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Brent Prockish Brent Prockish Team at Total Lending Concepts Phone: 913-444-9194 License: 229476 Brent@TLCLender.com www.BrentProckish.com |
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June 2010
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A Second Chance at Tax Savings You've got about three years to amend your return, so go back and make sure you got everything you deserve. By Mary Beth Franklin, Kiplinger.com Did you claim every tax break that you were entitled to when you filed your 2009 federal tax return this year? Now that the pressure is off and the April 15 deadline for filing your return has passed, it may be worth your time to give your return a thorough review. There were so many new tax breaks for 2009 that it would have been easy to miss a few. If you did, you may have received a smaller refund – or paid a bigger tax bill – than you should have. But you can set things right by filing an amended tax return now, which could put more money in your pocket in a matter of months. Don't worry if you discover a simple math error, though. You don't need to file an amended return. The IRS can correct computation errors and will send you a notice if you owe more money or are entitled to a bigger refund. Missing forms Although most employees received the credit throughout the year in the form of lower tax withholding, you had to file Schedule M to claim the credit and adjust your tax bill accordingly. Retirees who received a $250 economic-recovery check or direct deposit in the summer of 2009 and who had earned income from a job in 2009 are also required to file a Schedule M. To avoid prohibited double dipping, retirees must deduct the $250 payment they received from the $400 Making Work Pay credit for a net tax credit of $150. But the new Schedule M caused lots of confusion, and millions of people who should have filed one didn't. So the IRS took matters into its own hands. "Most of the time, we're going to pick up that omission," says Eric Smith, a spokesman for the IRS. "Normally, we'll send you a math-error notice showing the adjustment." If your refund is larger than you expected, it means the IRS computed the proper tax for you and included the credit amount in your refund. (Retirees with earned income who failed to subtract their $250 economic-recovery check may get a smaller refund than expected.) If you didn't claim the Making Work Pay credit and the IRS didn't adjust your refund, file an amended return to claim your extra cash. Another new form – Schedule L – also caused some confusion. On this form, taxpayers who didn't itemize their deductions could claim an enhanced standard deduction for net disaster losses, sales or excise tax paid on the purchase of a new car after February 16, 2009, and a property-tax deduction of up to $500 ($1,000 for married couples filing jointly). If you missed one of those tax breaks, file an amended return. Don't wait to claim the home buyer's credit Review education credits Depending on your income, you could claim the supercharged Hope credit for the midwestern disaster area, with a top credit of $3,600 for qualified students, rather than the $2,500 American Opportunity credit available to students elsewhere in the country. Caution: If you choose the Hope credit, you cannot claim the American Opportunity credit for any student in the same year. And while a portion of the American Opportunity credit is refundable if you owe no tax, the Hope credit is not. Tax-preparation software can help you figure out which tax break is best for your situation. Check your filing status Above-the-line deductions Mail your paperwork Unlike your regular income-tax return, you can't file Form 1040X electronically. You can prepare it electronically but you'll have to print it out and mail it to the IRS. Figure it will take about 12 weeks to process your request. And you can't ask for direct deposit, either. The IRS will mail your refund check to you. If you are filing amended tax returns for several different years, mail each amended return in a separate envelope. You may also need to file an amended return with your state tax agency. Reprinted with permission. All Contents © 2010 The Kiplinger Washington Editors. www.kiplinger.com | ||||||||||||||||||||||||||||||
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