The Internal Revenue Service is looking to return $164.6 million in undelivered refund checks. A total of 111,893 taxpayers are due one or more refund checks that could not be delivered because of mailing address errors.
“We want to make sure taxpayers get the money owed to them,” said IRS Commissioner Doug Shulman. “If you think you are missing a refund, the sooner you update your address information, the quicker you can get your money.”
A taxpayer only needs to update his or her address once for the IRS to send out all checks due. Undelivered refund checks average $1,471 this year, compared to $1,148 last year. Some taxpayers are due more than one check.
If a refund check is returned to the IRS as undelivered, taxpayers can generally update their addresses with the “ Where’s My Refund?” tool on IRS.gov. The tool also enables taxpayers to check the status of their refunds. A taxpayer must submit his or her Social Security number, filing status and amount of refund shown on their 2009 return. The tool will provide the status of their refund and, in some cases, instructions on how to resolve delivery problems.
Taxpayers checking on a refund over the phone will receive instructions on how to update their addresses. Taxpayers can access a telephone version of “Where’s My Refund?” by calling 1-800-829-1954.
While only a small percentage of checks mailed out by the IRS are returned as undelivered, taxpayers can put an end to lost, stolen or undelivered checks by choosing direct deposit when they file either paper or electronic returns. Taxpayers can receive refunds directly into their bank, split a tax refund into two or three financial accounts or even buy a savings bond.
The IRS also recommends that taxpayers file their tax returns electronically, because e-file eliminates the risk of lost paper returns. E-file also reduces errors on tax returns and speeds up refunds. E-file combined with direct deposit is the best option for taxpayers; it’s easy, fast and safe.
The public should be aware that the IRS does not contact taxpayers by e-mail to alert them of pending refunds and that such messages are common identity theft scams. The agency urges taxpayers not to release any personal information, reply, open any attachments or click on any links to avoid malicious code that will infect their computers. The best way for an individual to verify if she or he has a pending refund is going directly to IRS.gov and using the “ Where’s My Refund?” tool.
From: http://www.irs.gov/newsroom/article/0,,id=231551,00.html
Friday, November 19, 2010
Wednesday, November 17, 2010
Estate planning: DIY or pro?
In this economy, smart consumers are tackling projects they used to turn to pros to handle in an effort to save. Can you do that with estate planning? Experts generally agree that there are a few aspects of estate planning you can take on yourself. But trying to handle others on your own would be supremely unwise.
What you can do
An advanced health care directive, also called a health care proxy, designates who your health care agent -- or who can affect your medical decisions -- will be if you become incapacitated. You can get that online, but it's essential to update it occasionally because it may expire.
Another document you can execute easily is a Health Insurance Portability and Accountability Act, or HIPAA, release. It's really essential so that your family members can speak to your physician about your medical condition without liability to your physician. You can also do that through an online form.
Though a durable power of attorney -- which allows others to control your finances -- may seem like another simple form you can execute yourself, experts have reservations about executing one without legal assistance. Typically, a durable power of attorney "springs" into effect when a specified event triggers it. That event could be your incapacitation, or it could simply be your unavailability for a scheduled real estate closing.
You can inadvertently grant unlimited access to their finances because if a durable power of attorney isn't filled out properly, it's not springing. Where people also need counsel is determining the proper person to act for them. What attributes does that person need to properly act on your behalf? Just because people are relatives doesn't mean they're the best people to do that.
What may be risky to handle yourself
Many companies sell form wills and trusts you can download and execute yourself. Creating a will on your own is appropriate only in limited circumstances, and doing the same for a trust is truly risky.
Online estate planning documents may work very well if you want to leave your assets outright to one or two people, and those people have virtually no legal or financial problems. Before you do estate planning on your own, attorneys suggests asking yourself these questions:
How big is my estate?
Who am I leaving it to, and are they minors, or do they have issues like angry creditors I need to plan around?
How am I leaving it to them, such as through a will or a trust?
There are some situations in which expert advice is truly necessary. Get professional help in these situations:
Hire a pro if:
Anyone in your family has a disability.
You're in a blended family.
You have assets and insurance in excess of the current estate tax exemption of $3.5 million.
You own real estate outside of your state of residence.
Also ask yourself whether you truly know the intricacies of will-drafting and are willing to take the risk of committing an easy-to-make mistake that will wholly invalidate your will. Many states don't recognize holographic -- or handwritten -- wills. Most states also require one or two witnesses and some evidence that the person making the will is competent and not under duress. You also can't do a videotaped will.
