Friday, April 10, 2009

General Tips From March Tax Tips 2009,,id=108510,00.html

Tuesday, March 17, 2009

Deductions: The Facts about Tuition & Fees

**this notification is simply an attempt to convey IRS meaning into a language the common hillbilly can understand. I follow due diligence practices and will not be held responsible for a mis-interpretation of my posts. I adhere as closely and often more stringent than IRS tax codes. It is always advisable to verify tax advice, as it is always the taxpayer who is responsible for their tax returns. this blog is an effort to perform a free service to those who would pull their hair out as they listen to yet another song on 1-800-829-1040.

1) Many people (taxpayers) miss deductions because they have to take the Standard Deduction, and are not itemizing. They think, "since I can't itemize, I cannot count my Fees, or Tuition for last year", - Hold up! Yes, you can claim a tuition and fees deduction.

1). The way to take this deduction is to get Form 8917. If you are doing your own taxes, search Form 8917, 2008. Follow the Form 8917 Instructions. This will be included with your regular Form 1040 (The Blue One - Long Form) or Form 1040A. (The Pink One - Average Tax Payer Form - usually with Attachment(s) A and / or B). Some software will have this listed as Expenses, Expenditures, Tuition, Fees.

2). You may be qualified for a deduction on tuition and fees expenses. This might be an adjustment to income, a Hope or Lifetime Learning credit, or – sometimes – as a business expense.

3). Reason A. You are not eligible = MFS - Married Filing Separate

4). Reason B. You are not eligible = If you are a Dependent on someone else's taxes. If you do not claim yourself, or if you are not qualified to claim yourself on your tax return.

5). Reason C. You are not eligible = The evil AMT & your filing status has cut into your tax liablilty, it could reduce the amount you can deduct for medical expenses. [very good reason to contact your Rep or Senators] Write or call your representatives and repeal the AMT now.

6). Reason D. Limitations = You cannot claim the tuition and fees deduction if you or anyone else claims the Hope or Lifetime Learning credit for the same student in the same year.

7). Reason E. Limitations = If you can take the educational expenses & are also allowable as a business expense, or the Tuition and Fees deduction may be claimed in conjunction with a business expense deduction. Decide which one and stick with it. One entry for these expenses.

8). You cannot claim a deduction or credit based on expenses paid with tax-free scholarship, fellowship, grant, or education savings account funds such as a Coverdell education savings account, tax-free savings bond interest or employer-provided education assistance.

9). The same rule applies to expenses you pay with a tax-exempt distribution from a qualified tuition plan, except that you can deduct qualified expenses you pay only with that part of the distribution that is a return of your contribution to the plan.

10). IRS Publication 970, Tax Benefits for Education, can help eligible parents and students understand the special rules that apply and decide which tax break to claim. The publication is available at or by calling 800-TAX-FORM (800-829-3676).

Issue Number: TT-2009-52 - March 17, 2009 is where I got my info. :8 - >

Saturday, February 21, 2009

Here is a notification from the IRS.
There is a lot of talk around about the Stimulus Package, the following will help clearify what is really going on and how it may affect you.

The new American Recovery and Reinvestment Act of 2009 is the subject of
many conversations and is generating many questions. Many of these questions
center on how will this affect taxpayers this filing season and next. We have
placed information to help answer that question, and others, a special

Tax Provisions in the American Recovery and Reinvestment Act of

The Service is working diligently to complete an analysis
of this new legislation to determine its full effect on processes and forms and
to implement them. We are committed to doing this as quickly – but more
importantly – as thoroughly as possible and will be providing updates via So, please monitor our Website ( for the latest
information over the course of the next few weeks and months.

The link above - was sent via IRS notification 2-20-09
For those of you with CPA's, and other Tax Professionals, make sure they update you on upcoming changes that may affect your particular tax scope. Many of you do not realize how much an hour you pay to these sages ahold of your "books", so make them earn it. Ask to be put on an e-mail notification list, or go to the IRS website and do a "search" for your item, include the tax year you are considering ie; 2008, 2009, 2010

Wednesday, February 18, 2009

Deductible Medical Expense Records!!! Easy!

Tax Professionals & Tax Payers,

A company that I love, is Walgreen's. Many of their products are Made in America, and they have reasonable prices and are coupon friendly.

