Tax Archive

Sawyer Adams asked:




One of the most important cases where your tax preparer certification provides value is to individuals with uncommon miscellaneous income. Taxpayers will often neglect to report unusual types of income. But, tax preparer jobs include communicating with people to identify income that’s not from their routine employment.

This is especially important because payers of miscellaneous income usually have to report it on Form 1099. Therefore, even if a recipient taxpayer forgets about some type of income, the IRS will know from the 1099 reporting.

Failing to include income on a tax return that is reported by a payer on Form 1099 results in an IRS notice. These will include late payment penalties and interest. The thorough work you provide by having become a tax preparer helps people avoid these adverse consequences.

Uncommon sources of miscellaneous income include prizes, awards, contest winnings, gambling, and odd jobs. Taxable gambling winnings include more than amounts earned at casinos and racetracks. This category also includes lotteries, raffles, and tournaments. Non-cash prizes are taxed at their fair market value.

Sometimes taxable income is even incurred without money changing hands. This happens with barter agreements. In addition, some tasks do not generate any 1099 because the form is only required from any one source that pays at least $600 per year. However, all miscellaneous income is taxable – even when 1099s are not issued.

Your tax preparer training aids taxpayers in complying with requirements to report miscellaneous income. So you want to remember to find out about these types of income when preparing tax returns. Miscellaneous income can become a substantial total amount even when no single payment source is required to provide a 1099. Your tax class study program also teaches you to identify for taxpayers all deductions available to reduce miscellaneous income.

As a Registered Tax Return Preparer you are required to help taxpayers report all sources of taxable income. In doing so, you allow them to avoid IRS trouble while meeting the ethical standards that the IRS demands of you.

IRS Circular 230 Disclosure

Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.

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Frank W Ellis asked:




So, you’ve heard about (free tax filing) and you might have even heard it’s available at Turbo Tax. Well, you’re right, there is a program available at Turbo Tax which is called the Tax Freedom Edition free tax filing program. Because of an agreement with the (IRS), this free tax filing program is available to those taxpayers who have an adjusted gross income (AGI) of $28.000 or less.

Why is the Government and Turbo Tax doing this? Because, it helps them, and it helps you!

Since initially debuting in 2003, the IRS has received more than 15 million tax returns through the Free File program, representing a cost-savings to the government of more than $32 million in processing costs of an electronic return compared to that of paper. You the taxpayer, get to file your taxes in a more efficient and timely manner than ever before. By using online tax software for your tax filing you get a number of benefits not previously available. Mainly… Free Tax Filing!
The Freedom Edition Tax Software Program, through the Free Tax File Alliance, provides free tax preparation services to millions of Americans with low-to-medium incomes. A partnership between the Government and 19 private tax software companies has been reached which allows you to prepare and file your Federal income tax return for free. There are also 21 States which have a similar program.

If you think you might qualify for (free tax filing) then do yourself a favor and check it out and see. You might get to save yourself a buck in the process and also learn an easier way of doing taxes. One thing is for sure… Online tax filing is here to stay. This is your chance to get started for free.

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Elijah James asked:




If you are looking to file your taxes online yourself this coming tax season not all the online tax preparing sites include an online form for state tax submission but only federal. There are some places online where you can do both conveniently and at the same time.

IRS Government Website

On the IRS website you can file State taxes online as well as Federal. That is if your state is cooperating with the government in their Federal/ State e-filing online program. This is to make it easier for the tax filer to be able to file their state taxes as well as Federal and to be able to file them at the same time when they go to file on the IRS government website. Here are the States that do participate so you then can file your state tax returns online:

Alabama, Arizona, Arkansas, Colorado, Connecticut, Delaware, District Colombia, Hawaii, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Mississippi, Missouri, Montana, Nebraska, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Utah, Vermont, Wisconsin, West Virginia, Oregon.

California, Maine and Massachusetts must directly file with each of these states.

OLT (Online Taxes)

OLT is another place where you can file online for your state taxes. They have the E-Z file seal that shows there are authorized with the IRS e- filing system. You then can file State taxes online as well as Federal and they offer customer service support if you have any questions. This does cost you though,but you can view your entire tax return free before you send it and pay.

