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Archive for the ‘Tax Prep’ Category
Common Mistakes to Avoid Making on Your Tax Return
Even when taxpayers are cautious while preparing their returns, errors can still occur. The IRS corrects simple errors, such as miscalculations, without you having to file an amended return. For other errors, such as incorrectly claiming credits and/or deductions, you may need to amend your return and file again. Serious errors such as understatement of income can trigger an IRS audit and may lead to tax debt. To help you out, we've put together a list ...
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Tips for Choosing a Tax Return Preparer
A large number of taxpayers hire a return preparer to prepare and file their tax returns. Most return preparers are legitimate and honest. However, taxpayers can be in danger if they come in contact with fraudulent return preparers. Here are the eight points which will indicate the type of preparer you’re dealing with. 1. Personal Tax Identification Number (PTIN) The IRS has mandated that every paid tax return preparer must have a Personal Tax Identification Number or ...
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Education Tax Credits And Deductions
If you are a student, you can cover some of the costs of your education by using education tax credits and deductions. Many of the major tax credits and deductions are designed to help students afford higher education. Here are some of the top education tax credits and deductions. American Opportunity Tax Credit This tax credit helps eligible students cover expenses made to receive higher education for the first four years. The maximum credit is $2,500 per ...
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The Importance of Filing Your Taxes, Even If You Can’t Pay
As far as IRS penalties are concerned, there is a difference between filing your tax return and paying your taxes. If you do not file your return, you pay the failure-to-file penalty. If you do not pay your tax bill, you pay the failure-to-pay penalty. If you do not file and pay, you pay the greater of the two penalties. You can and should file your tax return even if you cannot pay your taxes ...
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Married? The Question is to File Jointly or Not to File Jointly
The perpetual question that married couples ask each other at the time of tax filing is, "Should we file jointly or separately?" Filing jointly is typically more advantageous for married couples. Under certain circumstances, however, married couples will find that filing separately will provide them with more benefits. If you have been filing jointly for years, you should calculate your taxes using both methods to see if filing separately would reduce your tax liability. If you ...
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What is The EITC and Why is it a Common Cause of Tax Debt?
The Earned Income Tax Credit (ETIC), also known as the Earned Income Credit (EIC) is a refundable tax credit that provides benefits to working individuals with moderate income. As with every other credit, the EITC reduces the total tax liability of the taxpayer. Even if the taxpayer does not owe taxes, they can get a refund if they file a tax return and claim the EITC. Qualifying Requirements To qualify for the EITC, you need to fulfill ...
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What is a Substitute for Return?
There are typically two kinds of people in this world: people who can’t wait to file their tax returns and those who’d like to avoid tax season altogether. Generally, it’s the people who are expecting a nice refund check who rush their income tax returns to the IRS as soon as they receive their W2s. Everyone else hears “taxes” and envisions piles of boring and complicated paperwork, as well as the sizable check they’ll have ...
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