Taxes: How To Obtain Information You May Need

When filing their 2011 taxes a taxpayer may need to look at their past tax return for a vital piece of information.   This information is available from the Internal Revenue Service.   When attempting to obtain this information there are certain criteria you must know.

  1. The IRS offers three ways to obtain this information.   You may ask for it in a written letter, search for it online or you may call them by phone.  You can also obtain forms to file your 2011 taxes through these options.
  2. This is a free service for a transcript and records are available from the IRS from as far back as the last three previous years.
  3. This transcript will only be for the original tax form filed with any attachments that were included.  If you filed a corrected return this will not show on the transcript.
  4. You can request a tax account transcript that will reflect any changes made after the initial filing.  These transcripts will reflect personal information, schedule of tax return and your adjusted gross income.
  5. This information can be obtained by logging on to www.IRS.gov.  On the left side of the webpage under online services you will find a tool  a link called Order Tax Return or Account Transcript or if you prefer to call the toll free number is 800-908-9946.  You will receive a voice prompt that will guide you to what you need.   These options take about 5-10 business days to receive your transcripts.
  6. If you like doing everything in writing and have time to wait 30 days for this transcript you can request the forms by mail.  You will need to use Forms 4506T or 4506T-EZ to order by mail.
  7. To receive copies of returns older than 3 years old, you will need to complete the Form 4506 and mail it with $57 to the Internal Revenue Service listed or your area.  It is recommended that you allow 60 days to receive these returns.
  8. You can obtain the printable forms you need to request a transcript at the IRS’ website or call and request them from 800-TAX-FORM.

The Internal Revenue Service has made obtaining copies of your tax returns easy by following these suggestions.   If you need a past tax return for information requested on your 2011 taxes, everything you need is available and easily obtainable through three simple options.

Tax Tips for Consultants

Finding the right tax tips for consultants can sometimes be the difference between success and failure. Taxes can be a painful and expensive part of doing business as an entrepreneur. The government will always get its portion, but knowing the rules and making the most of them can help reduce the amount that has to be paid when April rolls around.

Becoming aware of certain tax benefits can give consultants and other entrepreneurs the needed boost to finances. It is always a good idea to take some time to talk to a tax professional to be sure that all possible angles have been covered and all regulations have been meet when it comes to dealing with the tax code.

Top Tax Tips for Consultants

1. Working from home means a wide range of things to entrepreneurs. To make the most of tax deductions, it is important to set aside a space that is used for the business. Having a designated office space will allow the entrepreneur to deduct a portion of household expenses (including mortgage payments, electric bills, and even housekeeping) that is equal to the portion of the house dedicated to the business. Measure out the office space and get that figure, along with the total square footage of the home, to the accountant.

2. Technology can do more than help run a business. The cost of doing things in this day and age can also serve as major tax deductions for consultants. Internet service, cell phone connections and even television may all be candidates for tax deductions for consultants. The major issue is always whether or not the service, space or product is used mainly or in its entirety for the business. Personal use of an item or space will decrease the amount of the value that can be used towards a tax deduction.

3. Many work from home consultants choose the path in order to care for their children in the home. It can still be a benefit to deduct some expenses that might be associated with childcare. When a business person hires someone to work in the home to help care for the children in order to free up time to work, that employment can usually be deducted as a business expense. Even day camps, that go on while the parent is working, can be deducted in the same percentage as traditional childcare.

4. Equipment deductions and credits are still available for many businesses. Special exemptions have been made to allow small businesses to expand. The cost of expansion can be calculated into a tax credit when taxes are filed in the New Year. Equipment can also be deducted in full, or may have to be deducted over the life of the equipment (usually five to ten years). Keep in mind that the income from sales of equipment that has been used for deductions will count into the gross income of the business for the year that it sold.

5. Mileage costs can add up for consultants. Driving to meeting or even just to the post office can drive up the cost of doing business. Investing in a log that helps keep track of ever trip and any additional costs associated with the trip (like meals) will make it possible to use the mileage on tax forms that could result in large deductions for the business.

The more funding that a business can save through credits and deductions then the more potential earnings that may be discovered. Changing a few techniques can save big money for entrepreneurs. The right tax tips for consultants can be the difference between financial success and monetary ruin for a business.

Mark has been in personal finance for 4 years, he currently blogs about the best places to find an online insurance quotes.