State Websites

You can also always go directly to your states governments’ web page and submit your state return right there if your state allows it. Many States have made it mandatory that you submit electronically to rid the paper work and make their business more eco friendly.

Tax Brain

Another online site where you can submit your return electronically. Actually you have to file your Federal first and then from your Federal they fill out your State tax form so you submit online as well as Federal all in one easy swoop. They are authorized with the IRS EZ Filing System as well. This site is not free either but you only pay what you need and only if you are satisfied and ready to send them out will you get charged.

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Edith Gates asked:




A lot of parents feel guilty about placing their kids in children daycare. They have this misconception that doing so is equivalent to ditching the kids and letting someone else raise them. But that’s not true. The best daycares offer services that will benefit your kids in a variety of ways.

Here are the top 5 benefits of placing your kid in child care.

1. Social skill development – Socialization is an important part of child development. If you don’t let your kids interact with other children their age, they won’t know how to react when it comes time to go to kindergarten. Holding out on socialization at an early age can cause a child to never fully learn how to feel comfortable around others. Children daycare allows your kids to make their own friends, creating their own social life.

2. You get a break – Between your day job and raising your children, being a parent can be an overwhelming task. Every parent deserves a break. Enrolling your child in daycare gives you that break. Whether you use this break to relax or to take care of your to-do list (those little tasks you can’t get done with kids distracting you), the point is this break will benefit you in one way or another.

3. Importance of structure – The sooner your child gets structure in his life the better. See, life really is all about structure. From the first day of kindergarten to being an adult with a career, there is always a structure that you have to follow. By giving your child some structure early on in life, he will be able to adapt to school better later on.

4. Solid curriculum – Let’s be honest – The concepts your kid will learn in children daycare aren’t all that difficult to teach. But the reason daycares are so effective is because they have a set curriculum that they’ve been using and refining for years. This will help your kids learn much easier than with a curriculum that you make up as you go. Most children daycare curriculum offer a good balance of left and right-brained activities, so your child receives a well-rounded early education.

5. Becoming independent – If your child is constantly attached to your hip, it can be difficult for him to learn how to do things on his own. Placing your child in daycare helps him deal with separation anxiety, and more importantly, it teaches him how to work through these challenges. Your child’s self-confidence will benefit from this independence as he plays and learns on his own.

Choose the Right Children Daycare

If you’re thinking of placing your kid in children daycare, you have a lot of different options to choose from. Make sure you choose the right child care facilities for your needs by using the internet to do free daycare searches. Simply enter a few search parameters (city, state, provider type, etc.) to get instantly matched with the best daycares in your area. Be sure to check reviews and or references to be sure you are placing your child into an environment that is safe.

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Merry Makes asked:




We teach our children many of the skills and experiences to prepare them for adulthood. Home education and some form of formal or academic education, together with a wide range of social experiences help our children grow in many ways.

But what can we do to equip children with the unique skills and experiences that will enrich their lives in other ways?

Learning a hobby is my number one choice for the enrichment of a child, and here are 18 reasons why:

