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.

Know the Impact of Bankruptcy on Your Taxes

Know the Impact of Bankruptcy on Your Taxes

The term bankruptcy is considered as a legal status of an individual or company that happens to be unable to repay their incurred debts from their creditors. In most cases, bankruptcy is being imposed by the court orders. It is usually initiated by the debtor. However, sometimes the weight of the issue is given to the debtor from the creditors.

YOU ARE ONE OF 50,000,000 AMERICANS WHO MUST F...
YOU ARE ONE OF 50,000,000 AMERICANS WHO MUST FILL OUT AN INCOME TAX RETURN BY MARCH 15. FILE YOURS EARLY. – NARA – 516201 (Photo credit: Wikipedia)

The IRS pub 17 2013 signifies the legal implications on income taxes. This involves the possibility of declaring bankruptcy and its variable forms. Chapter 11 bankruptcy pertains to the debts of the person being reorganized. In this scenario, the debtors have ways to repay some or total amount of their debts. The Chapter 7 bankruptcy involves the liquidation of the debtor’s assets and liabilities. In this situation, the debtors have no means to repay most, if not, the total amount of their debt.

How can Bankruptcy Create an Impact to Debts

Basically, filling of bankruptcy is very complicated. This makes it important for you to consult a bankruptcy lawyer to ensure that all actions you make are done appropriately. In general, bankruptcy does not create impacts to your income tax return, even if there is a cancellation of debt, which is normally taxable on your tax returns.
The reason behind this is that any sources of debts discharged in bankruptcy are excluded from the incomes under the income tax regulations. The regulations pertaining to bankruptcy in relation with income tax returns are:

1. If you are being audited, filling of bankruptcy will not stop the auditing. However, it will stop the collection process while the bankruptcy is on pending status. Moreover, the time collection activities stop, such as during the time that you are deemed as not collectible or during the processing of the compromise state is extended. Always consider these concerns before declaring bankruptcy.

2. Not all of tax debts are entitled for discharge in bankruptcy. Items that are considered as priority debt are not dis-chargeable, as well. This includes student loans, child support, fines stemming from committing of felonies, and drunk driving cases. The priority debts should be fully repaid, which are classified under the Chapter 13 bankruptcy.

Forgiveness of debt is usually considered as taxable income. However, it becomes ineffective to insolvency and bankruptcy. Sometimes, it is good to present offer in compromise by settling your tax debt. It is still suggested to confer your debt issues with a tax professional and bankruptcy attorney in order to come up with a set of appropriate course of action. This can help you eliminate the possibilities of applying legal actions, which are not suitable for your specific case.

There’s an App for That: Taxes from Your Phone

We do pretty much everything from our phones these days, turns out, taxes are no different. Accountants and techies are combining forces as new ways develop for those who choose to file from their phone. From an easier way to track and report expenses to hand-held glossaries and customer service, exploring ways to file from your phone will change the way taxes get done.

Tracking Expenses

Deducting expenses is essential for businesses owners or the self-employed. Keeping track of those expenses however can be incredibly cumbersome. Travel, meals, supplies, and mileage really add up and the ability to immediately input related data and transfer that information to taxes can keep things clear and easy when the time comes to report.

  • iXpenseIt offers password protected expense tracking which can be programmed and stored in customizable categories.
  • ShoeBoxed integrates snap technology and expense reporting into one package. The app allows users to snap photos of receipts and upload them into an organizationally customizable online platform.
  • TripCubby provides the ability to track and record mileage and other travel data. The data collected can be exported into Excel using email or automatically added into deduction categories in the app itself.

Estimates

Mobile devices are especially handy for retrieving pertinent information for those who need an estimated income tax return but lack the actual W-2. Tax Caster by TurboTax doesn’t require exact figures to calculate return estimates which enable users to fulfill tax-based qualifications or anticipate amounts of returns without having to retrieve the actual tax information this includes more in-depth tax issues such as deductions related to family size, properties, alimony, and vehicles.

