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How To Check The Status Of Your Tax Refund Online

(category: Taxes, Word count: 481)
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So, you were pleasantly surprised to learn that you are getting a refund on your taxes. Congratulations! The question for most taxpayers expecting a return is, "Where is my refund?"

Check Your Refund Status Online

The easiest way to check on your refund is to ask the IRS through On the home page of the site, you will see a "Where's My Refund?" link. Using the service is fairly easy. You will need a copy of your tax return to provide the necessary information to get the status of your refund. Specifically, you need to provide your social security number, you tax filing status and the exact amount of your refund. The reason the IRS requires all of this information is purely for security purposes, to wit, the agency wants to make sure it is giving access only to the taxpayer. Again, all of this information should be on your return. If it is not, something is very wrong!

Once you submit the required information, the IRS will provide online results typically showing:

1. That the return was received and is in processing;

2. The expected mailing date or direct deposit date of your refund; or

3. Whether your refund could not be issued because of a delivery problem.

In some cases, the results may alert you to the fact that the IRS is reviewing your tax return because of errors or questionable entries. In such a case, it is highly advised that you review your return with a qualified tax professional and make absolutely sure that the return will stand up to scrutiny.

How Long Do You Have To Wait Before Checking?

If you filed your tax return electronically, you should be able to access the status of your refund within 48 to 72 hours. Since the return is coming into the database electronically, it should be assimilated into the system fairly quickly. If you do not file your return electronically, you are going to have to wait three weeks or more before the status of your return can be checked. As you can imagine, the IRS is receiving an enormous amount of paper tax returns and it takes time to organize and enter the returns into the system.

How Long Should It Take To Receive Your Tax Refund?

If you are expecting a refund, the time to issue the refund will depend upon how you filed your return. If you filed a paper return via regular mail, you refund should be issued in six to eight weeks from the date it was received by the IRS. Alternatively, if you filed your return electronically, you should expect to receive your refund in three to four weeks. If you elected to have your refund directly deposited in your banking account, you should take one week off of the above estimates.

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Various Ford And Mercury Hybrids Get Tax Credit Certification From Irs

(category: Taxes, Word count: 383)
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Starting in 2006, individuals buying hybrid cars will get a tax credit instead of a tax deduction. The IRS has just started to kick out the exact amounts you can claim for your new hybrid.

Various Ford and Mercury Hybrids Get Tax Credit Certification From IRS

Under the Energy Policy Act of 2005, the tax benefits of owning a hybrid vehicle underwent significant changes. Whereas you could previously claim a tax deduction, the new law converted the deduction into a tax credit. Tax credits are FAR more valuable than deductions, because they reduce the amount of tax you owe on a dollar for dollar basis. Tax Deductions, on the other hand, merely reduce your adjusted gross income prior to determining the amount of tax you owe pursuant to the tax tables. In laymen's terms, this conversion is a very good thing.

Not every hybrid car qualifies for a tax credit. The Internal Revenue Service must first evaluate it and then issue guidance on which cars qualify and the size of the credit you can claim for each. The maximum the IRS can designate per car is $3,400. Here are the numbers it recently kicked out for various Ford and Mercury hybrid models.

2006 Ford Escape Hybrid Front WD: $2,600

2006 Ford Escape Hybrid 4 WD: $1,950

2006 Mercury Mariner Hybrid 4 WD: $1,950

If you purchased your hybrid car prior to 2006, you are restricted to claiming a tax deduction in the amount previously designated by the IRS, usually $2,000. If you waited until 2006, you can claim the above amounts with a few hitches. First, the amount only applies to the first 60,000 cars sold for each model. If you purchase a hybrid in the 60,0001 to 120,000 sales range, you can claim only half of the tax credit. Sales 120,001 through 180,000 can claim on a quarter of the amount designated above. Exactly how you are supposed to know the sales figures is a bit murky, but Ford and Mercury will undoubtedly take steps to make it clear.

Hybrid vehicles make sense from an environmental aspect. Throw in significant savings on gas costs and a large tax credit, and they should fly off the lots.

