Parents who work may be able to take advantage of the federal Child and Dependent Care Credit when they file their 2014 federal income taxes. A credit lowers the amount of money you have to pay. In order to claim this credit, expenses must be for one or more children under age 13 and must be work-related. This includes the cost of childcare while you are looking for work if you do not have a job. Continue reading
Internal Revenue Service officials say groups who are required to file Form 990 and fail to do so are at risk of losing their tax exemption. Do not include Social Security numbers or other personally identifiable information on the form, as it can lead to identity theft. The IRS and most organizations are required by law to make most parts of their completed forms available to the public, including schedules and attachments.
Today is the deadline to either file your federal and state income taxes or electronically file an extension request in order to avoid hefty penalties and interest from the IRS and Indiana Department of Revenue. If you’ve waited until the last minute and won’t be able to get your return done, H&R Block senior tax advisor Michelle Bachtel says you have an option if you act quickly. “File the extension, because the extension alone is going to save you money. Even if you can’t afford to give them a penny, just file the extension,” Bachtel says. That extension will need to be filed electronically. It will give you six months to complete your return without late filing penalties, but Bachtel says any taxes you may owe still need to be paid today if possible in order to avoid failure to pay penalties and interest. Continue reading
Federal and state income tax returns are due a week from today. H&R Block Senior Tax Advisor Michelle Bachtel says the worst thing you can do is ignore the looming deadline if your taxes aren’t done. “To ask for more time, you can file an extension using form 4868. This gives you an automatic six months of extra time. It’s faster if you e-file the request through your tax preparer. The IRS will send you a message of receipt if you file that way. Paper applications, unfortunately, do not get acknowledged,” Bachtel says. She adds you should have an idea if and how much you will owe when you file for an extension, as it only gives you extra time to finish your return and not more time to pay. “Do everything you can to pay the full amount when you file for the extension. Otherwise you’ll face interest and penalties that could raise your bill by up to 25 percent. Continue reading
Parents of divorced dependent children may face extra challenges when it comes to preparing their income taxes.
H&R Block Senior Tax Advisor Michelle Bachtel says that’s one of the more common questions she gets. Generally she says the IRS says whoever the child remains with the majority of the year is the person who gets the claim.
“Sometimes though divorce decrees will grant the non-custodial parent the claim,” Bachtel said. “That’s when you hear people refer to splitting an exemption. The custodial parent is still entitled to some credits, like the Earned Income Tax Credit, where the non-custodial parent who gets the exemption is entitled to the child tax credit. It is possible to split an exemption, but there are some very strict rules for doing that.”
The deadline to file federal income taxes is almost here. H&R Block Senior Tax Advisor Michelle Bachtel says many low and middle-income families benefit from the Earned Income Tax Credit. “Basically depending on the number of children you have, the credit can range anywhere from $2 to $6,044. The Earned Income Tax Credit is also available for people who don’t have children. They do need to be considered low income according to the IRS, but there is also a credit available for them.” The amount of the Earned Income Tax Credit varies depending on the size of the household. For an individual who does not have any children, they can make up to $14,340, or if they are married they can make up to $19,680. For people that do have children, they can make up to $37,870 or $43,210 if they just have the one child. From there the amounts increase, but the maximum amount for three children they can make up to $51,567. The Earned Income Tax Credit is one of the most lucrative. Unfortunately, Bachtel says it’s also one of the most widely abused. Continue reading
Anyone who prepares or helps prepare all or substantially all of a federal tax return, claim for refund or other federal forms for compensation must have a valid PTIN. All enrolled agents also must have a PTIN. Tax professionals can obtain or renew their PTINs at www.irs.gov/ptin.
The Internal Revenue Service has released a warning for consumers regarding a sophisticated phone scam that targets taxpayers, including recent immigrants, throughout the country. Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are then threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting.
In order to qualify for deductions, you must volunteer to work for a qualified organization, so be sure to ask the charity about its tax-exempt status. To see if a group is qualified, visit IRS.gov and use the Select Check tool.
With warm weather comes weddings, and the IRS is offering several tips for newlyweds when it comes to taxes. It’s important to ensure the names and Social Security numbers that are on your tax return match your Social Security Administration records, so if you’ve changed your name, report that to the SSA by filing a Form SS-5, Application for a Social Security Card. This form can be obtained on their website at SSA.gov, by calling 800-772-1213 or by visiting your local SSA office.
St. Joesph County Auditor Peter Mullen told WKVI that the library was in arrears approximately $48,000 and the IRS contacted his office to file the necessary paperwork to put a lien on the library. The library closed in mid-May and just reopened on a limited schedule.
The letter, led by Senate Finance Committee Ranking Member Orrin Hatch of Utah and Senate Republican Leader Mitch McConnell of Kentucky, raised concerns about conflicting responses from the IRS and emphasized the need for the administration to work with Congress on investigating the agency.
If you haven’t yet filed your taxes, it’s time to do so before the IRS tax filing deadline on Monday. With the deadline less than three days away, the IRS is offering tips for those who have completed their federal tax return but are unable to pay it all upon filing.
IRS officials encourage taxpayers to file on time and pay as much as they can; filing on time ensures that the taxpayer will avoid the late filing penalty, and paying as much as possible reduces the late payment penalty and interest charges. For electronic payment options, see IRS.gov, and if paying by check, make it payable to the United States Treasury and include it with your return.
With just three days until the IRS tax filing deadline, the IRS is reminding taxpayers to review their tax returns for some of the more common errors that could potentially delay the processing of their returns.
The IRS encourages filers to file electronically, whether through e-file or IRS Free File, to vastly reduce the risk of tax return errors. The tax software performs the calculations, flags common errors, and prompts the taxpayer for missing information. Best of all, there are free options available for everyone.