IRS grants go to Quinnipiac University and UConn

The Internal Revenue Service has awarded nearly $10 million in matching grants to Low-Income Taxpayer Clinics (LITCs) for the 2011 grant cycle, including two recipients from Connecticut.
The IRS awarded $75,000 to Quinnipiac University in Hamden and $88,000 to the University of Connecticut's Greater Hartford campus.

LITCs are organizations that represent low-income taxpayers in federal tax controversies with the IRS for free or for a nominal charge and/or provide tax education and outreach for taxpayers who speak English as a second language.

Through the LITC program, the IRS awards matching grants of up to $100,000 a year to qualifying organizations.

Questions about the LITC Program can be addressed to the LITC Program Office at (202) 622-4711 (not a toll-free call) or by e-mail at LITCProgramOffice@irs.gov. IRS Publication 4134, Low-Income Taxpayer Clinic List, provides information on LITCs in each geographic area and the languages each clinic serves in addition to English.

Save your receipts: Summer day camps may reap tax benefits

Many working parents must arrange for care of their children age 12 or under during the school vacation period.

A popular solution — with favorable tax consequences — is a day camp program. Unlike overnight camps, the cost of day camp may count as an expense toward the Child and Dependent Care Credit.

Here are five facts the Internal Revenue Service wants you to know about a tax credit available for child care expenses:

1. The Child and Dependent Care Credit is available for expenses incurred during the summer and throughout the year.
2. An expense for an overnight camp does not qualify.
3. If your childcare provider is a sitter at your home or a daycare facility outside the home, you'll get some tax benefit if you qualify for the credit.
4. The actual credit can be up to 35 percent of your qualifying expenses, depending upon your income.
5. You may use up to $3,000 of the unreimbursed expenses paid in a year for one qualifying individual or $6,000 for two or more qualifying individuals to figure the credit.

For more information check out IRS Publication 503, Child and Dependent Care Expenses. This publication is also available by calling 800-TAX-FORM (800-829-3676).

Conn. IRS tax assistance centers offer Saturday hours

Taxpayers having difficulty visiting an Internal Revenue Service Taxpayer Assistance Center during weekday business hours can visit an IRS office on Saturday from 9 a.m. to 2 p.m. in New Haven at 150 Court St. or Hartford at 135 High St.

This will be the IRS' final Saturday Open House during the income tax filing season to provide free assistance to taxpayers who need help filing their tax returns. Help with account questions, such as collection or examination issues, is also available during the Open House.

“We are opening our doors on Saturday, March 26, to help taxpayers who may not have a chance to seek assistance during the work week,” said IRS spokesperson Gregg Semanick. “If taxpayers need help preparing their tax returns or have an account question, we encourage them to visit one of our open houses.”

The IRS offers assistance at 97 locations around the country. A complete list of places is available online at http://www.irs.gov/.

In addition to IRS help, community organizations partner with the IRS.
 
Volunteer Income Tax Assistance (VITA) programs assist people who earned $49,000 or less, and Tax Counseling for the Elderly (TCE) programs assist individuals age 60 and over with their 2010 income tax return preparation and electronic filing. Many of these sites have Saturday hours, while others offer assistance at various times during the week. Taxpayers can call 800-906-9887 to find local partners.

4 ways to find free tax help

The Internal Revenue Service offers free assistance by computer, telephone and in person. The IRS can also help find free tax preparation sites for those who qualify. Here are four ways you can get the information you need to file your tax return.

1. The IRS website is a one-stop shop for a wide array of tax information.
You can even prepare and file your federal tax return through Free File, a service offered by IRS and its partners who make available free tax preparation software and free electronic filing. But you must go through IRS.gov to use Free File.

2. Taxpayer Assistance Centers.
When you believe your tax issue cannot be handled online or by phone and you want face-to-face assistance, you can find help at a local IRS Taxpayer Assistance Center. Locations, business hours and an overview of services are available at IRS.gov. Just go to the Individuals tab and click on the link for Contact My Local Office in the left tool bar section under IRS Resources.