Walgreen's also has on-line service for Prescriptions and many of their other products. Today they sent me an e-mail on down-loading their paid medical expenses for 2008. Way to go Walgreen's!! Thank you for making life easier.

I do not receive any compensation from Walgreen's for recommending their easy and helpful service.

Tuesday, February 10, 2009

Be Ware of Unknow Advertisers - Who is Legitimate?

Dear Everyone - The Gay CPA is legitimate! 02/10/2009

I check every advertiser on my site. It may take a day or two, but please use Safety tips blogged yesterday, when accessing any site.

I reported a fake advertiser yesterday evening and they are gone. The reason for Grizzly Bear Tax Care is because so many individuals who need good tax care are not given dignity during their return and it is reasonable to acknowledge not the best tax service. The Gay CPA will offer planning and sound advice for those in the gay community.

Grizzly Bear is to protect people and give dignity.
Thank you for choosing my site.
Grizzly Tax Cares and Helps advocates due diligence.
Bless us Everyone

Monday, February 9, 2009


I am seeing some
advertisers on my site that are not familiar. The best way to get to a Secured site; like a tax preparation site, you want to go directly to that site.

I. Safety tip! when you look at the Title of a Site you are Searching, it may say File Free Here on the top, but where it says www. there will be the site name ie; irs and since it is a government agency - .gov. Misleading sites will say www. freeirs. com, leading you to think it is irs. The name of the business or agency should be the First Thing after www or don't go there.

II. A site is secure (safe from normal to high intrusion attempts), when the browser address [example:] that is standard. Secure is with a padlock on the browser. Continue to check for the "s" at the end of the http_. You are then secure.


Many tax returns are coming to the IRS in error. The IRS is sending public notices asking tax payers to take just a minute to familiarize yourself with the Recovery Rebate & the Stimulus Package.

There is a lot of information and much of it false telling people they are supposed to be getting these big checks for $12,000.00. They are mis-representing, don't fall for the Scam! I have included the announcement. If you need any help understanding, just leave a post or get with me, but if you have a question, probably 23 other people do too...

Tax Scams
The Tax Gap
Noticias en Español
Forms and Publications
Frequently Asked Questions
Taxpayer Advocate Service

