Category: Individual Taxes

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    6 Smart Ways to Optimize Your Tax Return

    alphausr / March 13, 2018 / Individual Taxes, Tax Planning / comments

    Although it's obviously very important to file your taxes in a timely manner and pay anything you owe, you want to optimize your return to claim all eligible credits and deductions. Since that can get quite tricky with the wide range that is available, we want to share 6 smart ways to optimize your tax return.  

    1. Pool Deductions

     In most cases, pooling itemized deductions are going to have the biggest impact on your return. You can definitely lower your income tax bill by taking as many available deductions as possible over the two percent threshold for adjusted gross income.

    1. Deductions for Working from Home

    There has been a persistent myth floating around for a number of years that taking a deduction related to a home office will trigger an audit. As long as you follow the guidelines related to exclusive business use, that's unlikely to happen. The same is true for deducting mileage. The most important thing is to be accurate with these deductions and to have supporting documentation/logs for all of them. 

    1. Donations

    When people think of deducting charitable donations, they often focus solely on very large donations. However, if you look at everything you donate over the course of a year, it likely adds up to quite a bit. That's why it's important to document and track donations of all sizes. Having this information when tax time arrives will help out a lot.

    1. Retirement Contributions

     Another area where you can really optimize your tax return is in regards to what you contribute to retirement. This includes accounts like a Roth IRA or Roth 401(k). Not only are you improving your overall financial health, but these accounts will grow your nest egg in a tax-free way for years to come. If you have an employer who offers any type of matching, try to take full advantage of that opportunity. 

    1. Optimize Capital Gains

    As you progress in your financial life, investing becomes more important. While it's great when stocks perform well and you're able to sell for a profit, those amounts do get taxed. One strategy for minimizing the tax implications of capital gains is to offset profits by also selling some holdings for a loss.

    1. Work with a Professional

    If you want to work with an experienced and affordable professional to get your taxes filed, we're here to help. We will ensure that your return is fully optimized and that you're able to take full advantage of all credits & deductions that you're entitled to receive.

     For more information, visit us at Alpha Tax or give us a call in Anderson at (513) 832-0026 or in Georgetown at (937) 378-3111.

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    Be Aware of Common E-Filing Mistakes

    alphausr / April 12, 2017 / Individual Taxes, Services, Tax Planning / comments

    By filing your taxes online instead of on paper, you can streamline this entire process and reduce the likelihood of making a mistake. While e-filing has definitely made it easier to deal with personal and business taxes, that doesn't mean it's foolproof. It's still possible to make mistakes when you file this way, and plenty of people still do. Not only can making an e-filing mistake cause a headache, but it can also cost you money. Since those are both things you'd probably prefer to avoid, we want to highlight the most common e-filing mistakes that get made every year:

    Your Social Security Number
    Even though it seems like an obvious thing, statistics show that plenty of people incorrectly enter one or more digits of their social security number. While this mistake is easy to avoid, entering the wrong number can cause a substantial delay with getting your refund. So let this be a reminder to double-check the SSN you enter before proceeding with your e-filing.

    Use the Right Name
    Whether you go by your middle name instead of your first name or recently got married, there are a number of factors that can result in you frequently using a different version of your name than the one that's legally recognized. Although there's nothing wrong with that, just be sure you use the most current version of your legal name when you e-file. If anything has happened that may have changed your name, you can use the SSA.gov website to check.

    Double Check Your Bank Info
    One of the advantages of choosing to e-file is you can get your tax refund in much less time than if you file by mail. However, that will only be the case if you enter the right routing and bank account number when you e-file. As with your SSN, double check before submitting. Making a mistake with a single digit can greatly increase how long it takes to get your refund.

    Get All Your Ducks in a Row
    While e-filing allows the Internal Revenue Service to process your return in much less time, it doesn't mean they're not paying close attention to the numbers you enter and deductions you claim. The last thing you want to do is make any mistake that triggers an IRS notice or audit, so be sure that you have all the necessary forms for filing your return and get that information entered correctly.
    If you want to be sure that your return is filed correctly and you're able to maximize your refund, Alpha Tax Services can help. In addition to having over two decades of tax preparation experience, you can instantly get a $50 check when you file with us.

