IRS Tax Tips on YouTube

Our friends at the Internal Revenue Service would like to remind taxpayers that IRS YouTube videos can help them with their taxes before the April 17, 2012, deadline. The IRS channels offer information on a variety of the most frequently asked taxpayer questions at this time of year. Videos are available in English, Spanish and American Sign Language. Among the hot topics for last-minute filers:

• Need More Time to File Your Tax Return? English | Spanish | ASL
• Last-Minute Tax Tips English | ASL
• IRS Tax Payment Options English | Spanish | ASL 
• Owe Taxes But Can’t Pay? English | Spanish | ASL 
• When Will I Get My Refund? English | Spanish | ASL

The three IRS YouTube channels are home to hundreds of videos on subjects ranging from how to choose a tax preparer to how to efile your taxes for free.

The IRS YouTube channel in English is the fourth most viewed U.S. government YouTube channel. Since its debut in August 2009, there have been more than 3.1 million views.

Taxpayers can subscribe to the channels to receive notice of new video offerings year-round. The videos are also available on the IRS’s phone app, IRS2Go.

Top Five Ways Persons with Disabilities Can Increase Their Tax Refunds Presented by MyFreeTaxes.com

April 17, the last day to file taxes, is fast approaching. But last-minute filers with disabilities shouldn’t despair. Eligible taxpayers across the nation still have time to maximize their tax refunds and file their federal and state taxes online or in person for free through tax filing provider MyFreeTaxes.com. Powered by the Walmart Foundation, United Way Worldwide, One Economy and National Disability Institute’s Real Economic Impact Tour, MyFreeTaxes.com partners are dedicated to building the capacity of free tax preparation campaigns to better reach and serve taxpayers with disabilities.

MyFreeTaxes.com suggests these five ways to maximize your refund, or minimize your payment, if you owe taxes.

1. File and get all the tax credits and deductions you deserve. Did you know you could be leaving money on the table by not filing your taxes? Many taxpayers with disabilities who receive federally funded benefits wrongly fear that a tax refund will jeopardize their benefits. But the fact is, tax refunds are not counted as income when determining other federally funded public benefits. So by not filing taxes, you may be missing out on tax credits for which you are eligible and leaving money that is rightfully yours unclaimed. One in five Americans fail to claim the Earned Income Tax Credit (EITC) each year. You do not need to be married, have children, owe taxes or give up your public benefits to get the EITC. You just need to have earned less than $50,000 in income from employment or self-employment, be between the ages of 25-65, and file a tax return. Calculate your EITC benefits by visiting http://bit.ly/mytaxbackapp. For a helpful list of other tax credits and deductions that you may be eligible for visit http://bit.ly/taxcreditlist.

2. Skip the tax preparer and file online or onsite, in-person for free. You’ll have to gather all relevant documents and receipts whether you do your taxes yourself or pay a preparer. If you earned below $57,000 in 2011, use MyFreeTaxes.com to file both your federal and state taxes. MyFreeTaxes.com provides easy-to-follow directions and saves your work at every step. If you earned less than $50,000 in 2011, you can take advantage of free, in-person Volunteer Income Tax Assistance (VITA) sites through United Way in more than 100 communities nationwide. Enter your zip code on MyFreeTaxes.com to locate the nearest free filing center or call 2-1-1.

3. Avoid late payment penalties. If you owe taxes, you’re probably waiting until the last minute to file. Rushing through the process can increase your chances of making a mistake and may cause you to miss out on your highest possible deductions. With only a short time left, prepare your documents now. Check out MyFreeTaxes.com for a handy checklist to help get your taxes in order.

4. Keep your receipts. In particular, those having to do with your vehicle (gas, parking, repairs, auto registration), medical expenses, charity donations, and business expenses, especially if you are self-employed or have incomes outside your full-time job. These expenses may reduce your self-employment income, which means you pay less in taxes.

5. Save your refund for rainy days. Your refund is not a gift from the IRS – it is part of what you earned. Use it wisely. Get your refund deposited directly into your savings account or use it to order paper bonds. One in four people in the US are unbanked or underbanked and savings bonds can make an ideal refund option for people not receiving public benefits. Series I Savings Bonds have a current 3.06% rate that’s better than most savings accounts.

