Some taxpayers may have needed to take an early distribution from their retirement plan last year. The IRS wants individuals who took an early distribution to know that there can be a tax impact to tapping your retirement fund. Here are ten facts about early distributions.
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The IRS sas $39,713 for Washingtonians Who Have Not Filed a 2006 Tax Return. Unclaimed refunds totaling more than $39,713 for individuals in Washington State are awaiting people who did not file a federal income tax return for 2006. However, to collect the money, a return for 2006 must be filed with the IRS no later than Thursday, April 15, 2010. The IRS estimates that the median unclaimed refunds for Washington filers for tax-year 2006 is $641. There is no penalty for filing a late return qualifying for a refund. Some people may not have filed because they had too little income to require filing a tax return even though they had taxes withheld from their wages or made quarterly estimated payments. In cases where a return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund. If no return is filed to claim the refund within three years, the money becomes property of the U.S. Treasury. For 2006 returns, the window closes on April 15, 2010. For more information about how to file a return, see teh IRS New Release IR-2010-24, March 2, 2010, http://www.irs.gov/pub/irs-news/ir-10-024.pdf. College can be very expensive. To help students and their parents, the in Tax Tip 2010-30, the IRS offers five ways to offset education costs. 1. The American Opportunity Credit. This credit can help parents and students pay part of the cost of the first four years of college. The American Recovery and Reinvestment Act modifies the existing Hope Credit for tax years 2009 and 2010, making it available to a broader range of taxpayers. Eligible taxpayers may qualify for the maximum annual credit of $2,500 per student. Generally, 40 percent of the credit is refundable, which means that you may be able to receive up to $1,000, even if you owe no taxes. 2. The Hope Credit. The credit can help students and parents pay part of the cost of the first two years of college. This credit generally applies to 2008 and earlier tax years. However, for tax year 2009 a special expanded Hope Credit of up to $3,600 may be claimed for a student attending college in a Midwestern disaster area as long as you do not claim an American Opportunity Tax Credit for any other student in 2009. 3. The Lifetime Learning Credit. This credit can help pay for undergraduate, graduate and professional degree courses – including courses to improve job skills – regardless of the number of years in the program. Eligible taxpayers may qualify for up to $2,000 – $4,000 if a student in a Midwestern disaster area – per tax return. 4. Enhanced benefits for 529 college savings plans. Certain computer technology purchases are now added to the list of college expenses that can be paid for by a qualified tuition program, commonly referred to as a 529 plan. For 2009 and 2010, the law expands the definition of qualified higher education expenses to include expenses for computer technology and equipment or Internet access and related services. 5. Tuition and fees deduction. Students and their parents may be able to deduct qualified college tuition and related expenses of up to $4,000. This deduction is an adjustment to income, which means the deduction will reduce the amount of your income subject to tax. The Tuition and Fees Deduction may be beneficial to you if you do not qualify for the American opportunity, Hope, or lifetime learning credits. For more information, visit IRS Tax Tip article 2010-30. Anyone who contemplates arguing on legal grounds against paying their fair share of taxes should first read the 80-page document, The Truth about Frivolous Tax Arguments. The document explains many of the common frivolous arguments made in recent years and it describes the legal responses that refute these claims. It will help taxpayers avoid wasting their time and money with frivolous arguments and incurring penalties. Congress in 2006 increased the amount of the penalty for frivolous tax returns from $500 to $5,000. The increased penalty amount applies when a person submits a tax return or other specified submission, and any portion of the submission is based on a position the IRS identifies as frivolous. BIDaWIZ is an online service where you can ask tax, accounting, and finance questions from licensed business professionals, (called “Wizards”) with expertise in Accounting & Finance, for a fixed fee. BIDaWIZ is affordable, available and easy to understand. Pricing depends on complexity of issue but can be as low as $10. During tax season, you can ask a tax advisor (CPA) privately, for a fixed fee. You can also register for a free newsletter or read newsletter articles online for free. The Office Depot Web Workshop series also known as Web Café offers free web-based seminars. These Webinars provide small business owners and other professionals with access to industry experts who present on a variety of topics, from marketing and sales tools to finance and technology trends. Web Cafe seminars are held on select Tuesdays at 4PM EST. Each Webinar consist of the following information. For those who are unable to attend the live event, replays are available in the Web Workshop archives. For a schedule or to register for an upcoming presention, visit the Web Cafe at www.officedepot.com/webcafe. Web Café was launched in 2002 as part of the Company’s online Business Resource Center featured on www.officedepot.com. Upcoming Webinars for February 2010 including the following topics. 4Culture’s Individual Artist Projects program provides artists who reside in King County with critical project support. Artists of all disciplines are encouraged to apply. Eligible projects may be at any stage of development including initial planning, in-process and final production. Our goals for the Individual Artist Projects program: In 2009, 4Culture received 341 applications for this program and 94 artists were selected to receive funding. Award amounts ranged between $1,000 and $7,500. A total of $330,015 was awarded to support projects, such as, adapting printmaking to animation, continuing the development of a film about a wetlands area, taking time away from a day job to complete a novel. Some of the program requirements are: The 2010 Program Deadline is March 10, 2010 at 5:00 p.m. For additional details and requirement or to apply, visit 4Culture Individual Projects Funding Programs page. Here is the link to the Frequently Asked Tax Questions and Answers page at www.IRS.gov. Find Tax Tips, Free File and Fillable Forms for 2010 on YouTube from the IRS. Is this is your first time filing a Federal Income Tax return? If you need forms for filing your income taxes, here are five easy methods for getting the information you need from the IRS.
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