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WASHINGTON — An expanded Earned Income Tax Credit (EITC) means larger families will qualify for a larger credit, offering greater relief for people who struggled through difficult financial times last year, the Internal Revenue Service said today. The IRS and the Treasury Department marked EITC Awareness Day as their partners nationwide worked to highlight the availability of this important tax credit. EITC, which is in its thirty-fifth year, is one of the federal government’s largest benefit programs for working families and individuals. Last year, nearly 24 million people received $50 Billion in benefits. The average credit was more than $2,000. "As part of the economic recovery efforts, there have been important changes to expand EITC to benefit taxpayers,” said IRS Commissioner Doug Shulman. “Today, more than ever, hard-working individuals and families can use a little extra help. EITC can make the lives of working people a little easier.” Eligibility for EITC depends on earne...

If you are donating to charities providing earthquake relief in Haiti, you may be able to claim those donations on your 2009 tax return. Here are 10 important facts the Internal Revenue Service wants you to know about this special provision. 1.A new law allows you to claim donations for Haitian relief on your 2009 tax return, which you will be filing this year. 2.The contributions must be made specifically for the relief of victims in areas affected by the Jan. 12 earthquake in Haiti. 3.To be eligible for a deduction on the 2009 tax return, donations must be made after Jan. 11, 2010 and before March 1, 2010. 4.In order to be deductible, contributions must be made to qualified charities and can not be designated for the benefit of specific individuals or families. 5.The new law applies only to cash contributions. 6.Cash contributions made by text message, check, credit card or debit card may be claimed on your federal tax return. 7.You must itemize your deductions in order to claim the...

Haiti Charitable Contributions Congress has passed legislation designed to encourage charitable contributions for the relief efforts in Haiti. The President is expected to sign it into law shortly. Under the new law, taxpayers may deduct charitable contributions made for the relief of earthquake victims in Haiti on their 2009 tax return rather than wait to deduct it on their 2010 return. Qualifications: The deduction is allowed on the 2009 return if all of the following conditions are met: The contribution is made after January 11, 2010 and before March 1, 2010. The contribution is a cash contribution. (Contributions of food and clothing are not cash contributions.) The contribution is made for the relief of victims in areas affected by the earthquake in Haiti on January 12, 2010. All other requirements for deducting cash contributions under Section 170 of the Internal Revenue Code are satisfied. (Example: The contribution has to be made to a qualified charitable organization.) Recordk...

Ten Things You Should Know about the Making Work Pay Tax Credit Many working taxpayers are eligible for the Making Work Pay Tax Credit, a provision created by the American Recovery and Reinvestment Act in early 2009. Here are 10 things the IRS wants you to know about this tax credit to ensure you receive the entire amount for which you are eligible. 1. In 2009 and 2010, the Making Work Pay provision provides a refundable tax credit of up to $400 for individuals and up to $800 for married taxpayers filing joint returns. 2. For taxpayers who receive a paycheck and are subject to withholding, the credit will typically be handled by their employers through automated withholding changes. 3. Taxpayers receiving less than the full amount of the allowable credit through reduced withholding will be entitled to claim any remaining credit when they file their tax return. 4. The amount of the credit actually received during 2009 in the form of reduced withholding will be reported on your 2009 tax ...

WASHINGTON — The Internal Revenue Service today reminded tax-exempt organizations to make sure they file their annual information form on time. In 2010 the tax-exempt status of any non-profit that has not filed the required form in the last three years will be revoked. The Pension Protection Act of 2006 requires that non-profit organizations that do not file a required information form for three consecutive years automatically lose their Federal tax-exempt status. This requirement has been in effect since the beginning of 2007. A list of revoked organizations will be available to the public, as well as state charity and tax officials on this website. If an organization loses its exemption, it will have to reapply with the IRS to regain its tax-exempt status. Any income received between the revocation date and renewed exemption may be taxable. Small non-profit organizations with annual receipts of $25,000 or less can file an electronic notice, Form 990-N (e-Postcard). They will need onl...

WASHINGTON — The Internal Revenue Service today released the new form that eligible homebuyers need to claim the first-time homebuyer credit this tax season and announced processing of those tax returns will begin in mid-February. The IRS also announced new documentation requirements to deter fraud related to the first-time homebuyer credit. The new form and instructions follow major changes in November to the homebuyer credit by the Worker, Homeownership, and Business Assistance Act of 2009. The new law extended the credit to a broader range of home purchasers and added new documentation requirements to deter fraud and ensure taxpayers properly claim the credit. With the release of Form 5405, First-Time Homebuyer Credit and Repayment of the Credit, and the related instructions, eligible homebuyers can now start to file their 2009 tax returns. Taxpayers claiming the homebuyer credit must file a paper tax return because of the added documentation requirements. The IRS expects to start p...

