You should only call the IRS if it has been:. If you can't meet the April 15 deadline to file your tax return, you can get an automatic six-month extension of time to file from the IRS.
The extension will give you extra time to get the paperwork into the IRS, but it does not extend the time you have to pay any tax due. You will owe interest on any amounts not paid by the April deadline, plus a late payment penalty if you have paid less than 90 percent of your total tax by that date. You must make an accurate estimate of any tax due when you request an extension. You may also send a payment for the expected balance due, but this is not required to obtain the extension.
You can file your extension request by computer or mail the paper Form to the IRS. The system will give you a confirmation number to verify that the extension request has been accepted. Put this confirmation number on your copy of Form and keep it for your records. Do not send the form to the IRS. As this is the area of our expertise, please contact us for more detailed information on how to file an extension properly! The IRS reminds taxpayers that specific rules apply for taking a tax deduction for donating cars to charities.
People who want to take a deduction for the donation of their vehicle on their tax return should take quite a few steps, but here is the most obvious:. Taxpayers must make certain that they contribute their car to an eligible organization; otherwise, their donation will not be tax deductible. Taxpayers can search Tax Exempt Organization Search to check that an organization is qualified.
Be sure to have the organization's correct name and its headquarters location, if possible. Churches, synagogues, temples, mosques and governments are not required to apply for this exemption in order to be qualified.
Please contact us if you're considering a car donation for your tax return! When preparing to file your federal tax return, don't forget your contributions to charitable organizations. Your donations can add up to a nice tax deduction for your corporation if you are a member of a flow-through business entity or your personal taxes if you itemize deductions on IRS Form , Schedule A.
You cannot deduct contributions made to specific individuals, political organizations and candidates, the value of your time or services and the cost of raffles, bingo, or other games of chance. Organizations can tell you if they are qualified and if donations to them are deductible. Alternatively, contact us for more! The credit is available only to the original purchaser of a new qualifying vehicle, and the vehicle must be placed in service in the same year the credit is being claimed on the return.
If the qualifying vehicle is leased the credit is available only to the leasing company. Also, the vehicle must be used primarily in the United States. Additional conditions regarding qualified manufacturers and phase out rules may also apply in determining credit eligibility.
Millions of Americans forgo critical tax relief each year by failing to claim the Earned Income Tax Credit EITC , a federal tax credit for individuals who work but do not earn high incomes. Taxpayers who qualify and claim the credit could pay less federal tax, pay no tax or even get a tax refund.
The IRS estimates that 25 percent of people who qualify don't claim the credit and at the same time, there are millions of Americans who have claimed the credit in error, many of whom simply don't understand the criteria. EITC is based on the amount of your earned income and the number of qualifying children in your household.
If you have children, they must meet the relationship, age and residency requirements. And, you must file a tax return to claim the credit.
Please contact us for more information! Taxpayers should consider claiming tax credits for which they might be eligible when completing their federal income tax returns, advises the IRS. A tax credit is a dollar-for-dollar reduction of taxes owed. Some credits are refundable — taxes could be reduced to the point that a taxpayer would receive a refund rather than owing any taxes.
Below are some of the credits taxpayers could be eligible to claim:. There are other credits available to eligible taxpayers.
Please contact us so we may analyze your specific situation, and offer advice. Taxpayers who refinanced their homes may be eligible to deduct some costs associated with their loans. Points paid to obtain an original home mortgage can be, depending on circumstances, fully deductible in the year paid. However, points paid solely to refinance a home mortgage usually must be deducted over the life of the loan. For a refinanced mortgage, the interest deduction for points is determined by dividing the points paid by the number of payments to be made over the life of the loan.
This information is usually available from lenders. Taxpayers may deduct points only for those payments made in the tax year. However, if part of the refinanced mortgage money was used to finance improvements to the home and if the taxpayer meets certain other requirements, the points associated with the home improvements may be fully deductible in the year the points were paid.
Also, if a homeowner is refinancing a mortgage for a second time, the balance of points paid for the first refinanced mortgage may be fully deductible at pay off. Other closing costs — such as appraisal fees and other non-interest fees — generally are not deductible.
