Tag Archives: Earned Income Tax Credit

IRS Tax Tip: Ten Reasons Why You Should Become a Trained and Certified Tax Volunteer

25 Tuesday Sep 2012

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The Internal Revenue Service is seeking community volunteers to provide free tax help to qualified individuals during the tax filing season.

Managed by the IRS, the Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the Elderly (TCE) programs are community based partnerships that provide free tax return preparation for low-to-moderate income taxpayers, seniors, people with disabilities and those with limited English skills. If you are looking for a way to help in your community, then consider becoming a tax volunteer. People helping people – it’s that simple.

Here are 10 things the IRS wants you to know about becoming a community volunteer for VITA or TCE.

1. No previous experience is required. Volunteers receive specialized training and – if tax preparation is not preferable – have the option of serving in a variety of other roles.

2. If you are fluent in a language other than English, you can help those who do not speak English understand their tax return.

3. IRS provides free tax law training and materials needed to prepare basic individual income tax returns.

4. Volunteers become familiar with deductions, allowable expenses and credits that benefit eligible taxpayers, such as the Earned Income Tax Credit, the Child Tax Credit and the Credit for the Elderly.

5. The hours are flexible. Volunteers generally serve an average of three to four hours per week from mid-January through the tax filing deadline, which is April 15, 2013.

6. Volunteer sites are generally located at community and neighborhood centers, libraries, schools, shopping malls and other convenient locations.

7. Most VITA/TCE sites offer free electronic filing for both federal and state tax returns.

8. As a tax volunteer, veterans (and non-veterans alike) may choose to help military personnel and their families.

9. Volunteers will become part of an established program that has helped community members file tax returns at no charge for more than four decades.

10. You can make a difference as a tax volunteer.

Last year nearly 99,000 community volunteers answered the call and made a difference by preparing over 3.3 million tax returns for free at more than 13,000 locations nationwide. Anyone can volunteer for this exciting, educational and enjoyable experience. Sign up to become a tax volunteer and see what a difference learning about taxes and helping others makes in your life.

Additional information about becoming a VITA or TCE volunteer is available on IRS.gov by typing the key words “tax volunteer” in the search box. Those interested must submit Form 14310, VITA/TCE Volunteer Sign Up, by email through the IRS website.
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Special Tax Benefits for Armed Forces Personnel

19 Thursday Jul 2012

Posted by in Income Tax

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US flag(Photo credit: Mad-Loïs)

IRS Summertime Tax Tip 2012-04

Military personnel and their families face unique life challenges with their duties, expenses and transitions. The IRS wants active members of the U.S. Armed Forces to be aware of all the special tax benefits that are available to them.

 

Here are 10 of those special tax benefits:

1. Moving Expenses If you are a member of the Armed Forces on active duty and you move because of a permanent change of station, you may be able to deduct some of your unreimbursed moving expenses.

2. Combat Pay If you serve in a combat zone as an enlisted person or as a warrant officer for any part of a month, all your military pay received for military service during that month is not taxable. For officers, the monthly exclusion is capped at the highest enlisted pay, plus any hostile fire or imminent danger pay received. You can also elect to include your nontaxable combat pay in your “earned income” for purposes of claiming the Earned Income Tax Credit.

3. Extension of Deadlines The deadline for filing tax returns, paying taxes, filing claims for refund, and taking other actions with the IRS is automatically extended for qualifying members of the military.

4. Uniform Cost and Upkeep If military regulations prohibit you from wearing certain uniforms when off duty, you can deduct the cost and upkeep of those uniforms, but you must reduce your expenses by any allowance or reimbursement you receive.

5. Joint Returns Generally, joint income tax returns must be signed by both spouses. However, when one spouse is unavailable due to military duty, a power of attorney may be used to file a joint return.

6. Travel to Reserve Duty If you are a member of the US Armed Forces Reserves, you can deduct unreimbursed travel expenses for traveling more than 100 miles away from home to perform your reserve duties.

7. ROTC Students Subsistence allowances paid to ROTC students participating in advanced training are not taxable. However, active duty pay – such as pay received during summer advanced camp – is taxable.

