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Injured Spouse Form

Injured Spouse Form

If you file your taxes jointly with your spouse and your spouse has outstanding past-due federal debt, your joint refund can be affected. The outstanding debt may be back taxes, past-due child support, past-due student loans, or any other federal debt. But even if your name is on the refund, the IRS can still withhold the entire amount and apply it to the outstanding debt of your spouse. How can you protect yourself and your portion of the tax refund? Filing an Injured Spouse Claim may be your best option.

What is an Injured Spouse Claim?

If the IRS has intercepted your tax refund on a married filing jointly tax return, an injured spouse claim can help you get back your part of the tax refund. This applies only when the outstanding debt is owed by your spouse but not by you. An injured spouse claim cannot help you if the outstanding debt is jointly owned by both you and your spouse. For example, if you owe taxes on a previous year tax return that was filed “married filing jointly”, you would both be responsible for this debt and neither spouse would be able to claim an injured spouse claim.

How to Qualify For Injured Spouse Claim

In order to qualify for an injured spouse claim, you must meet all three of the following conditions:

  • You are not required to pay the past-due amount. This would include a debt that your spouse incurred before you got married, or a debt that only your spouse is liable for.
  • You must have reported income on the joint tax return. Some or all of the reported income must be yours from a job, self-employment, or investments. If you don’t have any income contributed, you do not have a portion of the refund.
  • You made and reported payments on the joint return. Payments may include federal income tax withheld from your wages, estimated tax payments, or refundable tax credits such as the earned income tax credit or additional child tax credits.

How Do I Request an Injured Spouse Claim?

To make an Injured spouse claim, you will need to fill out and file IRS Form 8379. As soon as you realize that your tax refund is going to be intercepted you will want to submit this form. If you meet all of the qualifications, the IRS will determine how much of the refund is your portion.

If you are aware of your spouse’s outstanding debt at the time you are filing your tax return, you can submit the Form 8379 with your tax return and be ahead of the IRS. If you were not aware of the outstanding debt at the time you filed your tax return and you receive a letter in the mail from the IRS stating they are going to withhold your tax refund, you will want to submit this completed Form 8379 as soon as possible.

What To Do if There is a Discrepancy

If at any time you don’t agree with the amount of money the IRS is saying is your portion of the tax refund, contact the IRS and they can provide the information you need to better understand how the amount was determined.

Get your tax refund on your own time. Visit our AnyTime Tax Refund and Tax Refund Advance to see how RefundNote® can help you.

Five Most Common Federal Tax Credits

Five Most Common Federal Tax Credits

When it comes time to file your tax return, you always want to see if you qualify for any tax credits. Tax credits lower your total tax bill.

Earned Income Tax Credit

The Earned Income Tax Credit provides support to low and moderate income level working families. You can claim this credit even if you don’t have children, but your support will be very little compared to if you do have children you are claiming as dependents. In order to claim the Earned Income Tax Credit, you must meet several qualifications.

American Opportunity Tax Credit

The American Opportunity Tax Credit is a credit you can receive for qualified education expenses paid for an eligible student for the first four years of higher education. The maximum annual credit you can receive is $2,500 per eligible student. You qualify as an eligible student if you meet all of the following requirements:

  • You must be pursuing a degree or recognized education credential.
  • You must be enrolled at least half time for at least one academic period in the tax year in which you are filing.
  • You must not have finished the first four years of higher education at the beginning of the tax year in which you are filing.
  • You must not have claimed the AOTC for more than four tax years.
  • You must not have a felony drug conviction at the end of the tax year in which you are filing.

Make sure you qualify before claiming the American Opportunity Tax Credit. If your tax return gets audited by the IRS and your claim is incorrect, you will have to pay back the amount you received for the credit plus interest.

Lifetime Learning Credit

The Lifetime Learning Credit is for qualified tuition and related expenses paid for eligible students enrolled in an eligible educational institution. There is no limit on the number of years you can claim this credit. The maximum credit amount is $2,000 per tax return. An eligible student must be yourself, your spouse, or a dependent that is listed on your tax return.

