Are You Missing Your Federal Tax Refund for 2008?
If you have just filed your 2008 federal tax return, and you have yet to receive your rebate, you can log onto the irs.gov website to find out if the return has been processed. Whether you opted for direct deposit or asked the IRS to mail your refund check, you still have the option of tracking your refund on the irs.gov website.
You can generally get information about your refund 72 hours after IRS acknowledges receipt of your e-filed return, or three to four weeks after mailing a paper return.
Have a copy of your tax return handy. You will need to provide the following information from your return:
*Your Social Security Number (or Individual Taxpayer Identification Number);
*Filing status (Single, Married Filing Joint Return, Married Filing Separate Return, Head of Household, or Qualifying Widow(er))
*The exact whole dollar amount of your refund
It’s a good indicator that if you have not received your refund within 28 days, from the original IRS mailing date shown, then you are able to trace your refund by changing your address online.
Begin your search at“Where’s My Refund” Here you will enter your SSN, Filing Status, and Refund Amount, and hit submit.
As always, please be aware of emails and phising scams. It is important to keep in mind that the IRS never sends out emails falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private information that will be used for identity theft.
Will Obama Regret the House’s Cap and Trade Give-Away?
During the presidential campaign, Barack Obama and John McCain profoundly disagreed on many issues, among them climate change legislation and the tax treatment of health care. Now, President Obama seems to be bowing to one of McCain’s poor ideas while resisting one of his better proposals.
It is funny how the politics of these issues is playing out. Many economists agree that McCain had the right idea on health care—the Arizona senator proposed replacing the current exclusion for employer-sponsored insurance with a generous tax credit. Yet, Obama continues to resist (though with increasingly less vigor) any change in the tax treatment of insurance.
On the other hand, when it came to cap and trade legislation, McCain favored giving away credits to create a market for CO2 pollution. Obama preferred auctioning those rights to pollute. The difference is more than technical. While in the long run both versions promise to reduce carbon emissions by raising the cost of fossil fuels, an auction could generate $100 billion or more annually in new federal revenues. By contrast, giving away the credits would create a windfall for those companies that produce fossil fuels.
Surprisingly, both Obama and the House Democratic leadership seem to have abandoned the idea of an auction in the face of opposition from Republicans (who called it a huge tax hike) and energy and farm state Democrats (who steered the new subsidy to their local industries). The result: The cap and trade bill passed by the House last week would give away about 85 percent of the credits.
Before he so quickly capitulated, Obama had big plans for that new revenue. His 2010 budget would have spent about $120 billion on clean energy technology over the next decade. But Obama would have used the biggest chunk, more than $500 billion, to extend his signature middle class tax cut, the Make Work Pay credit. His idea was to use the credit to help offset the higher energy costs for middle-class families. Now, I have no idea where he’ll get the money for either initiative.
I am not so worried about the clean technology subsidies since this sort of industrial policy rarely works anyway. But helping out low- and moderate-income taxpayers who end up paying more to air condition their homes or fuel their cars seems to be a necessary step. Now, my biggest fear is that Obama and Congress will merely extend Make Work Pay without finding the offsetting revenues. Something else for those Chinese bondholders to finance, I suppose.
With so much attention paid to health care, this massive energy bill slipped through the House with barely a notice. Now, it goes to the Senate where, I fear, it will only be made worse. After all, there are still about 15 percent of the credits to be given away.
Federal Tax Preparation Tips: Where To File
Federal tax preparation is a time consuming mess if you try to do it yourself. For whatever reason, their instruction book is hard-to-read and even when you follow all instructions to the best of your ability, the tax papers do not always work out well. A better method of federal tax preparation is to use a self-help Internet service.
Intuit created the first TurboTax type of program that started the online tax preparation craze. Today, it is very common to find people who have used online tax preparation services that have given wonderful results. The nice thing about the online tax preparation services where you fill in your own information are the deduction lists.
As you enter information for the online federal tax preparation, the program will ask you a series of questions. Each time that you answer a question, it will bring up all possible deductions that apply to your type of a situation. After you are finished filling in your online federal tax preparation forms, every deduction that is possible will be listed.
Computer programs are not as friendly as that nice person sitting in an H & R Block cubicle to help you in person, but they are less likely to make human-error mistakes that can cause your taxes to be flagged for an audit, or otherwise suffer through the less pleasant aspects of our federal tax system.
When choosing an online service for federal tax preparation, if you make less than 57,000 dollars per year, go to one of the government-approved free services available. The IRS has made a deal with the online tax preparation industry that they will not put their own tax preparation programs online if lower incomes can file free.
Not all companies offer free tax filing to lower income taxpayers, but some do so that there is no need to spend money on federal tax preparation if one of these free services applies to your situation. Federal tax preparation sites that charge are also good to use as long as you are sure that the site runs a legitimate business.
Online federal tax preparation services to stay away from are those that offer deals that sound too good to be true. Advertising that includes offers for extra large refunds, luxury household items, or shopping credits that are larger than your tax bill are all examples of places that might not be running the best kind of business.
