Who Should File a 2012 Tax Return?

If you received income during 2012, you may need to file a tax return in 2013. The amount of your income, your filing status, your age and the type of income you received will determine whether you’re required to file. Even if you are not required to file a tax return, you may still want to file. You may get a refund if you’ve had too much federal income tax withheld from your pay or qualify for certain tax credits.

Even if you’ve determined that you don’t need to file a tax return this year, you may still want to file. Here are five reasons why:

1. Federal Income Tax Withheld.  If your employer withheld federal income tax from your pay, if you made estimated tax payments, or if you had a prior year overpayment applied to this year’s tax, you could be due a refund. File a return to claim any excess tax you paid during the year.

2. Earned Income Tax Credit.  If you worked but earned less than $50,270 last year, you may qualify for EITC. EITC is a refundable tax credit; which means if you qualify you could receive EITC as a tax refund. Families with qualifying children may qualify to get up to $5,891 dollars. You can’t get the credit unless you file a return and claim it. Use the EITC Assistant to find out if you qualify.

3. Additional Child Tax Credit.  If you have at least one qualifying child and you don’t get the full amount of the Child Tax Credit, you may qualify for this additional refundable credit. You must file and use new Schedule 8812, Child Tax Credit, to claim the credit.

4. American Opportunity Credit.  If you or someone you support is a student, you might be eligible for this credit. Students in their first four years of post-secondary education may qualify for as much as $2,500 through this partially refundable credit. Even those who owe no tax can get up to $1,000 of the credit as cash back for each eligible student. You must file Form 8863, Education Credits, and submit it with your tax return to claim the credit.

5. Health Coverage Tax Credit.  If you’re receiving Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, Alternative Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty Corporation, you may be eligible for a 2012 Health Coverage Tax Credit. Spouses and dependents may also be eligible. If you’re eligible, you can receive a 72.5 percent tax credit on payments you made for qualified health insurance premiums.

This article is provided for information purposes only and should not be relied upon for legal or financial advice. We would be happy to discuss how the information in this article affects or may help you. For more details about this matter, please contact our offices at 847-466-7947 of 702-966-2770.

IRS CIRCULAR 230 DISCLOSURE: Pursuant to requirements imposed by the Internal Revenue Service, any tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter.

Document Management – Why Do I Need it!

Why Use Document Management Software?

Is your office currently buried in paper? Having trouble quickly finding a specific document when you have to wade through hundreds of folders in dozens of file cabinets? Running out of space to keep all those files and file cabinets. Tired of spending money on the storage space when you can better use this space? What do you do if a document has been misfiled or lost? If a stiff breeze were came through your office, would papers go scattering everywhere?

Document management software can help you get out from under all that paper, increasing your and your staffs productivity. Document management software can help you easily and quickly scan documents, allowing you to file them electronically in a centralized location. Just for starters Document management software helps reduce waste and overhead costs, streamlines your workflows, reduces printing and shipping costs. Document management software also, often includes professional level PDF and OCR modules, you may already being paying for.

When determining which document management software is best for you, the most import thing is ease of use and portability of your files. The software’s interface should be familiar enough so users of any skill level can be up and running with little or no training and has the features you need to effectively manage your documents. The software should also allow you to easily convert back to your previous system or a new system, avoiding the proprietary structures that make converting cumbersome.

And then there is the cost – until recently these features have been cost prohibitive for the small office.

Recently our office has converted our document management to a software produced by Lucion Technologies – FileCenter. After extensive use, our firm has given this software our Seal of Approval.

With FileCenter you can:

Scan

Go from paper to searchable PDF in a single mouse click. Scanning important documents has never been easier … or faster.

Manage and Organize Your Files

Manage your files in a way that makes sense: electronic file cabinets. Organize your scans, computer files, and e-mail together. Organize & manage your files two ways: using a regular “Explorer” interface just like Windows, or using FileCenter’s electronic file cabinets.

