Time is Running Short to Claim Your 2010 Refund
If you haven’t filed your 2010 federal tax return, you may still have time to claim your tax refund. The IRS has $917 million in unclaimed refunds from an estimated 984,000 tax returns that people didn’t file for the 2009 tax year. The IRS estimates that half the potential refunds for 2009 are more than $500.
Here are some things the IRS wants you to know about unclaimed refunds.
IRS Has $917 Million for People Who Have Not Filed a 2009 Income Tax Return
Haven't Filed a Tax Return in Years?: Refunds totaling just over $917 million may be waiting for an estimated 984,400 taxpayers who did not file a federal income tax return for 2009, the Internal Revenue Service announced today. However, to collect the money, a return for 2009 must be filed with the IRS no later than Monday, April 15, 2014.
The IRS estimates that half the potential refunds for 2009 are more than $500.
Some people may not have filed because they had too little income to require filing a tax return even though they had taxes withheld from their wages or made quarterly estimated payments. In cases where a return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund. If no return is filed to claim a refund within three years, the money becomes property of the U.S. Treasury.
For 2009 returns, the window closes on April 15, 2013. The law requires that the return be properly addressed, mailed and postmarked by that date. There is no penalty for filing a late return qualifying for a refund.
The IRS reminds taxpayers seeking a 2009 refund that their checks may be held if they have not filed tax returns for 2010 and 2011. In addition, the refund will be applied to any amounts still owed to the IRS or their state tax agency, and may be used to offset unpaid child support or past due federal debts such as student loans.
By failing to file a return, people stand to lose more than refund of taxes withheld or paid during 2009. In addition, many low-and-moderate income workers may not have claimed the Earned Income Tax Credit (EITC). For 2009, the credit is worth as much as $5,657. The EITC helps individuals and families whose incomes are below certain thresholds. The thresholds for 2009 were:
$43,279 ($48,279 if married filing jointly) for those with three or more qualifying children,
$40,295 ($45,295 if married filing jointly) for people with two qualifying children,
$35,463 ($40,463 if married filing jointly) for those with one qualifying child, and
$13,440 ($18,440 if married filing jointly) for people without qualifying children.
It's Tax Season The Office Is Open Monday-Sunday From 9am-9pm Individual and Business e-file
As a small business owner you need to understand how taxes are going to affect you and your business. It is important that you file properly, avoid audits, and claim the right tax deductions.
Here are a few tips that may ease the burden of tax preparation and to help you get ready for the April 15, 2013 deadline.
1. Keep Good Records: Proper record-keeping year-round is the first step to ensuring your taxes are filed accurately and that you have the paperwork you need to back-up your deduction claims should you be audited.
2. Understand Your Deductions: What small business deductions can you take? Do you have the documentation and original receipts to back them up? Tax credits and deductions change each year.
3. Utilize the Small Business Jobs Act Tax Provisions: The Small Business Jobs Act of 2010 signed into law by President Obama has over 17 tax provisions decreasing the tax burdens for small businesses--several of these provisions can be taken advantage of during this year's tax season. Utilizing these provisions will provide great savings for your business.
4. Remember the tax credits within the Affordable Care Act: These tax credits will allow small businesses to cover up to 35 percent of the premiums a small business pays to cover its workers. In 2014, the rate will increase to 50 percent.
5. Avoid Common Audit Traps: It is very important to be aware of potential red flags and act on them before the IRS does:
•Classifying Employees as Independent Contractors -- Independent contractors and employees are not the same, and it's important to understand the difference. In the eyes of the IRS, misclassification can be seen as an attempt to avoid payroll taxes, and non-compliance can bring penalties and back taxes.
•Home Office Deduction -- This deduction is very specific and not all home-based businesses will qualify. Likewise, if you run your business from a commercial location and claim the home office deduction, you might trigger some interest from the IRS. Know how to determine if you are eligible to claim it, and what specific expenses you can write off.
