Get Your Refund Early by Filing Your Returns Early: E-filing with TurboTax 2014 to Start on Jan. 2
Now that the IRS has set January 31, 2014 as the commencement date for processing tax returns, taxpayers are urged to start filing early. You can now get free TurboTax 2014 version from www.turbotax.com and start filing your returns from the 2nd day of January, 2014. The sooner you file your taxes, the sooner you will get your tax refund.
Tax Refund Ballerz (Photo credit: bornazombie)
The average American taxpayer claims around 3,000 dollars in tax refunds. Furthermore, 8 in every 10 taxpayers in the country claim a refund every tax season. Intuit is encouraging taxpayers to start filing their returns at the soonest possible time to avoid delays in processing their tax refund.
Since TurboTax will start accepting e-files earlier than the IRS, the company will hold the information safely and forward them to the revenue service in a first-in, first out basis. This will go a long way in ensuring that taxpayer’s refunds are processed and sent back without delays, and it is important to note that the IRS does not anticipate any delays in doing this. The agency expects to perform as it did in the 2013 tax season; where 90 percent of all refunds were made in less than 21 days.
You never know when problems can occur, and this year people have experienced their fair share of unexpected problems. This summer alone people across the country are dealing with blazing wildfires, destructive storms with dangerous winds, and other natural disasters. Some people are lucky and come out of the damage relatively unscathed, but others aren’t as fortunate. Some people have had significant damage done to their property, and they’re trying to find a way to rebuild. There are also some people that aren’t dealing with disasters caused by nature, they’re dealing with problems caused by other people. Theft of expensive objects, damage done by vandals, blackmail, and other problems happen to people every day.
Many people don’t know what to do when disaster occurs. People with insurance may be able to get some help from their policy, but some policies don’t have enough coverage to completely compensate the policy holder for their loss. Luckily for tax paying American citizens, Uncle Sam has measures in place to help people in their hour of need. Financial losses incurred because of casualty, disaster, and theft losses may be tax-deductible. Tax payers can report casualty and theft can be reported on Form 4684 and Form 1040 Schedule A.
Casualty Losses
A casualty is defined as the loss, significant damage, or destruction of property because of a sudden event. In order to claim property as a casualty cost, the event that caused it must be easily identifiable and unexpected. Natural disasters like floods, earthquakes, storms, and wildfires fit the criteria, but Mother Nature doesn’t have to be the only cause of your loss. Losses due to car accidents, terrorist attacks, and vandalism can all be claimed as a casualty loss.
Theft Losses
The IRS’ definition of theft isn’t too different from what law enforcement officials view as theft of property. The IRS defines theft as “the taking and removing of money or property with the intent to deprive the owner of it. The taking of property must be illegal under the law of the state where it occurred and it must have been done with criminal intent.” According to the IRS embezzlement, robbery, blackmail, burglary, extortion, larceny, and even kidnapping for ransom all full under the umbrella of theft losses.
Losses You Can’t Claim
The government offers IRS tax help to taxpayers that have experienced hardship, but there are some situations where you won’t be able to claim the property and finances you lost over the year. Property that was misplaced cannot be claimed as a loss, nor can property that was accidentally broken. Tax payers may also not claim any property that has gone through progressive deterioration. In order to be tax-deductible the damage must be cause by a sudden and unexpected event. As an example, if your home was significantly damaged in a storm you would be able to claim that. If your home was damaged because of termite infestation or mold over a period of time, you would not be allowed to claim that.
Stories of large companies avoiding tax litter the news, but those are companies have purposely exploited loopholes and international trade agreements to avoid paying a fair rate of tax. That doesn’t mean it is immoral to avoid unnecessary tax and in fact, it is perceivable to consider HMRC as acting inappropriately by not advising people of the best or most tax efficient method of investing their money and receiving the resulting income. What is even more worrying is that succession planning is taxed heavily and the money, if from an estate, has already been taxed many times before.
How HMRC Taxes Inheritance
Anyone who receives an income in the form of inheritance will need to pay tax on that income if it reaches the inheritance tax threshold. The current inheritance tax threshold of £325,000 is in force until April 5th 2015 and that means any estate worth over £325,000 will pay 40% tax on the amount that breaches the threshold. So for example, an estate worth £325,001 is just one pound over the threshold and this would mean there is 40 pence of tax to pay.
You can’t simply avoid tax by giving someone gifts just before you die because any gifts given in the seven years prior to death count towards the overall estate. This is to avoid the obvious move by people who are diagnosed with terminal illness or have low expectations of making it through the next few years. However, here are a number of ways you can legitimately minimise any tax on your estate:
1. Create a Will
You need to have a will in place if you want to control how your estate is distributed. A Spouse may not need to pay inheritance tax, but other members of your family may come forward and lay claim to a portion of your estate if you have no instructions in place. This form of distribution will attract the taxman.
