS.

b.      Charitable mileage would be those miles you put on your vehicle when driving in the service of a charitable organization.

c.      Medical mileage would be those miles put on the vehicle when visiting the doctor, dentist or other medical specialist.

4.     Casualty, disaster and theft losses may be overlooked by many people when it comes to taxes. The amounts you can claim on your taxes are only those above any payments made by insurance companies. You will along be able to claim a portion of those totals. These loses are generally deductible for the year they occurred. Property located in a federally declared disaster area may meet different guidelines.

Knowing all that you can about the tax code will help you find even little deductions that you might be missing. A tax professional can make it easier to weed through all of the tax code. Some of the deductions seem little until you begin to add them all up. Counting a penny here and a penny there will help you save big money in the long run.

The key to making the most of your tax deductions is documentation. Keep well organized records of your actions and activities (for your business as well as your personal activities). It will be easier for you to sort through the records when they are in order. Good documentation will help you discover any of those little deductions you may have otherwise missed. The more deductions you uncover the lower you will be able to push your tax bill.

 

Nick Maddux has been in the finance industry for 3 years; he contributes to blogs that deal with insurance deductions and where to get a free credit score report.