•Large Sum Miscellaneous Deductions -- If you claim a large amount of itemized deductions relative to your income, the IRS will get suspicious. Likewise, if you bucket a large amount of miscellaneous expenses, you may raise eyebrows. Be specific and label every deduction.
6. Keep Business and Personal Expenses Separate
The IRS scrutinizes personal expenses that may have been claimed as a business expense, such as the use of a business vehicle for personal use. Be diligent about keeping good records. Maintain a separate bank and credit card account for your business.
The IRS reviewed tax returns you prepared in the past year and found that many have a high percentage of traits they believe typically indicate errors on the Form 1040, Schedule C, Profit or Loss from Business (Sole Proprietorship).
This is the fourth year that the IRS is contacting selected tax return preparers nationally in an effort to improve the accuracy and quality of filed tax returns and to heighten awareness of preparer responsibilities. These contacts are another step in the IRS's increased efforts to ensure paid tax return preparers are assisting taxpayers appropriately.
Tax Return Preparation:
Don't worry: You found the right tax professionals. Our tax practice has been meeting and exceeding the needs of its clients in many aspects of tax return preparation. From the simplest to the most sophisticated financial transactions, including negotiations and settlements with the Internal Revenue Service and the States.
Whether you're a corporation with overseas operations or a business or individual needing to work out taxation of U.S. residents working abroad or foreign citizens working in the U.S., we can help you plot a course through cross-border taxation issues
Multi-national businesses have special challenges and risks, whether based inside or outside of the United States. Let us help you navigate such complicated issues as:
Expanding out of or into the US
Selecting the right holding company
Transfer pricing, planning and compliance
Sourcing of income and foreign tax credits
Intercompany agreements, including:
o Cost sharing and "offshoring" technology
o Contract research and development
o "Cost plus" arrangements
International tax audits
VAT and GST considerations
Foreign tax withholding and treaty issues
US compliance (Forms 5471, 1118, 5472, etc.)
Dividend repatriation policy
Cross-border mergers and acquisitions
Review of US multi-state consequences
FIN 48 analysis and reports
Expatriation Filings (I.R.S. form 8854) and related analysis
Every day the massive computer center at the IRS is getting more sophisticated, it's just a matter of time
before they catch up with you.
This is not a situation to take lightly; failing to file your tax returns is a criminal offense. If you do not file, you
can be prosecuted and punished with potential jail time, one year for each year not filed. Why risk
potentially losing your freedom for failing to file your tax returns!
Let us give you the peace of mind you deserve by helping you get in compliance with the law. If you
voluntarily file your delinquent returns you'll likely avoid further problems other than having to pay the
interest and penalties.
If you wait for the IRS to file your returns for you, they are filed in the best interest of the government,
usually with little or none of the deductions you are entitled to.
Before anything can be done to extract you from this predicament all the returns must be filed. You must be
current. In most cases, you will likely owe taxes, interest, and penalties after the returns are filed. Once we
see how much is owed, we'll set a course of action to get you off the hook!
Filing a past due return may not be as difficult as you think. Taxpayers should file all tax returns that are due, regardless of whether or not full payment can be made with the return. Depending on an individual's circumstances, a taxpayer filing late may qualify for a payment plan. All payment plans require continued compliance with all filing and payment responsibilities after the plan is approved. However, full payment of taxes saves you money.
Maria Elena Lopez, MS, MBA
4416 Georgia Avenue NW
Business Return Tax Check List
Gross receipts from sales or services
Sales records (for accrual based taxpayers)
Inventory (if applicable)
Items removed for personal purposes
Returns and allowances
Business checking/savings account interest
(1099-INT or statement)
Transportation and travel expenses
• Business trip (mileage) log
• Contemporaneous log or receipts for public
transportation, parking, and tolls
Travel away from home
• Airfare or mileage/actual expense if drove
• Meals, tips
• Taxi, tips
• Internet connection (hotel, Internet café etc.)