Racing Sponsorship
June 30, 2009 by Tax Blog
Filed under Questions & Answers
Today TaxMama hears from Craig in California with this question. “I’m a kart driver, who is going to be doing a lot of racing in Europe in 2010. My budget and sponsorship money that I’m expecting to receive is in the 5 to 6 digits. Do I have to pay taxes on the sponsorship money I receive from companies or corporations? I receive it only once, and it covers the whole year. How does that work?”
Dear Craig,
Congratulations! How wonderful for you that you were able to raise the money to cover your expenses for a whole year.
Basically, sponsorship money is for advertising rights. Your sponsors want to see their logos all over your uniform and/or vehicles. It’s income. Naturally, you have to pay tax on it.
However, first you get to deduct all your expenses. For instance, all the maintenance and tires and parts on the vehicle that get expended with each race. Your staff, if you have permanent American staff, should be on payroll. If you pick up local staff, keep meticulous records about how much you pay them – and the dates. You will need to convert the local currency to US dollars for tax purposes. There are online tools you can use, as long as you have the dates – or an average conversion rate for the year – like OANDA – http://www.oanda.com/
Keep track of all your travel and meals via a log that spells out just where you are each day. By tracking the dates, you may be able to take advantage of per diem rates for hotels and meals that might turn out to be higher than what you actually spent. Be sure to track meals separately, since only 50% of meals dollars are deductible.
Track all the tips and other cash expenses you incur. Don’t forget transportation, shuttles, cabs, etc. If you track every dime, date and location of your trip, by the time the year ends, you won’t be showing much profit. You only pay taxes on the profit – not the full sponsorship money. Note: The Tax MiniMiser in The 100% Home-Based Business Tax Solution would be perfect for you.
Incidentally, since all the expenses are in 2010, see if they can hold off paying you the bulk of the amount until after January 1, 2010. In 2009, collect only what you will be spending during 2009 to set up the car and the races.
Good luck in your races!
And remember, you can find answers to all kinds of questions about racing income and other tax issues, free. Where? Where else? At TaxMama.com
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California Probate: What If The Will Is Lost?
When opening a California probate (in Los Angeles Superiour Court, for example) believing that the will is lost, there’s a rebuttable presumption that it was destroyed. What this means is that the court will presume that the the person who died destroyed the will.
But, to probate a lost will you may introduce evidence that the will was not destroyed. The sort of evidence that is allowed must satisfy the probate court that the will wasn’t destroyed. If the evidence suggests that the will wasn’t destroyed, then it will be admitted to probate. For example, you look for a copy of the will and any reason as to why that copy should not be valid.
California Probate Code 6124 says that: “If the testator’s will was last in the testator’s possession, the testator was competent until death, and neither the will nor a duplicate original of the will can be found after the testator’s death, it is presumed that the testator destroyed the will with intent to revoke it. This presumption is a presumption affecting the burden of producing evidence.”
Let’s assume there’s no copy, and that the California will is just lost. Most likely what’s going to happen is the property will probably pass intestate, meaning it will go equally to whomever the natural objects of the bounty are, the natural heirs or lineal descendants.
For probate help, call Mitchell A. Port at (310) 559-5259.
Expiring Homeowners Credit
June 29, 2009 by Tax Blog
Filed under Questions & Answers
Today TaxMama hears from Penny in Kansas who is confused. “Have you heard anything about the new home tax credit having to be used by Monday, June 29, 2009? A couple of realtors have told clients that the money’s running out. If we are going to get the credit, they must get it by Monday.”
Dear Penny,
That’s utter nonsense.
They’re just trying to accelerate their sales, perhaps to win monthly bonuses at their offices…or just to pressure people to make offers and close escrows. Who knows what goes on in the minds of real estate agents who have to stoop to lying to generate a sale?
Relax. Take your time and find the perfect house. It is, after all, a buyers market this year. You can use the credit for any first-time home purchase until November 30, 2009. In fact, there is even talk on Capitol Hill about expanding the credit to $15,000 and removing the first-time homebuyer stipulation. That’s just talk so far. So don’t bank on it.
Now, perhaps there is a STATE credit in Kansas that’s expiring?
Though, I cannot find one.
And remember, you can find answers to all kinds of questions about the first time homebuyers credit and other tax issues, free. Where? Where else? At TaxMama.com
[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the subscribe link and join us.]
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How To Trace Your Income Tax Refund Check
Did you know that you can track your IRS income tax refund online after filing your taxes? The government keeps a Website called, ‘Where’s My Refund’ that is quick and simple to use. After placing a few pieces of information into the program, the IRS will show you on the computer screen exactly where you income tax refund check is.
How to find your income tax refund check online:
To use the income tax refund locating system, simply fill in the blanks for Social Security number, exact amount of refund, and the information on your tax filing status. This will take you to a page that shows where the refund check is located at that time. Checks can be in the mail, in the bank, or returned to the IRS for various reasons.
Changes in your address for IRS mailings:
The IRS income tax refund tracing program is set-up for users to put their new address into the system if their IRS refund has gone back to the IRS as unable to be delivered. When a taxpayer places a new address into the government tracing program, if they have any refunds sitting there, they will be sent out to the new address quickly.