Questions and Answers about the Recovery Rebate Credit

The following are answers to some basic questions regarding the recovery rebate credit. Check back periodically for updates and additional questions and answers that may be added.
Basic Information
Q. What is the recovery rebate credit?
A. This credit is a new refundable credit that is related to the 2008 economic stimulus payment. Generally, a credit increases the amount of a refund or reduces the amount of taxes owed. Those who did not receive their economic stimulus payment (or did not receive what they were fully entitled to) in 2008 are eligible for the credit.
Q. What is the basis of the recovery rebate credit calculation?
A. The recovery rebate credit is calculated the same way and with the same requirements as the 2008 economic stimulus payment. The only difference is that the credit is based on the tax year 2008 income tax return and the stimulus payment was based on the tax year 2007 income tax return.
Qualifying for the Rebate
Q. Who is eligible?
A. Those who were eligible for the stimulus payment but did not receive it (or did not receive what they were fully entitled to) in 2008 are eligible for the credit. Also eligible for the credit are those who did not meet the requirements for the stimulus payment last year but whose circumstances have since changed, causing them to now meet the requirements.
Q. Why doesn’t everyone qualify for the rebate?
A. Most taxpayers have already received their full benefit in advance in the form of the 2008 economic stimulus payment. However, if certain conditions changed for taxpayers in 2008, they may be eligible for an additional benefit.
Q: How will the recovery rebate credit payments be made?
A: The Treasury won't send out separate economic stimulus payments for 2009. Instead, those eligible will claim the rebate credit on their 2008 returns. Credits generally increase the amount of a refund or reduce the amount of taxes owed.
Q. I was claimed as a dependent on my parents’ 2007 tax return, and was not eligible for the stimulus payment, but I lived on my own in 2008. Do I qualify for the rebate?
A. That depends on whether you can be claimed as a dependent on your parents' 2008 return. The rebate is based on circumstances that occurred in 2008, while the stimulus payment was based on the 2007 tax return filing information. You'll have to use the tax booklet's worksheet on claiming the recovery rebate credit to see if you're eligible to claim it.
Claiming the Credit
Q. How do I claim the recovery rebate credit?
A. Use the recovery rebate worksheet that is found in your 2008 tax booklet to figure the credit you can take, if any. Then, include that figure in the payments section of your 2008 tax return.
Q. How do I get help figuring the credit?
A. The IRS will figure the credit for you, if you enter “recovery rebate credit” next to line 70 on your Form 1040 (line 42 of Form 1040A; line 9 of Form 1040EZ). You can also access the online recovery rebate tools using the recovery rebate credit link on this Web site. For taxpayers filing electronically, the software will calculate any credit they may be due.
Q. What information do I need to figure the credit?
A. You need to know the amount of your 2008 economic stimulus payment to complete the recovery rebate worksheet. The IRS sent recipients Notice 1378, Economic Stimulus Payment Notice, which reported this amount and any reductions that were made to pay other debts. If you don’t have your notice, you can use the online tool How Much Was My 2008 Stimulus Payment? to find the amount.
Q. My filing status in 2007 was different than it is for 2008. Does this impact the amount of the credit I can claim?
A. Maybe. That's because married taxpayers who file jointly are each assumed to have received half of the economic stimulus payment. So, if your filing status for 2008 changed to or from Married Filing Jointly or if you remarried in 2008, follow these directions to determine the amount you need to use when determining the recovery rebate credit.
Q. What tools are available to help figure the credit?
A. The IRS will post interactive tools on this Web site to help figure the Recovery Rebate Credit: the Recovery Rebate Credit Calculator and How Much Was My 2008 Stimulus Payment?. The 2008 tax packages also include a worksheet to help figure the credit.
Q. When can I expect to receive my rebate?
A. The rebate is part of your 2008 income tax refund. The amount you receive for the recovery rebate credit will be included as part of your refund, as shown on your tax return. Unlike the stimulus payment, it will not be issued as a separate check. You can check the status of your refund under Where’s My Refund?. Generally, you will receive your refund within 6–8 weeks after you file your return.
Q. I am not required to file a tax return, but I still would like to get the rebate. How do I claim the rebate?
A. You must file a tax form to claim the credit, and be sure to fill in lines 7, 20a and 70 of your Form 1040 (lines 7, 14a and 42 of Form 1040A; lines 7 and 9 of Form 1040EZ).
Q. Because the IRS applied part of my stimulus payment to an outstanding debt, I actually received less than the total amount as stated on my Notice 1378. What amount should I use when figuring my credit?
A. You must use the total amount the amount before the deduction to satisfy the debt — as stated on your Notice 1378. That total is considered to be the amount of your stimulus payment, even though part of it was used to satisfy a debt.
Economic stimulus payments received
Q. Do I have to claim my stimulus payment as income on my 2008 income tax return?
A. No, the stimulus payment is not reportable as income on your 2008 income tax return.
Q. My stimulus payment was more than what the worksheet calculates my recovery rebate credit to be. Does this mean I will have to pay the difference?
A. No, you do not need to repay the difference, and the difference will not affect your return. However, your recovery rebate credit will be zero.
Q. Will the payment I received in 2008 reduce my 2008 refund or increase the amount I owe for 2008?
A. No, the stimulus payment will not reduce your refund or increase the amount you owe when you file your 2008 tax return. The combined amount you received in the form of an economic stimulus payment plus any additional amount you receive, if any, in the form of a recovery rebate credit is independent of the normal tax you would have paid.
Q. I have no earned income and no filing requirement, but I filed a 2007 economic stimulus payment return to get the payment. Do I have to file a 2008 tax return?
A. If you received your stimulus payment, no. If you did not receive the stimulus payment, and do not pay income tax but have at least $3,000 in qualifying income for 2008, then you should file a 2008 tax return to receive the recovery rebate credit.
Related items:
Recovery Rebate Credit Information Center
Economic Stimulus Payment Information Center
1040 Central

Page Last Reviewed or Updated: January 16, 2009
Accessibility Freedom of Information Act Important Links IRS Privacy Policy U.S. Treasury

Tuesday, February 3, 2009

Free File - Fillible Forms From the IRS!

