Friday, February 7, 2014
Summary DELAYED FUNDING - Today banks industry-wide experienced unusual funding patterns impacting a significant number of taxpayers. Funding arrived a day late for taxpayers that had an expected refund date of February 6th. Taxpayers in this group that requested an ACH direct deposit should see the refund in their bank account tomorrow or Monday for those that have confirmed deposit by the IRS (some may still be delayed according to IRS review procedures). CHECKS PRINTED - Despite the delay, TPG released check print records this morning and taxpayers were able to receive their check today. MORE CHECKS COMING MONDAY- It appears that taxpayers with an expected funding date of February 10th will receive their refund amount on time, so be prepared for a number of check print records on Monday. You may run the new "Checks to Print" report from our website Monday morning to see a list of checks that will be ready to print that day. We appreciate your patience during this busy part of the season, and we are doing everything possible to maintain our reputation for superior customer support and fast, reliable data processing.
Tuesday, February 4, 2014
To claim the Child Tax credit, you must determine if your child is eligible. There are seven qualifying tests to consider: age, relationship, support, dependent status, citizenship, length of residency and family income. You and/or your child must pass all seven to claim this tax credit. How to determine who qualifies Here’s how to determine which of your kids will qualify you for the credit: 1) Age Test To qualify, a child must have been under age 17 (i.e., 16 years old or younger) at the end of the tax year for which you claim the credit. 2) Relationship Test The child must be your own child, a stepchild, or a foster child placed with you by a court or authorized agency. An adopted child is always treated as your own child. ("An adopted child" includes a child lawfully placed with you for legal adoption, even if that adoption is not final by the end of the tax year.) You can also claim your brother or sister, stepbrother, stepsister. And you can claim descendents of any of these qualifying people — such as your nieces, nephews and grandchildren — if they meet all the other tests. 3) Support Test To qualify, the child cannot have provided more than half of his or her own financial support during the tax year. 4) Dependent Test You must claim the child as a dependent on your tax return. Bear in mind that in order for you to claim a child as a dependent, he or she must: 1) be your child (or adoptive or foster child), sibling, niece, nephew or grandchild; 2) be under age 19, or under age 24 and a fulltime student for at least five months of the year; or be permanently disabled, regardless of age; 3) have lived with you for more than half the year; and 4) have provided no more than half his or her own support for the year. 5) Citizenship Test The child must be a U.S. citizen, a U.S. national or a U.S. resident alien. (For tax purposes, the term "U.S. national" refers to individuals who were born in American Samoa or in the Commonwealth of the Northern Mariana Islands.) 6) Residence Test The child must have lived with you for more than half of the tax year for which you claim the credit. There are important exceptions, however: A child who was born (or died) during the tax year is considered to have lived with you for the entire year. Temporary absences by you or the child for special circumstances, such as school, vacation, business, medical care, military services or detention in a juvenile facility, are counted as time the child lived with you. (There are also some exceptions to the residency test for children of divorced or separated parents. For details, see the instructions for Form 1040, lines 51 and 6c, or Form 1040A, lines 33 and 6c.) 7) Family Income Test The child tax credit is reduced if your modified adjusted gross income (MAGI) is above certain amounts, which are determined by your tax-filing status. The phase out threshold is $55,000 for married couples filing separately; $75,000 for single, head of household, and qualifying widow or widower filers; and $110,000 for married couples filing jointly. For each $1,000 of income above the threshold, your available child tax credit is reduced by $50. What if the credit exceeds my tax liability? The Child Tax Credit is nonrefundable; if your credit exceeds your tax liability, your tax bill is reduced to zero and any remaining unused credit is lost. However, you may be able to claim a refundable Additional Child Tax Credit for the unused balance. You can find out if you're eligible for this refundable credit by completing the worksheet in IRS Form 8812. Remember, when you file your taxes with TurboTax, we’ll ask simple questions about you and your kids and figure out exactly how much of the Child Tax credit you’re eligible to receive.
Monday, January 13, 2014
Tax planning very rarely makes it on people’s new year’s resolution lists. But perhaps 2014 should be the year you vow to achieve a greater level of understanding about your taxes and to properly organize and plan for your liability.
Not only would this pledge make your life easier come tax season, it could also end up keeping more money in your bank account.
Here are some tips to get rolling on fulfilling this resolution:
Set up your 2014 tax file.
This could be an electronic file in which you scan documents and transactions throughout the year that will affect your tax return, or a folder or bin that holds the information.
The beauty of an electronic file is that at tax time you can simply e-mail it to your tax professional, who will likely also maintain the file in the event of an audit. Just make sure you have adequate back up of your data in case something goes wrong. Adding notes on the tax documents to aid your tax pro in understanding the transaction can help the filing process.
Examples of documents to store for tax purposes include: W2s, 1099s, K-1s, escrow papers for purchase, sale of refinance of properties, receipts for property tax and vehicle registration fees, receipts for other tax deductible items, and acknowledgement letters from donations made to qualified nonprofit organizations.
Schedule a mid-year tax planning appointment if your financial situation will change this year from last year.
If you plan to get married or divorced, buy or sell a home, start a family, or experience any other financially-altering event in 2014, it’s a good idea to meet with a professional to do some tax planning. However, I advise against scheduling a planning session at the height of tax season--your tax pro will likely get hysterical.
Make plans to fund your retirement plan.
If you have a retirement plan at work, check to see if you qualify to contribute more to the plan and to make sure you are taking advantage of an employer match.
If you have no retirement plan in place, open an IRA, ROTH IRA or other such plan. Your bank or investment house will be able to help you decide between various instruments to find one that best fits your financial situation. A tax professional can also weigh in on which type of savings vehicle would work best for a particular situation. This will not only reduce your current year tax liability, but it will help provide for your future. With so much uncertainty surrounding the viability of Social Security and Medicare (which experienced cuts this past year), it is important to look out for yourself.
Log estimated tax payments, log the dates and amounts into your calendar.
The IRS penalizes those who do not prepay their income tax liabilities in a timely manner. The dates for the four installments of your 2014 estimates for individuals filing on a calendar year basis are: April 15, June 16, Sept. 15, and Jan. 15, 2015.
Follow tax legislation news.
Tax law changes rapidly and what you may think is a valuable deduction or credit for your tax return may have been obliterated by a Congressional whim. I’ve encountered many disappointed clients who were counting on a credit or deduction that no longer exists.
Best wishes to you all for a happy, healthy, prosperous and tax-savvy new year!