A HOBBY…

Has great entertainment value - Hobbies are a wonderful opportunity for the extra-curricular development of your child, providing additional learning perspectives while the child is being entertained. Makes good use of spare time - Instead of lounging around or watching excessive television or loitering in parks and streets, hobbies can be a great way to keep your child occupied in relevant activities which they enjoy. Stops your child from getting bored - From time to time, all children complain of being bored. Having a hobby to engage their interest in, is invaluable in relieving that problem. Encourages using external sources of information – Having a hobby can help your child to learn independently of an adult e.g. a child can learn to fold paper and make origami objects from a book; she can learn and make a delicious recipe from the internet; she can learn and try out hair-styling from an instructional CD. Teaches different skills – E.g. crafting and cooking are hands on activities, sports exercise the whole body, puzzles challenge the mind, performing arts and debating develops verbal skills. Improves motor skills - Crafting teaches fine finger-movements; cooking and sports such as badminton and tennis, teach hand-eye co-ordination; ball-games e.g. football, basketball etc. improve accuracy while skate-boarding improves balancing skills. Increases listening skills - In addition to developing musical abilities, learning a musical instrument can result in your child learning all of the above (as listed in reason 6). It doesn’t have to be music but listening to others’ opinions, or the instructions of a martial arts’ master can also increase your child’s ability to listen carefully. Develops fitness, strength and endurance – All sports including cycling, swimming and martial arts will help your child’s physical capabilities and general state of health. Improves social skills – Playing board games and team-sports encourages trust in others and trustworthiness. Participating in a choir or a gardening club requires a child to be less self-centred and more considerate, teaching her to act as a part of a whole. Increases self-confidence – As a child improves in a particular skill, so does it increase the child’s sense of self-esteem. Develops strategic thinking - Your child’s mind will be stretched beyond their daily thinking capacities when pursuing pastimes such as the classics: chess and draughts, board games like Ludo, some video games, Mancala, Chinese Checkers, Rubik’s Cube, code-breaking games etc. Improves deduction skills – Some activities will help your child to sharpen her ability to ‘think outside the box’ i.e. use the information available and use it in an unusual way. For example, some scouting activities may demand the development of deductive skills and innovative thinking under limited conditions. Develops word-power and number-power – Any hobby which involves extensive use of the written word or numeracy skills will ultimately increase your child’s competency in these crucial areas of communication. This may be as simple as reading and following an instructions manual for assembling a model. Improves management skills - In order to make time for her chosen hobby or hobbies, your child will soon learn to manage her homework and chores. She will also improve in her management of time for other social arrangements such as spending time with family and friends. Losing and winning - Competitive sports and activities teach children to be good sports, whether they win or lose. They can help your child to deal with anything less than success with grace, learning that winning is not always as important as participating. Quickens reflex responses - Some electronic games can be useful for sharpening a child’s wits, and processing and responding to multiple stimuli. There are many educational and fun electronic gaming systems which a child can engage in and benefit from. However, it is recommended that parents check and screen video games to determine suitability for the age of their child. In addition, it is best to talk over and agree with the child about the length of playtime per day. Develops a child’s sense of achievement – When a child successfully reaches a milestone in her chosen hobby or follows a project to completion, she is rewarded with a feeling of accomplishment and pride in her work. Can lead to tangible rewards – A finished jigsaw puzzle or art project, a successful sporting event resulting in a medal, a completed Rubik’s cube in her hands, or a well-attended choir recital – these all offer real, tangible recognition of your child’s sustained efforts and serve as encouragement for continued progress in her chosen hobby.

If your child doesn’t already have a hobby which she enjoys in her spare time, offer her the opportunity to try out a few of the pastimes referred to in this article (or any other hobby you consider suitable for your child). If your child has a favourite hobby, encourage her to pursue it to the next level and support her activities by providing resources, time and opportunities which will help her to develop in up to 18 different ways.

child benefit

James Kahn asked:




It is a common habit of people to file their income tax forms at last minute. Many advise that this is not such good idea. Many last minute filers rush to complete their forms and forget to fill-in some deductions which they may regret later because the tax refund will vary on their income less deductions. The sooner you file your tax forms the faster your refund will be received.

There are some companies that file the income tax returns for their employees. However, the personnel in-charge will distribute these forms to each employee to have them review and verify that all details and data are correct, the employee will submit it back to the HRD (Human Resource Department) and the HRD personnel will submit the forms to the BIR (Bureau of Internal Revenue). A system ensures that all employees have their taxes paid on time. And as a result, all employees receive their tax refunds as early as possible.

Some companies do not do the filing of tax; they leave it to their employees to file their own. Usually this happens to small companies or businesses in which the owner runs the business on their own and only hires a few employees. There are employees will file their tax as early as they can but some may not bother at all. However, if the owner of these businesses files their own taxes early the accountants cannot disapprove the business’s request for renewal. Although, many employees are not benefited properly, oftentimes those employees that pay early cannot received any tax refund and for those who did not bother in filing are not questioned. Therefore even for small company or businesses it is recommended that they will properly file their tax and the tax of their employees along for the benefits of all.

