IRS Tips

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I need an extension. What do I do?

IRS Extension

Whenever you find that you cannot file your tax return by the due date, you may apply for an extension from the IRS. You must apply for this extension by the due date of your tax return, however. For the tax year 2006, the deadline for requesting an extension is April 16, 2007. It must be noted, also, that an extension of time to file your tax return is not an extension of time to pay your taxes due. It simply is an extension to file your tax return. You must include an estimated tax payment when applying for the extension.

Use IRS tax Form 4868 to request the extension. Send this form to the mailing address (IRS office) where you send your tax return. Form 4868 will result in you receiving an automatic six-month extension to file your 2006 tax return. It must be filed by April 16, 2007. By getting this extension, you will have until October 15, 2007 to file your tax return.

You also may file for an extension electronically. Here, you would use a credit card for payment. By filing electronically, and paying by credit card, you would not have to file Form 4868. Still keep a hard copy of Form 4868 for your records. It also contains more information regarding how to make these payments and what service providers to contact.

   
What are IRS Publications?

IRS Publications

IRS Publications are informational booklets designed to make your understanding of the tax laws and regulations easier. They are intended to provide you with insight into the whys and hows of various tax areas.

You can order any available IRS Publication the same way you would IRS tax forms. Phone, Internet, download, CD-ROM, pick up – are all available methods for obtaining an IRS Publication. You also can simply view IRS Publications online. Your computer needs to have Adobe Reader, however. The documents are in PDF format.

Topic areas are extensive and widely varied. Any tax area will probably have a publication associated with it. Visit the IRS website under Forms and Publications to get a feel for all that is available. Here you can find both the Publication, Notice number and document title.

Some of the more popular IRS Publications are:

Publication 1 – Taxpayer's Rights

Publication 15 – Employer's Tax Guide (also known as Circular E)

Publication 17 – Your Federal Income Tax (for individuals)

Publication 334 – Tax Guide for Small Businesses

Notice 433 – Interest & Penalty Information

Publication 501 – Exemptions, Standard Deductions, and Filing Information

Publication 502 – Medical and Dental Expenses

Publication 503 – Child and Dependent Care

1040 Tax Table

IRS Publications may change yearly (they are updated with current tax laws). It is recommended you start a library for future reference purposes. For businesses, in particular, Publication 15 (Circular E) is necessary for proper payroll tax reporting information.

   
Where do I mail my IRS 2006 tax return?

IRS Address

The IRS has Service Centers (offices) throughout the United States. To find your local office, simply look in the Governmental section of your phone book. Or, you can visit the IRS website for a link.

When you are filing your taxes by mail (or “snail mail” as it has become known), you need to mail them to your regional IRS office. Addresses are found in the 1040 instructions that you will receive with your blank tax forms. If you received this packet from the IRS, use the pre-addressed envelope that came with it. If you have moved, use one of the addresses below. You file your tax return in the state where your legal residence is. For your ease, here are the regional IRS addresses for filing your 1040 2006 tax return. They are listed in no particular order.

States: AK, HI, CA, NV, AZ, WA, OR, MT, WY, CO, NM, ND, SD, and NE:

Internal Revenue Service

Fresno, California 93888-0102 if making payments, otherwise 93888-0002

States: TX, OK, KS, LA, MS, TN, WV.

IRS

Austin, Texas 73301-0102 if making payments, otherwise 73301-0002

States: IA, MO, AR, WI, IL, MI, IN, OH, NJ, CT

IRS

Kansas City, Missouri 64999-0102 if making payments, otherwise 64999-0002

States: AL, GA, FL, SC, NC, VA, DE, RI

IRS

Atlanta, Georgia 39901-0102 if making payments, otherwise 39901-0002

States: KY, PA

IRS

Philadelphia, Pennsylvania 19255-0102 if making payments, otherwise 19255-0002

(Note: this address will not be effective after June 30, 2007. Residents of these states will

send their returns to Kansas City, MO.)

States: NY, MD, DC, NJ, MA, NH, ME

IRS

Andover, Massachusetts 05501-0102 if making payments, otherwise 05501-0002

NOTE: If you are filing Form 1040A, the zip code will have the last four digits as 0115 (for payment) or 0015 (for no payment).

For Form 1040EZ tax filers, the last four digits of the zip code will be 0114 (for payment) or 0014 (for no payment).

Tax Tip: Make certain to notice the different zip code addresses depending on the tax form you are filing with the IRS. Each zip code will help expedite the processing of your 2006 tax return.

   
What is the Taxpayer Advocate Service?

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.

   
Am I eligible to get help from the IRS Taxpayer Advocate Service?

Who Is Eligible for Taxpayer Advocate Services?

