Tax Tips
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KEEPING GOOD RECORDS

You can avoid headaches at tax time by keeping track of your receipts and other records throughout the year. Good record-keeping will help you remember the various transactions you made during the year, which in turn may make filing your return a less taxing experience.

Records help you document the deductions you’ve claimed on your return. You’ll need this documentation should the IRS select your return for examination. Normally, tax records should be kept for at least three years after it appears on your tax return, but some documents — such as records relating to a home purchase or sale, stock transactions, IRA and business or rental property — should be kept longer.

In most cases, the IRS does not require you to keep records in any special manner. Generally speaking, however, you should keep any and all documents that may have an impact on your federal tax return:

Good record-keeping throughout the year saves you time and effort at tax time when organizing and completing your return. If you hire a paid professional to complete your return, the records you have kept will assist the preparer in quickly and accurately completing your return.

For more information on what kinds of records to keep, see IRS Publication 552, Recordkeeping for Individuals, which is available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

APPEAL RIGHTS

Are you in the middle of a disagreement with the IRS? If you disagree with the IRS about the amount of your tax liability or about proposed collection actions, you have the right to ask the IRS Appeals Office to review your case.

IRS Publication 1, Your Rights as a Taxpayer, explains some of your most important taxpayer rights. During their contact with taxpayers, IRS employees are required to explain and protect these taxpayer rights, including the right to appeal.

The Appeals Office, which is independent of the IRS office that proposed the disputed action, can work with taxpayers by correspondence, telephone, or informal conferences.

Through Appeals procedures, taxpayers can settle most differences without expensive and time-consuming court trials. However, if you and the Appeals Officer or Settlement Officer cannot reach agreement or if you prefer not to appeal within the IRS, in most cases, you may take your disagreement to federal court.

For more information about Appeals and its processes, go to the IRS Web site at IRS.gov and select the link to “Appeal a Tax Dispute”, which is found at the bottom of the page. This website assists you in determining if you are ready for Appeals, how to request an appeal, and what you can expect from Appeals. The site also provides easy to use online self-help tools designed to help you focus on your area of dispute and to determine if you will benefit from filing an appeal.

For additional information about Appeals, this website contains informative online video streams entitled “The Appeals Process (Examination)” and “The Appeals Process (Collection).”

Information is also available in IRS Publication 5, Your Appeal Rights and How to Prepare a Protest If You Don't Agree; Pub. 556, Examination of Returns, Appeal Rights, and Claims for Refund; and Pub. 1660, Collection Appeal Rights (for Liens, Levies, and Seizures). To get copies of IRS publications, visit the IRS Web site at IRS.gov or call 800-TAX-FORM (800-829-3676).

PAYMENT OPTIONS

If you cannot pay the full amount of taxes you owe by the April deadline, you should still file your return by the deadline and pay as much as you can to avoid penalties and interest. There are also alternative payment options to consider:

For more information about filing and paying your taxes, visit the IRS Web site at IRS.gov and choose “1040 Central” or refer to the Form 1040 Instructions or IRS Publication 17, Your Federal Income Tax. You can download forms and publications at IRS.gov or request a free copy by calling toll free 800-TAX-FORM (800-829-3676).

BEWARE OF TAX SCAMS

Don’t fall victim to tax scams. These schemes take several shapes, ranging from promises of large tax refunds to illegal ways of “untaxing” yourself.

The IRS suggests that you remember three important guidelines:

Beware of these common schemes:

Telephone Tax Refund Abuse:

Encouraged by tax preparers, some individual taxpayers have requested large and apparently improper amounts for the special telephone tax refund. In some cases, taxpayers appear to be requesting a refund of the entire amount of their phone bills, rather than just the three-percent tax on long-distance and bundled service to which they are entitled. The IRS is investigating potential abuses in this area and will take prompt action against taxpayers who claim improper refund amounts and against the return preparers who help them. You may request a refund on your 2006 tax return if you paid long distance telephone excise taxes after February 28, 2003 and before August 1, 2006. For most taxpayers the telephone tax refund will be $30 to $60.