2. Avoid the Seven-Year Rule
Consider the benefits of seeing your loved ones benefit from some inheritance before you pass on. Giving gifts more than seven years before your death will ensure there are no hidden surprises that push your state over the threshold when your time comes.
3. Give in Stages
You can give anyone £3,000 as a gift without worrying about inheritance tax and that amount rises to £5,000 if the gift is a wedding present. The recipient may need to declare the money as income, but that is unlikely to be an issue and unless the recipient is a high earner, they would still benefit from a reduced tax rate if they need to pay any tax at all.
4. Use Family Trusts where Possible
Family trusts protect gifts from inheritance tax up to the threshold limit, but the control of the trust remains with the original trust creator. You still need to be aware of the seven-year limit, so making a trust sooner rather than later is a good idea.
5. Close Tax Efficient Saving Accounts
Savings kept in the tax-free savings accounts known as ISAs or Peps are not protected from any taxation when inheritance is due. Taking your money and either using it in one of the above outlined methods or spending it to reduce the overall size of your estate can benefit your loved ones when the time is right.
None of the methods mentioned here are remotely immoral, but they are simple guidelines that help your family benefit as much as possible from the accumulation of your life’s work. You will have paid tax on your income and possibly on your pension contributions if you exceeded your annual allowance at any time. Additionally you may have been taxed when you withdrew your pension so nobody can argue a case against you if you are as tax efficient as possible.
Paula Whately is a writer who believes that you should consider succession planning as early as possible to ensure that you and your family pay as little tax as possible. To help you understand how to sort inheritance tax limitations, you should contact will solicitors for more information.
There’s an accounting joke (yes, they exist) that goes like this:
Q: What is a CPA?
A: It’s someone who solves a problem you didn’t know you had in a way you don’t understand.
Even if that joke doesn’t make you laugh, it does contain an interesting bit about the necessity of a tax professional. The IRS certainly isn’t your friend, but it also isn’t your enemy. It is an organization operating on a mind-numbing system of complexities, the kind most people just aren’t cut out to navigate. The truth is, if you have a business of any size, you need professional help with your taxes. This comes in the form of tax preparers, enrolled agents, CPAs and tax attorneys.
If you’re as confused by the line-up as me, here’s a little clarity on the biggest differences between the bottom and top of the totem pole.
1. Education:
Tax preparers are trained in the general structure of tax returns. The majority of preparers are educated by whatever franchise they work at (H&R Block, Jackson Hewitt, Liberty Tax Service). Independent preparers may attend tax preparer courses, but no formal training is needed to start a practice.
Tax attorneys must obtain a specialized law degree. Beyond the basic degree, many tax attorneys obtain a Master of Laws degree in taxation as well as a mandatory Juris Doctor degree. In addition to this rigorous education, specialized courses are required covering advanced topics in business taxation. Many tax attorneys also have experience as certified public accountants.
2. Certification:
Anyone can become a tax preparer. On Jan. 18, 2013, the District Court put a stop to IRS requirements for registered tax return preparers to complete competency testing or secure continuing education. In fact, all it takes to offer the public service of tax preparation is the acquisition of a preparer tax identification number (PTIN), which costs all of $64.25.
Tax attorneys must pass the state bar. After completing the years-long process of law school, tax attorneys must pass the bar exam of whichever state they wish to practice in.
3. What they can do for you:
Tax preparers are capable of assisting you with basic, straightforward tax returns. If you have no special needs or complications involved in your taxes then a tax preparer is a good call. Whatever choice you make, be sure to ask about the full extent of your tax professional’s capabilities.
Tax attorneys can navigate your tax needs at every possible level. If you run a business and require assistance with complicated tax matters, or need year-round accounting, the seasoned tax attorney is your best bet. They’ll keep you from getting in trouble with the IRS by guiding you through your finances before tax season and/or representing you in front of the U.S. Tax Court if that’s necessary.
4. Who should hire them:
Tax preparers are appropriate help for anyone with an ordinary tax structure. The ideal client of a tax preparer is an individual with run-of-the-mill tax needs who forgoes the option to fill out taxes themselves. A small business without complicated tax structure can use them also, but it is advisable to seek a more experienced professional. It’s worth noting that chain tax services like H&R Block, Jackson Hewitt, or Liberty Tax Service employ people with varying levels of experience, and it’s a good idea to ask if any CPAs are employed there. If the answer is yes, request to work with them.
Tax attorneys are the choice for anyone with intricate tax needs, or issues with the IRS. If you get audited by the IRS or owe an excessive amount of money ($10,000 or more) you should seek the help of a tax attorney. It’s a good to be proactive and hire a tax attorney for management of a more involved account where a traditional accountant will not suffice. This would include businesses with payroll, international business or estate planning. One option is to turn to a company like Burkett, Burkett and Burkett that staffs experienced CPAs and tax attorneys. These kinds of firms benefit from the shared experience of a group.