While tax refunds are not counted as income for publicly funded benefits, refunds can be counted as assets after a period of time (often nine months) if the refund puts you above the benefit asset limit (often $2,000 per individual/$3,000 per couple but can vary from state to state). If you receive federally funded public benefits such as SSI and your tax refund takes you over the $2,000 asset limit, you may want to look into qualifying for and opening an Individual Development Account (IDA), a federally-matched savings account and financial education program that helps you save for a home, college or starting a business. Important note: If you receive publicly funded benefits and wish to open an IDA, you need to make sure you work with a program that receives federal IDA funding so the asset limit for publicly funded benefits will not apply. If you open an IDA not funded with federal dollars, funds will count toward the $2,000 asset limit ($3,000 for couples) and can affect or cause you to lose benefits. Do your homework and find a federally funded IDA provider near you through the federal Office of Community Services in the U.S. Department of Health and Human Services http://www.acf.hhs.gov/programs/ocs/afi/states.html.

MyFreeTaxes.com is committed to providing online and on-the-ground free tax filing and preparation for low- and moderate-income individuals and has experienced a 48-percent increase in total online returns filed so far this year. Find MyFreeTaxes on Facebook and on Twitter @MyFreeTaxes.

April 17th

It’s tax season again. Federal tax deadline is April 17th. That’s because April 15th falls on a Sunday and Washington, D.C. will observe Emancipation Day on Monday, April 16th. So the deadline to file federal tax returns this year is April 17th. Most deadlines for filing state returns are also April 17; however some states may be different. Be sure to check on your own state deadlines.

Knowing some tips will help you get through this tax season. And knowledge is half the battle.

Start early and get ready. Spend some time up front to get together the information you or your tax preparer will need such as your W-2 form from your employer and any 1099 statements.

You’ll then need to decide if you want to prepare your own taxes or have a trained preparer file for you. My friends at National Disability Institute introduced me to Myfreetaxes.com, where you can file yourself online (for FREE!) or have your taxes prepared in person (for FREE!) by a certified volunteer!

They will e-file your taxes and use direct deposit. About 70 percent of taxpayers last year e-filed, many from their home computers, or through their local Volunteer Income Tax Assistance (VITA) site, where you can also get free tax prep.

It’s ultimately easy and secure. And you know what else is easy and secure? Having your refund deposited right into your bank account. No waiting around for the mail. No hassle of going to cash or deposit the check!

More on what to do with your tax refund in my next blog. Hint: I’m a big believer in an emergency fund.

Cindy

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Cindy Battles is a freelance writer based in Rutland, VT, winner of the National Disability Institute’s 2008 Blog Contest and a regular contributor here on the Real Economic Impact blog.

Just the Facts, by National Disability Institute’s Real Economic Impact Tour

Work for a radio station? Run a podcast? Have a blog geared toward low-income Americans or people with disabilities? Spread the word and help dispel tax myths with this series of featurettes designed to provide important financial education and tax time tips to help advance economic empowerment for Americans with disabilities. Topics include:

• MyFreeTaxes.com [audio clips] [video PSA]
• the Earned Income Tax Credit (EITC) [audio clips] [video PSA]
• Disability Tax Time Myths [audio clips] [video PSA]
• Supplemental Nutrition Assistance Program (SNAP) (formerly Food Stamps) [audio clips] [video PSA]

While similar to PSAs, these downloadable audio featurettes play more like a featured show in the 1:20 format and are also available as :30 spots. The 1:20 formats are also available as video PSAs (closed captioned). Check out the Just the Fact playlist at our YouTube channel!

We created this series  as part of the MyFreeTaxes campaign in partnership with United Way Worldwide and One Economy, thanks to a grant from Walmart.

Take a look at today’s featured PSA on MyFreeTaxes.com!

MyFreeTaxes.com - Website of the Week →

National Disability Institute’s Real Economic Impact Tour is proud to be a part of Walmart’s MyFreeTaxes collective, along with OneEconomy and United Way Worldwide. The MyFreeTaxes initiative was created to bring free tax prep to low-income taxpayers as well as education about the Earned Income Tax Credit (EITC), along with WIC and SNAP eligibility.

If you earned less than $57,000 in 2011, you have 3 ways to file with MyFreeTaxes: 

• Online at www.MyFreeTaxes.com (in English and Spanish);
• At one of 100 United Way led, community-based tax preparation efforts at Volunteer Income Tax Assistance (VITA) sites; or
• At a mobile MyFreeTaxes van event.

