William Penn Life, 2001 (36. évfolyam, 1-12. szám)

2001-01-01 / 1. szám

IRS offers one stop for tax help

Facing a lot of different tax questions this year? Experts at the Internal Revenue Service have pulled together an overview of common tax issues and released “Publication 17: Your Federal Income Tax. This updated publication contains a vast array of helpful information in one guide.

This free publication is available by calling toll-free 1-800-829- 3676. It can also be accessed directly over the internet at http:// ftp.fedworld.gov/pub/irs-pdfp 17 pdf.

This publication can help you prepare your tax return by taking you through each part of the return. It supplements the information in your tax form instruction booklet. It explains the tax law and will help you understand your taxes so that you pay only the tax you owe and no more.

The publication begins with the rules for filing a tax return. It explains who must file a return, which tax form to use, when the return is due and other general information. It will help you identify which filing status you qualify for, whether you can claim any dependents, and whether the income you’re receiving is taxable.

The publications goes on to explain the standard deduction, the kinds of expenses you may be able to deduct and the various kinds of credits you may be able to take to reduce your tax.

Throughout the publication are examples showing how the tax law applies in typical situations.

Sample forms and schedules show you how to report certain items on your return. It also contains flowcharts and tables that present tax information in an easy-tounderstand manner.

Little things could mean a lot when filing your tax return

NOT ALL AMERICANS procrastinate when it comes to filing their federal income tax return. Those expecting a tax refund are quite eager to file early. But, if you're one of those lucky taxpayers who will get money back from the IRS, make sure that in your haste you don't overlook some basic—but very important-details as you prepare your return.

The IRS, in its "Publications 17: Your Federal Income Tax," offers a list of important reminders and other items that may help you file your 2000 tax return correctly.

These will help speed up your refund and may even lead to more money in your pocket.

Write in your social security number. To protect your privacy, social security numbers (SSNs) are not printed on the peel-off label that comes in the mail with your tax instruction booklet.

This means you must enter your SSN in the space provided on your tax form. If you filed a joint return for

1999 and are filing a joint return for

2000 with the same spouse, enter your names and SSNs in the same order as on your 1999 return.

Taxpayer identification number.

You must provide the taxpayer identification number for each person for whom you claim certain tax benefits. This applies even if the person was born in 2000. Generally, this number is the person's SSN.

Child tax credit. You may be able to claim a tax credit for each of your qualifying children under age 17.

This credit can be as much as $500 for each qualifying child.

Advance earned income credit. If a

qualifying child lives with you and

you expect to qualify for the earned income credit in 2001, you may be able to get part of the credit paid to you in advance throughout the year (by your employer) instead of waiting until you file your tax return.

Sale of your home. Generally, you will only need to report the sale of your home if your gain is more than $250,000 ($500,000 if married filing a joint return).

Individual retirement arrangements (IRAs). A married couple filing a joint return can contribute up to $2,000 each to their IRAs, even if one spouse had little or no income.

Even if your spouse is covered by an employer-sponsored retirement plan, you may be able to deduct contributions to your traditional IRA if you are not covered by an employer plan.

Also, you may be able to establish a Roth IRA. In this type of IRA, contributions are not deductible but earnings grow tax free and qualified withdrawals are not taxable. You may also be able to convert a traditional IRA to a Roth IRA, but you must include all or part of the taxable converted amount in income.

Include your phone number on your return. To promptly resolve any questions it may have in processing your tax return, the IRS would prefer to call you. Enter your daytime phone number on your tax form next to your signature.

Faster ways to file your return. If

you want to speed up things even more, you can file your tax return electronically. Log onto www.irs.gov for more details on e-filing. U\|>|J

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William I'pim Life, January 2001