| Tax Tip 2006-67 |
April 5, 2006 |
| Making Tax Payments Correctly |
| When filing your return, remember to make sure your tax payment check or money order is payable to the "United States Treasury." |
| Tax Tip 2006-66 |
April 4, 2006 |
| Last Minute Payment and Filing Tips |
| If you’re trying to beat the tax deadline, there are several options for last-minute help:
• Receive a six-month extension of time to file using Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return
• Payment options are available to taxpayers having trouble paying their tax bill
• Download forms and publications at IRS.gov |
| Tax Tip 2006-65 |
April 3, 2006 |
| Filing Your Federal Tax Return |
| Once you complete your 2005 federal tax return, you can either file it electronically or mail it to the IRS. If you choose to mail your return, you will find directions on where to send it on the back cover of your instruction booklet. |
| Tax Tip 2006-64 |
March 31, 2006 |
| Preparing Your Tax Return for Mailing |
| If you are mailing a paper return to the IRS, take a few minutes to make certain that all information is complete and accurate before sealing the envelope. This simple precaution could help you avoid mistakes that can delay your refund or result in correspondence from the IRS. |
| Tax Tip 2006-63 |
March 30, 2006 |
| Avoid Common Errors |
| The IRS recommends reviewing your entire tax return to be sure it is accurate and complete. Even a simple mistake can cause problems which might lead to delays in processing your return and receiving your refund. |
| Tax Tip 2006-62 |
March 29, 2006 |
| Tips for Last-Minute Filers |
| With the tax filing deadline close at hand, the IRS offers some tips for those still working on their paper tax forms: |
| Tax Tip 2006-61 |
March 28, 2006 |
| You Can Still Make a 2005 IRA Contribution |
| If you haven’t contributed funds to an Individual Retirement Arrangement for tax year 2005, or if you’ve put in less than the maximum allowed, you still have time to do so. You can contribute to either a traditional or Roth IRA until the April due date for filing your tax return for 2005, not including extensions. |
| Tax Tip 2006-60 |
March 27, 2006 |
| How to Check on Your Tax Refund |
| If you already filed your federal tax return and are due a refund, you have several options for checking on the status of your refund. |
| Tax Tip 2006-59 |
March 24, 2006 |
| Coverdell Education Savings Accounts |
| A Coverdell Education Savings Account is an account created as an incentive to help parents and students save for education expenses |
| Tax Tip 2006-58 |
March 23, 2006 |
| Deducting Vehicle Donations |
| If you donated a car or other vehicle to charity in 2005 and claim a deduction greater than $500, remember the rules for deducting that donation have changed. If the vehicle is sold by the charitable organization, the deduction claimed by the donor may not exceed the gross proceeds from the sale. |
| Tax Tip 2006-57 |
March 22, 2006 |
| Tips for Deducting Charitable Contributions |
| When preparing to file your federal tax return, don’t forget your contributions to charitable organizations. Your donations could add up to a sizeable tax deduction if you itemize on IRS Form 1040, Schedule A. |
| Tax Tip 2006-56 |
March 21, 2006 |
| Deduction For Hybrid Vehicles |
| If you are the original owner of a qualifying hybrid vehicle — one that combines an electric motor with a gasoline-powered engine — you may be eligible to claim a one-time tax deduction on your federal income tax return. |
| Tax Tip 2006-55 |
March 20, 2006 |
| Deducting Costs of Refinancing Your Home |
| Taxpayers who refinanced their homes may be eligible to deduct some costs associated with their loans. The term "points" is used to describe certain charges paid to obtain a home mortgage.Here are some things to remember when deducting points:
• Generally, for taxpayers who itemize, the “points” paid to obtain a home mortgage may be deductible as mortgage interest
• Depending on circumstances, points can be fully deductible in the year paid
• Points paid solely to refinance a home mortgage usually must be deducted over the life of the loan |
| Tax Tip 2006-54 |
March 17, 2006 |
| Sale of Your Home |
| If you sold your main home, you may be able to exclude up to $250,000 of gain ($500,000 for married taxpayers filing jointly) from your federal tax return. This exclusion is allowed each time that you sell your main home, but generally no more frequently than once every two years. |
| Tax Tip 2006-53 |
March 16, 2006 |
| Home Office Deduction |