If you or someone you know could benefit from free state and federal tax prep (online or in person) visit MyFreeTaxes.com and pass on this info today!

Spend Some, Save Some - Publication of the Week →

Spend Some, Save Some is a financial education guide published by CFED. The free, easy-to-read guide (available in English and Spanish) walks VITA clients through some important things to consider when they receive their refunds to help them make the most of the money they expect to receive. The guide and the included Savings Plan Worksheet can help taxpayers:

• Recognize the value of using the tax moment to contribute to their short- and long-term savings goals
• Make decisions about how to use their refunds for spending on “must-haves,” saving for the future and spend on “nice-to-haves”
• Get connected to resources like U.S. Savings Bonds, College Savings Accounts, additional tax credits like the Saver’s Credit, Individual Development Account programs and Bank On campaigns

Read more about Spend Some, Save Some at the CFED blog. The page also includes a link to the spanish version of the guide.

EITC Central - Website of the Week →

EITC Central was created by the IRS to help IRS partners and tax preparers spread the word about the Earned Income Tax Credit to ensure that all who are eligible benefit from the credit. The IRS estimates that 1 in 5 taxpayers eligible for the EITC doesn’t claim it - EITC Central is packed with information and resources for two main audiences:

• partners who may serve populations that are not aware of the EITC
• tax preparers who want to ensure they are up to speed on the latest EITC requirements

EITC Central also serves as a hub for EITC Awareness Day. January 27, 2012 marks the 6th annual EITC Awareness Day. Find out more at www.eitc.irs.gov/ptoolkit/awarenessday.

Spring Cleaning: What to Keep, What to Shred

Spring is traditionally the time we do some major cleaning around the house.  That should also apply to paperwork.  But what papers should you keep and what can you shred? And how can you, by organizing, reduce tax time anxiety for next year?  Two books I found addressed this question. Stephanie Denton is the author of “The Organized Life: Secrets of an Expert Organizer.”  There’s also Peter Walsh’s weight loss (and financial clutter) book comically titled “Does This Clutter Make My Butt Look Fat?” Both take up the issue of what to do with your mounds of financial papers. I have complied a list of some of their tips, along with some tips from my brother Mike who is the Chief Financial Officer of a medical supply company:

ATM Receipts

Keep ATM receipts until you reconcile them with your monthly statements.  Then shred.

Bank Statements

File your monthly checking and savings account statements and save.  The general rule of thumb is five years in a secure file. Thanks, Mike.

Credit Card Statements

Apparently you don’t need to keep them forever after you’ve checked and paid them, unless you need a bill to support a deduction on your taxes.  Still the rule here is hold on to them for one year.

Paid Monthly Bills

You can shred last month’s bills if you have already paid them. 

Taxes

Place documents you’ll require for next year’s return in a file. If you need to save a lot of receipts and bills, consider a file cabinet.  It will save you some headaches and works a heckuva lot better than shoeboxes.

Insurance policies

Keep until you get new policies, then shred the outdated ones. 

Pay stubs

Keep until you compare them with your annual W-2 form, then shred them.

Household Electronics 

Keep warranties, and, while you’re at it, how-to-put-together booklets for big home appliances and electronics. 

Vehicle title

Keep your automobile title in a secure, reachable spot as long as you own the car. 

Tax returns

Keep for seven years.  That’s the Golden Rule.  

Birth certificates, Social Security Card

Keep indefinitely.

There are many other documents such as marriage license (keep) and divorce decree (also keep) that are covered by the experts.  The first step might be to buy an accordion file and a file cabinet and start that organizing!  

Happy Spring, happy sorting.

Cindy

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Cindy Battles is a freelance writer based in Rutland, VT, winner of the National Disability Institute’s 2008 Blog Contest and a regular contributor here on the Real Economic Impact blog.

Be Informed: IRS Operations During A Government Shutdown

If the federal government shuts down, IRS operations will be severely limited. However, the underlying tax law remains in effect, and all taxpayers should continue to meet their tax obligations as normal. 

Individuals should keep filing their tax returns with the IRS and are required to do so by April 18 unless they obtain a six-month extension.  The IRS will be accepting all tax returns.  Once they’ve been accepted, the IRS will generally process and issue refunds for electronically filed individual returns. 