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Getting A Tax Credit For Doing The Right Thing

(category: Taxes, Word count: 325)
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Making energy-efficient home improvements and purchasing fuel-efficient hybrid electric vehicles is no longer just an environmentally friendly move -making these purchases could save you money at tax time.

That's because the Energy Policy Act of 2005 will offer consumers federal tax credits for making energy-efficient purchases.

Using energy-efficient appliances and installing better windows and insulation can provide many benefits. In addition to lower energy bills, individual energy-saving action can increase comfort in the home and reduce air pollution.

By driving or buying or leasing a new hybrid gas-electric automobile fuel-efficient vehicle you can get an income tax credit of $250-$3,400 plus better mileage-meaning lower gasoline prices-and fewer emissions.

What Are Tax Credits?

One of the best benefits this year is the new tax credit offered by the Energy Policy Act. Qualifying products and vehicles can mean having to pay less at tax time.

Eligible homeowners don't get an instant return on what they buy, like a rebate or a discount. Instead, they itemize the purchase on their federal income tax form and that affects the total amount of tax they're supposed to pay. This credit increases a person's rebate or lowers the amount he or she owes.

A tax credit is not like a tax deduction. It's generally more valuable since it reduces tax dollar for dollar, while a deduction only removes a percentage of the tax that is owed.

Home mortgages, charitable giving and home office expenses reduce taxable income only by a percentage of what's taken in tax; a tax credit, on the other hand, reduces taxable income directly, not as a percentage.

Energy-Efficiency Improvement Tax Credit: The Breakdown

According to the Department of Energy, you can, for example, get a one-time tax credit of up to $500 total for installing efficient new windows, insulation, doors, roofs, and heating and cooling equipment in your home. Building materials must meet Energy Star

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1099 Misc Forms For Independent Contractors For 2005

(category: Taxes, Word count: 453)
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As we begin 2005, you're probably not thinking about taxes at all. This is a mistake as deadlines are approaching for issuing and filing 1099s to independent contractors.

What is a 1099 MISC?

Generally speaking, the IRS requires you to report certain payments you made during the year to independent contractors. The 1099-MISC form is a single page on which you report to total amount you paid to the independent contractor during 2005.

The 1099-MISC forms must be issued to any person you paid at least $600 in rents, services or other income payments. For example, if you hired a contractor to renovate a room in your home and paid them $5,000, a 1099-MISC filing would be required. As with practically any IRS filing, there are additional situations that require a 1099 filing. Any payments to attorneys must be reported regardless of the amount. Royalties totaling over $10 also must be reported. Generally, you are not required to report payments to a corporation.

When and What Must Be Filed?

The 1099-MISC form is a multi-layered carbon form, so make sure the information you provide appears clearly on all of the copies. Once you fill out the form, provide Copy B to the person you are reporting to the IRS by January 31, 2005.

Copy A of the 1099-MISC form is intended for the IRS. You must file it by February 28, 2005 if you are sending the form by mail. If you prefer to file electronically, you have until March 31, 2005.

The IRS has made a major effort to cut down on red tape, but you'll still find it with 1099-MISC filings. In addition to filing the 1099 with the IRS, you must also file a 1096 form. The 1096 form is the "Annual Summary and Transmittal of U.S. Information Returns" form. It is one page and extremely easy to fill out.

Although the IRS has an excellent web site, you can't download 1099 forms off of it. The official forms are still multi-layered carbon paper, which means you need to get a physical copy. The IRS should send you the forms in the mail. If they don't, you can order them off the IRS site or call the IRS to have them sent to you. If all else fails, you can usually find the forms at major post office and public library locations. If you fail to file 1099s, the IRS will penalize you $50 per 1099.

More than a few people have grumbled about filling out 1099s so early in the year, but doing so has indirect benefits. You are forced to start organizing your records for 2005.

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Truly Bizarre Taxes The Tax On Illegal Drugs

(category: Taxes, Word count: 413)
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One can never underestimate the enthusiasm that politicians have for trying to hunt up tax revenues. The creativity of some politicians can lead to bizarre taxes and unfortunate results.