Additionally, the amount of Adjusted Gross Income can affect the amount of deductions that can be taken. Please contact us if you've recently refinanced, and we can be a big help! You may be able to take the Credit for the Elderly or the Disabled if you were age 65 or older at the end of last year, or if you are retired on permanent and total disability, according to the IRS. Like any other tax credit, it's a dollar-for-dollar reduction of your tax bill. The maximum amount of this credit is constantly changing.
Generally, you are a qualified individual for this credit if you are a U. If you are under age 65, you can qualify for the credit only if you are retired on permanent and total disability. This means that:. Even if you do not retire formally, you are considered retired on disability when you have stopped working because of your disability. If you feel you might be eligible for this credit, please contact us for assistance.
This exclusion is allowed each time that you sell your main home, but generally no more frequently than once every two years. To be eligible for this exclusion, your home must have been owned by you and used as your main home for a period of at least two out of the five years prior to its sale. You also must not have excluded gain on another home sold during the two years before the current sale. If you and your spouse file a joint return for the year of the sale, you can exclude the gain if either of you qualify for the exclusion.
To exclude gain, a taxpayer must both own and use the home as a principal residence for two of the five years before the sale. The two years may consist of 24 full months or days. Short absences, such as for a summer vacation, count as periods of use. Longer breaks, such as a one-year sabbatical, do not. If you do not meet the ownership and use tests, you may be allowed to exclude a reduced maximum amount of the gain realized on the sale of your home if you sold your home due to health, a change in place of employment, or certain unforeseen circumstances.
Unforeseen circumstances include, for example, divorce or legal separation, natural or man-made disaster resulting in a casualty to your home, or an involuntary conversion of your home. Send us a message for more! With more and more United States citizens earning money from foreign sources, the IRS reminds people that they must report all such income on their tax return, unless it is exempt under federal law.
This applies whether a person lives inside or outside the United States. The foreign income rule also applies regardless of whether or not the person receives a Form W-2, Wage and Tax Statement, or a Form information return.
Foreign source income includes earned income, such as wages and tips, and unearned income, such as interest, dividends, capital gains, pensions, rents and royalties. An important point to remember is that citizens living outside the U. However, the exclusion does not apply to payments made by the U.
Please contact us if you feel you may have earned foreign income to learn more! In measuring the cost, include house-related expenses incurred for the mutual benefit of household members, including property taxes, mortgage interest, rent, utilities, insurance on the property, repairs and upkeep, and food consumed in the home.
To qualify under this rule, you must be able to claim the parent as your dependent. You must be unmarried to claim head of household status. The joint rates are more favorable than the head of household rates. If this is the case, you can qualify as head of household.
Last Updated by Admin on PM. Abrams McKeever Portal Tutorial. The availability of any additional standard deduction. Under what circumstances can she claim a personal exemption for her husband? Would it matter if the parties reside in a community property state? She can claim the cousin as a dependent but not her son. Who can qualify for the dependency exemption?
Who takes preference? Can he do so? Margo tells her brothers to decide which one of them will claim the parents as dependents because the exemptions will not save her any income taxes. He provides almost all of the support of his parents and two aunts, who are citizens and residents of Guatemala. Would such a move have any impact on Roberto? Jack suggests that they file separately—he will itemize his deductions from AGI, and she will claim the standard deduction.
What should they do? Taxpayer lives alone but maintains the household of his parents, only one of whom qualifies as his dependent. Taxpayer, a single parent, maintains a home in which she and her unmarried son live. Assume the same facts as in b except that the son is age 20, not Taxpayer lives alone but maintains the household where her dependent daughter lives. During , Florence maintains a household in which she and her son, Derrick, live.
In computing his tax liability for , he determines that it is less than it was for even though his AGI is the same. Oliver is married to Regina, a British citizen, and they reside in England. Regina receives substantial rent income from real estate she owns in western Europe.
Must Oliver file a U. Under what circumstances might Regina be considered a resident of the United States?
Would such a classification be advantageous? Justification for the tax. Earned income versus unearned income. Age exception. Effect of parental election. Other exceptions. How should Hernando treat these transactions for income tax purposes? Gain on the sale of land held as an investment for 4 years.
