SHOULD YOU FILE A TAX RETURN?
You must
file a tax return if your income is above a certain level. The amount varies depending on filing status,
age and the type of income you receive.
For
example, a married couple under age 65 generally is not required to file until
their joint income reaches $16,900. However self-employed individuals generally
must file a tax return if their net income from self employment exceeds $400.
Even if
you do not have to file, you should file to get money back if Federal Income
Tax was withheld from your pay, or you qualify for any of the following:
Earned
Income Tax Credit. The Earned Income Tax Credit is a federal income tax credit
for eligible low-income workers. The credit reduces the amount of tax an
individual owes, and may be returned in the form of a refund.
Telephone
Tax Refund. The telephone tax refund is
a one-time payment available on your 2006 federal income tax return, designed
to refund previously collected long-distance federal income taxes. It is available
to anyone who paid long-distance taxes on landline, cell phone or Voice over
Internet Protocol (VoIP) service.
Additional
Child Tax Credit. This credit may be available to you if you have three or more
qualifying children or if you have one or two qualifying children and earned
income that exceeds $11,300. The Additional Child Tax Credit may give you a
refund even if you do not owe any tax.
Health
Coverage Tax Credit. Limited to certain
individuals who are receiving certain Trade Adjustment Assistance, Alternative
Trade Adjustment Assistance, or pension benefit payments from the Pension
Benefit Guaranty Corporation.
ADVICE FOR CHOOSING A TAX
RETURN PREPARER
When you
pay someone to do your taxes, choose a preparer wisely and find a qualified tax
professional. You are ultimately responsible for everything on your return even
when it’s prepared by someone else
The most reputable preparers will request to
see your records and receipts and will ask you multiple questions to determine
your total income and your qualifications for expenses, deductions, and other
items. By doing so, they have your best
interest in mind and are trying to help you avoid penalties, interest, or
additional taxes that could result from later IRS contacts.
While
most tax return preparers are professional and honest, use the following tips
to choose a preparer who will offer the best service for your tax preparation
needs.
Ask about
service fees. Avoid preparers who claim
they can get larger refunds than other preparers, or those who guarantee
results or base fees on a percentage of the amount of the refund.
Plan
Ahead. Choose a preparer you will be able to contact after the return is filed
and one who will be responsive to your needs.
Get
References. Ask questions and get references from clients who have used the tax
professional before. Were they satisfied
with the service received?
Research.
Check to see if the preparer has any questionable history with the Better
Business Bureau, the state’s board of accountancy for CPAs or the state’s bar
association for attorneys. Find out if the preparer belongs to a professional
organization that requires its members to pursue continuing education and also
holds them accountable to a code of ethics.
Determine
if the preparer’s credentials meet your needs. Are they an Enrolled Agent,
Certified Public Accountant or Tax Attorney? Only attorneys, CPAs and enrolled
agents can represent taxpayers before the IRS in all matters including audits,
collection actions and appeals. Other return preparers may represent taxpayers
only in audits regarding a return they signed as a preparer.
You can
report suspected tax fraud and abusive tax preparers to the IRS on Form 3949-A,
IRS Web site at IRS.gov or 1-800-TAX-FORM (1-800-829-3676)