If there is one thing you don’t want to forget when preparing your taxes, IT’S CREDITS. I repeat, you want to receive as many credits as you qualify for, this is one of the main reasons, you shouldn’t go at it alone. Many taxpayers that fail to use a tax preparer miss these very important credits because they change and vary from year to year. For a full list of available credits visit theIRSwebsite, three of the most popular are Earned Income Tax Credit (EITC), Child Tax Credit and Child & Dependent Care Credit.

First off, a tax credit is more valuable than a tax deduction of the same amount because a tax credit reduces tax directly, while a deduction or allowance only reduces taxable income and so the reduction in tax is only a fraction of the deduction or allowance.

There are two types of credits, refundable and nonrefundable. Refundable can reduce the tax owed below zero and result in a net payment to the taxpayer more than their own payments into the tax system. (Ex. EITC and child tax), non-refundable cannot reduce the tax owed below zero, and hence cannot cause a taxpayer to receive a refund in excess of their payments into the tax system. (Ex. Child and Dependent Care Credit).

To qualify for the EITC, you must earn less than $37K with two child dependents, less than $33K with one child and yes you can still qualify for EITC if you don’t have any dependents as long as you earn less than $12,500. With the Child tax credit you can qualify for $1000 per child under 17, the portion that is not used to reduce any tax owed can be refunded to the taxpayer.

So go ahead to get those credits.

With the standard deduction, every taxpayer is allowed to use this option. Standard assumes you have an “average” amount of tax-deductible expenses, and lumps them into one easy sum based on your circumstances. With itemized, you list all your expenses individually and this can save you hundreds to thousands of dollars more than the standard deduction, if when they are totaled your expenses are more than what your standard would be.

Itemized deductions are:
* Charitable donations
* Medical costs
* Interest payments
* Investment losses
* Gambling losses
* Certain legal fees
* Property lost to theft
* Casualty losses
* Expenses for your employer or business that were not reimbursed
* Estate tax payments

In general, you should claim whichever of the two deduction methods saves you the most money. If your itemized deductions are greater than the standard deduction, you should probably itemize. If the standard deduction is greater, claim the standard deduction.

For more information check out, tax deductions

One of the most important choices you have to make as a taxpayer is to know what filing status is best for you. This determines the rate at which your income is taxed, there are 5 statuses available so choose wisely.

Single — you are unmarried, legally separated or divorced and you do not qualify for another filing status.

Married Filing Jointly — you are married and both you and your spouse agree to file a joint return. You must included all income, you can still file joint if only one spouse work.

Married Filing Separately — you must be married, should be last result, only if you have no other option that applies to you should you use this status. This method may benefit you if you want to be responsible only for your own tax, you know your spouse owes or if this method results in less tax than a joint return. If you and your spouse do not agree to file a joint return, you may have to use this filing status.

Head of Household — there are a couple qualifications you have to meet for this status: 1. You have to be single and you paid more than half the cost of keeping up a home for the year. 3. A qualifying person lived with you in the home for more than half the year (except temporary absences, such as school). However, your dependent parent does not have to live with you.

Qualifying Widow(er) — your spouse died in 2008, you can use married filing jointly as your filing status for 2008 if you otherwise qualify to use that status. The year of death is the last year for which you can file jointly with your described spouse. You may be eligible to use qualifying widow(er) with dependent child as your filing status for two years following the year of death of your spouse. This filing status entitles you to use joint return tax rates and the highest standard deduction amount (if you do not itemize deductions). This status does not entitle you to file a joint return.

Most accountants and tax preparers dreaded when clients schedule an appointment, than arrive with not one but at least two shoe boxes full of documents. Ranging from invoices, receipts, credit card statements, etc. etc. I immediately categories them as “My Shoe Box Crew”, and from that point on I know to schedule their appointment for a Friday where my weekend will be slow, lol.

Being unorganized is not only careless it can be costly. Because of the time it takes to sort through and than arrange all the papers into a manageable situation, you’re absolutely going to be charged a higher tax preparation fee. Because as they say time is money, if you don’t have time to deal with it than you must have the money to pay someone else to do it. Because believe me you want it manageable!