Child and Dependent Care Credit

This tax credit helps with some of the costs related to childcare and dependent care. If you had to pay someone to care for your child, dependent, or spouse while you worked, looked for work, went to school, or because of a disability, then you will want to check into this tax credit. A qualifying child or dependent is any child or dependent who was under the age of 13 when the care was provided or you spouse or dependent over the age of 13 is physically or mentally incapable of caring for themselves.

Saver’s Tax Credit

The Saver’s Tax Credit is also known as the retirement savings contribution credit. This is a lesser known tax credit that the IRS offers as an incentive for low and moderate income taxpayers to make contributions to an IRA, 401K, 403B, 457B, or any other retirement account that is recognized by the IRS. Your income level and contribution amount will determine the amount of your Saver’s credit. It is worth your time to see if you are eligible. Only about 12% of eligible taxpayers actually claim this credit.

Get your tax refund on your own time. Visit our AnyTime Tax Refund and Tax Refund Advance to see how RefundNote® can help you.

What Is The Earned Income Credit & Who Can Claim It?

What Is The Earned Income Credit & Who Can Claim It?

The Earned Income Tax Credit (EITC) is a benefit for working people who have low to moderate income, particularly those with children. The amount of EITC benefit depends on your income and the number of children you have.

Qualifications to Claim Earned Income Tax Credit

In order to qualify and claim the Earned Income Tax Credit, you must meet all of the following conditions:

  • Have earned income
  • Have been a U.S. citizen or resident alien for the entire tax year
  • Have a valid social security number for yourself, your spouse, and any dependents
  • Not have investment income exceeding $3,450
  • Not be filing a Form 2555 or 2555-EZ
  • File a return as single, married filing jointly, head of household, or qualifying widower – you cannot claim the Earned Income Tax Credit if your filing status is married filing separately

These are the basic qualifications. There are also income requirements you must meet. In addition to the above qualifications, your earned income and Adjusted Gross Income (AGI) may not exceed:

  • $15,010 if you are not claiming a dependent (or $20,600 if filing jointly)
  • $39,617 if you are claiming 1 dependent (or $45,207 if filing jointly)
  • $45,007 if you are claiming 2 dependents (or $50,597 if filing jointly)
  • $48,340 if you are claiming 3 or more dependents (or $53,930 if filing jointly)

If you are not claiming a dependent and you are trying to qualify for the Earned Income Tax Credit, you must meet these requirements also:

  • You (or your spouse if filing jointly) must have been born on or after January 1, 1953
  • You (or your spouse if filing jointly) must have been born on or after December 31, 1992
  • You (and your spouse if filing jointly) cannot be claimed as a dependent on anyone else’s tax return

There are a lot of qualifications and requirements you must meet in order to claim the Earned Income Tax Credit. However, if you qualify, this means more money in your pocket. The Earned Income Tax Credit reduces the amount of tax you owe and may also give you a refund on your tax return.

What Is Earned Income?

Earned income is income you receive while working for someone who pays you or income you receive from running a business or a farm. Taxable income may include wages, salaries, and tips.

Some examples of income that is not earned income includes: pay received for work while an inmate, interest and dividends, retirement income, social security, unemployment benefits, alimony, and child support.

When Can I Expect to Receive My Refund?

There is a law that states the IRS cannot issue refunds before mid-February on any tax returns that have claimed the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC). The IRS will hold your entire refund until after mid-February, not just the portion associated with your EITC or ACTC. When you receive your refund depends on when you file your tax return. If you file it early, you will have to wait until after the mid-February deadline. If you file your taxes later than mid-February, your refund shouldn’t be held up.

Get your tax refund on your own time. Visit our AnyTime Tax Refund and Tax Refund Advance to see how RefundNote® can help you.

How to Choose a Tax Preparer

How to Choose a Tax Preparer

When you are choosing someone to help you prepare and file your income tax return, you want to be able to trust this person. You are giving your tax preparer all of your personal and financial information. One of the first things you need to do is determine what type of tax preparation professional can best help you.