Taxes on Illegal Drugs

One argument for the legalization of various narcotics is that massive tax revenues would be created. Interestingly, a few states already are trying to collect such taxes!

More than 10 states have tried to tax people that possess illegal drugs. For example, Kansas levies a drug tax on dealers as soon as they take possession of the substance. To avoid prosecution for failure to pay the drug tax, individuals possessing the drugs are supposed to purchase "drug tax stamps" and attach the stamps to the drugs in question. The stamps are valid for 3 months.

In an apparent attempt to promote compliance, the Kansas Department of Revenue promises:

"A dealer is not required to give his/her name or address when purchasing stamps and the Department is prohibited from sharing any information relating to the purchase of drug tax stamps with law enforcement or anyone else."

The tax is levied on cocaine, marijuana, methamphetamines and other hard drugs. Interestingly, the state collected over $300,000 in such taxes by going after individuals that were charged with criminal activity. This is better known as the "Al Capone Theory", which is derived from the fact that authorities were able to put away the famous mobster on tax evasion charges. Alas, criminal prosecutors have not always welcomed the illegal drug tax.

Drug Tax Foils Prosecution of Drug Dealers in Texas

The 5th Amendment of the Constitution protects Americans from being punished twice for the same crime. This concept, known as "double jeopardy", caused prosecutors in 1989 to literally beg the state comptroller's office to stop accepting tax payments by drug dealers. The reason? A Texas Criminal Court of Appeal ruled that the state law assessing taxes on illegal drugs constituted a "punishment". As a result, requiring the payment of the tax constituted double jeopardy if the taxpayer had already been charged criminally.

In an attempt to get their clients off on drug charges, criminal attorneys began advising them to rush to pay their drug-related taxes. The theory was that once the taxes were paid, the drug dealer could not be prosecuted because doing so would constitute a second punishment! The appellate court agreed with the theory and the state comptroller immediately stopped collecting the Texas drug tax.

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Tax Credits Available For New Furnace Buyers

(category: Taxes, Word count: 372)
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Not letting hot air get lost up the chimney has its rewards. Many homeowners who are replacing their furnaces are choosing high-efficiency models to help combat rising heating costs. High-efficiency furnaces, however, can be more expensive in the short term than their standard-efficiency counterparts. To make the purchase of this and other high-efficiency appliances easier on the average household, Congress passed the Energy Policy Act of 2005, which provides tax credits for the purchase of high-efficiency furnaces.

The new Energy Policy Act (EPACT) makes provisions for tax credits for qualified homeowners who install furnaces between Jan. 1, 2006 and Dec. 31, 2007. If the furnace installed has an energy-efficiency rating of 95% AFUE (Annual Fuel Utilization Efficiency) or higher, the homeowner may qualify for a tax credit of $150. And if the furnace uses a high-efficiency variable-speed blower motor, the purchaser may be eligible for an additional $50 tax credit!

According to Jim Miller, product manager for Goodman furnaces, 95% AFUE furnaces save homeowners money in the long run, even without the tax credit. "Simply put, with a 95% AFUE furnace, for every dollar you spend on heating energy, 95 cents of that dollar is used to warm your home," explained Miller. "Many furnaces older than 15 years operate at efficiencies of approximately 60% AFUE, meaning only 60 cents of the gas burned contributes to your home's heating." The remaining 40 cents is lost up the chimney-expensive and wasteful.

"Plus, 95% AFUE furnaces with a variable-speed blower are even more efficient," Miller added. "The variable-speed blowers we use in our Goodman GMV95 95% AFUE Variable-Speed Furnace typically require up to 75 percent less electricity than a standard motor. Because a furnace's blower also works with the home's cooling system to circulate air, consumers experience increased efficiency year-round."

Homeowners should work with a certified heating and air-conditioning contractor to choose the furnace that meets the needs of their home and should check with their tax professional regarding the requirements for the EPACT tax credits. Goodman is the second-largest unit manufacturer of residential heating and cooling equipment in the United States, and the first manufacturer to provide a complete line of 95% AFUE furnaces.