Return Preparer Fraud:

Dishonest tax return preparers can cause many headaches for taxpayers who fall victim to their ploys. Such preparers derive financial gain by skimming a portion of their clients’ refunds and charging inflated fees for return preparation services. They attract new clients by promising large refunds. Choose carefully when hiring a tax preparer. As the saying goes, if it sounds too good to be true, it probably is. No matter who prepares your tax return you are ultimately responsible for its accuracy and for any tax bill that may arise due to a questionable claim.

Identity Theft:

It pays to be choosy when it comes to disclosing personal information. Identity thieves have used stolen personal data to access financial accounts, run up charges on credit cards and apply for new loans. The IRS is aware of several identity theft scams involving taxes or scammers posing as the IRS itself. The IRS does not use e-mail to contact taxpayers about issues related to their accounts. If you have any doubt whether a contact from the IRS is authentic call 800-829-1040 to confirm it.

Frivolous Arguments:

Promoters have been known to make outlandish claims that the Sixteenth Amendment concerning congressional power to establish and collect income taxes was never ratified; that wages are not income; that filing a return and paying taxes are merely voluntary; and that being required to file Form 1040 violates the Fifth Amendment right against self-incrimination or the Fourth Amendment right to privacy. Don’t believe these or other similar claims. Such arguments are false and have been thrown out of court. Taxpayers have the right to contest their tax liabilities in court but no one has the right to disobey the law.

For more information about these and other tax scams visit the IRS Web site at IRS.gov.

TIPS FOR DEDUCTING CHARITABLE CONTRIBUTIONS

When preparing to file your federal tax return, don’t forget your contributions to charitable organizations. Your donations could add up to a sizeable tax deduction if you itemize on IRS Form 1040, Schedule A.

Here are a few tips to ensure your contributions pay off on your tax return:

For more information, check out Publication 526, Charitable Contributions, which is available at IRS.gov or by calling 1-800-TAX-FORM (1-800-829-3676).

MAKING TAX PAYMENTS CORRECTLY

When filing your return, remember to make sure your tax payment check or money order is payable to the "United States Treasury."

Whether you are filing your current year’s return, a prior year’s return or an amended return, always provide your correct name, address, Social Security number, daytime telephone number, tax year and form number on the front of your check or money order. Enclose your payment with your return, but do not staple it to the form. Do not mail cash with your tax return.

If you have a balance due on your 2005 Form 1040, complete and include Form 1040-V, Payment Voucher, when sending your payment and tax return to the IRS. This will help the IRS process your payment more accurately and efficiently.

If you are paying by electronic debit of your bank account, you will need to know your account number and your financial institution’s routing number. You can check with your financial institution to make sure that an electronic withdrawal is allowed and to get the correct routing and account numbers.

If you are paying by credit card, call toll free or visit the Web site of either service provider listed below and follow the instructions:

The service providers charge a convenience fee which may vary between the providers. You will be told what the fee is during the transaction and you will have the option to either continue or cancel the transaction. You can also find out what the fee will be by calling the provider’s toll-free automated customer service number or visiting the provider’s website. You will be given a confirmation number at the end of the call.

For more information, call toll free 1-800-829-4477 to check out TeleTax Topic 158, "Ensuring Proper Credit of Payments.” This information is also contained in Publication 17, Your Federal Income Tax, available at IRS.gov, as are Forms 1040-V and 1040-ES.

LAST MINUTE PAYMENT AND FILING TIPS

If you’re trying to beat the tax deadline, there are several options for last-minute help:

The extension will give you extra time to get the paperwork to the IRS, but it does not extend the time you have to pay any tax due. You have to make an accurate estimate of any tax due and pay at least 90 percent when you request an extension. You will owe interest on any amounts not paid by the April deadline.

You can also e-file an extension request using tax preparation software on your own computer or by going to a tax preparer.

If your return is completed but you are unable to pay the tax due, do not request an extension. File your return on time and pay as much as you can. The IRS will send you a bill or notice for the balance due and will charge interest and penalties only on the unpaid balance.

If you cannot pay the full amount due with your return, you can ask to make monthly installment payments for the full or a partial amount. You can request an installment agreement by completing Form 9465, Installment Agreement Request, either when you file the return or when you later get a bill from the IRS.

