Amended Tax Return

You have filed your 2006 income tax return and find more income or expenses that you should have claimed/reported on your Form 1040. What do you do? You need to file an amended return. You must obtain the paper form and submit it via ‘snail mail’ to the IRS. (Be certain to keep a copy for your own records). Filing an amended income tax form cannot be done electronically. Here is some information you need to know about an amended return.

First of all, use Form 1040X– Amended U.S. Individual Income Tax Return. The timeframe for filing an amended return is three years from the date you originally filed your tax return. For instance, to file an amended return for your 2006 tax return, you have until April 15, 2009 to file an amended return.

You can use this form to correct a mistake or to claim a refund on the original income tax return. For instance, if you did not report some income (like when you receive a Form 1099 after your filed your 1040), you claimed deductions or credits you should not have claimed or vice versa. You also need to file an amended return when you need to change your filing status on your original tax return (stipulations apply).

When you complete Form 1040X, you need to have your original tax information available. You need to write in your original income, deductions, and any credits taken on your original tax return. You also will report the changes you are making, and any correct amounts. Finally, figure your new tax based upon these new figures. Include your tax payment, if any, along with your amended return.

All About Tax Products

Okay – you've heard the old adage a million times, “Nothing is certain but death and taxes”, but how apropos! The best news is that online tax filing sites improve constantly.
Online Tax Filing products walk you through the income and expense reporting for both federal and state taxes. Your answers are calculated and automatically placed into the correct forms fitting your required needs. The bonus parts of this are they double check for errors PLUS make tax saving suggestions!

You then print your return and/or file it electronically. Want to hear more great news? Tax return electronic filing is less expensive in some cases. But be careful - state often has additional filing charges and would you believe - sometimes more expensive than federal!

Track Your Refund

Where's My Refund? is a cool new online tool offered by the IRS that allows you to track the status of your tax refund. Once you file your IRS tax forms, you can use the Where's My Refund? tool to check on the status of your refund. To use Where's My Refund? you will need to provide specific information from your tax return, including your Social Security number, filing status, and your refund amount.

About the Taxpayer Advocate Service

The Taxpayer Advocate Service is one of many IRS tax programs offered to taxpayers. It is an independent system to help taxpayers resolve problems with their federal taxes, IRS tax forms, and other tax-related matters that, for whatever reason, have not yet been resolved through the normal channels. If you qualify to receive help through the Taxpayer Advocate Service, you will be assigned a case advocate, who will help you address your concerns. Some of the things a case advocate might do include reviewing your problem, giving you the name and phone number of the person assigned to your case, and give you updates on progress and time-frames for resolution of your problem. You can find out more about the Taxpayer Advocate Service by visiting the IRS' Web site.

Social Security Income Tax

In conjunction with your other other social security income tax payments, you must include tax-exempt interest when you are preparing your social security income tax preparation. Also, if you are married and filing a joint return, you have to use the total of your spouse's income, your income (other than Social Security), plus your social security and equivalent tier 1-railroad retirement benefits when figuring the taxable portion of the benefits. There is a worksheet in the Form 1040 or Form 1040A in the instruction book for base amounts and other taxable information. There are instances where you're SSI and/or your Disability Benefits are taxable.

In regards to SSI income tax preparation, you must first look at the base amount you are filing against the total of one half of your social security payments in addition to all of your other income.

Benefits of Using e-File

More and more people are using the IRS' e-File option to file tax returns. Whether you use do-it-yourself tax preparation software or hire a professional tax preparer, filing your federal taxes using e-File has distinct benefits. For starters, taxpayers who file tax returns by e-File have far fewer inaccuracies in their tax returns. That means your tax return gets processed with fewer delays. The main benefit of e-File is faster refunds. If you are due a refund, file your tax return using e-File, and opt to have your refund deposited to your bank account electronically, you'll get your refund in about two weeks—four weeks sooner than people who file paper forms.

About e-File

According to the IRS, more than 73 million people filed their IRS tax forms using e-File, the IRS' Internet-based method to file tax returns in 2006. Most home software tax preparation packages include information and processes on e-filing. Some packages include the service for free, others charge, and still others charge but offer a rebate for low- or no-cost tax filing. If you have a tax professional prepare your taxes, most will now file tax returns using e-File if you request it. For information on how e-file works, visit IRS.gov. For information on software-specific e-File options, check the documentation that came with the software or contact the software manufacturer.

About Free File

Free file is an online tax return preparation service offered through a cooperative effort by the IRS and the Free File Alliance, LLC, a group of companies from the tax payer software industry. It will be available on the IRS' Web site (www.IRS.gov) beginning in mid-January 2006. Taxpayers with adjusted gross income of $50,000 or less can use Free File services to prepare and file their 2005 IRS tax forms. Be sure to check with your local tax preparer - every state has specific age requirements for Free File. The software offered through Free File are essentially identical to the popular do-it-yourself tax programs such as TurboTax and TaxCut, but with some of the extra features stripped out. Each company participating in the Free File Alliance has its own eligibility criteria (aside from the income criteria), so make sure you read the fine print carefully. Free File, like other IRS tax programs, must be accessed directly through the IRS Web site rather than through individual participating company Web sites.

Available Software Tax Planning Features

Some tax software programs include tax planning tools, and others don't. Most of the major tax software programs, such as TaxCut and TurboTax offer different versions of their software from basic to deluxe or premier. Each version will get the job—accurately preparing the current year's taxes—done, but the more robust versions (deluxe or premier) include added features such as tax planning software tools. For example, the tool will review your current year's tax return and makes suggestions for strategies you can use to lower your tax liability in the coming tax year. Premium software versions may also gain you access to additional online tax planning tools such as calculators, professional tax advice, and newsletters at the company's site. This is something that is not normally included with free tax software.