At the end of the calendar year, many taxpayers make last-minute charitable contributions in order to help others AND reduce their taxable income.

For information about charitable contributions, check out this “mini-course” endorsed by the IRS: http://www.stayexempt.irs.gov/Mini-Courses/Can_I_Deduct_My_Charitable_Contributions/can_i_deduct_my_charitable_contributions.aspx.  This 20-minute course covers monetary donations as well as the donation of household goods such as clothing or furniture.

Generally speaking, to deduct a charitable donation of money, a taxpayer needs to have a written communication from the charity showing the name of the charity as well as the date and amount of the contribution. A bank record such as a canceled check, bank statement or credit card statement will also suffice if the name of the charity as well as the date and amount paid to the charity is included on the bank or credit car record. It’s also important to verify that the charity is a qualified one.

For more information about charitable donations, either monetary or clothing and household goods, visit the link above or visit the “Charities and Donations” section on the IRS website (www.irs.gov). You may also want to speak with a tax professional.

Daniel Stoica Accounting Professional

Information on taxes can be found on the IRS website at www.irs.gov and is accessible 24 hours a day, 7 days a week, 365 days a year. There, you will find answers to every income tax question and you are able to download forms at any time.

You will also find information on the benefits of e-filing. E-filing is the fastest and easiest way to file your tax return. The IRS has made it simple to file on their website, with secure forms, and   provides answers to questions regarding how and where to have your refund returned to you. Two out of three taxpayers who file are doing so electronically. Almost 70% of taxpayers qualify for free e-filing.

On the IRS website you are able to check the status of your refund. If you chose to have your refund direct deposited into your bank account or you requested a check in the mail, you can click on “Where is my refund?” . Simply enter your social security number (it’s secure), your filing status, and the amount you are expecting, and you get the status of your refund.

The website even shows you how to make electronic payments of any taxes you owe. You can use a credit or debit card, authorize electronic payments, or enroll in the Treasury Department’s Electronic Federal Tax Payment System to make your payment. Electronic payments are fast easy, and secure.

Just answer a few questions and give your tax information through the EITC Assistant to see if you qualify for the Earned Income Tax Credit.

The IRS website has made it very easy to request forms, documents, and any other paperwork you may need. Nearly every tax-related document can be downloaded from the IRS website.

You can even figure the exact amount of your withholdings by using the IRS Withholding Calculator, which is also found on their website.

If you have trouble paying your taxes on time, you even have the option to apply for a payment agreement on the website. Look for the Payment Agreement Application to set up a payment plan with the IRS.

You can look for charities to see if they qualify for exemption from federal taxes. If they do, look to see what percentage of your contributions are tax deductible.

The IRS website even allows you to find out about the updated changes to the tax laws. These change regularly, so you should check often. Some tax revisions are in place for certain parts of the tax year and some laws are amended by Congress. The site shows changes that affect both individuals and businesses.

Visit www.IRS.gov when you have questions or need more information on your taxes. It really is a great resource for many of your tax questions.  For all the rest of your questions, seek the help of a qualified tax professional. 

Daniel Stoica Accounting Professional

How to File Your Taxes at No Cost via IRS Free File Program

This is an awesome resource made available to frugal Do It Yourself taxpayers.

Start early, check it out and you still have time to consult with a tax professional if you want to.

IRS Tax Tip 2011-11 – January 17, 2011

Everyone can prepare and e-file their federal tax returns for free through the IRS Free File Program. Free File is offered through a public-private partnership between the Internal Revenue Service and brand-name tax software companies. Free File can help you do your taxes fast; it’s safe and it doesn’t cost anything.

Free File offers two options: easy-to-use software or online fillable forms.

Free File software is for taxpayers who earn $58,000 or less

Nearly 100 million Americans – that’s 70 percent of the nation’s taxpayers – can use the free brand-name software and secure e-filing offered by private-sector companies. Several software products also are in Spanish. Each company sets its eligibility requirements, generally based on income, age or state residency. However, if your adjusted gross income was $58,000 or less in 2010, you will find at least one tax software product to use.

Here’s how it works: You must access Free File through the IRS website. At http://www.irs.gov/freefile, you can use an online tool which allows you to give a little information about yourself and the tool will guide you to the software for which you are eligible. Or, you can review the complete list of companies and their offerings and make a selection.

Once you select a software product, you will be directed away from the IRS website to that company’s website. There, the software generally will offer a step-by-step guide through the tax preparation process.

Free File does all the hard work. You don’t need to be a tax expert; the software will help find tax breaks, such as the Earned Income Tax Credit, that you may be due. The software asks the questions; you supply the answers. It will find the right tax forms and do the math. Free File has a high satisfaction rate among its users, 98% recommend it to others. Combine e-file and direct deposit and you get your refund in as few as 10 days.

A word about security: all Free File companies use the latest is secure technology. The safety of taxpayer information is everyone’s priority. Thirty million taxpayers have used Free File since 2003, safely and securely.

Some companies provide state tax return software – sometimes for free and sometimes for a fee. Some states also have a relationship with the Free File Alliance and those states are listed on the companies’ websites.

