LAP Financial Services

Six Facts about the American Opportunity Tax Credit There is still time left to take advantage of the American Opportunity Tax Credit, a credit that will help many parents and college students offset the cost of college. This tax credit is part of the American Recovery and Reinvestment Act of 2009 and is available through December 31, 2010. It can be claimed by eligible taxpayers for college expenses paid in 2009 and 2010. Here are six important facts the IRS wants you to know about the American Opportunity Tax Credit: This credit, which expands and renames the existing Hope Credit , can be claimed for qualified tuition and related expenses that you pay for higher education in 2009 and 2010. Qualified tuition and related expenses include tuition, related fees, books and other required course materials. The credit is equal to 100 percent of the first $2,000 spent per student each year and 25 percent of the next $2,000. Therefore, the full $2...

Eight Things to Know If You Receive an IRS Notice Did you receive a notice from the IRS this year? Every year the IRS sends millions of letters and notices to taxpayers but that doesn’t mean you need to worry. Here are eight things every taxpayer should know about IRS notices – just in case one shows up in your mailbox. Don’t panic. Many of these letters can be dealt with simply and painlessly. There are number of reasons the IRS sends notices to taxpayers. The notice may request payment of taxes, notify you of a change to your account or request additional information. The notice you receive normally covers a very specific issue about your account or tax return. Each letter and notice offers specific instructions on what you need to do to satisfy the inquiry. If you receive a correction notice, you should review the correspondence and compare it with the information on your return. If you agree with the correction to your account, usually no reply is necessary unles...

GM WILL GO PUBLIC General Motors has announced it will reenter the stock market. Last Wednesday, it filed an IPO registration with the Securities and Exchange Commission . One of the largest IPOs in history may come as soon as October, including common and preferred shares. This signals the end of “Government Motors”: the Treasury Department will now have the opportunity to reduce its 61% stake in the company. GM earned $1.3 billion in 2Q 2010 – its second straight quarter in the black

Ten Tips for Taxpayers Making Charitable Donations Did you make a donation to a charity this year? If so, you may be able to take a deduction for it on your 2010 tax return. Here are the top 10 things the IRS wants every taxpayer to know before deducting charitable donations. Charitable contributions must be made to qualified organizations to be deductible. You can ask any organization whether it is a qualified organization and most will be able to tell you. You can also check IRS Publication 78 , Cumulative List of Organizations, which lists most qualified organizations. IRS Publication 78 is available at IRS.gov . Charitable contributions are deductible only if you itemize deductions using Form 1040, Schedule A. You generally can deduct your cash contributions and the fair market value of most property you donate to a qualified organization. Special rules apply to several types of donated property, including clothing or household items, cars and boats. If your contr...

Proposed Regulations Expand the Use of Electronic Payment System and Discontinue Paper Coupons Next Year WASHINGTON — Consistent with a Financial Management Service initiative announced in April of this year, the IRS today issued proposed regulations to significantly increase the number of electronic transactions between taxpayers and the federal government. The proposed regulations (REG 153340-09) would eliminate the rules for making federal tax deposits by paper coupon because the paper coupon system will no longer be maintained by the Treasury Department after Dec. 31, 2010. The proposed regulations generally maintain existing rules for depositing federal taxes through the Electronic Federal Tax Payment System (EFTPS). Using EFTPS to make federal tax deposits provides substantial benefits to both taxpayers and the government. EFTPS users can make tax payments 24 hours a day, seven days a week from home or the office. Deposits can be made online with a computer ...

IRS Announces New Return Preparer Application System and User Fee; IRS Also Releases Proposed Regulations to Amend Circular 230 Rules WASHINGTON — The Internal Revenue Service today announced that a new online application system for compensated tax return preparers is expected to go live in mid-September. The IRS has proposed to require all individuals who receive compensation for preparing all or substantially all of a federal tax return or claim for refund after Dec. 31, 2010, to have a Preparer Tax Identification Number (PTIN). Under the proposed regulations, compensated tax return preparers will need to obtain, or reapply for, a PTIN and pay a user fee using this new comprehensive system, which is part of a series of steps planned to increase oversight of federal tax return preparation . Tax return preparers will be creating PTIN accounts with the IRS when they use the new system. “This is an important first step because it lays the groundwork in our efforts to ...

