Archive for January, 2011

LDR Statement on Electronic Filing of Extensions

The Louisiana Department of Revenue (LDR) announced Thursday that it will not require the electronic filing of corporate and individual income tax extensions and payments for 2010 tax returns due in 2011.

On November 20, 2010 notices of intent for LAC 61:III.1503, LAC 61:III.1505, LAC 61:III.2501 and LAC 61:III.2503 were published in the Louisiana Register. The proposed rules would have required electronic filing of corporate and individual income tax extensions and extension payments beginning with returns due on or after January 1, 2011. LDR will not proceed with rulemaking for these four notices of intent.

LDR does intend to mandate electronic corporate and individual income tax extensions and extension payments beginning with the 2012 filing season/2011 tax year. The department will publish an advance notice of proposed rulemaking in the Potpourri section of the March or April 2011 issue of the Louisiana Register to allow stakeholders to participate in the rulemaking process well before the implementation date.

LDR encourages all taxpayers and tax professionals to take advantage of the benefits of electronic filing of extensions and extension payments.  For more information about electronic filing and payment options, including extensions and bulk filing, visit the LDR E-services page at revenue.louisiana.gov.

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IRS launches IRS2Go app for iPhone, Android

IR-2011-8, Jan. 24, 2011

WASHINGTON — The Internal Revenue Service today unveiled IRS2Go, its first smartphone application that lets taxpayers check on their status of their tax refund and obtain helpful tax information.

“This new smart phone app reflects our commitment to modernizing the agency and engaging taxpayers where they want when they want it,” said IRS Commissioner Doug Shulman. “As technology evolves and younger taxpayers get their information in new ways, we will keep innovating to make it easy for all taxpayers to access helpful information.”

The IRS2Go phone app gives people a convenient way of checking on their federal refund. It also gives people a quick way of obtaining easy-to-understand tax tips.

Apple users can download the free IRS2Go application by visiting the Apple App Store. Android users can visit the Android Marketplace to download the free IRS2Go app.

“This phone app is a first step for us,” Shulman said. “We will look for additional ways to expand and refine our use of smartphones and other new technologies to help meet the needs of taxpayers.”

The mobile app, among a handful in the federal government, offers a number of safe and secure ways to help taxpayers. Features of the first release of the IRS2Go app include:

Get Your Refund Status

Taxpayers can check the status of their federal refund through the new phone app with a few basic pieces of information. First, taxpayers enter a Social Security number, which is masked and encrypted for security purposes. Next, taxpayers pick the filing status they used on their tax return. Finally, taxpayers enter the amount of the refund they expect from their 2010 tax return.

For people who e-file, the refund function of the phone app will work within about 72 hours after taxpayers receive an e-mail acknowledgement saying the IRS received their tax return.

For people filing paper tax returns, longer processing times mean they will need to wait three to four weeks before they can check their refund status.

About 70 percent of the 142 million individual tax returns were filed electronically last year.

 Get Tax Updates

Phone app users enter their e-mail address to automatically get daily tax tips. Tax Tips are simple, straightforward tips and reminders to help with tax planning and preparation. Tax Tips are issued daily during the tax filing season and periodically during the rest of the year. The plain English updates cover topics such as free tax help, child tax credits, the Earned Income Tax Credit, education credits and other topics.

Follow the IRS

Taxpayers can sign up to follow the IRS Twitter news feed, @IRSnews. IRSnews provides the latest federal tax news and information for taxpayers. The IRSnews tweets provide easy-to-use information, including tax law changes and important IRS programs.  

IRS2Go is the latest IRS effort to provide information to taxpayers beyond traditional channels. The IRS also uses tools such as YouTube and Twitter to share the latest information on tax changes, initiatives, products and services through social media channels. For more information on IRS2Go and other new media products, visit www.IRS.gov.

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IRS: Six things you need to know about Gulf Oil Spill payments

The Internal Revenue Service has this advice for individuals and businesses that received payments from lost income resulting from the Gulf of Mexico oil spill. 

