1. Choosing a Paid Tax Preparer

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    When tax time rolls around, many people seek help from tax professionals to file their taxes. If you use a paid preparer to file your tax return, choose carefully because you are legally responsible for what is on your return. Keep these tips from the IRS in mind when choosing a paid preparer: Check the preparer’s qualifications.  All paid preparers are required to have a Preparer Tax Identification Number. In addition to making sure they have a PTIN, ask if the preparer belongs to a professional organization and attends continuing education classes. Read reviews of the preparer.  Check with the Better Business Bureau to see if the preparer has a questionable history. Also look for any disciplinary actions and for the status of their licenses. For certified public accountants, go to the state boards of accountancy. For attorneys, check with the state bar associations. For enrolled agents, IRS Office of Enrollment will be able to help. Ask about service fees.  Avoid preparers who base their fee on a percentage of your refund or those who claim they can obtain larger refunds than other preparers can. Also, always make sure any refund due is sent to you or deposited into an account in your name. Check that the preparer is accessible.  Make sure you will be able to contact the tax preparer after you file your return, even after Tax Day. This may be helpful in the event questions arise about your tax return. Review the entire return before signing.  Before […]
  2. Some tax refunds will be delayed this year

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    Beginning this year, a new law approved by Congress in 2015 (the PATH Act) requires the IRS to hold refunds on tax returns claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) until February 15. The IRS estimates that taxpayers may not start receiving refunds until the week of February 27. We expect this to cause an inconvenience or hardship for many low- and moderate-income individuals and families who rely on their tax refunds to meet basic needs. Additionally, paid preparers like H&R Block and Liberty Tax have shared that they will offer products promising taxpayers a portion of their refund before February 15 through advanced refund loans, which could be costly. What do taxpayers need to know? Federal tax refunds will take longer this year for taxpayers receiving the Earned Income Tax Credit (EITC) and/or Additional Child Tax Credit (ACTC). The IRS will begin processing returns with these credits starting February 15. The IRS cautions taxpayers that due to processing times these refunds likely won’t appear in bank accounts until the week of February 27. This is an extra measure to prevent against fraud and identity theft. No one can speed up your federal refund so don’t pay someone who promises they will. You should still file your taxes as planned. Resources and referrals Where’s My Refund? Within 24 hours after the IRS has received someone’s e-filed tax return, taxpayers can go online to check the status of their refund. Tips for Managing the […]
  3. IRS: You May Need to Renew Your Expired ITIN

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    Espanol Background IRS announced changes to the Individual Taxpayer Identification Number (ITIN) program. First, ITINs that have not been used on a tax return at least once in the last three consecutive tax years and ITINs with middle digits 78 or 79 will expire at the end of this year. Second, new requirements for a dependent’s use of the passport as a stand-alone identification document, to prove foreign status and identity, will take effect Oct. 1, 2016. What’s changing? The new law requires all ITINs not used on a federal income tax return at least once for tax years 2013, 2014 or 2015 will expire on December 31, 2016. Additionally, all ITINs with middle digits 78 or 79 whether used on a tax return or not will expire at the end of 2016. The IRS will send Letter 5821 to taxpayers who have filed a tax return containing an ITIN with the middle digits 78 or 79 in the last three years. The letter will explain the steps to take to renew the ITIN if it will be included on a U.S. tax return to be filed in 2017. What do you need to do to renew your ITIN? To renew an expiring ITIN, you must submit a completed Form W-7, Application for IRS Individual Taxpayer Identification Number, and all required identification documents to the IRS. No tax return is required for a renewal application. Taxpayers who will file a tax return in 2017 and whose ITIN will expire at the end of the calendar year can begin the renewal process starting […]
  4. Get your summer tax resources here!

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    While tax season is over, some people may have questions about their taxes, need help filing their Renter’s Credit, or might want to start planning for next tax season. Below are answers to some common questions. Are there free tax preparation sites open during the summer? There are some free tax preparation sites open this summer in Minnesota. Enter your zip code or select your county to find the closest one. What if I can’t get to a free tax prep site, can I file online? MyFreeTaxes (www.myfreetaxes.com) provides free, online federal and state tax preparation to individuals and families with household incomes of $62,000 or less in 2015. What if I only need to file my Renter’s Credit or Homestead Credit Refund? Renters filing their Renter’s Property Tax Refund, often called the Renter’s Credit, can get assistance at a free tax prep site and can find information about filing online on the Department of Revenue’s website. Homeowners can file online for free using the Minnesota Department of Revenue’s Property Tax Refund Online Filing System. The deadline to claim both property refunds for 2014 is August 15. How can I start getting organized for next tax season? Getting organized for the next tax season is important. For example, if a taxpayer had a major life event like change in martial status or birth of a child, the amount of tax withheld from pay should be changed. To do that, file a new Form W-4 with the employer(s). Additionally, parents who […]
  5. Getting ready to file your taxes? Don’t miss these ten tips.

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    Tax season is around the corner, and January is a great time to start thinking about filing taxes. Below are ten tips to help make the most of the 2016 tax season. 1. Save hundreds of dollars by filing for free. Minnesota has more than 290 free tax preparation sites where taxes are prepared by IRS-certified volunteers who will help you get your maximum refund. You can also file online for free using MyFreeTaxes, if you made under $62,000. 2. If you use a paid tax preparer, choose wisely. When selecting an individual or company to prepare your taxes, check the person or company’s qualifications, ask about their service fees, and make sure they are accessible after April 18 in case you have a question. 3. Bring all your documents to maximize your refund. Ensure you have all your documents including proof of identification and a Social Security card or Individual Tax Identification Number (ITIN), picture I.D., and income statements. 4. Get your refund faster and safer using direct deposit. Bring your routing and account numbers for your checking account, savings account, and/or prepaid card. 5. You could receive up to $6,242 from the Earned Income Tax Credit. If you had earned income in 2015 and made less than $53,267, you could be eligible for the Earned Income Tax Credit. 6. Know who you can claim as a dependent. If you are separated, divorced, or never married, know who is entitled to claim the child(ren). 7. Save your receipts from […]
  6. Blurb to share on your website, in your newsletter, and on social media

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    Please feel free to cut and paste the copy below to help us spread the word. Filed taxes yet? March is a great month to file and avoid the end-of-season rush If you haven’t filed your taxes yet, March is a great time to do it. Did you make less than $30,000 as an individual or $50,000 as a family? You could qualify for free tax preparation. Below are reasons why filing for free is better. Volunteers are tax experts! Free tax preparation volunteers go through hours of training and are IRS-certified. They’re equipped to make sure you get your maximum refund. Volunteers are tax experts! Free tax preparation volunteers go through hours of training and are IRS-certified. They’re equipped to make sure you get your maximum refund. You keep 100% of your money! Free tax prep filers pocket 100% of their refund instead of having to pay an average of $200 to file taxes with a paid preparer Many free tax prep options! There are more than 250 free tax prep sites across Minnesota. You can find a list of them here: http://bit.ly/mnfreetaxprep. You can also file for free online atwww.myfreetaxes.com. For more information about free tax preparation, tax credits, and a list of items needed for tax preparation, visit the Claim it! website at www.youclaimit.org.