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Some taxpayers might need to amend a tax return…here’s what they should know

Taxpayers may discover an error after filing their tax return. They shouldn’t panic, they just need to correct it by filing an amended tax return.

Here are some common reasons to file an amended return:

Using the wrong filing status
Entering income incorrectly
Not claiming credits for which they’re eligible
Claiming deductions incorrectly

The IRS may correct math or clerical errors on a return and may accept returns without certain required forms or schedules. In these instances, there’s no need for taxpayers to amend the return.

Taxpayers who do need to amend their tax return might have questions about how to do so. Here are some things they should know. The taxpayer should:

Complete paper Form 1040-X, Amended U.S. Individual Income Tax Return. Taxpayers must file an amended return on paper even if they filed the original return electronically.
Mail the Form 1040-X to the IRS address listed in the form’s instructions under Where To File. Taxpayers filing Form 1040-X in response to an IRS notice should mail it to the IRS address indicated on the notice.
Attach copies of any forms or schedules affected by the change.
File a separate Form 1040-X for each tax year. Mail each tax year in a separate envelope and enter the year of the original return being amended at the top of Form 1040-X.
Wait – if expecting a refund – for the original tax return to be processed before filing an amended return.
Pay additional tax owed as soon as possible to limit interest and penalty charges.
File Form 1040-X to claim a refund within three years from the date they timely filed their original tax return or within two years from the date the person pays the tax – usually April 15 – whichever is later.
Track the status of an amended return three weeks after mailing using Where’s My Amended Return? It can take up to 16 weeks for the IRS to process an amended tax return.

For Small Business Week: Backup withholding rate now 24 percent, bonuses 22 percent; workers urged to do a Paycheck Checkup

WASHINGTON — The Internal Revenue Service today reminded small businesses that recent tax reform legislation lowered the backup withholding tax rate to 24 percent and the withholding rate that usually applies to bonuses and other supplemental wages to 22 percent. The agency also urged employers to encourage their employees to check their withholding using the IRS Withholding Calculator. [Read more…]

Tips for Taxpayers Who Need to Amend a Return

Some taxpayers may need to amend their tax return

Taxpayers who discover an error after filing may need to amend their tax return. Taxpayers should file an amended return if there’s a change in filing status, income, deductions or credits.

The IRS may correct mathematical or clerical errors on a return. They also may accept returns without certain required forms or schedules. In these instances, there’s no need to file an amended return. [Read more…]

Ten things for taxpayers to think about when choosing a tax preparer

Ten things for taxpayers to think about when choosing a tax preparer

It’s the time of the year when many taxpayers choose a tax preparer to help file a tax return. These taxpayers should choose their tax return preparer wisely. This is because taxpayers are responsible for all the information on their income tax return. That’s true no matter who prepares the return.

Here are ten tips for taxpayers to remember when selecting a preparer:

Check the Preparer’s Qualifications. People can use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This tool helps taxpayers find a tax return preparer with specific qualifications. The directory is a searchable and sortable listing of preparers.
Check the Preparer’s History. Taxpayers can ask the Better Business Bureau about the preparer. Check for disciplinary actions and the license status for credentialed preparers. For CPAs, people can check with the State Board of Accountancy. For attorneys, they can check with the State Bar Association. For Enrolled Agents, taxpayers can go to the verify enrolled agent status page on IRS.gov or check the directory.
Ask about Service Fees. People should avoid preparers who base fees on a percentage of the refund or who boast bigger refunds than their competition. When asking about a preparer’s services and fees, don’t give them tax documents, Social Security numbers or other information.
Ask to E-File. Taxpayers should make sure their preparer offers IRS e-file. The quickest way for taxpayers to get their refund is to electronically file their federal tax return and use direct deposit.
Make Sure the Preparer is Available. Taxpayers may want to contact their preparer after this year’s April 15 due date. People should avoid fly-by-night preparers.
Provide Records and Receipts. Good preparers will ask to see a taxpayer’s records and receipts. They’ll ask questions to figure things like the total income, tax deductions and credits.
Never Sign a Blank Return. Taxpayers should not use a tax preparer who asks them to sign a blank tax form.
Review Before Signing. Before signing a tax return, the taxpayer should review it. They should ask questions if something is not clear. Taxpayers should feel comfortable with the accuracy of their return before they sign it. They should also make sure that their refund goes directly to them – not to the preparer’s bank account. The taxpayer should review the routing and bank account number on the completed return. The preparer should give you a copy of the completed tax return.
Ensure the Preparer Signs and Includes Their PTIN. All paid tax preparers must have a Preparer Tax Identification Number. By law, paid preparers must sign returns and include their PTIN.
Report Abusive Tax Preparers to the IRS. Most tax return preparers are honest and provide great service to their clients. However, some preparers are dishonest. People can report abusive tax preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If a taxpayer suspects a tax preparer filed or changed their return without the taxpayer’s consent, they should file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit.