SALE OF YOUR HOME

If you sold your main home, you may be able to exclude up to $250,000 of gain ($500,000 for married taxpayers filing jointly) from your federal tax return. This exclusion is allowed each time that you sell your main home, but generally no more frequently than once every two years.

To qualify for this exclusion of gain, you must meet ownership and use tests.

If you and your spouse file a joint return for the year of the sale, you can exclude the gain if either of you qualify for the exclusion. But both of you would have to meet the use test to claim the $500,000 maximum amount.

If you do not meet the ownership and use tests, you may be allowed to exclude a reduced maximum amount of the gain realized on the sale of your home if you sold your home due to health, a change in place of employment, or certain unforeseen circumstances. Unforeseen circumstances include, for example, divorce or legal separation, natural or man-made disasters resulting in a casualty to your home, or an involuntary conversion of your home.

If you can exclude all the gain from the sale of your home, you do not report the gain on your federal tax return. If you cannot exclude all the gain from the sale of your home, use Schedule D, Capital Gains and Losses, of the Form 1040 to report it.

For more details and information see IRS Publication 523, Selling your Home, available at IRS.gov or by calling 1-800-TAX-FORM (1-800-829-3676).

YOU CAN STILL MAKE A 2005 IRA CONTRIBUTION

If you haven’t contributed funds to an Individual Retirement Arrangement for tax year 2005, or if you’ve put in less than the maximum allowed, you still have time to do so. You can contribute to either a traditional or Roth IRA until the April due date for filing your tax return for 2005, not including extensions.

Be sure to tell the IRA trustee that the contribution is for 2005. Otherwise, the trustee may report the contribution as being for 2006 when they get your funds.

Generally, you can contribute up to $4,000 of your earnings for 2005 or up to $4,500 if you are age 50 or older in 2005. You can fund a traditional IRA, a Roth IRA (if you qualify), or both, but your total contributions cannot be more than these amounts.

You can file your tax return claiming a traditional IRA contribution before the contribution is actually made. However, the contribution must be made by the due date of your return, not including extensions. If you report a contribution to a traditional IRA on your return, but fail to contribute by the deadline, you must file an amended tax return by using Form 1040X, Amended U.S. Individual Income Tax Return. You must add the amount you deducted to your income on the amended return and pay the additional tax accordingly.

For more information get IRS publication 590, Individual Retirement Arrangements (IRAs), available at IRS.gov or by calling 1-800-TAX-FORM (1-800-829-3676). Taxpayers who need any IRS publication should act soon to be sure they have the item in time to meet the April due date.

TIPS FOR LAST-MINUTE FILERS

With the tax filing deadline close at hand, the IRS offers some tips for those still working on their paper tax forms:

The numbers to check most carefully on the tax return are the identification numbers — usually Social Security numbers — for each person listed. This includes the taxpayer, spouse, dependents and persons listed in relation to claims for the Child Care or Earned Income Tax Credits. Missing, incorrect or illegible Social Security Numbers can delay or reduce a tax refund.

Taxpayers should also check that they have correctly figured the refund or balance due and have used the right figure from the tax table.

Taxpayers must sign and date their returns. Both spouses must sign a joint return, even if only one had income. Anyone paid to prepare a return must also sign it.

People sending a payment should make the check out to “United States Treasury” and should enclose it with, but not attach it to, the tax return or the Form 1040-V, Payment Voucher,” if used. The check should include the taxpayer’s Social Security number, daytime phone number, the tax year and the type of form filed.

By the April due date, taxpayers should either file a return or request an extension of time to file. Remember, the extension of time to file is not an extension of time to pay.

Forms and publications and helpful information on a variety of tax subjects are available around the clock on IRS.gov.

HOW TO CHECK ON YOUR TAX REFUND

If you already filed your federal tax return and are due a refund, you have several options for checking on the status of your refund.

One way is to use "Where’s My Refund?" an interactive tool on IRS.gov. Simple online instructions guide taxpayers through a process that checks the status of their refund after they provide identifying information shown on their tax return. Once the information is processed, results could be one of several responses, including:

The results also include links to customized information based on the taxpayer’s specific situation. The links guide taxpayers through the steps they need to take to resolve any issues that may be affecting their refund.

