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n its latest effort to help struggling taxpayers, the Internal Revenue Service today announced a series of new steps to help people get a fresh start with their tax liabilities . The goal is to help individuals and small businesses meet their tax obligations, without adding unnecessary burden to taxpayers. Specifically, the IRS is announcing new policies and programs to help taxpayers pay back taxes and avoid tax liens. “We are making fundamental changes to our lien system and other collection tools that will help taxpayers and give them a fresh start,” IRS Commissioner Doug Shulman said. “These steps are good for people facing tough times, and they reflect a responsible approach for the tax system.” Today’s announcement centers on the IRS making important changes to its lien filing practices that will lessen the negative impact on taxpayers. The changes include: Significantly increasing the dollar threshold when liens ...

You may be able to take a tax credit of up to $13,170 for qualified expenses paid to adopt an eligible child. The Affordable Care Act increased the amount of the credit and made it refundable, which means it can increase the amount of your refund. Here are seven things the IRS wants you to know about the expanded adoption credit. 1. Beginning in tax year 2010 the credit is refundable, meaning that you can get it even if you owe no tax. 2. For tax year 2010 you must file a paper tax return and Form 8839, Qualified Adoption Expenses, to get the credit and you must attach documents supporting the adoption. 3. Documents may include a final adoption decree, placement agreement from an authorized agency, court documents and the state’s determination for special needs children. 4. Qualified adoption expenses are reasonable and necessary expenses directly related to the legal adoption of the child. These expenses may include adoption fees, court costs, attorney fees and travel expenses. 5. An...

Before you file your 2010 tax return, you should make sure you have all the needed documents including all your Forms W-2. You should receive a Form W-2, Wage and Tax Statement, from each of your employers. Employers have until January 31, 2011 to send you a 2010 Form W-2 earnings statement. If you haven’t received your W-2, follow these four steps: Contact your employer If you have not received your W-2, contact your employer to inquire if and when the W-2 was mailed. If it was mailed, it may have been returned to the employer because of an incorrect or incomplete address. After contacting the employer, allow a reasonable amount of time for them to resend or to issue the W-2. Contact the IRS If you do not receive your W-2 by February 14th, contact the IRS for assistance at 800-829-1040. When you call, you must provide your name, address, city and state, including zip code, Social Security number, phone number and have the following information: • Employer’s name, address, city a...

Taxpayers should make sure they are aware of many important changes to the tax law before they complete their 2010 federal income tax return. Here are several important changes that the IRS wants you to keep in mind when you file your 2010 federal income tax return in 2011. Health Insurance Deduction Reduces Self Employment Tax In 2010, eligible self-employed individuals can use the self-employed health insurance deduction to reduce their social security self-employment tax liability in addition to their income tax liability. As in the past, eligible taxpayers claim this deduction on Form 1040 Line 29. But in 2010, eligible taxpayers can also enter this amount on Schedule SE Line 3, thus reducing net earnings from self-employment subject to the 15.3 percent social security self-employment tax. Premiums paid for health insurance covering the taxpayer, spouse and dependents generally qualify for this deduction. Premiums paid for coverage of an adult child under age 27 at the end of the...

You can buy Series I U.S. Savings Bonds with a portion or all of your federal tax refund for yourself or anyone. Series I bonds are low-risk bonds that grow in value for up to 30 years. While you own them they earn interest and protect you from inflation. Here are six things the IRS wants you to know about using your federal refund to purchase savings bonds. You may use a portion of your refund to purchase up to $5,000 in U.S. Series I Savings Bonds for yourself or anyone. The total amount of saving bonds purchased must be in multiples of $50. Any portion of your refund not used to buy savings bonds will be deposited into another financial account – such as a checking or savings account or can be mailed to you as a paper check. Paper bonds will be issued in your name or the name you designate as primary owner, co-owner or beneficiary. If you are married and filed a joint return, the bonds will be issued in yours and your spouse’s name. You can also designate a beneficiary or co-own...

The Child Tax Credit is an important tax credit that may be worth as much as $1,000 per qualifying child depending upon your income. Here are 10 important facts from the IRS about this credit and how it may benefit your family. Amount - With the Child Tax Credit, you may be able to reduce your federal income tax by up to $1,000 for each qualifying child under the age of 17. Qualification - A qualifying child for this credit is someone who meets the qualifying criteria of six tests: age, relationship, support, dependent, citizenship, and residence. Age Test - To qualify, a child must have been under age 17 – age 16 or younger – at the end of 2010. Relationship Test - To claim a child for purposes of the Child Tax Credit, they must either be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister or a descendant of any of these individuals, which includes your grandchild, niece or nephew. An adopted child is always treated as your own child. An ...

Taxpayers looking for free basic income tax preparation assistance may qualify for IRS sponsored community-based, volunteer tax return preparation programs. Here are the top 10 things the IRS wants you to know about these volunteer programs. 1. The IRS sponsors both the Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs. 2. The IRS Volunteer Income Tax Assistance Program offers free tax help to people who earn less than $49,000. Most locations offer free electronic filing. 3. The Tax Counseling for the Elderly Program offers free tax help to taxpayers who are 60 and older. 4. The IRS trains community volunteers so they can help eligible taxpayers with several special credits, such as the Earned Income Tax Credit, the Child Tax Credit and the Credit for the Elderly. 5. Many volunteer sites have language specialists to assist people with limited English skills. 6. More than 12,000 free tax preparation sites are open nationwide this year as the IRS continues t...