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It’s that time of year again when the taxman wants to know how much you have earned and how much tax you owe him. Don’t forget that your individual tax return has to be returned to the Internal Revenue Service (IRS) by April 15 this year, unless you have applied for, and received an extension. We all want to pay less tax, but instead of looking for loopholes and gray areas, rather focus on managing your tax affairs as efficiently as possible. The following business and personal tips should make the current tax year a little easier on your pocket when completing your return:

1. Travel Expenses It is good practice to keep a mileage logbook of distance travelled, in order to accurately determine you travel deduction. If you have two jobs, you can deduct the cost of traveling from the first to the second, but if you have a single job, you cannot deduct commuting costs because it is considered a personal expense, not a business expense. Travel for business, including costs to go to seminars and conferences are 100% deductible. Deductible travel costs include hotels, airfare, taxis, car rentals, parking fess, tolls and tips.

 2. Medical Expenses Keep records (including invoices and statements) of medical expenses which are not covered by your medical aid, in order to get a deduction for those expenses on assessment. Depending on your income, certain medical expenses including health insurance and dental insurance premiums may be deductible. This deduction is limited to costs over 7.5% of your income. Pursue turning your non-deductible personal medical expenses into a legitimate business expense.


3. Entertainment Expenses Be careful of entertainment allowances. Since March 1, 2002, no deductions can be claimed against entertainment allowances for personal reasons. Make sure your employer is aware of this and that the allowances are taxed in full, otherwise you might end up with a tax liability on assessment. You may however deduct “ordinary and necessary” business meal and entertainment expenses up to 50%.

4. Tax Records

Why not make your life easier and ensure that you don’t miss any deductions by organizing your record keeping system early and keeping it updated. Not only does having organized records make it easier and less frustrating for you to file your tax return, it also enables you to explain an item on your return that the IRS might question, and could prevent you from having to pay additional taxes and penalties for unsubstantiated items. Although legally you need only keep tax records for three years , you should keep a copy of the returns in case you need information from these returns at some point.

5. Electronic Filing

If you want your return processed in approximately half the time of a paper return, you should consider filing the forms electronically. IRS E-file makes you life a lot easier as it picks up problems with your returns instantly and provides immediate feedback and confirmation regarding your return.


6. Avoid Refund Anticipation Loans While it would be nice to get your money back in your pocket as soon as possible, it is much better to wait for your refund. The downside of these loans is that the annual interest rates on them are very high, usually between 50% and 500%. So between the loan fee, tax preparation fees and other administrative fees imposed on the loan, you end up losing a big portion of your refund.


7. Deadlines

Be aware of deadlines in order to avoid penalties. Tax returns must be submitted before the due date given by the IRS. If your previous years’ tax affairs are up-to-date, an extension for submission of the return can be requested. However, extensions are granted less frequently, depending on your particular circumstances.


Conclusion

Tax season makes everyone a little nervous. Rather start early to allow yourself time to prepare and to ensure that you are taking full advantage of every eligible tax break.

It might be a good idea to purchase an electronic book or two in order to gain more information, and educate yourself about income tax and submitting your return correctly. The following E-books provide a wealth of tax information as well as tips, stories and explanations of tax laws and how to make the most of them:

Planning Your Tax,
Save on Taxes,
Tax Survival Guide.

Additionally, the Official IRS website is a great resource for additional information.

What are the federal income tax rates? I’m talking about investments. I heard there’s one tax rates on savings account, a different tax rate on short term capital gains, a different tax rate on long term capital gains, another tax rate on dividends, and so on. Is there a chart somewhere that shows these rates so I can consider tax consequences of how I invest my money?

Are you looking for some inside information on income tax refund? Here’s an up-to-date report from income tax refund experts who should know.

Those are the words that every taxpayer would love to hear, yes, you’re receiving an income tax refund. For many individual taxpayers those refunds can be obtained through Earned Income credit, a real refund of overpayment of tax, or through an overpayment from previous years. Once you determine you’re receiving a refund, there are several options for actually putting that money in the taxpayer’s hands. Standard paper filing, electronic filing with direct deposit, rapid refunds, and refund anticipation loans are the options we have the choice of exercising, and for many refund anticipating individuals, the rapid refund or the refund anticipation loan is the refund of choice.

Since the advent of the computer age, and the great invention of the internet, the Internal Revenue Service has been fairly quick to react to the benefit of electronic filing. The returns are filed much faster, refunds are made faster, and money due the IRS can be obtained faster. Let’s take a minute to look at the different refund options, and what each offers the individual taxpayer.

The standard paper filing, although many are more familiar with this method of filing, is slowing reaching obsolescence. There will soon come a time that the old system of paper filing will be entirely eliminated and replaced by the electronic filing methods. If you are still one of the dying numbers of Americans who files a paper return, you should anticipate receiving a refund in about 6 weeks; today, thanks to the great use of the internet, 6 weeks to receive a refund, seems like an extremely long time.

If you find yourself confused by what you’ve read to this point, don’t despair. Everything should be crystal clear by the time you finish.