The most important thing to remember about DIY estate planning is that if you make a mistake that invalidates your will, the entire document will be thrown out. Many people think an invalid will still influence(s) where your assets go, but it doesn't. If you have an invalid will because of a failure in the execution of the document, your state's law of intestate succession steps in.
Also be brutally honest with yourself about whether you truly understand what will happen to the proceeds of all the contractual estate planning agreements you've entered into over your lifetime. Contract law covers things like U.S. savings bonds and bank accounts, which are almost always held in joint tenancy with a right of survivorship. There are also pay-on-death accounts in which you open an account, check a box as payable on death and name somebody to receive those funds. Retirement plans, individual retirement accounts and life insurance policies also have beneficiary forms."
Will you know when changes are necessary?
Finally, remember that an expert can help you identify when changes in the law make it necessary to update your estate planning documents. Sometimes people think that when they've done estate planning, they never have to look at those documents again.
Final words of caution: there are a number of people who don't consult estate planning experts because they don't want to spend the money. But estate planning is something that if you make a mistake, there's no way to correct it because you're no longer around. If you don't pay to have estate planning documents done properly now, your heirs will probably pay more than you'll have ever paid a professional to do them. In many ways, the most selfless thing you'll ever do is to make sure your children or heirs will receive your assets in the best and least costly way possible.
From: http://www.bankrate.com/system/util/print.aspx?p=/finance/personal-finance/estate-planning-diy-or-pro-2.aspx&s=br3_b&c=investing&t=guide&e=1&v=1
What you can do
An advanced health care directive, also called a health care proxy, designates who your health care agent -- or who can affect your medical decisions -- will be if you become incapacitated. You can get that online, but it's essential to update it occasionally because it may expire.
Another document you can execute easily is a Health Insurance Portability and Accountability Act, or HIPAA, release. It's really essential so that your family members can speak to your physician about your medical condition without liability to your physician. You can also do that through an online form.
Though a durable power of attorney -- which allows others to control your finances -- may seem like another simple form you can execute yourself, experts have reservations about executing one without legal assistance. Typically, a durable power of attorney "springs" into effect when a specified event triggers it. That event could be your incapacitation, or it could simply be your unavailability for a scheduled real estate closing.
You can inadvertently grant unlimited access to their finances because if a durable power of attorney isn't filled out properly, it's not springing. Where people also need counsel is determining the proper person to act for them. What attributes does that person need to properly act on your behalf? Just because people are relatives doesn't mean they're the best people to do that.
What may be risky to handle yourself
Many companies sell form wills and trusts you can download and execute yourself. Creating a will on your own is appropriate only in limited circumstances, and doing the same for a trust is truly risky.
Online estate planning documents may work very well if you want to leave your assets outright to one or two people, and those people have virtually no legal or financial problems. Before you do estate planning on your own, attorneys suggests asking yourself these questions:
How big is my estate?
Who am I leaving it to, and are they minors, or do they have issues like angry creditors I need to plan around?
How am I leaving it to them, such as through a will or a trust?
There are some situations in which expert advice is truly necessary. Get professional help in these situations:
Hire a pro if:
Anyone in your family has a disability.
You're in a blended family.
You have assets and insurance in excess of the current estate tax exemption of $3.5 million.
You own real estate outside of your state of residence.
Also ask yourself whether you truly know the intricacies of will-drafting and are willing to take the risk of committing an easy-to-make mistake that will wholly invalidate your will. Many states don't recognize holographic -- or handwritten -- wills. Most states also require one or two witnesses and some evidence that the person making the will is competent and not under duress. You also can't do a videotaped will.
The most important thing to remember about DIY estate planning is that if you make a mistake that invalidates your will, the entire document will be thrown out. Many people think an invalid will still influence(s) where your assets go, but it doesn't. If you have an invalid will because of a failure in the execution of the document, your state's law of intestate succession steps in.
Also be brutally honest with yourself about whether you truly understand what will happen to the proceeds of all the contractual estate planning agreements you've entered into over your lifetime. Contract law covers things like U.S. savings bonds and bank accounts, which are almost always held in joint tenancy with a right of survivorship. There are also pay-on-death accounts in which you open an account, check a box as payable on death and name somebody to receive those funds. Retirement plans, individual retirement accounts and life insurance policies also have beneficiary forms."
Will you know when changes are necessary?
Finally, remember that an expert can help you identify when changes in the law make it necessary to update your estate planning documents. Sometimes people think that when they've done estate planning, they never have to look at those documents again.
Final words of caution: there are a number of people who don't consult estate planning experts because they don't want to spend the money. But estate planning is something that if you make a mistake, there's no way to correct it because you're no longer around. If you don't pay to have estate planning documents done properly now, your heirs will probably pay more than you'll have ever paid a professional to do them. In many ways, the most selfless thing you'll ever do is to make sure your children or heirs will receive your assets in the best and least costly way possible.