8. Transitioning Back to Civilian Life You may be able to deduct some costs you incur while looking for a new job. Expenses may include travel, resume preparation fees, and outplacement agency fees. Moving expenses may be deductible if your move is closely related to the start of work at a new job location, and you meet certain tests.

9. Tax Help Most military installations offer free tax filing and preparation assistance during and/or after the tax filing season.

10. Tax Information IRS Publication 3, Armed Forces’ Tax Guide, is an excellent resource as it summarizes many important military-related tax topics. Publication 3 can be downloaded from IRS.gov or may be ordered by calling 1-800-TAX-FORM (800-829-3676).
Link:

IRS Publication 3, Armed Forces’ Tax Guide (PDF)

IRS Tax Tip: Injured or Innocent Spouse Tax Relief

13 Friday Apr 2012

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You may be an injured spouse if you file a joint tax return and all or part of your portion of a refund was, or is expected to be, applied to your spouse’s legally enforceable past due financial obligations.

Here are seven facts about claiming injured spouse relief:

1. To be considered an injured spouse; you must have paid federal income tax or claimed a refundable tax credit, such as the Earned Income Credit or Additional Child Tax Credit on the joint return, and not be legally obligated to pay the past-due debt.

2. Special rules apply in community property states. For more information about the factors used to determine whether you are subject to community property laws, see IRS Publication 555, Community Property.

3. If you filed a joint return and you’re not responsible for the debt, but you are entitled to a portion of the refund, you may request your portion of the refund by filing Form 8379, Injured Spouse Allocation.

4. You may file form 8379 along with your original tax return or your may file it by itself after you receive an IRS notice about the offset.

5. You can file Form 8379 electronically. If you file a paper tax return you can include Form 8379 with your return, write “INJURED SPOUSE” at the top left of the Form 1040, 1040A or 1040EZ. IRS will process your allocation request before an offset occurs.

6. If you are filing Form 8379 by itself, it must show both spouses’ Social Security numbers in the same order as they appeared on your income tax return. You, the “injured” spouse, must sign the form.

7. Do not use Form 8379 if you are claiming innocent spouse relief. Instead, file Form 8857, Request for Innocent Spouse Relief. This relief from a joint liability applies only in certain limited circumstances. However, in 2011 the IRS eliminated the two-year time limit that applies to certain relief requests. IRS Publication 971, Innocent Spouse Relief, explains who may qualify, and how to request this relief.

For complete information on Injured and Innocent Spouse Tax Relief, visit IRS.gov.
Links:

  • Publication 555, Community Property (PDF)
  • Form 8379, Injured Spouse Allocation (PDF)
  • Instructions for Form 8379, Injured Spouse Allocation (PDF)
  • Form 8857, Request for Innocent Spouse Relief (PDF)
  • Instructions for Form 8857, Request for Innocent Spouse Relief (PDF)
  • Publication 971, Innocent Spouse Relief (PDF)

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Free File Still Available for Last-Minute Filers

13 Friday Apr 2012

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The tax deadline is fast approaching and even though the April 17 deadline offers a couple of extra days this year, the IRS wants to remind taxpayers who haven’t filed yet that IRS Free File is still available.
For people who find taxes a little too taxing, IRS Free File offers free software to prepare and e-file your taxes for free. Get started at IRS.gov/freefile. Here are four tips about IRS Free File.

1. Free File Does the Hard Work for You Free File is a partnership between the IRS and leading tax software providers who make their brand-name products available for free. You don’t need to be a tax expert; the software will help find tax breaks for you, such as the Earned Income Tax Credit. The software asks the questions; you supply the answers. It will find the right tax forms and do the math.

2. Access to Free File products You must access the Free File products through www.irs.gov to avoid any charges for preparing or e-filing your federal tax return. Once you choose a Free File software product, you’ll be directed away from the IRS website to the partner’s site to prepare, print and e-file your federal return – all for free.