  1. Payments received from the Gulf Coast Claim Fund (GCCF), British Petroleum (BP) and Vessels of Opportunity Program (VOP) as a result of the BP oil spill are taxable if the payments are for lost business income, lost wages or lost profits.
  2. These companies will send you a 1099 or a W-2 and will also provide a copy of these forms to the IRS.
  3. Some individuals who received these payments may have opted to make quarterly estimated tax payments in 2010. While Tuesday, Jan. 18 was the last day to make an estimated tax payment for 2010, if you file your 2010 federal income tax return by Jan. 31, 2011 and pay the total taxes due, you may avoid any penalties you might otherwise have faced for underpayment of taxes.
  4. Whether or not you made estimated tax payments in 2010, it is important to file your 2010 federal income tax return by April 18, 2011 (this year’s tax filing deadline for filing 2010 tax returns).
  5. After completing your tax return, if you find that you owe money and cannot pay, the IRS will work with you.  
  6. Contact the IRS’s special toll-free phone line for Gulf Oil Spill related tax questions at 866-562-5227. The special services phone line operates weekdays from 7 a.m. to 10 p.m. local time.

 For more information, visit the Gulf Oil Spill Information Center on IRS.gov.

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LDR Video: Louisiana Wind & Solar Energy Tax Credit

State tax credits can help to offset the cost of installing wind and solar energy systems.

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Louisiana tax filing deadline is May 16, 2011

BATON ROUGE – This year’s filing deadline for 2010 Louisiana Individual Income Tax Return forms is Monday, May 16, 2011, the Louisiana Department of Revenue announced Friday.

The deadline is May 15 ordinarily, but that date falls on a Sunday this year.  Therefore, the filing deadline is extended to the next business day, May 16.

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‘IRS Kicks Off 2011 Tax Season with Deadline Extended to April 18; Taxpayers Impacted by Recent Tax Breaks Can File Starting in Mid- to Late February ‘

IR-2011-1,

Jan. 4, 2011

WASHINGTON — The Internal Revenue Service today opened the 2011 tax filing season by announcing that taxpayers have until April 18 to file their tax returns. The IRS reminded taxpayers impacted by recent tax law changes that using e-file is the best way to ensure accurate tax returns and get faster refunds.

Taxpayers will have until Monday, April 18 to file their 2010 tax returns and pay any tax due because Emancipation Day, a holiday observed in the District of Columbia, falls this year on Friday, April 15. By law, District of Columbia holidays impact tax deadlines in the same way that federal holidays do; therefore, all taxpayers will have three extra days to file this year. Taxpayers requesting an extension will have until Oct. 17 to file their 2010 tax returns.

The IRS expects to receive more than 140 million individual tax returns this year, with most of those being filed by the April 18 deadline.

The IRS also cautioned taxpayers with foreign accounts to properly report income from these accounts and file the appropriate forms on time to avoid stiff penalties.

“The IRS has made important strides at stopping tax avoidance using offshore accounts,” said IRS Commissioner Doug Shulman. “We continue to focus on offshore tax compliance and people with offshore accounts need to pay taxes on income from those accounts.”

The IRS also reminded tax professionals preparing returns for a fee that this is the first year that they must have a Preparer Tax Identification Number (PTIN). Tax return preparers should register immediately using the new PTIN sign-up system available through www.IRS.gov/taxpros.

Who Must Wait to File

For most taxpayers, the 2011 tax filing season starts on schedule. However, tax law changes enacted by Congress and signed by President Obama in December mean some people need to wait until mid- to late February to file their tax returns in order to give the IRS time to reprogram its processing systems.

Some taxpayers – including those who itemize deductions on Form 1040 Schedule A – will need to wait to file. This includes taxpayers impacted by any of three tax provisions that expired at the end of 2009 and were renewed by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act Of 2010 enacted Dec. 17. Those who need to wait to file include:

  • Taxpayers Claiming Itemized Deductions on Schedule A. Itemized deductions include mortgage interest, charitable deductions, medical and dental expenses as well as state and local taxes. In addition, itemized deductions include the state and local general sales tax deduction that was also extended and which primarily benefits people living in areas without state and local income taxes. Because of late Congressional action to enact tax law changes, anyone who itemizes and files a Schedule A will need to wait to file until mid- to late February.
  • Taxpayers Claiming the Higher Education Tuition and Fees Deduction. This deduction for parents and students – covering up to $4,000 of tuition and fees paid to a post-secondary institution – is claimed on Form 8917. However, the IRS emphasized that there will be no delays for millions of parents and students who claim other education credits, including the American Opportunity Tax Credit extended last month and the Lifetime Learning Credit.
  • Taxpayers Claiming the Educator Expense Deduction. This deduction is for kindergarten through grade 12 educators with out-of-pocket classroom expenses of up to $250. The educator expense deduction is claimed on Form 1040, Line 23 and Form 1040A, Line 16.