Few people that work for themselves do not pay any tax at all, especially when they are initially losing money. Little do they know that any working people need to pay tax according to what they earn annually either small business or big. Besides any individual that will pay their taxes significantly everybody will be benefited out of it by means of government projects and infrastructure.

All must know that the government cannot to any improvements to the country without the taxes. An improved country will cater more businesses from other countries such as more business investment either commercial or industrial or agricultural. These means more jobs be available within the country. And tourism business will boost as many citizens from other country will visit or have their holiday in such country. Therefore, everybody must pay tax for the best of all not just for oneself, not only for the good cause of few days abundance but for continual job opportunity and country’s improvement.

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Rahul G asked:




2010 Federal Tax Return for Unemployment has various tax benefits associated that federal government is giving for unemployed people.

In 2010, the US Recovery Act intends to provide $288 billion in tax cuts and benefits for millions of working families and businesses in USA.

Here are some of the top 2010 Tax return benefits -

1. Earned Income Tax credit – This is REFUNDABLE credit (personal tax credits reduce your taxes but refundable tax credits provide you a good refund) which was already there but it’s been earmarked for those with minimal income who have qualifying children. The credit percentage has been increased for 2010, to a good 45%.

In 2010 Federal Tax Return for Unemployed, following are some of the qualifying characteristics for availing Earned Income Credit:

* If You have three or more qualifying children and you earn less than $43,352 ($48,362 if married filing jointly),

* If You have two qualifying children and you earn less than $40,363 ($45,373 is married filing jointly),

* If You have one qualifying child and you earn less than $35,535 ($40,545 if married filing jointly), or

* If You do not have a qualifying child and you earn less than $13,460 ($18,470 if married filing jointly).

The amounts of the 2010 federal credit have been increased. The amounts you can get for 2010 are:

* $3,050 if you have one qualifying child, or

* $5,036 if you have two qualifying children, or

* $5,666 if you have three or more qualifying children, or

* $457 if you do not have a qualifying child.

2. Tax Exemption – Another relief can be with respect to the 2010 federal unemployment income. For 2010 federal return, the first $2,400 of unemployment income will be tax exempt. This exclusion only applies to unemployment compensation paid as part of a government program, not for private supplemental plans through an employer or any union.

3. Work Pay credit – This 2010 Federal benefit is available to unemployed people having income tax of 6.2 percent of earned income, up to a maximum credit of $400 for individuals, or $800 if married. This is only eligible to U.S. citizens, but is phased out for individuals with income equal to $75,000 or higher.

So there are a lot of federal benefits that you can avail for filing 2010 Federal Tax return for Unemployed.

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Wendy Pan asked:




Joint child custody is one of the best arrangements that can be made between a couple when divorcing. Children who have both parents actively involved in them and their life usually fare much better during and after a divorce. When a couple chooses to do joint custody after a divorce, they are choosing to work together, rather than fighting over their child(ren). Now, it’s not always the case that both parties voluntarily agree to joint custody, but if parents can choose to work together, rather than putting their children in the middle, it’s best for everyone involved.

Joint child custody is where both parents have equal legal rights to their child(ren), full access to medical and school records, and they both spend as much time as possible with their child(ren). Although joint custody is pretty much equal as far as parental rights and responsibilities, usually one parent DOES have actual “physical” custody of the child. This is the case when the child spends more time at one house, actually lives in one home more, and goes to “visit” the other parent. This is usually done for school age children during the school year.

Among the benefits of joint child custody, there are numerous reasons why it’s the practical option. Joint custody gives the parents a chance to “share” their child, and helps the child maintain strong parent-child bonds with BOTH parents, and it even gives each parent a much needed “break” when the child is staying with the other parent.

Keeping sanity and peacefulness after a divorce is of utmost importance, joint custody can help with this- providing neither parent uses the child(ren) in a way to get back at the other parent or uses their child(ren) as a way to manipulate, then joint custody really is best for all involved. Children are less likely to feel “abandoned” or “shuffled aside” when a joint custody agreement exists, because they still get quality time with both parents and this helps maintain good communication between parent and child.

