Personal Taxes

The Telefile system is an interactive computer program that calculates your taxes and begins the electronic filing process over the phone. The IRS automatically sends taxpayers a special Telefile package to those who may be eligible to use it. Generally, teenagers and students are Telefiler candidates. Only those receiving the package can use the Telefiler system. Telefile is available 24 hours a day and requires nothing to be mailed in.

If you suspect or know of an individual or company that is not complying with the tax laws, you may report this activity by completing Form 3949-A. You may fill out Form 3949-A online, print it and mail it to: Internal Revenue Service Fresno, CA 93888. If you do not wish to use Form 3949-A, you may send a letter to the address above. Include the following information, if available: Name and address of the person you are reporting. The taxpayer identification number (social security number for an individual or employer identification number for a business) A brief description of the alleged violation, including how you became aware of or obtained the information. The years involved and the estimated dollar amount of any unreported income. Your name, address and daytime telephone number

If an area has been classified as a Presidentially declared Disaster Area, then the filing deadlines of the tax returns are delayed. Also the payment of any tax liability is delayed. Penalties and interest in some circumstances can be waived if it can be proven the disaster caused you to file or pay late. You should speak with your local CPA or the Federal Emergency Management Agency for more details.

A CP-2000 notice informs you of the proposed changes in income, credits, payments, or deductions and the amount due to the IRS, or a refund due to you. You should forward a copy of this letter to your local CPA for a follow-up response. Frequently these notices are sent out erroneously.

The IRS has a tax assistance staff in 7 U.S. Embassies throughout the world. Speak to your local CPA about locating the U.S. Embassy nearest to you.

If you itemized your deductions in the prior year and received a state tax refund in the current year (reported on a 1099-G slip), you may have to include all or part of the refund as income on your current year's tax return.
If you did not itemize your deductions in the prior year, you will not have to pick up as income the 1099-G refund amount.

If you use a dwelling as a home and rent it out for fewer than 15 days during the year, you should not include the rental income or deduct the rental expenses on your tax return. You may deduct the residence's mortgage interest and real estate taxes as a itemized deduction on IRS Schedule A.

Costs incurred while entertaining customers, prospective customers, clients, suppliers, employees and other business associates are valid business expenses that are subject to conditions and restrictions. For entertainment costs to be deductible, the following must be documented: the time, place and the nature of the entertainment, a description of the business purpose involved, the amount of each separate expense, the business relationship and identification of the persons entertained. A calender diary is recommended to maintain this information.

On Form W-2, box 15 will have an X in the box "retirement plan". You are an active participant in a retirement plan if contributions are made or allocated to your account for the plan year that ends within your tax year.