But “My Shoe Box Crew” aren’t the only ones driving my up the wall. Next in line are “My Cutting it Close Crew”, these are my clients that every year wait to the last minute, when I say last minute I mean April, 12th, 13th or14th. And they all know what category they fall in because I tell them their status as soon as they walk in.

We all know procrastination is never good, but with taxes it should fall in line with other evil-doings. Many of my colleagues will turn you down, because of the stress, risk of mistakes and there’s a strong possibility of overlooked tax savings.

So when’s the best time to file? Early February but no later than late March. Even if you owe, at least you’ll know how much and you have until April 15th to pay it. I love “My Get In, Get Out Crew”, they come early, get it done, get their refund and don’t speak to me no more until October, just to make sure I’m getting ready for the next year. Well, unless I owe them for referrals, lol.

After verifying whether you should file a tax return, your next step is to gather your personal and financial information. Your employer is required by law to mail your W2 on by January 31st. It’s important to have a W2 and / or 1099 for each job you worked the year prior. Here’s what you do if you are missing some of your documents.

Did you get your W-2 or All 1099s? I repeat these documents are essential to filling out your tax returns. So if you haven’t receive them when you’re ready to file:

1. Contact your employer to see when it was mailed and to what address. Request them to resend it to your current address.

2. Contact the IRS, I know this is scary but if you still do not receive your W-2 by February 17th you have no choice. Provide them your with employer’s name and address, your name, address and social security number. Also have available your gross year to date wages, you can find this amount on your final pay stub.

3. Lastly file your return and advise your preparer of the steps you’ve taken. They are allowed to use Form 4852, Substitute for Form W-2, Wage and Tax Statement to complete the preparation process.

With the “Tax Day” deadline getting closer and closer here’s a tax tip to help those that procrastinate for the inevitable. The first question you should is do I have to file a tax return?

For example, a married couple both under age 65 generally is not required to file until their joint income reaches $17,900. However, self-employed individuals generally must file a tax return if their net income from self employment was at least $400.

Even if you don’t have to file, here are six reasons why you may want to file:

1. Federal Income Tax Withheld. If you are not required to file, you should file to get money back if Federal Income Tax was withheld from your pay, if you made estimated tax payments, or had a prior year overpayment applied to this year’s tax.

2. Recovery Rebate Credit. If you did not qualify or did not receive the maximum amount for the 2008 Economic Stimulus Payment, you may be entitled to a Recovery Rebate Credit when you file your 2008 tax return.

3. Earned Income Tax Credit. You may qualify for the Earned Income Tax Credit, or EITC, if you worked, but did not earn a lot of money. EITC is a refundable tax credit meaning you could qualify for a tax refund.

4. Additional Child Tax Credit. This credit may be available to you if you have at least one qualifying child and you did not get the full amount of the Child Tax Credit.

5. First time Homebuyer Credit. If you bought a main home after April 8, 2008, and before July 1, 2009 and did not own a main home during the prior 3 years, you may be able to take this refundable credit.

6. Health Coverage Tax Credit. Certain individuals, who are receiving certain Trade Adjustment Assistance, Alternative Trade Adjustment Assistance, or pension benefit payments from the Pension Benefit Guaranty Corporation, may be eligible for a Health Coverage Tax Credit when you file your 2008 tax return.

No this is not an April Fools joke, ya girl is back at it with this blogging stuff. As you all know I operate a tax business and tax season this year was mad crazy. With the recession in full effect my clients wanted their money like yesterday and I was getting it to them just that fast.

But anywho, I figured with the Tax Day deadline quickly approaching there was no better day than April 1st to jump back into the swing of things.

Stay tuned for a bigger, bolder, better blog. Thanks for sticking in this with me!

Yours Truly,
LaQuitta

How to choose a Tax Return Preparer, according to the gov-ment?

Many people use a professional tax return preparer to help them with their tax returns. If you plan to use a return preparer this year, be careful when you choose one –– as careful as you would be choosing a doctor or lawyer.

Even when someone else prepares your tax return, you, the taxpayer, are ultimately responsible for all the information on the return. For that reason, you should thoroughly review the completed return before signing it and ask questions on entries you don’t understand. Never sign a blank tax form.