The "Where’s My Refund?" service meets stringent IRS security and privacy certifications. Taxpayers enter identifying information that includes their Social Security number, filing status and the exact amount of the refund shown on the return. This specific information verifies that the person is authorized to access that account and avoids an unsuccessful response.

"Where’s My Refund?" is accessible to visually impaired taxpayers who use the Job Access with Speech screen reader used with a Braille display and is compatible with different JAWS modes.

Additionally, you can call the IRS TeleTax System at 1-800-829-4477 or the IRS Refund Hotline at 1-800-829-1954. When you call, you will need to provide the first Social Security number shown on the return, your filing status and the amount of the refund. If the IRS processed your return, the system will tell you the date your refund will be sent. The TeleTax refund information is updated each weekend. If you do not get a date for your refund, please wait until the next week before calling back.

HOME OFFICE DEDUCTION

If you use a portion of your home for business purposes, you may be able to take a home office deduction whether you are self-employed or an employee. Expenses that you may be able to deduct for business use of the home may include the business portion of real estate taxes, mortgage interest, rent, utilities, insurance, depreciation, painting and repairs.

You can claim this deduction for the business use of a part of your home only if you use that part of your home regularly and exclusively:

Generally, the amount you can deduct depends on the percentage of your home that you used for business. Your deduction will be limited if your gross income from your business is less than your total business expenses.

If you use a separate structure not attached to your home for an exclusive and regular part of your business, you can deduct expenses related to it.

If you are self-employed, use Form 8829 to figure your home office deduction and report those deductions on line 30 of Schedule C, Form 1040. There are special rules for qualified daycare providers and for persons storing business inventory or product samples.

If you are an employee, you have additional requirements to meet. The regular and exclusive business use must be for the convenience of your employer.

For more information see IRS Publication 587, Business Use of Your Home, available at IRS.gov or by calling 1-800-TAX-FORM (1-800-829-3676).

ITEMIZERS CAN DEDUCT CERTAIN TAXES

Did you know that you may be able to deduct certain taxes on your federal income tax return? You can receive these deductions if you file Form 1040 and itemize deductions on Schedule A. Deductions decrease the amount of income subject to taxation.

There are four types of deductible non-business taxes:

  1. State and local income or sales taxes: You can choose to claim a state and local tax deduction for either income or sales taxes on your return. You can deduct any estimated taxes paid to state or local governments and any prior year's state or local income tax as long as they were paid during the tax year. If deducting sales taxes instead, you may deduct actual expenses or use the optional tables provided by the IRS to determine your deduction amount, relieving you of the need to save receipts. Sales taxes paid on motor vehicles and boats may be added to the table amount, but only up to the amount paid at the general sales tax rate.
  2. Real estate taxes: Deductible real estate taxes are usually any state, local or foreign taxes on real property. If a portion of your monthly mortgage payment goes into an escrow account and your lender periodically pays your real estate taxes to local governments out of this account, you can deduct only the amount actually paid during the year to the taxing authorities. Your lender will normally send you a Form 1098, Mortgage Interest Statement, at the end of the tax year with this information.
  3. Personal property taxes: Personal property taxes are deductible when they are based on the value of personal property, such as a boat or car. To be deductible, the tax must be charged to you on a yearly basis, even if it is collected more than once a year or less than once a year.
  4. Foreign income taxes: Generally, you can take either a deduction or a tax credit for foreign income taxes, but not for taxes paid on income that is excluded from U.S. tax.

You can find more information on non-business deductions for taxes in IRS Publication 17, Your Federal Income Tax, under Chapter 22, Taxes, which is available at IRS.gov or by calling 1-800-TAX-FORM (1-800-829-3676).

Income from Foreign Sources

IRS Tax Tip 2006-36

Many United States citizens earn money from foreign sources. These taxpayers must remember that they must report all such income on their tax return, unless it is exempt under federal law.

U.S. citizens are taxed on their worldwide income. This applies whether a person lives inside or outside the United States. The foreign income rule also applies regardless of whether or not the person receives a Form W-2, Wage and Tax Statement, or a Form 1099 (information return).

Foreign source income includes earned and unearned income, such as:

An important point to remember is that citizens living outside the U.S. may be able to exclude up to $80,000 of their 2005 foreign source income if they meet certain requirements. However, the exclusion does not apply to payments made by the U.S. government to its civilian or military employees living outside the U.S.

