IRS Launches the IRS2Go App for iPhone, Android; Taxpayers Can Check Refunds, Get Tax Information

Posted January 25, 2011 by Catherine Crismore, CPA
Categories: Uncategorized

I received this in an email from the IRS and wanted to share:

WASHINGTON — The Internal Revenue Service today unveiled IRS2Go, its first smartphone application that lets taxpayers check on their status of their tax refund and obtain helpful tax information.

“This new smart phone app reflects our commitment to modernizing the agency and engaging taxpayers where they want when they want it,” said IRS Commissioner Doug Shulman. “As technology evolves and younger taxpayers get their information in new ways, we will keep innovating to make it easy for all taxpayers to access helpful information.”

The IRS2Go phone app gives people a convenient way of checking on their federal refund. It also gives people a quick way of obtaining easy-to-understand tax tips.

Apple users can download the free IRS2Go application by visiting the Apple App Store. Android users can visit the Android Marketplace to download the free IRS2Go app.

“This phone app is a first step for us,” Shulman said. “We will look for additional ways to expand and refine our use of smartphones and other new technologies to help meet the needs of taxpayers.”

The mobile app, among a handful in the federal government, offers a number of safe and secure ways to help taxpayers. Features of the first release of the IRS2Go app include:

Get Your Refund Status

Taxpayers can check the status of their federal refund through the new phone app with a few basic pieces of information. First, taxpayers enter a Social Security number, which is masked and encrypted for security purposes. Next, taxpayers pick the filing status they used on their tax return. Finally, taxpayers enter the amount of the refund they expect from their 2010 tax return.

For people who e-file, the refund function of the phone app will work within about 72 hours after taxpayers receive an e-mail acknowledgement saying the IRS received their tax return.

For people filing paper tax returns, longer processing times mean they will need to wait three to four weeks before they can check their refund status.

About 70 percent of the 142 million individual tax returns were filed electronically last year.

Get Tax Updates

Phone app users enter their e-mail address to automatically get daily tax tips. Tax Tips are simple, straightforward tips and reminders to help with tax planning and preparation. Tax Tips are issued daily during the tax filing season and periodically during the rest of the year. The plain English updates cover topics such as free tax help, child tax credits, the Earned Income Tax Credit, education credits and other topics.

Follow the IRS

Taxpayers can sign up to follow the IRS Twitter news feed, @IRSnews. IRSnews provides the latest federal tax news and information for taxpayers. The IRSnews tweets provide easy-to-use information, including tax law changes and important IRS programs.

IRS2Go is the latest IRS effort to provide information to taxpayers beyond traditional channels. The IRS also uses tools such as YouTube and Twitter to share the latest information on tax changes, initiatives, products and services through social media channels. For more information on IRS2Go and other new media products, visit www.IRS.gov.

IRS Announces 2011 Standard Mileage Rates

Posted December 8, 2010 by Catherine Crismore, CPA
Categories: Mileage Rate, Taxes

I received this update from the IRS and wanted to share.

WASHINGTON — The Internal Revenue Service today issued the 2011 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning on Jan. 1, 2011, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 51 cents per mile for business miles driven
  • 19 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study. Independent contractor Runzheimer International conducted the study.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles used simultaneously.

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

Revenue Procedure 2010-51 contains additional details regarding the standard mileage rates.

Section 179 Deduction Limit Increased for 2010 and 2011 Tax Years

Posted November 30, 2010 by Catherine Crismore, CPA
Categories: Section 179, Small Business, Small Business Jobs Act, Taxes

The IRS has announced that the cost limitations for expensing property under Section 179 for the 2010 and 2011 tax years has been increased to $500,000.  The aggregate cost of any section 179 property a taxpayer may elect to treat as an expense cannot exceed $500,000.  This amount is reduced by the amount by which the cost of the property placed in service during the year exceeds $2,000,000.  The amounts reflect statutory changes made by the Small Business Jobs Act.

Before this change, the Section 179 expense limits for 2010 and 2011 were $134,000 and $25,000, respectively.  The total cost limits of property placed in service before the change for 2010 and 2011 were $530,000 and $200,000 respectively.

IRS Seeks to Return $164.6 Million in Undelivered Checks to Taxpayers; Recommends E-file and Direct Deposit to Eliminate Future Delivery Problems

Posted November 17, 2010 by Catherine Crismore, CPA
Categories: Direct Deposit, E-file, Electronic Filing, Individual Taxes, Tax Refunds, Taxes

I received this update from the IRS and wanted to share it…

WASHINGTON — The Internal Revenue Service is looking to return $164.6 million in undelivered refund checks. A total of 111,893 taxpayers are due one or more refund checks that could not be delivered because of mailing address errors.

“We want to make sure taxpayers get the money owed to them,” said IRS Commissioner Doug Shulman. “If you think you are missing a refund, the sooner you update your address information, the quicker you can get your money.”

A taxpayer only needs to update his or her address once for the IRS to send out all checks due. Undelivered refund checks average $1,471 this year, compared to $1,148 last year. Some taxpayers are due more than one check.

The average dollar amount for returned refunds rose by just over 28 percent this year, possibly due to recent changes in tax law which introduced new credits or expanded existing credits, such as the Earned Income Tax Credit.

If a refund check is returned to the IRS as undelivered, taxpayers can generally update their addresses with the “ Where’s My Refund?” tool on IRS.gov. The tool also enables taxpayers to check the status of their refunds. A taxpayer must submit his or her Social Security number, filing status and amount of refund shown on their 2009 return. The tool will provide the status of their refund and, in some cases, instructions on how to resolve delivery problems.