Simplifying Monthly Business Accounting With Tax Software

When ever tax time rolls around, our eyes glaze over with questions about business expenses and deductions: Can she write off this short sleeved shirt? What about that business lunch a couple months ago? And then there’s the question of his XXXL shirts you put the company logos on. This it the point at which the need for some good business technology becomes obvious.

Various software programs are available for download for businesses to use.  Bookkeeping and tax software makes monthly business accounting easy.  This software will aid the bookkeeper or accountant in recording the businesses various financial transactions in the correct ledger, including payments, revenues, sales, and purchases.

A company has the choice of high-cost, low-cost, or even free software for their accounting and bookkeeping management.  The software chosen needs to have all the basic functions businesses will need and should incorporate the utilities needed for accounting, business taxes, and payroll. The program should include modules to assist businesses in creating monthly budgets, follow the progress of projects or jobs, and help with scheduling recurring payments.

It should have a section to help manage the bank transactions and credit card transactions.  There needs to be a component for tracking and paying bills along with a module for payroll management that assists with federal and state tax calculations.  It might include an element devoted to accounts receivables that help in creating invoices and estimations, calculating sales taxes and automatically calculate the full amounts due.

A reporting function would disclose to the business owner all financial transactions. The program chosen by any business should support both of the two major forms of accounting that businesses can use.  There is the Cash Basis and Accrual Method.  Service businesses generally operate on the Cash Basis Method and Manufacturing or Inventory businesses usually operate on the Accrual Method.

The software should also help a business in establishing internal controls to establish procedures for tracking all income and payments to prevent fraud, waste, or carelessness.  Making the right choice in the bookkeeping and tax software is essential and can help the business to function successfully.

What to Look for in Online Tax Prep and Filing Software

What to Look for in Online Tax Prep and Filing Software

This April, you may reduce your time it takes to file your taxes by utilizing computer software designed for filing your returns online.

You are not alone. Many people file tax returns online; according to last year’s record from IRS, the total electronically filed tax returns was more than 68 million, out of which around 17 million taxpayers filed their returns online themselves.

Debra Gray said that e-filing of your returns and online tax preparation offer lot of benefits but it require some homework on the part of the … Read more at 2011 Taxes.

What to Look for in Online Tax Prep and Filing Software

This April, you may reduce your time it takes to file your taxes by utilizing computer software designed for filing your returns online.

You are not alone. Many people file tax returns online; according to last year’s record from IRS, the total electronically filed tax returns was more than 68 million, out of which around 17 million taxpayers filed their returns online themselves.

Debra Gray said that e-filing of your returns and online tax preparation offer lot of benefits but it require some homework on the part of the individual.

Gray points out certain questions worth looking asking:

Is the software secured and easy to work with?

As there is no need for downloading, it saves time to work with internet-based software. But certain things that you should make sure of in the beginning are whether the program is easy to use, whether the information can be organized properly, whether it provides complete support resources for the process, and most importantly whether it has proper security standard to encrypt your data.

Is it comfortable for you to work with it?

Normally the online tax prep sites password-protect your work. Also see whether the program can automatically check for certain minor errors and is able to provide suggestive corrections for some major mistakes.

After you’ve filed, what happens to your return?

You should also make certain that the program can maintain previous year’s record of your return filing so that you can go back there and check for some useful information.

Does it show clearly the cost of your tax preparations and filing?

Sometimes it is not so easy to navigate the pricing structure of many tax software providers; some of them offer free filing and others have a price tag mentioned, but normally they do not clearly indicate the added costs for the completion of a state tax return. As Gray points out, it’s better to find out a good do-it-yourself tax program in order to prepare your taxes yourself, and it should be available for below $40 which includes costs for both federal and state tax return preparation and filing.

Is there any payment and refund option?

There are some web sites that allow you to directly deposit the refund amount to your bank account after deducting the costs of using the software.

Is there any help and support system?

Ideally, the program needs to be straightforward; but for your own convenience, you should make sure that it provides live help and support through chatting or e-mail.

Gray said, "Taxpayers should have a look at the new features coming with the latest tax software this year as they might have become frustrated by filing their tax returns on paper or using the old online tax programs." He also added, "It’s not the way many people like to spend time by preparing for taxes, but if they are accessed to the right tools, then online return filing could be easy as well as time-saving. Moreover, they might even learn new tips for saving money on taxes."

