Free Tax Filing for Taxes

Tax Filing for 2011

Each year, thousands of taxpayers fail to file their federal income taxes. Some individuals willingly forgo this action while others run into special circumstances. No event or situation frees a taxpayer from their responsibilities though. With that in mind, a person can always file back taxes in order to start catching up. Various options are currently available for taxes 2011.

Tax Preparation
Tax Preparation (Photo credit: agrilifetoday)

Filing tax returns for previous years often proves relatively simple. However, an individual needs the right software and extensive records for that particular year. Products like TurboTax, TaxAct, and others offer software for past returns. Free tax filing 2011 is hard to come by but is not impossible to find. Undoubtedly, taxpayers want to save as much money as possible.

For taxes 2011, the taxpayer needs to fill out all necessary tax return forms. They should treat this return just like any other one, making sure to avoid common mistakes. Failure to do so might cause problems when the IRS receives the return. Without a doubt, it is important to handle this matter quickly to avoid major consequences and problems.

Free tax filing 2011 is still available even though it is a past tax year. Many people fail to realize that they can still finish taxes 2011. The longer an individual waits, the more penalties they will face. In the end, finishing this task quickly produces the best results under all circumstances. That fact should not be forgotten for obvious reasons. The IRS takes federal income taxes very seriously after all.

IRS Tax Fraud Increasing

turbotax

IRS Tax Fraud Increasing

Identity theft linked to IRS tax fraud has been increasing. However, according to a recent government report, the IRS is actually unaware of the number of persons who are running scams on the system.

Based on a study from the Government Accountability Office (GAO), a watchdog that collaborates with Congress, between January and September 2012, there were approximately 642,000 incidents of identity theft which involved tax fraud, which is 62 percent more than 2011. The report further stated that during that same period of time, the IRS would have paid some $754 million in refunds that were suspicious.

The report also shared that returns that involve identity theft are hard to track. The IRS informed the GAO that it is unable to determine why and how this is happening. American taxpayers who have been victims of identity theft and false returns, may experience delayed refunds and have to pay additional costs for re-filing, in addition to the tons of paperwork.

The Government Accountability Office is an imp...
The Government Accountability Office is an important information-gathering agency for Congress. (Photo credit: Wikipedia)

Unfortunately, the tax and fraud professionals advised that this problem in increasing because it is easy to run the scam via electronic filing such as turbotax 2011. Once scammers have someone’s Social Security number and name, they can apply for the refund to be transmitted via direct deposit. Therefore, it is difficult for the IRS software to determine the legitimacy of the returns that are filed.

This problem is estimated to burden the US Government by billions of dollars. CNBC reported that the IRS inspector general forecasted an estimated $21 billion that could be paid out over the next five years in tax refunds that are fraudulent.

One of GAO’s directors, James White, shared with The Huffington Post that this problem is hard to solve and partnering with the banks could be one of the solutions. During the first nine months of 2012, 116 banks reported information to the IRS about over 193,000 accounts that were linked to tax fraud. White further stated that this type of crime is hard to catch and measure.

The IRS was able to block an estimated 262,000 fraudulent tax returns in 2011. However, according to CNNMoney, approximately $5.2 billion was lost to identity theft.

Tax Carnival Ecstasy – April 5, 2012

Welcome to the April 5, 2012 edition of Tax Carnival Ecstasy. In this edition we start with Learning About Tax Liability by Bill Smith. We also have an article on starting a small business, Home Business, Yay or Nay? from the site 2010 Tax. Jeffery Weber looks at Using Credit Card Rewards to Reduce the Cost of Paying your Taxes. Finally, Edward Webber examines How Much Can a tax payer can Earn Without Paying Taxes 2012. Hope you enjoy the articles, bookmark, share, tweet, like on Facebook and come back real soon.

Amy Gardner presents Social Media Marketing Basics for Small Businesses posted at Small Business Credit Cards.

Jill Thompson presents What Debt Collectors Cannot Do To Collect Your Debts posted at How Does Rent To Own Work?.

Maria Clark presents Phrases to Avoid When Negotiating With Lenders posted at Credit Cards for Bad Credit Resource.

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Bill Smith presents Learn About Tax Liability posted at 2010Taxes, saying, “Tax liability can have you make wrong choices. However, the IRS has been helpful to some people in difficulties such as these.”

taxes

Bill Smith presents Home Business, Yay or Nay? posted at 2010 Tax, saying, “While the old American dream was once to land a steady job with good benefits and an early retirement, the updated version often entails becoming an…”

Jeffery Weber presents Using Rewards to Reduce the Cost of Paying Taxes with a Credit Card posted at Smart Balance Transfers, saying, “Paying taxes with a credit card is costly, but these costs can be mitigated with certain rewards credit cards.”