Taxpayer Advocate Services are generally available to individuals who have been unable to resolve an ongoing issue with the IRS through normal channels, or who have suffered or are about to suffer a hardship as the result of an unresolved problem with the IRS. Some of the types of things the Taxpayer Advocate Service might help with include ironing out problems with your tax return or resolving conflicts in advice you received under the IRS tax help program or other IRS tax programs. Taxpayer Advocate Services are delivered locally at taxpayer assistance centers in each state. To find one near you, visit the IRS Web site and search on the term “Taxpayer Advocate Service” or call IRS customer service at 1-800-829-3676.

   
Is the IRS offering hurricane assistance?

2005 Hurricane Assistance

In response to the devastation caused throughout the Southeast United States by hurricanes Wilma, Katrina, and Rita, the IRS has set up a dedicated hurricane assistance toll-free number for taxpayers personally impacted by the storms. For hurricane-related IRS tax help, including information on tax law changes and any special IRS forms you may need to complete, call 1-866-562-5227. Some of the tax law changes implemented in response to the 2005 hurricanes apply to individuals and businesses directly impacted by the storms, and some apply to individuals and business donating to charities that responded to the disasters. The IRS is preparing Publication 4492 to summarize information on the tax law changes and specific hurricane relief tax programs. It will be available for download at IRS.gov.

   
Is there an advantage to using the IRS e-file option?

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.

   
Where can I get help preparing my taxes?

Where to Find Tax Help

There are a number of places you can get help preparing your federal taxes. The IRS tax help service is available online at the IRS' Web site. It offers topic-specific information in the form of a FAQ list as well as more in-depth fact sheets on topics commonly asked about. You can also hear pre-recorded information on many of these same topics by calling TeleTax at 1-800-829-4477. If you don't feel like wading through the telephone menus at TeleTax, individual tax filers can call IRS customer service at 1-800-829-3676. Business filers should call 1-800-829-4933. TTY/TDD callers can reach IRS customer service at 1-800-829-4059. Finally, if you're using one of the popular do-it-yourself tax programs, those offer a wealth of information under the “Help” tab, and screen-specific help pops up as you work on your return. Just remember to check for updates to ensure you have the latest, greatest information before you begin plugging in your numbers. You can also hire a tax professional to prepare your taxes. For qualified tax professionals in your area, check the business listings in your phone book.

   
What is e-File?

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.

   
Is it true that the tax filing deadline is different this year?

Tax Year 2005 Filing Deadline

April 15 is known far and wide as the dreaded deadline to file tax returns. However, in 2006, April 15 falls on a Saturday, so the deadline to file your 2005 federal taxes in most parts of the country is Monday, April 17, 2006. If you live in Maine, Maryland, Massachusetts, New Hampshire, New York, Vermont, or the District of Columbia, you don't have to file your IRS tax forms until Tuesday, April 18, 2006. That's because Monday, April 17, 2006, is a holiday in Massachusetts where the IRS has a processing center.

   
What is Free File?

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.

   
What is 1040 Central?

About 1040 Central

1040 Central is the IRS' new and improved navigation tool to help taxpayers more easily find information and services on its Web site. You can download IRS tax forms or publications you need to file tax returns. You can search for information on IRS tax programs. You can also get IRS tax help on the FAQ page or by reading any number of fact sheets on popular topics. There is a link to 1040 Central on the IRS' home page.

   
How do I contact the IRS?

IRS Methods of Contact

The IRS offers taxpayers a variety of ways to contact them.

Phone . You can contact the IRS regarding general tax questions via phone anytime between 7a-10pm your local time. This applies for Monday through Friday. For individuals, the number is 1-800-829-1040. For business matters, the number is 1-800-829-4933. If you want to contact your local IRS office, find their number either via the IRS website or your phone directory.

In person . If you want to contact your local IRS office, find their number either via the IRS website or your phone directory. Your local office is great for face-to-face contact regarding your tax concern.

Online . You can also contact the IRS with tax matters or concerns via their website. The IRS website address is located at irs.gov.

Email : The IRS can be reached by email in cases where the military personnel have questions about their tax returns, combat zone status, or taxes. T

Mail . You can contact the IRS via mail. The address you contact will not be the same as the one you send your tax return to. If you receive an IRS notice regarding any tax concern, the mailing address will be included on the notice.

The best times to call the IRS via their 800-829-1040 number is after 2pm. Most people call in the morning. Also, if you must call the IRS, Tuesday, Wednesday and Thursday are the best days for this. Once again, most taxpayers call on Monday and Friday.

   
How can I pay my taxes?

Methods of Tax Payments

The IRS accepts various methods of payments from taxpayers. Payments can be made by standard and traditional methods to modern day electronic methods. For a listing of details involved in tax payments, visit the IRS website. Here is some general information to help you.