Individuals are urged to file electronically, because most of these returns are processed automatically and should not be delayed.  Because of limited IRS staffing, paper returns will be accepted, but will not be processed in the event of a government shutdown and taxpayers who file paper returns will experience a delay in receiving their refunds. Limited telephone customer service functions will remain available, but IRS walk-in taxpayer assistance centers will be closed. 

While the government is closed, people with appointments related to examinations (audits), collection, Appeals or Taxpayer Advocate cases should assume their meetings are cancelled. IRS personnel will reschedule those meetings at a later date. 

Here are some basic steps for taxpayers to follow in case of a governnment shutdown:

How Does This Affect Me? What Do I Do?

• You should continue to file and pay taxes as normal.
• The April 18, 2011, tax deadline for filing the 1040 series of tax returns remains in effect.
• Individuals filing the 1040 series of returns can still request a six-month filing extension to Oct. 17 by filing Form 4868. Taxpayers who request a filing extension must still make their tax payments by April 18, 2011.
• The quarterly estimated tax payment due April 18 is unchanged.
• All other tax deadlines remain in effect, including those covering individuals, corporations, partnerships and employers. The regular payroll tax deadlines remain in effect as well.
• You can file your tax return electronically or on paper –– although the processing of paper returns will be delayed until full government operations resume. Payments accompanying paper tax returns will still be accepted as the IRS receives them.
• Tax refunds for most electronically filed returns will continue to be issued. Because of limited IRS staffing, taxpayers who file paper returns will experience a delay in receiving their refunds.
• Tax software companies, tax practitioners and Free File remain available to assist with taxes.
• State tax deadlines are not impacted by the federal government shutdown.

What Will Happen At The IRS If The Government Shuts Down?

 Only the most basic functions will remain operating in light of the critical April 18 filing deadline.

Operations Available During the Government Shutdown

Tax processing operations are continuing at this time for electronically filed 1040 series tax returns.

Tax refunds will be issued as returns are processed, so most tax refunds for electronically filed returns will be issued. Taxpayers should expect longer than normal delays for paper filed tax refunds. IRS e-file and Free File remain the best way of getting tax refunds quickly and are unaffected by the government shutdown.

Tax deposits and payments are being processed, both for electronic and paper tax returns. Taxpayers should continue to make these payments as normal.

The IRS will continue accepting all tax returns during this period. In addition to individual e-file, business e-file will remain open as well and refunds for business e-filers will continue.

For individual taxpayers seeking assistance, the regular 800-829-1040 telephone line remains open. However, this line will not accept calls unrelated to individual tax issues, and taxpayers should anticipate much longer wait times. As an alternative, taxpayers are strongly encouraged to use www.IRS.gov.

The IRS website, www.IRS.gov, will remain available, although some interactive features may not be available. ”Where’s My Refund” will remain available on the IRS website for people to check on the status of their tax refunds.

If people have already filed their return and the IRS has started processing their tax return, they generally will see no delays in their refunds being issued. The best source for information will be checking “Where’s My Refund” at www.IRS.gov.

The IRS Free File partners will continue to accept and file tax returns.

Tax software companies will continue to accept and file tax returns.

The IRS Volunteer Income Tax Assistance Program (VITA) and the Tax Counseling for the Elderly (TCE) Programs will remain open in many locations to offer free tax help for taxpayers who qualify. Many Low-Income Taxpayer Clinics will remain open.

Many automated IRS notices will continue to be mailed.

Operations Closed Or Unavailable During a Government Shutdown

(Partial Listing)

Taxpayer Assistance Centers (TACs) where taxpayers walk-in for service will be closed. People with scheduled appointments during the government shutdown will have to reschedule.

While the government is closed, people with appointments related to examinations (audits), collection, Appeals or Taxpayer Advocate cases should assume their meetings are cancelled. IRS personnel will reschedule those meetings at a later date.

No live telephone assistance will be available for non-1040 series business taxpayers on the 800-829-4933 number.

No live telephone assistance will be available for exempt organizations, retirement plans administrators or governmental entities that use the 877-829-5500 number.

The phone number for victims of identity theft (800-908-4490) will not be available.

The IRS will not be working any paper correspondence during this period.

Most IRS legal counsel services will stop.

Information for Tax Practitioners

• The e-Help Desk will be available for e-file error reject code assistance only — Monday through Friday from 6:30 a.m. to 5:00 p.m. Central Time.
• The Practitioner Priority Service line will not be available.
•  Quick Alerts will be issued as necessary via the normal e-mail process.