Most tax return preparers provide honest service to their clients. But it’s always a good idea to be careful. When seeking someone to prepare your tax returns:

* Be cautious of tax preparers who claim they can obtain larger refunds than other preparers.

* Avoid preparers who base their fee on a percentage of the refund.

* Use a tax professional who signs the completed tax return and provides you a copy.

* Consider whether the individual or firm will be around to answer questions months, or even years, after the return has been filed.

* Check credentials. Only attorneys, certified public accountants (CPAs) and enrolled agents can represent taxpayers before the IRS in all matters, including audits, collection and appeals. Other return preparers may only represent taxpayers for audits of returns they actually prepared.

* Find out if the preparer is affiliated with a professional organization that provides its members with continuing education and holds them to a code of ethics.

* Ask friends and family whether they know anyone who has used the tax professional and whether they were satisfied with the service they received.

Reputable preparers will ask to see receipts and other documentation and will ask numerous questions to determine whether expenses, deductions and other items qualify. By doing so they are trying to help you avoid penalties, interest or additional taxes that could result from an IRS audit.

Check out Terrell Tax & Planning or IRS for more tax information

Sometime it seems with Diddy all things are possible, so when you stepped to the mayor of New York City offering $1 million to change the NYE ball to blue. I thought it was a go, especially since New York seems to be having some difficult financial times. Check out previous refund post. From a business standpoint it’s brilliant, nobody hypes their products more or is as lavish as Diddy. He’s already plastered massive and numerous billboard in Times Square. Also he seems to think Circo is the ‘Official Vodka of New Year’s Eve’, I’m sure local new yorkers and the million visitors would love to be apart of a Diddy party.

The blue color Diddy wants to tranform the apple to has historic meaning, according to Livesteez it traces back to the “pastel” plant that was once native to the Gaillac region of France. The dye produced from the plant was commonly used for painting and clothes during the 15th and 16th centuries. Its distinctive look eventually made the dye a symbol of wealth in the region, and earned it the phrase “Pays de Cocagne,” meaning “the land of plenty.” Diddy told AllHipHop.com, “Having this iconic blue stone sit atop the New York skyline on New Year’s Eve is my way of wishing New York a fruitful New Year.”

But obviously NOT. According to The NY Post, the mayor and all others involved is not that impressed with Diddy, Ciroc or his offer cause he flat out turned down the mill.

Why he gotta throw people in foreclosure, the homeless and the public school systems business in this? How can anybody change the ball to blue, it’s the Big Apple, Apples are Red, Diddy, Red. This had to be a joke, right? I mean really these events are planned a year or so ahead of time, how he gone wait til three or fours days before everything is to happen and threw a million dollar curve ball. What businessman offers a million dollar deal on You Tube, Puff is too much sometimes. I’m so over him. Check out his Video Channel and request below:

On the low, I heard Ciroc mixed with lemonade ( referred to as “The Diddy”), goes down real nice. But y’all didn’t hear that from me. Drink Responsibly!

With Katrina coming through and disabling the NO, it seems Detroit has unwilling stepped up to the place to replace it as America’s most beleaguered city. And I’m not just talking about their football team, Detroit Lions, who had the worst record in NFL history 0-16, this year or their ex-mayor being in the slammer for lying under oath about creeping around with a city council member. It’s the unemployment rate being 21%, the school district faltering and even criminals choosing to stay in jail, simply because they are better off in jail than their communities. I mean at least you’re guaranteed three meals a day and somewhere to sleep, who cares if it’s slop and on a concrete floor, it’s free!

Many feel this meltdown is sphere headed by the auto industry financial issues, check out Bossip, I mean it is the “Motor City”, 83% of the population is African American and the recession, is taking no prisoners for many Detroit citizens.

According to The Huntington Post, car companies were hardly multiracial utopias, but they, especially Ford, employed blacks when many industries would not. Through the decades, the automakers and their higher wage scales provided a route to the middle class for many blacks, especially those with limited education, and their children. Now, with Detroit reeling, many blacks find their economic well-being threatened. By last month, nearly 20,000 African-American auto workers had lost jobs, a 13.9 percent decline in employment, since the recession began last December.