The IRS Audit Blog

Archive for September, 2010

Question: Can you find out status of refund on AMENDED tax return on IRS website?

I have put in the information correctly, our SSN, refund amount, etc. but it keeps coming up with “incorrect information.” It says the IRS accepted my amended 1040X form on Turbotax, which is how I did it. Because it was an amended return, I had to mail it and will receive the difference via a paper check.

Because it’s an amended return with a refund, is it NOT going to show up on the IRS website?

Answer: Amendment gererally take from 8 to 12 weeks before the refund is issued. At the 8 week mark you should call to confirm that they have received the amendment. They seem to have a way of getting lost.

Late changes to tax laws will prevent some from filing early

Should federal tax forms be simplified so that the average person can understand them? Increases for some tax filers and decreases for others, changes in education credits, delayed filings, a later deadline. Those are some of the changes taxpayers face as they prepare their 2010 tax returns.

Daniel Ahart Tax Service, Atlanta, GA

Question: IRS Estimated Tax…Line 1 Adjusted Gross Income…Does it include expenses?

On Form 1040 ES, the quarterly estimated tax form for the IRS, I have a question about Line 1…the “adjusted gross income” I expect for 2008.

How do I estimate it? Do I just take the number I made to date and multiply by 4? I made tons of money in January, but I can’t estimate on that explosion of money because it’s just not coming at that rate anymore…

Where do I include my expenses?

What should I specifically do so I only have to pay 110% of last year’s income quarterly instead of 90% of this year’s income quarterly?
And if I’m self-employed…do I include ALL my self-employment income on line 1? And then I list that same income again when I do the estimated self-employment tax?

Answer: You estimate it as if you were doing your taxes:
1. What do you expect your total income (from all sources) will be?
2. What do you expect your total adjustments to income will be?

That’s your expected AGI for 2008.

Another way to do it is to start with your 2007 taxes. Use that as your estimated 2008 income (and tax liability). Since you can re-estimate this quarter-by-quarter, you’ll know what your next estimated quarterly payment should be based on the income you earned in that recent quarter. (Since taxes are a pay-as-you-go system, as long as your quarterly payments match are in synch with your income, you’ll be OK with the IRS.)

Tax Basics for Startups

Part one in a three-part series to help get your business started on a strong foundation.

How to Complete a 1040A Tax Form : 1040A Adjusted Gross Income Tips

Question: Reporting of Foreign Bank and Financial Accounts (FBAR) for U.S. resident aliens?

According to the link http://www.irs.gov/pub/irs-pdf/f90221.pdf any United States person(including resident aliens which I am) who has a financial interest in or signature authority, or other authority over any financial account in a foreign country, if the aggregate value of these accounts exceeds $10,000 at any time during the calendar year, must complete Treasury Department Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts, and file it with the Department of the Treasury.

1. My funds in my home country’s banks are held in a joint savings account with my mother. Does that amount count toward calculating the 10K or not?

Answer: You have authority over those funds, so the full amount on deposit there is included and must be reported.

Several folks are misinterpreting the suspension of reporting. You are a resident so you must file the reports.

IRS 2010 Milestones

Here’s my own not very scientific list of ten highs and lows we taxpayers saw in 2010, mostly from t

IRS Offshore Account Amnesty: What if you don’t owe any tax?