Finance Tax Time

Every year, the IRS announces that it is holding unclaimed tax refunds. Taxpayers have a limited time to claim the $2 billion dollars the IRS is currently holding.

Three years is a magical number when it comes to tax returns. It refers to the statute of limitations on certain tax issues such as when an audit can occur, when refunds can be claimed and when amended tax returns can be filed. The IRS is currently holding $2 billion dollars in unclaimed tax refunds for the 2002 tax year and taxpayers must file their claims by April 17, 2006 or lose the refunds forever.

Approximately 1.7 million people are due refunds out of the $2 billion dollars currently held by the IRS. These people have refunds due because they failed to file tax returns for 2002. This occurred most likely because people felt they did not make enough money to warrant filing a tax return. By failing to file, however, they have left $570 on average with the IRS.

If a taxpayer fails to claim the tax refund by filing a tax return for 2002, the money will default to the federal government. Importantly, there is no penalty associated for filing late if a taxpayer is due a tax refund. This is common misconception among non-filers.

One group of taxpayers that almost always has a large percentage of non-filers is military personnel. Obviously, it is a bit hard to file from Afghanistan, but now is the time to do so for 2002. Members of the military that failed to file in 2002 are owed an average of $749 per taxpayer.

The IRS releases demographic on the areas in the United States where refunds are due. To this end, California and Texas are the states where the most individuals are due refunds while Idaho has only 6,200 people due a refund.

Nobody finds filing taxes an exciting prospect. The pain is much less, however, is you know you are due a refund. If you failed to file in 2002, you might be throwing away a nice little chunk of change.

Richard A. Chapo is with http://www.businesstaxrecovery.com - recovery of business taxes through tax help and tax relief. Visit http://www.businesstaxrecovery.com/articles to read more business tax articles.

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Every year, we citizens of the United States have to “pay our dues” so to speak, in the form of filing our income tax documentation with the federal, state, and in some cases, municipal government. For many years, people and businesses have filed their taxes with the government using the post office. Taxpayers could (and still can) obtain the required forms for their claim at their local post office, then take them home where they can be prepared by themselves or by a professional tax specialist with services such as H&R Block or Jackson Hewitt.

Many people who do their own taxes get many of the benefits of a professional tax preparer by using tax software to prepare their tax documents and transmit them to the government using the internet.

Using tax preparation software is an excellent, efficient way to do your taxes and can help you get your taxes filed as quickly as possible. All of the forms that you could possibly need to file your taxes is included in the major tax preparation software packages. You can opt to digitally complete and transmit your forms via the software interface using fully digital documents (you will still need to file the hard copies with your W2 forms as well, but your claim is considered received when the digital files are transmitted and accepted) or you can complete the forms using the software and it’s helpful wizards, and then print the forms using the tax software in order to fulfill your tax requirements the old fashioned way (with a little help from digital era technology.)

Whatever way you choose to use it, tax preparation software can be a very convenient way for you to take control of another aspect of your financial destiny without having to learn complicated accounting procedures. There are several reputable software packages out there such as Quicken, TurboTax and Microsoft Money that can help you get started in the world of digital tax filing.

James Hunt has spent 15 years as a professional writer and researcher covering stories that cover a whole spectrum of interest.
Read more at http://www.tax-software-guide.com

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The mail has arrived and oh, no there is a dreaded letter from the IRS. Don’t panic yet, it maybe something as innocuous as information they think you might need, a question of where to apply a payment you made or even a refund check for an overpayment. But should it be more serious, all is not lost.

What to do should you get a notice of a payment due? First and foremost, make sure you really do owe that payment. The Internal Revenue Service is a very large organization and since they have people working for them, sometimes they make mistakes. So read the notice carefully, check your records to ascertain whether or not you have already paid the amount being requested, and whether the check has cleared.

Sometimes they are looking for a return not received. That doesn’t mean you didn’t file the return, it means they have no record of receiving it. Locate your copy (always, always keep a copy of your dated and signed return). Find the post office receipt that proves you sent in your return. You know that green card that the post office returns to you proving that you mailed something to the IRS on a particular date. Of course that “something” might have been an empty envelope not an envelope with your return enclosed. One thing that could point to the return actually being in the envelope is that a check for payment was sent with the return and the check had cleared your bank account.

If you cannot prove a timely filing than your next step is to contact the agent listed on the letter. You may want to do this yourself, however it is probably a better idea to enlist your accountant’s or tax preparer’s help. These people have the experience to handle these situations in the best light and to your best advantage. If, however, you personally meet with the tax agent, please remember to be polite and upfront. And do not be late for your meeting. Provide the records they ask for, and answer the questions they ask truthfully and directly. Remember they are people too, and if treated with respect they will respond in kind.

There are a few things you can do in advance to make sure any future IRS dealings go more smoothly. Of course the first is to make sure you follow the rules. And one of those rules is to keep clear, complete, and accurate records. Remember the article about “shoebox clients”. It is the business people that don’t take the necessary steps to keep a good set of books that get in the most trouble. If you think hiring a bookkeeper or bookkeeping service is expensive, wait until you try to go through an audit with unorganized financial records.

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