3. Free options for all There is a free option for everyone. People who make $57,000 or less, which includes most Americans, can use the Free File software. People who make more can use Free File Fillable Forms, an electronic version of IRS paper forms.

4. Free Extensions Taxpayers who can’t make the April 17 deadline can request an extension. Making the request is easy and free through IRS Free File. Just look for “free extensions” in the company offers. Remember, this is an extension of time to file your return, not to pay. If you think you owe, make a payment with your extension request.
Get all the information you need about IRS Free File at IRS.gov/freefile.

IRS Tax Tip: Free File Still Available for Last-Minute Filers

13 Friday Apr 2012

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The tax deadline is fast approaching and even though the April 17 deadline offers a couple of extra days this year, the IRS wants to remind taxpayers who haven’t filed yet that IRS Free File is still available.
For people who find taxes a little too taxing, IRS Free File offers free software to prepare and e-file your taxes for free. Get started at IRS.gov/freefile. Here are four tips about IRS Free File.

1. Free File Does the Hard Work for You Free File is a partnership between the IRS and leading tax software providers who make their brand-name products available for free. You don’t need to be a tax expert; the software will help find tax breaks for you, such as the Earned Income Tax Credit. The software asks the questions; you supply the answers. It will find the right tax forms and do the math.

2. Access to Free File products You must access the Free File products through www.irs.gov to avoid any charges for preparing or e-filing your federal tax return. Once you choose a Free File software product, you’ll be directed away from the IRS website to the partner’s site to prepare, print and e-file your federal return – all for free.

3. Free options for all There is a free option for everyone. People who make $57,000 or less, which includes most Americans, can use the Free File software. People who make more can use Free File Fillable Forms, an electronic version of IRS paper forms.

4. Free Extensions Taxpayers who can’t make the April 17 deadline can request an extension. Making the request is easy and free through IRS Free File. Just look for “free extensions” in the company offers. Remember, this is an extension of time to file your return, not to pay. If you think you owe, make a payment with your extension request.
Get all the information you need about IRS Free File at IRS.gov/freefile.

Free Tax Help for Military Personnel and Their Families

29 Wednesday Feb 2012

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Free Tax Help for Military Personnel and Their Families

Free tax return preparation assistance is available for eligible military members and their spouses. The IRS and U.S. Armed Forces participate in the Volunteer Income Tax Assistance program, which provides free tax advice, tax preparation, return filing and other tax assistance to military members and their families.

Here are five things you need to know about free military tax assistance:

1. Armed Forces Tax Council The Armed Forces Tax Council oversees the operation of the military tax programs worldwide, conducting outreach with 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.

2. Volunteer tax sites Volunteer assistors at military-based VITA sites are trained to address military-specific tax issues, such as combat zone tax benefits and the Earned Income Tax Credit guidelines.

3. What to bring To receive free tax assistance, bring the following records to your military VITA site:

  • Valid photo identification
  • Social Security cards for you, your spouse and dependents or a Social Security number verification letter issued by the Social Security Administration
  • Birth dates for you, your spouse and dependents
  • Wage and earning statement(s) like Form W-2, W-2G, 1099-R
  • Interest and dividend statements (Forms 1099)
  • A copy of last year’s federal and state tax returns, if available
  • Checkbook for routing and account numbers for direct deposit
  • Total amount paid for day care and day care provider’s identifying number
  • Other relevant information about income and expenses

4. Joint returns If your filing status is Married Filing Jointly and you wish to file your tax return electronically, both you and your spouse should be present to sign the required forms. If it isn’t possible for both of you to be present, a valid power of attorney that allows tax preparation can be used to sign and file the return.

5. Special exception There is a special exception to using a power of attorney for spouses in combat zones. The exception allows  the filing spouse to e-file a joint return with only a written statement stating the other spouse is in a combat zone and unable to sign.

For more information, review IRS Publication 3, Armed Forces’ Tax Guide, available on the IRS Web site at www.irs.gov or order a free copy by calling 800-TAX-FORM (800-829-3676).
Link:

  • Publication 3, Armed Forces’ Tax Guide (PDF 1010.5K)