5. What they will cost:
Tax preparers charge in a number of different ways, but are generally affordable. From independent preparers to franchise services, methods of billing range from flat fees to hourly and scaled fees by level of complexity. The average 2012 price for H&R Block was $192 per return where Liberty Tax Service averaged $173.
Tax attorneys are costly. We all know that hiring a lawyer is going to cost and a tax lawyer is no exception. You will more than likely be charged an hourly rate and can expect to see them ranging from a few hundred dollars to $1,000 or more per hour. This is obviously what puts such an emphasis on hiring the right kind of professional. If you don’t require complicated tax services, you may be able to get by with a tax preparer or certified public accountant. However, don’t make the mistake of cutting corners in a situation where potential consequence so greatly outweighs the savings.
Intuit’s Quickbase Decides To Move Headquarters From Current Location
Quickbase is owned and operated by Intuit, the creator of TurboTax software. A cloud-based collaboration platform, Quickbase allows individuals to create applications with ease. In fact, users don’t even need to write their own code in order to use the platform. This particular company is headquartered in Waltham, Massachusetts, and has been for its entirety. That’s going to change this coming fall, though.
English: Central Square in Waltham, Massachusetts. (Photo credit: Wikipedia)
In a few months, Quickbase will move from Waltham to Cambridge and brand new headquarters. The location is nearly 70,000 square feet in size and comprises two floors of a large office building. More space will allow the business to continue growing at a rapid pace. Plus, a location in Cambridge allows the business to attract better employment candidates, which is always desirable in this day and age.
Also, other Intuit employees in the area will join Quickbase at its new headquarters. This includes members of the Intuit Payments Solution Division, Intuit Partner Platform, and CTO team. Each separate entity will continue working on its own projects, including TurboTax software. Of course, Quickbase will continue expanding its resources and features for its users.
Quickbase offers a subscription service for countless business individuals. Undoubtedly, being able to create an application without lengthy coding sessions is desirable. The company doesn’t have much to do with TurboTax software, except for the fact that Intuit owns both businesses. In the end, a new headquarters will improve Quickbase in plenty of ways. It continues to grow each and every day with a number of new subscribers.
What do you do when there is an invalid charged-off debt?
It’s nothing new to hear or see a dispute between the tax payers and the IRS. Of course, there are quite a few reasons behind the disputes, but most commonly these disputes involve examination and/or collection issues and also the different interpretations of tax law. The IRS reporting a charged-off account on the credit report also proves to be a great hassle for more reasons than one. Now, if you happen to be one of those whose credit report shows charged-off tax accounts and that too having been reported by the IRS, then it’s definitely worth disputing. In fact, if you sit on it without taking heed, then this’ll definitely have a negative impact on your credit rating and that can be far worse than not having accrued debt, yet souring your credit.
What’s a charge-off debt actually?
Before you get into surmises about what exactly charged-off debt is all about, it’s important for you to understand the concept behind a charged-off debt in the first place. A charge-off debt actually happens to be that debt which has been determined uncollectible by the original creditor and that’s usually done after the debtor is seriously delinquent. Now, it’s only after 6 months that charge-offs are known to occur. Moreover, creditors still have the right to collect on the charge-offs because the debt still remains valid. Charge-offs are also known to appear on your credit report at least for 7 years since the debt appears.
Hence, it’s obvious that you’d like to validate your debts before coming to any conclusion about whether or not you should dispute the charge-offs. Debt validation is necessary like you do when going for the programs aimed to solve your financial problems. In this case too, debt validation programs serve the purpose of telling you for sure whether or not you can dispute the charged-off account with the IRS.
How’ll you dispute a charged-off debt with the IRS?
As a taxpayer who’s looking to dispute a charged-off debt, it’s rather important that you evaluate all possible options before taking any conclusive steps. Have a look at the steps discussed below and you should know how you can dispute a charged-off debt with the IRS.
Write out a formal protest: The very first thing you should do is write out a formal protest and request a review with the IRS Appeals Office. If an issue arises, then the IRS is bound to issue a Notice of Proposed Adjustment (NOPA), Form 5701 which details the position of the IRS regarding particular financial matters. You might as well reply to this by citing tax laws and other substantial evidences to support your position.
Review alternative dispute methods: You should also try and review alternative dispute methods that might be available. Generally there are 4 alternate dispute resolution tools available at the IRS Appeals Office – early referral to appeals, fast track settlement, post appeals mediation and delegation orders. You can request the tax office for early referral to the Appeals Office.
Look for the best method: It’s always advisable that you peruse for the best method when it comes to your particular case of disputing charged-off accounts. Advisably since it’s a dispute, hence you might as well take the assistance of a tax professional. The ultimate option of course remains litigation in a tax court or federal district court.
Keep in mind the above instances and steps when looking to dispute your charged-off debts with the IRS for unless you’re sure about what you’re doing, things can get even messier ultimately. Take heed now and conclude things smoothly.