Types of Tax Preparer Professionals

  • Tax Preparers for Chains or Outlets – If you have a fairly simple return, this may be the easiest and most cost-efficient way to have your taxes prepared.
  • Enrolled Agents – An enrolled agent (EA) is a federally-authorized tax practitioner who has technical expertise in the tax field. Enrolled agents are licensed by the federal government and are either a former IRS employee or they have passed an IRS exam. Enrolled agents are empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the IRS should there be any questions about a return.
  • Certified Public Accountant – A certified public accountant (CPA) can help you with more complex financial situations. A CPA can also represent you before the IRS if there are any issues with your return.
  • Tax Attorney – Tax attorneys typically work with clients who have large assets and business dealings. Tax attorneys are tax specialists and they are experienced when it comes to more complex matters. They know the latest tax laws and are great to have when there may be a tax dispute.

PTIN

When choosing a tax preparer, you want to make sure they have a Preparer Tax Identification Number. A PTIN is an identification number that is issued by the IRS to paid tax return preparers. They will use this number when filing your tax return so they don’t have to disclose their social security number. You also may want to check into your tax preparer’s history. You can check with the Better Business Bureau to see if the preparer has any questionable activity on their history.

Do They Have the Availability?

A very important quality to look for in a tax preparer is if he or she has enough time to prepare and file your taxes in a reasonable amount of time. You don’t want to commit to someone who is going to put you on the back burner and slowly get around to your tax return. You also don’t want to commit to someone who already has too many other clients. They may have a hard time completing your return by the tax deadline. You need to make sure you can easily get ahold of your tax preparer, even after your taxes have been completed and filed.

Make Sure They Ask For Records and Receipts

A good tax preparer will ask for records and receipts from the year they are filing your taxes for. They may ask you several questions about your income, deductions, tax credits, and other information they may need. This is a very important quality a tax preparer must have. Don’t use a tax preparer who is willing to electronically file your tax return using just your last pay stub instead of you W-2. This is against the IRS e-file rules and is not an accurate way to file taxes.

Don’t Settle

Do your homework and check into your tax preparer before you choose who you want to help you with your tax return. Don’t settle with someone you don’t feel comfortable with. You need to trust your tax preparer and feel confident that they are accurately filing your tax return.

Get your tax refund on your own time. Visit our AnyTime Tax Refund and Tax Refund Advance to see how RefundNote® can help you.

How to Work With a Tax Preparation Professional

How to Work With a Tax Preparation Professional

Many taxpayers would rather have a tax preparation professional assist them with filing their income tax return rather than trying to attempt to do it on their own. It can be much easier to have a trained tax professional doing all of the hard work for you since they have more knowledge and experience. Since it is the taxpayer’s responsibility to submit an accurate income tax return to the IRS, it is important to find a tax preparer you can trust.

Initial Consultation

When you first meet with a tax preparation professional, they should interview you and find out all of your information to determine how to best file your tax return. They need to know which tax form is going to be required to file your taxes. This is when the tax preparation professional will also ask you information about your annual income, exemptions, deductions, and expenses.

Gathering Information

The tax preparation professional will need to collect and go over your current year financial information. This includes any income statements (W-2’s), expense documents (receipts), names and social security numbers of any spouse or dependent, and any other forms you may have received for the current year.

Completing Your Tax Return

Some tax preparers will use income tax software to assist them in preparing your income tax return. The IRS also offers fillable forms which calculate the amounts automatically. The tax preparer should check over your tax return and look for tax-saving deductions or credits to try to reduce or eliminate your tax. Once the tax preparer has all of your forms complete, they will have you look over everything and they will let you know the amount of your refund or the amount of taxes you owe to the IRS. You will need to sign your tax return, but don’t sign anything until you have verified all your information and numbers are correct.

Filing Your Tax Return

A tax preparer can file your taxes electronically or you can choose to file the return through the mail. If you choose to file electronically, you can eliminate any inaccuracies, the IRS can process your return more quickly, and you can receive a prompt refund. Filing your return by mail takes longer to be processed, which delays your refund. However you choose to file your tax return, your tax preparer professional can assist you.

RefundNote Automated Tax Preparation Service

If you are looking to reduce tax errors, save valuable time, view your tax filing status anytime, or have access to a dedicated account manager, then RefundNote’s Automated Tax Preparation Service is for you. All you have to do is upload your documents through the app and from there a professional tax preparer has access to everything through this platform. With this service, not only do you have help from a live tax professional, you can also access cash from your tax refund easy and fast. This service makes it easy to prepare, file, and monitor your tax return on your own time.

