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There are two federal tax credits available to help you offset the costs of higher education for yourself or your dependents. These are the American Opportunity Credit and the Lifetime Learning Credit. Visit our Blog, Facebook, or Twitter page to learn more..
If you file a joint return for your client and all or part of their refund is applied against their spouses’ past-due federal tax, state income tax, child or spousal support or federal nontax debt, such as a student loan, your client may be entitled to injured spouse relief. There are seven facts the IRS wants you to know about claiming injured spouse relief. Visit our Blog, Facebook, or Twitter page to learn more.
Eight Tips for Deducting Charitable Contributions
Charitable contributions made to qualified organizations may help lower your client's tax bill. The IRS has put together the following eight tips to help ensure their contributions pay off on their tax return. Visit our Blog, Facebook, or Twitter page to learn more.
Ten Things to Know about Farm Income and Deductions
If your client has a farming business, there are several tax issues to consider before filing their federal tax return. The IRS has compiled a list of 10 things that you may want to know. Visit our Blog, Facebook, or Twitter page to learn more.
Employee Business Expenses
If you itemize deductions for your client and they are an employee, they may be able to deduct certain work-related expenses. The IRS has put together the following facts to help you determine which expenses may be deducted as an employee business expense. Expenses that qualify for an itemized deduction include... Visit our Blog, Facebook, or Twitter page to learn more.
Work From Home? Consider the Home Office Deduction
Whether you are self-employed or an employee, if you use a portion of your home for business, you may be able to take a home office deduction. There are six things the IRS wants you to know about the Home Office deduction. Visit our Blog, Facebook, or Twitter page to learn more.
What Parents Should Know about Their Child’s Investment Income
Parents need to be aware of the tax rules that affect their children’s investment income. There are four facts from the IRS that will help parents determine whether their child’s investment income will be taxed at the parents’ rate or the child’s rate... Visit our Blog, Facebook, or Twitter page to learn more.
Health Insurance Tax Breaks for the Self-Employed
There is some information from the IRS about a special tax deduction for the self-employed. You and your client may be able to deduct premiums paid for medical and dental insurance and qualified long-term care insurance for you, your spouse, and your dependents if you are one of the following... Visit our Blog, Facebook, or Twitter page to learn more.
Get Credit for Making Your Home Energy Efficient or Buying Energy-Efficient Products
Taxpayers who made some energy efficient improvements to their home or purchased energy-efficient products last year may qualify for a tax credit this year. The IRS wants you to know about these six energy-related tax credits created or expanded by the American Recovery and Reinvestment Act of 2009. Visit our Blog, Facebook, or Twitter page to learn more.
Tax Refund Withholdings and Offsets
If your client owes money because of certain delinquent debts, the IRS or the Department of Treasury's Financial Management Service (FMS), which issues IRS tax refunds, can offset or reduce their federal tax refund or withhold the entire amount to satisfy the debt. There are seven important facts the IRS wants you to know about tax refund offsets. Visit our Blog, Facebook, or Twitter page to learn more.
The Earned Income Tax Credit is a financial boost for workers earning $48,362 or less a year. Four of five eligible taxpayers filed for and received their EITC last year. There are 10 things the IRS wants you to know about this valuable credit. Visit our Blog, Facebook, or Twitter page to learn more.
Medical and Dental Expenses
If you itemize deductions for your client on Form 1040, Schedule A, There are six things the IRS wants you to know about medical and dental expenses and other benefits. Visit our Blog, Facebook, or Twitter page to learn more.
The Social Security benefits your client receives in 2010 may be taxable. They should receive a Form SSA1099 which will show the total amount of the benefits. The information provided on this statement along with the following seven facts from the IRS will help you determine whether or not the benefits are taxable. Visit our Blog, Facebook, or Twitter page to learn more.
Six Facts the IRS Wants You to Know about the Alternative Minimum Tax
The Alternative Minimum Tax attempts to ensure that anyone who benefits from certain tax advantages pays at least a minimum amount of tax. The AMT provides an alternative set of rules for calculating your income tax. In general, these rules should determine the minimum amount of tax that someone with your income should be required to pay. If your regular tax falls below this minimum, you have to make up the difference by paying alternative minimum tax. Visit our Blog, Facebook, or Twitter page to learn more about the facts.
