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IRS TAX TIP 2007-18

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.

• Fast.  No more last minute trips to the Post Office – just hit Send!

• Accurate. The electronic filing program checks for errors and necessary information, increasing the accuracy of your return and reducing the need for correspondence with the IRS to clarify errors or omissions.

• Easy. The computer software leads you step-by-step. You can usually file a state tax return at the same time you electronically file your federal return.

• Quicker Refunds. Generally, when you file electronically, your refund will be issued in about half the time it would take if you filed a paper return. Those who choose direct deposit will get their refund in even less time.

• Peace of mind. Once the return is accepted for processing, the IRS electronically acknowledges receipt of the return.

• Payment options.  With electronic filing, you can file your return early but wait to pay any balance due by the April deadline. You can also pay electronically, using a credit card, electronic funds withdrawal or, in some cases, the Electronic Federal Tax Payment System.

• Request your Telephone Excise Tax Refund.  E-file can be used to request this refund.

The IRS is again offering eligible taxpayers the opportunity to electronically prepare and file their tax returns for free through the Free File Alliance, a partnership between the IRS and private-sector software companies. For information on taxpayer eligibility, access the Free File Web page on the IRS Web site at IRS.gov.

For more information on e-filing, check the IRS Web site at IRS.gov. You will also find a withholding calculator and worksheet, along with Form W-4, Employee’s Withholding Allowance Certificate, on the Web site.  You may also get Form W-4 from your employer or by calling the IRS at 800-TAX-FORM (800-829-3676).

Links:

• Telephone Excise Tax Public Service Announcement -Uncle Sam-
• E-file
• Free File
• Form W-4, Employee’s Withholding Allowance Certificate (PDF 31K)
• Withholding calculator
• Electronic Federal Tax Payment System

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.

Here are some things to consider:

• Failure to File penalty. If you owe taxes, a delay in filing may result in a “failure to file” penalty, also known as the “late filing” penalty, and interest charges. The longer you delay, the larger these charges grow.

• Losing your Refund. There is no penalty for failure to file if you are due a refund. However, you cannot obtain a refund without filing a tax return. If you wait too long to file, you may risk losing the refund altogether. The deadline for claiming refunds is three years after the return due date. For example, the last day for claiming a refund for your 2003 tax return will be April 17, 2007.

• EITC. Individuals who are entitled to the Earned Income Tax Credit must file their return to claim the credit even if they are not otherwise required to file.

Whether or not you must file a tax return will depend upon a number of factors, including your filing status, age, and gross income.

For more information on how to file a tax return for a prior year, visit the IRS Web site at IRS.gov, call the IRS Tax Help Line for Individuals at 800-829-1040 or visit your local IRS office.
Links:

• Earned Income Tax Credit
• Previous Years’ Forms

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.
• For recently married taxpayers, the tax scenario begins when the bride says “I do.” If she takes her husband’s last name, but doesn’t tell the SSA about the name change, a complication may result. If the couple files a joint tax return with her new name, the IRS computers will not be able to match the new name with the Social Security Number.

• After a divorce, a woman who had taken her husband’s name and made that change known to the SSA should contact the SSA if she reassumes a previous name.
It’s easy to inform the SSA of a name change by filing Form SS-5 at a local SSA office. It usually takes two weeks to have the change verified. The form is available on the agency’s Web site, www.socialsecurity.gov, by calling 800-772-1213 and at local offices. The SSA Web site provides the addresses of local offices.
Generally, taxpayers must provide SSNs for each dependent claimed on the tax return. For adopted children without SSNs, the parents can apply for an adoption taxpayer identification number, or ATIN, by filing Form W-7A with the IRS. The ATIN is used in place of the SSN on the tax return. The form is available on the IRS Web site, IRS.gov, or by calling 800-TAX-FORM (800-829-3676).
 

Links:

• Form SS-5, Application for a Social Security Card 
• Social Security Administration
• Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions (PDF 42K)

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.

There are several ways to do this.
• On your tax return: You may correct the address legibly on the mailing label that comes with your tax package or write the new address in the appropriate boxes on your tax return when you file.
• Form 8822: You may use Form 8822, Change of Address, to submit an address change at any time during the year.
• Verbal Notification: If an IRS employee contacts you about your account, you may verbally provide a change of address.
• Written Notification:  Write to the IRS center where you file your return and provide your new address.  The mailing addresses for the IRS centers are in the tax instruction booklet. In order to process your address change, you will need to provide your full name, old and new addresses, your social security number or employer identification number, and signatures. If you filed a joint return, you should provide the same information for both spouses. If you filed a joint return and have since established separate residences, you should each notify the IRS of your new addresses.