Get your tax refund on your own time. Visit our AnyTime Tax Refund and Tax Refund Advance to see how RefundNote® can help you.

How Does A Credit Card Work?

How Does A Credit Card Work?

A credit card offers you a line of credit through a bank or another financial institution. With a credit card you can make large purchases and pay the balance back over time. Every credit card has a minimum balance that must be paid each month. The balance you have on the credit card may determine what your minimum payment is. Credit cards charge interest and fees on the purchases you make, and this is how the bank or the financial institution makes money from credit cards.

How to Get A Credit Card

To get a credit card, you must apply for it. Before you start applying for credit cards, it’s important to do your research. You want to know about the company that you are going to have an open credit account with. Credit card approvals are based on your credit score. If you have a high credit score, you are more likely to be approved for a credit card with a high credit limit and a low interest rate. On the other hand, if you have a low credit score, you may have a hard time being approved for a credit card. Some lenders will extend credit to you, but it will be a low credit limit and a high interest rate.

Fees Associated with Credit Cards

Different financial institutions charge different fees with their credit cards. When you are approved for a credit card, the issuing bank will provide you with a full list of disclosures which will include any fees that may be associated with your new credit card. One fee to be aware of is if your credit card has an annual fee. Not all credit cards charge an annual fee, but some charge you every year just for the privilege of having the credit card. Another fee to be aware of is the late payment fee. It’s important to pay your monthly credit card bill early or on time. If you are late by just one day, you can be charged somewhere around $25 to $35.

Credit Limits

Mainly your credit score will determine your credit limit. Every credit card has a credit limit. This is the maximum amount you can charge on your card.

Different Types of Credit Cards

There are a few different types of credit cards and they all have their own perks. Rewards credit cards offer cardholders cash back on purchases or points that can be redeemed for travel or other items. Secured credit cards require a cash deposit that is used as collateral against the credit card balance. Most people sign up for secured credit cards to help improve their credit score. Charge cards require cardholders to pay the full card balance every month. The minimum payments on these cards is always equal to the balance that is on the card. Retail credit cards are issued by a retailer or a store rather than a bank or a financial institution. Retailers offer coupons and other discounts for customers that use their store credit card.

Be Responsible

Proper credit card usage and being responsible with your credit cards is extremely important. It’s easy to charge purchases on a credit card and then not pay them off. Also, if you are only making the minimum payment every month, you will end up paying a lot more for your purchase because interest is charged every month. Depending on your balance, your minimum payment may not even equal the interest charge amount.

Get your tax refund on your own time. Visit our AnyTime Tax Refund and Tax Refund Advance to see how RefundNote® can help you.

6 tips for lowering your living expenses and costs

6 tips for lowering your living expenses and costs

Most Americans struggle with debts and live hand to mouth. The resultant effect is an unhappy life full of debts. In fact, 80% of Americans are in debt. The best way for a person to enjoy life to the fullest is to have full financial freedom. And that only comes when you’re self-aware of your incomes. Lowering your living expenses and cutting costs down will help you have extra disposable income that you can then use to offset your financial goals. Here are 6 tips on how to lower your living expenses.

1.    Watch what you eat

Food is one of the basic needs. However, most people find themselves so deep in the habit of buying expensive food and going out to dinner not realizing that the best food is cooked at home. Fast foods are expensive and worse still, non-nutritious. Try to go a weekend without going out and only eat what’s in the fridge or in the house. You will save a lot of bucks.

2.    Buy only what you need

While the temptation to buy something extravagant is always there especially when credit is so easily accessible nowadays, buying only what you need will help you from overspending. So you have a 32-inch TV? You don’t need a bigger one. That sofa you have is enough. The dishwasher is working fine. Cutting expenses means being financially wise.

3.    Reduce lavish trips

You will realize that the best things in life are often free. When you cut off expensive trips and decide to spend more time at home playing with family, having real conversations, you become happier. Reducing trips to once a month or tri-annually can help cut down on costs.