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    The Ins and Outs of the Earned Income Tax Credit (EITC)

    alphausr / February 21, 2017 / Fast Refund Products, Individual Taxes, Services, Tax Planning / comments

    Since 1975, the Earned Income Tax Credit has been providing American families with a federal subsidy designed to alleviate the burden of taxation and to encourage taxpayers to remain employed throughout the year. This benefit has been expanded over the last few decades as a way to provide some level of economic relief for low-income and middle class workers. This credit is interchangeably referred to as EIC or EITC.

     

    Basics of the EITC

    In essence, the EITC allows qualified taxpayers to get back a fixed percentage of their annual income. Families with more than one child stand to get higher EITC amounts. Low-income taxpayers who do not have children or dependents may also qualify for the EITC, although the amount will be considerably lower. The EITC is paid through the refund indicated on an annual tax return.

     

    EITC Eligibility

    The EITC is not determined by federal poverty guidelines. Instead, it's calculated by income levels and by the size of the taxpayer's family. The minimum age is 25 and the maximum age is 65. All income earners and dependents must have valid Social Security numbers. The EITC can be taken by taxpayers filing jointly or individually. The choice of filing should be left to accountants and tax preparation professionals.

    As an example, let's say a married couple with three children produces an annual household income that is less than $53,000. the maximum EITC amount this family could receive would be $6,629. Individual workers who earn less than $14,880 per year would receive no more than $506. It is important to note that the EITC is a benefit and not a deduction.

    Self-employed professionals and income earners who do not have a 9 to 5 job may still qualify to receive the EITC. To this effect, construction workers who are independent contractors and are paid by means of 1099 forms may still be eligible.

    Investment income does not automatically preclude taxpayers from getting the EITC. An office worker, for example, may receive stock options from her employer as a performance bonus. Even if she exercises those options, she may still be eligible as long as her profit was not higher than $3,400 by the time she files her tax return.

     

    Disqualifying Income

    Receiving child support, Social Security or early retirement income could render taxpayers ineligible to take the EITC. The same goes for unemployment benefits since the goal of this tax credit is to reward workers. Imprisoned workers do not qualify for the EITC.

    In the end, the EITC is a benefit that low-income and middle class taxpayers should explore, particularly if they have children. In terms of determining eligibility and the EITC amount that can be taken, this credit can be as difficult to calculate as itemized deductions or depreciation. For this reason, taxpayers should let a tax preparation professional handle the preparation of their annual return.

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    5 Benefits of Having Your Tax Return Prepared Professionally

    alphausr / February 21, 2017 / Business Taxes, Individual Taxes, Services, Tax Planning / comments

    With a wide variety of software and forms available online, it seems easier than ever to prepare and file your own tax returns. However, this process can quickly get complicated, which why you may want to put your taxes in the hands of professionals. Here are five benefits of having your taxes professionally prepared and filed:

    1. Extra Deductions

    The cost of having your taxes professionally prepared is often offset by returns you didn't even know you were entitled to. Even just the time it might take you to research available deductions and find the right forms to claim those deductions may cost you more in time and effort than it would cost you to simply have Alpha Tax Services handle them.

    2. Speed and Simplicity

    The companies that make tax software do a great job of marketing their tools as fast and easy to use. However, most people who have spent time trying to file their taxes in this way know that the experience often takes much longer than expected. If you are looking for a truly fast and simple experience, there's no match for a knowledgeable tax professional.

    3. Valuable Ongoing Relationships

    A tax professional can not only help you with this year's taxes, but they can also help you plan and prepare for your future. You may have done or not done something this year that could have saved you significantly if you had just done it a bit differently. In addition, a tax professional can help you figure out how to get the best tax advantages for any future plans you may have.

    4. Reduce Errors & Costly Delays

    Something as simple as entering a number on the wrong line or even mixing up one or two numbers can cause you to believe you owe far less than you actually do or lead to significant delays in getting your return. Hiring a professional significantly minimizes your risks of sending in a return that contains costly mistakes or errors.

    5.) Minimize Your Own Liability

    If you are audited and the IRS finds any errors in your returns, you could face serious financial and legal consequences. Although hiring a professional to prepare your taxes doesn't automatically clear you from all liability, it does add a significant level of protection.

