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income tax returns

The IRS Has Over $1.1 Billion In Unclaimed Refunds

By //  by Khaleef Crumbley

The IRS has more than $1.1 Billion in unclaimed refunds for nearly 1.1 million people who did not file an income tax return for 2007. Many taxpayers may have chosen not to file a return because they did not earn enough income to require filing an income tax return, even though they had taxes withheld from their income. There are many reasons for you to file a return even when you are not required to do so.

How To Get Your Unclaimed Refunds

In order to recover your unclaimed tax refunds, you must file a return for tax year 2007. Taxpayers are given 3 years from the due date of a return in order to file – there are no late-filing penalties charged when a refund is due. Since the tax return deadline has been extended, you have until April 18, 2011 to file your 2007 return.

You may not feel like going through the trouble of filing an old return for a couple of dollars (I probably wouldn’t either), but…

The IRS estimates that half of these potential 2007 refunds are $640 or more.

If you fail to file a 2007 return by the deadline listed above, the money becomes property of the U.S. Treasury. Here is another lost benefit that you need to consider:

By failing to file a return, people stand to lose more than a refund of taxes withheld or paid during 2007. In addition, many low-and-moderate income workers may not have claimed the Earned Income Tax Credit (EITC). The EITC helps individuals and families whose incomes are below certain thresholds, which in 2007 were $39,783 for those with two or more children, $35,241 for people with one child, and $14,590 for those with no children.

There are a few things that you must know when filing a return for tax year 2007:

  • You will not be able to file an electronic return, although you will be able to request direct deposit
  • If you did not file a tax return for 2008 or 2009, your 2007 return will not be released to you
  • Your 2007 refund will be used to satisfy any outstanding debts owed to the IRS, unpaid child support, and any delinquent federal student loans
  • To be honest, if you any of the outstanding debt mentioned above, collecting an unclaimed refund from 3 years ago would be a great way to pay it off! This way, you don’t have to worry about taking out any unsecured loans! If you don’t have any of the above, then take a look at the IRA contribution limits and prepare yourself for retirement!

    Here is some final guidance that the IRS issued in order to make this process as easy as possible:

    Current and prior year Internal Revenue Service tax forms and instructions are available on the Forms and Publications page of IRS.gov or by calling toll-free 1-800-TAX-FORM (1-800-829-3676). Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for 2007, 2008 or 2009 should request copies from their employer, bank or other payer. If these efforts are unsuccessful, taxpayers can get a free transcript showing information from these year-end documents by ordering on-line, calling 1-800-908-9946, or by filing Form 4506-T, Request for Transcript of Tax Return, with the IRS.

    It may be helpful to look at your last year tax return as well.

    Hopefully, a few of the 1.1 million people who are due money will read this before the deadline – be sure to share this article with everyone that you know before then 😉 !

    photo by Salvatore Vuono

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    Filed Under: Taxes Tagged With: earned income tax credit, economy of the united states, government, income tax in the united states, income tax returns, internal revenue service, IRS, irs gov, irs tax forms, refund anticipation loan, refunds, tax refund, tax return, tax returns, tax withholding, taxation in the united states, Taxes, taxes form, unclaimed refunds, unclaimed tax refunds, united states

    What You Need To Know About Tax Exemptions And Dependents

    By //  by Khaleef Crumbley

    Some tax laws and guidelines affect every person who may have to file a return – this includes rules governing tax exemptions and dependents. Ever since I became involved in preparing taxes, I have noticed a lot of confusion regarding exemptions and dependents.

    Apparently, so has the IRS. Therefore, they have released a bulletin outlining six facts regarding tax exemptions and dependents that will help you when you file a tax return:

    Tax Exemptions And Dependents:

    1. Exemptions reduce your taxable income. There are two types of exemptions: personal exemptions and exemptions for dependents. For each exemption you can deduct $3,650 on your 2010 return.

    2. Your spouse is never considered your dependent. On a joint return, you may claim one exemption for yourself and one for your spouse. If you’re filing a separate return, you may claim the exemption for your spouse only if they had no gross income, are not filing a joint return, and were not the dependent of another taxpayer.

    3. Exemptions for dependents. You generally can take an exemption for each of your dependents. A dependent is your qualifying child or qualifying relative. You must list the social security number of any dependent for whom you claim an exemption.

    4. If someone else claims you as a dependent, you may still be required to file your own return. Whether you must file a return depends on several factors including the amount of your unearned, earned or gross income, your marital status, any special taxes you owe and any advance Earned Income Tax Credit payments you received. [Find out if you need to file an income tax return]

    5. If you are a dependent, you may not claim an exemption. If someone else – such as your parent – claims you as a dependent, you may not claim your personal exemption on your own return.

    6. Some people cannot be claimed as your dependent. Generally, you may not claim a married person as a dependent if they file a joint return with their spouse. Also, to claim someone as a dependent, that person must be a U.S. citizen, U.S. resident alien, U.S. national or resident of Canada or Mexico for some part of the year. There is an exception to this rule for certain adopted children. See IRS Publication 501 (opens a PDF),  Exemptions, Standard Deduction, and Filing Information for additional tests to determine who can be claimed as a dependent.