In addition to notifying the IRS directly you should notify the U.S. Postal Service.  You may file a change of address with your local post office in person or via the internet at www.usps.com.    The USPS-United States Official Change of Address Form via the website is safe and secured.

It’s a good idea to notify your employer of your new address so that you can get your W-2 forms on time.

If you change your address after filing your return, don’t forget to notify the post office at your old address so your mail can be forwarded.

You should also notify the IRS if you make estimated tax payments and you change your address during the year. You should mail a completed Form 8822, Change of Address, or write the IRS center where you file your return. You can continue to use your old pre-printed payment vouchers until the IRS sends you new ones. Do not correct the address on the old voucher.

You can download Form 8822, Change of Address at the IRS Web site, IRS.gov, or order by calling 800-TAX-FORM (800-829-3676).
 

Links:

• Form 8822, Change of Address (PDF 60K)
• Tax Topic 157, Change of Address — How to Notify IRS

IRS TAX TIP 2007-14

You may be eligible for a one-time tax refund! This one-time refund of previously collected federal telephone excise taxes may be requested on your 2006 federal income tax return. Anyone who paid long-distance excise taxes on landline, cell phone, Voice over Internet Protocol (VoIP), or bundled service that was billed for the period after Feb 28, 2003 and before Aug 1, 2006 is eligible for this refund.  (Bundled service is local and long-distance service provided under a plan that does not separately list the charge for local service.)

You can request a refund of the actual federal excise tax you paid based upon your telephone bills for this period. Or you can request the standard refund amount ranging from $30-$60 based upon the number of exemptions you claim on your individual income tax return. 

Choosing the standard amount is optional. Using this option is the easiest way to get your refund and avoid gathering 41 months of old phone records. By choosing the standard amount you will only need to fill out one line on your tax return. The standard amount is based on actual telephone usage data and reflects the long-distance phone tax paid by similarly sized families or households.

Choosing to request the actual amount paid may be more beneficial for some taxpayers.  To request a refund based upon the actual amount you paid, you must determine the amounts paid based on your phone bills. Figure the refund on Form 8913 and attach this form to your 2006 income tax return.

If you are not normally required to file a tax return, there is a new form (Form 1040EZ-T) that you can use to request this refund.  Form 1040EZ-T can be mailed to the IRS or it can be prepared and filed electronically at no cost by using Free File at IRS.gov.

Businesses and tax-exempt organizations are also eligible for the telephone excise tax refund.  These organizations must use Form 8913, Credit for Federal Telephone Excise Tax Paid.  Businesses and tax-exempt organizations may report the actual amount of refundable phone taxes they paid for the 41-month billing period from March 2003 through July 2006.  Or they may use a formula established to estimate the refund.  Businesses should attach Form 8913 to their regular 2006 income tax returns.  Tax-exempt organizations must attach it to Form 990-T.

For more information as well as answers to the most commonly asked questions, go to the IRS Web site at IRS.gov and select the link for the Telephone Excise Tax Refund.

Links:

• Telephone Excise Tax Refund
  
• Telephone Excise Tax Refund Public Service Announcement- Uncle Sam

• Internet:  You can access forms and publications on the IRS website 24 hours a day, 7 days a week, at IRS.gov.
• Phone:  Call 800-TAX-FORM (800-829-3676) to order current year forms, instructions and publications and prior year forms and instructions.  You should receive your order within 10 days.
• Walk-in: During the tax-filing season, many libraries and post offices offer free tax forms to taxpayers. Some libraries also have copies of commonly-requested publications. Braille materials are also available. Many large grocery stores, copy centers, and office supply stores have forms you can photocopy or print from a CD.
• Mail: Send your order for tax forms and publications to National Distribution Center, P.O. Box 8903, Bloomington, IL 61702-8903. You should receive your products within 10 days after we receive your order.

Links:

• Publication 910, Guide to Free Tax Services (PDF 636K)
• Publication 2053A, Quick and Easy Access to IRS Tax Help and Forms (PDF 40K)
• Order Publication 1796, Federal Tax Products on CD-ROM, from NTIS — the National Technical Information Service.
• State tax forms

IRS TAX TIP 2007-12

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.