    Tax time is generally a dreaded event for almost everyone. However, it doesn't have to be. Turning your taxes over to a professional can not only save you time and potentially a significant amount of money, it can also save you a great deal of stress. Rather than spending your free time laboring over a complex labyrinth of codes and forms, you could spend it doing something you genuinely enjoy!

     

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    Advance Loans On Refunds

    alphausr / January 16, 2017 / Fast Refund Products, Individual Taxes, Services, Tax Planning / comments

    As we covered in our previous post on some tax refunds being delayed until 2/15, a change implemented by Congress means that anyone who claims the Earned Income Tax Credit or Additional Child Tax Credit is going to have to wait longer than usual to receive their refund. This extra window of time will be used by the IRS to help combat the growing problem of fraudulent returns.

    And even for filers who don't claim either of those credits, it can take a full three weeks before returns are processed and refunds issued. If you would like to receive money from your refund in much less time, an advance loan can be the perfect solution.

    3 Benefits of An Advance Loan on Your Refund

    There are several significant benefits associated with this type of loan. The first is the fact that you don't have to wait for your refund to arrive. Even if you aren't claiming the EITC or Additional Child Tax Credit, it can still take up to three weeks to get your refund from the IRS. This type of loan means you can get going right away with the plans you have for that money.

    Another benefit of this option is it's quite convenient. Unlike other loans that can require you to fill out a ton of paperwork, this one is based off your tax return, which means there's no extra work for you to do.

    Finally, getting this type of advance loan is simple. As long as you work with a reputable tax preparer, you won't have to worry about figuring out any complicated tax issues on your own. Instead, the preparer will walk you through this straightforward process and get your refund money to you in the form of an advance loan.

    Get a Great Advance Loan From Alpha Tax

    With over two decades of industry experience and relationships, we understand how hard people in Cincinnati work for their money. That's one of the reasons Alpha Tax is committed to making taxes as easy as possible on our clients.

    In addition to the quality of our tax preparation service, one of the ways we help to make things easy is by offering advance loans. if you sign up to do your return with us, you'll receive $50 immediately. We can also provide up to a $1200 refund advance in as little as one hour once your return is filed. The IRS starts accepting returns on 1/23/17, so don't miss out on your chance to get ahead of the curve. If you have any questions about our tax preparation service or advance loans, don't hesitate to give us a call at 513-528-9100.

     

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    Some Tax Refunds Delayed Until 2/15

    alphausr / January 16, 2017 / Individual Taxes, IRS/State Problem Resolution, Services, Tax Planning / comments

    According to the commissioner of the IRS, stolen identity refund fraud is a growing problem for the organization. Based on this issue, Congress approved a change that's designed to combat this type of fraud. However, fraudsters aren't the only ones who may be affected by the measure instituted by Congress. The significant change that this measure implements is requiring the IRS to hold refunds until February 15th for anyone who claims the Additional Child Tax Credit or Earned Income Tax Credit. As a result, people who are used to filing early and then getting their refund early may not have that experience in 2017.

    While the IRS has acknowledged the impact this change will have on millions of legitimate taxpayers and has taken measures to help spread the word, the new policy has still caused plenty of frustration.

    More Details About This Tax Policy Change

    The Earned Income Tax Credit is designed to help families with low to moderate incomes. A single head of household with two children can qualify for this credit if they earned less than $44,648 in 2016 (the limit is $50,198 for a married couple filing jointly with the same number of children).

    According to IRS statistics, more than twenty-six million filers have received the EITC. And in 2014, over twenty million filers claimed the Additional Child Tax Credit. As always, the IRS will accept and process federal tax returns for 2016 as soon as filing season begins. If someone files early and doesn't claim either of the credits discussed above, they can expect to receive their refund in less than twenty-one days after submitting their return.

    But if a filer claims either of those credits, refunds will be held until February 15th. The purpose of this holding period is to give the IRS additional time to check for signs of fraudulent returns. Based on data from 2013, just under $15 billion of EITC payments were done in mistake. This accounts for nearly a fourth of all payments for this credit. Estimates from 2013 for the Additional Child Tax Credit peg the improper payment rate at over thirty percent.

    If you want to avoid feeling stressed out this tax season and have the peace of mind that goes along with knowing that everything on your return was done correctly, be sure to take a look at how our tax preparation service can help.

     

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