3. Community Resources.
Free tax preparation is available through the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly programs in many communities. Volunteer return preparation programs provided through IRS and its partners offer free help in preparing simple tax returns for low-to-moderate-income taxpayers.

For a list of the 2011 VITA sites you can visit IRS.gov, or call 800-906-9887. You may also call AARP — the largest TCE participant — at 888-227-7669 (888-AARPNOW) or access http://www.aarp.org/ to find the nearest AARP Tax-Aide site.

4. Telephone.
Call the IRS Tax Help Line for Individuals, 800-829-1040, to get answers to your federal tax questions. To hear pre-recorded messages covering various tax topics or check on the status of your refund, call 800-829-4477. TTY/TDD users may call 800-829-4059 to ask tax questions or to order forms and publications. To order free forms, instructions and publications call 800-829-3676.

Tuesday Tax Tip: 10 tax benefits for parents

Did you know that your children may help you qualify for some tax benefits?

Here are 10 tax benefits parents should consider when filing their tax returns this year:

1. Dependents.
 In most cases, a child can be claimed as a dependent in the year they were born. For more information see IRS Publication 501, "Exemptions, Standard Deduction, and Filing Information."

2. Child Tax Credit.
 You may be able to take this credit on your tax return for each of your children under age 17. If you do not benefit from the full amount of the Child Tax Credit, you may be eligible for the Additional Child Tax Credit. For more information see IRS Publication 972, Child Tax Credit.

3. Child and Dependent Care Credit.
 You may be able to claim the credit if you pay someone to care for your child under age 13 so that you can work or look for work. For more information see IRS Publication 503, Child and Dependent Care Expenses.

4. Earned Income Tax Credit.
 The EITC is a benefit for certain people who work and have earned income from wages, self-employment or farming. EITC reduces the amount of tax you owe and may also give you a refund. For more information see IRS Publication 596, Earned Income Credit.

5. Adoption Credit.
 You may be able to take a tax credit for qualifying expenses paid to adopt an eligible child. Taxpayers claiming the adoption credit must file a paper tax return because adoption-related documentation must be included. For more information see the instructions for IRS Form 8839, Qualified Adoption Expenses.

6. Children with Earned Income.
 If your child has income earned from working they may be required to file a tax return. For more information see IRS Publication 501.

7. Children with Investment Income.
 Under certain circumstances a child’s investment income may be taxed at the parent’s tax rate. For more information see IRS Publication 929, Tax Rules for Children and Dependents.

8. Higher Education Credits.
 Education tax credits can help offset the costs of education. The American Opportunity and the Lifetime Learning Credit are education credits that reduce your federal income tax dollar-for-dollar, unlike a deduction, which reduces your taxable income. For more information see IRS Publication 970, Tax Benefits for Education.

9. Student Loan Interest.
 You may be able to deduct interest you pay on a qualified student loan. The deduction is claimed as an adjustment to income so you do not need to itemize your deductions. For more information see IRS Publication 970.

10. Self-employed Health Insurance Deduction.
 If you were self-employed and paid for health insurance, you may be able to deduct any premiums you paid for coverage after March 29, 2010, for any child of yours who was under age 27 at the end of 2010, even if the child was not your dependent.

The forms and publications on these topics can be found at the IRS Web site or by calling 800-TAX-FORM (800-829-3676).

Checking your tax return? There's an App for that...

The Internal Revenue Service is keeping up with the times. This is the first tax season the government agency will offer an application for smartphones: IRS2Go.

“This new smart phone app reflects our commitment to modernizing the agency and engaging taxpayers where they want when they want it,” said IRS Commissioner Doug Shulman. “As technology evolves and younger taxpayers get their information in new ways, we will keep innovating to make it easy for all taxpayers to access helpful information.”

The IRS2Go phone app will also give you easy-to-understand tax tips.

Apple iPhone users can download the free IRS2Go application by visiting the Apple App Store. Android users can visit the Android Marketplace to download the free IRS2Go app.

I just downloaded it to my DroidX.

