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Taxes-income-tax-basics

E-filing tips that should save time, if not money

Filed under: Tax, Technology, Taxes-income-tax-basics, Taxes-advice

If the trend in e-filing continues, the IRS expects more than 100 million individual taxpayers to file their tax returns electronically for the 2009 tax year.

More than one-third of those taxpayers will file by personal computer; the remainder will use a professional tax preparer or free file at an IRS site. No matter how you choose to e-file this year, following are some tips to make it as easy as possible.


IRS' e-file program gaining users

Filed under: Tax, Taxes-income-tax-basics, Taxes-advice

Chances are, you filed your federal taxes electronically this year.

According to the IRS, about two out of every three individual taxpayers elected to e-file in 2009, up almost 6% from returns filed electronically in 2008. That works out to just a few million returns shy of 100 million individual returns, or 67% of tax returns.

It's a pretty incredible increase for the IRS e-file program which began just more than 20 years ago. In 1986, the first year of the program, just 25,000 refund-only returns were accepted in three locations, less than 1% of the returns filed in 2009.

If George Costanza had an iPhone, he'd use this app

Filed under: Tax, Technology, Taxes-income-tax-basics, Taxes-tax deduction

In one of the great "Seinfeld" episodes of season nine, the character George Costanza has a wallet so filled with receipts, business cards and other things such as packets of Sweet'N Low that he sits on an incline when he puts it in his back pocket.

Eventually it all blows away onto a snowy and wet New York City street, leaving George to try to scurry after all of the little slips of paper that burst out of what he calls his "organizer, secretary and a friend."

If I were the folks at Shoeboxed.com I'd be doing all I could to get Jerry Seinfeld to allow commercial use of that scene in promoting its new free app for the iPhone or any cell phone with a camera.

Here's some of that "Seinfeld" episode, to refresh your memory:



Are late filers setting themselves up for audit?

Filed under: Tax, Taxes-audit, Taxes-income-tax-basics

Fall is by far my favorite time of year. The leaves are turning, the weather is cooling, baseball playoffs are in full swing... It seems nearly perfect -- until you remember that you haven't yet filed your taxes.

While the majority of taxpayers file their tax returns on time in April, more than 10 million taxpayers (just more than 7% of the total number of filers) will file in October. Those are taxpayers who elected to file an extension by the April 15 deadline.

To file an extension, you simply complete a federal form 4868 with your name, address and tax ID information, along with an estimate of any taxes that you might owe. Assuming that it's timely filed in April, applications for extension are granted automatically by the IRS for a period of six months, no questions asked.

It's ridiculously easy. So much so that many taxpayers are hesitant to file for an extension because of the perception that an extension will trigger an audit. After all, they wonder, surely the IRS will assume that your failure to file in April is somehow indicative of bad behavior. Those taxpayers believe that filing is extension (especially if you do it year after year) is the equivalent sending the IRS a personal "audit me" invite.

The statistics, however, don't bear that out at all. Statistically, your chances of getting audited are fairly low to begin with: about 1 in 150. Certainly greater than your chances of getting hit by an asteroid (1 in 500,000) but less than dying in a car accident (1 in 100).

Is the taxman Facebook-stalking you?

Filed under: Tax, Technology, Taxes-audit, Taxes-income-tax-basics

IRS

Just when you thought the only people you had to worry about offending with your Facebook profile were prospective employers, parents, and creepy sex offenders, The Wall Street Journal reports (subscription required) that tax collectors are going online to hunt down deadbeats.

According to the Journal, "In Minnesota, authorities were able to levy back taxes on the wages of a long-sought tax evader after he announced on MySpace that he would be returning to his hometown to work as a real-estate broker and gave his employer's name. The state collected several thousand dollars, the full amount due."


Tracking Uncle Sam's spending

Filed under: Extracurriculars, Tax, Technology, Taxes-audit, Taxes-income-tax-basics, Taxes-tax credits, Taxes-tax deduction

If you're bored with keeping track of where the money goes in your household, try out a relatively new government Web site that tracks where your tax dollars are spent.

USASpending.gov offers an easily digestible look into where the government is spending money, with current and historical spending broken down by grants, contracts and loans. It drills further down by breaking it down into congressional districts and by contractors.

For example, I was amazed to learn that the top government contractor so far in fiscal year 2009 -- Lockheed Martin Corp. at $20.36 billion -- has received more money from the federal government than the top assistance recipient -- $18.9 billion to the Department of Health Care Services.
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