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How to Check Tax Refund Status

Written By: Sasha Feagin

When a person finally files his tax return, sneaking in moments before the deadline, only to find the government owes him money back, suffice it to say, that guy wants his refund as soon as possible. However, there are various factors that affect the length of time it will take for a refund check to come back to the taxpayer. Knowing the basic timeframe the Internal Revenue Service (IRS) uses is imperative to soothing worries that always come during the tax season.

When was the return filed?

It is only logical that the IRS cannot issue a refund if it does not know a refund is due. The only way the IRS is aware it owes a taxpayer money is for that taxpayer to, by way of filing an income tax return, request those funds. A tax return submitted electronically will begin processing immediately, usually being confirmed within three days. A return submitted via the postal service will take significantly longer to arrive at the IRS for processing. Taxpayers that mail returns are urged to wait at least one week (7 days) before asking for information about the status of the return.

When will the refund be processed?

Once the IRS receives the return, and it checks all the data for validity. So, in addition to waiting three days for an electronically submitted return or one week for a mailed return, taxpayers should anticipate waiting another seven to fourteen days for the return to be processed. During this time, the IRS could flag a return for audit. It also could reject the return for incomplete information or other arithmetic miscalculations. If the return is flagged or rejected, the taxpayer may not find out about it until seven days later when the letter from the IRS arrives in the mail. However, if the return receives the all clear from the IRS, taxpayers should expect funds to be authorized for disbursement. After the authorization, the taxpayer must still wait until the next refund disbursement date during the season. Because of the number of refunds the IRS must process, it does bulk delivery of funds on one day per week during the season to minimize expenses. Usually, !
this is the Tuesday after funds are authorized for release.

Who knows where tax refund checks are?

In recent years, the IRS has employed technology to make finding information about the taxpayer’s refund check very accessible to the average American. The fastest and easiest way to find out where a refund check is, is to use the IRS’s “Where is My Refund?” link on irs.gov. Taxpayers can enter information from the tax return such as filing status, refund amount, and social security number to find out where in the process the refund is. If a taxpayer has been waiting over 21 days for the refund, the IRS advises the taxpayer to call 1-800-829-1040. The 21 day suggestion should not include time added for mailing either the return to the IRS or the refund to the taxpayer.

Taxes 101- The Best Online Tax Agencies

Written By: Quai Wentt

April 15th is just days away, and while that ominous deadline has some Americans fretting, others will let the day pass without so much as a second thought. Paying taxes has seemed to lose some of its infamy. In fact, a recent Survey Money study revealed that 68% of Americans complete their tax returns before April 1st, and 56% either are neutral about taxes or actually enjoy doing their taxes (See the rest of the study here).

The results of the study beg the question: what is taking the sting out of preparing taxes? The answer could lie in the ways in which most Americans file their taxes. About 91% of Americans don’t do their taxes alone. The most popular method of filing taxes is through online or software programs (41%) followed closely by accounting services (39%). With the average cost of accounting services coming in at $180, while the average for online filing is $60, filing taxes online can be the most cost-effective and painless option available. This article will discuss the top three online tax agencies that help make tax time considerably less stressful.

TurboTax

TurboTax is one of the most familiar and trusted brands of online tax agencies. It offers an interface that is easy to use and a considerable amount of tax-education materials. It has several editions ranging from Free Federal to Premium. Other features that make filing through TurboTax simpler are a mobile version, all deduction options, and the convenience of importing tax documents. TurboTax is the best option all around. Additionally, TurboTax offers a special military version that is free for soldiers with lower pay grades (E1-E5), but costs $84.98 for soldiers with higher pay grades (E-6-Officers).

H&R Block

H&R Block is another well-established tax preparation agency. It offers a well-put together and intuitive interface, though some prefer TurboTax’s look. The main advantage of using H&R Block is its customer support. Unlike any of the other tax agencies, it offers free in-person support at one of its many locations and instant chat with an online agent. TurboTax on the other hand, does not have any physical locations (but it does have support over the phone and by online chat). Another huge advantage for H&R Block is that it offers a free military version. All active duty members of the military can file federal and up to three state tax returns absolutely free using the link provided by Military One Source.