Ten Things to Know About the Child and Dependent Care Credit
If your client paid someone to care for their child, spouse, or dependent last year, they may be able to claim the Child and Dependent Care Credit on their federal income tax return. There are 10 things the IRS wants you to know about claiming a credit for child and dependent care expenses. Visit our Blog, Facebook, or Twitter page to learn more about the facts.
Seven Tips About Rental Income and Expenses
Does your client rent property to others? If so, you’ll want to read the following seven tips from the IRS about rental income and expenses. You generally must include in your client's gross income all amounts your client receives as rent. Rental income is any payment you receive for the use of or occupation of property. Expenses of renting property can be deducted from your gross rental income. You generally deduct your rental expenses in the year you pay them. Publication 527, Residential Rental Property, includes information on the expenses you can deduct if you rent property. Visit our Blog, Facebook, or Twitter page to learn more about the seven tips.
Ten Facts for Mortgage Debt Forgiveness
If your client's mortgage debt is partly or entirely forgiven during tax years 2007 through 2012, they may be able to claim special tax relief and exclude the debt forgiven from your income. There are 10 facts the IRS wants you to know about Mortgage Debt Forgiveness. Visit our Blog, Facebook, or Twitter page to learn more.
Four Credits That Can Pay at Tax Time
Your client might be eligible for a valuable tax credit. A tax credit is a dollar-for-dollar reduction of taxes owed. Some credits are even refundable, which means you might receive a refund rather than owe any taxes at all. There are four popular tax credits you should consider before filing your client's 2010 Federal Income Tax Return. Visit our Blog, Facebook, or Twitter page to learn more.
Many Tax Return Preparers Must Use IRS e-file Beginning in 2011
A new law requires many paid tax return preparers to electronically file federal income tax returns prepared and filed for individuals, trusts, and estates starting Jan. 1, 2011. The e-file requirement will be phased in over two years. As a result of the new rules, preparers will be required to start using IRS e-file beginning:
January 1, 2011— for preparers who anticipate filing 100 or more Forms 1040, 1040A, 1040EZ and 1041 during the year; or
January 1, 2012— for preparers who anticipate filing 11 or more 1040, 1040A, 1040EZ and 1041 during the year.
Did your Client Take an Early Distribution from Their Retirement Plan?
Some taxpayers may have needed to take an early distribution from their retirement plan last year. The IRS wants individuals who took an early distribution to know that there can be a tax impact to tapping your retirement fund. There are ten facts about early distributions. Visit our Blog, Facebook, or Twitter page to learn more.
Get Credit for Your Client's Retirement Savings Contributions
Your client may be eligible for a tax credit if you make eligible contributions to an employer-sponsored retirement plan or to an individual retirement arrangement. There are six things the IRS wants you to know about the Savers Credit. Visit our Blog, Facebook, or Twitter page to learn more.
Important Tax Law Changes for 2010
Tax Preparers should make sure they are aware of many important changes to the tax law before they complete their client's 2010 federal income tax return. There are several important changes that the IRS wants you to keep in mind when you file your 2010 federal income tax return in 2011. Visit our Blog, Facebook, or Twitter page to learn more.
Eight Essential Facts about Claiming the First-Time Homebuyer Credit
If your client purchased a home in 2010, they may be eligible to claim the First-Time Homebuyer Credit, whether they are a first-time homebuyer or a long-time resident purchasing a new home. The purchaser must have been at least 18 years old on the date of purchase; for a married couple, only one spouse must meet this age requirement. A dependent is not eligible to claim the credit. There are eight things the IRS wants you to know about claiming the credit:Visit our Blog, Facebook, or Twitter page to learn more.
Six Facts about Choosing the Standard or Itemized Deductions
When filing your client's federal income tax return, taxpayers can choose to either take the standard deduction or to itemize their deductions. The IRS has put together the following six facts to help you choose the method that gives you the lowest tax. Visit our Blog, Facebook, or Twitter page to learn the facts.
Tax Benefits for Disabled Taxpayers
Taxpayers with disabilities and parents of children with disabilities may qualify for a number of IRS tax credits and benefits. There are seven tax credits and other benefits. Visit our Blog, Facebook, or Twitter page to learn more.
Taxable or Non-Taxable Income?