Gain on the sale of a houseboat owned for 2 years and used for family vacations. Loss on the sale of a reconditioned motorcycle owned for 3 years and used for recreational purposes. Presuming each had the same amount of gain, explain the difference in result. How are these transactions treated for income tax purposes?
Does this treatment favor the taxpayer or the IRS? Audry has no income. Marcie does not plan to claim Jamie as a dependent because he has too much gross income. She does not plan to claim Audry as a dependent because Audry signed the joint return with Jamie. In fact, Marcie plans to use single filing status as none of the persons living in her household qualifies as her dependent. All parties live in Indiana a common law state. All parties live in California a community property state.
Erica is married and has four children. Her brothers are single and claim the standard deduction. What suggestions can you make regarding the tax position of the parties? Sidney and Cora, ages 39 and 37, are married and file a joint return. Amelia, age 44, is single and supports her dependent parents who live with her and also supports her maternal grandparents who are in a nursing home.
Paul, age 50, is an abandoned spouse. His household includes three unmarried stepsons who qualify as his dependents. Angel, age 33, is a surviving spouse and maintains a household for her four dependent children.
Dale, age 42, is divorced but maintains the home in which he and his daughter, Jill, live. Note: Problems 29 and 30 can be solved by referring to Figure 3.
His filing status is single. Alexis is married but has not seen or heard from her husband since Audry age 65 is divorced and lives alone. Olive is age 82 and blind. Both Carin and Pierce are age All parties live in New York a common law state.
Assume the same facts as in c , except that all parties live in Nevada a community property state. Alberto, a U. Pablo, a U. Marlena, a U. Elena is a U. Her household includes Mario, a fouryear-old adopted son who is a citizen of Spain. Specify whether any such exemptions would come under the qualifying child or the qualifying relative category. Andy maintains a household that includes a cousin age 12 , a niece age 18 , and a son age All are full-time students.
Andy furnishes all of their support. She also furnishes most of the support of her stepmother who does not live with her. Raul, a U. Karen maintains a household that includes her ex-husband, her mother-in-law, and her brother-in-law age 23 and not a full-time student. Karen provides more than half of all of their support. Karen is single and was divorced in the current year. The household is maintained by the grandfather. Who is eligible to claim Billy as a dependent?
Who has preference as to the exemption? Marcus age 68 and Alice age 65 and blind file a joint return. Penny age 45 is single and maintains a household in which she and her nephew, Clint, live. Trent age 38 is single and lives alone. Jack and Carol were divorced in , and Carol has custody of their three children ages 5, 7, and 9. Jack furnished more than half of their support, and the divorce decree is silent as to the dependency exemptions.
Carol does not sign a Form Must Buddy and Heloise be claimed by the same person s for both and ? Who, if anyone, can claim their medical expenses? Their three children and two of their parents qualify as their dependents. Winston is not married.
Winston maintains a household in which he and his unmarried son, Ward, live. Same as a , except that Ward is married. Winston lives alone, but he maintains a household in which his parents live. Winston lives alone but maintains a household in which his married daughter, Karin, lives. She is a full-time student for but not for and Sue and Peyton do not file joint returns.
All parties live in Pennsylvania a common law state. All parties live in Texas a community property state. Walter and Nancy engage you to prepare their tax return for During a meeting with them in late March , you learn that John and Irene have filed a joint return. What tax advice would you give based on the following assumptions? All parties live in Louisiana a community property state. All parties live in New Jersey a common law state.
Miles age 42 is a surviving spouse and provides all of the support of his four minor children who live with him. Should any of these individuals file a return even if filing is not required? Sam is married and files a joint return with his spouse, Lana. Both Sam and Lana are 67 years old. Mike is single and is 67 years old. Ben, age 19, is a full-time college student. He is claimed as a dependent by his parents.
Anita, age 12, is claimed as a dependent by her parents. Earl, age 16, is claimed as a dependent by his parents. With this income, student loans, savings, and nontaxable scholarships, he is self-supporting. How much income tax, if any, can Addison save if she and Corey marry in and file a joint return? Can the parental election be made? Gain on the sale of unimproved land held as an investment for 3 years Loss on the sale of a camper purchased 2 years ago and used for family vacations Loss on the sale of ADM stock purchased 9 months ago as an investment Gain on the sale of a fishing boat and trailer acquired 11 months ago at an auction and used for recreational purposes R O F T O N a.