From: http://www.bankrate.com/system/util/print.aspx?p=/finance/personal-finance/estate-planning-diy-or-pro-2.aspx&s=br3_b&c=investing&t=guide&e=1&v=1
Friday, November 12, 2010
New Rules Require Rental Property Owners to Issue 1099s
The recently enacted Small Business Jobs Act contained one provision that may have escaped the notice of taxpayers who own rental property, but will affect them starting in January. Under the provision, owners of property who receive rental income will be required to issue Forms 1099 to service providers for payments of $600 or more during the year.
The act subjects recipients of rental income from real estate to the same information-reporting requirements as taxpayers engaged in a trade or business. Thus, rental income recipients making payments of $600 or more to a service provider in the course of earning rental income are required to provide an information return (typically, Form 1099-MISC, Miscellaneous Income) to the IRS and to the service provider. This provision will apply to payments made after Dec. 31, 2010, and will cover, for example, payments made to plumbers, painters or accountants in the course of earning the rental income.
While rental property owners will not actually issue the required 1099s until early 2012, they need to start keeping adequate records of payments starting Jan. 1, 2011, so they will be prepared to issue correct 1099s. They will also need to obtain the name, address and taxpayer identification number of the service provider, using Form W-9 or a similar form.
Exceptions
The law provides exceptions for individuals who can show that the requirement will create a hardship for them. The IRS is directed to issue regulations on this, but has not done so yet, so there is currently no guidance on what constitutes sufficient hardship to qualify for the exception or how a taxpayer would demonstrate that hardship.
The law also contains an exception for individuals who receive rental income of “not more than a minimal amount.” Again, the IRS is directed to issue regulations to determine what constitutes “not more than a minimal amount” but has not done so yet.
If such guidance is not forthcoming before Jan.1, all individuals who receive rental income should start keeping records of payments to service providers so they are prepared to issue 1099s in 2012.
The law also contains an exception for members of the military or employees of the intelligence community if substantially all their rental income comes from renting their principal residence on a temporary basis.
The act subjects recipients of rental income from real estate to the same information-reporting requirements as taxpayers engaged in a trade or business. Thus, rental income recipients making payments of $600 or more to a service provider in the course of earning rental income are required to provide an information return (typically, Form 1099-MISC, Miscellaneous Income) to the IRS and to the service provider. This provision will apply to payments made after Dec. 31, 2010, and will cover, for example, payments made to plumbers, painters or accountants in the course of earning the rental income.
While rental property owners will not actually issue the required 1099s until early 2012, they need to start keeping adequate records of payments starting Jan. 1, 2011, so they will be prepared to issue correct 1099s. They will also need to obtain the name, address and taxpayer identification number of the service provider, using Form W-9 or a similar form.
Exceptions
The law provides exceptions for individuals who can show that the requirement will create a hardship for them. The IRS is directed to issue regulations on this, but has not done so yet, so there is currently no guidance on what constitutes sufficient hardship to qualify for the exception or how a taxpayer would demonstrate that hardship.
The law also contains an exception for individuals who receive rental income of “not more than a minimal amount.” Again, the IRS is directed to issue regulations to determine what constitutes “not more than a minimal amount” but has not done so yet.
If such guidance is not forthcoming before Jan.1, all individuals who receive rental income should start keeping records of payments to service providers so they are prepared to issue 1099s in 2012.
The law also contains an exception for members of the military or employees of the intelligence community if substantially all their rental income comes from renting their principal residence on a temporary basis.