Keeping Good Records Reduces Stress at Tax Time You may not be thinking about your tax return right now, but summer is a great time to start planning for next year and to make sure your records are organized. Maintaining good records now can make filing your return a lot easier and it will help you remember transactions you made during the year. Here are a few things the IRS wants you to know about recordkeeping. Keeping well-organized records also ensures you can answer questions if your return is selected for examination or prepare a response if you receive an IRS notice. In most cases, the IRS does not require you to keep records in any special manner. Generally speaking, you should keep any and all documents that may have an impact on your federal tax return. Individual taxpayers should usually keep the following records supporting items on their tax returns for at least three years: Bills Credit card and other receipts Invoices Mileage logs Canceled, imaged o...

Five Tax Tips for Recently Married Taxpayers Are you getting married this summer? If you recently got married or are planning a wedding, the last thing on your mind is taxes. However, there are some important steps you need to take to avoid stress at tax time. Here are five tips from the IRS for newlyweds to keep in mind. Notify the Social Security Administration Report any name change to the Social Security Administration, so your name and Social Security Number will match when you file your next tax return. Informing the SSA of a name change is quite simple. File a Form SS-5, Application for a Social Security Card , at your local SSA office. The form is available on SSA’s website at www.socialsecurity.gov , by calling 800-772-1213 begin_of_the_skype_highlighting 800-772-1213 end_of_the_skype_highlighting or at local offices. Notify the IRS If you have a new address you should notify the IRS by sending Form 8822, Change of Address . You may...

Seven Facts about the Nonbusiness Energy Property Credit Thinking about making some energy saving improvements to your home this summer? Taking some energy saving steps now may lead to bigger tax savings next year. The Nonbusiness Energy Property Credit, a tax credit for making energy efficient improvements to homes was increased as part of the American Recovery and Reinvestment Act of 2009 . Here are seven things the IRS wants you to know about the Nonbusiness Energy Property Credit: The new law increases the credit rate to 30 percent of the cost of all qualifying improvements and raises the maximum credit limit to $1,500 claimed for 2009 and 2010 combined. The credit applies to improvements such as adding insulation, energy-efficient exterior windows and energy-efficient heating and air conditioning systems. To qualify as “energy efficient” for purposes of this tax credit, products generally must meet higher standards than the standards for the credit that was av...

Nine Tips for Taxpayers Who Owe Money to the IRS Did you end up owing taxes this year? The vast majority of Americans get a tax refund from the IRS each spring, but those who receive a bill may not know that the IRS has a number of ways for people to pay. Here are nine tips for taxpayers who owe money to the IRS. If you get a bill this summer for late taxes, you are expected to promptly pay the tax owed including any penalties and interest. If you are unable to pay the amount due, it is often in your best interest to get a loan to pay the bill in full rather than to make installment payments to the IRS. You can also pay the bill with your credit card. The interest rate on a credit card or bank loan may be lower than the combination of interest and penalties imposed by the Internal Revenue Code . To pay by credit card contact one of the following processing companies: Official Payments Corporation at 888-UPAY-TAX (also www.officialpayments.com/fed ) or Link2Gov at 888-PAY-1040 (also www...

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Secretary Geithner Remarks as Prepared for Delivery at Center For American Progress Thank you, John and Doug, for hosting this event and for your efforts through the Center for American Progress and the American Action Forum to better inform our national discussion. We face important economic choices in the next several months, and these choices need to be made carefully, guided by what will be best for the middle class and for economic growth. Over the past two decades, Washington provided the country with a useful lesson in the consequences of two very different approaches to economic and fiscal policy. In the 1990's, sound fiscal policies led to large surpluses and important investments in the middle class, which helped contribute to a period of strong growth and job creation, led by the private sector, with broad gains in income for all Americans. After that, Washington changed course, abandoned the basic disciplines of budgeting, and borrowed to fin...

Do You Need to Amend Your Return? If you forgot to include some income or to take a deduction on your tax return – you can correct it by amending your tax return. In some cases, you do not need to amend your tax return. The Internal Revenue Service usually corrects math errors or requests missing forms – such as W-2s or schedules – when processing an original return. In these instances, do not amend your return. However, you should file an amended return if any of the following were reported incorrectly: Your filing status Your dependents Your total income Your deductions or credits You may also elect to amend your 2009 return if you are eligible to claim the first-time homebuyer credit for a qualified 2010 home purchase. The amended tax return will allow you to claim the homebuyer credit on your 2009 return without waiting until next year to claim it on the 2010 return. ...