Gain on the sale of an arrowhead collection acquired as an investment at different times but all pieces have been held for more than one year Loss on the sale of IBM Corporation stock purchased 11 months ago as an investment Gain on the sale of a city lot acquired 5 years ago as an investment a. Upon the advice of a friend, they do the following: in early January , they pay their pledge for ; during , they pay the pledge for ; and in late December , they prepay their pledge for Explain what the Hundleys are trying to accomplish.
Assume the standard deduction amounts for and are the same. Jan C. She is employed part-time by several local law firms as a paralegal. She maintains a household that includes the following persons: Peter age 19 , Mary age 23 , Irene age 24 , and Hortense age Peter is her own son and a full-time student, while Mary and Irene are stepdaughters and college graduates. Except for Hortense, who receives a modest Social Security benefit, none of these persons receive any income during the year.
However, since she had extra funds e. Social Security numbers used throughout the textbook have been replaced with fictitious numbers. The accident was caused by a moving van owned by a national trucking company. As the driver of the van was charged with criminal negligence, Jan filed suit against the company.
To avoid a trial and the unfavorable publicity that would result, in March the company reached an out-of-court settlement. As Jan acted as her own attorney in handling the case, she incurred no legal fees.
Marty was an ardent sportsman and owned considerable hunting and fishing equipment e. All proper amounts of Social Security and Medicare taxes were withheld. Jan does not wish to contribute to the Presidential Election Campaign Fund. Part 2—Follow-up Advice In early , the following take place. Jan suspects that these events will have an effect on her income tax position in and requests your advice.
Mary and Irene obtain jobs and move out of state. Hortense decides to live with her daughter in Santa Fe and moves there. Jan pays off the mortgage on her personal residence. Write a letter to Jan explaining in general terms the changes that will take place and the additional tax liability that could result.
Assume that her salary remains the same in , and that she has invested any discretionary amounts in a municipal bond fund. Since Jan is a paralegal, you can assume that she understands certain basic tax concepts e.
Andrew A. Young ages 44 and 45 are married and live at Live Oak Blvd. Andrew is the accountant for a local medical clinic, and Sandra is the receptionist for a law firm. For tax year , the Youngs recorded the following receipts. No interest was provided for, and Leon repaid the loan in March Due to its proximity to a nearby army base, they believed the property was a good investment. No commissions were involved, as the Youngs handled the purchase and sale of the property on their own.
Andrew won a bass fishing boat as the second prize in a yearly raffle held by his church. Andrew chose the boat.
The treasurer of the church told Andrew that the results of the raffle are not reported to the IRS. The Youngs had the following expenditures during Both Crystal and Paige graduated from high school in May and are undecided about attending college.
Isabella had zero gross income before she was killed in a hunting accident on January 4, The appropriate amounts of Social Security and Medicare tax were withheld. Young Sandra L. They do not desire to contribute to the Presidential Election Campaign Fund. If an overpayment results, it is to be refunded to them. It is also possible to prepare solutions to the Research Problems by using tax research materials found in a standard tax library.
Research Problem 1. Pat and Cathy McKeever are husband and wife and file a joint return. Tim, age 24, is an army veteran and a full-time student. Eileen, age 18, also is a full-time student, but has no income for the year.
Other relevant information about the McKeevers and their expenditures during is summarized below. The policy is owned by the father and designates Mary as the beneficiary. Eileen paid for the car with savings and has the title registered in her name. How many dependency exemptions will the McKeevers be entitled to claim on their Federal income tax return for ?
Explain your answer. From a planning standpoint, how might the McKeevers have improved their tax result? Partial list of research aids: Reg. Berniece and Nate were divorced on July 7, Under the divorce decree, Berniece received full custody of their three children, and Nate was awarded the dependency exemptions for them.
After the trial was over, Nate had Berniece sign a release of her rights to the dependency exemptions for the next five years. In early April , Berniece realizes the tax costs to her of losing the deduction for the dependency exemptions. Besides contacting Nate, who is already delinquent in his child support payments, does Berniece have any way out?