Thursday, November 4, 2010
Voters Decide Numerous Tax Measures on Nov. 2 Ballot
Below are a few of the ballot measures decided yesterday:
Washington State
Voters approved a measure to reinstate the previously suspended requirement that tax increases must be approved by a two-thirds majority in the Legislature or receive voter approval. Initiative 1053 (TAXDAY, 2010/07/21, S.30)
Voters rejected a measure to enact the state's first personal income tax (to have been imposed on "adjusted gross income" above $200,000 for individuals and $400,000 for joint filers), reduce the limit on statewide property taxes by 20%, and increase the business and occupation tax credit to $4,800. Initiative 1098 (TAXDAY, 2010/07/21, S.29)
Voters approved a measure to eliminate the sales tax on candy and bottled water and the excise tax on sales of carbonated beverages and reinstate a reduced business and occupation tax rate for processors of certain foods. Initiative 1107 (TAXDAY, 2010/07/30, S.20)
Voters rejected a measure to extend the sales tax on bottled water beyond its scheduled expiration date, in order to fund energy-saving improvements in schools and public buildings. Referendum Bill 52 (TAXDAY, 2010/05/06, S.32)
Florida
Voters approved an amendment to the state constitution to provide an additional homestead property tax exemption for deployed members of the military. Amendment 2
Virginia
Voters approved an amendment to the state constitution to authorize legislation letting localities set their own income or financial worth limitations for property tax exemptions for persons 65 years of age or older or for people permanently and totally disabled. Question 1
Voters approved an amendment to the state constitution to provide a property tax exemption for the principal residence of a disabled veteran or surviving spouse. Question 2
California
Voters approved a measure to change the legislative vote necessary to pass the state budget from two-thirds to a simple majority. It does not affect the existing requirement for a two-thirds vote to raise taxes. Proposition 25
Voters approved a measure to expand the definition of a "tax" that must be approved by a two-thirds vote of the Legislature, or a vote of the electorate in the case of local taxes. It also provides that any state tax adopted since January 1, 2010, that was not adopted in compliance with this requirement is void within twelve months, unless it is reenacted in such compliance. Proposition 26
Voters rejected a measure to impose an $18 annual vehicle license fee to maintain state parks. Proposition 21
Missouri
Voters approved a measure to repeal local authority to enact future earnings taxes and require Kansas City and St. Louis voters to reauthorize continuation of the existing earnings taxes in those cities. Proposition A
Voters approved an amendment to the state constitution to prohibit any new tax on the sale or transfer of real estate. Amendment 3
Voters approved an amendment to the state constitution to exempt from property tax the homestead of a disabled former prisoner of war. Amendment 2
Massachusetts
Voters approved a measure to eliminate the sales tax on sales of alcoholic beverages and alcohol that are already subject to a separate state excise tax. Question 1
Voters rejected a measure to reduce the state sales and use tax rate to 3% from the current 6.25%. Question 3
Washington State
Voters approved a measure to reinstate the previously suspended requirement that tax increases must be approved by a two-thirds majority in the Legislature or receive voter approval. Initiative 1053 (TAXDAY, 2010/07/21, S.30)
Voters rejected a measure to enact the state's first personal income tax (to have been imposed on "adjusted gross income" above $200,000 for individuals and $400,000 for joint filers), reduce the limit on statewide property taxes by 20%, and increase the business and occupation tax credit to $4,800. Initiative 1098 (TAXDAY, 2010/07/21, S.29)
Voters approved a measure to eliminate the sales tax on candy and bottled water and the excise tax on sales of carbonated beverages and reinstate a reduced business and occupation tax rate for processors of certain foods. Initiative 1107 (TAXDAY, 2010/07/30, S.20)
Voters rejected a measure to extend the sales tax on bottled water beyond its scheduled expiration date, in order to fund energy-saving improvements in schools and public buildings. Referendum Bill 52 (TAXDAY, 2010/05/06, S.32)
Florida
Voters approved an amendment to the state constitution to provide an additional homestead property tax exemption for deployed members of the military. Amendment 2
Virginia
Voters approved an amendment to the state constitution to authorize legislation letting localities set their own income or financial worth limitations for property tax exemptions for persons 65 years of age or older or for people permanently and totally disabled. Question 1
Voters approved an amendment to the state constitution to provide a property tax exemption for the principal residence of a disabled veteran or surviving spouse. Question 2
California
Voters approved a measure to change the legislative vote necessary to pass the state budget from two-thirds to a simple majority. It does not affect the existing requirement for a two-thirds vote to raise taxes. Proposition 25
Voters approved a measure to expand the definition of a "tax" that must be approved by a two-thirds vote of the Legislature, or a vote of the electorate in the case of local taxes. It also provides that any state tax adopted since January 1, 2010, that was not adopted in compliance with this requirement is void within twelve months, unless it is reenacted in such compliance. Proposition 26
Voters rejected a measure to impose an $18 annual vehicle license fee to maintain state parks. Proposition 21
Missouri
Voters approved a measure to repeal local authority to enact future earnings taxes and require Kansas City and St. Louis voters to reauthorize continuation of the existing earnings taxes in those cities. Proposition A
Voters approved an amendment to the state constitution to prohibit any new tax on the sale or transfer of real estate. Amendment 3
Voters approved an amendment to the state constitution to exempt from property tax the homestead of a disabled former prisoner of war. Amendment 2
Massachusetts
Voters approved a measure to eliminate the sales tax on sales of alcoholic beverages and alcohol that are already subject to a separate state excise tax. Question 1
Voters rejected a measure to reduce the state sales and use tax rate to 3% from the current 6.25%. Question 3
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