Tax Talk - The 20/20 tax resolution blog

Now is about the time that time of year that people begin thinking about all the things to do for filing a federal income tax return.

Have you ever wondered if there is a convenient one-stop resource to locate answers to all the questions you have regarding any new IRS changes in laws, regulations, credits, or deductions?

The good news is that the Internal Revenue Service has a comprehensive Publication 17, Your Federal Income Tax that highlights all the ways to take advantage of the newest tax credits available in 2009.  Specifically, you’ll find information on making work pay credits, American opportunity education credits, earned income credits, first-time home buyer credits, energy credits for homeowners, and numerous other credits that can help save money.

The downside is that this publication is over a whopping 300 pages. Publication 17 in its entirety can be accessed directly via the IRS website in PDF format.  However, we found that the best way to digest the information to ensure that you obtain all the necessary details is to use the IRS’ interactive guide that has over 6,000 links to answer all your questions.

Most importantly, it is recommended that you consult with an expert regarding all the planning necessary to complete your 2009 tax return.  If you have any questions about how these credits will be interpreted in the face of a back tax liability contact us at 20/20 for your free consultation.

We wish you well in this tax planning and holiday season!

The Internal Revenue Service announced that they are looking for taxpayers who are due a combined $123.5 million in the form of 107,831 refund checks that were returned to the IRS by the U.S. Postal Service.

IRS Commissioner Doug Shulman said, “We are eager to get this money into the hands of taxpayers, so don’t delay if you think you are missing a refund. The sooner you update your address information, the quicker you can get your refund.”

All a taxpayer has to do is update his or her address once. The IRS will then send out all checks due. Undeliverable refund checks average $1,148 this year, compared to $990 last year. Some taxpayers are due more than one check.

If a refund check is returned to the IRS as undeliverable, taxpayers can generally update their addresses with the “Where Is My Refund” tool on IRS.gov. The tool enables taxpayers to check the status of their refunds. A taxpayer must submit his or her social security number, filing status and amount of refund shown on their 2008 return. The tool will provide the status of their refund and in some cases provide instructions on how to resolve delivery problems.

Taxpayers checking on a refund over the phone will be given instructions on how to update their addresses. Taxpayers can access a telephone version of “Where’s My Refund?” by calling 1-800-829-1954.

Contrary to Commissioner Shulman’s statement, I’m not exactly sure how “eager” the IRS truly is to chase taxpayers down for their refunds.  However, if you happen to owe the IRS for back taxes and have any questions about whether or not you are entitled to your refund or how to obtain information about your refund please contact 20/20 for the answers to all your questions.

It seems like everyone is trying to tap into the social media lifeline these days.  Even the historically drab and sterile IRS is getting in on the act.  The Service recently launched a YouTube channel and podcasts on Itunes with the intention of presenting tax advice to its viewers.

The videos highlight the $8,000 first-time homebuyer’s credit for those who purchase a house this year, the sales or excise tax deduction on new car purchases and the expanded credits for education and energy conservation.

After reviewing the videos it’s apparent that the provided information is helpful and applicable to a broad base of taxpayers.  For example, included is a video on using the IRS Withholding Calculator. Many workers received the Making Work Pay tax credit in April through their tax withholding at work. However, people who have more than one job or working spouses should double-check their withholding to ensure neither too much nor too little is being withheld. Taxpayers can utilize the IRS calculator to help determine if they need to make adjustments to their withholdings or not.

It’s commendable that the IRS is reaching out to taxpayers using the newer social media avenues such as YouTube, but the jury is still out on the efficacy of this outreach.  After almost two months, there are a measly 315 subscribers and 32,543 channel views.  While this could be the start of a new, albeit unlikely, hip IRS it’s more likely that no matter how much promotion goes into their channel—the same drab IRS communication methods will remain.  Therefore, only time will answer the lingering question: Is this social media venture a step in the right direction for the IRS or a waste of time and resources?