A tax return transcript shows most line items from the tax return (Form 1040, 1040A or 1040EZ) as it was originally filed, including any accompanying forms and schedules.  It does not reflect any changes you, your representative or the IRS made after the return was filed. In many cases, a return transcript will meet the requirements of lending institutions such as those offering mortgages and student loans.

A tax account transcript shows any later adjustments either you or the IRS made after the tax return was filed. This transcript shows basic data, including marital status, type of return filed, adjusted gross income and taxable income. The IRS does not charge a fee for transcripts, which are available for the current and three prior calendar years.  Allow two weeks for delivery.

To request either transcript:

• Phone: Call 800-829-1040 and follow the prompts in the recorded message

• Mail: Complete IRS Form 4506-T, Request for Transcript of Tax Return.

If you need a photocopy of a previously processed tax return and attachments, complete Form 4506, Request for Copy of Tax Form, and mail it to the IRS address listed on the form for your area. There is a fee of $39.00 for each tax period requested. Copies are generally available for the current and past 6 years.

Forms 4506-T and 4506 can be found on the IRS Web site at IRS.gov or by calling the IRS forms and publications order line at 800-TAX-FORM (800-829-3676).

Links:

• Form 4506-T, Request for Transcript of Tax Return (PDF 45.3K)
• Form 4506, Request for Copy of Tax Form (PDF 42.3K)

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.

From stock sales to student loans, this nearly 300-page publication holds the answers to many of your questions: 

• Need help deciphering the mysteries of the Roth IRA? Try Chapter 17 for retirement accounts.
• Do you have a new child in the house? See Chapter 34 for the Child Tax Credit.
• Are you selling stock for the first time? Check Chapter 16 for capital gains. If you’re unloading losers, capital losses are there, too.
• Do you need to report the profit on your home sale? See Chapter 15 for some good news. Generally, you only need to report the sale of your home if your gain is more than $250,000 ($500,000 if married filing a joint return).

And the best part about Publication 17? It’s free. To get a copy, visit the IRS Web site at IRS.gov or call 800-TAX-FORM (800-829-3676).

Links:

• Publication 17, Your Federal Income Tax
• Publication 17, Your Federal Income Tax (PDF 2085K)

IRS TAX TIP 2007-09

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.

To find what you’re looking for, follow any one of these easy steps:

• Access the IRS Web site. Click on the Forms and Publications resource page to find what you need. There’s a search feature you can use if you know the topic but not the number of the form or publication.
• Read Publication 910. The Guide to Free Tax Services identifies the many IRS tax materials and services available. You’ll also find information about accessing tax materials, filing options, tax publications, tax education and assistance programs.
• Call Toll-free. If you know the name or number of the form or publication you need, call the toll-free Forms and Publications telephone line at 1-800-TAX-FORM (1-800-829-3676) to place your order.

If you still can’t find the information you need, visit IRS.gov or call the IRS toll-free customer service line at 1-800-829-1040.
 

Link:

• Forms and Publications 

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 2006 tax return quick and easy.

No matter which form you use, 1040 Central has the links you’ll need to file your tax year 2006 federal income tax return:

• Filing Options. 1040 Central links you to information about IRS e-file and Free File. Join the millions of people who already file their tax returns electronically. IRS e-file is the easiest and most accurate way to file and the fastest way to get your refund. You can even split your refund under among up to three accounts with Direct Deposit.
• Check on your refund. Track your refund by clicking on the “Where’s My Refund?” link on 1040 Central.
• Tax law changes. 1040 Central highlights changes in the tax law that directly affect taxpayers
• Current News. Access the latest IRS News Releases, Tax Tips and customer alerts.
• Forms and Publications. 1040 Central also has quick links to the most commonly used the tax forms and all other tax forms, instructions and publications you may need.
• Access convenient tools.  Determine if the Alternative Minimum Tax (AMT) might apply to you. Calculate the proper amount of income tax that should be withheld from your paychecks in 2007.
• Details about important tax credits. Find information about special tax credits like the Earned Income Tax Credit.
• Answers to important questions. 1040 Central includes Frequently Asked Questions on a broad range of tax issues.

Links:

• 1040 Central
• Where’s My Refund?