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IRS Mileage Rate for 2016 Changes in 2017

IRS mileage rate

Most Americans are reliant on their car as their primary mode of transportation. Business owners often have a large fleet of vehicles that literally drive their success.

Tax-deductible travel is a vital part of your annual tax return, and it’s important to keep track of exactly what you can claim for, and how much you can claim per mile.

The IRS sets the standard mileage rate for 2017 based on several factors such as inflation, oil price, and total consumption, and they have lowered the deductible amount from the 2016 rate.

With the new rates set to come into effect on January 1, it’s important that you adjust your returns and tax forecasts with the appropriate figures. Here’s an overview of the changes that are set to affect you.

Standard Mileage Rate Changes

You can claim back on vehicle use in several industries, and different types of vehicle use. The rates for vehicles used for transporting furniture when moving, transferring medical goods and supplies, or using your car for business are changing.

It’s important to note that in this instance, the definition of a vehicle is a panel truck, car, van or pickup.

Here are the new rates:

  • The rate for business miles travelled is down by half a cent, from 54 cents to 53.5 cents per mile driven for business purposes.
  • If you’re driving your vehicle for medical or moving reasons, you’re looking at 2 cents less per mile – the new rate is 17 cents for every mile.
  • Due to federal legislature, the standard mileage rate you can claim when servicing a charity remains fixed at 14 cents per mile.

A Complex Science

Although there are larger macro-economic factors at play around the global oil and fuel price, the IRS uses an annual study to make sure that the rate adjustments are as accurate as possible.

This means that you get the best, fairest rate possible.

Factors like the real costs of maintaining a vehicle, general depreciation figures, changes to average insurance premiums, the price of tires, and of course the actual price of gas all play a role.

Exclusions

In some instances, you are not allowed to claim tax back on the miles you travel for business purposes.

You may not apply if you have used the Modified Accelerated Cost Recovery System to gauge the value of a vehicle, for instance.  You also can’t claim if you have already filed a Section 179 deduction on a specific car.

Most importantly, you can only apply the standard rate to four automobiles at once, so select the vehicles that do the most driving to maximize your benefit.

Important Figures

Apart from the actual standard mileage rate, you need to know a few other figures when calculating travel tax.

In 2017, 25 cents per mile is depreciation, a 1-cent rise from 2016.

In addition, the maximum standard cost per vehicle has been dropped to $27,900 for normal cars, and raised by $300 to $31,300 for your truck or van.

Use these figures when setting allowances for a fixed and variable rate plan. Remember, the standard rate only applies to money spent by the employer reimbursing an employee for the fuel expenses gathered while driving a vehicle to perform business functions.

It is a difficult adjustment to get used to, but factoring these slight adjustments to the standard IRS mileage rate and defining costs could save you a chunk of cash overall.

TurboTax Will Calculate Mileage Rate Deduction for You!

Don’t worry about knowing these tax deductions and how to claim them, TurboTax asks simple questions about you and helps you easily file your taxes based on answers to your questions.

TurboTax Online finds all the new tax deductions and credits you are entitled to for the largest possible refund. It’s the most complete free tax filing solution for everyone. Start for Free now or sign into your TurboTax Account.

 

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TaxCaster 2017 Tax Refund Calculator

Tax season is just around the corner. That means it’s time to start thinking about your tax refund and how much you might be getting back.

taxcaster 2017The TurboTax TaxCaster is an all-in-one online tax tool that helps you work out a range of tax-related figures.

This free tax refund calculator can be accessed online, and because you can use the calculator anonymously, you can rest assured that your personal information is protected.

Let’s look at TaxCaster 2017 and see how it analyzes your income and key tax factors to determine an income tax refund estimate for 2016 – 2017 that you can use to budget accordingly.

How TurboTax TaxCaster Works

The calculator uses information about the deductions and exemptions that you qualify for, and factors them into a calculation to work out your total taxable income.

This total is then used to work out how much you owe the IRS, or how much you should be refunded, again by working out any potential tax credits and outstanding amounts owed to you.

Determining your Deductions

There are certain payments, transactions, and expenses that will be subtracted from your tax payments. These are called tax deductions: tax deductible payments that mean you can claim a refund back from the Internal Revenue Service (IRS).