If you are paying your taxes by check, money order, cashier's check they need to be made payable to the United States Treasury. Be sure to include your tax identification number. For an individual taxpayer (or sole proprietor), this will be your social security number. For a business, this will be your employer identification number (EIN). Also be sure to include the affected tax period, and related tax form on your check, money order, or cashier's check (in memo section).

If you are making your tax payment by cash, make it only at your local IRS office. Do not send cash through the mail.

Be sure to get a receipt, also.

If you are paying by credit card, you have the option of two places. One is through a company known as Official Payment Corporation who has a website located at officialpayments.com online. Or, you can call them at 1-800-2PAYTAX (1-800-272-9829) to make a tax payment. Your other option is found through Link2Gov online at pay1040.come or by calling their number at 1-888-PAY1040 (1-888-729-1040).

EFTPS: Or, there is another way to pay your taxes online. It is a safe, convenient, free, and secure way for taxpayers to pay their taxes. It is found through an online program known as EFTPS – Electronic Federal Tax Payment system. Taxpayers can use it 24 hours a day, 7 days a week. This system is provided by the United States Department of the Treasury. The online address is eftps.gov.

Taxpayers can make estimated 1040 tax payments, employment taxes, and individual tax payments.

Some of the benefits of paying online using EFTPS include: receiving an immediate confirmation receipt number; tracking history and payments online; saving on postage and time spent mailing; and the option of scheduling payments in advance.

Taxpayers can also call 1-800-555-4477 to make a tax payment using this system. What is even nicer, enrollment is easy and quick. There is a link found on the IRS website. Either visit the EFTPS website for more information, or read IRS Publication 966 (The Secure Way to Pay your Federal Taxes).

If you are having problems paying your entire tax due, you can establish monthly installment arrangements. This can be done either online or via the phone with the IRS.

   
What is the IRS Code?

IRS Code

Here is a simple history lesson about the IRS. The Internal Revenue Service developed the IRS Code back in the Civil War era. It has gone through changes throughout the years, the last one being in 1998. The IRS Code (also known as the ‘IRC') is the legal document (multitudes of regulations, rules, notices, amendments, etc.) that contains the United States tax laws. The more you understand this body of work, the easier your life will be. However, if you do not want to learn this law, at least have a tax professional explain it to you and help you with your tax return. Or, get a basic idea.

As mentioned, the IRS Rules and Regulations are found in the IRS publications. Of course, publications are broken down per subject matter. Every topic covered in any tax form will be covered by either a rule or regulation. These rules and regulations set guidelines and standards for taxpayers to follow and abide by. And, it is continually changing while being updated. That is the IRS Code in simple terms. Try reading and learning this enormous body of work, and you will gain an appreciation for the Internal Revenue Service. (Or, end up with a huge headache).

For instance, depreciation rules taxpayers must follow are found in publication 946 – How to Depreciate Property.

Business owners must follow rules set forth in Publication 535 – Business Expenses.

   
What does the IRS website contain?

IRS Website

Visit the IRS website and you will see a wealth of information that can both help and inform you. Sections of this website are broken down into individual, business, charities, governmental entities, retirement planning community, and tax exempt bond community. Of main concern to individual and business taxpayers are the following:

Individual tax resources provided on the IRS website include:

  • Finding your local IRS office. The IRS website provides a map of the U.S. to help you.
  • Taxpayer Advocacy Service. This independent organization within the IRS helps taxpayers who have not been helped by following the ‘normal' routes in settling tax matters. Taxpayers will be assigned as case advocate for more personalized attention.
  • E-filing of tax returns with links to providers offering free service
  • Order tax forms and publications
  • Applying for online extensions
  • Applying for a monthly installment agreement
  • Obtaining copies of tax return transcripts
  • “Where's My Refund?” a section where taxpayers can find out about their expected tax refund.
  • Methods of contacting the IRS
  • Researching tax questions
Business owners (including sole proprietors) will benefit by the IRS website through:

  • Online learning (including tax issues, obtaining an employer identification number, etc.)
  • Checklists for starting, operating, and closing business
  • Other important tax issues business owners need to know
  • Tax forms and publications needed
Retirement Planning Community contains a wealth of information to help with retirement issues and their tax effects.

There also are links to other business sites, state sites, and form sites on the IRS website.

Note: The information found in this summarizing section just touches on he huge amount of information found on the IRS website. Visit irs.gov for more information on how it can help ease your tax concerns. The IRS website is one of the most comprehensive governmental websites around. It is user friendly, informative, and contains a wealth of information. The IRS makes it easy for taxpayers to learn about the tax laws. The IRS also supplies information on retirement planning, business operations, and tax exempt securities. Plus, professional tax preparers will be helped by visiting the IRS website.