It is, however, important to remember that joint child custody isn’t for every family- there are sometimes extenuating circumstances which make joint custody a bad idea. If the other parent is struggling with some sort of addiction, is mentally unstable, abusive or violent, or he/she is irresponsible when it comes to parenting- then joint custody is NOT a good option.

Joint custody can, in the long-term provide the benefit of stronger bonds with both parents for the child, and can even help the parents to transition to their new family status as a divorced and single parent. And of course, joint custody can help encourage both parents to communicate and successfully co-parent their child(ren). If you and your ex-spouse are amicable, or at least can be civil, both are willing to communicate in a mature, effective manner, and you are both dedicated to the well-being of your child(ren), then joint custody is likely the right choice for your family.

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Manuel Davis Jr. asked:




Did you make a mistake on your tax return? Mistakes happen, and there is no reason to get upset. Instead, you need to file an amended return to ensure that this error is taken care of. No matter if you made an error in your favor or against yourself it has to be done to get everything squared away.

Why? In most cases you need to do this if you realize a mistake in the following areas: your total income, your filing status, your credits, your deductions, or your dependents. The IRS usually corrects mathematical mistakes so you don’t have to worry about amending a return if you added or subtracted wrong.

If you need to file this return you should start by filling out Form 1040X, Amended U.S. Individual Income Tax Return. Does it matter how I filed my return in the first place? No matter if you filed electronically or with the paper form you can amend your return with Form 1040X. That being said, it is important to note that you must file your amended return on paper. At this time the IRS does not electronically accept Form 1040X.

What does Form 1040X look like? What type of information do you need to include? Generally speaking, this form requests the corrected information as well as the changes that are being made.

Many people are unaware of the fact that they can file an one within three years of the original filing date. So if you made a mistake in the past and have been putting it off you may still have time to rectify the situation. But of course, it is better to do this sooner rather than later to ensure accuracy. If you did not pay your taxes in full the first time around you only have two years to make corrections.

As noted above, even if an amended form is going to cost you money it is better to be safe than sorry. Remember, the IRS will more than likely catch the mistake soon enough. For peace of mind you should file an amended return no matter what it will bring.

Filing and correcting a tax return is easy enough if you know the process for doing so. Once you have Form 1040X by your side you will find it simple to get started.

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Chris Simons asked:




Tax season always brings out talk about 1040 EZ forms and W-2s, but most of us are in the dark about what to do with our tax returns even with the long set of directions the IRS puts in with the forms. There is always the option of paying someone else to take care of it, and for many people it is best option. However, most people feel it is a little strange to pay someone to get their money back so they struggle through it on their own. If you worked at only one company and no deductions or supplemental income filling out your taxes is relatively simple, but this is not the case for most people. Most people have numerous deductions, credits, and supplemental income that require extra work when filing out a tax return. While filing out your tax return may not be the most fun thing to do, there are a few precautions that should be taken to avoid extra problems later on.

Check W-2 and 1099 Forms

W-2s and 1099 forms report the income of a taxpayer. The taxpayer receives a copy of this form, but that is not the only place these forms are sent. Companies and employers are also required to submit these forms to the IRS. When you receive your W-2 or 1099 it is important to check the numbers against your own records and make sure they are correct. You will need to inform your employer so that they can change the information with the IRS. If this is not done and there are discrepancies between the information the government has and the information you report, it could cause a lot of problems later on.

Dot your T’s

When paying for taxes you owe make sure that you make the check out to the United States Treasury. Writing it out to the United States Treasury instead of the IRS makes it harder for the check to be used by a thief who can easily change the To: line. The second common mistake with paying taxes is simple enough to avoid: always double check that you have signed it.

E-File

If you are worried about mistakes or have a difficult return, using e-file is probably the best bet. The e-file system will cut down on math mistakes and other errors. If something is left off of the return it will not file until it is fixed. The IRS also has set up a system where the return can be submitted and if there is a problem it will be returned within seventy-two hours. The taxpayer will also be notified of the problem and how to fix it. E-file is also much faster and free, so there isn’t really any reason not to use it.

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