Tax ACT

Tax ACT is the least expensive option of all three (with a impressive price point of $8-$14.95 to file state taxes and free federal taxes), but it doesn’t have the longstanding reputation that TurboTax and H&R Block have. It has most of the same features that the other two have including free federal filing, a mobile app, an accuracy guarantee, and step-by-step guidance. It is the best option for taxpayers with simple returns. In summary, different online tax agencies are most beneficial to people with different needs. TurboTax is very strong in all categories, so it is generally a safe choice for many people. H&R Block is very advantageous for military members and is a no-brainer. Tax ACT is the simple, cheaper, yet still effective option. All in all, any online tax agency is much better than filing on paper for most people.

Worst and Best States for Income Tax Rates

Written By: Quai Wentt

As the end of tax season approaches, some citizens are finding themselves abysmally disappointed by their tax returns. Paltry refunds, or worse, tax deficits are enough to make any taxpayer bitter. Federal taxes are more than enough to complain about, but state taxes are the coupe de grace. For those whose state taxes make them want to pack up and move to a more merciful state, there are resources on the internet that can help.

Tax-brackets.org is a useful site that conveniently lists tax brackets of all 50 states in alphabetical order with shortcut links to a specific state on column to the left. The ingenious thing about this site is that it color-codes the percentages of each tax bracket in a gradient from bright green (signifying a low tax rate) to bright red (signifying a high tax rate). This special touch makes it remarkably simple to glance at the tables and pick out the safe haven states with the best tax rates.

The Best States

Crowd favorites are Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming, which have absolutely no income tax (every taxpayer’s dream). Close runners-up are Colorado, Illinois, Indiana, Massachusetts, Michigan, New Hampshire, Pennsylvania, Tennessee, and Utah, which all have flat income tax rates of 6% or lower. Flat taxes are those with the same rates across the board for people of all incomes, and are desirable (especially low ones) for those with the most income because usually they would be stuck with paying taxes in the highest brackets.

The Worst States

It is no surprise that California (a notoriously expensive state in which to live) is among the states with the worst income tax rates. The single-filer who makes at least $34005 must pay a shocking 8%, while the wealthy making $1 million or more hand over 10.3%. Hawaii is another state that is nice to visit, but is hard on the wallet as a resident. Those who earn at least $48000 pay a whopping 8.25% and the rates only go up from there, finally capping at 11%. Iowa’s tax rates skyrocket for income after $5284 (6.2%) before capping at 7.8% for income at only $26418. Other states to stay away from include Arkansas, Idaho, Iowa, New Jersey, New York, Oregon, Vermont, and Wisconsin.

There’s a Catch

However, the best states for income tax rates may not actually be the best states overall; there’s always a catch. Taxes do serve an essential purpose, so states must make their money somehow. Before being enticed by some states’ low income tax rates, it is important to consider the reasons for this and their implications. For one thing, lower income taxes does not always equate to lower net taxes. Texas, for example has one of the highest property taxes. Another thing to consider is the state’s minimum wage. Wyoming, another state on the best income tax list, has a minimum wage of only $5.15/hr. Finally, consider the cost and benefits of high taxes themselves. Sure, it may hurt to pay high taxes, but it might be worth it if that means better roads, schools, and public services.

Taxes 101-What are Tax Brackets?

Written By: Quai Wentt

The simplest way to think about tax brackets is that people of differing incomes pay different amounts in taxes. Basically, this means that the more money a person makes, the higher that person will pay in taxes. It is called a “bracket” because there are certain cut-off incomes that determine what percentage of income tax is applied. For example, the table below shows the tax brackets for 2014 (for taxes due April 15, 2015).