Full Featured PDF Tools

PDF is the standard. FileCenter aims to make bot printing and scanning as efficient and automatic as possible. A basic scan will scan a new document straight to searchable PDF with no additional prompts. OCR runs automatically as part of the scanning process. Literally go from paper to a fully searchable PDF file in one mouse click. And you can stack, join and split PDF’s without even opening them. Or just print to PDF from your favorite software.

FileCenter includes its own PDF editor. Use FileCenter to open, view, mark up, comment and annotate your PDF files. Delete pages, rearrange pages, extract pages, and move pages between files. You can even fill out forms and sign your PDFs with digital signatures or simply type right on your PDF document. The tabbed interface keeps multiple open files at your fingertips.

FileCenter includesPDF Conversion Tools. With one click, convert many kinds of files into the popular PDF format. It’s an easy way to convert office files, faxes, and scans to PDF without opening them.

FileCenter can scan directly to Word. Sometimes all you want from a scan is the text. So why bother with a scanned file at all? With just one command, FileCenter will acquire a scan, run OCR to extract the text, and send the text straight to Word (or your favorite word processor) for editing.

OCR – Automatically

Make scans, faxes and other documents fully searchable. Or pull the text from a paper document into Word. FileCenter integrates OCR (text recognition) as a seamless part of the scanning process. As the scan comes in, FileCenter automatically runs OCR on each page and inserts the text invisibly in the resulting PDF. This makes the PDF searchable, indexable, and lets you copy real text out of the PDF.

Preview

When all you need is a quick glimpse, preview the file without opening it. As fast and easy as thumbing through documents.

Search

Find files effortlessly. Search the keywords and notes in your PDFs or the entire body of your documents.

Share

Share cabinets on the office network or float them onto the cloud. And enjoy the robust Windows file security you’re already used to.

E-Mail Securely

Send  those sensitive files on the fly with a password-protected and encrypted PDF, without the worry of hackers getting to your sensitive information.

Cloud Compatible

FileCenter is full compatible with most popular cloud providers, like DropBox, SugarSync, Google Drive, and Microsoft SkyDrive. This means that your FileCenter files can viewed on your local PC, or when you’re on the go through your cloud provider.

And much more…

What will this cost?

FileCenter currently costs just $49.95 for the Standard Version and $199.95 for the Pro Version. NOTE: Some of the above features are only included in the Pro version.

A Free Trial is also available!

This article is provided for information purposes only and should not be relied upon for legal or financial advice. We would be happy to discuss how the information in this article affects or may help you. For more details about this matter, please contact our offices at 847-466-7947 of 702-966-2770.

IRS CIRCULAR 230 DISCLOSURE: Pursuant to requirements imposed by the Internal Revenue Service, any tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter.

NoteWikipedia: The note-naming convention specifies a letter, any accidentals, and an octave number. →

AMT – IRS Sees A Problem, Congress Doesn’t!

In a letter to The Honorable Sander M. Levin, Ranking Member of the Committee on Ways and Means in the U.S. House of Representatives IRS warned that if Congress fails to extend the patch for the AMT 60 million Americans could be affected.

In this letter IRS reminded Congress that “The AMT applies to individual taxpayers with incomes above specific thresholds set by law. For many years, Congress has been enacting “patches” to index these income thresholds for inflation in order to prevent millions of taxpayers from being subject to the AMT. The last such patch expired on December 31,2011. “

IRS went on to say that without an AMT patch about 28 million taxpayers would be faced with a very large, unexpected tax liability for the current tax year (2012). In addition, another 60 million may not be able to file their returns or receive a refund until IRS completes the necessary changes. 2013 could prove even worse.

Finally, IRS added, “… because the AMT patch already expired at the end of 2011, there is no ability to consider partial year extensions of the AMT (since by the end of 2012 it would have already lapsed for an entire year).”

This article is provided for information purposes only and should not be relied upon for legal or financial advice. We would be happy to discuss how the information in this article affects or may help you. For more details about this matter, please contact our offices at 847-466-7947 of 702-966-2770.

IRS CIRCULAR 230 DISCLOSURE: Pursuant to requirements imposed by the Internal Revenue Service, any tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter.