For more information, check out IRS Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad. It’s available on the IRS Web site at IRS.gov or by calling 1-800-TAX-FORM (1-800-829-3676)

TAXES ON Early Distributions From Retirement Plans

IRS TAX TIP 2006-35

Payments that you receive from your IRA or qualified retirement plan before you reach age 59½ are normally called ‘early’ or ‘premature’ distributions. These funds are subject to an additional 10 percent tax and must be reported to the IRS.

There are a number of exceptions to the age 59½ rule if you make an early withdrawal. Some exceptions apply only to IRAs, some only to qualified retirement plans, and some to both.

In addition to the 10 percent tax on early distributions, you generally must include the distribution in your income. If you received a distribution from an IRA, other than a Roth IRA, to which you made any nondeductible contributions, the portion of the distribution attributable to those contributions is not taxed. If you received a qualified distribution from a Roth IRA, none of the distribution is taxed. If you received a distribution from any other qualified retirement plan, the portion of the distribution attributable to your cost, not including pre-tax contributions, is not taxed.

A ‘rollover” is a way to avoid paying tax on early distributions. Generally, a rollover is a tax-free transfer of cash or other assets from an IRA or qualified retirement plan to another eligible retirement plan. An eligible retirement plan is a traditional IRA, a qualified retirement plan, or a qualified annuity plan. You must complete the rollover within 60 days after the day you received the distribution. The amount you roll over is generally taxed when the new plan pays you or your beneficiary.

For more information see IRS Publication 560, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans), Publication 575, Pension and Annuity Income, or Publication 590, Individual Retirement Arrangements (IRAs), available on IRS.govor by calling 1-800-TAX-FORM (1-800-829-3676).

What income is Taxable? Nontaxable?

Generally, most income you receive is taxable. But there are some situations when certain types of income are partially taxed or not taxed at all. A complete list is available in IRS Publication 525, Taxable and Nontaxable Income.

Some common examples of items that are not included in your income are:

  1. Adoption Expense Reimbursements for qualifying expenses
  2. Child support payments
  3. Gifts, bequests and inheritances
  4. Workers' compensation benefits
  5. Meals and Lodging for the convenience of your employer
  6. Compensatory Damages awarded for physical injury or physical sickness
  7. Welfare Benefits
  8. Cash Rebates from a dealer or manufacturer

Examples of items that may or may not be included in your income are:

  1. Life Insurance - If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy. Life insurance proceeds paid to you because of the death of the insured person are not taxable unless the policy was turned over to you for a price.
  2. Scholarship or Fellowship Grant - If you are a candidate for a degree, you can exclude amounts you receive as a qualified scholarship or fellowship. Amounts used for room and board do not qualify.

These examples are not all-inclusive. For more information, visit the IRS Web site at IRS.gov to view or download Publication 525 from the Forms and Publications section.

ARE YOUR SOCIAL SECURITY BENEFITS TAXABLE?

AT-2006-30

How much, if any, of your social security benefits are taxable depends on your total income and marital status. Generally, if social security benefits were your only income, your benefits are not taxable and you probably do not need to file a federal income tax return

If you received income from other sources, your benefits will not be taxed unless your modified adjusted gross income is more than the base amount for your filing status. Your taxable benefits and modified adjusted gross income are figured in a worksheet in the Form 1040A or Form 1040 Instruction booklet.

Before you go to the instruction book, do the following quick computation to determine whether some of your benefits may be taxable:

  1. First, add one-half of the total social security you received to all your other income, including any tax exempt interest and other exclusions from income.
  2. Then, compare this total to the base amount for your filing status.

The 2005 base amounts are:

For additional information on the taxability of social security benefits, see IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits. Publication 915 is available on the IRS Web site at IRS.gov or by calling 1-800-TAX-FORM (1-800-829-3676).

Changes to Tax Law for 2005

Year 2006 Tax Tip 26

Taxpayers should make sure that they are aware of important changes to the tax law before they complete their 2005 federal income tax forms. Here are some significant changes that may affect you when completing your 2005 federal tax return:

For more information, visit the IRS Web site at IRS.gov. Also, see Publication 553, Highlights of 2005 Tax Changes, and the instruction book for Form 1040.