Where’s My Refund? tool lets taxpayers check status of their refund

Where’s My Refund? tool lets taxpayers check status of their refund

The best way for taxpayers to check the status of their refund is to use the Where’s My Refund? tool on IRS.gov. This tool gives taxpayers access to their tax return and refund status anytime. All they need is internet access and three pieces of information:

Their Social Security number
Their filing status
The exact whole dollar amount of their refund

Taxpayers can start checking on the status of their return within 24 hours after the IRS received their e-filed return, or four weeks after they mail a paper return. Where’s My Refund? includes a tracker that displays progress through three stages: the IRS receives the tax return, then approves the refund, and sends the refund.

Where’s My Refund? Updates once a day, so taxpayers don’t need to check more often.

Taxpayers on the go can track their return and refund status on their mobile devices using the free IRS2Go app. Those who file an amended return should check out the Where’s My Amended Return? tool.

Generally, the IRS issues most refunds in less than 21 days, but some may take longer. IRS phone and walk-in representatives can research the status of refunds only if it’s been 21 days or more since a taxpayer filed electronically, or more than six weeks since they mailed a paper return. Taxpayers can also contact the IRS if Where’s My Refund? directs them to do so.

More information:
Understanding Tax Return Preparer Credentials and Qualifications
Tax Topic 254 – How to Choose a Tax Return Preparer
Choosing a Tax Professional
Filing for Individuals
e-File Options for Individuals
Paying Your Taxes
What to Expect for Refunds in 2019
Tax Reform: Basics for Individuals and Families

Here’s what taxpayers should consider when determining if they need to file

Here’s what taxpayers should consider when determining if they need to file

As people prepare to file their taxes, there are things to consider. They will want to determine if they need to file and the best way to do so.

For tax year 2018, all individual taxpayers will file using the new Form 1040. Forms 1040A and 1040EZ are no longer available. Taxpayers who previously filed these forms will now file Form 1040. The new Form 1040 uses a “building block” approach allowing individuals to add only the schedules they need to their 2018 federal tax return. Taxpayers with more complicated returns will need to complete one or more of the new Form 1040 Schedules. This group of taxpayers includes those who claim certain deductions or credits, or who owe additional taxes.

Individuals who filed their federal tax return electronically last year may not notice any changes, as the tax return preparation software will automatically use their answers to the tax questions to complete the Form 1040 and any needed schedules.

Here are three more things for people to keep in mind as they prepare to file their taxes:

Who is required to file. In most cases, income, filing status and age determine if a taxpayer must file a tax return. Other rules may apply if the taxpayer is self-employed or if they are a dependent of another person. For example, if a taxpayer is single and younger than age 65, they must file if their income was at least $12,000. There are other instances when a taxpayer must file. Taxpayers can visit IRS.gov/filing for more information.

Filing to get a refund. Even if a taxpayer doesn’t have to file, they should consider filing a tax return if they can get money back. If a taxpayer answers “yes” to any of these questions, they could be due a refund:

Did my employer withhold federal income tax from my pay?
Did I make estimated tax payments?
Did I overpay on my 2017 tax return and have it applied to 2018?
Am I eligible for certain refundable credits such as, the earned income tax credit

Taxpayers can file for free. Join the millions of Americans who safely file their taxes and save money using IRS Free File. Seventy percent of the nation’s taxpayers are eligible for IRS Free File. The IRS’s commercial partners offer free brand-name software to about 100 million individuals and families with incomes of $66,000 or less. Taxpayers who earned more can use Free File Fillable Forms. This option allows taxpayers to complete IRS forms electronically. It is best for those who are comfortable doing their own taxes.

