Los Angeles, California (PRWEB) April 13, 2013
There's still a few days of panic left, before the looming date of April 15th requires those not filing an extension to send in their personal tax returns. Many people worry about sending in the proper owed amount, along with the 1040 V, on an extension, but the important thing to remember is that any payment will automatically reduce the interest and penalty amounts. Also, as indicated by the Miami Herald, the IRS Free File system doesn't cost anything to use, so long as the Adjusted Gross Income (AGI) is $57,000 or less – even for Schedule C filers. A Fox article reported that the Free File system allows taxpayers to access software from a variety of tax preparation companies, but that downloads are unnecessary. Platinum Tax Defenders offers tips for those who still want to file by April 15th, but suggests that those needing back tax help may want to file an extension, giving themselves time to find a tax resolution firm.
E-filing has certainly overtaken sending in paper forms. Fox Business says that over 80% of 2012 returns are expected to be e-filed, and that 3 million of 2011 returns were e-filed via Free File. For those who truly cannot afford to consult with a tax resolution firm (or a tax preparation firm), but who need personal assistance, the IRS has arranged for Volunteer Income Assistance programs to be set up in libraries and other public areas. Sites can be found on the IRS website, or by calling (800) 906-9887.
IRA contributions are still an option until April 15th. There are rules about 401(k) contributions made toward an employer account, but singles under age 50 can contribute $5,000, and those over 50 can contribute $6,000. Each member of a married couple is allowed to contribute $5,000, says Hometown Life. Those earning less than $5,000 are only allowed to contribute up to the amount of your 2012 annual earnings, although that may raise questions at the IRS as to how you were able to live during the year. Of course, the magic AGI number for contributions is still for those making $58,000 or less during the year, or $112,000 or less for married couples. (See IRS Publication 590 for full details and exceptions, including work retirement plans.)
Some education credits and deductions tend to get overlooked, with the changes made by Congress. Taxpayers should remember that dependent children can count for $1,000 tax credit per child, and undergraduate children can count for a credit of up to $2,500 under the American Opportunity Credit, for up to four years. However, these credits don't apply for single parents with an AGI of $90,000, or married parents with an AGI of over $180,000, says Kiplinger.
Also, adults going back to school should know that employer-paid education is tax-free, up to $5,250, so long as the classes are not directly tied to work. Classes that are tied to work can still be lumped in with itemized deductions, so long as the amount is 2% or more of a taxpayer's AGI. Lifetime learners who have gone beyond the standard four years of college need not count their education a loss. Continuing education and graduate courses can count for up to $2,000, or 20%, of the first $10,000 paid. Again, the AGI limit for singles is $60,000, and married couples can't claim it after an AGI of $120,000. Also, scholarships tend to be tax-free, and student-loan interest is a deduction of up to $2,500, so long as the single taxpayer has an AGI of under $75,000, and the married couple's AGI is under $150,000.
Though there is a lot of confusion about what is and what isn't deductible on medical expenses, the IRS says both tax-deductible HSA contributions and standard medical deductions are still possible. Singles can contribute up to $3,100, couples can contribute up to $6,250, and those over 55 can add on an extra $2,000. If your medical bills are high enough to reach the 7.5% AGI mark, it's good to add these expenses to itemization.
Since taxes aren't just for the Federal government – state taxes are also due on April 15th – it can be easy to forget what can be deducted on state taxes and what only applies to a Federal 1040. For example, the IRS has said that only 7 states are allowed certain breaks on payroll taxes related to mandatory 'contributions', such as disability and unemployment. (The Miami Herald also pointed out that residents of Florida may be facing large tax bills for debt forgiveness on foreclosed homes.) State rules can be complicated. Platinum Tax Defenders encourages taxpayers who intend to file late, or especially those owing back taxes, to research tax resolution services that can help negotiate unresolved cases, or negotiate for tax relief and a payment plan.
Platinum Tax Defenders has a dedicated team of 10 professionals (including tax attorney s, CPA's and former IRS agents) with a ten-year track record of stopping bank levies and removing tax liens. Most initial consultations range from 20 to 45 minutes, in which a qualified tax resolution professional can examine the specifics of the situation and offer strategies for dealing with the IRS.
For more information from Platinum Tax Defenders on stopping property seizure and getting help with back taxes, call 1-877-668-1807 or send an email to info(at)tax-resolution(dot)me.