Do not restrict your search to the World Wide Web, but include a review of newsgroups and general reference materials, practitioner sites and resources, primary sources of the tax law, chat rooms and discussion groups, and other opportunities. Go to www. Contact us for more information about your situation. If you own a home, the interest you pay on your home mortgage may provide a tax break. However, many people believe that any interest paid on home mortgage loans is deductible.
First, you must itemize deductions in order to deduct mortgage interest. And the deduction is limited. But interest may be deductible on a home equity loan, home equity credit line, etc.
Married couples often wonder if they should file joint or separate tax returns. It depends on your individual tax situation. In general, you should use the filing status that results in the lowest tax. Therefore, the IRS can come after either of you for the full amount. In most cases, joint filing offers more tax savings but some people can save by filing separately. We can look at both options. Contact us to prepare your tax return or if you have questions.
The tax rules involved in selling mutual fund shares can be complex. One difficulty is that certain mutual fund transactions are treated as sales even though they might not seem like it. For example, many funds provide checkwriting privileges. Another problem may arise in determining your basis for shares sold.
We can explain in greater detail how the rules apply to you. If you qualify, you can make a deductible contribution to a traditional IRA right up until the Wed. Right now, you may be more concerned about your tax bill than you are about your tax picture.
Keep in mind that not all tax figures are adjusted for inflation and some amounts can only change with new tax legislation. Contact us if you have questions or need more information about your situation. Many people who used to claim a tax break for making charitable contributions are no longer eligible. You can only claim a deduction if you itemize deductions on your tax return and your itemized deductions exceed the standard deduction.
If you do meet the rules for itemizing, there are still other requirements to claim a charitable deduction. The IRS is opening the individual income tax return filing season on Jan. Then, when the legitimate taxpayer files, the IRS rejects the return because one with the same information has already been filed for the year. If you file first, any would-be fraudulent returns will be rejected by the IRS, rather than yours.
Starting in , an individual of any age can make contributions, as long as he or she has compensation. These are only some of the new law changes. Technology has made it easier to work from home. In order to be deductible, you must be self-employed and the space must be used regularly and exclusively for business purposes.
If you qualify, there are two options for a deduction. You can deduct a portion of your mortgage interest, property taxes, insurance, utilities and certain other expenses, as well as the depreciation allocable to the office space. This requires calculating and substantiating actual expenses. Other rules and limits apply. Contact us for details. As part of a year-end budget bill, Congress just passed a package of tax provisions that will provide savings for some taxpayers.
It contains a variety of tax breaks. In addition, there is a package of retirement-related provisions, including new rules that allow some part-time employees to participate in k plans.
These are only some of the provisions in the new law. We can help ensure that you meet all the requirements to get the full benefit of the tax savings available to adoptive parents.
When you file your tax return, you do so with one of five filing statuses. Here are the filing statuses: Single, married filing jointly, married filing separately, head of household and qualifying widow er with a dependent child.
Does your employer offer a k or Roth k plan? Contributing to it is a taxwise way to build a nest egg. Are you charitably minded and have a significant amount of money in an IRA? These distributions are called qualified charitable distributions, or QCDs. Contact us if you have any questions. Qualified expenses include college tuition, fees, books and room, as well as elementary and secondary school expenses. Victims of tax-related scams can be contacted through regular mail, phone calls and email.
If you receive a text, letter, email or phone call purporting to be from the IRS, keep in mind that the tax agency never calls taxpayers demanding immediate payment using a specific method of payment such as a wire transfer or prepaid debit card.
The IRS generally mails bills or notices to taxpayers and gives them time to respond with questions or appeals. Contact us if you have questions about a letter, email or call from the IRS. As we head toward gift-giving season, you may be considering giving cash or securities to your loved ones. Taxpayers can transfer amounts free of gift taxes to their children or others each year through the use of the annual federal gift tax exclusion.
Do you have Series EE U. Instead, the accrued interest is reflected in their redemption value. However, owners can elect to have the interest taxed annually.
And using the money for higher education may keep you from paying federal income tax on the interest. Contact us if you have questions about the taxability of savings bonds. We all know college is expensive. Fortunately, there are two sizable federal tax credits for higher education costs that you may be able to claim.