It opens with four options: Get your refund status (this will prompt you for information specific to your return); get tax updates (which will be sent to an e-mail account); follow us (via the @IRSnews Twitter feed); and contact us.

“This phone app is a first step for us,” Shulman said. “We will look for additional ways to expand and refine our use of smartphones and other new technologies to help meet the needs of taxpayers.”

IRS holding $1.53 million in undelivered refund checks to CT taxpayers

The Internal Revenue Service is looking for 1,013 Connecticut taxpayers who have not yet claimed their share of undelivered refund checks totaling $1.53 million.

These undelivered refund checks were returned to the IRS by the U.S. Postal Service due to mailing address errors. The IRS can reissue the checks, which average $1,517, after taxpayers correct or update their addresses with the IRS.


Nationally, there are 111,893 taxpayers with undelivered refunds, totaling $164.6 million with an average refund of $1,471.

“We want to make sure taxpayers get the money owed to them,” IRS Commissioner Doug Shulman said in a statement.  “If you think you are missing a refund, the sooner you update your address information, the quicker you can get your money.”

Gregg Semanick, the IRS Connecticut spokesperson, said taxpayers only need to update the information once for the IRS to send out all checks that are due.  “Some taxpayers are due more than one check,” Semanick said.

Nationwide, undelivered refund checks average $1,471 this year, compared to $1,148 last year. The average dollar amount for returned refunds rose by 28 percent this year, possibly due to recent changes in tax law which introduced new credits or expanded existing credits, such as the Earned Income Tax Credit.

Taxpayers can generally update their addresses with the online “Where’s My Refund?” tool, where they also can check the status of refunds.

A taxpayer must submit his or her Social Security number, filing status and amount of refund shown on their 2009 return.
Those checking on a refund over the phone will receive instructions on how to update their addresses. Taxpayers can access a telephone version of “Where’s My Refund?” by calling 1-800-829-1954.

While only a small percentage of checks mailed out by the IRS are returned as undelivered, taxpayers can put an end to lost, stolen or undelivered checks by choosing direct deposit when they file either paper or electronic returns. Taxpayers can receive refunds directly into their bank, split a tax refund into two or three financial accounts or even buy a savings bond.

An open letter from the IRS to CT charities: File or lose tax-exempt status (w/list)

The Internal Revenue Service released this open letter Tuesday, as an outreach effort to let these charities and nonprofits know that they must file by Oct. 15 to retain their tax exempt status.



Dear Editor:

We at the Internal Revenue Service are concerned because as many as 3,900 small community-based nonprofits in Connecticut are in jeopardy of losing their tax-exempt status. The loss of this status could greatly impact the organizations' charitable work and their donors' potential tax deductions.

Among the organizations that could lose their tax-exempt status are local sports associations and community support groups, volunteer fire and ambulance associations and their auxiliaries, social clubs, educational societies, veterans groups, church-affiliated groups, groups designed to assist those with special needs and a variety of others.

The organizations that are at risk failed to file the required returns for 2007, 2008 and 2009, according to IRS records. The requirement to file is the result of a tax law change that occurred in 2006. For many of these small organizations, complying with the new law may be as simple as completing a 10-minute form online. They can preserve their exempt status under a one-time relief program the IRS announced in July, but only if they file by Oct. 15, 2010.

The IRS has made numerous attempts to alert these organizations, but we are concerned that many may not have gotten the word. A list of the organizations that were at-risk as of the end of July is posted at IRS.gov along with instructions on how to comply with the new law.

We encourage everyone who is connected with a small nonprofit community group to make sure that their organization is aware of the law change and is in compliance before the Oct. 15 deadline.

Best regards,
Gregg Semanick
IRS CT Spokesperson
200 Sheffield Street, Mountainside NJ

Six Tax Benefits for Job Seekers

The top challenge in our economy is getting people back to work.

There are millions of taxpayers taxpayers who are spending the summer months searching for employment, so I thought I would pass along these tidbits from the Internal Revenue Service on job search expenses that can be deducted.

