2011 Taxes - Free Online Tax Filing

Using Turbo Tax To Avoid A Tax Audit

February 2, 2012 – 2:03 pm

Turbo tax is a popular software package for filing income taxes accurately in order to avoid a potentially costly IRS audit. Audit letters arriving in the mail can be a significant source of anxiety and stress. Some of these notices are only to call the recipients’ attention to oversights such as a missed signature or a math mistake. More serious IRS letters address discrepancies in reported income or deductions.

In addition to a quality tax preparation software package, tax filers are also advised to gather their needed paperwork ahead of time and to keep a few important numbers in mind. Although the process may seem intimidating at first, Turbo Tax has plenty of resources on the company’s website available to get newcomers started.

IRS officials often report that most taxpayers using Turbo Tax are honest about filling out their returns and only make mistakes by oversight. The IRS also has a variety of screening processes to catch those who purposefully submit inaccurate tax information. The decision to audit a certain return often comes from examining certain computer data algorithms. The first main thing that IRS agents will look for in 2012 taxes is the presence of numbers that do not add up or that should not be entered in certain columns. The first step to an audit is known as a review examination in order to verify a submitted return’s overall accuracy. On average, only a small percentage of filed tax returns are subject to audit within a given year.

How Does The IRS Choose Who To Audit? (2012taxes.org)
Tax Filing Using Turbo Tax Is Easy (2012tax.org)

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By Steve | Posted in tax forms, Tax Preparation, TurboTax | Tagged Audit, internalrevenueservice, irs, tax, Tax Preparation, turbo tax, TurboTax, United States | Comments (0)

Pay Your Taxes On Unemployment Insurance Benefits

February 1, 2012 – 11:06 am

When filing your 2012 taxes, make sure you pay taxes on your unemployment insurance benefits.

While the rate of unemployment may be reducing, there are still millions of people who are unemployed. Sadly, these individuals also have to pay taxes on their unemployment insurance benefits.

If you are unemployed and you collected unemployment insurance benefits last year, you must pay taxes on it. After calculating your tax incidence, you will be surprised at the amount of tax you owe the government, unless you requested the federal government to withhold taxes.

The VP of Turbo Tax, Bob Meighan says that people still think that unemployment benefits are not taxable. While that might have been the case in 2009, congress reviewed that provision.

However, when filing your returns, you will find yourself in the lowest tax bracket because of your low income. In fact, you might also find yourself qualifying for several tax breaks.

Terry Lemons, I.R.S. spokesman says the agency encourages taxpayers to take advantage of things like earned income credit when they lose their jobs.

He also said that the agency encourages individuals to file their returns even if they do not have the money to pay their taxes. In such cases, taxpayers can benefit from installment agreements to pay their taxes.

Many households in the U.S are still recovering from the Great Recession of 2007 – 2009. According to government statistics, more than 13 million who are not employed have stopped looking for jobs because companies have not yet started recruiting new workers.

Fortunately, those who spent the better part of 2011 can get tax breaks on 2012 taxes.

Unemployment Insurance Is Taxable (2012tax.org)
Use Turbo Tax For Easy Tax Filing (2009taxes.org)

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By Steve | Posted in tax credits, Tax Law, Tax Preparation, TurboTax | Tagged Accounting, Bob Meighan, Federal government of the United States, internalrevenueservice, tax, turbo tax, TurboTax, unemployment, Unemployment Benefit, Unemployment benefits, United State, United States | Comments (0)

Who to Invest Your IRA With

January 26, 2012 – 3:13 pm

With all of the investment choices and terms thrown around in our markets today it can be very intimidating trying to find the best IRA account. if you do a search on the Internet for an IRA company you will be inundated with ads in all of them claim to have the best deals. However, picking the right company for your IRA investment dollars boils down to just a few simple items. The following should be helpful.

One of the biggest choices you will have when it comes to opening an IRA is whether or not you need investment advice. There’s no need to be ashamed if you need help with your choices. You will, however, end up paying more going to a full-service brokerage firm. The nice thing about a full-service brokerage is that many have local offices across the country where you can go and sit down and meet one-on-one. However, you should remember that no matter how friendly these investment reps are they are still commissioned salespeople. A better choice is often to spend a little money and hire a fee only investment adviser and let them decide what the best investments are for you and your risk tolerance. You can then use a discount mutual fund company or brokerage to buy the investments directly yourself nearly commission free.

If you are going to be doing your own investing then you will need to use individual stocks or mutual funds for your investment dollars. There really is no one good company which offers both low-cost stock trades and a good selection of low-cost mutual funds. For this reason, you will need to decide if you are going to use mutual funds or stocks. This will allow you to then choose the best company in their field. If you will be using a company which handles everything for you than this may not be of any concern.

The last, and most important, thing you need to remember when looking for an IRA company are the fees which will be associated with the account. There is no need to pay full service prices on stock trades when using individual stocks. Each time you trade or buy stocks or bonds you will pay a significant amount more on your trades if you do not use a discount broker such as Scottrade or TradeKing. For mutual funds there are a number of great companies whose management fees are much lower than the industry average. Always look for these low-cost fund companies and choose the one who has the greatest selection of funds to meet your investment goals. The reason this is so important is because extra fees will remove money from your account which could have been compounding for perhaps decades. Over time this can really add up.