Guidelines for Roth IRA Contributions

Taxpayers confused about whether they can contribute to a Roth IRA should consider guidelines based on the following categories:

Roth IRA contributions are not tax deductible and are not reported on your tax return. On the other hand, you do not include in your gross income, and therefore are not taxed on, any qualified distributions or distributions that are a return of your regular Roth IRA contributions or that are rolled over into another Roth IRA.

For complete information and definitions of terms, get Publication 590, Individual Retirement Arrangements. Visit the IRS Web site at IRS.gov, or call 1-800-TAX-FORM (1-800-829-3676) to request a free copy of the publication.

Tips for recently Married or Divorced taxpayers

IRS TAX TIP 2006-16

Newlyweds and the recently divorced should ensure the name on their tax return matches the name registered with the Social Security Administration. A mismatch could unexpectedly increase a tax bill or reduce the size of any refund.

It's easy to inform the SSA of a name change by filing Form SS-5 at a local SSA office. It usually takes two weeks to have the change verified. The form is available on the agency's Web site, www.ssa.gov, by calling 1-800-772-1213 and at local offices. The SSa Web site provides the addresses of local offices.

Generally, taxpayers must provide SSNs for each dependent claimed on the tax return. For adopted children without SSNs, the parents can apply for an adoption taxpayer identification number, or ATIN, by filing Form W-7A with the IRS. The ATIN is used in place of the SSN on the tax return. The form is available on the IRS Web site, IRS.gov, or by calling 1-800-TAX-FORM (1-800-829-3676).

Change Your Address

IRS TAX TIP 2006-15

If you changed your home or business address, notify the IRS to ensure that you receive any refunds or correspondence. While the IRS uses the Postal Service’s change of address files to update taxpayer addresses, notifying the IRS directly is still a good idea.

There are several ways to do this.

It's a good idea to notify your employer of your new address so that you can get your W-2 forms on time.

If you change your address after filing your return, don't forget to notify the post office at your old address so your mail can be forwarded.

You should also notify the IRS if you make estimated tax payments and you change your address during the year. You should mail a completed Form 8822, Change of Address, or write the IRS center where you file your return. You can continue to use your old pre-printed payment vouchers until the IRS sends you new ones. However, do not correct the address on the old voucher.

You can download Form 8822, Change of Address at the IRS Web site, IRS.gov, or order by calling 1-800-TAX-FORM (1-800-829-3676).

GIFT TAXES

IRS Tax Tip 2006-14

If you gave any one person gifts in 2005 that valued at more than $11,000, you must report the total gifts to the Internal Revenue Service and may have to pay tax on the gifts.

The person who receives your gift does not have to report the gift to the IRS or pay gift or income tax on its value.

Gifts include money and property, including the use of property without expecting to receive something of equal value in return. If you sell something at less than its value or make an interest-free or reduced-interest loan, you may be making a gift.

There are some exceptions to the tax rules on gifts. The following gifts do not count against the annual limit:

If you are married, both you and your spouse can give separate gifts of up to the annual limit to the same person without making a taxable gift.

For more information, get the IRS Publication 950, Introduction to Estate and Gift Taxes, IRS Form 709 or 709-A, United States Gift Tax Return, and Instructions for Form 709. They are available at the IRS Web site at IRS.gov in the Forms and Publications section or by calling 1-800-TAX-FORM (1-800-829-3676).

QUICK AND EASY ACCESS TO IRS FORMS AND PUBLICATIONS

IRS TAX TIP 2006-13

The Internal Revenue Service has many forms and free publications on a wide variety of topics to help you understand and meet tax filing requirements. If you need IRS materials try one of these easy options:

HOW TO GET A COPY OF YOUR TAX RETURN INFORMATION

IRS TAX TIP 2006-12

There are two easy and convenient options for obtaining copies of your federal tax return information tax return transcripts and tax account transcripts by phone or by mail.

A tax return transcript shows most line items from the tax return (Form 1040, 1040A or 1040EZ) as it was originally filed, including any accompanying forms and schedules. It does not reflect any changes you, your representative or the IRS made after the return was filed. In many cases, a return transcript will meet the requirements of lending institutions such as those offering mortgages and student loans.