Hopefully, these are helpful:

1. To qualify for a deduction, the expenses must be spent on a job search in your current occupation. You may not deduct expenses incurred while looking for a job in a new occupation.

2. You can deduct employment and outplacement agency fees you pay while looking for a job in your present occupation. If your employer pays you back in a later year for employment agency fees, you must include the amount you receive in your gross income up to the amount of your tax benefit in the earlier year.

3. You can deduct amounts you spend for preparing and mailing copies of your résumé to prospective employers as long as you are looking for a new job in your present occupation.

4. If you travel to an area to look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area. You can only deduct the travel expenses if the trip is primarily to look for a new job. The amount of time you spend on personal activity compared to the amount of time you spend looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job.

5. You cannot deduct job search expenses if there was a substantial break between the end of your last job and the time you begin looking for a new one.

6. You cannot deduct job search expenses if you are looking for a job for the first time.

For more information about job search expenses, see IRS Publication 529, Miscellaneous Deductions at IRS.gov or call 800-TAX-FORM (800-829-3676).

Closing deadline extended to Sept. 30 for first-time homebuyer tax credit

The Internal Revenue Service released a statement today saying that taxpayers who entered into a binding contract before the end of April now have until September 30, 2010 to close on the home.

The Homebuyer Assistance and Improvement Act, which went into effect on July 2, 2010, extended the closing deadline for eligible home buyers who entered into a binding purchase contract on or before April 30 and were required to close on the purchase on or before June 30.

Here are five facts from the IRS about the First-Time Homebuyer Credit and how to claim it:

1. If you entered into a binding contract on or before April 30, 2010 to buy a principal residence located in the United States you must close on the home on or before September 30, 2010.

2. To be considered a first-time home buyer, you and your spouse – if you are married – must not have jointly or separately owned another principal residence during the three years prior to the date of purchase.

3. To be considered a long-time resident home buyer, your settlement date must be after November 6, 2009 and you and your spouse – if you are married – must have lived in the same principal residence for any consecutive five-year period during the eight-year period that ended on the date the new home is purchased.

4. The maximum credit for a first-time home buyer is $8,000. The maximum credit for a long-time resident home buyer is $6,500.

5. To claim the credit you must file a paper return and attach Form 5405, First Time Homebuyer Credit, along with all required documentation, including a copy of the binding contract. New homebuyers must attach a copy of the properly executed settlement statement used to complete the purchase. Long-time residents are encouraged to attach documentation covering the five-consecutive-year period such as Form 1098, Mortgage Interest Statements, property tax records or homeowner’s insurance records.

For more IRS information about the First-Time Homebuyer Tax Credit and the documentation requirements, go here.

Weigh Your Retirement Options and Plans

(Editor's Note: Paul Schatz, President of Heritage Capital, LLC, in Woodbridge, will be contributing to Fi$callyFit every Friday. Read his biography here)

One casualty of the recent bear markets has been many people's faith in their ability to retire. Retirement plans based on what once seemed a reasonable 10% annual rate of appreciation have instead seen 10 years of minimal, if any, real appreciation in their equity investments. The question now is what should you do with respect to planning for retirement?

The first step is simply to spend less and save as much as you can.

If the market experiences an average return of 5.5% (which looks quite rosy at this point), building a nest egg of $1 million will take either hefty investments now, or a longer period until retirement. Each year you delay saving, the more you will need to set aside.



Source: Investopedia


Remember that risk is very real when you invest your savings.

Before working with a financial adviser or money manager, ask what they will do to protect your savings in the event of another market downturn, because there will be one. If they don't have a plan that you can buy into, don't invest.

Consider alternative retirement goals.
Work longer, which will increase your Social Security payments and give your retirement investments more time to grow. IRS regulations allow participants in a 401(k) and other workplace retirement plans to delay their required minimum distributions well beyond 70.5 as long as they continue to work

Phase in your retirement.
Gradually reduce your work hours until you can afford to fully retire.
Plan to work part-time in retirement. But be careful because this will impact the amount you receive from Social Security if you opt for early retirement.