Generally, most income you receive is considered taxable but there are situations when certain types of income are partially taxed or not taxed at all. Visit our Blog, Facebook, or Twitter page to learn more.
Four Tax Tips about Tip Income
If you work in an occupation where tips are part of your total compensation, you need to be aware of several facts relating to your federal income taxes. Here are four things the IRS wants you to know about tip income. Visit our Blog, Facebook, or Twitter page to learn more.
Some tax rules affect every person who may have to file a federal income tax return – these rules include dependents and exemptions. Here are six important facts the IRS wants you to know about dependents and exemptions that will help you file your 2010 tax return. Visit our Blog, Facebook, or Twitter page to learn more.
Five Important Facts about the Making Work Pay Credit
Many working taxpayers are eligible for the Making Work Pay Tax Credit in 2010. The credit is based on earned income and is claimed on your 2010 tax return when you file your taxes in 2011. Here are five things the IRS wants you to know about this tax credit to ensure you receive the entire amount for which you are eligible. Visit our Blog, Facebook, or Twitter page to learn more.
Tax information can be tough to understand in any language, but it can be even more difficult if it is not in your first language. The IRS offers a wide range of free and easy-to-use products and services for Spanish speaking taxpayers. There are nine ways you can get help from the IRS if you need assistance with your federal taxes in Spanish. Visit our Blog, Facebook, Twitter page to learn more.
The first step to filing your federal income tax return is to determine which filing status to use. Your filing status is used to determine your filing requirements, standard deduction, eligibility for certain credits and deductions, and your correct tax. There are five filing statuses: Single, Married Filing Jointly, Married Filing Separately, Head of Household and Qualifying Widow(er) with Dependent Child. There are eight facts about the five filing status options the IRS wants you to know so that you can choose the best option for your situation. Visit our Blog, Facebook, or Twitter page to learn more.
If you file your return using IRS e-file, the system will automatically decide which form you need. There are some general rules to consider when deciding which paper tax form to file. Visit our Blog, Facebook, or Twitter page to learn more.
Millions of workers will see their take-home pay rise during 2011 because the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 provides a two percentage point payroll tax cut for employees, reducing their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid. This reduced Social Security withholding will have no effect on the employee’s future Social Security benefits. Visit our Blog, Facebook, or Twitter page to learn more.
The Internal Revenue Service has free tax forms and publications on a wide variety of topics. Due to the continued growth in electronic filing, the availability of free options to taxpayers and efforts to reduce costs; the IRS will no longer be automatically mailing paper tax packages. If you need IRS forms, there are four easy methods for getting the information you need. Visit our Blog, Facebook, and Twitter page to learn more.
For 2010, individual taxpayers can deposit up to a certain amount into a Traditional or Roth Individual Retirement Account (IRA). Visit our Blog, Facebook, or Twitter page to learn more.
There are 10 tax benefits the IRS wants parents to consider when filing their tax returns this year. Visit our Blog, Facebook, and Twitter page to learn more.
Taxpayers Can check refunds and get tax information.
The IRS Small Business and Self-Employed Tax Center at https://xxxwww.irs.gov/smallbiz offers extensive resources and online tools designed to help small businesses and self-employed persons.
If you are in business for yourself, or carry on a trade or business as a sole proprietor or an independent contractor, you generally would consider yourself self-employed and you would file IRS Schedule C, Profit or Loss From Business or Schedule C-EZ, Net Profit From Business with your Form 1040. There are six things the IRS wants you to know about self-employment. Visit our Blog, Facebook, or Twitter page for more information.
Did you know that almost everything you own and use for personal or investment purposes is a capital asset? Capital assets include a home, household furnishings and stocks and bonds held in a personal account. When a capital asset is sold, the difference between the amount you paid for the asset and the amount you sold it for is a capital gain or capital loss.There are ten facts from the IRS about gains and losses and how they can affect your Federal income tax return. Visit our Blog, Facebook, or Twitter page for more information.
Seven Facts about the Expanded Adoption Credit
Eligible self-employed individuals can use the self-employed health insurance deduction to reduce their Social Security tax in addition to their income tax liability for the 2010 tax year.
In today’s economy, small business owners sometimes look to the oldest form of commerce – the exchange of goods and services, or bartering. The fair market value of property or services received through barter is taxable income. Visit our Blog, Facebook, or Twitter page to learn about the four facts.