The rapid refund, that is rapidly replacing the standard paper filing, is an electronic method used for filing your tax return, and allowing you to receive your refund in about 10-14 days. Much faster than the six weeks it used to take. There are usually no excess fees attached to this type of filing, and returns may be filed for free through many local, public access facilities.

The refund anticipation loan, however, is a little different. These must be administered by a tax professional through an established alliance with a financial and lending institution. There are several excellent choices available, and many qualified tax professionals to complete your tax return, you will however be required to pay a loan fee or a small interest fee for the opportunity to obtain an anticipation loan. There are several restrictions placed on receiving a refund anticipation loan, and some of the restrictions may affect many people.

For example, if you owe back taxes, back child support, or liens and judgments, you can’t qualify for the refund anticipation loan. Most often, the individuals who apply for and use the refund anticipation loan are recipients of earned income credit, and their refunds are usually well into the thousands of dollars. The refund anticipation loan can be processed in as little as 3 hours, and back in the hand of the tax payer by late afternoon; this is provided everything works exactly as planned. The higher interest rates charged by the bank product providers, and the higher processing fees charged by the tax preparers, equate to less money for the tax payer, but many of these individuals don’t even blink when told how much it will be to process their return, they just want the refund immediately. This is just one more example of the instant gratification upon which our society chooses to operate.

Even for individuals filing with the electronic returns, and choosing to have their funds direct deposited, the turn around time is usually no more than 10 to 15 days. You would think that a turn around of less than 2 weeks would be quick enough for many taxpayers, but typically, the bigger the refund, the faster the necessary return.

It would seem to me, that this is just another way for the system to profit from the poor; as it is usually the poor that qualify for the earned income credit refunds, and these can be extremely large, especially for families with 2 or 3 dependents.

There’s no doubt that the topic of income tax refund can be fascinating. If you still have unanswered questions about income tax refund, you may find what you’re looking for in our article directory.

My husband retired in October of last year and we are really afraid they are not taking out the proper amount of income tax. We do not want to have to pay a large amount when we file our taxes. He is filing married with 0 exemptions. They are only taking out 2.7% in taxes and we are both fairly certain this is not correct. Is pension income taxed differently than regular income? Should we have them taking out a larger, fixed amount to be safe?

Okay, I already filed my taxes, and I am getting a refund, but that is because I have deductions and kids and I overpaid. Because of the economic stimulus package, I want to be sure I paid at least $600 in taxes to get the full rebate. Since I don’t have a copy of my 1040 in front of me, can’t I just look at the IRS tax sheet to see how much taxes I owed according to my income and go by that? Or would that be incorrect since I had deductions etc?

The current tax system imposed on corporations by the U.S. government is at best, a biased system; for corporations that have a net profit, taxes on those profits amount to a full one-third. So, if you’re doing business as a standard “C” corporation, and you do manage to make a profit, you’re going to owe Uncle Sam about 30%. That’s an amazing figure, so let’s look at some of the behind-the-scenes information that will help to enlighten us as to the “why” so much tax should be levied.

The first thing you must understand when dealing with the corporate tax structure, is that for the most part, many large corporations do not pay the complete 30% tax that would typically be levied against an individual if they were in the same situation; corporate accountants and the sheer process by which corporations must report their income, expenses, deductions, depreciation, dividends, and any other financial transactions allows for huge deductions that typically offset any tax due. This concept is a major topic of discussion today, as we attempt to better control and regulate corporate accountability for their finances.

When you have large corporations that are obviously reporting earnings and paying dividends, yet they pay no tax, you should be tipped off to the fact that there is a problem. How to fix that problem, may be another subject altogether.

The latest proposals have been to eliminate the corporate tax altogether. This would shift the tax burden to the individuals of this country; that is a tremendous shift from the post-war era of the Second World War, when corporations and individuals shared the responsibility almost equally. Thanks to the lobbying done by corporate lobbyists over the last thirty years, we’ve finally reached the point of no return. The latest proposals have come from within the halls of Congress to eliminate corporate tax, and let the average taxpayer assume all the responsibility.

In case some of you have noticed, we as individual citizens are losing more and more of our take home pay each year, to taxes of some kind. Medicare, social security, and income taxes take a larger portion of our dispensable income each year. This would take a step closer to making even more of our income the property of the tax man.

What about this seems unfair? As pointed out by the individuals who are in favor of eliminating corporate tax, it would encourage capital investment and job growth in this country and that is absolutely true, it theoretically would do just that. But since when does theory actually work in practice? Communism works in theory. Many individuals believe it is simply another way to provide tax-free income to CEOs, and Board Members. The latest scandals such as Enron and HealthSouth have shown this country real hard evidence of the corporate abuses that are rampant in this country, and so far uncontrolled. The Sarbanes-Oxley Act has taken great steps toward greater accountability on the part of the corporate environment, but elimination of corporate tax is simply a legal way to avoid paying the tax.

The most interesting information I have found in researching this topic, is the fact that the media has paid little or no attention to these issues, thus allowing the purported growth of the corporate lobbyists to go virtually unnoticed by the American public. While mush emphasis has been placed on the Social Security issues we face, nothing has been mentioned about the loss of revenue we’ve experienced over the last thirty to forty years because of the decreased taxation of corporate America.

