Simply Junior

Imagine doing taxes without having to make sure a pencil has been sharpened, looking for a calculator, or having to erase mistakes on a tax return. Imagine not having to worry about adding incorrectly or overlooking deductions.

Taxpayers who find themselves fretting over such concerns every year as April 15 approaches may find that using an online tax program to prepare their returns can make the process less painful. Preparing taxes manually requires a taxpayer to think, but using an online tax service is more about answering questions and entering data. In effect, all the adding and subtracting involved with the old-fashioned means of preparing taxes is replaced by typing and rolling a mouse on a computer or laptop.

Places to file your tax online can be found by searching the Internet, where various programs can be found, each offering different options for different costs. Each web site may vary with the addition of different options that include:

Basic tax filing programs Enhanced programs that ask dozens of questions designed to help increase deductions Programs for taxpayers who have investment and rental properties Home and business

The decision to file taxes online also allows a taxpayer to prepare their taxes on their schedule. Most online programs allow a user to log out and back in at the point where they left off. Of course, finding the original paperwork and calculator is now replaced with remembering the password selected to log onto the program. There are usually numbers or email addresses for contacting someone about any problems with using these tax filing web sites.

Another advantage of using a program online is that the actual filing can also be done with a few clicks of a mouse. Submitting a return no longer involves getting a neat copy of a return done, finding an envelope and attaching a stamp.

Instead, a tax filer adds their signature electronically and hits “submit.” The process of either the federal or state government accepting the return may take a day or two, so it’s best not to wait until the last minute (the translation being that even though filing electronically makes preparing your tax faster, you still should not wait until 5 p.m. on April 15).

In most cases, filing your tax returns online is free. The actual cost is incurred with the filing. Because of that, it’s important to have a credit or debit card handy to enter account information. Along with a card, there are still some things that a taxpayer is required to have ready for entry into the program:

All W2 forms from current employers or those in the previous year; Receipts for deductions; Receipts or cancelled checks for gifts to charity, churches or other organizations; Medical receipts; Canceled checks for any other purchases or expenses

The bottom line is that using an online system can make preparing and filing taxes more convenient by holding the hand of a taxpayer as it walks them through the process via cyberspace.

Online tax preparation provides you with an easy and safe way to file your taxes. Some accountants have been using this online method to file for their clients for two decades. Between the IRS and some private tax services, online tax return filing has now been updated to accommodate the requirements of individuals as well as businesses.

1. Saves Your Time and Money
Online tax preparation saves your time and money. You will save your time because you can fill in your information using online software without writing all your information manually with your hand. You can save your money by paying less for online services compared to hiring a professional that might be unaffordable to you. You can also think of using free e-file services available.

By filing electronically, you can also receive your refund much faster within a couple of weeks. You can choose direct deposit option in order to get your tax refund deposited directly into your bank account. Filing electronically can save time for the IRS because there is less paperwork or they do not have to re-type your return file.

2. File Your Income Taxes Conveniently
Another advantage of online tax filing is you can file your tax returns conveniently from your home computer if you have access to internet connection. You can fill out your information using online software any time whenever you wish. Whether you use free online software or free/paid e-filing service, you will be able to deal with all your filing needs from your office or home.

3. Make Your Return File Errors-free
Online tax preparation can help you reduce errors because of the error-check feature in the software. Moreover, the software will calculate your mathematical totals accurately for you when you enter the right information. It will prompt you to correct errors before moving forward with the form submission. So, less errors means less chances for an audit and quick processing of your return file.

4. Claim Credits and Deductions that You Qualify for
Now you do not have to worry about which credits to take and which deductions to claim. The easy deduction search tool will help you find out and choose those deductions which will suit you. Claim the deductions suitable to your tax situation so that you may have less chances of being unnecessarily audited by the IRS.

5. Get the Fast IRS Income Tax Refund
When you choose to file your tax return online with direct deposit option, then you will get your refund directly into your bank account within as few as 10 to 14 days. Getting online refund is the fastest and safest way of getting your money back into your pocket.

These days, everything is online. From our bank statements to our resumes to our high school photos–its all there out in the open. A lot of times, this just makes things easier and more automated for all of us, especially when it comes to taxes. Being able to lodge a tax return online is one of the biggest conveniences ever created. No more stumbling over maths or taking forever to deal with your tax pack.

But does having a tax return online mean your information is safe?

Yes. And no. Like any information on the internet, a tax return online is vulnerable to hacking and phishing and all sorts of nastiness. The trick is to be cautious, be secure, and be careful about who you’re trusting. Never assume that information is secure and always make sure you know what to do in case of an attack.

