Understanding Your IRS Notice or Letter

About Your Notice

If you receive a letter or notice from the IRS, it will explain the reason for the correspondence and provide instructions. Many of these letters and notices can be dealt with simply, without having to call or visit an IRS office.

The notice you receive covers a very specific issue about your account or tax return. Generally, the IRS will send a notice if it believes you owe additional tax, are due a larger refund, if there is a question about your tax return or a need for additional information.

IRS Notice Redesign

Currently, the IRS is in the process of redesigning and revising its correspondence with taxpayers for clarity, effectiveness and efficiency. The new format includes a plain language explanation of the nature of the correspondence, clearly states what action the taxpayer must take and presents a clear, clean design.  

http://www.irs.gov/Individuals/Understanding-Your-IRS-Notice-or-Letter

Share These Online Safety Tips with Your Valentine

Valentine’s Day is around the corner, and yes, romance is in the air. But the month of love also celebrates Safer Internet Day on February 10^th. Show how much you care by sharing this short online safety Q&A with your loved one.

Has your security software been updated recently? The bad guys constantly come up with new ways to attack your computer. Your security software must be up-to-date to keep you protected. Set your security software, operating system, and web browser to update automatically. It’s just one less thing for you and your loved ones to worry about.

What should you do if your email or social media account gets hacked? If you think someone’s taken over your account: make sure your security protections are current, reset your passwords, and warn your friends. Get detailed steps on what you should do if your account has been hacked, and what you can do to reduce your chances of getting hacked in the first place.

Have you heard about the latest online scam? The FTC’s Scam Alerts give you a window into what’s happening out there. You’ll be better equipped to spot scams and avoid getting tricked. Sign up now — it’s free! Let your loved ones know about it, too.

http://www.consumer.ftc.gov/blog/share-these-online-safety-tips-your-valentine?utm_source=govdelivery

Updated IRS Smartphone App IRS2Go Version 5.0 Now Available

WASHINGTON — The Internal Revenue Service today announced the release of IRS2Go 5.0, an update to the only official IRS smartphone application, compatible with both Apple and Android devices.

Download IRS2Go free of charge for Android devices from the Google Play Store or from the Apple App Store for Apple devices.  Use it to check your refund status, watch the IRS YouTube channel, find free tax preparation help, get IRS news as soon as it's released, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs.

 “The new version of IRS2Go provides taxpayers another way to quickly get information and help around the clock,” said IRS Commissioner John Koskinen. “The IRS is focused on providing taxpayers with convenient self-service tools like IRS2Go, but it’s important to remind taxpayers to only use official IRS products to safeguard their personal information.”

Users who have already downloaded past versions of IRS2Go should make sure to update their devices with the most current official- and completely free-version of the app by visiting the Apple App or Google Play Store.

The newest version of the free mobile app offers a number of safe and secure ways for taxpayers to access other popular tools and the most up-to-date tax information, including:

·         Refund Status. Taxpayers can check the status of their federal tax refund through IRS2Go. People simply enter their Social Security number, which will be masked and encrypted for security purposes, then select their filing status and enter the amount of their anticipated refund for their 2014 tax return.

·         Free Tax Prep Providers. The IRS Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the Elderly (TCE) Programs offer free tax help for taxpayers who qualify. This brand new tool on IRS2Go will help taxpayers find the nearest volunteer tax help site to their home by simply entering their zip code and selecting a mileage range. By clicking on the directions button within the results, the maps application on the device will load with the address, making it easy to navigate to your desired location.

·         Stay Connected. Taxpayers can interact with the IRS by following the IRS on Twitter,@IRSnews or @IRSenEspanol, watching helpful videos on YouTube, signing up for email updates, or by using the Contact Us feature.

For more information on IRS2Go, products and services through social media channels and other media products, visit www.IRS.gov.

http://www.irs.gov/uac/Newsroom/Updated-IRS-Smartphone-App-IRS2Go-Version-50-Now-Available

IRS to Parents: Don’t Miss Out on These Tax Savers

Children may help reduce the amount of taxes owed for the year. If you’re a parent, here are several tax benefits you should look for when you file your federal tax return:

·         Dependents.  In most cases, you can claim your child as a dependent. You can deduct $3,950 for each dependent you are entitled to claim. You must reduce this amount if your income is above certain limits. For more on these rules, see Publication 501, Exemptions, Standard Deduction and Filing Information.

·         Child Tax Credit.  You may be able to claim the Child Tax Credit for each of your qualifying children under the age of 17. The maximum credit is $1,000 per child. If you get less than the full amount of the credit, you may be eligible for the Additional Child Tax Credit. For more, see Schedule 8812 and Publication 972, both titled Child Tax Credit.

