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Yearly Archives: 2010
IRS Presents: Five Tips to Avoid Tax Time Stress
Filing your tax return doesn’t have to be stressful. The IRS has put together five stress-relieving tips to help you.
1. Don’t Procrastinate Resist the temptation to put off your taxes until the very last minute. Rushing to meet the filing deadline may cause you to overlook potential sources of tax savings and will likely increase your risk of making an error.
2,. Visit the IRS Website In 2009, more than 296 million visits were made to IRS.gov. Make 1040 Central your first stop to learn the latest news and find answers to your questions.
3. File Your Return Electronically Last year, two out of three tax returns were filed electronically. More than 800 million tax returns have been processed safely and securely over the past 20 years. Use e-file and direct deposit to get your refund in as few as10 days. E-filed returns have a much lower error rate. Taxpayers receive a fast acknowledgement that the IRS received the return, a service not available to paper filers. You can e-file through your tax preparer or commercial software. Or, you can use Free File, a service offered by the IRS and private sector partners to prepare and e-file your federal return for free. Again, see IRS.gov for more information.
4. Don’t Panic if You Can’t Pay If you cannot pay the full amount of taxes you owe by the April 15th deadline, you should still file your return by the deadline and pay as much as you can to avoid penalties and interest. You should also contact the IRS to discuss your payment options at 1-800-829-1040. The agency may be able to provide some relief such as a short-term extension to pay, an installment agreement or an offer in compromise.
More than 75 percent of taxpayers eligible for an Installment Agreement can apply using the Web-based Online Payment Agreement application available on IRS.gov. To find out more about this simple and convenient process type “Online Payment Agreement” in the search box on the IRS.gov homepage.
5. Request an Extension of Time to File – But Pay on Time If the April 15 clock runs out, you can get an automatic six-month extension of time to file until October 15. However, this extension of time to file does not give you more time to pay any taxes due. If you have not paid at least 90 percent of the total tax due by the April deadline you may also be subject to an Estimated Tax Penalty. To obtain an extension, just file Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. The easiest way to file a Form 4868 is through Free File at www.irs.gov/freefile. Form 4868 is also available at IRS.gov or you can call 800-TAX-FORM (800-829-3676) and have a paper form mailed to you.
Links:
- Official Payments Corporation
- Link2Gov Corporation
- Electronic filing
- Free File
- Electronic payment options
- Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return (PDF)
Outline of the Tax Provisions of HR 4872 The Health Care and Education Reconciliation Act
By Stacie Clifford Kitts, CPA
Okay so earlier this week I talked about the passing of HR 3590 aka the Patient Protection and Affordable Care Act which is now a law known as P.L. 111-148.
However, the new law was amended yesterday by the passing of HR 4872 aka the Health Care and Education Reconciliation ACT. This new bill is on its way to the president’s desk for approval.
As the Journal of Accountancy points out, this new bill adds stuff that was not built-in to the Patient Protection Act.
If you need to get up to speed, you can check out my previous post which outlines the original tax provision here Outline of Health Care Act – Tax Provisions of HR 3590.
The following is a list of things that were changed or added. For a complete analysis, check out the J of A’s article.
- Premium Assistance Credit – Updated
- Excise Tax on Uninsured Individuals – Updated
- Adult Dependent – Updated
- Excise Tax on High Cost Employer-Sponsored Coverage Updated
- Medicare Tax on Investment Income ( I thought this one might be of particular interest to taxpayers so I have included the J of A’s analysis here- my take, this provision is likely to tick some folks off)
The Reconciliation Act added a new IRC § 1411 that imposes a tax on individuals equal to 3.8% of the lesser of the individual’s net investment income for the year or the amount the individual’s modified adjusted gross income exceeds a threshold amount. For estates and trusts, the tax equals 3.8% of the lesser of undistributed net investment income or adjusted gross income over the dollar amount at which the highest trust and estate tax bracket begins.
For married individuals filing a joint return and surviving spouses, the threshold amount is $250,000; for married taxpayers filing separately, it is $125,000; and for other individuals it is $200,000.
Net investment income is defined as income from interest, dividends, annuities, royalties and rents, other than such income derived in the ordinary course of a trade or business (however, income from passive activities and from a trade or business of trading in financial instruments or commodities is included in the definition of net investment income).
This provision applies to tax years beginning after Dec. 31, 2012.
- Economic Substance Doctrine – New
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Here is a calendar of dates related to the Act to know:
| Dates to follow | |
| January 1, 2010 | Small Business Tax Credit – For tax Years Beginning on or after 1/1/10 |
| July 1, 2010 | Tax on Indoor Tanning Services – For services on or after 7/1/2010 |
| January 1, 2011 | Tax on HSA Distributions – For tax years beginning on or after 1/1/2011 |
| January 1, 2011 | SIMPLE Cafeteria Plans for Business – For tax years beginning on or after 1/1/11 |
| January 1, 2011 | Charitable Hospitals – For payments made on or after 1/1/2011 |
| January 1, 2012 | Medicare tax on Investment Income – for tax years beginning on or after 1/1/2012 |
| October 1, 2012 | Fees on Health Plans – Beginning for plan years on or after 10/1/12 |
| January 1, 2013 | Medical Care Itemized Deductions Threshold -Beginning on 1/1/13 |
| January 1, 2013 | Additional Hospital Insurance Tax on High Income Taxpayers – For tax years beginning on or after 1/1/13 |
| January 1, 2013 | Flexible Spending Account – Tax years beginning on or after 1/1/13 |
| January 1, 2014 | Premium Assistance Credit – For years beginning on 1/1/14 |
| January 1, 2014 | Excise tax on Uninsured Individuals – Tax years beginning on or after 1/1/14, |
| January 1, 2014 | Reporting Requirements – Beginning on 1/1/14 |
| January 1, 2014 | Cafeteria Plans – Starting 1/1/14 |
| January 1, 2014 | Employer Responsibility – Beginning on 1/1/14 |
| January 1, 2018 | Excise Tax on High-Cost Employer Plans – For tax years beginning on or after 1/1/18 |
Stacie's Tax Stuff 