The Internal Revenue Service has announced that more than 12,000 free tax preparation sites are open for service. The free tax help sites are part of the IRS’s effort to expand its partnerships with nonprofit and community organizations providing vital tax preparation services for low- to moderate-income and elderly taxpayers.

The IRS Volunteer Income Tax Assistance (VITA) Program offers free tax help to people who earn less than $49,000. The Tax Counseling for the Elderly (TCE) Program offers free tax help to taxpayers who are 60 and older.

The benefit of the visiting the free tax help sites is to take advantage of their free tax preparation programs and learn about the Earned Income Tax Credit (EITC). The EITC is one of the federal government’s largest benefit programs for working families and individuals. But taxpayers must file a tax return, even if they do not have a filing requirement, and specifically claim the credit to get the benefit.

Taxpayers need to present the following items to have their returns prepared:

• Photo identification
• Valid Social Security cards for the taxpayer, spouse and dependents
• Birth dates for primary, secondary and dependents on the tax return
• Wage and earning statement(s) Form W-2, W-2G, 1099-R, from all employers
• Interest and dividend statements from banks (Forms 1099)
• A copy of last year’s federal and state returns, if available
• Bank routing numbers and account numbers for direct deposit
• Other relevant information about income and expenses
• Total paid for day care
• Day care provider’s identifying number

To file taxes electronically on a Married Filing Jointly tax return, both spouses must be present to sign the required forms.

Trained community volunteers can help eligible taxpayers with all special credits, such as the EITC, Child Tax Credit or Credit for the Elderly. Also, many sites have language specialists to assist people with limited English skills. To locate the nearest VITA site, taxpayers should check the VITA site List available online at www.IRS.gov or call 1-800-906-9887.

As part of the IRS-sponsored TCE Program, AARP offers the Tax-Aide counseling program at more than 7,000 sites nationwide during the filing season. Trained and certified AARP Tax-Aide volunteer counselors help people of low-to-middle income with special attention to people age 60 and older.
To locate the nearest AARP Tax-Aide site, call 1-888-227-7669 or visit AARP’s Internet site.

For more information about the location of an IRS free tax help site near you check the VITA site list. For additional tax help, tax tips, tax facts and answers to your tax questions visit the IRS website

source: irs.gov

The first thing you do when filing your income tax return is determine your filing status. Filing status is used to determine all aspects of your income tax return, including: filing requirements, standard deductions, tax credit eligibilities and tax deductions.

There are five filing statuses options when filing your income tax: Single, Married Filing Jointly, Married Filing Separately, Head of Household and Qualifying Widow(er) with Dependent Child.

Here are important tax facts about the filing statuses.

• Your marital status on the last day of the year determines your marital status for the entire year.
• If more than one filing status applies to you, choose the one that gives you the lowest tax obligation.
• Single filing status generally applies to anyone who is unmarried, divorced or legally separated according to state law.
• A married couple may file a joint return together. The couple’s filing status would be Married Filing Jointly.
• If your spouse died during the year and you did not remarry during 2010, usually you may still file a joint return with that spouse for the year of death.
• A married couple may elect to file their returns separately. Each person’s filing status would generally be Married Filing Separately.
• Head of Household generally applies to taxpayers who are unmarried. You must also have paid more than half the cost of maintaining a home for you and a qualifying person to qualify for this filing status.
• You may be able to choose Qualifying Widow(er) with Dependent Child as your filing status if your spouse died during 2008 or 2009, you have a dependent child and you meet certain other conditions.

The fact is there is much more information about determining your filing status in IRS Publication 501, Exemptions, Standard Deduction, and Filing Information.

You can also use the Interactive Tax Assistant on the IRS website to determine your filing status. The ITA tool is a tax law resource on the IRS website that takes you through a series of questions and provides you with responses to tax law questions.

For tax tips, tax facts and answers to your tax questions, visit the IRS website.

source: irs.gov

Do you know the facts about the Earned Income Tax Credit? This tax credit is a financial boost for workers earning $48,362 or less a year. Last year, 80% of eligible taxpayers who filed for EITC received the tax credit.

Here are the top 10 tax facts the IRS wants you to know about this valuable tax credit.

1. As your financial, marital or parental situations change from year to year, you should review the EITC eligibility rules to determine whether you qualify. Just because you didn’t qualify last year, doesn’t mean you won’t this year.
2. If you qualify, the credit could be worth up to $5,666. EITC not only reduces the federal tax you owe, but could result in a refund. The amount of your EITC is based on your earned income and whether or not there are qualifying children in your household. The average credit was around $2,100 last year.
3. If you are eligible for EITC, you must file a federal income tax return and specifically claim the credit – even if you are not otherwise required to file. Remember to include Schedule EIC, Earned Income Credit when you file your Form 1040 or, if you file Form 1040A, use and retain the EIC worksheet.
4. You do not qualify for EITC if your filing status is Married Filing Separately.
5. You must have a valid Social Security Number. You, your spouse – if filing a joint return – and any qualifying child listed on Schedule EIC must have a valid SSN issued by the Social Security Administration.
6. You must have earned income. You have earned income if you work for someone who pays you wages, you are self-employed, you have income from farming, or – in some cases – you receive disability income.
7. Married couples and single people without children may qualify. If you do not have qualifying children, you must also meet the age and residency requirements as well as dependency rules.
8. Special rules apply to members of the U.S. Armed Forces in combat zones. Members of the military can elect to include their nontaxable combat pay in earned income for the EITC. If you make this election, the combat pay remains nontaxable.
9. It’s easy to determine whether you qualify. The EITC Assistant, an interactive tool available on the IRS website, removes the guesswork from eligibility rules. Just answer a few simple questions to find out if you qualify and estimate the amount of your EITC.
10. Free tax help is available at Volunteer Income Tax Assistance sites and IRS Taxpayer Assistance Centers to help you prepare and claim your EITC. If you are preparing your taxes electronically, the software program you use will figure the credit for you.

For more information about the EITC, see IRS Publication 596, Earned Income Credit.

Visit the IRS website for tax tips, tax facts and answers to your tax questions.

source: irs.gov