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Child Custody Agreement And Taxes

(category: Taxes, Word count: 510)
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A child custody agreement can have serious implications on your tax filing and your taxes overall. This issue should be addressed with your attorney or with your accountant while you are going through the process of negotiating or litigating child custody or a divorce agreement. Waiting until after you have finalized a child custody agreement to investigate the tax impact is not adviseable.

State law on child custody does not dictate who gets the tax deductions. If your child custody agreement is entirely silent on this issue, the parent with primary residential or sole custody will have all of the tax benefits available through the children. That party will be able to claim the children as deductions, and so forth. This can be a significant issue. There are parents who simply assume that if they are paying thousands of dollars per year in support, they will be able to take the children as deductions. Not so. This is incredibly important when you consider that all child support payments are not tax deductible to the payor and they are not taxable to the recipient parent.

Thus, when negotiating your child cusody agreement, you must address the issue of how custody will be structured and who will recieve the tax benefits. This negotiation should be a part of an overall financial scheme that encompasses a consideration of all issues, including child custody, child support, property, alimony, and tax impact.

The ability to claim head of household instead of married filing separate or even filing single can be incredibly important to your overall tax scheme. You can claim head of household if you have your children for more than 50% of the time. Thus, a head of household tax filing should be a part of the overall negiating outline in a divorce or separation situation. A child custody agreement that is silent on this issue is really not a well negotiated or written agreement.

Your child custody agreement can address this issue in a number of ways. If your child custody agreement provides for joint shared custody, it must state who has the children for 50% of the time. If you have two children, you can divide that up so that each parent has the possibility of fiing for head of household. If you simply have joint custody and one parent has residential custody, you can still provide a head of household deduction to the other parent by wording the agreement in a way that allows for that filing.

There are other tax benefits available to parents that have to be considered when negotiating a child custody agreement. Many or most of those tax benefits are variable depending upon your income level ad whether or not you can claim the child or children as deductions. If you are really thinking through your child custody agreement, you will negotiate all of these benefits. The objective should be to maximize all available benefits for both parties, thereby providing an overall highly advantageous tax impact for your

child custody agreement.

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Why Income Tax Hurt Income Earners And Workers

(category: Taxes, Word count: 940)
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All wealth redistribution comes in the form of the equivalent of tax and welfare. However, you need to be careful. Incorrect taxation schemes can result in less wealth for you. You see, by reading this website I would suppose that you're poor or middle class wanting to skyrocket your income, right. Rich means owning a lot of money. If you're poor and would want to get rich, you need to have a lot of income. So will income tax help? No! Abolish income tax.

The Peril of Income Tax

Income tax can exaggerate wealth difference and can cause great deviation from meritocracy. Income tax can be very unfair and bad for workers.

Think of it this way. Imagine a country where you live. Say your friend Bob has an employee Ann. Bob is a rich man because he owns a lot of farm land that he uses as his recreational facility. Ann works for Bob as a farm labor. You work by productively serving the market through various means.

Bob earns his land through inheritance from his ancestors. His ancestors earn the land by massacring Indians and seizing their land. Not exactly productive means of acquiring wealth, however for all legal purposes, Bob's land is his.

The market tends to reduce the effects of injustice. A stupid lazy person owning great wealth will lose it in gambling table while the smart and diligent worker will have plenty of capital owners willing to lend money to him. So I am not going to argue much over 300 years old injustice.

It's simply a natural order that the more capable gets more money and it does take skill to commit genocide I must admit. Moreover, people often earn large amount of money unproductively due to society's failure to embrace meritocracy. If the rule says you got to bribe or be a dictator to get rich, can we blame people to do just that? So in a certain very twisted sense, it's fair.

Nevertheless, I look much more kindly on capitalistic wealth earned recently through merit within ones' own lifetime rather than wealth earned through inheritance. The latter is rather dubious.

Now, what would income tax do with this injustice? Income tax will exaggerate it. You, as workers who serve the will of the market will have to pay income tax. The money goes to pay subsidy for farm products. Politicians will say that it benefits Ann. Will it? No. Ann is a farm laborer. The market value of any labor is constant across industry. If Ann gets paid with less money as farm labor, Ann will move job to a service industry.