Hit reset on your lifestyle.
A smaller house, renting a vacation home instead of owning, cutting back on club memberships... these are all ways to free up funds that you can use for retirement. Look for ways to minimize monthly expenses such as property maintenance, loan payments etc. Even when expenses seem small individually, added together they become real money. If you are assisting younger members of your family with their expenses, this may be the time to cut the strings.

Retirement is not beyond your reach. In fact, it may be much more feasible than you think. The important thing is to not wait until the last minute to start planning. The earlier you put a plan in place the greater your chances of succeeding. For help with achieving your retirement goals, let's talk.

Please feel free to email me with any questions or comments at Paul@investfortomorrow.com.

Until next time…

Paul Schatz

Heritage Capital LLC
http://www.investfortomorrow.com/

2010: Will Your Small Business Claim the Health Care Tax Credit?

The Internal Revenue Service this week started mailing out postcards to small businesses and tax-exempt organizations to raise awareness of benefits that were enacted with the federal Patient Protection and Affordable Care Act last month.

The IRS mailed approximately 54,000 postcards throughout Connecticut. More information about state-by-state distribution of the postcard may be viewed here.

The health care tax credit passed by Congress and signed by President Barack Obama is one of the first health care reform provisions to take effect and is designed to make it more affordable for small businesses and nonprofits to maintain existing coverage or begin offering coverage to their employees.

“We want to make sure small employers across the nation realize that, effective this tax year, they may be eligible for a valuable new tax credit. Our postcard mailing – which is targeted at small employers – is intended to get the attention of small employers and encourage them to find out more," IRS Commissioner Doug Shulman said in a statement Tuesday. “We urge every small employer to take advantage of this credit if they qualify.”



Eligible small businesses will be able to claim the credit as part of the general business credit starting with the 2010 income tax return filed in 2011. For tax-exempt organizations, the IRS will provide further information on how to claim the credit. Click here for an online guide.

In general, the credit is available to small employers that pay at least half the cost of single coverage for their employees in 2010. For tax years 2010 to 2013, the maximum credit is 35 percent of premiums paid by eligible small business employers and 25 percent of premiums paid by eligible employers that are tax-exempt organizations, the IRS said.

The maximum credit goes to smaller employers – those with 10 or fewer full-time equivalent (FTE) employees – paying annual average wages of $25,000 or less. Because the eligibility rules are based in part on the number of FTEs, not the number of employees, businesses that use part-time help may qualify even if they employ more than 25 individuals.

The credit is completely phased out for employers that have 25 FTEs or more or that pay average wages of $50,000 per year or more.



Please comment below on whether your business offers health coverage and you plan to claim the credit or if you are unable to offer health insurance to your staff and the credit will not help. We want to hear from you...

Check Out IRS Publication 17

The Internal Revenue Service has created a guide to help taxpayers get a jump on filing their 2009 federal income tax returns and navigate tax breaks provided under the American Recovery and Reinvestment Act of 2009.

The 308-page guidebook is accessible at IRS.gov and is named (in short) "IRS Publication 17."

You can click through more than 6,000 interactive links for answers you may need on your tax questions.

“IRS Publication 17, Your Federal Income Tax Guide, is your ‘tax encyclopedia’ for all your tax planning and tax return filing needs," Connecticut's IRS spokesperson Gregg Semanick said Monday. “Publication 17 summarizes the tax changes for 2009 and 2010 to ensure you do not miss out on entitled tax credits, deductions and benefits.”

The book offers details on how you can take advantage of new tax-saving opportunities, such as the making work pay credit for most workers, American opportunity credit for parents and college students, energy credits for homeowners going green, first-time homebuyer credit, sales or excise tax deduction for new car buyers, and the expanded child tax credit and earned income tax credit for low- and moderate-income workers.

Publication 17 has been published annually by the IRS for more than 65 years and has been available on the IRS Web site since 1996, Semanick said.

How to Get It:

Go to http://www.irs.gov/and enter “17” in the search box in the upper right corner of the home page.

