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Picking Apart the IRS’ Top 10 Tax Time Tips

January 10, 2011 1:51 pm / 2 Comments on Picking Apart the IRS’ Top 10 Tax Time Tips

By Stacie Clifford Kitts, CPA

The IRS has started their seasonal “Tax Tip” campaign. I do like these tips. They cover many of the general questions that taxpayers ask. In the interest of having a little fun, let’s pick apart Tax Tip 2011-01

Start gathering your records – I agree. Waiting to the last minute can cost you deductions. Lost receipts or forgotten documents are the bane of tax preparation. Give yourself time to get it together before the filing deadline gets here.
Be on the lookout for w-2 and 1099’s – well duh IRS, this kind of falls into item number 1 don’t ya think? If you are owed a 1099 or W2, these are delivered or mailed to you by January 31, 2011. So if it’s March and you don’t have your forms, better start making some calls because something is wrong.
Use free file – This option is cool, but a bit deceiving. Free file is a great product to prepare your federal income return if your income is less than $58,001. Free file is sponsored by brand name – for profit- tax software companies. So keep in mind, you still pay for the use of the software when you prepare your state tax return (only the federal part is prepared for free).
IRS e-file – Personally I like efiling. It is convenient, fast, accurate, and paperless. Besides, here’s a heads up, E-file is mandatory for some taxpayers. It’s a new age, time to get on the ball and accept modern technological advances.
Consider other filing options – Yes there are other options – you could prepare your return yourself (not recommended). And, if you qualify, there are ways to get your return filed that don’t cost money. Consider checking out your local VITA program. The IRS Volunteer Income Tax Assistance Program (VITA) and the Tax Counseling for the Elderly (TCE) Programs offer free tax help for taxpayers who qualify.
Consider direct deposit – I still get taxpayers who want to have their refund checks mailed to them. I can’t really get my head around this one. Generally, there isn’t a good reason to have a check mailed versus having your refund direct deposited.
Visit the IRS website again and again – okay, lots of helpful information here. No reason not to. I say, do it.
Remember to checkout IRS publication 17. Well, yes if you want to learn all about income tax by all means here is a publication that will help. Helpful stuff includes: a) What’s new for 2010, b) Reminder, c) When you should file a return, d) When to paper file vs. efile, c) Yada yada yada
Review! Review! Review! – Well ya check for mistakes. But people really, if you’re not a tax expert, you really aren’t going to know if you blew it. Might I suggest you have a tax professional review your return before you file.
Don’t panic! – Unless you want too of course – or waited until the last minute. When all else fails, the IRS says you can give them a call at 800-829-1040.

Tax tip: It’s time to get started; here’s a few things you can do (seattletimes.nwsource.com)
Some Tax Payers Will Need to File Their 1040 Later Rather Than Sooner This Coming Filing Season (staciesmoretaxtips.wordpress.com)
Important 2011 tax filing deadlines: Jan. 14, mid-February, April 18, Oct. 17 (dontmesswithtaxes.typepad.com)
IRS Delays Start of Filing Season for Some Taxpayers (businessweek.com)

IRS Presents:Ten Things Tax-Exempt Organizations Need to Know About the Oct. 15 Due Date (This is a how to on keeping your exempt status)

October 7, 2010 4:59 pm / 3 Comments on IRS Presents:Ten Things Tax-Exempt Organizations Need to Know About the Oct. 15 Due Date (This is a how to on keeping your exempt status)

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Stacie says: This tax tip is some particularly good information from the IRS for tax exempt organizations to help them keep their exempt status. The time period to fix your delinquent Form 990 filings for years 2007, 2008 or 2009 will expire on October 15. That’s just a few more days. You are encouraged to take advantage and keep your tax exempt status.

A crucial filing deadline of Oct. 15 is looming for many tax-exempt organizations that are required by law to file their Form 990 with the Internal Revenue Service or risk having their federal tax-exempt status revoked. Nonprofit organizations that are at risk can preserve their status by filing returns by Oct. 15, 2010, under a one-time relief program.

The Pension Protection Act of 2006 mandates that most tax-exempt organizations must file an annual return or submit an electronic notice, with the IRS and it also requires that any tax-exempt organization that fails to file for three consecutive years automatically loses its federal tax-exempt status.

Here are 10 facts to help nonprofit organizations maintain their tax-exempt status.

Small nonprofit organizations at risk of losing their tax-exempt status because they failed to file required returns for 2007, 2008 and 2009 can preserve their status by filing returns by Oct. 15, 2010.

Among the organizations that could lose their tax-exempt status are local sports associations and community support groups, volunteer fire and ambulance associations and their auxiliaries, social clubs, educational societies, veterans groups, church-affiliated groups, groups designed to assist those with special needs and a variety of others.

A list of the organizations that were at-risk as of the end of July is posted at IRS.gov along with instructions on how to comply with the new law.

Two types of relief are available for small exempt organizations — a filing extension for the smallest organizations required to file Form 990-N, Electronic Notice and a voluntary compliance program for small organizations eligible to file Form 990-EZ, Short Form Return of Organization Exempt From Income Tax.

Small tax-exempt organizations with annual receipts of $25,000 or less can file an electronic notice Form 990-N also known as the e-Postcard. To file the e-Postcard go to the IRS website and supply the eight information items called for on the form.

Under the voluntary compliance program, tax-exempt organizations eligible to file Form 990-EZ must file their delinquent annual information returns by Oct. 15 and pay a compliance fee.

The relief is not available to larger organizations required to file the Form 990 or to private foundations that file the Form 990-PF.

Organizations that have not filed the required information return by the extended Oct. 15 due date will have their tax-exempt status revoked.

If an organization loses its exemption, it will have to reapply with the IRS to regain its tax-exempt status and any income received between the revocation date and renewed exemption may be taxable.

Donors who contribute to at-risk organizations are protected until the final revocation list is published by the IRS.