The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, enacted on December 17, 2010, included several changes impacting workers’ take-home pay and retirees’ net pension checks for 2011. The Tax Relief Act extended for two years the income tax rates that were scheduled to expire at the end of 2010; that extension prevented a large increase in federal income tax withholding. Visit our Blog, Facebook, or Twitter page for more information.
The Child Tax Credit is an important tax credit that may be worth as much as $1,000 per qualifying child depending upon your income. There are 10 important facts from the IRS about this credit and how it may benefit your family. Visit our Blog, Facebook, or Twitter page for more information.
IRS to Start Processing Delayed Returns on Feb. 14
The Internal Revenue Service plans a Feb. 14 start date for processing tax returns delayed by last month’s tax law changes. The IRS reminded taxpayers affected by the delay they can begin preparing their tax returns immediately because many software providers are ready now to accept these returns.
Platinum Professional Services is here for you every step of the way. As part of our commitment to offer you the best in education, this page is designed to help make the transitions easier for you with the new IRS changes. Please check back periodically as we will be updating it.
IRS Competency Test and Continuing Education Update: As of Friday, January 18, 2013, the United States District Court for the District of Columbia has enjoined the Internal Revenue Service from enforcing the regulatory requirements for registered tax return preparers. In accordance with this order, the IRS Competency Test is not currently mandatory for tax preparers and any option to obtain the and pass the IRS Competency Exam at this time is voluntary. The IRS has appealed this decision. Judge Boasberg clarified that his injunction did not affect a separate set of regulations requiring tax preparers to have a Preparer Tax Identification Number, or PTIN, or prevent the IRS from operating its testing or continuing education centers on a strictly voluntary basis. The court wrote, “[S]ome preparers may wish to take the exam or continuing education even if not required to. Such voluntarily obtained credentials might distinguish them from other preparers.” More information will be available soon.
Please note the information listed below are for prior reference only.
The IRS plans on implementing an enforcement strategy for the 2011 tax season. The Franchise Tax Board enforcement program, which CTEC is under, will remain intact for California. All CTEC registered tax preparers will be required to complete the IRS and CTEC requirements in order to be legally qualified to prepare state and federal returns. Remember the FTB and the IRS share information, be sure your registration is up to date with both.
All CTEC and Oregon registered tax preparers will have to complete both the IRS requirements and their state requirements. CTEC will still be requiring 60 hours of qualifying education to become a CTEC registered tax preparer. and Oregon will still require qualifying education as well. CTEC presently requires 20 hours of continuing education (12 hours federal, 4 hours state, 2 hours ethics and 2 hours either federal or state). CTEC has indicated that the 15 hours of federal continuing education will be allowed for the 20 hour requirement additional hours will have to be completed for the CA component. Oregon presently requires 30 hours of continuing education. Oregon will follow the same quidelines as CTEC. Once paid preparers register, they will be subject to the 15-hour per year continuing education requirement. The IRS plans to base the completion of the required continuing education on the preparer’s registration anniversary date as opposed to a calendar year for everyone. The starting date for the IRS Continuing Professional Education CPE requirement is January 1st, 2012.
The following are the IRS requirements for Tax Preparation:
1. The IRS will require all paid tax preparers to sign up with the IRS, pay a registration fee and obtain a preparer tax identification number (PTIN). All paid preparers will be required to register and obtain a PTIN or they cannot prepare returns for compensation. Under the proposed regulations, the requirement to sign up on the new system will apply to all compensated tax return preparers of federal tax returns regardless of whether they currently possess a PTIN. Tax return preparers who already have a PTIN generally will be reassigned the same number. Compensated tax return preparers would pay a $64.25 user fee the first year for a PTIN based on two underlying costs. The IRS proposes to collect $50 per user to pay for outreach, technology, and compliance efforts associated with the new program. And the third-party vendor will receive $14.25 per user to operate the online system and provide customer support. Click here to access to an online sign-up system.
