Have you had your mortgage debt partly or entirely forgiven during tax years 2007 through 2012? If so, you need to be aware of the tax facts regarding mortgage debt forgiveness. Most importantly, you may be able to claim special tax relief and have the forgiven debt excluded from their income.

Here are ten more tax facts the IRS wants you to know about Mortgage Debt Forgiveness.

1. Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence.
2. The limit is $1 million for a married person filing a separate return.
3. You may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure.
4. To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence.
5. Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion.
6. Proceeds of refinanced debt used for other purposes – for example, to pay off credit card debt – do not qualify for the exclusion.
7. If you qualify, claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attach it to your federal income tax return for the tax year in which the qualified debt was forgiven.
8. Debt forgiven on second homes, rental property, business property, credit cards or car loans do not qualify for the tax relief provision. In some cases, however, other tax relief provisions – such as insolvency – may be applicable. IRS Form 982 provides more details about these provisions.
9. If your debt is reduced or eliminated you normally will receive a year-end statement, Form 1099-C, Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.
10. Examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven in Box 2 as well as the value listed for your home in Box 7.

Refer to IRS publication 4681, Canceled Debts, Foreclosures, Repossessions and Abandonments, for more about the Mortgage Forgiveness Debt Relief Act of 2007.

For more tax relief facts that may affect you this tax season, visit the IRS website.

source: irs.gov

One of the most frequently asked question by taxpayers is how do I check on my income tax refund. If you already filed your federal tax return and are due a refund, you have several options to check on your refund.

Here are eight things the IRS wants you to know about checking the status of your refund:

1. Online Access to Refund Information Where’s My Refund? or ¿Dónde está mi reembolso? are interactive tools on http://www.irs.gov and are the fastest, easiest way to get information about your federal income tax refund. Whether you split your refund among several accounts, opted for direct deposit into one account, used part of your refund to buy U.S. Savings Bonds or asked the IRS to mail you a check, Where’s My Refund? and ¿Dónde está mi reembolso? give you online access to your refund information, 24 hours a day, 7 days a week. It’s quick, easy and secure.
2. When to Check Refund Status If you e-file, you can get refund information 72 hours after the IRS acknowledges receipt of your return. If you file a paper return, refund information will generally be available three to four weeks after mailing your return.
3. What You Need to Check Refund Status When checking the status of your refund, have your federal tax return handy. To get your personalized refund information you must enter:
   • Your Social Security Number or Individual Taxpayer Identification Number
   • Your filing status which will be Single, Married Filing Joint Return, Married.
     Filing Separate Return, Head of Household, or Qualifying Widow(er).
   • Exact whole dollar refund amount shown on your tax return.
4. What the Online Tool Will Tell You Once you enter your personal information, you could get several responses, including:
   • Acknowledgement that your return was received and is in processing.
   • The mailing date or direct deposit date of your refund.
   • Notice that the IRS could not deliver your refund due to an incorrect address. In this instance, you may be able to change or correct your address online using Where’s My Refund?
5. Customized Information Where’s My Refund? also includes links to customized information based on your specific situation. The links guide you through the steps to resolve any issues affecting your refund. For example, if you do not get the refund within 28 days from the original IRS mailing date shown on Where’s My Refund?, you may be able to start a refund trace.
6. Visually Impaired Taxpayers Where’s My Refund? is also accessible to visually impaired taxpayers who use the Job Access with Speech screen reader used with a Braille display and is compatible with different JAWS modes.
7. Toll-free Number If you do not have internet access, you can check the status of your refund in English or Spanish by calling the IRS Refund Hotline at 800-829-1954 or the IRS TeleTax System at 800-829-4477. When calling, you must provide your or your spouse’s Social Security number, filing status and the exact whole dollar refund amount shown on your return.
8. IRS2Go This is the IRS’ first smartphone application that lets taxpayers check on the status of their tax refund. Apple users can download the free IRS2Go application by visiting the Apple App Store. Android users can visit the Android Marketplace to download the free IRS2Go app.

Using the IRS online tool is how you check on your income tax return. To access the tool, visit the IRS website and click on “Check on Your Refund” under Online Services.

source: irs.gov

Taxpayers are constantly looking for tax help to determine what tax form to use. The first thing to know is you must use one of three tax forms to file your income tax return: Form 1040EZ, Form 1040A, or Form 1040. Form 1040EZ is the simplest form but you meet specific criteria to use it to file your taxes.

Here is the tax help you need that spells out the criteria you must meet to use the 1040EZ.

You can use Form 1040EZ if all of the following apply.

1. Your filing status is single or married filing jointly. If you were a nonresident alien at any time in 2010, our filing status must be married filing jointly.
2. You (and your spouse if married filing a joint return) were under age 65 and not blind at the end of 2010. If you were born on January 1, 1946, you are considered to be age 65 at the end of 2010.
3. You do not claim any dependents.
4. Your taxable income is less than $100,000.
5. Your income is only from wages, salaries, tips, unemployment compensation, Alaska Permanent Fund dividends, taxable scholarship and fellowship grants, and taxable interest of $1,500 or less.
6. You did not receive any advance earned income credit (EIC) payments.
7. You do not claim any adjustments to income, such as a deduction for IRA contributions or student loan interest.
8. You do not claim any credits other than the earned income credit or the making work pay credit.
9. You do not owe any household employment taxes on wages you paid to a household employee.
10. You are not claiming the additional standard deduction.

You must meet all of these requirements to use Form 1040EZ. If you do not, you must use Form 1040A or Form 1040.

Figuring tax. On Form 1040EZ, you can use only the tax table to figure your tax. You cannot use Form 1040EZ to report any other tax.

Visit the IRS website’s publication on “Your Federal Income Tax” for more about the 1040EZ or to get income tax filing tax help.

source: irs.gov