    Hopefully, these guidelines have helped you to develop a better understanding of exemptions and dependents. If you need more assistance, visit out tax help page. There you will find guides, articles, and other reference material related to this and other subjects!

    Once you are ready to prepare a return, be sure to contact us to set up an appointment for tax preparation. If you decide to file your own taxes, we recommend using TurboTax to do so.

    Be sure you are aware of the tax filing delay, as well as the fact that the tax filing deadline has been extended this year. To get the most out of your financial situation in 2011, you should know the IRA Contribution Limits, 401k Contribution Limits, and the Income Tax Rates for 2011!

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    Filed Under: Taxes Tagged With: dependents, earned income tax credit, economy of the united states, exemptions, finance, gross income, income tax in the united states, income tax returns, internal revenue service, irs tax forms, personal exemption, publication 501, standard deduction, tax, tax exemption, tax exemptions, taxable income, taxation in the united states

    Which Of The Free Tax Forms Should I Use To File?

    By //  by Khaleef Crumbley

    Many people are confused by the different free tax forms available to use. Of course, if you come to KNS Financial for tax preparation, then you won’t have to worry about finding free tax forms!

    Choose The Simplest Free Tax Forms For Your Situation

    In order to file a tax return, you will have to determine which form to use (unless you decide to e-file). Since the IRS is no longer mailing out paper tax packages to taxpayers, the choice will become that much more difficult!

    Because of this, the IRS has released the following guidelines to follow in order to determine which option is best for your tax situation when looking at the free tax forms:

    What To Look For When Choosing Your Free Tax Forms

    Use the 1040EZ if:

    • Your taxable income is below $100,000
    • Your filing status is Single or Married Filing Jointly
    • You and your spouse – if married — are under age 65 and not blind
    • You are not claiming any dependents
    • Your interest income is $1,500 or less

    Use the 1040A if:

    • Your taxable income is below $100,000
    • You have capital gain distributions
    • You claim certain tax credits
    • You claim adjustments to income for IRA contributions and student loan interest

    If you cannot use the 1040EZ or the 1040A, you’ll probably need to file using the 1040. Among the reasons you must use the 1040 are:

    • Your taxable income is $100,000 or more
    • You claim itemized deductions
    • You are reporting self-employment income
    • You are reporting income from sale of property

    Now that you know what to look for, here is a link to get the Internal Revenue Service Tax Forms that you need. If you don’t want to deal with the headache of checking these figures, then be sure to contact us for tax preparation!

    If you are brave enough to prepare your own income tax return, then I would recommend using TurboTax – this software will actually choose the correct paperwork for you!

    Be sure you are aware of the tax filing delay, as well as the fact that the tax filing deadline has been extended this year. Also, you should know the IRA Contribution Limits, 401k Contribution Limits, and the Income Tax Rates for 2011!

    photo by Arvind Balaraman

    Filed Under: Taxes Tagged With: economy of the united states, finance, forms, free tax, income tax in the united states, income tax returns, internal revenue service, internal revenue service tax forms, irs tax forms, itemized deduction, self employment, tax credits, tax filing, tax preparation, tax return, tax returns, taxable income, taxation in the united states, Taxes, taxes form, turbotax, united states, which one

    Do I Need To File An Income Tax Return?

    By //  by Khaleef Crumbley

    By this time, most people should have received all of the necessary tax forms in order to prepare their income tax return. Many people have questions about various deductions, credits, and exemptions. However, there are a large number of people who never get that far, because they have one major question: Do I need to file an income tax return?

    Well, the IRS has provided a couple of resources to help you understand if you need to prepare a tax return.

    What Determines If I Need To File An Income Tax Return?

    According to the IRS, “you must file a federal income tax return if your income is above a certain level”. How do you know what that “certain” level is? Well, that varies depending on a few factors:

    • Your Filing Status

    • Your Age at the End of the Tax Year

    • The Type of Income You Receive

    Is There An Easy Way To Determine If I Need To File An Income Tax Return?

    There are two main methods that the IRS lists that you can use to figure out if you must prepare a return:

    1. Check the Individuals section of the IRS website or consult the instructions for Form 1040 (opens PDF), 1040A (opens PDF), or 1040EZ (opens PDF) for specific details that may help you determine if you need to file a tax return with the IRS this year.

    2. Use the Interactive Tax Assistant available on the IRS website to determine if you need to file. The ITA tool is a tax law resource that takes you through a series of questions and provides you with responses to tax law questions.

    If you have determined that you have to prepare a return, then be sure to contact us to set up an appointment for tax preparation. If you decide to file your own taxes, we recommend using TurboTax to do so. Also, keep in mind that there are many benefits when you file a tax return, even when you are not required to do so.

    Be sure you are aware of the tax filing delay, as well as the fact that the tax filing deadline has been extended this year. Also, you should know the IRA Contribution Limits, 401k Contribution Limits, and the Income Tax Rates for 2011!

    photo by JD Hancock

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    Filed Under: Taxes Tagged With: economy of the united states, federal income tax return, file, filing, government, income, income tax, income tax in the united states, income tax returns, internal revenue service, irs tax forms, return, social issues, tax filing, tax preparation, tax protester statutory arguments, tax return, tax returns, taxation in the united states, Taxes, taxes form, turbotax, united states

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