Edward Webber presents How Much Can You Earn Without Paying Taxes 2012? posted at TaxFix Feed Update, saying, “Each year the amount that you can earn tax free changes. This article will look at how much you can earn in 2012 without being taxed”

That concludes this edition. Submit your blog article to the next edition of tax carnival ecstasy using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: tax carnival ecstasy, blog carnival.

Budget Cuts Prevent The I.R.S. From Collection Of Taxes

Budget Cuts Make the I.R.S. Less Efficient, Report Claims

Reduced funding and an expanding mandate have left the Internal Revenue Service incapable of performing its primary duty of tax collection efficiently. This is according to a report released by the agency’s Internal Monitor on Wednesday.

The backlog of cases and job cuts has made the agency less capable of collecting hundreds of billions of dollars in taxes every year. This is what the national taxpayer advocate, Nina E. Olson claims in her annual report to Congress.

The agency is now using computer software to ask taxpayers to file their returns without necessarily going through the costly and time consuming audit. This has helped the agency to administer the ever-complex tax code.

She dismisses the claims made in the Internal Monitor report as baseless and inaccurate.

The report was released in the middle of a political showdown in Capitol Hill. The mandate of the I.R.S. is expected to expand in the coming years. This is because it is tasked with administering the healthcare plan proposed by Congressional Democrats and President Obama.

In the last financial year, the president asked for an increase of more than one billion dollars in I.R.S’s budget. This is to enable the agency to hire 5,100 employees.

While the proposed healthcare scheme is not yet in place, the operations of the agency have already been affected by the budget squeeze.

Due to the expanded mandate and job cuts, the IRS has not been able to respond to inquiries from the public. For instance, some taxpayers have to wait for up to six weeks to get a response to their inquiries.

While the report noted that IRS is already a well run agency, an increase in funds will increase its efficiency.

What’s New For Taxes

We have made it to our next tax season!  While your taxes are not due for several weeks still, this is the month that you will be receiving the documents you need to turn in: all of your W-2s, any 1099s you may have received for investments, and so on.  If you do not have a system in place to take care of your 2011 tax filing, now is the time.

Thanks to April 15 being on a weekend this year, taxes are not due until April 17 this year.  If you cannot get your taxes filed by that point, you also have the option of filing for an extension until Oct 15.  This is for filing, and not paying your taxes.

The IRS has made some adjustments to the way it requires people to file their income, particularly for capital gains taxes.  They have developed a new form, Form 8949, that you will use for these gains or loses.  This will be especially useful if you are reporting sales of stocks.

There has been a payroll tax on the books for the past couple years, and Congress has extended it to February 29, meaning you will be paying 2% less on social security wages through February at the least.  If you make more than $110,000 per year, you will not need to pay social security.

Another major change is that a health insurance deduction for self-employed workers no longer offsets the self-employment tax.  If you pay these premiums you can still deduct them from your 1040 however.

Finally, the Making Work Pay tax credit is no longer offered.  For the past couple years many Americans got a $400 credit for working traditional daytime jobs.  This has expired and there are no plans to renew it in the future.  These changes have not drastically changed 2011 tax filing, but they are new for 2012 and are something to make note of.

Should I File A Tax Return This Year?

The law requires you to complete a tax return when you have income above a designated amount.  The amount varies according to your age, filing status and income type.  However, even if you are not required to file, you might benefit as you could get a refund if taxes were withheld or you qualify of certain refundable credits.

The IRS website is a helpful resource to see if you should file.  The Interactive Tax Assistant on the site can lead you through a several questions to see if you should file.  Other information is found on printed tax forms.

Six reasons to file a Federal Income Tax Return in 2011 even though you are not required:

Taxes withheld – If any employer withheld taxes, you paid in estimated taxes or had a refund from a previous year credited to this year’s taxes, file for a refund.

EITC – EITC is for those who worked but had limited income.  This credit means you might get a refund even if you did not pay any taxes.  You must complete the return claiming the credit to qualify.

ACTC – A refundable tax credit for those with one or more children who qualifies that did not get the total amount of the  Credit for Child Tax .

AOCS – During the first 4 years of education past high school qualify for this credit of up to $2,500.  Even if there is no tax due 40% of the money ($1000) can be refunded to the filer.

Adoption Credit – This credit is available for expenses paid in adopting a child.

HCTC – This credit is available to some individuals receiving assistance in the back to work programs that were established as a part of economic recovery and those receiving pension benefits from a Pension Benefit Guaranty Corp. for tax year 2011.  Eligible individual can include a large portion of the payments for health insurance they made when they file a tax return this year.