The 52 Cent Mistake: Will You Do It Again?

The 52 Cent Mistake: Will You Do It Again?

With regard to your tax return filing, it could be the big mistake you would ever spend 52 cents on. Many people send their income tax return through general mail by sticking a 52-cent stamp on the envelope. And every year many taxpayers are committing this mistake. Why am I saying it is a mistake to put your tax return in a mailbox? I will explain. It’s a fact that every year, a fraction of the mail goes undelivered. Even though the postal service does not admit it, this is … Read more at 2011 Taxes.

The 52 Cent Mistake: Will You Do It Again?

With regard to your tax return filing, it could be the big mistake you would ever spend 52 cents on. Many people send their income tax return through general mail by sticking a 52-cent stamp on the envelope. And every year many taxpayers are committing this mistake. Why am I saying it is a mistake to put your tax return in a mailbox? I will explain. It’s a fact that every year, a fraction of the mail goes undelivered. Even though the postal service does not admit it, this is true. Moreover, in case your return thus sent is delivered, still there is the chance that your tax return might get misplaced by the IRS; the IRS loses a fraction of the paper tax returns every year. What, you don’t trust me? I can never forget one client of mine showing me a letter one day from the IRS which stated the following:

“We deeply regret the loss of your return…even though we received it…”

Whether you believe or not, it’s a fact!

My question is very simple: If it happens to you, what will you do?

In case your tax return does not reach the IRS, or even if it reaches, and then gets lost out there somehow, will you be able to prove later that you actually filed your return and mailed it to them?

You can call the IRS and say that you filed on time and sent the return for sure, but that hardly proves anything, right? It will remain a burden for you to prove that you actually mailed your returns to the IRS.

This dangerous problem can be solved in two ways:

(A) Go for electronic filing.

The benefits of e-filing are as follows:

  • Accuracy: It reduces a lot of human error when you e-file your return, your document has to pass many accuracy tests for security reasons. The returns that are e-filed are subject to this type of scrutiny at the very initial stage.
  • Security: As it is a paperless transaction, a unique electronic signature of the owner is created.
  • Speed: It normally takes around 6 to 8 weeks for a refund in case of a paper return. But in case of an e-filed return, refund can be expected within 10 working days.
  • Acceptance proof: You should definitely focus on this benefit. Within just 48 hours of e-filing your returns, the IRS sends you an electronic acknowledgement of the acceptance of your return.

Great! You’ve received the proof of filing your return. I think it’s enough!

E-filing has nowadays become a preferred method to file your returns. But as most people are still using the paper way of filing returns, this second method of avoiding the problem of “lost return” becomes important.

(B) In case you prefer paper filing, then spend around $ 4.25 in the post office and send your mail through certified mail, requesting for a return receipt.

This will serve two important purposes:

(i) The certified mail costing $ 2.40 provides you proof of mailing the return, as well as proof of date sent.

The IRS considers a paper return to be filed legitimately in cases where it is mailed on time in an envelope properly addressed and which has a postmark dated earlier than the due date. In the case of certified mail, you always receive a receipt that is postmarked by the post office. So, in case of any mishap, like the return getting lost, or at any time if IRS asks whether it was mailed on time or not, you will be able to show documentation to prove it was. Moreover certified mail is easily tracked.

(ii) Another insurance will be your return receipt. For another $ 1.85, the IRS is prompted to sign a receipt at the time of delivery of the letter. Then this receipt will be mailed back to you which will become further proof that IRS received your returns.

Certified mail is enough to prove that the return was mailed. The return receipt gives you an added insurance that the IRS actually received the mail. It will also tell you the exact date of receipt. This means you have the proof of delivery.

Why should you take the risk of your tax return getting lost on the way? Also it is advisable not to take on the risk of your tax return getting lost under piles of papers at the IRS. This is something worth thinking about. There are more than 100 million income tax returns filed each year that are prepared on paper and mailed to the IRS through the post office.

The IRS and the post office staff are only hard-working human beings. And they are always prone to making mistakes. If you don’t want a mistake to be made with your returns, it is advisable not to put your valuable tax returns in the uncertain mailbox.

The best way is to e-file it; otherwise you should send it through a certified mail, request a return receipt. You definitely won’t regret it later.