Taxes

Taxes

Written by Staff Monday, 24 March 2008

Tax preparation

The Internal Revenue Service offers tips for early tax preparation:

• Get the right forms — Forms are available at multiple locations and online at www.irs.gov.
• Take your time — Rushing through a return may result in errors, which can cause refunds to be delayed.
• File online — It’s quick, easy and even catches math errors. E-filing also provides delivery confirmation and speeds up refunds.
• Direct deposit — Taxpayers who choose direct deposit over a check receive refunds quicker.
• Ask an expert — For complex returns, call a CPA or tax preparer. Hiring help could actually save time and money.

Margin tax

On May 2, 2006, the Texas State Legislature passed House Bill 3, which replaced the franchise tax with a margin tax. It affects nearly every legal entity doing business in Texas and is calculated as follows: Tax margin = total revenue - the greater of: cost of goods sold or compensation

Self-employment tax

The maximum amount of net earnings subject to the social security part of the self-employment tax for tax years beginning in 2007 has increased to $97,500. All net earnings of at least $400 are subject to the Medicare part of the tax.

Important dates

• March 15 — Business returns due, last day to file an extension form
• April 15 — Income tax returns due, last day to file an extension form
• Sept. 15 — Business returns due for those who extended their deadline
• Oct. 15 — Income tax return due for those who extended their deadline

• Printing tax forms
  • Internet access to IRS forms is available at all Austin Public Library locations. Printouts at APL locations cost 20¢ a page.
• Post offices open late: The Austin General Mail Facility at 8225 Cross Park Drive in south Austin will have mail handlers out until midnight to accept IRS returns.
• Where to pick up tax forms:
  • To download and print forms, visit www.irs.gov
  • Basic and reproducible forms: Milwood Branch, 12500 Amherst Drive • 339-2355
  • Reproducible forms only: Spicewood Springs Branch, 8637 Spicewood Springs Rd., 974-3800; North Village Branch, 2139 W. Anderson Lane • 458-2239
• Providing tax assistance: North Village Branch, 2139 W. Anderson Lane • 458-2239, Thursdays, 11 a.m.-4 p.m., Sponsored by Tax Counseling for the Elderly (TCE) by AARP

Important forms

• 1040 Standard tax return form allows users to itemize deductions
• 1040EZ The most simple tax form; can only be used by those under 65 with no dependents and an income under $50,000
• 1040A Can be used to report other types of income such as dividend interest
• 4868 Application for automatic extension of time to file; moves due date back six months
• W-4 Withholding allowance certificate; determines amount to be deducted from employee’s paycheck

Economic Stimulus

Payments - Beginning in May, the Treasury department will begin sending economic stimulus payments to more than 130 million households. To receive a payment, taxpayers must have a valid Social Security number, $3,000 of annual income and file a 2007 federal tax return. The IRS will take care of the rest. Eligible taxpayers will receive between $300 to $600 if single or $600 to $1,200 if married filing jointly. Visit www.irs.gov for more information on filing taxes and to see examples of how the Economic Stimulus Act of 2008 may affect taxpayers of different marital and parental situations.

Social Security or Veterans benefits recipients - Many people who receive Social Security benefits are not required to file a tax return. But they need to this year to get the stimulus payment. Many can use the simpler Form 1040A.

Rebate scam alert - Be aware that identity thieves are already pushing scams involving the stimulus payments. At least one telephone scam is making the rounds using the proposed rebates as bait.

Source: www.irs.gov

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