Saturday, April 3, 2010

Incredible tax statistic: Nearly 1.4 million people did not file 2006 returns, and they are owed as much as $1.3 billion!

The IRS estimated that the median return that was not claimed for 2006 is $604. People may not have filed because their income levels were below the level that required them to file even though their employers may have withheld taxes from their wages.

Taxpayers may be due a larger refund than they realize. In 2006 many taxpayers qualified for a refund of between $30 and $60 based on excise taxes included in phone bills between March 2003 and July 2006. Some low income tax payers may also be able to claim the Earned Income Tax Credit (EITC).

If you have not filed your 2006 return, be sure to file by April 15, 2009. The law generally provides a three-year window for claiming a refund.

Ask your CPA or tax advisor for details. You can also find information on the IRS web site.

Friday, April 2, 2010

Home Buyer Tax Credits

If you purchased a home in 2008, 2009 or 2010, you may be able to take advantage of the first-time homebuyer credit. Here's what you need to know:
  • The credit only applies to homes used as a taxpayer's principal residence.
  • It reduces a taxpayer's tax dollar for dollar.
  • The credit is refundable. This means the credit will be paid to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.
You will need to file a Form 5405 with your return. If you have already filed and did not take advantage of the credit, you can amend your return with a Form 1040X. You will also need to provide documentation such as a HUD-1 or settlement statement. Be sure to check with your CPA or tax advisor.

For more details, check out this page on the IRS website.