4.    Keep an eye on household bills

You never know how much you can save on your internet and energy bills until you start cutting down on them. For instance, only use the internet for important stuff. Switch off appliances that are not in use and electric lamps when no one is in the room. You may also cut down on your cable TV premiums. If your service provider is charging more, then by all means move to another competitive company that can offer such a service at lower fees.

5.    Set a realistic budget

Setting a budget ensures that you are fully in charge of your incomes. Ensure you set a realistic budget that reflects your income. Don’t overspend on certain things, and don’t cut down on necessary things. Always set aside some amount for saving, and make sure you stick to your budget.

For millennials, it can be so easy to follow the trends. With the digital age and social media integration into our daily lives, you can feel pressured to buy new stuff when your peers have them. You don’t have to. Stick to your budget and only buy what you need. That will help in cutting expenses and costs, giving you more financial freedom.

What Documents Do I Need to File My Taxes?

What Documents Do I Need to File My Taxes?

You can use the following list to help you gather the documents you may need when you are preparing to file your taxes. Once you have gathered all your personal information and the personal information of your spouse and any dependents, you need to make sure you have all the correct forms and documents.

Sources of Income

Any documents you have that show your sources of income will be needed before you begin to prepare your tax return. You may not have official documents for all of your earned income, but you still need to report all of your earned income, so make a list if you weren’t provided with any documentation. If you are employed, you will be looking for a W-2 to show your income for the year. If you are self-employed, you will need a 1099 or a Schedules K-1. In addition to this, you will need access to a record of all your business expenses.

Rental Income

If you have rental properties, you will be required to report your rental property income. You will need a record of all income and expenses, your rental asset information, and a record of estimated tax payments made. This will be on a Form 1040ES.

Retirement Income

Any retirement income will be reported on a Form 1099-R. If you have a traditional IRA, you must provide the amounts you contributed to the IRA that were already taxed. If you have social security or RRB income, you must have Forms 1099-SSA or RRB-1099.

Savings & Investments and Dividends

Interest earned on investments is taxable income. For this, you will need Forms 1099-INT, 1099-OID, or 1099-DIV. Other forms that fall into this category include: 1099-B, 1099-S, 1099-SA, 1099-LTC, or 1099-ES to show any record of tax payments that have already been made.

Documentation for Other Income & Losses

Other documentation you need is to show income from gambling, jury duty, hobby income and expenses, prizes and awards, trusts, royalty income (1099 Misc.), any other 1099’s received, and records of alimony either paid or received with your ex-spouse’s information.

Documentation for Deductions

For home ownership deductions you will need a 1098 or other mortgage interest statements. For your charitable contribution deductions, you will just need the total cash and non-cash amounts that were donated. Most charities will provide you a receipt with this amount on it. Receipts from medical expenses are also needed for this section of your tax return. Childcare fees are also able to be claimed as a deduction. Receipts for these expenses are all you need for proof of childcare expenses. If you paid any student loan interest during the year, you should be provided with a 1098-E form. Any other educational expenses are provided on a 1098-T form.

Health Insurance

To show that you had health insurance, you will need one of the following forms: Form 1095-A, Form 1095-B, Form 1095-C, or an ECN. An ECN is a marketplace exemption certificate if you received an exemption from the Marketplace (Exchange).

Retirement & Other Savings Contributions

If you have HSA contributions, you will receive a Form 5498-SA. For IRA contributions, you will receive a Form 5498. The other 5498 series forms include 5498-QA and 5498-ESA.

Get your tax refund on your own time. Visit our AnyTime Tax Refund and Tax Refund Advance to see how RefundNote® can help you.

How to Do Your Own Taxes

How to Do Your Own Taxes

Preparing and filing your own taxes can be a daunting task. If you don’t know what you’re doing it can seem overwhelming and impossible. Here are a few tips on how to prepare and file your own tax return.

Filing Status

One of the first things you will want to do is determine your filing status. Your options include: single, married filing jointly, married filing separately, head of household, or qualifying widow(er) with dependent child. Once you determine your filing status, you can begin to gather all the information and documents you need. You will need social security numbers for each person that is going to be included on your tax return. This includes yourself, your spouse, and your dependents. You will also need any tax or income related forms from the year in which you are filing. You will also need health insurance documents to show whether or not you had insurance for the entire year.