Much like expense reporting for businesses, keeping track of personal donations and other charitable activities is essential. A group of accountants created the iDonatedIt app which generates an itemized list of donated items, values and the date and location at which they were dropped off. Additionally, the app supports snapped photos of the donations which can be uploaded via email.

Questions and Support

Taxes can get confusing, particularly for those with more tax materials than the basic W-2. H&R Block has created the Tax Answers app which allows for a chat-based Q&A with their representatives. The app also provides FAQ categories and checklists as well as a handy glossary.

  • Internal Revenue Code (IRC) app by LawToGo.net is aimed at professionals or filers with complex returns and contains a searchable database of the various codes determined by the IRS.
  • TaxMama is an app which generates a costume tax calendar to suit various filing needs for those with different tax forms which carry different deadlines.
  • IRS2Go, produced by the IRS allows users to check the status of their filed tax return and refund while also providing information on pertinent updates.
  • MyTaxRefund by TurboTax can also track tax refund status, determine whether the return was accepted or rejected by the IRS and produce the expected date of refund arrival.

Filing

Phones have turned actual filing into a snap. Particularly with SnapTax which fills out the 1040EZ form using a snapped photo of a W-2. The information is filled automatically and can be filed after review. However, SnapTax is currently available only for Californian 1040EZ filers.

Katei Cranford is a freelance writer and tech lover who insists on filing taxes properly and helping others do the same.

Enhanced by Zemanta

7 Steps To Reduce Your Tax Related Stress

7 Steps To Reduce Your Tax Related Stress

If you have your own business what may haunt you most is the stressful task of filing your tax returns at the end of the year. Every year brings you the harrowing experience of piling up your financial documents and preparing your tax return. It adds to your worries if you have earnings in other countries as well, as you need to file your tax return from those countries as well.

Here are seven gradual steps that will certainly minimize your tax returns related hassles.

1. Maintain your accounts accurately. Buy a … Read more at 2009 Tax.

7 Steps To Reduce Your Tax Related Stress

If you have your own business what may haunt you most is the stressful task of filing your tax returns at the end of the year. Every year brings you the harrowing experience of piling up your financial documents and preparing your tax return. It adds to your worries if you have earnings in other countries as well, as you need to file your tax return from those countries as well.

Here are seven gradual steps that will certainly minimize your tax returns related hassles.

1. Maintain your accounts accurately. Buy a ruled ledger from the nearby stationery store and keep a record of your accounts.

2. Keep your receipts/bills in a safe place. Enter the finer details of the receipts into your accounts book once a week.

3. When you receive a payment, don’t forget to record that payment in your accounts system.

4. Browse through various accounting software packages available with your software retailer. Don’t go for a complex accounting software that may make your accounting more complicated instead of simplifying it. Choose a simple application. If spreadsheets and cell formula work better for you, keep your accounts in a spreadsheet program.

5. Now, open your tax return envelope without any delay. Check if all the sheets are there that you may need. If you find that any sheet is missing, you can download it.

6. Don’t leave your tax return job for the eleventh hour. Try to file your tax return well ahead of time. This will give IRS or the revenue department time to check your forms to ascertain how much you owe them. This is rather less stressful than calculating it yourself and continuing to doubt your calculations skills.

7. Analyze steps 3-6 again. If you feel they are not your cup of tea, you can hire an accountant. Of course, you will have to pay the accountant for keeping your accounts and for preparing your tax return. How much you will pay will depend on the complexity of the work the accountant will have to complete. If you have a habit of keeping a neat and clean accounts book and keeping a safe copy of each of your receipts, you may not have to pay a higher fee to your accountant.

When Is The Best Time To Go For A Tax Return Filing?

When Is The Best Time To Go For A Tax Return Filing?

Millions of US citizens get ready either for paying taxes or for collecting tax refund from the government by 15th of April each year; when exactly did this day become a great day for the taxpayers and when are the people expected to file their income tax returns? Let us see the history of the date “15 April” as the date for income taxes and why it got chosen.

In the early 1860s, under the reign of President Abraham Lincoln, the Americans were known to pay the first … Read more at 2009 Tax.

When Is The Best Time To Go For A Tax Return Filing?