·         Child and Dependent Care Credit.  You may be able to claim this credit if you paid for the care of one or more qualifying persons. Dependent children under age 13 are among those who qualify. You must have paid for care so that you could work or could look for work. See Publication 503, Child and Dependent Care Expenses, for more on this credit.

·         Earned Income Tax Credit.  You may qualify for EITC if you worked but earned less than $52,427 last year. You can get up to $6,143 in EITC. You may qualify with or without children. Use the 2014 EITC Assistant tool at IRS.gov to find out if you qualify. See Publication 596, Earned Income Tax Credit, to learn more.

·         Adoption Credit.  You may be able to claim a tax credit for certain costs you paid to adopt a child. For details see Form 8839, Qualified Adoption Expenses.

·         Education tax credits.  An education credit can help you with the cost of higher education.  There are two credits that are available. The American Opportunity Tax Credit and the Lifetime Learning Credit may reduce the amount of tax you owe. If the credit reduces your tax to less than zero, you may get a refund. Even if you don’t owe any taxes, you still may qualify. You must complete Form 8863, Education Credits, and file a return to claim these credits. Use the Interactive Tax Assistant tool on IRS.gov to see if you can claim them. Visit the IRS’s Education Credits Web page to learn more. Also see Publication 970, Tax Benefits for Education, for more on this topic.  

·         Student loan interest.  You may be able to deduct interest you paid on a qualified student loan. You can claim this benefit even if you do not itemize your deductions. For more information, see Publication 970.

·         Self-employed health insurance deduction.  If you were self-employed and paid for health insurance, you may be able to deduct premiums you paid during the year. This may include the cost to cover your children under age 27, even if they are not your dependent. See Publication 535, Business Expenses, for details.   

You can get related forms and publications on IRS.gov.

http://www.irs.gov/uac/IRS-to-Parents-Dont-Miss-Out-on-These-Tax-Savers

Important Information about Advance Payments of the Premium Tax Credit and Your Tax Return

The Affordable Care Act includes financial assistance in the form of the premium tax credit for eligible taxpayers with moderate incomes who purchase coverage through the Health Insurance Marketplace.

When you purchased coverage for 2014 through the Marketplace, you may have chosen to have the government send advance payments of the premium tax credit to your insurer to lower your monthly insurance premiums. At that time, the Marketplace estimated these credits based on information you provided about your expected household income and family size for the year.  

If you chose to have advance credit payments sent to your insurer, you must file a federal income tax return, even if otherwise not required to file. You will need to reconcile these payments with the amount of premium tax credit you’re eligible for on your tax return. Receiving too much or too little in advance can affect your refund or balance due when you file.

For example, if you had certain life changes during the year and notified the Marketplace, the Marketplace should have adjusted the amount of the advance credit payments sent to your insurer accordingly. If you did not notify the Marketplace about these life changes, the advance credit payments may have been either too high or too low.

Advance credit payments that are lower than the amount of premium tax credit on your tax return will reduce your tax bill or increase your refund.

On the other hand, if your advance credit payments are more than the premium tax credit you are eligible for based on your actual income, you will need to repay the excess amount, subject to certain caps. This will result in a smaller refund or a larger bill when you file your return.  The repayment amount is based on your household income and family size. For more information on the repayment if your household income is less than 400 percent of the federal poverty line, the repayment amount is limited. Taxpayers with household incomes of 400 percent or more of the federal poverty line must repay all of the excess amount. See the instructions for Form 8962,Premium Tax Credit (PTC) for more information on the federal poverty line amounts.

Normally, taxpayers may owe certain penalties for late payments or underpayment of estimated tax. However, to help smooth the process for the first year of the Affordable Care Act, the IRS will waive these penalties for eligible taxpayers if they resulted from repayment of excess advance payments of the premium tax credit.  This has no effect on the fee individuals will pay if they chose not to buy affordable health coverage.

You must complete Form 8962 to claim the premium tax credit and reconcile your advance credit payments with the premium tax credit you are eligible to claim on your return. You should receive Form 1095-A, Health Insurance Marketplace Statement from your Marketplace by early February. This form provides information you will need when completing Form 8962. If you have questions about the information on Form 1095-A for 2014, or about receiving Form 1095-A for 2014, you should contact your Marketplace directly.  

Remember that filing electronically is the best and simplest way to file a complete and accurate tax return as it guides individuals and tax preparers through the process and does all the math. Electronic Filing options include free volunteer assistance, IRS Free File for taxpayers who qualify,commercial software, and professional assistance.

http://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/Important-Information-about-Advance-Payments-of-the-Premium-Tax-Credit-and-Your-Tax-Return