Updated statistics from the IRS show continued growth in e-filing of
returns.
So far in 2013, more than 43 million people have self-prepared and e-filed
returns from home, an increase of more than four percent compared to the prior
year.
Through May 10, the IRS received more than 43.6 million self-prepared e-file
returns, up from 41.7 million a year earlier. E-filed returns from tax
professionals increased slightly, reaching almost 70.4 million.
In all, almost 114 million tax returns came in through e-file this year, up
from 112.1 million at this point last year. Other highlights from the season:
During 2013, the IRS issued more than 101 million refunds worth almost $268
billion.
Almost 80 percent of refunds used direct deposit.
So far in 2013, the IRS Web site has been accessed more than 300 million
times, up almost 25 percent compared with the same time last year.
IRS Circular 230 Disclosure
Pursuant to the requirements of the Internal Revenue Service Circular 230, we
inform you that, to the extent any advice relating to a Federal tax issue is
contained in this communication, including in any attachments, it was not
written or intended to be used, and cannot be used, for the purpose of (a)
avoiding any tax related penalties that may be imposed on you or any other
person under the Internal Revenue Code, or (b) promoting, marketing or
recommending to another person any transaction or matter addressed in this
communication
Wednesday, May 22, 2013
Keep the Child Care Credit in Mind for Summer
If you are a working parent or look
for work this summer, you may need to pay for the care of your child or
children. These expenses may qualify for a tax credit that can reduce your
federal income taxes. The Child and Dependent Care Tax Credit is available not
only while school’s out for summer, but also throughout the year. Here are
eight key points the IRS wants you to know about this credit.
1. You must pay for care so you
– and your spouse if filing jointly – can work or actively look for work. Your
spouse meets this test during any month they are full-time student, or
physically or mentally incapable of self-care.
2. You must have earned income.
Earned income includes earnings such as wages and self-employment. If you are
married filing jointly, your spouse must also have earned income. There is an
exception to this rule for a spouse who is full-time student or who is
physically or mentally incapable of self-care.
3. You must pay for the care of
one or more qualifying persons. Qualifying children under age 13 who you claim
as a dependent meet this test. Your spouse or dependent who lived with you for
more than half the year may meet this test if they are physically or mentally
incapable of self-care.
4. You may qualify for the
credit whether you pay for care at home, at a daycare facility outside the home
or at a day camp. If you pay for care in your home, you may be a household
employer. For more information, see Publication 926, Household Employer's Tax
Guide.
5. The credit is a percentage
of the qualified expenses you pay for the care of a qualifying person. It can
be up to 35 percent of your expenses, depending on your income.
6. You may use up to $3,000 of
the unreimbursed expenses you pay in a year for one qualifying person or $6,000
for two or more qualifying person.
7. Expenses for overnight camps
or summer school tutoring do not qualify. You cannot include the cost of care
provided by your spouse or a person you can claim as your dependent. If you get
dependent care benefits from your employer, special rules apply.
8. Keep your receipts and
records to use when you file your 2013 tax return next year. Make sure to note
the name, address and Social Security number or employer identification number
of the care provider. You must report this information when you claim the
credit on your return.
For more details about the rules to
claim this credit, see Publication 503, Child and Dependent Care Expenses. You
can get both publications at IRS.gov or have them mailed by calling
800-TAX-FORM (800-829-3676).
IRS Circular 230 Disclosure
Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication
Thursday, May 2, 2013
What every student should know about summer jobs and taxes
Planning a summer job during your
break from school? That’s great, but keep in mind that you do have to pay taxes on the money you earn from that job. Here
are a few tips about earning money and paying taxes.
• Be sure you fill out Form W-4, Employee’s
Withholding Allowance Certificate. Your employer uses this form to determine
the amount of tax to withhold from your paycheck. If you have more than one
job, you should make sure all your employers are withholding enough taxes to
cover your total income tax liability. To ensure your withholding is correct,
use the IRS Withholding Calculator on IRS.gov
• When determining how much income
to report, include all the money you earned while working. This usually means
wages, salaries and tips.
• In some jobs, like waiting tables,
you may receive tips from customers. Tips are considered income, just like your
hourly wages. Therefore, you must pay tax on them. This includes tips customers
give you directly, tips customers charge on credit cards and your share of the
tips you split with your co-workers. For more information about reporting your
tips, read Publication 531, Reporting Tip Income.
• Many students do odd jobs over the
summer to make extra cash. Earnings you receive from self-employment, including
jobs like babysitting and lawn mowing – are subject to income tax.
• If you have net income of $400 or
more from self-employment, you will have to pay self-employment tax. This pays
for your Social Security and Medicare benefits, which are normally paid for by
withholding from wages. The self-employment tax is figured on Form 1040,
Schedule SE. Net income is the money you earned after any deductions are
subtracted, such as business expenses.
• If you are in the ROTC and
participated in advanced training, the subsistence allowance you received is not
taxable. However, active duty pay, suchas pay received during summer advanced camp,
is taxable.
