In a word, no.

Many taxpayers find themselves in a situation where they cannot pay their tax obligations for a particular tax year.  If that’s your situation, you can opt to make monthly payments through an installment agreement if you’re not financially able to pay your tax debt immediately. You can find out more about installment agreements at http://www.irs.gov/individuals/article/0,,id=243335,00.html.

However, if you are currently paying your tax obligation through and installment agreement, any refund due to you in a future year will be applied  against the amount that you owe.

Some facts about installment agreements and refunds:

• The IRS will automatically apply the refund to the taxes owed.
• You must continue making your installment agreement payments as  scheduled and in full because your refund is not applied toward your  regular payment, and therefore any payments due under the installment  agreement must still be made in full.
• Regardless of whether you are participating in an installment  agreement or payment plan with the IRS, you may not get all of your  refund if you owe certain past-due amounts, such as federal tax, state  tax, a student loan, or child support. For more information you can  contact Financial Management Service (FMS) toll-free at 800-304-3107.

If you have any questions about installment agreements or refunds you are owed, contact a tax professional.

Daniel Stoica Accounting Professional

Every year, the IRS announces that millions of dollars in tax refunds are lost, stolen or returned to the IRS as undeliverable. These undeliverable or stolen refund checks can be avoided altogether if taxpayers choose to have their refunds deposited directly into their bank accounts.

Taxpayers who choose direct deposit receive their refunds faster than those who choose a paper check.

Direct deposit also allows taxpayers to easily split their refunds to two or even three different checking and/or savings accounts. In order to do this, you just need to use Form 8888, Allocation of Refund (Including Savings Bond Purchases). Just follow the instructions on the form. (If you want IRS to deposit your refund into just one account, use the direct deposit line on your tax form.)

When you split refunds, you have a convenient option for managing your money because you can send some of your refund to an account for immediate use and some for future savings.

If you have any questions about direct deposit, contact a tax professional.

Daniel Stoica Accounting Professional

Are you missing a tax refund? This video from the Internal Revenue Service explains how you can find out if you are owed a refund and how to get a missing refund.

Daniel Stoica Accounting Professional

Have you earned some income in the last few years but didn’t file your tax return because you didn’t earn enough to warrant filing? If so, you may have money waiting for you from the IRS. The IRS has millions of dollars waiting to be claimed.

If you feel you may be entitled to your share of this unclaimed money, the IRS offers help on how to claim it:

Unclaimed Refunds

There are some taxpayers who earned income in past years but didn’t make enough money to have to file a tax return. These people may be able to claim a refund from the tax that was withheld from their pay. Other taxpayers didn’t have any taxes taken out of their checks, but they may still be eligible for the Earned Income Tax Credit. These people will have to file a tax return in order to claim it.

-In order to claim this money, a tax return must be filed within three years of the tax return’s due date.

-The unclaimed money will become the property of the United States Treasury if there is no claim for the money within the three year time limit.

-The IRS will not assess a penalty if you file a late return where you are claiming your refund.

-For forms and publications that will instruct you on how to claim your potential refund, log on to www.irs.gov and click on Forms and Publications, or call 800-829-3676.

-To find information about the Earned Income Tax Credit, log on to www.irs.gov.

Undeliverable Refunds

Perhaps you were expecting a refund, but didn’t receive it?

-All refunds are sent to your last known address on file with the IRS. The checks will be returned to the IRS if you don’t provide them, or the post office, with your new address.

-You can updated your address on the IRS website by clicking on the “Where’s My Refund?” tab. You will have the opportunity to give your new address, and your refund check will be mailed to you at your new address.

-You can download and submit the 8822 Form, Change of Address, and mail it to the IRS. Or, you can call 800-829-3676 to request the form.

-If you feel you have money coming to you and you don’t have access to the Internet, check your tax return or talk to your tax preparer. If everything looks correct, you can call the IRS assistance line at 800-829-1040 and check the status of your refund.

Daniel Stoica Accounting Professional

If you are thinking of taking one of those tax refund anticipation loans, you might want to think twice about it. It is probably better to just wait it out because you will get your money. These short terms loans end up costing American taxpayers over $900 million in fees every year. Over 12 million people shelled out high fees and percentage rates in order to get their refunds faster.

Here are 3 reasons to not even ask for this refund anticipation loan.

1. Large Fees: If you add up the loan fees, the tax preparation fees and the e-filing charges, the average refund of $2000.00 is reduced by nearly $300.00 just to begin the filing of your return. Every one of us wants to know when we will get our refunds and some of us need that extra money so badly we are willing to spend the extra money to get it faster.
2. Outrageous APR: In order to go take a loan on your refund, you could end up paying between 222.5% and 2000% in interest. This is no joke. We wouldn’t accept those terms for any other kind of loan, so why accept it for money that is already rightfully yours?
3. The IRS Could Hold Up Your Refund: If the IRS finds a problem with your tax return, they could take weeks, or sometimes even months to finish processing your refund. If this is the case, your short-term loan turns into a long-term loan and you will end up having to pay out those outrageous interest rates. If that happens, goodbye tax refund.

If you take the time to plan ahead, you won’t end up looking for a way to get your refund so quickly. You can wait it out and not stress over it. There are certain things you can do to not stress over the whereabouts of your refund:

3 Things You Can Do Next Year

1. You can reduce your tax withholding for next year.
2. You can file your taxes as soon as you get your W-2, file electronically and opt-in for direct deposit.
3. Try to change your financial circumstances (i.e. get yourself into a smaller tax bracket or look for deductions and credits).

If you have any questions about your refund or a refund loan, please contact a tax professional.

Daniel Stoica Accounting Professional

June is unofficially the “wedding month” since that’s when many couples tie the knot. It is also the halfway point to the end of the year, which means keeping your tax changes in the back of your mind.

When you are planning your wedding, your taxes are most likely the last thing on your mind, but there are a few things to think about that will keep tax issues from bothering you while you are concentrating on your big day. If you are currently planning your wedding, or if you just recently got married, look into your new tax situation. You can save some money and maybe even keep an eye out for a possible future refund check.

Once you are married and settled, the first things you will need to take care of are name and address changes. Then, when tax season gets closer, think about whether or not you’ll itemize deductions, which tax return form is right for you and your spouse and what filing status you’ll use. A tax professional can help you with these issues.

There are a few things you should take into consideration as tax time approaches.

-Make Certain You Use Your Correct, Legal Name

You must provide your correct, legal name and identification number to claim exemptions on your tax return. If you changed your name when you got married, make sure you update your Social Security card right away so the number matches your new name when you file your taxes. Use Form SS-5, Application for a Social Security Card.

-Did You Change Your Address?

If you and your spouse have moved to a new address, get a change of address from the Post Office so they can forward any tax refunds or mail from the IRS. The Post Office will also send your new address to the IRS so they can update their records. You should probably contact the IRS, as well, by filing Form 8822.

-Are You Expecting a Refund Check?

Every year, the Postal Service returns thousands of tax refund checks, mainly because the addressee has moved. Notifying both the Postal Service and the IRS of your address change as soon as possible will ensure the delivery of any refund checks you may be waiting for. To check the status of a pending tax refund, go to the IRS web site and use the “Where’s My Refund?” service.

-Your Filing Status Will Probably Change

Your marital status as of December 31st will determine if you are considered married for that tax year. Married couples have the option of filing their federal income tax return either jointly or separately in any given year. Choosing the right filing status can save you money.

Filing a joint return (Married Filing Jointly) allows spouses to use their combined income and take combined deductions and expenses on a single tax return. Both spouses must sign the return. Both spouses are also held responsible for the contents.

With separate returns (Married Filing Separately), each spouse is responsible for their own tax return. Separately, they sign and file, and each is responsible for his or her own tax return. They are taxed on their own income separately, and can only take his or her individual deductions and credits. If one spouse itemizes deductions, the other must do the same.

Which filing status is right for you? It depends on your specific situation. You should consult with a tax professional to determine what situation is best for you and your new spouse.

Daniel Stoica Accounting Professional

The IRS states that the average refund was a little more than $3,000 for taxpayers who have already filed.

What’s the best use of your tax refund?

Financial experts say it makes sense to pay down any high-interest debt; this means your credit cards. The next debt to pay down would be auto and personal loans. American Express found that almost 40% of taxpayers plan to use their refund to pay down debt or pay bills.

Experts recommend getting rid of credit card debt because lenders have been known to use the CARD Act as an excuse to raise interest rates. If you pay down your credit card debt at 18 or 20 percent, it’s like getting a return on your investment for the same amount.
 
Create or add to an emergency fund. The economic recovery is still bleak so it’s a good idea to be cautious about potential unemployment. If your job is at risk, it is important to have some kind of savings. Your highest investment priority is cash on hand. The American Express survey found 30% of those polled plan to save their refunds.

If you haven’t put anything aside for retirement, start contributing to your company’s 401(k), especially if your employer matches your contribution amount. The best way to figure out how much to put into a 401(k) is to take the amount of your tax refund, divide by the number of pay periods per year, and contribute that amount each paycheck.

For those whose employers don’t offer a retirement plan, you might consider putting your tax refund in a Roth IRA. It offers more flexibility than a traditional IRA. The only downside to a Roth IRA is that there is not enough time to make your money back if stocks experience major losses. It might be best to stay with CDs and short-term bonds.

