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On January 12, a massive earthquake hit
According to the IRS press release, people who give to charities providing earthquake relief in
To learn more about how to claim donations made to Haitian relief effort visit www.irs.gov or call 800-829-1040 for individuals or 800-829-4933 for businesses.
Marsha Henry
Tax Quarry ©
For many the changing economic environment has meant scaling back on hours, losing a job or simply missing out on a promotion. At the most basic level, this means there is less cash flow to go around. The government, fully aware of this trend, decided to introduce a few tax incentives to lighten the financial burden of the crisis. For the unemployed, EI benefits eligibility was extended and increased. However, for those remaining gainfully employed, the government introduced through the American Recovery and Reinvestment Act (2009) the Making Work Pay Tax Credit.
If you are one of the lucky ones who still punches the clock everyday and logs those hours, the IRS has provided 10 tips to help you determine your eligibility for this tax credit and to ensure you receive the entire amount for which you are eligible.
1. In 2009 and 2010, the Making Work Pay provision provides a refundable tax credit of up to $400 for individuals and up to $800 for married taxpayers filing joint returns.
2. For taxpayers who receive a paycheck and are subject to withholding, the credit will typically be handled by their employers through automated withholding changes.
3. Taxpayers receiving less than the full amount of the allowable credit through reduced withholding will be entitled to claim any remaining credit when they file their tax return.
4. The amount of the credit actually received during 2009 in the form of reduced withholding will be reported on your 2009 tax return. Taxpayers who do not have taxes withheld by an employer during the year can claim the credit on their 2009 tax return filed in 2010.
5. Taxpayers who file Form 1040 or 1040A will use Schedule M, Making Work Pay and Government Retiree Credits to figure the Making Work Pay Tax Credit. Completing Schedule M will help taxpayers determine whether they have already received the full credit in their paycheck or are due more money as a result of the credit.
6. Taxpayers who file Form 1040-EZ will use the worksheet for Line 8 on the back of the 1040-EZ to figure their Making Work Pay Tax Credit.
7. In 2010, you may notice that your paychecks are slightly lower than in 2009. The slight decrease may be because of the Making Work Pay Credit. Most of the credit for wage earners is distributed through reduced withholding. The credit – which was spread out over nine months last year – is being spread over 12 months this year. A little less credit in each paycheck means slightly higher withholding. But don’t worry, in the end it all adds up.
8. Certain taxpayers should review their tax withholding to ensure enough tax is being withheld in 2010. Those who should pay particular attention to their withholding include: married couples with two incomes, individuals with multiple jobs, dependents, pensioners, Social Security recipients who also work, and workers without valid Social Security numbers.
Having too little tax withheld could result in potentially smaller refunds or – in limited instances – small balance due rather than an expected refund.
9. To ensure your current withholding is appropriate for your individual situation, you can review Publication 919, How Do I Adjust My Tax Withholding? You can also perform a quick check of your withholding using the interactive IRS Withholding Calculator on www.IRS.gov
10. If you find you need to adjust your withholding, submit a revised Form W-4, Employee's Withholding Allowance Certificate to your employer.
Visit IRS.gov for more information about the making Work Pay Tax Credit, Schedule M, Form W-4 or Publication 919. You can also call 800-TAX-FORM (800-829-3676) to order forms and publications.
January 22, 2010
Marsha Henry
Alright! It’s getting to that time of year again. Soon you will be receiving a flood of tax forms, tax records and advertisements for tax preparers in your mail box. You probably have already noticed the increase in the number of television and radio advertisements detailing numerous tax rules that you may benefit from in order to grab your attention and get you thinking about who will be completing your taxes this year. Well, before you do anything, you should do a little homework yourself so you know the right questions to ask your tax preparer and/or which documents to bring with you.
Cheers,
Tax Quarry
www.marshahenry.blogs.com(Taken from Steptoe & Johnson LLP Daily Tax Update)
Last week, President Obama announced a proposal to levy a new fee on financial services institutions (including insured depository institutions, bank holding companies, thrift holding companies, insurance or other companies that owned insured depository institutions, or securities broker-dealers) with over $50 billion in assets. Both domestic firms and U.S. subsidiaries of foreign-based firms would be subject to the fee. The fee will be equal to approximately .15 percent of “covered liabilities," which are determined by subtracting Tier 1 Capital and FDIC-assessed deposits and insurance reserves from assets.