Creative Tax

New Notices Related to Form 1099-K

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1099KThe IRS uses third-party information reporting on forms in the 1099 series to increase voluntary compliance and improve collections. Beginning in 2011, legislation requires reporting of income in two areas: payment card (credit, debit and certain electronic transactions) and securities basis reporting.

If you receive a letter or notice from the IRS, it will explain the reasons for the correspondence and provide instructions. The notice you receive covers a very specific issue about your account or tax return. Generally, the IRS will send a notice if it believes you owe additional tax or are due a larger refund, or if there is a question about your tax return. 

What do I do with the Form 1099-K?

Form 1099-K is an information return that reports payment card and third party network transactions. You should retain it for your records and use it to assist you in completing your tax return. Refer to Publication 583, Starting a Business and Keeping Records, for more detailed information and assistance regarding proper record keeping. 

Home Office Deduction: A Tax Break For Those Who Work From Home

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If you use part of your home for your business, you may qualify to deduct expenses for the business use of your home. Here are six facts from the IRS to help you determine if you qualify for the home office deduction. 1. Generally, in order to claim a deduction for a home office, you must use a part of your home exclusively and regularly for business purposes. In addition, the part of your home that you use for business purposes must also be: your principal place of business, or a place where you meet with patients, clients or customers in […]

Parents and Students: College Tax Benefits for 2013 and Years Ahead

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Parents and students now is a good time to see if you qualify for either of two college education tax credits or any of several other education-related tax benefits. In general, the American opportunity tax credit, lifetime learning credit and tuition and fees deduction are available to taxpayers who pay qualifying expenses for an eligible student. Eligible students include the primary taxpayer, the taxpayer’s spouse or a dependent of the taxpayer. Though a taxpayer often qualifies for more than one of these benefits, he or she can only claim one of them for a particular student in a particular year. […]

Save Money with the Child Tax Credit

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If you have a child under age 17, the Child Tax Credit may save you money at tax-time. Here are some facts the IRS wants you to know about the credit. Amount.  The non-refundable Child Tax Credit may help reduce your federal income tax by up to $1,000 for each qualifying child you claim on your return. Qualifications.  For this credit, a qualifying child must pass seven tests: 1. Age test.  The child must have been under age 17 at the end of 2012. 2. Relationship test.  The child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, or stepsister. […]

Choose Direct Deposit – Safeguard Your Refund

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Direct deposit is the fast, easy and safe way to receive your tax refund. Whether you file electronically or on paper, direct deposit gives you access to your refund faster than a paper check. Here are four reasons more than 80 million taxpayers chose direct deposit in 2012: 1. Security.  Every year the U.S. Postal Service returns thousands of paper checks to the IRS as undeliverable. Direct deposit eliminates the possibility of a lost, stolen or undeliverable refund check. 2. Convenience.  With direct deposit, the money goes directly into your bank account. You will not have to make a special trip to […]

Six Important Facts about Dependents and Exemptions

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While each individual tax return is unique, there are some tax rules that affect every person who files a federal income tax return. These rules involve dependents and exemptions. The IRS has six important facts about dependents and exemptions that will help you file your 2012 tax return.   1. Exemptions reduce taxable income.  There are two types of exemptions: personal exemptions and exemptions for dependents. You can deduct $3,800 for each exemption you claim on your 2012 tax return.   2. Personal exemptions.  You usually may claim one exemption for yourself on your tax return. You also can claim one for […]

What To Do if You don’t Have Your W2s

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It’s a good idea to have all your tax documents together before preparing your 2012 tax return. You will need your W-2, Wage and Tax Statement, which employers should send by the end of January. Give it two weeks to arrive by mail. If you have not received your W-2, follow these three steps: 1. Contact your employer first.  Ask your employer – or former employer – to send your W-2 if it has not already been sent. Make sure your employer has your correct address. 2. Contact the IRS. After February 14, you may call the IRS at 800-829-1040 if you […]

Qualifying For Earned Income Tax Credit

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Watch this video to learn about the Earned Income Tax Credit. If You have any question don't hesitate to come by Creative Tax Located at 3255E. South St in  Long Beach Ca or Call us at (562) 251 -1300    

Earned Income Tax Credit (EITC) – What You Need To Know

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The Earned Income Tax Credit has made the lives of working people a little easier since 1975. EITC can be a boost for workers who earned $50,270 or less in 2012. Yet the IRS estimates that one out of five eligible taxpayers fails to claim their EITC each year. The IRS wants everyone who is eligible for the credit to get the credit that they’ve earned. Here are the top five things the IRS wants you to know about this credit. 1. EITC is valuable.  The EITC not only reduces the federal tax you owe, but could result in a refund. […]

IRS UpDate — Late Filing For 2013

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The IRS will begin processing most individual income tax returns on Jan. 30 after updating forms and completing programming and testing of its processing systems. The IRS anticipated many of the tax law changes made by Congress under the American Taxpayer Relief Act (ATRA), but the final law requires some changes before the IRS can begin accepting tax returns. The IRS will not process paper or electronic tax returns before the Jan. 30 opening date, so there is no advantage to filing on paper before then. Using e-file is the best way to file an accurate tax return, and using […]