Taxpayers can also use the Interactive Tax Assistant tool on IRS.gov to answer many tax questions.. They should look for “Do I need to file a return?” under general topics.

All taxpayers should keep a copy of their tax return. Taxpayers using a software product for the first time may need their adjusted gross income amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

Think about this before Filing your taxes during the shutdown

Read this before filing your taxes during a government shutdown

The IRS has just announced it will recall 46,000 furloughed workers to do their duty of processing tax returns and issuing refunds. An agency-wide furlough began on December 22, 2018.

The return of the employees, who will work without pay until the partial government shutdown ends, means you can expect to get your refund in a timely manner this year — despite some back-and-forth speculation.

Now, the IRS has new advice to guide you through the process of filing this year. It outlines what to do, what not to do and what to expect as millions of Americans get ready to file their taxes at this unprecedented time in our nation’s history.

The IRS highly recommends that you e-file
Paper returns will be accepted, but the IRS is definitely doing everything it can to steer people toward e-filing because of the unusual circumstances surrounding this year’s tax season.

“The IRS strongly encourages people to file their tax returns electronically to minimize errors and for faster refunds,” the agency notes.

Think twice before picking up the phone and trying to call
In the coming days, the IRS will allocate a certain portion of those 46,000 returning furloughed workers to the phone banks. However, there’s no live telephone customer service assistance just yet.

If you do call, make sure you have plenty of patience and keep your expectations in check.

“Due to the heavier call volume, taxpayers should be prepared for longer wait times,” the IRS notes.

The preferred alternative is to use IRS.gov to address any questions you may have this year.

Non-return mail won’t be dealt with until the shutdown is over
Have to correspond with the IRS beyond just sending in a paper tax return? You should also be prepared for a long wait. The agency says it won’t get to that mail until after the shutdown ends.

“Taxpayers who mail in correspondence to the IRS during this period should expect a lengthy delay for a response after the IRS reopens due to a growing correspondence backlog,” the IRS notes.

In-person service won’t be available
The IRS walk-in taxpayer assistance centers you may be familiar with are closed until further notice.

That means the offices won’t be open to accept large cash payments. No in-person assistance for taxpayers facing a hardship will be available. And there won’t be any help for those who need to establish their identity by visiting an IRS office following an identity theft.

All of that will have to wait until the government showdown is resolved.

In light of that, why not just do a free credit freeze and limit the ability of criminals to steal your identity? We’ve got details on how you can do it here.

The IRS is cancelling all taxpayer appointments
Assume any meetings you have scheduled with the IRS related to “examinations (audits), collection, Appeals or Taxpayer Advocate cases” are cancelled for now.

You’ll hear from IRS personnel when they return to the job to reschedule for a future date after the government reopens.

Tax-exempt status applications are on hold
Seeking tax-exempt status for your organization? The IRS says it won’t accept new applications at this time. Nor will it make determinations about existing applications until the government reopens.

The IRS won’t conduct any audits during the shutdown
The tax laws of our nation still apply during the partial government shutdown. Criminal investigation work and basic enforcement activity like examining returns for fraud and identity theft will continue unabated.

However, the IRS will cut back in some other areas.

“During this period, the IRS will not be conducting audits, but automated initial contact letters will continue to be mailed,” the IRS writes. “No collection activity will generally occur except for automated collection activity.”

Passport certification will not take place
This is a very difficult time to get a passport if you have international travel on the horizon!

“The IRS will not be certifying for the State Department any individuals for passport eligibility,” the agency notes.

The best way to check your refund status remains the same
As in years past, the IRS says the best way to determine the status of your refund is to use the “Where’s My Refund?” tool or to download the IRS2Go mobile app.

All automated apps from the IRS like these two remain up and running during the shutdown.

Special Thanks to Theo Thimou with Clark Financial for “original” content/data share

What taxpayers should know about amending a tax return

What taxpayers should know about amending a tax return

Taxpayers who discover they made a mistake on their tax returns after filing can file an amended tax return to correct it. This includes things like changing the filing status, and correcting income, credits or deductions.