It's your Birthday - It's your Birthday - It's your Birthday - It's Your Birthday!!!! WEE HO!

If you can read instructions, you can file your Tax Return for ***FREE***
The Year of the Taxpayer!
  • Low Income, you are eligible for Earned Income Credit, in 8 days you can have your Federal Tax Return for 2008 for Free. This means the $300.00 - $600.00 you would be charged in preparation and loan fees will be back in your home and family where it belongs.
  • Consider yourself middle class in terms of pay? Do you know you are going to owe a little cheese to SAMMY, and now you are hacked off because you know you gotta pay some little twerp who just learned how to enter data in a machine around $100.00 bucks [or for some of us the $30.00 we may pay for "Free File" using other companies software] to do your return - AND have to pay in too...You can file free. All the forms you need are there. All instructions for each form are viewable while you are on that form. FREE *
  • Tax person * hate filing your taxes where you work? Like keeping your financial business to yourself? YOU WILL LOVE THIS.
  • Old School? - You know how to do your simple tax return on paper and by-Jobie that is the only true way? If you aren't familiar with the computer, ask that grand baby to show you how to get to the IRS website. Instructions are to follow:
  • Haven't done your taxes for a few years? You can go back and do every year FREE. Do you know how much money this will save you? For those who were scrambling to file for the Stimulus check, and you didn't get it done, now is a good time to finish. If you can read instructions. You can do this.
  • Rich? HATE giving anyone a penny to do what you may be able to do yourself? Do you wait until April 15Th [traditionally] to do your taxes to put off paying Uncle SAMMY, and the Big Twerp CPA who has been gouging you every year and you are ready to put it in his/her eye? Here is your chance...If you are High Income, you probably need to wait until the middle of March 2009 to do your Tax Return. This is when 2008 Tax Law Changes are done, and all Forms will be available.
  • Love to File Extensions? Hate to pay $25.00 - $50.00 or more for that pleasure? You can electronically file an Extension. How much? FREE!
  • Seniors - Disabled - Not required to file, you can file if you want to, just to stay in the system. Free * Free * Free

Go to click on the "Individual" Tab. Under the picture of the happy mixed family at the picnic table, the third item down (02/02/09) is a Link to Free File. At the top of Free File page it gives options for Your choosing a Tax Software or letting the IRS find a company for you. The next option is Choose Your Forms, click on that. It will advise you that you are leaving the IRS website, go ahead. You will come to a simple pretty blue form 1040. Have your last year Adjusted Gross Income (AGI) - that is the bottom line on the front page of your Last Year's Tax Return (2007). Come up with a pin number. Most choose last 5 of the Social Securtiy Number, because you always have it and can remember it. Choose your forms. If you are not sure if you will need a form, go ahead and choose it, you can delete it later. Come back later for further instructions....

If you have any questions. Leave them here, and I will do my best to get your Answer - This Year is the Year of the Tax Payer, because I am working for Free doing this as well. Any income I would earn is by over a thousand visits to my page...[maybe April 14Th huh?]. Really, let me help, this Old Grizzly knows her stuff! I have resources and training, that I get from the IRS. I am an approved e-file company. This is my Karma building year, and Americans and Visitor workers need all the Helps and benefits they can get.

For confidentiality - email:

***Case examples from all past years may be used without names or any identifying features. Due Diligence is Primary! Any questions intended to commit fraud? Don't ask me, because I will advise you to the illegality and possible punishments. -0- Tolerance. Honest questions - Priceless! :8 - ) ***

Sunday, February 1, 2009

Free File Forms - 2008 Tax Year

Good morning Taxpayers, [Happy Superbowl 43! Steelers vs Cardinals]
***Here is an update on the new Free File Forms available from the IRS Free File link.

Go to, in the Search Box, type Free File. You will be directed to a split page. The top portion of the page gives income limitations for Free File using approved Software. The IRS gives two options with Free File with Software; 1). You choose the Company, 2). The IRS will choose for you after you answer a couple of questions.,,id=118986,00.html

The next option on Free File using Software is that you choose your own. There are different reasons to choose, but find the one who best suits your needs without charging too much.