IRS Increases Mileage Rate to 55.5 Cents per Mile

The Internal Revenue Service today announced an increase in the optional standard mileage rates for the final six months of 2011. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business and other purposes.
The rate will increase to 55.5 cents a mile for all business miles driven from July 1, 2011, through Dec. 31, 2011. This is an increase of 4.5 cents from the 51 cent rate in effect for the first six months of 2011.

In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2011. The IRS normally updates the mileage rates once a year in the fall for the next calendar year.

“This year’s increased gas prices are having a major impact on individual Americans. The IRS is adjusting the standard mileage rates to better reflect the recent increase in gas prices,” said IRS Commissioner Doug Shulman. “We are taking this step so the reimbursement rate will be fair to taxpayers.”

While gasoline is a significant factor in the mileage figure, other items enter into the calculation of mileage rates, such as depreciation and insurance and other fixed and variable costs.

The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.

The new six-month rate for computing deductible medical or moving expenses will also increase by 4.5 cents to 23.5 cents a mile, up from 19 cents for the first six months of 2011. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Mileage Rate Changes:

Purpose	Rates 1/1 through 6/30/11	Rates 7/1 through 12/31/11
Business	51	55.5
Medical/Moving	19	23.5
Charitable	14	14

 

This article is provided for information purposes only and should not be relied upon for legal or financial advice. We would be happy to discuss how the information in this article affects or may help you. For more details about this matter, please contact our offices at 847-466-7947 of 702-966-2770.

IRS CIRCULAR 230 DISCLOSURE: Pursuant to requirements imposed by the Internal Revenue Service, any tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter.

Same-Sex Couples May Want to File A Protective Refund Claims

A recent decision by a federal appeals court regarding the Defense of Marriage Act (DOMA) suggests same-sex couples may want to file something known as a protective refund claim with the Internal Revenue Service in the event the Supreme Court overturns the law. In Windsor v United States, the court allowed an estate tax marital deduction to the surviving spouse of a same-sex couple, striking down the DOMA definition of marriage as unconstitutional.

DOMA is a federal law that defines marriage as the legal union of one man and one woman. This means that same-sex marriages are not recognized for federal purposes, including insurance benefits for government employees, Social Security survivor benefits, and the filing of joint tax returns. The constitutionality of which is expected to eventually be considered by the Supreme Court.

Married same-sex couples hoping to benefit from a challenge to DOMA shouldn’t wait for a final decision before filing a “Protective Refund Claim” under with the Internal Revenue Code Section 254, as the statute for filing amended returns only allows three years from the timely filing of the original return. The deadline for amending the 2009 returns will be closing in 2013.

In case the U.S. Supreme Court strikes down DOMA and to preserve your potential refund, same-sex couples who are married and, those who are in domestic union States, should file their claims to protect their right to refunds now. This will keep open those claims for years that are closing, until this matter is resolved by the Supreme Court.

This article is provided for information purposes only and should not be relied upon for legal or financial advice. We would be happy to discuss how the information in this article affects or may help you. For more details about this matter, please contact our offices at 847-466-7947 of 702-966-2770.

IRS CIRCULAR 230 DISCLOSURE: Pursuant to requirements imposed by the Internal Revenue Service, any tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter.

Tips for Taxpayers Who Receive an IRS Notice

Every year the IRS sends millions of letters and notices to taxpayers. In the event one shows up in your mailbox, here are some things every taxpayer should be aware of just in case you receive one.

