Tax Tip: How to get a replacement W-2

Kay Bell on Bankrate.com tells you how to get a replacement W-2 in case yours didn't make it to you in the mail, or if there is something wrong with it.

• Check with payroll
• Alert the IRS
• Form 4852
• Do-it-yourself W-2

Read the details at bankrate.

Mailbox alert!

The documentation that you will need to complete your tax forms is hitting the mailbox around this time.  Be on the lookout and start putting them in a folder so you will have everything when you sit down to do your taxes.

7 tax-filing moves you can make now

Kay Bell has a nice article on Bankrate.com that lists tips to make tax filing as painless as it can be this year. 

1. Get ready for the arrival of records.

2. Track down Social Security numbers.

3. Find your forms.

4. Decide how you want to do your taxes.

5. Consider electronic filing.

6. Use direct deposit.

7. Don't panic.

 

To read it in detail visit Bankrate.com

10 smart year-end tax moves

Bankrate.com lists 10 things you can do now to reduce your 2007 tax bill. Make it part of your holiday to-do list.

1. Get in the giving mood
2. Assess your assets
3. Let your home help you out
4. Eliminate energy excesses
5. Focus on fuel efficiency
6. Maximize medical expenses
7. Make more miscellaneous payments
8. Keep an eye on the 'kiddie tax'
9. Shop for your classroom
10. Ramp-up retirement contributions

Tax to-do list

Tax record keeping tips

Hopefully you have done your taxes already, and if you haven’t, stop reading blogs and go do them! Once you’re done, you should keep records of what you have filed. Bankrate.com lists some good tips on what you need to file and what you don’t.

There are limits
When it comes to tax-related documents, you should hang on to records that help you identify sources of income, keep track of expenses, determine the value of property, prepare tax returns or support claims made on those returns. However, common sense -- as well as storage space -- should be your guide. …

Use it or lose it
This means 1040 forms and any accompanying tax schedules, along with the documents supporting the return, such as W-2s, 1099 miscellaneous income statements and receipts or canceled checks verifying tax-deductible expenses. …

Housekeeping -- and selling -- records
For most taxpayers, the biggest asset -- and potential tax bill -- is a home.

While the tax rules for home sales have changed in recent years, meaning sale profits don't automatically face IRS charges, any paperwork relating to a residence should be kept for as long as the home is owned. …

Taking stock of investments
Fast on the heels of home sales as tax triggers (and record-keeping headaches) are stock transactions. …

Retirement record requirements
And then there are all those retirement savings plans, with all those different rules.

Contributions to traditional IRAs often are tax-deferred. But sometimes already-taxed money goes into these accounts, too. What happens to your taxes when you reach 59½ and start taking money out?

That depends in large part on your record keeping.

Business considerations
If you operate a small business, from a moonlighting job to a small operation with several employees, dealing with records becomes a bit more complex. But even then, it doesn't have to overwhelm you.

Pick a system, any system
Once you've identified critical records, the next step is to decide how to keep the data. Electronic bill paying can help keep track of your financial and tax life, but so can a plain old check register, as long as expenditures are entered faithfully.

It doesn't matter if it's a filing cabinet, cardboard boxes or a complex computer program. The key, says organizational expert Barbara Hemphill, is find your record keeping comfort level, pick a system and stick with it. …

Tax record keeping tips at Bankrate.com

10-point tax return checklist

Don’t send in your return until you have checked it for these 10 things from Bankrate.com

1. Use the peel-off label, even if it's wrong. About half of taxpayers still send in paper returns. If you're one of them, use the label. If anything on it is wrong, simply strike through the bad information and make corrections right on the label. If you don't have the label, write in the requested information clearly.

2. Be sure to enter your Social Security number in the box provided on the return. It is not there, the IRS won't process your return. If you and your spouse are filing a joint return, enter both tax ID numbers.

3. Check only one filing status. And make sure it's the status that gives you the most tax advantage.

4. Count all your allowable exemptions. Each dependent you claim on your return directly translates into an exemption, a specific dollar amount you can subtract from your adjusted gross income. The lower your income amount, the less there is for the IRS to tax. And be sure you include each listed person's correct Social Security number. Without it, the IRS could disallow an exemption -- and the $3,300 deduction that goes with it.

5. If you're filing a paper return, attach all of your W-2 wage statements, as well as any 1099 forms if they show you had tax withheld from those accounts. If you e-file, make sure you correctly entered the amounts from these forms. If you're e-filing, make sure you enter the information correctly in the computer software program. The IRS will be checking your payment statements it receives from your employers against what you enter on your 1040.