Deductions

Next you will want to go through and check your deductions. Tax deductions lower your tax liability by lowering your taxable income. Deductions are usually expenses that you have paid throughout the year that can be applied against or subtracted from your gross income when trying to figure out how much tax is owed. A few examples of deductions are state sales taxes, charitable contributions, and student loan interest that was paid. There is a long list of possible deductions, so make sure you check to see which deductions you qualify for. If you take your time on this part and do your research, you may be able to decrease the amount owed for taxes.

Income

It is very important to report all your income from the year on your tax return. Every penny you earn throughout the year is taxable income and it all must be reported. You may or may not receive a tax document related to some of your income, but it still must be reported. Taxable income may include (but is not limited to): profits from stocks or real estate sales, winnings from the lottery, betting on dogs or horses, casino winnings, and your regular annual salary. You must be very honest in this section.

Filing Your Tax Return

The last step to doing your own taxes is to actually file your tax return. You can do this electronically or by sending in a paper copy to the IRS via mail. You need to be aware of the tax deadline and when you need to have your taxes submitted by to avoid paying penalties and interest. Some people may choose not to file electronically because it makes them nervous having all their personal information submitted on the internet, while others may prefer filing electronically because of the quick turnaround time from the IRS. Either way, it’s up to you and however you feel most comfortable. Before submitting your tax return, make sure you double check all your information. If you submit an incomplete or incorrect tax return, your refund could be significantly delayed.

Get your tax refund on your own time. Visit our AnyTime Tax Refund and Tax Refund Advance to see how RefundNote® can help you.

10 Easy Budgeting Tips to Save Money

10 Easy Budgeting Tips to Save Money

10 Easy Budgeting Tips to Save Money

It is the dream of every person to have financial freedom. This means having enough money saved as well as passive incomes. It is therefore a good decision to start saving early so you may be able to implement some of your financial goals. Here are some tips for saving money.

1.    Set a budget

Setting a budget ensures that you have full control of your expenditure. Set a realistic budget that you can strictly adhere to. Your budget should not exceed your total income, and your savings should be part of the budgeting.

2.    Record your expenses

It is a good idea to record your expenses so you can track your money. For instance, knowing how much you spent on food, entertainment, or medical bills allows you to be financially savvy and avoid wondering where you spent your money.

3.    Set a percentage of total income aside

The general rule of thumb on how to make a budget is to use the 50/30/20 rule. That is, 50% of your income on general recurrent expenditure such as food, rent, or transport, 30% on lifestyle expenses such as entertainment, and 20% on savings. Ensuring you stick to this rule will save you the struggle.

4.    Cut down on expenses

If you find you spend too much leaving no room for savings, you have to cut down on expenses. If you spend too much on food, you have to reduce your budget for food. If it’s rent, move to a cheaper house. If it’s entertainment, you have to cut down. Your savings should come first before your expenses.

5.    Set a target for saving

Having a goal for savings gives you the motivation to keep on saving. If you set a target to buy a house, then by all means, you will try your best to save and avoid distractions. Also, avoid taking money from your savings when emergencies arise. That only draws you back.

6.    Set your priorities right

As stated, your savings should come even before your expenses. Things like entertainment and eating out should only be budgeted for after you have set aside your savings. Furthermore, medical bills should be high on your priority list before things like going out.

7.    Use the right tools

Having the right savings tools can help you a great deal if you’re looking to save. For example, having a fixed deposit account where you can’t withdraw your money until a certain maturity date will help you develop a saving culture. You can also use savings calculators from various banks that help you determine how much you should save.

8.    Make saving automatic

The best way to always ensure you set aside your savings is by making it automatic. This can be done by having automatic prepayments where money can be sent to your savings account without needing approval. This way, you only have your expenses to budget for.

9.    Hire a financial professional

If you’re dealing with huge sums of money, then hiring a professional can save you the stress. Their experience allows them to give you reliable advice on saving.

10. Keep off from your savings

As stated, avoid using your savings for unintended purposes other than accomplishing your goals. Unless it’s an emergency, which should be in your budgeting by the way, your savings should only be for accomplishing the targets you set yourself. Is it for retirement? For buying a house? Whatever the case, let your savings be and watch your money grow.

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