The American Opportunity credit generally provides the biggest benefit to most taxpayers. But it phases out based on modified adjusted gross income MAGI. There are requirements to qualify for both credits. In addition to the difficult personal issues that divorce entails, several tax concerns need to be addressed to ensure that taxes are kept to a minimum and that important tax-related decisions are properly made.
You also must decide how to file your tax return for this year single, married filing jointly, married filing separately or head of household. There are several other issues you may have to deal with. We can help you work through all of the financial issues involved in divorce. These payments must be sent to the IRS on a quarterly basis.
The 3rd estimated tax payment deadline for individuals is Monday, Sept. Even if you do have some withholding from paychecks or other payments, you may still have to make estimated payments if you receive income such as Social Security, prizes, rent, interest and dividends. Generally, taxpayers send four equal installments. But people who earn income unevenly during the year for example, from a seasonal business may be able to send smaller payments.
Contact us if you have questions about the estimated tax rules. Fortunately, they may be able to deduct some of them on their tax returns. Eligible expenses include books, supplies, computer equipment, software, other classroom materials, and professional development courses. To be eligible, taxpayers must be kindergarten through grade 12 teachers, instructors, counselors, principals or aides. They must also work at least hours a school year in an elementary or secondary school.
However, several exceptions may allow you to avoid the penalty tax but not the regular income tax. This includes any tax deficiency that the IRS assesses after an audit, as well as any penalties and interest.
We can assist you with the details. But be aware there are tax consequences. You report lottery winnings as income in the year you actually receive them. We can help you minimize taxes and stay in compliance with all requirements. Over the years, it has gradually affected more families because the age at which it generally applies was raised to children under age 19 and full-time students under age 24 unless the children provide more than half of their own support.
Now, under the Tax Cuts and Jobs Act, the kiddie tax hits even harder. Read More. Now that most schools are out for the summer, you might be sending your children to day camp. The good news: You might be eligible for a tax break for the cost. Eligible costs for care must be employment-related. Additional rules apply. Contact us if you have questions about your eligibility for this credit and other tax breaks for parents.
Are you a volunteer who works for charity? You may be entitled to some tax breaks if you itemize deductions on your tax return. Unfortunately, they may not amount to as much as you think your generosity is worth. Because donations to charity of cash or property generally are tax deductible for itemizers, it may seem like donations of something more valuable for many people — their time — would also be deductible.
However, no tax deduction is allowed for the value of time you spend volunteering or the services you perform for a charitable organization. However, you potentially can deduct out-of-pocket costs associated with your volunteer work.
Many rules apply, so contact us with questions Read More. The long-term capital gains tax rate is still historically low on appreciated securities that have been held for more than 12 months. Contact us to learn how to grow your investments by minimizing the amount of tax you must pay on profits. Some filers who have gotten a refund in past years wound up owing money.
The IRS reports that the number of refunds paid this year is down from last year — and the average refund is lower. In most cases, refunds are routinely sent to taxpayers within a few weeks. However, there may be delays, or, in worst-case scenarios, refunds may be applied to debts owed to the federal or state governments. Will you be age 50 or older on December 31? Are you still working? Increasing your retirement plan contributions can be particularly advantageous if your itemized deductions for will be smaller than in the past because of changes under the Tax Cuts and Jobs Act TCJA.
But NQDC plans must meet many requirements. One is that, if you wish to defer part of your compensation, you generally must make the election by the end of We can answer them and help you determine what, if any, steps you need to take before year end to defer taxes and avoid interest and penalties For investors, fall is a good time to review year-to-date gains and losses.
Not only can it help you assess your financial health, but it also can help you determine whether to buy or sell investments before year end to save taxes. Abrams McKeever Portal Tutorial. Track Your Refund. Manage Payroll. Contact Us. Welcome to your Secure Client Portal. Here you can upload and download sensitive files securely.
Subscribe to our Newsletter Enter Your Email:. Click for Archived News. Tax Briefs Feeling generous at year end? Strategies for donating to charity or gifting to loved ones Planning to donate to charity this year? Vacation home: How is your tax bill affected if you rent it out? Navigating the tax landscape when donating works of art to charity If you own a valuable piece of art, you may wonder how much of a tax deduction you can get by donating it to charity.
The tax score of winning Studies find that more people are gambling online and sports betting.
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