How to stay safe while finding your IRS refund check in the system:
Around tax time each year, there are scams and frauds running by horrible people that would like to have your income tax refund personal information so that they can try to rip-off your identity or bank account. The IRS will never send you an email before you contact them to request communications. Do not click on anything in a fake IRS email.
Some users are hesitant to use their social security number online for IRS transactions such as is necessary with the income tax refund tracing program. The IRS is aware of the hazards of placing your Social Security number online. There is a free service through the IRS that will assign an individual ITIN number that can be used instead the SS number.
What to do if your IRS income tax refund check is not showing in the system:
When a taxpayer cannot find their income tax refund any place inside of the IRS Where’s My Refund system, it is not time to panic. It takes the IRS up to 5-weeks to put your information into the system if you filed your return by mail and up to 1-week for your information to go into that system if you filed your tax return online.
Where Is My Tax Return: The Scam
If you are missing a tax return refund check in the mail, or one that should have been electronically deposited into your bank account, go to the government Website called, “Where’s My Refund”. Simply type those words into your Internet search bar to get started. The IRS keeps this site open all year long to allow taxpayers to trace refunds.
The government often hears the question, “Where is my tax return?” The scam artists are always working hard around tax time to try to trick you out of your refund checks. If you have a missing refund check, do not wait in hopes that it might show up someday, go straight to the government Website “Where’s My Refund” and find out where it is.
The program on the government Website is very easy to use. It requires that the taxpayer identify themselves with a social security number, the exact amount of refund to be collected and other information that only the person making out the tax papers would know. Key words: You and your tax preparer both have had access to this information.
It is never wise to use a tax service to prepare your taxes that are offering refunds that seem too high to be real, or ones that offer other gimmicks that go above simply filling in your paperwork for a fee. It is too easy for everybody that would like to become a tax preparation criminal to open their own professional looking Website.
The IRS puts out a list each year of the top scams and frauds that are going around that involved tax return refund checks. Some of the scams on the list are things that they are seeing internally, and ways that people try to cheat on their taxes. Other things on the list are ways that tax preparation or tax refund checks are ending up being used in frauds.
One of the top IRS listed scams this year was for phishing. Phishing is a term used to describe the acts of people who are trying to take your name, social security number, and bank account or credit card information so that they can become your identity long enough to take your money. The IRS never emails unless you ask them to. All letters in your email that claim to be from the IRS are fakes; never click fake email links.
If your IRS tax return refund check is missing, and it cannot be found inside of the government, “Where’s My Refund” program, then you might have been a victim to one of the various frauds or scams that are going around. Instantly call the IRS for a determination of your tax refund standing, and then follow their directions exactly.
Obama off the leader board
There’s an interesting exchange on the climate change bill going on over at Capital Gains and Games. Budget wonk Stan Collander was impressed that “…the White House once again has demonstrated an excellent ability to get Congress to go along with the things it wants.” Dartmouth economist and former Bush CEA member Andrew Samwick, however, argues that this is backwards. He thinks the legislative branch should take the lead on developing legislation and the executive branch should take a subordinate role.
Andrew also complained that the legislation would give away most of the permits to industry and that almost all Republicans had sat out the debate. I agree with him on those points, but not on the leadership point. I don’t see how Congress leads on complex policy issues. It can (and should) take charge of things like investigations, but only the executive branch has the analytical capability to fully develop policies and only the president has the political capital to advance them. Congress is designed to advance regional and factional interests. Those should be part of the policy debate, but I don’t see how a coherent policy on something like climate change can get very far if Congress takes the lead.
In fact, my concern is the opposite of Andrew’s. I think the President should be standing firmer on fundamental policy issues—such as allocation of permits. The bill that came out of the House seems almost designed to fail in practice. The subsidies for consumers are way too small. (Samwick suggests that a payroll tax offset would make more sense, and I agree. Obama proposed a version of that, but capitulated to Congress’s giveaways to industry.) The permit allocation seems designed to reduce emissions in the most costly way possible. And the capitulation to agriculture was obscene. (Agriculture is exempt from any emission restrictions and USDA, not EPA, gets to decide about offsets—activities that reduce carbon emissions. Given that USDA’s mission is to advance the interest of farmers, not the environment, this can’t work out well.)
The House did get the president to go along with its wishes (at least a version of them) and it wasn’t pretty. I dread what might emerge from the Senate.
Changes to the Tax Exclusion of Employer-Sponsored Health Insurance Premiums: A Potential Source of Financing for Health Reform
Many have suggested that reducing or eliminating the tax exclusion of employer-sponsored health insurance (ESI) could generate significant additional tax revenue to fund expansions in health insurance coverage. In this paper, we focus on two specific policy design elements: (1) a cap, or dollar limit, on the amount of employer-sponsored health insurance premiums excluded from taxable income; and (2) an index that determines how this cap might grow over time. Our analysis shows that limiting the tax exclusion would provide substantial funding for health reform and mitigate the huge inequities built into the current treatment of employer premiums.