1. Remain calm, but don’t ignore the notice either. Many of these letters can be dealt with very simply, but they  must be dealt with in a timely fashion. Contact us and send us a copy of your notice by fax or through our secure client portal. If sending to us by e-mail, make sure you block out any sensitive information, like social security numbers.
2. Receiving an IRS notice doesn’t necessarily mean you’ve done anything wrong or that you are going to be audited. There are many reasons the IRS sends notices to taxpayers. The notice may request payment of taxes, notify you of a change to your account or request additional information. The notice you receive normally covers a very specific issue about your account or tax return.
3. Each letter and notice offers specific instructions on what you need to do to satisfy the inquiry.NOTE: IRS notices are only sent by USPS mail! At this time, the IRS NEVER sends  any correspondence by email, and will only fax when you or your representative request it. If you receive and “IRS Notice” IT IS FAKE! And most likely a “phishing” scam/attempt.
4. If you receive a notice about a correction to your tax return, you should review the correspondence and compare it with the information on your return.
5. If you agree with the correction to your account, usually no reply is necessary unless a payment is due.
6. If you do not agree with the correction the IRS made, it is important that you respond as requested. We will assist you in writing to explain why we disagree with the notice. We will include any documents and information we wish the IRS to consider, along with a copy of the notice.
7. Most correspondence can be handled without calling or visiting an IRS office. However, we may be able to resolve your IRS matter by contacting them by phone. We will need a copy of your tax return and all the correspondence available.
8. It is important that you keep copies of any correspondence with your tax records.
9. IRS notices that result in a change may also result in State tax issues and notices. We can assist you with these as well, so forward them to our office for resolutions.

For more information or assistance with your IRS notices, please feel free to contact our offices.

This article is provided for information purposes only and should not be relied upon for legal or financial advice. We would be happy to discuss how the information in this article affects or may help you. For more details about this matter, please contact our offices at 847-466-7947 of 702-966-2770.

IRS CIRCULAR 230 DISCLOSURE: Pursuant to requirements imposed by the Internal Revenue Service, any tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter.

Fourth Amendment Right to Privacy Upheld For E-mails!

Ask Bob, Enzyte gave him back the male performance he needed, even though urologists insisted that there was no ingredient in the product guaranteed to promote virility.  But this did not stop customers for calling the 800 number and buying the product, nor stop Berkeley Premium Pharmaceuticals, producer of Enzyte from growing to a company with 1500 employees making annual sales of $250 million with their “Auto-Ship” program.

But whether Enzyte helped or not the “Auto-Ship” program rankled customers and by 2002 the there were 1,500 complaints, according to the ruling by the 6th U.S. Circuit Court of Appeals in Cincinnati.

In 2006, a federal grand jury handed down a 112-count indictment on fraud related charges against Steven Warshak owner of Berkeley as and co-defendents which included his mother and another of his businesses. And in August of 2008 the Court ordered Warshak to pay a fine of $93,000 and to forfeit the sums of $459,540,000 and $44,876,781.68, representing the proceeds of his crimes and sentenced him to 25 years in prison and his mother Harriet to 24 years imprisonment.

Defendants, Warshak and his mother, appealed the decision, claiming that government agents violated Warshak’s Fourth Amendment rights when compelling his Internet Service Provider (ISP) to turn over and produce the content of emails without first obtaining a warrant based on probable cause.

On appeal Warshak’s sentence was reduced to 10 years and his mother’s to one day. In it’s opinion the US Sixth Circuit Court of Appeals held that:

“Given the fundamental similarities between email and traditional forms of communication [like postal mail and telephone calls], it would defy common sense to afford emails lesser Fourth Amendment protection…. It follows that email requires strong protection under the Fourth Amendment; otherwise the Fourth Amendment would prove an ineffective guardian of private communication, an essential purpose it has long been recognized to serve…. [T]he police may not storm the post office and intercept a letter, and they are likewise forbidden from using the phone system to make a clandestine recording of a telephone call–unless they get a warrant, that is. It only stands to reason that, if government agents compel an ISP to surrender the contents of a subscriber’s emails, those agents have thereby conducted a Fourth Amendment search, which necessitates compliance with the warrant requirement…”

Regardless of the outcome, this case is important to us, because it marked the first time that the Court extended the Fourth Amendment protection that an individual has a reasonable expectation of privacy in the contemporary world of email correspondence.

This article is provided for information purposes only and should not be relied upon for legal or financial advice. We would be happy to discuss how the information in this article affects or may help you. For more details about this matter, please contact our offices at 847-466-7947 of 702-966-2770.

IRS CIRCULAR 230 DISCLOSURE: Pursuant to requirements imposed by the Internal Revenue Service, any tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter.