Monthly Archives: November 2011
Which IRS Form to File?
There are three types of 1040 forms for filing your tax return and your tax situation determines which form to use. It’s important to file the correct form to ensure that your return is processed quickly. Preparing your return with the help of tax preparation software is an easy way to make sure you are filing the right type of forms.
Form 1040EZ
Form 1040EZ is the simplest form to use, but it allows only the simplest types of tax returns. You can file Form 1040EZ if all the following are true:
Your filing status is single or married filing jointly.
You do not claim any dependents.
You do not claim any adjustments to gross income.
You do not claim any credits other than the Earned Income Credit.
You, and your spouse if filing jointly, are under age 65 and are not blind.
Your taxable income is less than $100,000.
You did not receive any advance Earned Income Credit payments.
You do not owe any household employment taxes on wages paid to household employees.
You are not a debtor in a Chapter 11 bankruptcy case filed after Oct. 16, 2005.
You are not claiming the additional standard deduction on Schedule L for net disaster losses or qualified motor vehicle taxes.
Your income is only from:
- Wages
- Salaries
- Tips (must be reported in boxes 5 and 7 of Form W-2)
- Unemployment compensation
- Taxable scholarships and fellowship grants
- No more than $1,500 in interest income
- Alaska Permanent Fund dividends
Form 1040A
You can file Form 1040A if all the following are true:
Your income is only from:
- Wages, salaries, tips
- Interest and ordinary dividends
- Capital gain distributions
- Taxable scholarship and fellowship grants
- Pensions, annuities and IRAs
- Unemployment compensation
- Taxable Social Security and railroad retirement benefits
- Alaska Permanent Fund dividends.
Your adjustments to income are only from:
- Educator expenses
- IRA deduction
- Student loan interest deduction
- Tuition and fees deduction
- You do not itemize deductions
- Your taxable income is less than $100,000
- You did not have an alternative minimum tax adjustment on stock acquired from the exercise of an incentive stock option
The only tax credits you claim are:
- Child and Dependent Care Credit
- Elderly or Disabled Credit
- Child Tax Credit
- Additional Child Tax Credit
- Education credits
- Retirement Savings Contribution Credit
- Earned Income Credit
Form 1040
If you do not qualify to file Form 1040EZ or Form 1040A, you will file Form 1040. All types of income, credits, deductions, and taxes can be reported on this form. You must use Form 1040 for any of the following:
- You have self-employment income (including farm income).
- You received $20 or more in unreported tips in any one month.
- You received income as a partner in a partnership, as a shareholder of an S corporation, or as a beneficiary of an estate or trust.
- You received dividends on insurance policies if they exceed the total of all net premiums you paid for the contract.
- Your taxable income is $100,000 or more.
- You itemize deductions.
- Your Form W-2, box 12, shows uncollected tax on tips or group term life insurance.
- Your Form W-2, box 12, shows a code Z.
- You owe excise tax on insider stock compensation from an expatriated corporation.
- You are a debtor in a Chapter 11 bankruptcy case filed after October 16, 2005.
- You have an alternative minimum tax adjustment on stock you acquired from the exercise of an incentive stock option.
- You owe household employment taxes.
- You are claiming the adoption credit or received adoption benefits from an employer.
- You are eligible for the Health Coverage Tax Credit.
- You are an employee and your employer did not withhold Social Security and Medicare tax.
- You had a qualified health savings account funding distribution from your IRA.
- You have a net disaster loss attributable to a federally declared disaster.
- You are eligible for the First-time Homebuyer Credit.
Most Overlooked Tax Deductions
| If you are one of the millions of Americans who throws all their receipts, credit card and bank statements into a box, you are likely to overlook hundreds of dollars in tax deductions when preparing your tax filings.Here are 25 deductible expenses you don’t want to overlook. 1. Medical transportation expenses including tolls, parking, and mileage for trips to doctor’s, health facilities, laboratories. 2. Prescribed medical aids such as crutches, canes, and orthopedic shoes 3. Hearing aids, eye glasses, and contact lenses 4. The cost of alcohol and drug abuse programs, and certain smoking-cessation treatments 5. Education expenses you paid to maintain or improve job skills (including professional books) 6. Professional journals, magazines, and newspapers that are job-related 7. Cost of safe deposit box used for to store investments or investment information 8. Required uniforms and work clothes not suitable for street wear 9. Union dues. 10. Job-seeking expenses within your present field of employment – from printing resumes to phone charges. 11. Dues to professional organizations and business gifts up to $25 per customer or client 12. Cellular phones required for business 13. If you are self-employed, half of the self-employment tax paid 14. Self-employed health insurance premiums and long-term care insurance premiums up to the annual limits. 15. Fees for tax preparation or advice, including software like TurboTax if you meet limits 16. Services of a housekeeper, maid, or cook needed to run your home for the benefit of a qualifying dependent while you work 17. Penalties paid on early withdrawal of savings 18. State income taxes owed from a prior year and paid in the tax year-with your last return 19. Mileage incurred in performing charitable activities 20. Gambling losses to the extent of your gambling winnings – but be prepared to document this 21. The cost of employment agency fees or commissions in certain cases 22. Home office expenses, if your home is your primary place of business 23. Cash and non-cash contributions to qualified charities 24. Reservist and National Guard overnight travel expenses 25. Worthless stock or securities – but you must follow the prescribed rules. |
First Rate Tax Preparation Services ®
At First Rate® Tax Services, we:
1. Respect:
We respect all our clients and strive to consistently do a superior job of satisfying the needs of every Tax Payer who places his or her trust in us by asking their income taxes for them.
2. Excellence:
We excel in meeting the needs of our clients, while treating all with courtesy, respect, honesty, and fairness. We always make sure you have the maximum Deduction and Credits you deserve on your Tax returns.
3. Quality:
We take pride in the accuracy, thoroughness, and quality of our work. We appreciate creative thinking and suggestions for better options of making our clients get the maximum tax benefits on their returns.
4. Efficiency:
We assume a sense of urgency in completing your Tax Returns by employing state-of-the-art Tax Preparation Software and always seeking the most prudent ways of getting our clients all the Tax Benefits they deserve.
“At First Rate® Tax Services, Maximum Tax Refund is a Guarantee”……………
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