In addition to extending those tax deductions for 2010, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act also extended those deductions for 2011 and a number of other tax deductions and credits for 2011 and 2012 such as the American Opportunity Tax Credit and the modified Child Tax Credit, which help families pay for college and other child-related expenses. The Act also provides various job creation and investment incentives including 100 percent expensing and a two-percent payroll tax reduction for 2011. Those changes have no effect on the 2011 filing season.

The IRS will announce a specific date in the near future when it can start processing tax returns impacted by the recent tax law changes. In the interim, taxpayers affected by these tax law changes can start working on their tax returns, but they should not submit their returns until IRS systems are ready to process the new tax law changes. Additional information will be available at www.IRS.gov.

For taxpayers who must wait before filing, the delay affects both paper filers and electronic filers. The IRS urges taxpayers to use e-file instead of paper tax forms to minimize confusion over the recent tax law changes and ensure accurate tax returns.

Except for those facing a delay, the IRS will begin accepting e-file and Free File returns on Jan. 14. Additional details about e-file and Free File will be announced later this month.

Many Ways to Get Assistance

The IRS is also continuing to focus on taxpayer service. Taxpayers with questions should check the IRS website at www.IRS.gov, call our toll-free number or visit a taxpayer assistance center.

This is also the first filing season that tax packages will not be mailed to individuals or businesses. There are still many options for taxpayers to get paper forms and instructions if they need them. In recent years, fewer and fewer taxpayers received these mailings. Last year, only 8 percent of individuals who filed tax returns received tax packages in the mail. Taxpayers can still get any forms and instructions they need online at www.IRS.gov, or they can visit local IRS offices or participating libraries and post offices.

In addition, individuals making $49,000 or less can use the Volunteer Income Tax Assistance program for free tax preparation and, in many cases, free electronic filing. Individuals age 60 and older can take advantage of free tax counseling and basic income tax preparation through Tax Counseling for the Elderly.

IRS Free File provides options for free brand-name tax software or online fillable forms plus free electronic filing. Everyone can use Free File to prepare a federal tax return. Taxpayers who make $58,000 or less can choose from approximately 20 commercial software providers. There’s no income limit for Free File Fillable Forms, the electronic version of IRS paper forms, which also includes free e-filing.

Check for a Refund

Once taxpayers file their federal return, they can track the status of their refunds by using the “Where’s My Refund?” tool, located on the front page of www.IRS.gov. Taxpayers can generally get information about their refunds 72 hours after the IRS acknowledges receipt of their e-filed returns, or three to four weeks after mailing a paper return.

Taxpayers need to provide the following information from their tax returns: (1) Social Security Number or Individual Taxpayer Identification Number, (2) filing status, and (3) the exact whole dollar amount of your anticipated refund. If the U.S. Postal Service returns the taxpayer’s refund to the IRS, the individual may be able to use “Where’s My Refund?” to change the address the IRS has on file, online.

Also, taxpayers may complete a Form 8822, Change of Address, and send it to the address shown on the form. They may download Form 8822 from www.IRS.gov or order it by calling 800-TAX-FORM. Generally, taxpayers can file an online claim for a replacement check if more than 28 days have passed since the IRS mailed their refund.

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Report: ‘New rules start for tax preparers’

Gannett reports on new federal rules for tax preparers. The first rule to take effect: paid preparers must register with the IRS.

It requires any paid preparer to obtain an identification number from the IRS and provide the agency with the preparer’s business address, professional certifications and the previous year’s personal tax returns.

It’s a move to reel in an industry the IRS and legitimate tax-preparing firms say has been a breeding ground for fraud.

“This will help to eliminate some of the fly-by-nights,” said Greg Storen, owner of Storen Financial Group in Brownsburg, Ind. “Before, you could hang a shingle out, know nothing about taxes and start doing returns. There was nothing to stop you.”

The IRS hopes the number, officially called the Preparer Tax Identification Number, or PTIN, is the first step in holding the industry accountable.

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