On the Bottom half of this page, Taxpayers are given the option of choosing their own forms; 1040, 1040A, or 1040EZ.

***** No income limits for using these forms. Some Forms for the more complicated returns will not be available until March of 2009. This is when Congress is done with 2008 Tax Law, and it is final.

***** Five Star rating for any Dependent who needs to file an income tax return. Remember Parents and Guardians; if you claim a dependent on your Tax Return who has earnings, they are required to File a Tax Return. After working for years at one of the big name tax firms, I can tell you the prices charged for a Dependent 1040EZ is too much. By getting your youngster started with Free Forms, this will give them a better understanding of their 'tax life". Oh yeah; It is completely free to file electronically. I have run into a glitch on the start-up, but on Monday I will be in touch with the IRS to find out Whatz up.

My tax return is more complicated because I legally take every penny possible, and I was up to 8 forms & worksheets last night when I realized I could not locate the place to enter W-2, 1099, 1099R [incoming money] forms. Again, I probably missed something on the sign in, but it should not be so hard to locate these areas of entry. Follow-up Monday night if I can get off of Eternal Hold.

~ Software - TaxSlayer is still my favorite. They are user friendly, provide links to information to what you are doing without charge. Under certain income limits; it is Free Fed & Free State = 9.95 E-File.

Many have used the same company for years. If you have had no problems and you are happy with the ease of use; don't change. Keep in mind when you purchase the Software in the stores, you are paying a lot more than 9.95, or 14.95. As they say, if you don't know how to use it correctly it will be problems without measure and you can be barred from the IRS by doing your own taxes.

Records, Records, Records. You must have them compiled before you File!

If you use a tax professional, do not put them in the position of "guessing" close to your numbers. This year more than ever, your Tax "people" will be held accountable for erroneous numbers. Do not let any Tax 'people' convince you to "use a Dependent" that you cannot prove the dependency.

I heard one guy in a school for a certain Large name firm say, "they told us no one ever goes to jail for that..."

Try this, go to the Department of Justice website, search Tax Firms & Preparers. Perhaps print out the 20 - 30 pages of firms that have been closed, the tax pros that have been fined and their punishments.

Tuesday, January 27, 2009

Really Free File - Income level much higher - You must know how to do taxes.

I was excited to see the Program just introduced by the IRS. For the first time ever, a taxpayer who knows how to do taxes, or is good at reading instructions can complete a tax return, electronically straight onto the forms.

If you are a Dependent (Someone else is qualified to claim you on their Personal Federal Tax Return), you can fill out your own Tax Return, without having to pay exorbitant prices for a usually simple form.

It is simple to move through the IRS website and find the links to do your own tax return for Free.

Go to When you get to that page, it will be on the front page of the Individual Tab Page, where there is an article about Free File, the two different ways you can file electronically for free, or for a very low cost. Click on the Free File link. There will be two choices where you can link to Free File Software offered by IRS Approved Companies. Many are well known. The benefits of using software is; 1). Keep forever records by software company, 2). There is assistance available when you run across a problem you don't know the answer to. 3). If your State requires you to file a State Income Tax Return, the numbers from the Federal Form will roll down into and fill the State Forms. I prefer TaxSlayer.

Disadvantage: Software Problems; think of your worst computer experience, add the Treasury, Social Security Admin, and the IRS, Cost, Security.

The second choice is new: Go to a linked site and pull your forms needed for your return and file it directly to the IRS without a middleman. All of the benefits are obvious.

Disadvantage: It is brand new and has quirks that must be worked out. It could possibly have large or small problems. Refunds could be delayed an unknown amount of time. The problem returns will be few, but it is good to know. I cannot wait to use it. As I update knowledge on this new program, I will update y'all.

Right now it is just me preaching to my own choir, but I can really help. If you leave a comment or a question I will check in and answer you promptly. If I don't have the technical answer, I will get you to a place to get the answer.

Friday, January 16, 2009

Ready, Set, GO! They're off and Running today!

Good Morning tax payers, and tax professionals.

Today is the day it all begins. The I.R.S. will begin accepting all those tax returns from all those who have simple tax returns.