Here are several common tax deductions:

  • Interest on your mortgage
  • Charitable donations
  • Municipal income taxes (both state and local)
  • Real estate tax
  • Certain medical and educational costs.

Here are 10 more tax deductions you may qualify for:

Tracking these deductions throughout the year will help you to work out both your local and state tax liability, but there’s a much easier way. The TurboTax TaxCaster is programmed to understand your potential deductions, and factors them into your overall tax estimate.

Qualifying for Exemptions

Most people do not realize that they could qualify for tax exemptions that can go a long way to reducing their tax bills.

These exemptions are structured on certain tiers, meaning you can qualify for different exemptions. There are personal exemptions, which cover individual costs; dependent exemptions that may apply to costs for your family members, and local city, state, or county exemptions that apply to you based on where you stay or do business.

Qualification for an exemption means that you do not have to pay tax on a certain transaction type or amount, which can go a long way to keeping you in the tax man’s good books. These exemptions are particularly useful if your estimate suggests you are not on track to claim a refund.

Do your research and make sure you keep up to date with the annual changes to tax legislation to not only select, but qualify for, a lucrative tax exemption.

Understanding AMT

AMT stands for Alternative Minimum Tax, and it forms another filter that will be applied when determining your tax status.

AMT is applied to companies, people, and certain types of investment accounts at a consistent rate that is based on the difference between their taxable income and the exemption threshold.

What makes AMT so complex is that it is calculated per different criteria. In addition to normal tax, it factors in asset depreciation and ongoing medical costs meaning the AMT repayment is not automatically the same as your standard tax figures.

Although it sounds complex, the bottom line is that you will be expected to pay the higher of the two tax rates if your federal tax payment is less than the AMT amount calculated. This means that it is essential to know both numbers so that you know what you’re going to pay.

You Can Use the Tax Caster for Free

Unlike the old days when working out your tax payments involved a trip to the tax man, you can use the TaxCaster calculator anywhere, because it is an online tool. For added convenience, you can also download the app.

The tax refund calculator can be accessed any time, meaning you always know exactly where you stand when it comes to your total pay, taxable income, marginal tax rate and whether you will be receiving a refund or a bill come tax time.

It’s an absolute must – try it out today!

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Getting Your 2016, 2017 W-2 Form Online

When you’re doing your income taxes, you will require a number of forms and probably the most significant one is the W2 form.

Every business that you were employed at in the course of the previous year is liable for supplying you with a W-2, which must be sent by January 31 of the current year. You may be able to get yours sooner online.

How to Get Your W2 Form Online

W-2 Tax Form

Many Employers are making their W-2 forms accessible on the internet since it makes submitting income taxes less complicated.

Once you get your W2 you have the option to begin filing online or download and print out your W-2 so it can be included with your tax return.

TurboTax Online will find and access your W2, which allows you to file your taxes as soon as you are ready. This year you can get your W2 easier than ever before! Just follow the TurboTax screens as it guides you to finding your W2 online.

Millions of employers and financial institutions participate so the odds are good your W2 will be available to download. You save time by doing so and it ensures that your information is delivered accurately.

H&R Block Online will also find and access your W2. When using an online based company like H&R Block, you will have the capability to get your W2 data online. You won’t have to wait for your forms to come in the mail.

The TurboTax and H&R Block search page has the capability to find and import your W2 data into your tax return so you can get your refund as soon as possible!

What is a W-2 Tax Form

A W2 is a tax form that documents money paid to you, and money withheld from your paycheck. It includes your commissions, tips, wages, and the taxes that were withheld from your income for federal, state, and social security purposes.

This document has all of the information that you will need to fill out the financial information for your personal taxes. If you have worked, the IRS requires that you use your W-2 to file, and then they determine the amount of taxes that you should pay the federal and state governments.

When Do W2s Come Out?

In order to file your income taxes and get your tax refund, you have to have your W2. This form contains all of the important information that you need for your annual income tax filing.

The IRS mandates that employers have to send out or make W2’s available to their employees by January 31. Even if you switched jobs, they still have this deadline in place yet sometimes you can expect to receive it earlier. Your former employer will also include your accumulated vacation, severance, and outstanding bonuses on your W-2 form.