Here are some tips for taxpayers who need to amend a tax return.

Complete and mail the paper Form 1040X, Amended U.S. Individual Income Tax Return. Taxpayers must file an amended return on paper whether they filed the original return on paper or electronically. Filers should mail the Form 1040X to the address listed in the form’s instructions. However, taxpayers filing Form 1040X in response to a notice received from the IRS, should mail it to the address shown on the notice.
If taxpayers used other IRS forms or schedules to make changes, they should attach those schedules to their Form 1040X.
Taxpayers should not amend a tax return to correct math errors; the IRS will make the math corrections for the taxpayers.
Taxpayers should also not amend if they forgot to include a required form or schedule. The IRS will mail a request about the missing item.
Anyone amending tax returns for more than one year will need a separate 1040X for each tax year. They should mail each tax year’s Form 1040X in separate envelopes.
Taxpayers should wait for the refund from their original tax return before filing an amended return. They can cash the refund check from the original return before receiving any additional refund.
Taxpayers filing an amended return because they owe more tax should file Form 1040X and pay the tax as soon as possible. This will limit interest and penalty charges.
Generally, to claim a refund, taxpayers must file a Form 1040X within three years from the date they timely filed their original tax return or within two years from the date the person pays the tax – usually April 15 – whichever is later.
Taxpayers can track the status of an amended return three weeks after mailing using “Where’s My Amended Return?” Processing can take up to 16 weeks.

Business Travel, can become a Nightmare!

Motivator excursions, meetings and different kinds of worker travel are basic courses for businesses to prepare, compensate and inspire their best representatives and chiefs. In any case, off-site work occasions can likewise be a legitimate land mine. From wounds to ambushes to liquor related episodes, your independent venture needs laborers’ comp scope to be set up for the different issues that can surface on work-supported treks—and possibly prompt exorbitant claims.

Here are probably the most widely recognized significant issues that jump up amid worker excursions and gatherings, alongside genuine circumstances:

Genuine damage.

In 2006, Danny Douglas, a PC bolster examiner for Advertisement Astra in Overland Stop, Kansas, went to an organization supported “group building” occasion at an indoor go-truck hustling office. Representatives were given a short get up and go discuss an up and coming item and were then isolated into groups and told they could win prizes by going the quickest. While adjusting a bend at 25 miles for every hour, Douglas was tossed from his go-truck and arrived on his side and endured a broke rib and lung damage that required prompt medical procedure.

His organization at first declined to pay laborers pay since it guaranteed the movement was willful; a judge later decided that the organization must pay specialists’ comp, as indicated by SafetyNewsAlert.com. The case in the long run achieved the Kansas Incomparable Court, which concurred that it seemed likely that Douglas was required to either be working or at the go-truck office, however said the state’s specialist remuneration board expected to reconsider the case utilizing an alternate test.

Representative wrongdoing.

A previous Microsoft director in the Assembled Kingdom, Simon Negus, was fired for “untrustworthiness” after he was professedly observed kissing another Microsoft worker at an Atlanta meeting in 2009. The organization rejected Negus the next September and sued him for $126,000—some portion of his 2008 marking reward—and for another piece of his vacation pay, as indicated by Bloomberg. Negus later counter-sued. For another situation of asserted offense, no less than one programming designer was laid off from his manager in 2013 after a tech blogger caught him and another engineer making jokes sexual in nature about “dongles” at PyCon, a Python designer meeting in Santa Clause Clara, California, as indicated by ArsTechnica.com.

Sickness and sustenance harming.

Legionnaire’s sickness is maybe the most scandalous instance of a noteworthy ailment episode amid a tradition (of the American Army in 1976). Be that as it may, representatives becoming ill amid a business related occasion isn’t so bizarre, truly. There’s dependably the hazard that representatives they will get sustenance harming or get an infectious ailment when going for work. Prior this year, indeed, in excess of 100 participants of—amusingly—a nourishment security summit in Baltimore, Maryland clearly got tired after one of the dinners, as per NBC News. Around 12 hours after the dinner, numerous visitors revealed queasiness, the runs and different side effects regularly connected with nourishment borne ailments. No participants were hospitalized and nourishment security overseers couldn’t promptly find the reason for the disease. Episodes, for example, this are simply one more motivation behind why organizations ought to consider a laborers’ pay protection design.