The only individuals who should be ready to file today, 1). w-2's are the only source of income, and you have gotten them all. ["forgetting" about that w-2 from that one little part-time job because they take too long is a bad idea]. 2). Your income is under $32,000.00, you own no home, or any other deductions. 3). You didn't have any unemployment, royalties, investment income or were self-employed.

Keep in mind; Congress is still working on Tax Law and Code changes for 2008 Tax Year. For the $28,000.00 income and up, I would advise waiting until February 15th before filling. The 'tax year' is pretty much solid by then.

For the low income individuals and families who are eligible for large sums of Earned Income Credit, please try to avoid getting your money in 1 day. You can wait 9 more days and save 200.00 - 400.00 in "loan fees". If you could wait an entire year, you can wait 10 days. The tax operations like Jackson Hewitt, H & R Block, JPL, Liberty make their biggest profits off of the poorest people.

Those Rapid or Instant refunds are not refunds. They are loans at 32% - 383.% interest. I have a few words to say about that, but I am keeping this family friendly.

Have Questions? Worried that the tax person you hired is not giving to you straight? Is it better to go "long form" or short? Can I claim my baby momma baby? Please Post your Questions here. If you can get that Let's talk to work, send me your Questions. Normally you would be paying good money for this service, but this is The Year. I am offering these services for Free. The only source of income would be if I get enough traffic coming to this site. My ultimate goal is to build good karma and open my offices next tax season.

I will be offering TaxSlayer, because as a professional, and a tax payer it is the simplest Free File ware out there. When/If you choose Free File, always approach these tax firms through the IRS website. It is safer.

Do not hesitate to let me know if I can be of any assistance to you: WoodSmoke - Lori

Thursday, January 8, 2009

January 06 2009 - IRS Notification w-edits

Due to the financial disasters affecting so many taxpayers, the IRS has a lot of steps available to help those who have lost jobs, homes, etc. There are many who are doing the best they can and have tried to pay the IRS what they owe, and are struggling with it.

I have included an IRS Notification from 01/06/09. For your benefit I highlighted the areas I think may help the everyday person who does not speak tax code. : ) I have added a couple of comments, they are italicized in green.

IR-2009-2, Jan. 6, 2009

WASHINGTON — The Internal Revenue Service today kicked off the 2009 tax filing season by announcing a number of new steps to help financially distressed taxpayers maximize their refunds and speed payments while providing additional help to people struggling to meet their tax obligations.

IRS Commissioner Doug Shulman encouraged taxpayers to take advantage of several new tax credits and deductions this filing season and announced a major enhancement to the Free File program that will allow nearly all taxpayers to e-file for free and accelerate their refunds.

“With so many people facing financial difficulties, we want taxpayers to get all the tax credits they’re entitled to as quickly as they can,” Shulman said. “In addition, we are creating new protections to help people trying to meet their tax obligations. The IRS will do everything it can to help during these tough times.”

Help for People Who Owe Taxes

With many people facing additional financial difficulties, the IRS is taking several additional steps to help people who owe back taxes.

“We need to ensure that we balance our responsibility to enforce the law with the economic realities facing many American citizens today,” Shulman said. “We want to go the extra mile to help taxpayers, especially those who’ve done the right thing in the past and are facing unusual hardships.”

On a wide range of situations, IRS employees have flexibility to work with struggling taxpayers to assist them with their situation. Depending on the circumstances, taxpayers in hardship situations may be able to adjust payments for back taxes, avoid defaulting on payment agreements or possibly defer (delay or put off for a time) collection action.

The IRS reminds taxpayers who are behind on tax payments and need assistance to contact the phone numbers listed on their IRS correspondence. There could be additional help available for these taxpayers facing unusual hardship situations.

Among the areas where the IRS can provide assistance:

  • Postponement of Collection Actions: IRS employees will have greater authority to suspend collection actions in certain hardship cases where taxpayers are unable to pay. This includes instances when the taxpayer has recently lost a job, is relying solely on Social Security or welfare income or is facing devastating illness or significant medical bills. If an individual has recently encountered this type of financial problem, IRS assistors may be able to suspend collection without documentation to minimize burden on the taxpayer.

