Archives for February 2012

Waiting For Your Refund

As business owners and individuals send off their tax paperwork, millions of people are already counting the days until they receive a refund check. Getting money back from the IRS allows many families to afford large purchases like new appliances or vehicle repairs. The IRS does its best to return refunds within 10 to 21 days after receiving your income tax return. Tracking your refund is easy with the tools offered by both the IRS and state tax agencies.

The IRS offers a “Where’s My Refund” tool directly on their website. Consumers and businesses alike can use it to check the status of their return. Even if you are not owed a refund, the system will let you check if your return has been received and if it has been reviewed. You will need to enter sensitive data like your social security number and birth date to access the database. Be sure that you are using a private home computer to do this, and keep your antivirus software updated to prevent someone from stealing your identity. This tool also has some issues with updates during the peak period of tax filing, which falls between the beginning of March and the deadline in April.

Calling the refund system phone number allows you to access the same information without using a computer. You will input your SSN and other details through the touch pad on the phone. This lowers the risk of identity theft. Most states also offer automated hotlines with state refund information. No matter which way you access your refund information, there is no point in checking for information within an hour of filing. It takes 72 hours for a return processed through the e-File system to register in the database. It could take up to a week for a mailed return to reach the IRS and get manually entered into the system.

A correct tax return will secure you a speedy refund, so hire a professional tax accountant to prepare it for you. Small mistakes will delay your refund by weeks or months. Taking the wrong deductions can also lead to the hassle of an audit.

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Tax Deductions You Shouldn’t Overlook

As another tax season rolls around, many tax filers are scrambling to get receipts and forms together. However, the IRS typically sees many tax returns that have deductions that were not taken. Are you one that is letting these nuggets of financial savings disappear? Here are some tax deductions that you should not overlook this tax season.

 

Itemize Your Deductions Before Taking the Standard Deduction

Many choose standard deduction on the form without even checking to see if they can take the itemized deduction. Many lose money by this every year. Some good deductions include:

  • Sales Tax – which can be deducted if it is higher than the state and local income tax that the tax filer paid. You can write this off with the help of the IRS’s sales tax deduction estimator even if you didn’t keep receipts.
  • Mileage – which can be written off for the miles you drive for work and other work-related trips.
  • Mortgage Insurance Deduction – which can treat insurance on a mortgage just like regular home mortgage interest (which is also deductible). It has a few rules, so be sure to check out if you qualify for this one.

 

Look For Your Credits

Credits are a good way to decrease your tax owed. There are some credits that get overlooked, such as:

  • The Child Tax Credit – which gives up to $1,000 per qualifying child under 17 years of age. If you have a younger child, always check for this credit.
  • Earned Income Tax Credit – which is a credit that can be a refund if it is more than your tax liability.
  • Retirement Savings Contributions Credit – which helps those with low income save for retirement. Credits can be up to $1,000 individually or $2,000 jointly.

 

 

This 2012 there are a number of good items for tax filers that are all new from 2010. The personal exemption and dependent exemption went up $50, to $3,700. There is also an increase in the maximum of the earned income tax credit, from $5,600 to $5,751. Tax-bracket thresholds increased slightly to keep more people in a lower tax bracket. These are all nice little items that can help in today’s economy.

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