Those who do not have access to the Internet can call 1-800-TAX-FORM (829-3676) to request a free copy from the IRS. Printed copies will be available in January 2010.

Wait, There's More:

Besides Publication 17, IRS.gov offers other helpful resources for those doing year-end tax planning.


Many 2009 forms are already posted, and updated versions of other forms, instructions and publications are being posted almost every day. Forms already available include Form 1040 , short Forms 1040A and 1040EZ , Schedule A for itemizing deductions, the new Schedule L for those increasing their standard deduction by real-estate taxes paid, sales or excise taxes on new car purchases or a net disaster loss, and the new Schedule M for claiming the making work pay credit.


Also, visit the American Recovery and Reinvestment Act of 2009 Information Center for a variety of recovery-related videos, podcasts, tax tips and answers to frequently-asked questions (FAQs).

Here's the Skinny on the Expanded Homebuyer Tax Credits

The IRS has issued the following guidance for taxpayers who may be planning to buy their first home or may have lived in their current house as a principal or primary residence for at least five consecutive years and want to buy a new home.

A new law that went into effect Nov. 6 extends the first-time homebuyer tax credit over five months and expands eligibility requirements to existing homeowners.

The Worker, Homeownership, and Business Assistance Act of 2009 extends the deadline for qualifying home purchases from Nov. 30, 2009, to April 30, 2010. Additionally, if a buyer enters into a binding contract by April 30, 2010, the buyer has until June 30, 2010, to settle on the purchase.

The maximum credit amount remains at $8,000 for a first-time homebuyer –– that is, a buyer who has not owned a primary residence during the three years up to the date of purchase.

But the new law also provides a “long-time resident” credit of up to $6,500 to others who do not qualify as “first-time homebuyers.” To qualify this way, a buyer must have owned and used the same home as a principal or primary residence for at least five consecutive years of the eight-year period ending on the date of purchase of a new home as a primary residence.

For all qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 tax returns.

A new version of Form 5405, First-Time Homebuyer Credit, will be available in the next few weeks.

A taxpayer who purchases a home after Nov. 6 must use this new version of the form to claim the credit. Likewise, taxpayers claiming the credit on their 2009 returns, no matter when the house was purchased, must also use the new version of Form 5405.

Taxpayers who claim the credit on their 2009 tax return will not be able to file electronically but instead will need to file a paper return.

A taxpayer who purchased a home on or before Nov. 6 and chooses to claim the credit on an original or amended 2008 return may continue to use the current version of Form 5405.

Income Limits Rise

The new law raises the income limits for people who purchase homes after Nov. 6.



The full credit will be available to taxpayers with modified adjusted gross incomes(MAGI) up to $125,000, or $225,000 for joint filers. Those with MAGI between $125,000 and $145,000, or $225,000 and $245,000 for joint filers, are eligible for a reduced credit. Those with higher incomes do not qualify.

For homes purchased prior to Nov. 7, 2009, existing AGI limits remain in place. The full credit is available to taxpayers with MAGI up to $75,000, or $150,000 for joint filers. Those with MAGI between $75,000 and $95,000, or $150,000 and $170,000 for joint filers, are eligible for a reduced credit. Those with higher incomes do not qualify.

Several new restrictions on purchases that occur after Nov. 6 go into effect with the new law:

Dependents are not eligible to claim the credit.

No credit is available if the purchase price of a home is more than $800,000.

A purchaser must be at least 18 years of age on the date of purchase.

Members of the Military Members of the Armed Forces and certain federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and still qualify for the credit. An eligible taxpayer must buy or enter into a binding contract to buy a home by April 30, 2011, and settle on the purchase by June 30, 2011. This special rule also applies to certain other federal employees.

For more details on the credit, visit the First-Time Homebuyer Credit page on IRS.gov. Related Items: IRS YouTube Videos: Recovery: New Homebuyer Credit, November 2009

IRS Fall Tax Tips

IRS Offers Money Saving & Time Saving Tips

The Internal Revenue Service wants to remind taxpayers that the fall is a good time to conduct a review of their tax situation. Take into account the latest tax changes, check your withholding status and start organizing your records.


