Income Tax Help
Income Tax Help
Tax time can be very stressful for everyone, the tax code can be complicated and let’s be honest we are all a bit scared of entering the wrong info and not paying enough tax (or even worse paying too much). It is more common to pay too much tax than not enough, which is exactly why we offer a free tax review service.
With different forms, and tons of deductions (which change from year to year), filling in income tax forms can end up being very confusing. Getting proper income tax help is essential to making sure no mistakes are made. Filing a tax return isn’t always cut and dry as everyone would like, but let’s explore some of most frequent questions, and problems that can arise during tax season.
Income Tax Help
Income Tax Forms
The first question that usually comes up is with regard to forms. The most common income tax forms to file, in the US, are the 1040 EZ, 1040, and the 1040 A, by average working adults, or retirees.
1040 – Also referred to as the long form. This is the best form if income is greater than $100,000 though filing is still possible if less was earned. Also if there are itemized deductions, income from businesses, rentals, stocks, mutual funds, or claiming any adjustments. If there is ever doubt, choose the 1040.
1040 A – Also known as the short form. This form is for those who made under $100,000 and is open to any age. People with income from unemployment compensation, pension, IRA, SSI benefits, dividends, and similar payments. Penalties for early withdraws, and student loan interest, may be claimed. Tax credits such as child credit, elderly or disabled credit, education credit, child tax credit, earned income credit, and retirement savings credits can be claimed. This form is shorter than the 1040, but still allows for some itemization, making it great for the filer that doesn’t want to lose out.
1040 EZ – This form is the shortest tax form, and does not allow itemization. This form is only for those under the age of 65, married filing jointly or single, with income under $100,000 and interest under $1,500. There may be no adjustments to income, and only standard deductions may be claimed. Income is only allowed from wages, interest, unemployment, or Alaska Permanent Fund dividends. Earned Income Credit is the only allowable tax credit. This form is great for those with no deductions, or children.
Paper or E-file
Should a person e-file, or paper file? This is another commonly asked question by those preparing taxes themselves. Both options are completely viable but let’s look at them closer.
Paper filing is generally cheaper, costing only a postage stamp, but e-filing can be as low as free or it could cost between $20 and $30 dollars if third party software is used. If choosing to mail in a refund, it can take months to receive the check, however e-filing can take as little as two to three weeks. Paper filing isn’t as safe as e-filing. With an e-file, conformation is given as soon as the IRS receives the file.
There are of course certain reasons a person can’t, or shouldn’t e-file, and therefore will need to send in a paper return. If a person plans to file as married but separate, and they currently reside in a community property state they must file a paper return. If the person plans to claim a dependent who is already being claimed by another person a paper return must be filed. Some forms are also not currently available for e-filing, for example the multiple support agreement.
Missed Tax Filing Deadline
If the filer has missed the deadline, they may file for an extension. This is done by filing out a Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. This form should be filled out, and mailed as soon as possible after the due date. However, there are special rules for those living abroad, those in an active combat zone, or a hazardous duty area that has been qualified to receive exemptions. For example, a member of the U.S. Military currently serving in an active war zone would have their pay exempt, for the time they are there. So, if a soldier served 12 months in a war zone, those 12 months would be exempt from taxes, and therefore no extension would need to be filed.
Professional Tax Help
Seeking professional income tax help is often the best option, yes it will cost you more than if you fill in your own taxes but a professional will often be able to find you allowances that you will not be able to find on your own. If you have extensive sources of income, small to medium self owned businesses or large amounts of deductions then it really is wise to seek professional help from a CPA.