Commissions paid to subcontractors
File Form 1099-MISCand 1096 as necessary
Cost and acquisition date of assets
Sales price and disposition date of any assets sold
Employer-paid pension/profit sharing contributions
Employer paid HAS contributions
Employer-paid health insurance premiums
Cost of other fringe benefits
Casualty loss insurance
Errors and omissions
Mortgage interest on building owned by business
Business loan interest
Pens, paper, staples, etc
Office space rent
Business-use vehicle lease expense
Square footage of office space (hours of use for
Total square footage of home (not applicable for
Mortgage interest or rent paid
Wages paid to employees
Form W-2 and W-3
Federal and state payroll returns(Form 940, etc.)
Repairs, maintenance of office facility, etc
• Your social security number
• Your spouse's full name and social security number
• Amount of any alimony paid and ex-pouse's Social security number
• Add Your 2011, 2010, and 2009 tax return(s). Your Tax Professional can check them for accuracy
Other people who may belong on your return
• Dates of birth and social security numbers
• Childcare records (including the provider's ID number) if applicable
• Approximate income of other adults in your home (not spouse, if you're filing jointly)
• Form 8332, copies of your divorce decree, or other documents showing that your ex-spouse is releasing their right to claim a child to you
• Bills from the educational institution or anything else that itemizes what you paid or received loans for versus what was covered by scholarship or other financial aid
• Forms 1098-T and 1098-E, if you received them
• Scholarships and fellowships
• Forms W-2
• Forms 1099-MISC, Schedules K-1, income records to verify amounts not reported on 1099s.
• Records of all expenses -- check registers or credit card statements, and receipts
• Business-use asset information (cost, date placed in service, etc.) for depreciation
• Office in home information, if applicable
• Total miles driven for the year (or beginning/ending odometer readings)
• Total business miles driven for the year (other than commuting)
• Amount of parking and tolls paid
• If you want to claim actual expenses, receipts or totals for gas, oil, car washes, licenses, personal property tax, lease or interest expense, etc.
• Records of income and expenses
• Rental asset information (cost, date placed in service, etc.) for depreciation
• Pension/IRA/annuity income (1099-R)
• Social security/RRB income (1099-SSA, RRB-1099)
Savings and Investments
• Interest, dividend income (1099-INT, 1099-OID, 1099-DIV)
• Income from sales of stock or other property (1099-B, 1099-S)
• Dates of acquisition and records of your cost or other basis in property you sold
• Unemployment, state tax refund (1099-G)
• Gambling income (W-2G or records showing income, as well as expense records)
• Amount of any alimony received and ex-spouse's name
• Health care reimbursements (1099-SA or 1099-LTC)
• Jury duty records
• Hobby income and expenses
• Prizes and awards
• Other 1099
• Forms 1098 or other mortgage statements
• Amount of state/local income tax paid (other than wage withholding), or amount of state and local sales tax paid
• Real estate and personal property tax records
• Invoice showing amount of vehicle sales tax paid
• HUD statement showing closing date of home purchase
• Cash amounts donated to houses of worship, schools, other charitable organizations
• Records of non-cash charitable donations
• Amounts paid for healthcare insurance and to doctors, dentists, hospitals
• Amounts of miles driven for charitable or medical purposes
• Expenses related to your investments
• Amount paid for preparation of your 2010 tax return
• Employment-related expenses (dues, publications, tools, uniform cost and cleaning, travel)
• Job-hunting expenses
• Amount contributed for 2011 (and 2012, if applicable)
• Traditional IRA basis
• Value of IRAs on Dec. 31, 2011
If you were affected by a federally declared disaster
• City/county you lived/worked/had property in
• Records to support property losses (appraisal, clean up costs, etc.)
• Records of rebuilding/repair costs
• Insurance reimbursements/claims to be paid
• FEMA assistance information
• Check FEMA site to see if my county qualifies for individual assistance