   

IRS Notice

In those cases where the IRS has any concern or question regarding your tax return, they will send you an IRS Notice. Also, if you have contacted the IRS regarding any tax concern or issue, you will receive a response from them known as an IRS Notice and/or letter. Do not be alarmed, this is the way for the IRS to communicate with you.

You will be given a reply reference number (or letter number). This number is located in the upper right of the Notice. You will need this number when communicating to the IRS regarding your tax matter.

Sections of your IRS Notice will include:

The Letter/Notice number, letter/notice date, your taxpayer identifying number, and caller ID (person who handled your call/claim).
The body of the Notice will include the purpose of the letter and what additional steps, if any, need to be taken to complete the concern.
The body will also will contain the results of any findings the IRS has made regarding your tax concern or issue.
You also may be given an explanation of any tax laws that apply to your IRS tax concern.
You also will be given the contact name, number, and address of anyone to contact.

Usually you are given two copies of the IRS Notice and/or Letter. One copy is for your records, and the other copy is to be signed and returned to the IRS office given by them.

   
What if I can’t file my tax return on time?

Requesting an Extension of Time to File

Until 2005, tax filing extensions were only four months long. To request an extension of time to file your tax return, you will need to submit IRS Form 4868. You can find the form on the IRS' Web site as well as at many local post offices or office supply stores. The form can be submitted by mail, phone, or computer. But remember, an extension of time to file means just that—you have six extra months to get your paperwork filed. It is not an extension of time to pay the taxes you owe, if any. You generally will need to pay some or all of the estimated taxes due at the time you file your request for extension.

   
What electronic payment options does the IRS offer?

About Electronic Tax Payments

The IRS offers individuals a variety of ways to pay their Federal Taxes electronically. Individuals can pay the taxes they owe on their 2005 tax returns by electronic funds withdrawal from a bank account or using a credit card. The IRS doesn't charge a fee for payments by credit card, but the third-party companies that process the payments often do. Individuals who need to pay income, employment, estimated, or excise taxes can also enroll in the IRS' Electronic Federal Tax Payment System (EFTPS). EFTPS offers the ability to pay taxes online or by phone 24 hours a day, seven days a week. To enroll in EFTPS, visit www.EFTPS.gov or request an IRS form to enroll by call EFTPS customer service at 1-800-555-4477.

   
What is Telefile?

About Telefile

Telefile was a telephone-based system that, until recently, allowed taxpayers to file tax returns by telephone. Because of the growth in home tax preparation software and Internet use in recent years, the demand for Telefile as a method for filing federal taxes has dropped off considerably. As a result, the IRS has stopped offering Telefile to taxpayers who want to file a tax return. There are a number of other tax filing options available to taxpayers, including mailing a hardcopy to an IRS processing center and electronic filing. If you need IRS tax help to decide which filing method is best for your needs, visit IRS.gov or call 1-800-829-1040. Many taxpayers who used Telefile in the past may qualify to use the IRS' new Free File service.

   
How do I know if I need to file a tax return?

Who Needs to File a Tax Return

Whether or not you need to file tax returns depends on your income level. If your income is above a certain level, you must file a tax return. That income level varies depending on your filing status, age, and the type of income you earned. The income level definitions can be found under the “individuals” section of the IRS Web site or in the instructions included with IRS form 1040EZ, 1040A, and 1040. Even if you aren't required to file a tax return, it could be to your advantage to do so, because you could get money back from the IRS if you qualify for the Earned Income Tax Credit, the Additional Child Tax Credit, or the Health Coverage Tax Credit.

   
How do I obtain IRS tax forms?

IRS Forms

You can obtain your IRS tax forms, publications, and instructions in a variety of ways.

Mail. You can order them through the mail. There is usually a blank order form in the back of any publication. You simply need to fill in what form or publication you are ordering (or circle them). The IRS will mail you two copies of tax forms and one copy of tax publications. Expect to receive your tax forms or publications in about 10 days after the IRS receives your request. The mailing address for tax form ordering is:

IRS

National Distribution Center

P.O. Box 8903

Bloomington, IL. 61702-8903

Pick up. You can pick up IRS tax forms at many IRS offices, post offices, and libraries. Call ahead of time to be certain the tax form you are interested in is still in stock. The tax forms go fast, you know.

Phone. You can call the IRS and order tax forms. Call 1-800-829-3676 to receive current and prior-year tax instructions, tax forms, and publications. 10 days is the expected time for receipt.

Download. You can download (and print) tax forms from the IRS website located at irs.gov.

Electronically. You can order your tax forms and publications electronically. This, also, can be done via the IRS website.

CD-ROM. You can purchase and order a CD that contains tax products including current and prior year forms, publications, and instructions. It also contains IRS Revenue Bulletins, an electronic tax research tool, and tax topics. This CD can be purchased through the IRS website or by calling 1-877-233-6767.

   
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