What is the Earliest Date I Can File My Taxes for 2009?

Eager to get those tax forms filled out? Ready to get your tax refund now? You can start filing your taxes as early as Janurary 1, 2010. In order to file taxes, you must have all your tax forms from your employer in hand — that is any W2s or 1099s from all jobs you worked in the past year. It’s unlikely that you will have received these forms by January 1, as they are not required to be mailed until the end of January.

Once you’ve received your W2 or 1099 from your employer, you can immediately begin to file your tax return using an efile program. We recommend TurboTax which includes a free federal efile. See our other recommendations on tax software.

Best Free eFile Tax Programs

Now that you’re ready to begin your taxes, the next step is to choose an eFile program. Many are free for Federal returns, and charge a fee for state filing. We recommend the following tax software:

• TurboTax – Free Federal and $29.95 State
• H&R Block At Home – Free Federal and $29.95 State

Both TurboTax and H&R Block at Home offer great solutions no matter the complexity of your tax returns. For basic filers with limited deductions, the free versions of these programs will be acceptable. But if you run a small business, have a lot of investments, or a lot of deductions, you will want to upgrade to a more comprehensive package.

Tags: 1099, dates, earliest date to file 2009, tax refund, w2

When Can I Start My Efile?

It’s a new year and the start of the ever dreaded “tax season.” I know some of you eager beavers want to get a jump on your taxes right away. But guess what? Not quite that time yet.

While some companies, such as H&R Block, are starting to efile taxes as early as January 4th…most of us are going to have to wait until at least January 11th before the IRS will start accepting independent efiling (those of us who aren’t a tax company that is). This doesn’t effect most of us since you do need to have all of your paperwork (W2’s and the like) in order before you can file. And seeing as companies aren’t liable to dispense these records until the end of January, most of us will just have to cool our heels for a couple of weeks before we can start.

Don’t fall into the trap of paying a company like H&R Block to do your taxes just because you want to get your taxes efiled a couple of days early. If you are a penny pincher like me, just wait a few extra days and it will save you a bunch of extra money.

Best Free eFile Tax Programs

Now that you’re ready to begin your taxes, the next step is to choose an eFile program. Many are free for Federal returns, and charge a fee for state filing. We recommend the following tax software:

• TurboTax – Free Federal and $29.95 State
• H&R Block At Home – Free Federal and $29.95 State

Both TurboTax and H&R Block at Home offer great solutions no matter the complexity of your tax returns. For basic filers with limited deductions, the free versions of these programs will be acceptable. But if you run a small business, have a lot of investments, or a lot of deductions, you will want to upgrade to a more comprehensive package.

Tags: efile, efile 2009, h&r block, independent filing, january 11, january 4, w2

When should I expect my W2 tax form?

Your W-2 tax form will be mailed to you by the end of January. If you have not received your W-2 form from your employer by February 1, you should contact your employer and see what’s up. Maybe they mailed it to the wrong address?

If you still haven’t received your W-2 by February 15, you better give the IRS a call: 800-829-1040. When you call, make sure you have all your personal information together — address, phone, social security number, etc. You’ll also want to have a rough estimate of your earnings, dates of employment, and how much income tax was taken out.

Lost your W-2? Dog ate your W-2? Just contact your employer — they can replaced your lost form with a “reissue statement.” (Of course, they might charge you for it)

Remember, you need a W-2 (or a 1099) from all jobs you’ve worked in the past year. So don’t forget about that little stint as a circus seal wrangler you did six months ago — circus income is taxable income. And as for that circus, they still owe you a W-2.

Tags: 1099, circus, IRS, w2

Reasons You Could Be Audited…and How to Avoid Them

The concept of being audited by the IRS scares most people, including me. Even though I follow the rules and pay my taxes on time, there is always that worry that the IRS will come a knocking. The word has gotten itself a frightful connotation, but the audit is really just justifying your deductions to an investigator from the IRS. That still doesn’t mean I want that headache and I assume neither do you. Here are some things to avoid that just scream “AUDIT ME.”

• You Are Already Being Watched If you receive the bulk of your income in cash (e.g. servers, dancers, etc) the IRS already tends to keep an eye on you. It’s important to try to get a 1099 from employers who compensate in cash to have exact documentation of your income, but we all know that this is not always an option. People who are self-employed and own small businesses are also on this radar.
• Errors in Calculation The main reason citizens receive letters from the IRS is due to simple errors in their calculations. Goofs in your addition and subtraction could lead to a full audit. Though math errors alone are rarely cause for a full fledged audit, check yourself before sending in your forms.
• Interest and Dividend Report Discrepancies Basically, this means that all those W2s and other paperwork you have sent the IRS does not match the figures you have put on your tax forms. There are a great deal of reasons for this to occur (1099s being one of the culprits) but you should always make sure that what you have recorded and what your employer(s) has reported match.
• Whistleblowers So, you have fooled the IRS. The worst thing you could do now is tell someone. Most people don’t realize that the IRS offers rewards, as much as 15-20% of the additional tax owed, to everyday citizens who inform on their peers’ tax evasions. If you know of someone who has been ”cheating” on their taxes, you can report it with Form 211: Application For Award For Original Information or call the IRS hotline at (800) 829-0433.
• The “DIF Score” This is an interesting one. The IRS has come up with a computer program that uses a secret IRS equation that will compare your deductions to those of other people in your income bracket. This way they can quickly see the DIF-ference and flag for audit returns that have exceptional deductions for their bracket.

So, do your best to avoid these red flags. You can’t really control if the government decides to audit you, but you can try to give them the least amount of reasons to suspect you. Good luck!

Tags: 1099, audit, audited, cash income, DIF score, Errors in Calculation, Form 211: Application For Award For Original Information, income bracket, Interest and Dividend Report Discrepancies, IRS hotline, red flags, self-employed, small business owner, tax evasions, w2, Whistleblowers

Income Tax Checklist

There are so many things to remember to get together before you do your taxes. Here is a short checklist so you have the essentials. There are more things you may need than this if you have a great deal of investments or give a lot to charities…but these basics should cover most of us.

• W2’s  obviously, make sure you have one from every job you have worked in the past year
• 1098 forms  these document mortgage interest
• Receipts for Donations   charities and what not, you must have documentation
• Property Tax Documentation
• Trade Information  basic investments

Again…this is a list of basics for beginners. For a full comprehensive list (it get complicated, but some of you may need complicated), I found a great chart in the Tax Section of the MSN website.

Tags: 1098, charities, property tax documentation, receipts for donations, trade information, w2

Tax Calendar…Important Dates You Want to Know

So we all know that we have to have our taxes in the mail to the IRS by April 15th. Did you know there are a great deal of other dates worth noting on your calendar that can help you from making some costly tax mistakes. Get a pen and your day-planners now!

12/31/08: Deduction Deadline
This is your absolute last day to make all those payments that can be deducted from your 2008 return.

1/15/09: Fourth Quarter Estimates Due (an extension can be requested, however, using the 1040ES form)

2/2/09: 1098s, 1099s, and W2’s all should have arrived

2/15/09: New W4’s for continued exemption
Even if you were exempt last year, you still need to fill out a new copy of the W4 form to continue your exemption into 2009.

4/15/09: TAX DAY!
All federal and state taxes due (or extension papers filed)

Mark ‘em down! Don’t cost yourself money in penalties just because you missed a deadline!

Tags: 1/15/09, 1098, 1099, 12/31/08, 2/15/09, 2/2/09, 4/15/09, deduction deadline, fourth quarter estimates, tax calendar, w2, w4