Now that you’re working this summer,
you may be wondering whether you’ll have to file a tax return. The answer
depends on a number of factors from how much you’re making to whether or not
your parents claim you as their dependent. You can read the rules and dollar
thresholds in Publication 501, Exemptions, Standard Deduction and Filing Information,
or use the IRS interactive tool to find out.
IRS Circular 230 Disclosure
Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication
Getting married this summer? Wedding season is in full swing!
Congratulations! You have tied the knot and cut the cake.
Here are some simple steps to make your first, joint- income tax return less
stressful.
Step 1
Marriage can mean a change in name. Make sure that the names
you enter on your first tax return match the names and Social Security numbers
on file with the Social Security Administration. For example, if the wife is
taking the husband’s surname, she should file Form SS-5, Application for a
Social Security Card, to notify SSA of the change in her name.
Step 2:
No matter when you get married this year, even on Dec. 31,
2013, you are considered to have been married for the entire year for tax
purposes. If both you and your spouse work, your combined income may place you
in a higher tax bracket. To make sure you are having enough taxes taken out of
your paychecks, check your withholding. The IRS Withholding Calculator will
help you figure the correct amount of withholding for a married couple. Making
a change to your withholding now can eliminate or reduce a tax bill when it’s
time to file your tax return. Use Form W-4, Employee’s Withholding Allowance
Certificate, to make the needed adjustments and give the form to your employer.
Step 3:
Let the IRS know your new address by completing IRS Form
8822, Change of Address. Mail the completed form to the address listed on Page
2 of this form.
Step 4:
The U.S. postmaster will also want to make sure the post
office has your correct address. So, don’t forget to notify U. S. Postal
Service when you move, so it can forward any IRS correspondence or refunds.
Step 5:
Just in case you forgot to invite your employer to the
wedding, make sure you let them know about any name and address changes. This
will ensure you receive your Form W-2, Wage and Tax Statement, after the end of
the year. Make sure banks or other payers that may send you year-end tax
statements have your updated name and address as well.
Step 6:
Select the right tax form. Choosing the right individual
income tax form can help save money. Newly married taxpayers may find that they
now have enough deductions to itemize on their tax returns. Itemized deductions
must be claimed on a Form 1040, not a 1040A or 1040EZ.
Step 7:
Choose the best filing status. A person’s marital status on
Dec. 31 determines whether the person is considered married for that year.
Generally, the tax law allows married couples to choose to file their federal income
tax return either jointly or separately in any given year. Figuring the tax
both ways can determine which filing status will result in the lowest tax, but
usually, filing jointly is more beneficial. When it comes to wedding planning,
details are important. Why not take these steps now to be sure your first tax season
as a married couple goes smoothly as well?
IRS Circular 230 Disclosure
Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication
Perform a Retirement Savings Check-up
Are you on track to save enough to
live the way you want to during your retirement? The middle of the year is a
good time to check whether you’re taking full advantage of all your retirement
savings opportunities because you still have the rest of the year to adjust
your contributions.
IRS Circular 230 Disclosure
Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication
Employer-sponsored retirement plan
Join the plan - If you haven’t
already, join your employer’s retirement plan as soon as you can to increase
your retirement savings. Many retirement plans have quarterly or semi-annual
entry dates.
Contact your employer immediately to
find out when you can participate in the plan, and then join on the next entry
date.
Salary deferral contributions - If
your employer’s plan allows you to contribute to the plan, remember that you
can decrease your taxable income by making pre-tax salary deferral
contributions. Many plans allow salary deferral elections to be submitted at anytime,
so review your contribution rate to ensure you are contributing as much as you
can.
The maximum annual salary deferral contributions
allowed for 2013 are:
•$17,500
to 401(k) or 403(b) plans
•$12,000
to SIMPLE plans
If you are 50 or older by the end of
the year, your plan may allow you to make additional catch-up contributions of:
•$5,500
to 401(k) or 403(b) plans
•$2,500
to SIMPLE plans
Your employer’s plan may match some
part of your salary deferral contributions. For example, your employer may
contribute 50 cents for each dollar that you contribute to the plan from your
salary up to a certain amount. Contact your employer for details and adjust
your salary deferrals to take full advantage of matching contributions.
Individual Retirement Arrangements
(IRAs)
For 2013, you may be able to
contribute to a traditional or Roth IRA the smaller of:
•$5,500
($6,500 if you are age 50 or older), or your taxable compensation for the year.
This is the most that you can contribute,
regardless of whether the contributions are to one or more traditional or Roth
IRAs or whether all or part of the contributions are nondeductible. Some
factors may limit or eliminate your ability to contribute to an IRA (for
example, your age, modified adjusted gross income, filing status and amount of
compensation). Also, the amount of traditional IRA contributions
that you can deduct from your taxable income depends on whether you or your
spouse were covered for any part of the year by an employer retirement plan if
your income is above certain thresholds. Remember, saving for retirement requires
planning! That is why you should periodically review your retirement savings
goals, savings options and annual contributions to maximize your retirement savings.IRS Circular 230 Disclosure
Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication
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