2. Beginning in November 2011, tax return preparers must pass a competency test to officially become a registered tax return preparer. Tax return preparers who have PTINs will have until December 31, 2013 to pass the competency test and may take the test an unlimited number of times to pass it. There will be a fee to take the test and that fee will be due each time the individual attempts to pass the test. The IRS test specifications identify the major topics that will be covered by the test, which will be available starting this fall. Although individuals who already have a provisional preparer tax identification number (PTIN) from the IRS do not have to pass the exam until December 31, 2013, they may take the exam at any time once it is available. The test will have approximately 120 questions in a combination of multiple choice and true or false format. Questions will be weighted and individuals will receive a pass or fail score, with diagnostic feedback provided to those who fail. Some reference materials will be available to individuals when they are taking the test. Prometric will provide individuals with Publication 17, Form 1040 and Form 1040 instructions as reference materials.
Test vendor Prometric Inc. worked with the IRS and the tax preparer community to develop the test. Platinum Professional Services was involved in providing Prometric with the development of the test. The time limit for the test is expected to be between two and three hours. The test must be taken at one of the roughly 260 Prometric facilities nationwide.
The fee for the test is $116.00, which is separate from the PTIN user fee. Currently there is no limit on the number of times preparers can take the test, but they must pay the fee each time. Individuals must pass the test only once.
Only certain individuals who prepare the Form 1040 series are required to take the test. Attorneys, Certified Public Accounts and Enrolled Agents (EAs) are exempt from testing and continuing education because of their more stringent professional testing and education requirements. Also exempt are supervised employees of attorneys, CPAs, attorneys or EAs who prepare but do not sign and are not required to sign the Form 1040 series returns they prepare and individuals who prepare federal returns other than the Form 1040 series.
Approximately 730,000 return preparers have registered and received PTINs in 2011. All tax preparers will need to renew an existing PTIN or obtain a new PTIN beginning in October 2011.
Tax Preparers who have on-line accounts at www.irs.gov/ptin can use their accounts to schedule a test time and select a Prometric site.
The IRS will require competency tests for all paid tax return preparers (except Attorneys, CPA's, Enrolled Agents). Enrolled Agents have separate requirements click here to learn more.
All preparers who obtain a PTIN will have until December 31, 2013, to pass the IRS competency exam. The test is part of an ongoing effort by the IRS to enhance oversight of the tax preparation industry. Preparers who pass this test, a background check and tax compliance check as well as complete 15 hours of continuing education annually will have a new designation: Registered Tax Return Preparer. Currently, tax Ppeparers who have a PTIN have a Provisional PTIN.
3. The IRS will require continuing professional education of 15 hours per year for all paid Tax Return Preparers (except Attorneys, CPA's, Enrolled Agents) Enrolled Agents have separate requirements click here to learn more. The IRS will require the 15 hours to include three hours of federal tax law updates, two hours of tax preparers ethics and 10 hours of federal tax law topics. The starting date for the IRS Continuing Professional Education CPE requirement is January 1st, 2012. Again, Tax Preparers who have a PTIN have a Provisional PTIN will still need to complete continuing education in 2012, before you are allowed to renew their Provisional PIN in 2012.
Platinum Professional Services will combined the Federal requirements and the CTEC requirements so you can meet all your tax education needs in one course.
4. The IRS will conduct Tax Compliance checks on all tax return preparers (i.e. if they have filed their personal and business returns etc.).
5, The IRS will extend Circular 230 ethics standards for all preparers. This will be included in the 15 hour continuing educational requirement.
6. Certain tax return preparers who must pass a suitability check will have to provide their fingerprints so that a Federal Bureau of Investigation database search can be conducted. Generally, the fingerprint requirement will affect those preparers who currently have provisional PTINs. The IRS also published proposed regulations ( REG-116284-11 ) that would establish user fees for fingerprinting and taking the competency examination. As proposed, the IRS portion of the fingerprinting fee would be $33, and the IRS portion of the testing fee would be $27. These user fees are in addition to any fees charged by the third-party vendors administering the programs. The fees to be charged by third-party vendors are not being announced at this time, but the total fees, including the IRS user fees, are expected to be between $60 and $90 for fingerprinting and $100 and $125 for testing.
Tax Courses Approved by the Internal Revenue Service
Tax Courses Approved by the California Tax Education Council
Tax Courses Approved by the Oregon State Board of State Practitioners (OTPB)
Notary Courses Approved by the Secretary of State
Certified Public Accountant Courses Awaiting NASBA Approval
Enrolled Agent Courses Approved by the Internal Revenue Service