A tax account transcript shows any later adjustments either you or the IRS made after the tax return was filed. This transcript shows basic data, including marital status, type of return filed, adjusted gross income and taxable income. The IRS does not charge a fee for transcripts, which are available for the current and three prior calendar years. Allow two weeks for delivery.

To request either transcript:

If you need a photocopy of a previously processed tax return and attachments, complete Form 4506, Request for Copy of Tax Form, and mail it to the IRS address listed on the form for your area. There is a fee of $39.00 for each tax period requested. Copies are generally available for the current and past 6 years.

Forms 4506-T and 4506 can be found on the IRS Web site at IRS.gov or by calling the IRS forms and publications order line at 1-800-TAX-FORM (1-800-829-3676).

It may be that if I have prepared your taxes that I can provide the information you need. Please contact me at ClergyTaxes@aol.com prior to contacting the IRS.

IRS PUBLICATION 17
FREE TAX GUIDE FOR INDIVIDUALS

IRS TAX TIP 2006-10

Are you facing a lot of different tax questions this year? IRS experts have pulled together an overview of common tax issues in one convenient place Publication 17, Your Federal Income Tax. This updated publication, available on the IRS Web site, IRS.gov, contains a vast array of helpful information for individual taxpayers.

From stock sales to student loans, this 300-page publication holds the answers to many of your questions:

And the best part about Publication 17? It’s free. To get a copy, visit the IRS Web site at IRS.gov or call 1-800-TAX-FORM (1-800-829-3676).

IRS HAS FREE PUBLICATIONS ON EVERY TOPIC YOU NEED

IRS TAX TIP 2005-09

The IRS has a free publication that answers any tax question you have. Publications on a variety of tax-related topics are available by phone or the Internet at IRS.gov. From students to seniors, first-time home buyers to landlords…everyone can find useful information in IRS forms and publications.

To find what you’re looking for, follow any one of these easy steps:

If you still can’t find the information you need, visit IRS.gov

Advice for Choosing a Tax Return Preparer

IRS Tax Tip 2006-06

Taxpayers who pay someone to do their taxes should choose a preparer wisely. If you choose to use a paid tax preparer, it is important that you find a qualified tax professional. Taxpayers are ultimately responsible for everything on their return even when it’s prepared by someone else. While most tax return preparers are professional and honest, taxpayers can use the following tips to choose a preparer who will offer the best service for their tax preparation needs.

Report suspected tax fraud and abusive tax preparers to the IRS by calling 1-800-829-0433.

KEEPING GOOD RECORDS

IRS TAX TIP 2006-07

You can avoid headaches at tax time by keeping track of your receipts and other records throughout the year. Good record-keeping will help you remember the various transactions you made during the year, which in turn may make filing your return a less taxing experience.

Records help you document the deductions you’ve claimed on your return. You’ll need this documentation should the IRS select your return for examination. Normally, tax records should be kept for three years, but some documents — such as records relating to a home purchase or sale, stock transactions, IRA and business or rental property — should be kept longer.

In most cases, the IRS does not require you to keep records in any special manner. Generally speaking, however, you should keep any and all documents that may have an impact on your federal tax return:

Good record-keeping throughout the year saves you time and effort at tax time when organizing and completing your return. The records you have kept will assist me in quickly and accurately completing your return.

For more information on what kinds of records to keep, see IRS Publication 552, Recordkeeping for Individuals, which is available on www.irs.gov

SHOULD YOU FILE A TAX RETURN?

IRS TAX TIP 2006-02

You must file a tax return if your income is above a certain level. The amount varies depending on filing status, age and the type of income you receive.

For example a married couple, under age 65, generally is not required to file until their joint income reaches $16,400. However self-employed individuals generally must file a tax return if their net income from self employment exceeds $400.

Check with me at GenFinSvcs@aol.com for specific details that may affect your need to file a tax return with IRS this year.

Even if you do not have to file, you should file to get money back if Federal Income Tax was withheld from your pay, or you qualify for any of these credits:

For more information about filing requirements and your eligibility to receive tax credits visit www.ClergyTaxes.com or write me at ClergyTaxes@aol.com.