Here are a few tips for making sure that if the worst happens, you’re prepared:

Only give your tax return online to a trusted source. The government is, of course, theoretically the gold standard of trusted sources. Unfortunately, in reality one still needs to be careful around them. A lot of time they’re the last people to update their sites and not always in the best way. Before filing with any site make sure they are using secure encryption (usually signified by an https:// in front of the address). The more established the company, the more likely they are to be good about security. And never be afraid to email them and ask! Wait a day or two after you sign up. When you do a tax return online, you don’t have to do it right away. It’s a good idea to wait a few days and see what sort of emails a service sends you. If you get a lot of scammy sounding emails–or if your spam goes up as a result of giving your address to them–then you definitely shouldn’t trust them with your tax information. Make sure to back-up. As useful as a tax return online can be, it’s always good to make sure you have a copy in the real world. Printing out that return and saving it someone secure in your flat is always a good idea. Even as safe as a tax return online is (with the right company) it’s always good idea to have a paper copy–and it’s useful for getting proving your financial record too!

Securing online data is extremely important, and it’s especially important when it involves putting a tax return online. Never be afraid to interrogate any company you’re going to use about their privacy practices and always trust you gut–if something seems fishy, it probably is. Your financial information is more important than returns cheaply.

A lot of small business overlook the IRC Section 44 small business disabled access credit.

Essentially Section 44 provides a credit for up to one half of the costs to comply with the Americans with Disabilities Act (ADA). The maximum annual credit cannot exceed $5,000 and the costs must exceed $250. Businesses that have revenues of under $1 million or under 30 full time employees qualify for this tax credit. Most costs to purchase equipment or devices and to create or modify personal or real property are eligible for this credit if (1) they are reasonably necessary to comply with the ADA and (2) the primary purpose of complying with the ADA.

The Fifth Circuit Court of Appeals recently addressed Section 44 in Arevalo v. Commissioner. The Arevalo case provides an example of when taxpayers should not try to qualify for the Section 44 tax credit and it shows how the IRS approaches these tax credits.

Arevalo was yet another individual taxpayer who “invested” payphones with Alpha Telecom. Alpha Telecom purports to “sell” payphones as “business opportunities” and at the same time, if the “business owner” agrees, Alpha Telecom essentially manages and operates the payphones for the “business owner.” The courts have held that these transactions are “investments,” and not “businesses.”

Arevalo had claimed a Section 44 tax credit on his personal 2001 tax return because, apparently, the Alpha Telecom payphones were modified to be ADA compliant. The US Tax Court and the Fifth Circuit (just like the Sixth Circuit did with a different taxpayer) held that Arevalo was not entitled to the Section 44 tax credit.

In reaching this determination, the court held that (1) Arevalo could not show how funds were expended to make the payphones ADA compliant, because Alpha Telecom, apparently, did not disclose to Arevalo how the payphones were ADA compliant and (2) that the Section 44 tax credit is only available to the party that is subject to the ADA, which in this case was Alpha Telecom (and not Arevalo).

The court also denied Arevalo’s Section 167 depreciation deduction with regard to the payphones. In doing so, the court used the old “substance over form” analysis to show that Arevalo did not acquire enough of the ownership in the payphones for it to count as a business. If Arevalo were operating the payphones he would have been able to explain how the phones were modified to comply with the ADA and he would have been the individual that was subject to the ADA.

The problem for taxpayers is that many common transactions could fall prey to this analysis, such as leasing/sales arrangements and even sales/consignment arrangements.

Perhaps the lesson learned from the Arevalo case is that taxpayers should only claim the Section 44 tax credit (or even the Section 190 architectural and transportation barrier removal expense tax deduction) if they document the underlying transactions prior to filing the Form 8826. An experienced tax attorney can assist taxpayers in this regard.

Though filing tax return is not difficult, most people miss the tax filing deadline. You do not have to worry about getting penalized for late filing. Now you can file IRS tax extension form online and extend the deadline from April 15th 2009 to October 15th 2009. It is quite simple process and you can avoid the rush of April 15. Please note that you are getting extension for filing your return, you are not getting extra time for paying your due.

When you e-file your tax return extension, you will have a considerable time for preparing and filing your return. You do not necessarily have to consult a tax professional. You can have enough time to collect necessary information and documents that may be helpful while you do filing task online. But you cannot afford to waste your time thinking that you are getting sic month your extra time. You need to start doing your task right away as soon as you send your online tax extension, otherwise, once you miss the opportunity then you will have tough time for requesting the other 6 month extension.

You will need to file IRS tax extension form 4868 for getting extension period. Suppose, even though you owe taxes and cannot pay, please note that the failure to pay penalty is only.5% per month, whereas the failure to file penalty is around 5% of the amount owed per month. If you choose to file income tax extension, you will get around that un-filed penalty until October 15th.

If you wish to get tax extension deadline or would like to extend your tax filing deadline, you need to send your documents online by April 15th. You can have nominal interest charges on your tax amount and for that, do your best estimate of taxes you owed. One of the best things is to pay online which is easier, faster and safe.