| If you use a portion of your home for business purposes, you may be able to take a home office deduction whether you are self-employed or an employee. Expenses that you may be able to deduct for business use of the home may include the business portion of real estate taxes, mortgage interest, rent, utilities, insurance, depreciation, painting and repairs. You can claim this deduction for the business use of a part of your home only if you use that part of your home regularly and exclusively:
* As your principal place of business for any trade or business
* As a place to meet or deal with your patients, clients or customers in the normal course of your trade or business. |
| Tax Tip 2006-52 |
March 15, 2006 |
| Deduction for Educator Expense |
| If you are an eligible educator, you may be able to deduct up to $250 of expenses you paid for purchases of books and classroom supplies. These out-of-pocket expenses may lower your 2005 tax bill even if you don’t itemize your deductions. |
| Tax Tip 2006-51 |
March 14, 2006 |
| Itemizers can Deduct Certain Taxes |
| Did you know that you may be able to deduct certain taxes on your federal income tax return? You can receive these deductions if you file Form 1040 and itemize deductions on Schedule A. Deductions decrease the amount of income subject to taxation. |
| Tax Tip 2006-50 |
March 13, 2006 |
| How to Avoid Tax Time Problems |
| Are you looking for ways to avoid the last-minute rush for doing your taxes? Here are some stress relieving ideas to help you. |
| Tax Tip 2006-49 |
March 10, 2006 |
| Credit for Retirement Savings Contributions |
| If you make eligible contributions to an employer-sponsored retirement plan or to an individual retirement arrangement, you may be able to take a tax credit. |
| Tax Tip 2006-48 |
March 9, 2006 |
| Offset Education Costs |
| Education tax credits can help offset the costs of higher education for yourself or a dependent. The Hope Credit and the Lifetime Learning Credit are two education credits available which may benefit you. You may be able to subtract them in full from your federal income tax, rather than just deducting from your taxable income. |
| Tax Tip 2006-47 |
March 8 2006 |
| Claiming the Credit for the Elderly or the Disabled |
| You may be able to take the Credit for the Elderly or the Disabled if you were age 65 or older at the end of 2005, or if you are retired on permanent and total disability. Like any other tax credit, it’s a dollar-for-dollar reduction of your tax bill, with a maximum amount of $1,125. |
| Tax Tip 2006-46 |
March 7, 2006 |
| Claiming the Child and Dependent Care Credit |
| If you paid someone to care for a child or a dependent so you could work or look for work, you may be able to reduce your tax by claiming the Child and Dependent Care Credit on your federal income tax return. You may also be able to claim the credit if you pay someone to care for your dependent who is under age 13 or for a spouse or a dependent of any age who is physically or mentally incapable of self-care. |
| Tax Tip 2006-45 |
March 6, 2006 |
| Claiming the Child Tax Credit |
| With the Child Tax Credit, you may be able to reduce the federal income tax you owe by up to $1,000 for each qualifying child under the age of 17. |
| Tax Tip 2006-44 |
March 3, 2006 |
| The Earned Income Tax Credit |
| Millions of Americans forfeit critical tax relief each year by failing to claim the Earned Income Tax Credit, a federal tax credit for low-to-moderate income individuals who work. Taxpayers who qualify and claim the credit could owe less federal tax, owe no tax or even receive a refund. |
| Tax Tip 2006-43 |
March 2, 2006 |
| Are You Eligible for a Tax Credit? |
| Taxpayers should consider claiming tax credits for which they might be eligible when completing their federal income tax returns. A tax credit is a dollar-for-dollar reduction of taxes owed. Some credits are refundable – taxes could be reduced to the point that a taxpayer would receive a refund rather than owing any taxes. Below are some of the credits taxpayers could be eligible to claim: |
| Tax Tip 2006-42 |
March 1, 2006 |
| Volunteer Tax Return Preparation |
| Are you puzzled by the tax law and which credits and deductions you can take? If so, then why not look into the free, IRS-sponsored, volunteer tax return preparation services? In addition to tax preparation, many also offer free electronic filing of tax returns. |
| Tax Tip 2006-41 |
Feb. 27, 2006 |
| Free Tax Services |
| The IRS provides free publications, forms and other tax material and information to help taxpayers meet their tax obligations. Free help is available on the IRS website, by phone, at local IRS offices and at other community locations. |
| Tax Tip 2006-40 |
Feb. 27, 2006 |
| Free Tax Help for the Military |
| If you, or your spouse, are a member of the military, you may be eligible to receive free assistance with the preparation and filing of your federal tax return. The U.S. Armed Forces participate in the Volunteer Income Tax Assistance Program. The Armed Forces Tax Council oversees the operation of the military tax programs worldwide, and serves as the main conduit for outreach by the IRS to military personnel and their families. The AFTC consists of tax program coordinators for the Marine Corps, Air Force, Army, Navy and Coast Guard. |
| Tax Tip 2006-39 |
Feb. 24, 2006 |
| Deferral of Back Taxes for Military |
| Reservists called to active duty and enlistees in the armed forces may qualify for a deferral of taxes owed if they can show that their ability to pay taxes was affected by their military service. |
| Tax Tip 2006-38 |
Feb. 23, 2006 |
| IRS Toll-Free Help |
| Free tax help from the IRS is just a phone call away. The IRS provides various services through its toll-free telephone numbers. Some of these services are available 24 hours a day. |
| Tax Tip 2006-37 |
Feb. 22, 2006 |
| Tax Rates for a Child's Investment Income |
| Part or all of a child's investment income may be taxed at the parent's rate rather than the child's rate. Because a parent's taxable income is usually higher than a child's income, the parent's top tax rate will often be higher as well. This special method of figuring the federal income tax only applies to children who are under the age of 14. For 2005, it applies if the child's total investment income for the year was more than $1,600. Investment income includes interest, dividends, capital gains, and other unearned income. |
| Tax Tip 2006-36 |
Feb. 21, 2006 |
| Income from Foreign Sources |
| Many United States citizens earn money from foreign sources. These taxpayers must remember that they must report all such income on their tax return, unless it is exempt under federal law. |
| Tax Tip 2006-35 |
Feb. 20, 2006 |
| Taxes on Early Distributions from Retirement Plans |
| Payments that you receive from your IRA or qualified retirement plan before you reach age 59½ are normally called ‘early’ or ‘premature’ distributions. These funds are subject to an additional 10 percent tax and must be reported to the IRS. |
| Tax Tip 2006-34 |
Feb. 17, 2006 |
| Tax Facts About Capital Gains and Losses |
| Almost everything you own and use for personal purposes, pleasure or investment is a capital asset. When you sell a capital asset, the difference between the amounts you sell it for and your basis, which is usually what you paid for it, is a capital gain or a capital loss. While you must report all capital gains, you may deduct only capital losses on investment property, not personal property. |
| Tax Tip 2006-33 |
Feb. 16, 2006 |
| Gambling Income and Losses |
| Gambling winnings are fully taxable and must be reported on your tax return. Gambling income includes, but is not limited to, winnings from lotteries, raffles, horse and dog races and casinos, as well as the fair market value of prizes such as cars, houses, trips or other noncash prizes. |
| Tax Tip 2006-32 |
Feb. 15, 2006 |
| Tips are Subject to Taxes |
| Do you work at a hair salon, barber shop, casino, golf course, hotel or restaurant or drive a taxicab? The tip income you receive as an employee from those services is taxable income. Here as some tips about tips: |
| Tax Tip 2006-31 |
Feb. 14, 2006 |
| Paying or Receiving Alimony? |
| If you were recently divorced and are paying or
receiving alimony under a divorce decree or agreement, you need to consider the tax
implication for your 2005 federal income tax return. Here are the general guidelines. |
| Tax Tip 2006-30 |
Feb. 13, 2006 |
| Are Your Social Security Benefits Taxable? |
| How much, if any, of your Social Security benefits
are taxable depends on your total income and marital status. Generally, if Social
Security benefits were your only income, your benefits are not taxable and you
probably do not need to file a federal income tax return |
| Tax Tip 2006-29 |
Feb. 10, 2006 |
| What Income is Taxable? Nontaxable? |
| Generally, most income you receive is taxable. But there are some situations when certain types of income are partially taxed or not taxed at all. A complete list is available in IRS Publication 525, Taxable and Nontaxable Income. |
| Tax Tip 2006-28 |
Feb. 9, 2006 |
| Deducting State and Local Sales Tax |
| If you itemize your taxes, you may choose to deduct state and local sales taxes instead of state and local income taxes.
The State and Local General Sales Tax Deduction Worksheet in the 2005 Form 1040 instruction booklet will help you determine your sales tax deduction amount in lieu of saving receipts throughout the year. You also may be able to add the state and local general sales tax paid on certain specified items. |
| Tax Tip 2006-27 |
Feb. 8, 2006 |
| Can You Use Schedule C-EZ? |
| Your business may be eligible to use the abbreviated Schedule C-EZ instead of the longer Schedule C when reporting business profit and loss on your 2005 Form 1040 federal income tax return. The maximum deductible business expense threshold for filing Schedule C-EZ is $5,000. |
| Tax Tip 2006-26 |
Feb. 7, 2006 |
| Changes to Tax Law for 2005 |
| Taxpayers should make sure that they are aware of important changes to the tax law before they complete their 2005 federal income tax forms. Here are some significant changes that may affect you when completing your 2005 federal tax return. |
| Tax Tip 2006-25 |
Feb. 6, 2006 |
| Guidelines for Roth IRA Contributions |
| Taxpayers confused about whether they can contribute to a Roth IRA should consider guidelines based on the following categories. |
| Tax Tip 2006-24 |
Feb. 3, 2006 |
| Beware of Tax Scams |
| Don’t fall victim to tax scams. These schemes take several shapes, ranging from promises of large tax refunds to illegal ways of untaxing yourself. Beware of these common schemes. |
| Tax Tip 2006-23 |
Feb. 2, 2006 |
| Missing a Form 1099? |
| If you receive certain types of income, you may get a Form 1099 for use with your federal tax return. Form 1099 is an information return provided by the payer of the income. You should receive your Form 1099-series information returns by January 31, 2006. |
| Tax Tip 2006-22 |
Feb. 1, 2006 |
| Missing Your Form W-2? |
| You should receive a Form W-2, Wage and Tax Statement, from each of your employers for use in preparing your federal tax return. Employers must furnish this record of 2005 earnings and withheld taxes no later than January 31, 2006 (if mailed, allow a few days for delivery). |
| Tax Tip 2006-21 |
Jan. 31, 2006 |
| Use EFTPS to Pay Your Taxes Electronically |
| If you are going to owe taxes when you file your federal tax return, consider paying through the Electronic Federal Tax Payment System. EFTPS is a fast, easy, convenient and secure service provided free by the Department of Treasury. |
| Tax Tip 2006-20 |
Jan. 30, 2006 |
| Check Out Free File |
| If you have access to a computer and the Internet, you may be eligible to prepare and file your 2005 federal tax return electronically for free. Free File is an easy way to file your taxes and get your refund in half the time. |
| Tax Tip 2006-19 |
Jan. 27, 2006 |
| Receive Your Refund Faster with Direct Deposit |
| Want your refund faster? Have it deposited directly into your bank account. More taxpayers are choosing direct deposit as the way to receive their federal tax refunds. More than 52 million people had their tax refunds deposited directly into their bank accounts in 2005. It’s a secure and convenient way to get your money in your pocket faster. |
| Tax Tip 2006-18 |
Jan. 26, 2006 |
| E-file - A Smart Way to do Your Taxes |
| Every year, more taxpayers discover the benefits of filing their tax return electronically. Whether you use a professional tax preparer authorized by the IRS or do it yourself on a home computer, there are many reasons to consider e-filing your tax return this year. |
| Tax Tip 2006-17 |
Jan. 25, 2006 |
| What to do if You Haven't Filed Your 2004 Return |
| The failure to file a federal tax return can be costly — whether you end up owing more or missing out on a refund. There are several reasons taxpayers don’t file their taxes. Perhaps you didn’t know you were required to file. Maybe, you just kept putting it off and simply forgot. Whatever the reason, it’s best to file your return as soon as possible. If you need help, even with a late return, the IRS is ready to assist you. |
| Tax Tip 2006-16 |
Jan. 24, 2006 |
| Tips for Recently Married or Divorced Taxpayers |
| Newlyweds and the recently divorced should ensure the name on their tax return matches the name registered with the Social Security Administration. A mismatch could unexpectedly increase a tax bill or reduce the size of any refund. |
| Tax Tip 2006-15 |
Jan. 23, 2006 |
| Moving Soon? Let the IRS Know |
| If you changed your home or business address, notify the IRS to ensure that you receive any refunds or correspondence. While the IRS uses the Postal Service’s change of address files to update taxpayer addresses, notifying the IRS directly is still a good idea. |
| Tax Tip 2006-14 |
Jan. 20, 2006 |
| Gift Taxes |
| If you gave any one person gifts in 2005 that valued at more than $11,000, you must report the total gifts to the Internal Revenue Service and may have to pay tax on the gifts. |
| Tax Tip 2006-13 |
Jan. 19, 2006 |
| Quick and Easy Access to IRS Tax Forms and Publications |