Taken from www.HUD.gov HUD TAKES ACTION TO SPEED RESALE OF FORECLOSED PROPERTIES TO NEW OWNERS Measure to help bring stability to home values and accelerate sale of vacant properties WASHINGTON - In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan today announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. The announcement is part of the Obama administration commitment to addressing foreclosure. Just yesterday, Secretary Donovan announced $2 billion in Neighborhood Stabilization Program grants to local communities and nonprofit housing developers to combat the effects of vacant and abandoned homes. "As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers," said Donovan. "FHA has an unprecedented opportunity to fulfi...

Q. I bought my home in 2009 (early) and filed my 2008 tax return claiming the $7,500 first-time homebuyer credit that has to be repaid. Now the expanded law provides for an $8,000 credit that doesn’t have to be repaid. What do I need to do to get the $8,000 credit that doesn’t have to be paid back? A. You can file an amended return. Q. If I purchase a home in June 2009, and have already filed my 2008 tax return, can I amend my 2008 return or will I have to claim it on my 2009 return? A. You can either file an amended return to claim it on your 2008 return or claim it on your 2009 return. Q. I am in the process of buying a home. Can I claim the first-time homebuyer credit now? That would allow me to use the refund for a down payment. A. No. You may not claim the credit in anticipation of a purchase that has yet to happen. Until you have finalized the purchase of your home, which for most purchasers occurs at the time of the closing, you do not qualify for the credit. IRS news release 2...

Q. What is the credit? A. The first-time homebuyer credit is a new tax credit included in the Housing and Economic Recovery Act of 2008. For homes purchased in 2008, the credit operates like an interest-free loan because it must be repaid over a 15-year period. The credit was expanded in 2009 for homes purchased in 2009, increasing the amount of the credit and eliminating the requirement to repay the credit, unless the home ceases to be your principal residence within the 36-month period beginning on the purchase date. It was further expanded in late 2009 to extend deadlines and to allow long-time homeowners buying replacement homes and people with higher incomes to qualify for the credit. (11/12/09) Q. How much is the credit? A. The credit is 10 percent of the purchase price of the home, with a maximum available credit of $7,500 ($8,000 if you purchased your home in 2009 or early 2010) for either a single taxpayer or a married couple filing a joint return, but only half of that amount...

To file your 2009 individual tax return, you’ll have to decide which form to use…unless you e-file. If you file electronically, the software automatically selects the simplest and best form for you. Whether you use e-file or prepare on paper, using the simplest form will help avoid costly errors or processing delays. And remember, if you file electronically, it speeds up the processing of your tax return and the delivery of your refund. Here are things to consider when deciding which IRS form to file. Use the 1040EZ if: * Your taxable income is below $100,000 * Your filing status is Single or Married Filing Jointly * You and your spouse – if married -- are under age 65 and not blind * You are not claiming any dependents * Your interest income is$1,500 or less * You are not claiming the additional standard deduction for real estate taxes, taxes on the purchase of a new motor vehicle, or disaster losses Use the 1040A if: * Your taxable income is below $100,000...

Everyone who files a federal tax return must determine which filing status applies to them. It’s important you choose your correct filing status as it determines your standard deduction, the amount of tax you owe and ultimately, any refund owed to you. Here are eight facts about the five filing status options the IRS wants you to know in order to choose the correct filing status for your situation. 1. Your marital status on the last day of the year determines your marital status for the entire year. 2. If more than one filing status applies to you, choose the one that gives you the lowest tax obligation. 3. Single filing status generally applies to anyone who is unmarried, divorced or legally separated according to state law. 4. A married couple may file a joint return together. The couple’s filing status would be Married Filing Jointly. 5. If your spouse died during the year and you did not remarry during 2009, you may still file a joint return with that spouse for the ...

Top Ten Tax Time Tips While the tax filing deadline is more than three months away, it always seems to be here before you know it. Here are the Internal Revenue Service’s top 10 tips that will help your tax filing process run smoother than ever this year. 1. Start gathering your records Round up any documents or forms you’ll need when filing your taxes: receipts, canceled checks and other documents that support an item of income or a deduction you’re taking on your return. 2. Be on the lookout W-2s and 1099s will be coming soon from your employer; you’ll need these to file your tax return. 3. Try e-file When you file electronically, the software will handle the math calculations for you. If you use direct deposit, you will get your refund in about half the time it takes when you file a paper return. E-file is now the way the majority of returns are filed. In fact, last year, 2 out of 3 taxpayers used e-file. 4. Check out Free File If your income is $57,000 or less you may b...

Five Important Facts about Dependents and Exemptions When you prepare to file your tax return, there are two things that will factor into your tax situation: dependents and exemptions. Here are five important facts the IRS wants you to know about dependents and exemptions before you file your 2009 tax return. 1. If someone else claims you as a dependent, you may still be required to file your own tax return. Whether or not you must file a return depends on several factors, including the amount of your unearned, earned or gross income, your marital status, any special taxes you owe and, any advance Earned Income Tax Credit payments you received. 2. Exemptions reduce your taxable income. There are two types of exemptions: personal exemptions and exemptions for dependents. For each exemption you can deduct $3,650 on your 2009 tax return. Exemption amounts are reduced for taxpayers whose adjusted gross income is above certain levels, depending on your filing status. 3. If you are ...