Tax Rate Single-Filer Married filing jointly (or widow/widower) Married but filing separately Filing as Head of Household
10% Up to $9,075 Up to $18,150 Up to $9,075 Up to $12,950
15% $9,076 to $36,900 $18,151 to $73,800 $9,076 to $36,900 $12,951 to $49,400
25% $36,901 to $89,350 $73,801 to $148,850 $36,901 to $74,425 $49,401 to $127,550
28% $89,351 to $186,350 $148,851 to $226,850 $74,426 to $113,425 $127,551 to $206,600
33% $186,351 to $405,100 $226,851 to $405,100 $113,426 to $202,550 $206,601 to $405,100
35% $405,101 to $406,750 $405,101 to $457,600 $202,551 to $228,800 $405,101 to $432,200
39.6% $406,751 or more $457,601 or more $228,801 or more $432,201 or more

Traditional Tax System

Under a traditional tax system, a person would pay the tax rate corresponding with his income. For example, according to the table above, John, a single-filer who makes $35,000 a year would pay taxes at a 15% rate (that is, $5250). That is a lot of money in taxes!

Progressive Tax System

However, fortunately for Americans, the United States uses a progressive tax system. This means that different portions of taxable income fall under different tax brackets, so they are taxed at different rates. Essentially, a person pays more taxes on the last dollar he earns than on the first dollar (unless he makes less than $9075, that is).

The following example demonstrates why a progressive tax system is advantageous for taxpayers. Under a progressive tax system, John would pay 10% on the first $9075 (that is, $907.50) of his income and 15% on the remaining $25,925 (that is $3888.75). Therefore, John would pay a total of $4796.25 in taxes for that year as opposed to the $5250 he would have paid under a traditional system.

Tax-Speak: Basic Vocabulary

The tax rate that is applied to the last portion’s of a person’s income is called the marginal tax rate, and it is what people usually mean when they speak of “tax brackets.” So, John’s marginal tax rate is 15%. In actuality, John paid 13.7% of his income in taxes (because $4796.25 is 13.7% of $35,000). The total tax rate paid on a person’s total income is called the effective tax rate. Therefore, John’s effective tax rate is 13.7%.

Decreasing Your Taxable Income With Deductions

Tax rates are only applied to taxable income. Deductions decrease the amount of taxes a person pays because they decrease taxable income. If John takes the standard deduction for the 2014 tax year of $6200, his total taxable income will be $28,800 ($35000-$6200). As before, he will pay 10% on the first $9075 of his income ($907.50). However, this time he only has $19,725 ($28,800-$9075) remaining to pay at a rate of 15%. That means he pays $2858.75 on the upper portion of his income. In total, he pays $3766.25 with the deduction as opposed to $4796.25 without the deduction. By taking the deduction, John saved more than $1000!

Taxes don’t have to be intimidating. When it comes to doing taxes, a little information goes a long way. For more demystified tax information, check out this article made by TurboTax about tax brackets and its accompanying video.

Free Tax Calculators Online

Written By: Lauren Wallen

At the end of every year, or before one files their tax return, they may wonder what they will receive or owe the IRS for the year. Instead of wondering, they now can use a free tax calculator online that will estimate what they will receive or owe. A well-known, commonly used free tax calculator is TurboTax TaxCaster. The tax calculator is easy to use and can be used either online or with a smartphone. Taxcaster updates its information every year to ensure that it is accurate with the updated deductions, credits, and other tax information.

Information Needed To Use TaxCaster

In order to use TaxCaster, one will need the following information available:

  • The individual’s marital status 
  • If they are filing head of household
  • Their age as of December 31st of that year (and their spouse’s age, if married)
  • Their total income
  • Any deductions, credits, or payments that need to be reported when filing taxes

This basic information is going to be able to help the calculator figure out the amount of refund that is going to be owed to the individual(s). This helps individuals make a plan before they ever file their tax return for the year. They can see how much money they need to come up with to pay back the IRS or how much they will receive and what they will do with the funds.

The Total Income Section on TaxCaster

The total income section is where all the income made for the year is entered. The first box listed is “Your Income.” This is for those that have W-2s that they need to report. They will need to put in the amount of money they made, how much they paid in federal taxes, and how much they paid in state taxes. There is a section available for the spouse’s income as well. Those that are self-employed will need to use the “Business Income” section in order to put in their profits or losses. They will also need to put down (if any) payments that were made towards their taxes.