  • Added Flexibility for Missed Payments: The IRS is allowing more flexibility for previously compliant individuals in existing Installment Agreements who have difficulty making payments because of a job loss or other financial hardship. The IRS may allow a skipped payment or a reduced monthly payment amount without automatically suspending the Installment Agreement. Taxpayers in a difficult financial situation should contact the IRS.

  • Additional Review for Offers in Compromise on Home Values: An Offer in Compromise (OIC), an agreement between a taxpayer and the IRS that settles the taxpayer’s tax debt for less than the full amount owed, may be a viable option for taxpayers experiencing economic difficulties. However, the equity taxpayers have in real property can be a barrier to an OIC being accepted. With the uncertainty in the housing market, the IRS recognizes that the real-estate valuations used to assess ability to pay may not be accurate. So in instances where the accuracy of local real-estate valuations is in question or other unusual hardships exist, the IRS is creating a new second review of the information to determine if accepting an offer is appropriate.

  • Prevention of Offer in Compromise Defaults: Taxpayers who are unable to meet the periodic payment terms of an accepted OIC will be able to contact the IRS office handling the offer for available options to help them avoid default.

  • Expedited Levy Releases: The IRS will speed the delivery of levy releases by easing requirements on taxpayers who request expedited levy releases for hardship reasons. Taxpayers seeking expedited releases for levies to an employer or bank should contact the IRS number shown on the notice of levy to discuss available options. When calling, taxpayers requesting a levy release due to hardship should be prepared to provide the IRS with the fax number of the bank or employer processing the levy.

Taxpayers with financial problems who discover they can’t pay when they file their 2008 tax returns also have options available. has a list of What If? scenarios that deal with payment and other financial problems. These scenarios, in question-and-answer format, provide information on specific actions taxpayers can take. Taxpayers unable to pay in full can likewise contact the IRS to discuss additional options to pay.

Maximizing Refunds and Speeding Refund Delivery

This filing season, there are several steps taxpayers can take to maximize their refunds and speed the delivery of money from the IRS.

Taxpayers should look into the numerous tax breaks available and take every credit, deduction and exclusion for which they qualify. People who had less income in 2008 could find they qualify for credits for which they previously did not qualify. And there are several new benefits this year:

  • First-Time Homebuyer Credit: Those who bought a principal residence recently or are considering buying one should take note. This unique credit of up to $7,500 works much like a 15-year interest-free loan. A special page on has more details and answers to common questions.

  • The Recovery Rebate Credit: This credit is figured like last year's Economic Stimulus Payment except that Recovery Rebate Credit amounts are based on tax year 2008 instead of 2007. Most people already received their full benefit in the form of the Economic Stimulus Payment. However, a taxpayer may qualify for the Recovery Rebate Credit, if, for example, he or she did not get an Economic Stimulus Payment, had a child in 2008 or had a change in income level. If you receive this credit, it will be included in your refund and will not be issued as a separate payment. See the Form 1040 Instructions, Fact Sheet 2009-3 or the information center on for details.

  • Standard Deduction for Real Estate Taxes: Taxpayers can claim an additional standard deduction, based on the state or local real estate taxes paid in 2008. The maximum deduction is $500, or $1,000 for joint filers.

  • Mortgage Workouts and Foreclosures: For most homeowners, these are now tax-free. Eligible homeowners can exclude debt forgiven on their principal residence if the balance of the loan was less than $2 million. The limit is $1 million for a married person filing a separate return. See Form 982 and its instructions for details.

This Web site,, has more information on these and other popular credits, such as the child tax credit, the Earned Income Tax Credit and alternative fuel vehicle credit.

E-File, E-Pay and Direct Deposit

This year, electronic filing options will speed the payment of refunds to millions of taxpayers. Taxpayers who e-file and choose direct deposit for their refunds, for example, will get their refunds in as few as 10 days. That compares to approximately six weeks for people who file a paper return and get a traditional paper check.
This year, taxpayers can begin filing electronically on Jan. 16.

The IRS in 2009 is again offering free tax preparation and filing through the Free File program. Anyone with an adjusted gross income up to $56,000 can use the standard Free File options this year –– that is approximately 98 million Americans. The program also has usability improvements, including a standardized set of electronic forms that are most frequently used by Free File-eligible taxpayers.

