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"Weekly Tax Tip" is a feature of the OOIDA Web site, designed to help you make decisions critical to the survival of your trucking business. Through April 15, we'll post frequently asked questions and up-to-date answers, provided by PBS Tax & Bookkeeping Service. If you need additional information, please contact Howard at 1-800-697-5153 or visit the Web site at www.pbstax.com
2010 Tax Tips
GET A JUMP ON YOUR TAXES
Follow the checklist:
1. Make sure you have all the records you need, including W-2’s and 1099’s.
2. Compare amounts on 1099’s and W-2’s with your records to make sure they agree.
3. If the amounts don’t agree call the payor or use the amount you think it is by doing an adjustment on your tax return 4. You must have receipts and back up information for everything that appears on your tax return. Using an income tax organizer that outlines everything you need will be very helpful.
5. E-file your tax return. E-filing catches errors and provides confirmation your return has been received and gives a faster refund.
6. Get the fastest refund. When you e-file early, you receive your refund sooner. When you choose direct deposit, you will receive your refund sooner than waiting for a check.
7. If recently married or divorced and/or changed your last name including hyphenating your last name you will need to notify the social security administration.
8. Every dependent claimed must have a social security number, even newborns.
401K WITHDRAWALS
If you took or are contemplating taking an early 401k withdrawal, you can avoid the 10% penalty if you stopped working, got laid off, quit or retired in the year you turn 55 or thereafter.
PER DIEM
For your overnights, deduct $52 per day from January 1 – September 30, 2009 and $59 per day thereafter. For 2010 it is $59 per day. Per Diem is 80 percent deductible. You must have motel receipts to deduct lodging.
TAX WITHHOLDING
Beware – The Making Work Pay Credit resulted in lower withholding tax for 2009 so prepare for smaller refunds or balance due to the IRS. The credit is up to $400 for individuals and up to $800 for married taxpayers filing joint returns. Taxpayers receiving less than the full amount of the allowable credit can claim the remaining credit when they file their tax return.
EARNED INCOME TAX CREDIT
Do I have to file a tax return? If you had income you should definitely have a tax return prepared even if you think it’s below a certain level and you will not owe any taxes. You may qualify for the earned income tax credit (EIC) which is a refundable credit.
INCORRECT 1099
The 1099 you received shows the wrong amount of income. You should request a corrected copy of the 1099. If you are unable to get a corrected copy of the 1099 you should report the incorrect 1099 information as it appears on the form. Then add or subtract the amount of the error when computing your total. Be sure to include a letter of explanation with your return. If you do not receive a 1099 you still are responsible to show the income.
FILING STATUS
1. You marital status on the last day of the year determines your filing status.
2. A married couple may file a “joint return” or each may file “married filing separately”. If your spouse died during the year you can still file a “joint return”. Choose the one that gives you the lowest tax obligation.
3. If you are unmarried your filing status is either “single” or “head of household”.
MISSING FORM W-2
If you have not received a W-2 and you have contacted your employer, contact the IRS @ 800-829-1040. You will need an estimate of wages earned. Even though a W-2 is missing, you must still file your return or get an extension. If filing, estimate the earnings and withholding on IRS Form 4852 and attach the form to your return. If after you filed and the missing W-2 is received file form 1040X, amended tax return, if there is a difference.
CREDITS GALORE FOR 2009 TAX RETURNS
In addition to the Making Work Pay Tax Credit, The First Time Home Buyer Credit and the Earned Income Tax Credit, which we wrote about earlier, there are numerous other tax credits to be aware of such as:
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