Do you think the IRS has a heart? Well, the Internal Revenue Service wants you to think so. Although the IRS has historically been cold-heartened and downright ruthless, it appears they recognize that many taxpayers are having difficult times financially. There can be a tax impact to events such as job loss, foreclosure, bankruptcy or tapping a retirement fund that may result in you not being able to pay your federal income tax. The IRS wants to help, sort-of, by providing this advice for those of you who can’t pay your taxes.

So what do you do if you can’t pay your federal taxes?

“The first thing to do is not panic. If you cannot pay the full amount of taxes you owe, you should still file your return by the deadline and pay as much as you can to avoid penalties and interest. You also should contact the IRS immediately to discuss your payment options at 1-800-829-1040. The agency may be able to provide some relief such as a short-term extension to pay, an installment agreement or an offer in compromise. In some cases, the agency may be able to waive penalties. However, the agency is unable to waive interest charges which accrue on unpaid tax bills” as is stated on the IRS website.

If you will owe a significant amount of federal taxes and can’t pay it, one of best things to do is consult with a tax attorney before you contact the IRS. The tax attorney will go over your situation, give the options available and make you feel more at ease. If you decide to hire the tax attorney, he can represent you in your case with the Internal Revenue Service

source: irs.gov

Are you still thinking about purchasing a new car even though you missed out on the Cash for Clunkers program? Well, there is still some good news - potential new car buyers can still claim a 2009 federal tax credit on newly purchased vehicles up until December 31, 2009.

The “money back for new vehicle purchases” deduction, through The American Recovery and Reinvestment Act of 2009, is not an itemized deduction, said Sue Hales, IRS spokesperson for Illinois.

“Everyone can take this deduction,” Hales explained. “Most deductions you have to itemize.”

WHAT VEHICLES QUALIFY FOR THE IRS AUTO TAX CREDIT PROGRAM?
The tax credit is available for the purchase of NEW cars, motorcycles and light trucks. 

HOW IS THE TAX CREDIT APPLIED?
The tax credit applies to taxes and fees paid on the first $49,500 of the car purchase.

WHO QUALIFIES FOR THE IRS AUTO TAX CREDIT PROGRAM?
Joint tax return filers with modified adjusted gross incomes of $260,000 or less
Individual tax return filers with modified adjusted gross incomes of $135,000 or less

With a few months left in 2009, taxpayers can take advantage of other federal tax credit incentives including:

• First-time homebuyer credit for people who purchase in 2009, up to $8,000
• Education benefits
• Enhanced tax credits for the tax years of 2009 and 2010, including new details to the additional child tax credit and earned income tax credit

For more information go visit irs.gov

 

source: Mt. Vernon Register-News, irs.gov

In these troubling times we need all the help we can get.  But did you know the IRS may be able to help you during these economically challenging times?  Here are 10 things to know”. 

1. Recovery Rebate Credit: If you didn’t get an economic stimulus payment this past summer and didn’t file a tax return, you may be eligible for the Recovery Rebate Credit . See IRS.gov for details.

2. The Alternative Minimum Tax has been ‘PATCHED”. For 2008, the exemption amounts are $69,950 for married couples filing jointly and $46,200 for single individuals . More information is available at IRS.gov.

3. Cancellation of Debt income: If you have had or will have a home foreclosure, check out the tax rules at IRS.gov. Things may not be as bad as you think.

4. Commuting: If you ride your bike (bicycle) to work in 2009, it could be worth $20 a month, tax free from your employer. See IRS.gov. for more.

5. Deductions: The new additional standard deduction for non-itemizers can be as much as $500 or $1,000 if you are married, filing a joint return. Go to IRS.gov for details.

6. Election to Deduct Sate and Local General Sales Tax: You have an option when itemizing. Claim either State and local general sales taxes paid or state and local income taxes paid, but not both. IRS.gov has more.

7. Mileage: The standard mileage rate is changing from 59.5 to 55 cents per business mile as of Jan. 1, 2009. More information at IRS.gov.

8. Homebuyer Credit: The new “First Time Home Buyers Credit” is for a home purchased after April 8th, 2008 and before July 1st, 2009 and could be worth as much as $7,500. Do you qualify? See IRS.gov.

9. Residential Energy Property Credit: This credit has been re-instated for 2009 and is worth up $500 for up-grading your home with certain energy efficient items. See if you qualify at IRS.gov

10. Plug-in Electric Drive Motor Vehicle Credit: Buy a new plug-in electric car and get a credit of $2,500 or more. See IRS.gov about this today.
And one more for “tax credit”:

11. Record Keeping: Make sure you don’t omit or forget an item so you pay only the correct amount of tax - no more, no less. See IRS.gov for more details

source= az family

The Internal Revenue Service is warning the public of a scam that could be lurking in your e-mail.

IRS spokesman David Stewart said “very official” looking e-mails alert people about a refund owed to them, but when it’s opened it can be “dangerous to you and your computer.”

“We’re getting reports of people getting an e-mail that appears to come from the IRS and tells recipients to respond to get their 2008 Economic Stimulus Refund,” Stewart said.

According to Stewart, if you have accessed a link or attachment in the bogus e-mail, you may have allowed the scammer to download malicious software to your computer and you should immediately scan for viruses and spyware, plus be alert for suspicious activity on your financial accounts.

“If you have actually responded to a scam e-mail by giving out your private information, you should immediately take steps to prevent identity theft. You may now be a prime target,” Stewart said.

Stewart said there are three things the IRS needs people to remember:

• The IRS never sends unsolicited e-mails about your taxes.

• If you get a scam e-mail, don’t access any links or attachments.

Anyone who receives suspicious e-mails addressed from the IRS should forward them to the IRS at phishing@irs.gov.

For more information about tax scams and a list of tax scams updated each year by the IRS, go to www.irs.gov. The IRS also provides information on its Web site to help taxpayers protect their personal and financial information.