How to Choose Your IRA CD Investment (2010tax.org)
Tax Carnival Ecstasy – January 24, 2012 (2012taxes.org)

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By Steve | Posted in Retirement Savings, tax forms, Tax Law, Tax Preparation, TurboTax | Tagged Brokerage firm, Credit card, Individual Retirement Account, invest, investment, IRA, Mutual fund, Scottrade, Stock broker, TradeKing, TurboTax | Comments (0)

Effective Tax Rate And 2010 Taxes What Is Real And What Is A Political Puzzle

January 26, 2012 – 11:17 am

Mitt Romney‘s 2012 taxes have been subject to extensive scrutiny and he has been cast a one of the wealthy elite. The truth is percentage wise he pays more in taxes than most American households, which is an effective tax rate.

The average middle class household may be taxed at thirty-five percent, but with deductions and other tax exemptions, a family making between fifty to seventy-five thousand dollars may only pay around six percent. Many families owe no taxes or pay extremely low taxes. Conversely, the tax rates for people making over one-million dollars per year is approximately nineteen percent. Many families in this country benefit from the same tax rates as Romney. Anyone who has investment income is taxed at fifteen percent. He does not belong to a special group with unique privileges; he is taxed at the same rate on capital gains, as any other investor. Tax rates can be interpreted in many ways to make them look as though someone is not paying their share. The truth can become obscured and a regular taxpaying citizen can be painted as a greedy capitalist. The average person works hard and the percentage of their income that goes to taxes is often examined carefully.

Mitt Romney pays his taxes and he may actually pay more than most citizens. The government is currently faced with a huge deficit, unemployment, and myriad economic problems. Instead of looking at his tax rate, people should look at his success rate and how he plans to move this economy forward.

Effective Tax Rate: Not As Simple As It Seems (2010tax.org)
Tax Carnival Ecstasy – January 24, 2012 (2012taxes.org)

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By Steve | Posted in Retirement Savings, Tax Law, Tax Preparation, TurboTax | Tagged 2010, effective, Middle class, Mitt Romney, Percentage, political, puzzle, rate, real, Romney, tax, Tax rate, taxes, TurboTax, United States | Comments (0)

Lower Capital Gains Taxes And 2012 Taxes Can Influence Voters

January 23, 2012 – 5:28 pm

The current capital gains taxes on investment income are fifteen percent. While the taxes on the middle class wages are around thirty-five percent. Mitt Romney admitted recently that he pays only fifteen percent on his total yearly income. The Occupy Wall Street movement has not faded from voters’ memories or the specter of the wealthy one-percent. Romney found himself identified as a member of this affluent group.

There has been serious debate as to whether lower capital gains taxes will help the economy. Top economists do not agree on the effect of lower taxes investment income. Some contend that lower taxes on investment income will generate economic growth. Other studies do not confirm there is a correlation between lower taxes and increased investment activity. Over the years capital gains tax has fluctuated from almost forty percent during the mid-seventies to the present fifteen percent. It is noted that savvy investors will not be deterred from a good investment opportunity, even when there is a higher tax rate. There is no suggestion that a higher investment income tax reduces investment activity.

A down market can shape investment activity, when it comes to the buying and selling of stocks. A major concern of the average American is whether the Romney’s of the world, pay their share of the taxes. High unemployment and a poor economy have the non-investors questioning their higher tax rates and 2012 taxes. Lowering the capital gains tax may not alter the market, but it may influence how people vote.

Top Tax Reduction Methods (2009tax.org)
Effective Tax Rate: Not As Simple As It Seems (2010tax.org)

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By Steve | Posted in Retirement Savings, tax credits, Tax Law, Tax Preparation, TurboTax | Tagged Capital gains tax, income tax, investment, Mitt Romney, Occupy Wall Street, Percentage, Romney, tax | Comments (0)

The Brownback Plan For 2012 Taxes Is Not Well Thought Out

January 20, 2012 – 4:00 pm

The Brownback plan for 2012 taxes has not been thought out very well by the Kansas Governor. Many of the people who are lower class income or below will see a rise in paying taxes, whereas those in a high class income will see higher tax cuts. These figures were produced by the Governor’s own Department of Revenue, showing that the plan will work like a Robin Hood movie in reverse, taking from poorer homes and giving to richer homes.

Brownback’s plan reduces the highest tax bracket to barely five percent, and leans heavily on eradicating tax deductions and credits, which includes home mortgage deductions, charity deductions, sales tax deductions, and earned income credits which benefit the poor by allowing them to keep more of the money they earn, to be used as is necessary. Increasing the price of taxes on the poorer and impoverished people while providing tax cuts to more affluent and wealthy people is wrong. There should be consistency in taxation policies, and one policy should evenly apply to all income classes.

The Kansas Governor, Sam Brownback, should have thought out a much better plan for the 2012 taxes, as it simply is not right to raise taxes on those that need their money, and it is not beneficial for them in any way. More affluent families can afford to pay more in taxes, as they have more money in general. This is an obvious point that should not be neglected when thinking up a tax plan.

Top Ten Most Overlooked Tax Deductions (2009taxes.org)
What are Our Income Taxes Used For? (2008taxes.org)

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By Steve | Posted in tax credits, Tax Law, Tax Preparation, TurboTax | Tagged brownback, internalrevenueservice, Kansas, Kansas Governor, Mortgage loan, Robin Hood, Sam Brownback, tax, Tax deduction, TurboTax, United States | Comments (0)

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