Millions of US citizens get ready either for paying taxes or for collecting tax refund from the government by 15th of April each year; when exactly did this day become a great day for the taxpayers and when are the people expected to file their income tax returns? Let us see the history of the date “15 April” as the date for income taxes and why it got chosen.

In the early 1860s, under the reign of President Abraham Lincoln, the Americans were known to pay the first income tax to the government. There was a huge loss to the country’s economy due to the Civil War, and the government decided to create an internal revenue-generating system and a law was enforced to make the citizens pay a federal income tax. The present-day income tax got started this way. On the basis of progressive or graduated taxation principles and of cutting a share of income at source, the income tax procedure was formulated. The commissioner had the highest authority of assessing, levying, and collecting federal income taxes. He also had the authority of enforcing tax laws through prosecution or by capturing income and property.

Initially, 15 April was not the deadline for filing the income tax. First March was the date initially set for this purpose. In 1918, the then Congress reset the date to 15th of March. Afterwards in the “1954 amendments”, the date was finally fixed at 15th of April, and is going on like that till today. The question is why this particular date? Many scholars argue that with this date, IRS gets more time for handling the workload and it can work conveniently for offering any tax refund. For over fifty years now, 15 April has been the official date for this purpose. Historically speaking, this is not a very long time period, and to a higher possibility could again be changed.

Being a taxpayer yourself, you are supposed to file a return or a time extension (Form 4868) on or before 15th of April. Legal or other corporate entities are supposed to file their tax returns or federal income tax return on or before 15 March, or they also can take a time extension. During this extended period of time, you will have to pay the government some extra taxes due. Therefore, if you are not ready with your business or personal financial information by the government-specified date, you are supposed to pay some extra tax in form of a penalty.

After World War II, the whole tax responsibility was equally shared by both the individual and corporate taxpayers. However nowadays, the responsibility has been shifted more toward individuals compared to business entities. In and around the year 1867, people started becoming more concerned about their special interests, they started raising their voice and getting heard, and finally in 1872, the government had to abolish the income tax law; and during the period from 1872 to 1913, almost all the government revenue was generated through the sale of tobacco, wine, liquor, and beer. In 1894, for a brief period of time, the income tax came back into force again, but soon afterwards in 1895, the US Supreme Court declared it unconstitutional with regard to it being not apportioned properly among all the states conforming to their Constitution.

Around 1918 in America, eventual taxation laws were defined. Until then, the government generated a major part of tax revenues from selling alcoholic beverages and through imports and exports. After the Constitutional amendment in 1919 when alcohol selling and manufacturing were made illegal, it became imperative to look for an alternative revenue-earner. Federal income tax was proposed as the solution, and since then it is operational till today. During the period from 1920 to 1933, when no alcoholic beverages were allowed to be sold in the country, the individual taxpayer had to take on a heavy burden to support the government revenue, and the burden naturally got heavier with time. Some people were in the business of illegal liquor making, and they had to pay tax too on the liquor so produced; these bootleggers were often imprisoned for tax evasion but and not for bootlegging. In case you wanted to prosecute somebody, taxes would invariably come into focus.

With the passing of the “Revenue Act of 1942”, a new era began in the American history known as the New Deal period. Since then there have been a continuous growth in the government power, control, and expenditures; and today, the US government has become a multi-billion dollar giant supported by the individual American taxpayers. Every year, it consumes 10 percent of the income that we earn, and it tends to eat up even more money once the Social Security Administration comes into play. There is nothing that we can anticipate as a sign of relief.

At present, IRS is taking all the responsibilities of tax regulations in the country, and this office has got 4 major segments, namely, the Small Business & Self-Employed, the Investment & Wage, the Large & Mid-size Business, and the Government Entities & Tax Exempt. Certain specific responsibilities are imposed upon each of these divisions.

The ways of collecting and calculating taxes are always in the focus and there is continuous effort of how to modify them for the better. National sales tax and the flat tax are the most common forms of taxes. It all depends upon the Congress to take the step up and make a change; otherwise taxes will continue to remain a cumbersome affair for everybody.