The Deductions, Credit, and Payments Section on TaxCaster

The deductions, credits, and payments section breaks down into several categories. Those categories are:

  • Family – for those with children
  • Education – for any interest amounts that need to be listed as paid 
  • House – for those that need to write off any deductions due to their home
  • Donations – list of donation amounts that were given out for the year
  • Retirement – 401K accounts or other pension plans that were paid
  • Other Tax Payments – any additional tax payments made
  • Others Deductions – any other deductions that need to be filed

Each section will break down the questions that need to be answered. By answering all of the questions in each section accurately, it is going to ensure that the refund amount will be as accurate as possible. This free calculator is just an estimate though and should not be accounted for to the exact dollar amount shown.

What is the Fasted Way to Get an Income Tax Return

Written By: Lauren Wallen

Individuals who file taxes using the paper method usually wait much longer before getting their income tax return. It can take up to six weeks before a refund is even received, and that is if the tax return was filed correctly. E-filing tax returns is the best way to ensure that the tax refund will arrive the fastest.

Best Ways to E-File

E-filing can be done by filing taxes through the IRS website, using a tax software program or company online, or by hiring a CPA that files tax returns for their clients electronically. H&R Block, Tax Act, and TurboTax are some of the most common companies who use online means to file taxes. They walk individuals through the process in the simplest manner, unlik!
e filing a paper return. The program will ask the individual simple questions in order to file the return. These companies will also help ensure that the tax return is filed accurately in order to receive the tax refund the fastest.

How Quick a Refund Can Be Received for an E-filed Tax Return

Once the tax return has been e-filed, the IRS will receive it within 48 hours. Once it has been received, the IRS will immediately notify the individual if there is an error on the return and how to fix it. This allows the correction to be made quickly so that it can be reverted to the IRS as soon as possible. If there are no errors found, the IRS will accept the tax return. The refund is then sent out and received by the individual in less than 21 days. Direct deposit is another way to receive the refund faster. Instead of having to wait on a refund check in the mail, the funds will be directly deposited into their bank account.

How To Check When the Tax Return Has Been Received, Accepted, and Sent Out

The IRS has an online tool that allows individuals to check the status of their tax return, whether it be filed by e-file or paper. This tool is known as “Where’s My Refund?” Those that have e-filed can start using this tool within 24 to 48 hours, while those that have sent theirs in by paper can start using the tool after three weeks. The “Where’s My Refund?” tool will show when the tax return has been received, accepted, and sent out. Those that have chosen to have their funds direct deposited will be able to see the date the funds will be in their account. Those that did not choose direct deposit will see a date that the refund has been put in the mail to be sent out to the address provided on the tax return.

As for individuals who do not have internet access, an app can be downloaded on an Android or iPhone in order to check the status. This app is called, “IRS2Go.” Still, others can also call the automated system at 1-800-829-1954. Information about the tax return is regularly updated every 24 hours.

Where to Find Printable Tax Forms

Written By: Lisa Swan

During each year’s tax time, before April 15, many Americans are interested in finding printable tax forms. Thanks to the internet, there are a variety of options available:

Printable tax forms are available at the Internal Revenue Service

It used to be that the IRS would mail out to taxpayers with their addresses on file the same types of tax forms that they filled out last year, along with an instruction book for the forms. However, the IRS appears to be phasing out that service, in no small part due to the popularity of electronic filing (e-filing) of tax returns.

These days, one can find a variety of downloadable and printable forms at the IRS’ website at irs.gov. At this link on the IRS’ web site, one can find current forms for the most recent tax year, as well as tax forms for previous tax years, for those taxpayers who did not complete their tax filing on time. Depending upon the type of tax form downloaded, in some cases, the taxpayer can even complete the forms on their computers before printing them out. There are even forms on the website that can be printed on a special Braille printer, so that the visually impaired can read the forms.

The forms available at the IRS web site include everything from standard 1040, 1040A and 1040EZ forms, as well as specialized forms, such as for the self-employed or for taxpayers who have specialized situations. For those who are unable to print the forms, the IRS can mail them the forms upon request.