If you do not have your W-2 form by the end of January, confirm that your employer has your correct mailing address. If you don’t receive the W-2 from your employer by Valentine’s Day, contact the IRS at 800-829-1040 and provide them with your details so they can find your information.

Before calling them, make sure you are prepared to provide them with your name, mailing address, phone number, social security number, employers name and address, and the dates that you were employed

The IRS will accept returns without W2’s; however, this could delay your refund. The IRS has to make sure that your income is accurate and matches their records before they can issue you a tax refund.

Who Can Get Their W2 Online?

Many companies, including the military, have their employees W-2’s available online. The documents can be downloaded via a variety of outsourcing companies so the distribution process of the W-2’s are automated. Your employer should alert you as to whether or not you will be able to access your W2 online.

If they do allow you to access it online, you will get the benefit of being able to file your taxes earlier in addition to not waiting for paper copies, and eliminating the security risks that come along with having that information sitting around on paper.

How to Find Your W2 Online – Video

What to Do if You Can’t Find Your W 2 Form

The W 2 form is usually mailed to you or made accessible online by the company you work for. If the form is lost, missing or you can’t find it online, contact your employer immediately. It’s a good idea to call the IRS if you don’t receive the W2 by mid-February.

In the worst case scenario, you can fill out Form 4852 and attach it to your tax return. The substitute wage and tax statement allows you to input the same details. A tax extension is another possibility, and buys you more time.

Your best bet is to file on time. If the W 2 arrives later, and the information is different from your estimates provided, Form 1040X can be filled out to correct any discrepancies, and amend the previous year’s tax return.

Getting Multiple W-2s from the Same Employer with Different Amounts

w2 tax formUsually, if you have multiple W2s from the same employer, with different amounts you need to enter all of them. Turbo Tax or H&R Block can help you get all of the W-2s entered and will calculate the combined income. You may have to file multiple W-2s if any of the following situations apply to you:

  1. You worked for a temporary agency that sent you on different jobs. This will cause you to have multiple W-2s with different amounts but the same Employer Identification Number.
  2. Your employer changes their payroll or placement agency who is responsible for your pay
  3. Your employer was purchased or merged with another company
  4. Different divisions of your company paid you. In this case the Employer Identification Numbers will differ
  5. Your employer reports additional compensation, such as reimbursement for employment business expenses

In the event that all of the Employment Identification Numbers, addresses, and names are the same you may want to contact the payroll department to see why the W-2s were issued like this. If it is a payroll error, you will have to get a correct W-2.

How to Get Prior Years W2s

If you file a prior year tax return, there may be complications such as missing W-2’s and other forms. You can still get a copy of that form. To receive a copy of a prior year W-2, there are a couple of possibilities.

Contacting the issuer is the easiest way to find that particular W2. Employer payroll departments save such important documents that contain tax information. You can simply contact them and ask for the form to be sent to your address. This is usually best way.

You can also contact the IRS directly. If you can’t get in touch with that employer, then you will need form 4506. Although it may take longer and cost you some money, this allows you to obtain the copy of that year’s W-2 rather than do nothing.

It’s important to note the IRS holds past W-2’s and other tax documents for 7-10 years. They’re filed under each taxpayer’s social security number. You can ask for a W-2, but not until a year after it was filed, and form 4506 will be required to get a copy thereafter. Also note:

  • The IRS charges a $57 service fee; checks are paid to “The United States Treasury”.
  • Check the second page of form 4506 for the address to send it to.
  • It takes the IRS up to two months to process the request and send the W-2.

Contacting a current or former employer is the easiest way to get a prior W-2. The IRS is the next alternative if you can’t contact the employer or you do not wish to contact them again.

Remember, with a few clicks of the mouse TurboTax can get the data from your current online W2, and your tax returns are ready to start in moments.

 

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Two Websites That Can Calculate Your 2017 Tax Refund

By now, you’ve probably gotten taxes out of the way for the 2016 tax season. However, if you want to be a financially conscious person you should already be preparing for the 2017 tax filing season.