6. If you're filing a paper 1040 or 1040A and have used schedules with them, assemble them in the right order. Each attachment has a sequence number in its upper right-hand corner. Put them in that order and staple them to your return.

7. Do you owe tax? Make your check or money order payable to the United States Treasury, not the IRS. Also put on the check, your name, address, Social Security number, daytime phone number and note in the memo area that it's payment for 2006 Form 1040 (or 1040A or 1040EZ). Put your payment (along with the voucher from your tax package if you're a 1040 filer) in your return envelope, but don't staple it to the return itself. The IRS cashes your check before it examines your return. That means your check is removed and sent to one office for deposit, while your return goes to another for review. When a stapled check is pulled off, other attachments could come loose, too. Tracking them down will slow the processing of your return or force the IRS to come back to you for duplicates.

8. Sign and date the return. If you file a joint return, both spouses must sign, even if only one had income. Both signatures are required on paper forms and e-filed returns.

9. Provide a daytime phone number. It could speed the processing of your return if the IRS has questions. Joint filers can use the contact phone number for either spouse. If you paid a professional to do your return, make sure that person's contact info is complete. And you can now refer questions about your tax return to anyone you choose, tax pro or not. Simply fill out the third party designee line (name, tax ID number and phone number) to give the IRS permission to call that person for answers.

10. Use the envelope included with your tax package to mail your return. In the last few years, as the IRS has reorganized and consolidated its services, some of its return processing and service center locations have changed. If you aren't using a pre-addressed IRS envelope or label, make sure you are sending your return to the proper place. Use the IRS' locator map to double-check the centers' mailing addresses in your state.

10–point checklist via Bankrate.com

One week left to do taxes

If you still haven’t completed your taxes, here’s a nice step-by-step guide to get them done before the deadline on Apr 17.

Day 1 Gather data.
Day 2 Reduce taxable income.
Day 3 Find your forms.
Day 4 Fill out your forms.
Day 5 Take a break.
Day 6 Check your work.
Day 7 Sign, seal and deliver.

Bankrate's 7-day tax-filing plan

Write off taxes you paid

You can deduct property taxes you paid in 2006 on your 2006 tax return, if you itemize. You can also deduct state income taxes or sales taxes, whichever will give you more money back.

You can find tables estimating the sales taxes paid by people in your state on http://www.irs.gov/. If you are looking for recommendations on what software to use, check out this post: Tax software reviews.

10 new tax laws you need to know

Lawmakers were busy in 2006, so be sure to check out these tax code changes. They might save you some money, if you haven't filed your taxes already. Bankrate.com lists 10 new laws that might affect what you receive back from the IRS.

1. Telephone tax credit
   One of the most welcome tax changes comes not from Congress but from the Internal Revenue Service, which decided last year to stop collecting the 3 percent federal telephone excise tax. …


2. 
   
   Multiple direct deposit option
   If the phone rebate bumps up your refund amount, the IRS is making it easier for you to save instead of spend that money. You can now have your tax refund divided and directly deposited into up to three accounts. …


3. 
   
   Energy-saving home improvements
   If you replaced your home's drafty windows last year with new, energy-efficient panes, make sure you file the long Form 1040, along with Form 5695, to get the corresponding tax credit. That's just one way to take advantage of the energy-efficient home improvement provisions included in the energy bill that took effect Jan. 1, 2006. …


4. 
   
   Alternative fuel auto credit
   Did your environmental concerns extend to the road? Then you might be able to drive away with substantial tax savings. …


5. 
   
   Tougher donation rules
   Tax breaks for charitable gifts provide rewards for both donors and their favorite nonprofit groups. In 2006, however, lawmakers decided some taxpayers had been pushing the goodwill envelope a bit too far. So beginning on Aug. 18, any donated clothing or household goods must be in good or better condition. …


6. 
   
   Older philanthropist options
   Some charitable giving, however, got easier thanks to tax-law changes. Now if you're 70½ or older, you can transfer money directly from an IRA to a charitable organization.


7. 
   
   Kiddie tax tightened
   In order to save for their child's college costs, some parents open accounts in the child's name. …


8. 
   
   Foreign income adjustments
   U.S. workers with jobs abroad will likely find they're now paying a higher tax price for their globe-trotting careers because of changes to the foreign earned income exclusion rules. …


9. 
   
   Rolling over retirement money
   However, if you're planning to someday retire abroad instead of work there now, some law changes can help you build up your post-career nest egg. To encourage workers to take their company retirement plans when they leave a job, the new Pension Protection Act of 2006 will soon allow departing employees to transfer that money directly into a Roth IRA. …


10. 
    