Individual states also have printable tax forms

Of course, completing federal tax forms is only part of the battle for many Americans during tax seasons. Many U.S. states also require taxpayers to complete state tax forms as well to pay their annual state income tax. That means more forms, of course. Generally speaking, a quick web search of the state’s name plus “tax forms” can help the taxpayer find the forms that he or she needs. For example, searching for “New York tax forms” will direct the searcher to New York State’s Department of Taxation and Finance’s page featuring tax forms for the state.

In addition, for those states that do not have a state income tax, there may still be tax forms to be completed for businesses. Doing the above referenced search can help the searcher find the forms in question.

Tax sites can also feature printable tax forms

These days, many people use a variety of tax management software or web pages to complete their taxes. That means that people who do their taxes that way can generally print out the tax forms after completing them on their computers. Whether they use an app, a program like TurboTax, or a web site to compute their taxes, they can either submit their taxes electronically, or print out the forms and mail them to the IRS or to state tax authorities. They can also simply print out the completed forms for their records.

In summary, with the rise of personal computing and the Internet, there are many options for those seeking to print out tax forms online.

What To Do If a Return Check is Stolen

Written By: Lauren Wallen

There are a couple of ways that one may be notified that their tax return check was stolen. The first notice they may receive could be a letter from the IRS stating that there was a problem. The problem could be that the reported amount of income didn’t match the amount of income that was actually made. This means that another individual used the social security number of the individual that received the notice. They reported a fraud amount of income in order to receive a tax refund check.

The second way that someone may discover that their tax return check was stolen is when they go to file taxes. They may get a notice at the end of filing taxes stating that the tax return was already filed for the year. This happens a lot to those that are filing by e-file. When the person is mailing in their tax return, they will not receive this type of notice right away. They may not even know about the fraud until they realize that the tax refund never came in. They can also find this information out by going to the IRS website and checking the “Where’s My Refund?” tool. This tool is going to show if the tax return was denied. It will state the reason for denial, letting the individual know if the tax return was already filed for the year – meaning that fraud had indeed occurred.

What Steps to Take if Tax Return Was Filed By Someone Else

As soon as a notice letter is received or a tax return doesn’t go through, the individual will need to get in contact with the IRS Identity Protection Specialized Unit. The number to contact is 1-800-908-4490 or 1-800-829-1954. The following are needed:

  • A Form 14039 or a copy of a police report that was made
  • Proof of identity – driver’s license, passport, or social security card
  • W-2 forms
  • Updated files
  • Record of dates when calls were made to the IRS or letters were sent out
  • Copies of letters sent to the IRS 

Other Things to Check When Fraud Is Present on Tax Return

Any time there is fraud present on a tax return, the individual will also need to pull their credit report. The credit report is going to show if the individual that caused the fraud has used their social security number or other information to open accounts. The fraud victim can then put out a fraud alert on their credit report and file any disputes needed. A police report will also need to be filed.

What Will The IRS Do About the Fraud?

The IRS will work on the claim as soon as they receive it. They will track down the person that filed the tax return and tax refund. This way, any arrests that need to be made can be done. In addition, the IRS will correct the tax return and send out the proper tax refund amount to the correct person. This entire process can take up to six months or longer depending on the case. Since the waiting process is long, the IRS will pay a small interest amount on the refund that is issued out late to the individual.

Fees Associated with Filing Taxes

Written By: Lauren Wallen

When people go to file their taxes, there are fees that will be associated with them. The fees are going to be based upon how the individual is filing their taxes. For instance, they could file their taxes themselves, use an online tax software program, or hire a CPA. Each one is going to have their own costs depending on the types of forms needed and how complicated the taxes are.

Filing Taxes On Your Own

Those that want to file their taxes on their own will not have the amount of fees that are associated with hiring a CPA. It is free to file taxes by paper. The individual will only be out the cost of the stamp to mail them in. However, when this method is used, there is more room for errors. People may miss the deductions that they were suppose to receive that could have qualified them for a bigger tax refund.