Tax Refund Calculator 2016If you are expecting a tax refund, you probably want to know just how much of a refund you can expect. However, coming up with an accurate estimation is not always easy. Therefore, this article will discuss two websites that offer a free tax refund calculator for 2017.

TurboTax Tax Refund Calculator

An increasing number of people are turning to TurboTax to get their income tax prepared and filed every year. Their user friendly tools take all the hard work and stress out of tax form preparation and will always get you the largest refund.

One popular tool is the TurboTax tax refund calculator because it is very user friendly and it is attractive. The graphics and sliders make understanding taxes very easy and it updates your estimate as you add in information.

Estimating your tax refund or balanced owed does not have to be complex. In fact, the online calculators make it easy for anyone. All you have to do is answer some basic questions and the calculators provide you with an estimate. Many taxpayers find that using the tax refund calculator only takes them a few moments.

H&R Block Refund Calculator

H & R Block has been helping American’s with their taxes since 1955, when their first office opened. Back then, they were offering high interest loans based on someone’s estimated tax refund.

Now that those programs have been discontinued, they still make it their business to help you see what amount you can expect in your tax refund. Just go here if you would like to use the H & R Block tax refund calculator. You can rest assured it’s up to date by the latest IRS tax figures.

Step 1 – Run Your Numbers in the Tax Refund Calculator

Answer the simple questions the calculator asks. You don’t have to be 100% exact, you just have to give a good estimate. If your tax situation changes you can always come back to the calculator again.

As you answer the questions, you will see that the information that you enter changes. You will even have access to your total income, adjustments, deductions, and other important numbers in the form of a tax summary.

Step 2 – Consider “What If” Scenarios

Did you go through the calculator and find out that your refund is low or your balance due is too high. If so, try playing around with different scenarios so you can reach a number that you are satisfied with. For example, you could increase your charitable contributions or add in some energy saving home improvements.

In the event that you foresee your income changing, you may want to try estimating taxes with a lower or higher income so you can see just how much of a difference it makes when tax time rolls around.

Step 3 – Estimate Again Once Time Has Passed

Anytime something changes with your tax situation you want to come back to the calculator again. This will allow you to ensure that you are always on the right track financially. The more you estimate your taxes, the better prepared you can be when it comes time to file.

Tax laws change throughout the year, but by using a tax calculator, you can make sure that you are prepared. By utilizing a tax refund calculator, you can have a peace of mind knowing that your tax outcome is going to be the best one possible.

Video – How to Use an Online Tax Refund Estimator

When Will You Get Your Refund?

Once you have your return accepted by the IRS your refund is based on the IRS E-file Refund Cycle Dates. It is estimated that if you electronically filed and selected direct deposit as your payment receivable method, you should get your refund in no more than 2 weeks. However, if you are waiting for a paper check it can take an additional week.

get your tax refund faster with efileWhen you eFile, you will be able to check your tax refund in real time using the “Where’s My Refund Tool” by the IRS within 24 hours after it has been received. Paper filing can take up to a month to be able to track your refund status through this tool.

Additionally, in order to use the tool you have to provide your social security number/EIN, filing status, and the exact amount of your projected refund. When you enter this information your estimated refund release date will be added. The date provided is not set in stone, which means you should check the status on a weekly basis.

Closing Thoughts

Estimating your refund does not have to be hard, thanks to the Free TurboTax refund calculator and the Free H&R Block refund calculator. You can plan and make sure that you spend your refund wisely when it arrives. The IRS says that taxpayers should expect to receive their refunds within 21 days after they file their tax returns.

Whether you are looking forward to paying off some debt or taking a vacation, direct deposit will get you your refund the quickest. Additionally, it is the safest way to get your money as paper checks can be lost or even stolen. Keep in mind, the IRS takes at least six weeks to replace a paper check that hasn’t been cashed and if it is cashed it can take even longer.

Lastly, keep in mind the child tax credits, earned income credits, and federal income tax brackets change yearly, therefore, you could be getting an even larger tax refund when the new laws go into place.

 

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How Much is the Child Tax Credit?

 

How Much do You Get Back in Taxes for a Child?