This year the IRS and its partners are offering a new option, Free File Fillable Tax Forms, that opens up Free File to virtually everyone, even those whose incomes exceed $56,000.

Free File Fillable Tax Forms allows taxpayers to fill out and file their tax forms electronically, just as they would on paper. This option does not include an “interview” process like the other Free File offerings, but it does allow taxpayers to enter their tax data, perform basic math calculations, sign electronically, print their returns for recordkeeping and e-file their returns. It may be just right for those who are comfortable with the tax law or those who use electronic software to prepare their returns but file using paper forms.

Both the fillable-forms option and the previously available Free File offerings are available only through the Web site. More information will be available in mid-January.

1040 Central and Taxpayer-Friendly Features (irs website [] has a lot of resources - search:student, trivia.)

When they visit the Web site this filing season, taxpayers may notice the new “rotating spotlight” feature on the homepage. The spotlights, which change every few seconds, give the taxpaying public direct access to more of the IRS Web site’s vast amount of content.

Also on the homepage, taxpayers can click on 1040 Central to find help preparing and filing their tax returns. Like last year, this popular section of has a wide range of offerings that address taxpayer needs.

Finally, the IRS is producing a number of podcasts this filing season that will be available on In addition to Tax Tips, Fact Sheets and News Releases, these short audio interviews cover a wide range of topics and are a way for the IRS to reach out to a new generation of taxpayers.

Tax Filing Fact Sheets

For more tax season topics, see the following fact sheets:

Tuesday, January 6, 2009

Recovery Rebate Credit - 2009

Good News! Mo Money! This is straight from
the IRS today! Way to go!

Subject: Recovery Rebate - IRS Notice 01/06/09

Recovery Rebate Credit Information Center

En Español
The Recovery Rebate Credit is a one-time benefit for people who didn't receive the full Economic Stimulus Payment last year and whose circumstances may have changed, making them eligible now for some or all of the unpaid portion.

Generally, a credit adds to the amount of a tax refund or decreases the amount of taxes owed. Therefore, the amount you receive for the Recovery Rebate Credit will be included as part of your refund, as shown on your tax return. Unlike the 2008 Economic Stimulus Payment, it will not be issued as a separate check.
You May Be Eligible
People who fall into the categories described below may be eligible for the Recovery Rebate Credit this year:
· Individuals who did not receive an Economic Stimulus Payment.
· Those who received less than the maximum Economic Stimulus Payment in 2008 — $600 per taxpayer; $1,200 if married filing jointly — because their qualifying or gross income was either too high or too low.

· Families who gained an additional qualifying child in 2008.
· Individuals who could be claimed as a dependent on someone else’s tax return in 2007, but who cannot be claimed as a dependent on another return in 2008.
· Individuals who did not have a valid Social Security number in 2007 but who did receive one in 2008.
How to Get the Recovery Rebate Credit
You need to claim the Recovery Rebate Credit on Form 1040, 1040A or 1040EZ. The instructions for these forms will show you which lines to use. Unlike the Economic Stimulus Payment, the Recovery Rebate Credit will be included in your tax refund for 2008 and will not be issued as a separate payment.
The IRS Will Figure the Credit for You in Most Cases
You can choose to let the IRS do the work when you file your 2008 Form 1040, 1040A or 1040EZ. If you're filing on paper, simply follow the line-by-line instructions to choose this option. If you're filing electronically, the software will figure the credit for you.
Or You Can Figure It Yourself
Likewise, you can figure and claim the Recovery Rebate Credit on your 2008 Form 1040,
or 1040EZ. Two interactive online tools will be available to help you with the calculation: The Recovery Rebate Credit Calculator and How Much Was My 2008 Stimulus Payment?
The Recovery Rebate Credit Calculator will help you figure the amount you should claim on your 2008 tax return. Or, you can use the worksheet in the Form 1040 instruction booklet to help you figure your credit by hand. To use the Recovery Rebate Credit Calculator or complete the worksheet, you'll need the amount of the Economic Stimulus Payment you received in 2008, if any. This amount was provided on Notice 1378, Economic Stimulus Payment Notice, sent by the IRS to taxpayers who received a payment.
You can use How Much Was My 2008 Stimulus Payment? to determine the amount you already received, if you don’t have or didn't receive Notice 1378.