Using a Tax Software Program or Company Online

The companies online will often state that the filing process is free. However, they will charge a small fee to file the state tax return in conjunction with the federal tax return. Those that only have basic information, such as an individual that is single with no children and only one W2, are not going to have to pay as much as someone that is married with children and has their own business. The user, filing the taxes, will start off with the basic tax form online and will be advised when more forms are needed. Each time more forms are needed, the cost of the fees are going to be higher. Another fee that is charged is for the filing of the state return. This fee is generally a set amount that is explained up front. Many will pay this fee because the information from their federal tax return can be placed onto the state tax return within seconds. This helps save additional time to get the state taxes filed. Some!
companies will not file the federal tax return without doing the state tax return in conjunction. This is how they are able to make money off of their tax software programs.

Using a CPA to File Taxes

A CPA is going to have the highest fees associated with filing taxes. However, a CPA is going to guarantee that the taxes will be filed correctly with no errors. This is perfect for those that receive an audit after taxes have been filed. The fees charged by the CPA can be based upon the amount of forms that are used, the amount of refund that is owed to the individual(s), or how much money the individual(s) made for the year. Some may even charge a basic fee amount just for doing the tax return.

Any fees associated with filing taxes can generally be taken out of the federal tax refund if one is suppose to be received. If no federal tax refund is received and taxes are owed, the individual will have to pay the fees upfront or with their federal tax payment. The tax software program or CPA will be able to advise what the fees are going to cost and how they should be paid at the time the taxes are filed.

Should I Hire Someone To Do My Taxes For Me?

Written By: Lauren Wallen

Should I Hire Someone to do My Taxes for Me?

When it comes to tax time, especially in the month of April, some individuals may feel like they want to pull their hair out. Taxes can be simple for some to figure out while others have a harder time knowing what to do or who to use. There are several tips that individuals can use in order to figure out if they need to hire a CPA, use a tax software program online, or file their taxes themselves using actual forms.

Should I File My Taxes Myself?

Several people may be nervous about filing their own taxes, especially if it is their first time doing so. There are several scenarios to where it makes perfect sense to file taxes by one’s self instead of paying hundreds of dollars to hire a professional. For example, if an individual just has two W2′s, a 401K account, are single and have no children, then they should consider filing their taxes themselves. They do not have to worry about any complicated forms that have to be filled out or any special types of deductions. They will be able to wrote out the forms and file their taxes within 15 to 20 minutes.

Since the individual is filing their taxes themselves, they are going to be able to save tremendous amounts of money and time. Once the form is filled out, they will just need to mail it in. If any funds are due to the IRS, they can send in their payment along with their taxes. For refunds, they will just have to wait until their tax return is received and accepted before the refund is mailed out to them or deposited into their bank account.

Should I Use an Online Tax Software Program or Company?

For those that still want to file their taxes themselves but don’t trust the paper method could use an online tax software program. There are several companies online that will allow people to file both their federal and state tax returns at once for a small fee. The fee is going to be based upon the amount of forms the individual needs. Some companies that are well-known and great to use are TurboTax, H&R Block, TaxAct, and many others. These sites will start off with the basic tax forms. If the individual needs additional forms, it will advise this information to the person along with the fee amount before they continue on with the program.

People have found that the online tax programs are easy-to-use. Instead of being like the paper forms, the online tax software program will ask the individual easy questions to answer. For example, it will state “Are you single or married?,” “Will you be filing your taxes with or without your spouse?,” or even “Do you have a W2 to enter?” These types of questions can be simply answered by clicking “yes” or “no.” This helps the program to provide the proper amount of standard deductions and to fill out the forms properly.

Should I Hire a CPA to File My Taxes?

A CPA should be hired if the taxes are complicated. A professional is going to be able to ensure that all of the credits, deductions, and any other exemptions are applied. They will be able to help the individual receive the best out of their tax returns. A person that would want to hire a CPA may have a home they own, rental properties, a small business, are married, have children, have a HSA savings accounts, have a 401K and much more. Since this all requires multiple types of forms, a CPA will be able to guarantee that the taxes are filed quickly and accurately. A CPA is also a great choice for those that do not feel comfortable filing their own taxes or using an online tax software program.

Taxes are Filed and Stress is Relieved for Yet Another Year

No matter how the individual decides to file their taxes, they can feel stress-free once it all has been done. If they filed their own taxes for the first time and know that everything went through properly, it may make them more comfortable to file their own taxes the following year.