The child tax credit for 2016 is worth up to $1,000 per child that is under 17. To be eligible to claim this credit your child or dependent must first pass all of the following tests:

  1. Must be 16 or younger on the last day of the year
  2. Must be a US citizen, US national, or a resident alien
  3. Must be claimed by you as a dependent
  4. Must be related to you by blood, or step relationship, or legally adopted child/foster child
  5. Must have resided with you for more than half of the year (special rules apply for special circumstances such as divorce)
  6. You must have provided them with more than half of their support

Your 2016 Child Tax Credit Amount

Child tax credit 2016, 2017

  • The credit is worth a maximum amount of $1,000 per child.
  • Until 2017, the Child Tax Credit is partially refundable if your earned income was more than $3,000.
  • The Child Tax Credit decreases if you have an AGI of $75,000 ($110,000 for married filers and $55,000 for separate filers).
  • You must include foreign income exclusions when calculating your income for this specific credit.

Claiming the Child Tax Credit

Any parent or legal guardian with a child age 17 or younger at the end of a tax year can claim said child for the child tax credit. The child must reside with the claiming parent for more than 50-percent of the year. The child also cannot financially support themselves with at least half of their own expenses.

When you prepare your taxes with TurboTax you automatically are asked the right questions to determine if you qualify and how much do you get back in taxes for a child.

TurboTax Child Tax Credit Video

The Additional Child Tax Credit

The Additional Child Tax Credit (ACTC) is a refundable credit that taxpayers who receive a larger child tax credit than their income owned receive if their earned income is greater than $3,000.

Form 1040 (Schedule 8812) helps determine if you qualify and the amount of the credit that you will receive. If you e-file your return the software will do all of the math for you. Worksheets for eligibility can be printed from the IRS.gov website anytime of the year.

Dependents on Multiple Returns

Only one taxpayer or couple can claim the child for the Child Tax Credit and ACTC. If more than one person tries to claim the child, the IRS will determine who gets to claim the child using the tiebreaker rules.

Other Child Related Tax SavingsHow much is the child tax credit

Most parents and legal guardians are aware of the earned income credit (EIC) and child tax credits that they can qualify for to reduce their tax liabilities.

Some do not know that adoption credits can be taken as well as paying out-of-pocket (OOP) for child/dependent care. These deductions can help reduce your tax liability, and in some cases, result in a refund.

Earned Income Credit (EIC) – In order to qualify for the EIC, you must meet income limitations and have the required number of qualifying children for your income level. The income thresholds can change. An example is the recent 2015 earnings year. Families with a single child filing jointly cannot have an adjusted gross income (AGI) more than $44,651. For single/head of household and surviving spouses, the income limit for a single child is $39,131

Child and Dependent Care Credit – You could deduct up to $3,000 for one dependent, or up to $6,000 for more than one with this credit. The percentage of child and dependent care costs that you can claim, as an allowable expense is 20 to 35-percent based upon your AGI. If you have a single qualifying child, the maximum credit amount is $3,000. For two or more children, the maximum credit is $6,000.

Adoption Tax Credit – If you have already adopted or are in the process, you may qualify for this credit. The process of adopting a child is costly. Some employers assist employees with adoption expenses. This “income” can be deducted and claimed as employer-provided adoption assistance. You can also claim any monies paid to an adoption agency for the adoption of a child that qualifies for the credit.

You cannot receive any excess funds. The maximum credit can change, view the yearly guidelines set by the IRS. Leftover monies are rolled forward as credits on upcoming tax returns.

Student Loan Interest – Student loan interest can be deducted up to the amount of $2,500 per school/tax year. The modified adjusted gross income constraints to claim this credit require that those filing single do not have more than $80,000 income. For those that are married, the income threshold is $160,000 if you file jointly

Filing Status – If you are unwed and your child resided with you for more than half of the year, you could qualify for a higher standard deduction and lower tax rates with the Head of Household filing status.

Exemptions – Receive the standard exemption for each child that qualifies.

How TurboTax Can Help

You don’t need to worry about figuring all this out. TurboTax makes it easy. After asking you a few simple questions about your family, TurboTax will determine for you who qualifies as a dependent on your tax return. That way, you’ll get the biggest tax refund possible with the least amount of hassle.

 

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