The IRS Audit Blog

Posts Tagged ‘irs form’

Question: Has the IRS mailed the 2006 1040 forms and instruction booklets yet?

Answer: They generally go out in late December. If you didn’t get anything, it’s probably because you used a computer generated tax form (like TurboTax, TaxCut, etc.) or used a paid preparer. In those cases, the IRS will send nothing except a brochure on e-filing.

Ask the Experts: Answering questions on short sales, tax credits

With the tax season under way, it’s a good time to get advice on vexing tax-related questions.

How to Complete and File a 1040A Tax Form : 1040A Child Care Credit Tips

Question: IRS form 8880 Credit for Retirement Savings Contributions?

Is line 2 of the 8880 the amount of box 12b Code D? All the contributions from my 401(k). Line 2 states Elective deferrals to a 401(k) or other qualified employer plan,… When I use turbo tax online it says I can not take this tax credit but H&R Block allows me to take this credit. All you tax experts out there let me know if Understand this credit. It is an incentive to save using a 401(k) correct?
I guess I have to spell it out clearer…. Am I reading the 8880 correctly. All my 401(k) contributions I put on line 2 of my form 8880? I know the income rules. I am just asking if this is correct for Example If I put $1000 in my 401(k) and I made just under $25,000 single. The tax credit would be $1000 x .1 = $100 Which in turn gives me back $100 more on my refund. Turbo Tax says I don’t qualify for this credit which I don’t understand why H&R Block allows me to take it. (Both online sites no people told me this)

Answer: “Internal Revenue Code (IRC) Section 25B provides a nonrefundable tax credit for an eligible individual who makes a regular traditional IRA or Roth IRA contribution or defers a portion of his/her salary to a qualified employer plan. An individual or married couple files IRS Form 8880 to take advantage of the credit, which is only available through 2006.

An individual bases the credit calculation on a percentage of his/her regular IRA contribution and/or salary deferral up to $2,000 each year. The credit ranges from 10 percent to 50 percent of the IRA contributions and/or salary deferrals depending on an individual’s adjusted gross income.

As a nonrefundable credit, it is only available to the extent of an individual’s income tax. In other words, if an individual determines that he is entitled to a $1,000 credit but only owes a tax of $500, the credit will zero out his tax, but the remaining $500 of credit is lost.

Furthermore, the credit is not available to any full-time student, any individual claimed as a dependent on another person’s federal income tax return, or to any individual with adjusted gross income over $25,000 ($37,500 for an individual filing as a head of household and $50,000 for a married couple filing a joint return).”

Time for a change? New rules apply to Roth IRAs

The economy has led many to take closer looks at how their retirement savings accounts are faring and, in light of new rules that took effect at the beginning of this year, some financial advisers urge consumers to consider converting traditional Individual Retirement Accounts into Roth IRAs.

Question: How do I fill out Form1040 if my income is from Japan?

I am working in Japan, but am a permanent resident in California. I have already filed Form 4868 (automatic extension). I have also filled out Form 2555-ez (foreign earned income exclusion). I have never worked before in the U.S. and never filed taxes. This is my first time.

My problem:
On line 7 (income) of the Form1040, I listed my wages from Japan (since it is my only source of income). Then on line 21 (Other Income) I listed my Japanese income again and wrote in 2555-ez. Because this is an exclusion, the amount is entered as a negative.

Then on line 22, I added line 7 to 21. However, this just cancels out everything and my total income equals ZERO. Is this correct? Every question after that is all zeroes so I am not sure if I am filling the form correctly…

I called the IRS but they are closed right now, so I am wondering if I can get any serious answers here. Please help! Thanks in advance!

Answer: If you qualify for foreign income exclusion, and do not have any other income, then you will get 0 on line 22. You will not owe any federal income tax.

You may owe CA tax if you are reequired to file CA tax return. CA will tax your foreign income.

If you have a bank account, make sure to report the interest income.

Tax time brings some changes to Tax Center

As tax season approaches, the Offutt Tax Center staff is preparing for a busy tax season and wants its customers to be aware of some changes in its service offerings.

Question: No rental history can I get a mortgage?

I have been pre qualified for an FHA loan. I ahve no rental history. I have lived with my girlfriend for 9 years, but not on the lease. He takes cash or money order so we only have handwritten reciepts which I don’t think will fly.The landlord will sign the verification form, but needs to know will there be any trouble for him with the IRS for example? What does the lender do with these verification forms? DO they go to the IRS or HUD or FHA or are they just for the use of the mortgage company? So can I go for a mortgage with this sheet filled out or should we rent for a year with a rental that is a managed company . I am thinking maybe this landlord isn’t reporting all income on taxes, but I don’t want to cause problems for him or my girlfriend.

Answer: FHA does not check rental history and your landlord is not involved. They will not be investigating your landlord. They are trying to verify that you are who you say you are.

Your CREDIT history (rent is not credit) and income is all they are interested in.

Tax season looms: Electronic filing begins on Friday

LAS CRUCES — Believe it or not, the deadline to file a tax return is just slightly more than three months away.

can the irs seize my bank account paycheck and social security