Where have tax laws and law makers turned to accommodate the decrease in corporate tax? There have been increases in individual tax liability and there has been an increase in sales tax. The sales tax affects the poorer of this country as a percentage of income, than the rich. The loss of revenue from the corporate structure of this country have led to starved educational systems, cities and counties that are revenue poor, and a economic system for the poor that only becomes harder to sustain.

When you factor in the ability of the wealthy and the corporate entities of this country to hire brilliant accountants that find loopholes in the tax system, and relieve their clients entirely of their tax liability, you cannot believe that the current system operates for the people, by the people, can you?

* Due date is the date prescribed by the department as the last date of filing return. For Individuals who are not liable to be audited the due date prescribed for filing return is 31st July 2008 unless extended further by a seperate notification.

* The income tax department may any time extend the due date for filing Return of Income by issuing a public notification. In that case such an extended date shall be considered as Due date of filing income tax return.

* Even if the person can not file return of income by due date, he can still file return upto 31st March of the next financial year . In such a case no penalty will be imposed for not filing the return by due date. E.g. if a person whose due date for filing is 31st July 2008, and could not file return by the due date, then he can file the return upto 31st March 2008.

* All losses are allowed to be carried forward to next year only if the return is filed within due date, except when there is loss under the head house property

Filing federal income tax returns is a concern for many individuals. Some are worried about getting their tax return in on time whereas others are concerned about filing it correctly. For the latter group of individuals, there are ways to find help in the area of federal taxes and some possibilities will be listed below.

Visit the IRS Website

One of the best resources to consult in order to gain general help with regard to your federal tax returns is on the IRS website. This site has a wealth of valuable resources on it as it comes directly from the government agency responsible for handling these taxes. On their website you can learn about various filing requirements in addition to being able to print out pertinent tax forms. If you are searching for help with federal income tax returns, a visit to the IRS website is a must.

Accountants

If you would prefer to contact a professional well versed in the field of taxes as opposed to embarking on the federal tax journey yourself then a visit to your accountant is the way to go. By inquiring with your accountant about taxes you will feel good in knowing that you are getting the right answers from a true professional. Accountants can handle a variety of tax matters including helping you with your federal tax returns.

Tax Forms

For those who may have a simple question which pertains to filling out the tax form you can always look directly at the forms to determine if the answers are right there in the fine print. These may not provide as detailed an answer as you wish them to but they will provide some guidance in general tax question areas. Federal tax forms can be printed out from the IRS website or picked up at your local post office.

Other Tax Related Websites

In addition to the IRS websites there are a multitude of other websites which feature federal tax topics and articles. The only downside to consulting these various websites is that the information contained within them will not be as accurate as that which is contained on the government websites. Therefore, if you are looking for concrete reference material your best bet is to go to the IRS website to find it there. However, if you are searching for general tax information relating to federal taxes you can take a perusal on these types of websites to see what is available.

Tax Software

These days many individuals choose to do their taxes on their own via tax software. When taking care of your federal taxes these software programs provide a good way to get the taxes done and have all of your tax related questions answered. In addition, many of these federal income tax software programs will also provide telephone numbers for you to call should you need further help with doing your taxes.

I live in British Columbia (Canada) and I’m just wondering when you have to start paying income taxes. I am currently 14 years old and I’m planning on getting a job at tim hortons ( 8 dollars an hour). Do I have to pay income tax once I start?

These days with all things for which we pay, it might be very hard to save money. Due to this, there are some things which we should find for saving money. A good method is preparation of income tax. This thing happens every other year and might cost huge amount of cash; especially if you’ve a company which fills out and files the tax for you. For cutting down this expense, there are various ways to prepare income tax, freely. That’s correct, you shall have your tax filled for free, whether you’re doing them or you’re having someone to do it. It is not always very easy to have places which have free preparation of income tax, though. You may have to do some digging to find these places.

All the time, businesses which have tax preparing services won’t have free preparation of income tax. That’s because, this is the way by which they make their cash. Still, there’s a way by which you might have them for free. There are some states which has laws where all might get the taxes done free, of cost. The state deputes few companies for handling the load of work. To know whether if your state has these kinds of things for the residents, you might find the information on the net. You can also find out which of the companies offers this service as well. Remember that the service that they provide freely would be the minimum. You will not get those special perks that they often give for their customers who pay. That doesn’t matter till you get income tax preparation, for free. It is all about how to save money. If you do not reside in a state which has these kinds of things for its residents, then you need not worry. You might still get income tax preparation for free somewhere.

The IRS, in their official site, is having a list of tax preparers, online, who offer their services freely. This is a very good idea as you shall do your taxes on your own from your own home’s comfort. You do not need to be worrying about meeting a tax accountant; we can just handle things in your computer. Do not forget that there may be some costs which are hidden. They let you file the federal returns freely and charge a very small fee for the state returns, usually. You might always print the completed tax return and send it to yourself if you would like to overcome that fee and also the state.