So the subsidy does not profit Ann. Then who profits? Bob... You see how a combination of income tax and governments' controlled subsidy take money from you, the still poor workers, and give the money away to rich land owning people?

The perils of income tax go on and on. You make money honestly. Your friend is lazy. Say you're both poor. Who pays more tax? You. That's because you have more income. The pretext is to take money from the rich and give it to the poor. Yet, even though you're both poor and start of with the same amount of money, you pay more tax. That punishes diligence and productivity.

Say Bob and you are equally rich. Bob builds mansions. You build factories. Who pays more tax? You... Why? That's because factories produce income. Factories also create jobs. So, income tax reduces incentives to use wealth for productive means.

Increase of Fearsome Governments Power

Income taxes give governments far more power than what's originally intended. In US, for example, governments do not have power to know your financial transaction. Yet governments can take your money through tax and then demand that you voluntarily report your financial transactions to get tax returns.

Federal governments do not have the power to regulate some aspects of the states. Yet federal governments can tax everyone and deny funding for states that do not observe federal speed limit. Federal governments do not have direct power to indoctrinate your kids, however, the governments can tax everyone and subsidies public school. The list can go on and on. With income tax, everyone is a slave.

If income tax is such a bad idea, how should we replace that then?

Non Productive Means to Acquire Wealth

There are two types of wealthy people. Self made millionaires, and the rest. Self made millionaires are highly capable, diligent, and ambitious individuals. That is you or what you'll become. To be rich, such self made millionaires need to have a lot of income. Taxing income hurts self made millionaires. Not only that, we're talking about highly diligent and capable people here. Those people don't go down easily. When income is taxed, they'll resort to other ways to create wealth. That ranges from hiring lawyers to avoid tax, fighting governments, corruptions, or becoming a dictator.

Just look at Saddam. Why do you think he chose to be a dictator? Why Kim Yong Il became a dictator? Are those people too stupid to earn wealth productively? No. They're smart. But they chose to be a dictator because productive means of creating wealth are harassed by various regulations like income tax.

Supporting income tax or any consensual means of making money will not only hurt you, but also hurt all poor and middle class. Just look at the median wealth of capitalistic countries and socialistic countries and you'll see my point easily.

If you really want wealth redistribution, don't tax income, tax wealth.

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Getting The Biggest Benefit From Tax Help

(category: Taxes, Word count: 447)
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Taxes are a way of American life. They are own duty to pay and file. Many people go in search of someone to help them when tax time rolls around. Tax help seems to be in abundance from January 1st to April 15th. Unfortunately, some tax help is best avoided. Other times the tax help is something that many people have no idea how to find. Getting the biggest benefit from tax help depends why you need help in the first place and where you get that help.

Most people seek tax help because they simply can not figure out he complicated tax codes. Every year it seems something has changed and people fear doing something wrong on their taxes and ending up in trouble with the IRS. Many people look at tax help as a way to guarantee an accurate and correct tax return. They also believe they will be able to get more deductions and credits this way, which equals a larger tax return. Unfortunately most of this depends on where you chose to get your tax help.

Trained tax professionals seem like the most logical and quickest way to get tax help. Most people do not know that the IRS offers a lot of useful information for free. They can also help you prepare your return and answer any questions you may have. The new tax preparation software also does a wonderful job of helping prepare taxes. You enter information in a step-by-step process that is easy to follow. The software handles all the complicated stuff and you only need to enter figures and answer simple questions. While sometimes consulting a tax professional is a great idea, often times people get lured in by offers of larger, faster returns. These offers only result in high fees and less of a return. Sometimes there are even untrained tax help that claim they are qualified. This can lead to many problems with incorrect returns that lie solely on you, the filer.

Once you understand why you need tax help then you can begin to look for someone to help you. If you are just looking for a quick return then try the accounting software that electronically files your return. You should see it within two weeks, possibly faster if you use direct deposit. If you are concerned about understanding the complicated tax codes then you should first seek help from the IRS or another free service and then try a software program. If all else fails look for a professional service. Make sure you completely understand their terms and fees and do not buy into any catchy advertising.

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