Free File Fillable Forms Is Another Free Option

For people who make more than $58,000 or who are comfortable preparing their own tax return, there is Free File Fillable Forms. It also must be accessed through http://www.irs.gov/freefile. There is no software assistance with Free File Fillable Forms. It does basic math calculations. It does not support state income tax returns. It is perfect for the true do-it-yourself taxpayer who has preferred paper tax returns in the past. It also has free e-filing.

Tax Topic 303 – Checklist of Common Errors When Preparing Your Tax Return

Before filing your return, review it to make sure it is correct and complete. The following checklist may help you to avoid common errors:

• Did you consider filing your tax return electronically? By electronically filing your tax return, many common errors may be avoided or corrected by the computer software. Depending on your income, you may even qualify to e-file for free by using IRS Free File. More information is available on the website.
• Did you clearly print your name, social security number, and address, including zip code directly on your return? Note that if you are married but filing a separate return, do not include your spouse’s name.
• Did you enter the names and social security numbers for yourself, your spouse, your dependents, and qualifying children for earned income credit or child tax credit, exactly as they appear on the social security cards? If there have been any name changes be sure to contact the Social Security Administration at www.ssa.gov or call at 800–772–1213.
• Did you check only one filing status?
• Did you check the appropriate exemption boxes and enter the names and social security numbers exactly as they appear on the social security cards, for all of the dependents claimed? Is the total number of exemptions entered?
• Did you enter income, deductions, and credits on the correct lines and are the totals correct?
• If you show a negative amount on your return, did you put brackets around it?
• If you are taking the standard deduction and checked any box indicating either you or your spouse were age 65 or older or blind, did you find the correct standard deduction using the worksheet in the Form 1040 Instructions or the Form 1040A Instructions?
• Did you figure the tax correctly? If you used the tax tables, did you use the correct column for your filing status?
• Did you sign and date the return? If it is a joint return, did your spouse also sign and date the return?
• Do you have a Form W-2 (PDF) from each of your employers and did you attach Copy B of each to your return? File only one return, even if you have more than one job. Combine the wages and withholdings from all Form W-2′s, on one return.
• Did you attach each Form 1099-R (PDF) that shows federal tax was withheld?
• Did you attach all other necessary schedules and forms in sequence number order shown in the upper right–hand corner?
• Did you use the correct mailing address from your tax form instructions?
• Did you use a postage stamp on the envelope?
• If you owe tax, did you enclose a check or money order made payable to the “United States Treasury” with the return and include your name, address, social security number, daytime telephone number, tax form, and tax year on the payment? For additional information, refer to Topic 158 , Ensuring Proper Credit of Payments.
• If you are due a refund and requested direct deposit did you check your financial institution routing and account numbers?
• Did you make a copy of the signed return and all schedules for your records?

A few of the most common errors are:

1. Incorrect or missing social security numbers.
2. Incorrect tax entered based on taxable income and filing status.
3. Computation errors in figuring the taxable income, withholding and estimated tax payments, Earned Income Credit, Standard Deduction for age 65 or over or blind, the taxable amount of social security benefits, and child and dependent care credit. Also, missing or incorrect identification numbers for child care providers.
4. Withholding and estimated tax payments entered on the wrong line, and
5. Math Errors. Both addition and subtraction.

It is important that you review your entire return because any errors may delay the processing of your return.

IRS Launches the IRS2Go App for iPhone and Android

Taxpayers Can Check Refunds, Get Tax Information

IR-2011-8, Jan. 24, 2011

WASHINGTON — The Internal Revenue Service today unveiled IRS2Go, its first smartphone application that lets taxpayers check on their status of their tax refund and obtain helpful tax information.

“This new smart phone app reflects our commitment to modernizing the agency and engaging taxpayers where they want when they want it,” said IRS Commissioner Doug Shulman. “As technology evolves and younger taxpayers get their information in new ways, we will keep innovating to make it easy for all taxpayers to access helpful information.”

The IRS2Go phone app gives people a convenient way of checking on their federal refund. It also gives people a quick way of obtaining easy-to-understand tax tips.

Apple users can download the free IRS2Go application by visiting the Apple App Store. Android users can visit the Android Marketplace to download the free IRS2Go app.

“This phone app is a first step for us,” Shulman said. “We will look for additional ways to expand and refine our use of smartphones and other new technologies to help meet the needs of taxpayers.”

The mobile app, among a handful in the federal government, offers a number of safe and secure ways to help taxpayers. Features of the first release of the IRS2Go app include:

Get Your Refund Status

Taxpayers can check the status of their federal refund through the new phone app with a few basic pieces of information. First, taxpayers enter a Social Security number, which is masked and encrypted for security purposes. Next, taxpayers pick the filing status they used on their tax return. Finally, taxpayers enter the amount of the refund they expect from their 2010 tax return.

For people who e-file, the refund function of the phone app will work within about 72 hours after taxpayers receive an e-mail acknowledgement saying the IRS received their tax return.

For people filing paper tax returns, longer processing times mean they will need to wait three to four weeks before they can check their refund status.

About 70 percent of the 142 million individual tax returns were filed electronically last year.

Get Tax Updates

Phone app users enter their e-mail address to automatically get daily tax tips. Tax Tips are simple, straightforward tips and reminders to help with tax planning and preparation. Tax Tips are issued daily during the tax filing season and periodically during the rest of the year. The plain English updates cover topics such as free tax help, child tax credits, the Earned Income Tax Credit, education credits and other topics.