Worker captured.

At the point when outside the workplace—notwithstanding when actually on the clock—in some cases representatives can get stuck in an unfortunate situation. A judge in Guadalupe Area, Texas, Mike Wiggins, was captured on medicate ownership when going to a gathering in 2012. A laborer at the inn where the meeting was occurring noticed pot amid the gathering and followed it back to Wiggins’ room, as per KWTX.com.

Following stages: Would you say you are hoping to deal with your representatives all the more viably however don’t have room schedule-wise to stay aware of the most recent research and patterns in ability administration? We have you secured with the week by week Little Business Ahead Bulletin. Join today and begin accepting the week after week pamphlet stuffed with the most recent devices and assets to enable you to maintain an effective business.

Veterans owed refunds for overpayments attributable to disability severance payments should file amended returns to claim tax refunds

Veterans owed refunds for overpayments attributable to disability severance payments should file amended returns to claim tax refunds

WASHINGTON — The Internal Revenue Service today is advising certain veterans who received disability severance payments after January 17, 1991, and included that payment as income that they should file Form 1040X, Amended U.S. Individual Income Tax Return, to claim a credit or refund of the overpayment attributable to the disability severance payment.

This is a result of the Combat-Injured Veterans Tax Fairness Act passed in 2016.

Most veterans who received a one-time lump-sum disability severance payment when they separated from their military service will receive a letter from the Department of Defense with information explaining how to claim tax refunds they are entitled to; the letters include an explanation of a simplified method for making the claim. The IRS has worked closely with the DoD to produce these letters, explaining how veterans should claim the related tax refunds.

Statute of Limitations

The amount of time for claiming these tax refunds is limited. However, the law grants veterans an alternative timeframe – one year from the date of the letter from DoD. Veterans making these claims have the normal limitations period for claiming a refund or one year from the date of their letter from the DoD, whichever expires later. As taxpayers can usually only claim tax refunds within 3 years from the due date of the return, this alternative time frame is especially important since some of the claims may be for refunds of taxes paid as far back as 1991.

Amount to Claim

Veterans can submit a claim based on the actual amount of their disability severance payment by completing Form 1040X, carefully following the instructions. However, there is a simplified method. Veterans can choose instead to claim a standard refund amount based on the calendar year (an individual’s tax year) in which they received the severance payment. Write “Disability Severance Payment” on line 15 of Form 1040X and enter on lines 15 and 22 the standard refund amount listed below that applies:

$1,750 for tax years 1991 – 2005
$2,400 for tax years 2006 – 2010
$3,200 for tax years 2011 – 2016

Claiming the standard refund amount is the easiest way for veterans to claim a refund, because they do not need to access the original tax return from the year of their lump-sum disability severance payment.

Special Instructions

All veterans claiming refunds for overpayments attributable to their lump-sum disability severance payments should write either “Veteran Disability Severance” or “St. Clair Claim” across the top of the front page of the Form 1040X that they file. Because all amended returns are filed on paper, veterans should mail their completed Form 1040X, with a copy of the DoD letter, to:

Internal Revenue Service
333 W. Pershing Street, Stop 6503, P5
Kansas City, MO 64108

Veterans eligible for a refund who did not receive a letter from DoD may still file Form 1040X to claim a refund but must include both of the following to verify the disability severance payment:

A copy of documentation showing the exact amount of and reason for the disability severance payment, such as a letter from the Defense Finance and Accounting Services (DFAS) explaining the severance payment at the time of the payment or a Form DD-214, and
A copy of either the VA determination letter confirming the veteran’s disability or a determination that the veteran’s injury or sickness was either incurred as a direct result of armed conflict, while in extra-hazardous service, or in simulated war exercises, or was caused by an instrumentality of war.

Veterans who did not receive the DoD letter and who do not have the required documentation showing the exact amount of and reason for their disability severance payment will need to obtain the necessary proof by contacting the Defense Finance and Accounting Services (DFAS).