| The Internal Revenue Service has many forms and free publications on a wide variety of topics to help you understand and meet tax filing requirements. If you need IRS materials try one of these easy options: |
| Tax Tip 2006-12 |
Jan. 18, 2006 |
| How to Get a Copy of Your Tax Return Information |
| There are two easy and convenient options for obtaining copies of your federal tax return information — tax return transcripts and tax account transcripts — by phone or by mail. |
| Tax Tip 2006-11 |
Jan.17, 2006 |
| Tax Information available in Spanish — Ayuda en Espanol |
| If you need federal tax information, the IRS provides free Spanish-language products and services. Pages on the Internal Revenue Service’s Web site, pre-recorded tax topics, refund information, tax publications and toll-free telephone assistance are all available in the Spanish-language. |
| Tax Tip 2006-10 |
Jan. 16, 2006 |
| IRS Publication 17 — Free Tax Guide for Individuals |
| Are you facing a lot of different tax questions this year? IRS experts have pulled together an overview of common tax issues in one convenient place — Publication 17, Your Federal Income Tax. This updated publication, available on the IRS Web site, IRS.gov, contains a vast array of helpful information for individual taxpayers. |
| Tax Tip 2006-09 |
Jan. 13, 2006 |
| IRS Has Free Publications on Every Topic You Need |
| The IRS has a free publication that answers any tax question you have. Publications on a variety of tax-related topics are available by phone or the Internet at IRS.gov. From students to seniors, first-time home buyers to landlords - everyone can find useful information in IRS forms and publications. |
| Tax Tip 2006-08 |
Jan. 12, 2006 |
| 1040 Central — One Click Away |
| Don’t wait in line, go on-line. The IRS Web site is home to a great resource for answers to tax questions that arise during the filing season. Access 1040 Central at IRS.gov under the “Individuals” tab and discover user-friendly tools that will make completing your 2005 tax return quick and easy. |
| Tax Tip 2006-07 |
Jan. 11, 2006 |
| Keeping Good Records |
| You can avoid headaches at tax time by keeping track of your receipts and other records throughout the year. Good record-keeping will help you remember the various transactions you made during the year, which in turn may make filing your return a less taxing experience. |
| Tax Tip 2006-06 |
Jan. 10, 2006 |
| Advice for Choosing a Tax Preparer |
| Taxpayers who pay someone to do their taxes should choose a preparer wisely. If you choose to use a paid tax preparer, it is important that you find a qualified tax professional. Taxpayers are ultimately responsible for everything on their return even when it’s prepared by someone else. While most tax return preparers are professional and honest, taxpayers can use the following tips to choose a preparer who will offer the best service for their tax preparation needs. |
| Tax Tip 2006-05 |
Jan. 9, 2006 |
| Should You Itemize? |
| Whether to itemize deductions on your tax return depends on how much you spent on certain expenses last year. Money paid for medical care, mortgage interest, taxes, charitable contributions, casualty losses, and miscellaneous deductions can reduce your taxes. If the total amount spent on those categories is more than the standard deduction, you can usually benefit by itemizing. |
| Tax Tip 2006-04 |
Jan. 6, 2006 |
| Choose the Simplest Federal Tax Form for Your Needs |
| The three forms used for filing individual federal income tax returns are Form 1040EZ, Form 1040A, and Form 1040. If you are filing a federal income tax return on paper, use the simplest form you can.
Using the simplest allowable form will reduce the chance of an error
that may cost you money or delay the processing of your return. |
| Tax Tip 2006-03 |
Jan. 5, 2006 |
| Choose Your Correct Filing Status |
| Your federal tax filing status is based on your marital and family
situation. It is an important factor in determining whether you must
file a return, your standard deduction and your correct amount of tax. |
| Tax Tip 2006-02 |
Jan. 4, 2006 |
| Should You File a Tax Return? |
| You must file a tax return if your income is above a certain level. The amount varies depending on filing status, age and the type of income you receive. For example a married couple, under age 65, generally is not required to file until their joint income reaches $16,400. However self-employed individuals generally must file a tax return if their net income from self employment exceeds $400. |
| Tax Tip 2006-01 |
Jan. 3, 2006 |
| Seven Ways to Get a Jump Start on Your Taxes |
| Earlier is better when it comes to working on your taxes. Taxpayers are encouraged to get a head start on tax preparation, especially since early filers avoid the last minute rush and get their refunds sooner. Here are seven easy ways to get a good jump on your taxes long before the April deadline is here. |