You can also put the money in a 529 plan. It will grow, tax-free, and can be withdrawn, tax-free, if the money is used for qualified education expenses. Each state may have its own plan that may offer up front tax deductions for the contribution.

Another great option would be to donate to charity. Researchers conducted a study by giving participants money. They instructed one group to spend it on themselves and the other group was to spend it on others, such as buying a friend a gift or contributing to charity. The second group reported a much bigger boost in happiness and fulfillment. Even in tax season, it may be better to give than receive.

Finally, 22% of taxpayers said they plan to indulge with their refunds on such things as: home improvements, vacation/travel and large purchases. As long as you have sufficient savings to meet any unexpected expenses, you may, of course, your refund any way you want.

No matter what you chose to do with your tax refund, research your options and decide where your money will benefit you, or others, the best.

Daniel Stoica Accounting Professional

How To Use Your Federal Tax Refund To Buy Savings Bonds

Your Federal Tax Refund is a clear indication that you were able to manage your personal finances without the need for those funds.

There are many ways that you can best use those funds during the year and also when you get Your Federal Tax Refund.

Buying Savings Bonds with Your Federal Tax Refund is an option that you can consider.

IRS Tax Tip 2011-22,  February 01, 2011

You can buy Series I U.S. Savings Bonds with a portion or all of your federal tax refund for yourself or anyone. Series I bonds are low-risk bonds that grow in value for up to 30 years. While you own them they earn interest and protect you from inflation.

Here are six things the IRS wants you to know about using your federal refund to purchase savings bonds.

1. You may use a portion of your refund to purchase up to $5,000 in U.S. Series I Savings Bonds for yourself or anyone.
2. The total amount of saving bonds purchased must be in multiples of $50. Any portion of your refund not used to buy savings bonds will be deposited into another financial account – such as a checking or savings account or can be mailed to you as a paper check.
3. Paper bonds will be issued in your name or the name you designate as primary owner, co-owner or beneficiary. If you are married and filed a joint return, the bonds will be issued in yours and your spouse’s name. You can also designate a beneficiary or co-owner under this name registration option.
4. You will receive the U.S. savings bonds in the mail.
5. Buying bonds with your refund is easy. Just select this option by filing Form 8888, Allocation of Refund (Including Savings Bond Purchases).
6. Form 8888 has step-by-step instructions on how to select this option and how to specify the amount of your refund you want to use to purchase savings bonds.

Choose Direct Deposit To Get Your Tax Refund Fast

You have several options for receiving your federal income tax refund. You can:

• Split your refund with direct deposits into two or three checking or savings accounts
• Direct deposit your refund into one checking or savings account
• Receive your refund as a paper check in the mail
• Buy up to $5,000 in U.S. Series I Savings Bonds with your refund

IRS TAX TIP 2011-19, January 27, 2011

Direct Deposit is the fastest, safest way to receive your tax refund. An e-filed tax return means a fast refund. Taxpayers who combine e-file and Direct Deposit can get their refunds in as few as 10 days.

Here are four reasons more than 73 million taxpayers chose Direct Deposit in 2010:

1. Security Thousands of paper checks are returned to the IRS by the U.S. Post Office every year as undeliverable mail. Direct Deposit eliminates the possibility of your refund check being lost, stolen or returned to the IRS as undeliverable.
2. Convenience The money goes directly into your bank account. You won’t have to make a special trip to the bank to deposit the money yourself.
3. Ease When you’re preparing your return; simply follow the instructions on your return. Make sure you enter the correct bank account and bank routing numbers on your tax form and you’ll receive your refund quicker than ever.
4. Options You can deposit your refund into multiple accounts. With the split refund option, taxpayers can divide their refunds among as many as three checking or savings accounts and up to three different U.S. financial institutions. Use IRS Form 8888, Allocation of Refund (Including Savings Bond Purchases), to divide your refund. A word of caution: Some financial institutions do not allow a joint refund to be deposited into an individual account. Check with your bank or other financial institution to make sure your Direct Deposit will be accepted.

With split refunds, you have a convenient option for managing your money — sending some of your refund to an account for immediate use and some for future savings — teamed with the speed and safety of direct deposit.

Whether you file electronically or on paper, direct deposit gives you access to your refund faster than a paper check.

Direct deposit also avoids the possibility that your check could be lost or stolen or returned to IRS as undeliverable.

Speed, safety and choice — with direct deposit you can have it all.

For more information about direct deposit of your tax refund and the split refund option, check the instructions for your tax form. Helpful tips are also available in IRS Publication 17, Your Federal Income Tax. To get a copy of Publication 17 or Form 8888, visit the IRS Forms and Publications section at http://www.irs.gov or call 800-TAX-FORM (800-829-3676).

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.