    Old deductions are new again
    Three popular tax breaks technically died at the end of 2005: deductions for state sales taxes, educators' classroom expenses and college tuition and fees. They were resurrected at the very end of the 2006 congressional session and are back in force through 2007, just as they were previously. …

10 new tax laws you need to know at Bankrate.com

Cut Your Taxes With Good Deeds

While doing my taxes with TurboTax, I was embarrassed to find out that the average charitable donations in my income bracket were a LOT higher than what I had donated in 2006. Right then I resolved to correct that in 2007. This article from Fool.com has some nice tips on how to make sure you are filing your deductions correctly.

The folks who oversee the Internal Revenue Service (yes, even the auditors get audited) recently discovered that roughly one-quarter of taxpayers who took a tax deduction for donating valuable stuff to charity didn't substantiate their gifts.

Turning junk into money
First, know that you can get a pretty good tax perk for donating your unwanted belongings to a qualified charity. If you're wondering whether your charity is qualified, check the IRS web site. …

Things to watch out for
Here's one wrinkle in these rules. If you're donating something that's not in good condition, but it has a value of $500 or more and you get a qualified appraisal, you may still qualify for a tax deduction. …

Not too much of a good thing
Just so you know, there are some limits to the generosity of these laws, but they're too high for most people to worry about. Technically, you can only deduct donations that amount to less than either 50% or 30% of your adjusted gross income. …

More here.

Where to Find Hidden Savings on Your 1040

I know it is starting to feel like a Tax blog, but 'tis the season, so here goes. Kiplinger.com has some savings that you might miss on your tax return. Hope it helps some of you out.

Green credits.
Save your energy.
Good news for high-earners.
Higher
limits.
A tougher "kiddie" tax.
Go for an IRA.

More here.

13 basic tax lessons

You maybe done with your taxes for this year, but these are lessons you can use forever. When it comes to taxes, knowledge is money. e.g. If you didn't know about the telephone credit being given this year, you would miss out on the easiest 40 bucks you ever made. Here are 13 lessons to last you a lifetime from Bankrate.com.

1. Overwithholding is bad.
2. Underwithholding is bad.
3. Tips to differentiating your income.
4. Different dollars have different rates.
5. Itemizing isn't always necessary.
6. Credits are better than deductions.
7. Exclusions add up to tax savings.
8. Stealth taxes sneak in.
9. Deductibility has its boundaries.
10. Earned and unearned are taxed differently.
11. Extension to file means just that.
12. Audit pain can be reduced.
13. Simple can be costly.

More details here.

Free TaxCut Premium Federal + FREE DeductionPro

Free tax software deal. Credit to slickdeals.net for identifying the deal.

Click here to get H&R Block's TaxCut Premium Federal + DeductionPro for FREE!

Tax Tip: Deduct your home office

Do you work from home? You might be able to deduct home office costs on your tax return, if you are self employed, and in some cases, even if you are an employee. As long as you meet the requirements, Bankrate.com lists out how you can claim home office expenses as deductions on your tax return.

A home-office deduction is generally easier for self-employed individuals to claim. But even then, the Internal Revenue Service has certain requirements a taxpayer must meet.

General requirements
First, your home-office area must be used regularly and exclusively for your business needs. You can't set up a computer in your den, sporadically type invoices and claim that room as your home office.

Secondly, the business part of your home must be either your principal place of business or where you meet or deal with patients, clients or customers in the normal course of your business. A separate, detached structure such as a garage or guesthouse that is used for business also may qualify as a home office.

More here.

12 common tax-filing mistakes you can avoid

Another one of my favorite websites, Bankrate.com, has a checklist of common mistakes people make on their tax returns, and how you can avoid them.

• Phone tax refund
• Extended deductions
• Direct deposit dangers
• Hybrid vehicle credits
• Charitable contributions
• Kiddie tax
• New interest
• Math miscalculations
• Social Security
• Ignoring IRS mail
• Signature required
• Make the deadline

For more details, click here.

What You Need to Know About Tax Prep Firms

Some more tax advice from Kiplinger.com. Apparently a majority (61%) of taxpayers had someone other than themselves do their taxes last year. Here are some things to look for when picking a tax prep firm.

1. Computers and calculators are not credentials.
2. You want a surgeon, not a first-year resident.
3. Some preparers are ethically challenged.
4. You get what you pay for.
5. You'll pay interest on that "rapid refund."
6. Your secrets aren't necessarily safe.

For more detail click here.