Taxpayers checking on a refund over the phone will receive instructions on how to update their addresses. Taxpayers can access a telephone version of “Where’s My Refund?” by calling 1-800-829-1954.

While only a small percentage of checks mailed out by the IRS are returned as undelivered, taxpayers can put an end to lost, stolen or undelivered checks by choosing direct deposit when they file either paper or electronic returns. Taxpayers can receive refunds directly into their bank, split a tax refund into two or three financial accounts or even buy a savings bond.

The IRS also recommends that taxpayers file their tax returns electronically, because e-file eliminates the risk of lost paper returns. E-file also reduces errors on tax returns and speeds up refunds. E-file combined with direct deposit is the best option for taxpayers; it’s easy, fast and safe.

The public should be aware that the IRS does not contact taxpayers by e-mail to alert them of pending refunds and that such messages are common identity theft scams. The agency urges taxpayers not to release any personal information, reply, open any attachments or click on any links to avoid malicious code that will infect their computers.  The best way for an individual to verify if she or he has a pending refund is going directly to IRS.gov and using the “Where’s My Refund?

Small Business Health Care Tax Credit for Small Employers

Posted October 22, 2010 by Catherine Crismore, CPA
Categories: Health Care Tax Credit, Small Business

Tags: ,

This information comes from the IRS’ website and I thought it would be useful to small business owners.

The Small Business Health Care Tax Credit helps small businesses and small tax-exempt organizations afford the cost of covering their employees.

Received a Postcard from the IRS?

Millions of small employers received postcards from the IRS beginning in April that alerted them to the new Small Business Health Care Tax Credit and encouraged them to check their eligibility. Even if you didn’t receive a postcard, your business still may be eligible. Read more about this effort.

Eligibility Rules

  • Providing health care coverage. A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
  • Firm size. A qualifying employer must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible).
  • Average annual wage. A qualifying employer must pay average annual wages below $50,000.
  • Both taxable (for profit) and tax-exempt firms qualify.

Amount of Credit

  • Maximum Amount. The credit is worth up to 35 percent of a small business’ premium costs in 2010. On Jan. 1, 2014, this rate increases to 50 percent (35 percent for tax-exempt employers).
  • Phase-out. The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.

Three Simple Steps for Employers to Qualify

To determine if your small business or tax exempt organization qualifies for the Small Business Health Care Tax Credit, follow the three simple steps on the IRS fact sheet.

Examples

Scenarios illustrate how the credit applies to employers in different circumstances.

Claiming the Credit

Both small businesses and tax-exempt organizations will use new Form 8941 to calculate the small business health care tax credit. A draft form is currently available for viewing.

Small businesses will include the amount of the credit as part of the general business credit on its income tax return.

Tax-exempt organizations will instead claim the small business health care tax credit on a revised Form 990-T. Form 990-T will be revised for the 2011 filing season to enable eligible tax-exempt organizations –– even those that owe no tax on unrelated business income –– also to claim the small business health care tax credit.

The final version of Form 8941 and its instructions will be available later this year. For more information, read the IRS news release.

Questions and Answers

Need more detailed information? Click here for answers.

YouTube Primer on Health Care Credit

This new video explains the who, what, why and how of the Small Business Health Care Tax Credit.

For More Information

New guidance makes it easier for small businesses to determine whether they’re eligible for the new health care tax credit under the Affordable Care Act and how large a credit they’ll receive.

Related Items:

Indiana Businesses with More Than 25 Employees Must Register to File Electronically Before End of December

Posted October 22, 2010 by Catherine Crismore, CPA
Categories: Electronic Filing, Payroll Taxes, W-2s

Tags: , ,

I received this update from the Indiana Department of Revenue and wanted to share it.

Indiana law now requires that all businesses that file more than 25 wage statements per calendar year must now file their WH-3 returns and W-2s electronically with the state. To comply with this law, these businesses will need to be registered to file electronically, and those that file more than 2,000 wage statements per calendar year must be certified to bulk upload those statements.

To better assist businesses in completing this process before the end of the year, the Department of Revenue has established a website to specifically help businesses quickly and easily register and certify to file their WH-3s and W2s in 2011.

Businesses can visit the website at: www.in.gov/dor/4455.htm

The deadline for businesses to register to file electronically, and to be certified for bulk upload of their wage statements is Dec. 31, 2010. WH-3s are due the end of February 2011.

Tax Credits for Energy Efficient Home Improvements About to Expire

Posted October 20, 2010 by Catherine Crismore, CPA
Categories: Individual Taxes, Tax Credits, Taxes

Tags: , , ,

Tax credits for energy-efficient home improvements, provided by the American Recovery and Reinvestment Act, will be expiring on December 31, 2010.

What Is It?

Currently the Act provides a tax credit  for homeowners who make energy-efficient improvements to their existing permanent residence on or before December 31, 2010.  The credit is 30% of the cost of all qualifying improvements up to $1,500.

What Types of Improvements Qualify?

The credit applies to improvements such as:

  • adding insulation
  • roofs (metal and asphalt)
  • energy-efficient exterior windows and doors
  • water heaters (natural gas, propane or oil)
  • energy-efficient heating and air conditioning systems
  • energy-efficient appliances (washers, dryers, dishwashers, refrigerators, stoves)

Also qualifying are residential alternative energy equipment such as:

  • solar hot water heaters
  • geothermal heat pumps
  • wind turbines

For the alternative energy equipment improvements, there is generally no limit to the dollar amount of the credit you may claim.

How Do I Claim The Credit?

Claim the credit for improvements made in 2010 by completing Form 5695 and attaching it to your 2010 individual tax return.