Remember to avoid any unsolicited e-mails claiming to come from the IRS. Don’t become a victim of “phishing” scams.

“Some tax breaks and a review of your current tax situation may result in a bigger refund or less taxes to be paid come tax time,” Gregg Semanick, the Connecticut spokesperson for IRS said in a statement. “The Internal Revenue Service offers these tax tips for you to consider.”

Don’t Miss Out on Recovery Tax Provisions

The Internal Revenue Service reminds taxpayers to take advantage of the numerous tax breaks made available earlier this year in the American Recovery and Reinvestment Act (ARRA). The recovery law provides tax incentives for first-time homebuyers, people purchasing new cars, those interested in making their homes more energy efficient and parents and students paying for college. But all of these incentives have expiration dates so taxpayers should take advantage of them while they can. For more information on the Recovery tax provisions, the IRS encourages taxpayers to go to the IRS.gov home page and access the Tax Benefits of the American Recovery and Reinvestment Act of 2009 section.

Educators Should Save Receipts for Tax Break

The IRS reminds teachers and other educators to save their receipts. The Educator Expense Deduction allows teachers and other educators to deduct the cost of books, supplies, equipment and software used in the classroom based on their receipts. Eligible educators include those who work at least 900 hours during a school year in an elementary or secondary school. Worth up to $250, the deduction is available whether or not the educator itemizes deductions.

IRS Offers Help to Small Business Owners

The small business section of IRS.gov provides a one-stop resource for information on starting, operating and closing a business. Whether a person is just considering opening a business or has years of small business experience, IRS provides a wide range of resource tools and educational assistance. The IRS also offers an "A-Z Index for Businesses" to assist small business owners in readily locating desired information. For more information, go to the Small Business and Self-Employed Tax Center on IRS.gov.

Check Your Withholding Status at IRS.gov

The Internal Revenue Service encourages taxpayers to take a few minutes to check their withholding to make sure what is being taken out of their paychecks matches their projected taxes. If not enough is withheld; individuals will owe tax at the end of the year and may, in some cases, have to pay a penalty. If too much tax is withheld, they will lose the use of this money until they get their refund.

Individuals should check their withholding if there are significant personal or financial changes in their life. Many of these changes involve the addition or reduction of exemptions or a change in filing status that alters the tax liability, even if there has been no change in income. These changes include: marriage, divorce, birth or adoption of a child, purchase or sale of a new home, or retirement.

Other changes that can alter the amount that needs to be withheld include taking a second job, having a spouse go back to work, or receiving income not subject to withholding, such as rent, dividends, interest, or capital gains.

On-line assistance is available by clicking "IRS Withholding Calculator" on the “Individuals” page. With the help of current pay stubs and a copy of last year’s tax form, users can check to see if they are withholding the right amount. Information from this automated calculator can then be used to revise a W-4 with your employer.

Maintain Good Tax Records

You can avoid headaches at tax time by keeping track of your receipts and other records throughout the year. Good recordkeeping will help you remember the various transactions you made during the year, which in turn may make filing your return a less taxing experience. Remember, good recordkeeping will ensure you do not miss out on any tax deductions. Publication 552 will help you in knowing what records you need.

Don’t Get Hooked by “Phishing” Scams

The IRS reminds taxpayers not to become a victim of e-mail scams, referred to as phishing scams. Recipients of questionable e-mails claiming to come from the IRS should not open any attachments or click on any links contained in the e-mails. Instead, they should forward the e-mails to mailto:phishing@irs.gov. Remember, the IRS does not send unsolicited e-mails to taxpayers.

Visit IRS.gov Web site

IRS.gov provides a wealth of information. You can access tax forms and publications; learn about electronic filing; check the status of your refund; c alculate the amount of withholding on your W-4; and, request an online payment agreement. You can even get information about a career with the IRS.

Best of all, you can access IRS.gov 24 hours a day, 7 days a week.