From the IRS website:

Taxpayers will have until Tuesday, April 17, to file their 2011 tax returns and pay any tax due because April 15 falls on a Sunday, and Emancipation Day, a holiday observed in the District of Columbia, falls this year on Monday, April 16. According to federal law, District of Columbia holidays impact tax deadlines in the same way that federal holidays do; therefore, all taxpayers will have two extra days to file this year. Taxpayers requesting an extension will have until Oct. 15 to file their 2012 tax returns.

IRS Publication 530 (2011 PDF version) describes new tax code changes for homeowners, what can and can’t be deducted, how a homeowner figures his or her adjusted basis in the home, and even contains a record-keeping worksheet to help homeowners track the costs of home improvement.

If you bought or sold a home last year, refinanced, paid real estate taxes, paid mortgage interest, or made significant home improvements, make sure you are prepared for the tax consequences of those actions.

For tax planning in calendar year 2012, please note that the itemized deduction for premiums you pay or accrue for qualified mortgage insurance in connection with home acquisition debt on your qualified home is no longer available after 2011.

• Be cautious of tax preparers who claim they can obtain larger refunds than other preparers.
• Avoid preparers who base their fee on a percentage of the amount of the refund.
• Use a reputable tax professional who signs your tax return and provides you with a copy for your records.
• Consider whether the individual or firm will be around to answer questions about the preparation of your tax return months, or even years, after the return has been filed.
• Review your return before you sign it and ask questions on entries you don’t understand.

Earned Income and adjusted gross income (AGI) must each be less than:

• $43,998 ($49,078 married filing jointly) with three or more qualifying children
• $40,964 ($46,044 married filing jointly) with two qualifying children
• $36,052 ($41,132 married filing jointly) with one qualifying child
• $13,660 ($18,740 married filing jointly) with no qualifying children

Tax Year 2011 maximum credit:

• $5,751 with three or more qualifying children
• $5,112 with two qualifying children
• $3,094 with one qualifying child
• $464 with no qualifying children

Investment income must be $3,150 or less for the year.

The Tax Relief and Job Creation Act signed into law December of 2010 provides a temporary increase in EITC and expands the credit for workers with three or more qualifying children. These changes are temporary and apply to 2009, 2010, 2011 and 2012 tax years.

The Education Jobs and Medicaid Assistance Act of 2010 signed into law August 10, 2010 repealed the Advance EITC.  It was not available to workers after December 31, 2010.

For more information on whether a child qualifies you for the EITC, see Publication 596, Chapter 2, Rules If You Have a Qualifying Child (2011 draft version, subject to change).

NOTE: Since the earned income credit is a refundable credit (meaning it can produce a tax refund even if no tax is owed), the IRS carefully monitors its use. Consequences for taking the credit when ineligible are more severe than with other credits. Accordingly, you should thoroughly review the EIC rules to make sure you can take the credit.

Any tax preparer you hire should ask you several questions about the EIC to ensure your eligibility. If not, you are getting second-rate service, plain and simple.

At more than three hundred pages, it’s not exactly a quick read cover-to-cover, but its helpful table of contents and index make it a worthwhile resource for anyone with income tax questions or who is looking to save tax dollars. From the IRS website:

Publication 17 (PDF version), Your Federal Income Tax, features details on taking advantage of a wide range of tax-saving opportunities, such as the American opportunity credit for parents and college students, and the child tax credit and expanded earned income tax credit for low- and moderate-income workers. This useful 303-page guide also provides more than 5,000 interactive links to help taxpayers quickly get answers to their questions.

Publication 17 has been published annually by the IRS since the 1940s and has been available on the IRS web site since 1996. As in prior years, this publication is packed with basic tax-filing information and tips on what income to report and how to report it, figuring capital gains and losses, claiming dependents, choosing the standard deduction versus itemizing deductions and using IRAs to save for retirement.

If you have a quick question about an IRS individual income tax topic, we cannot recommend Publication 17 enough!

Access the PDF version of IRS Publication 17 via irs.gov

These are taxes levied on a portion of a worker’s wages, paid (in most cases) by employers (though the actual economic incidence is on both employer and employee.) The wage base varies greatly from state to state; the lowest is $7,000 (in AK, CA, and FL) and the highest is $37,300 (in WA.)

See the full-size map of minimum and maximum unemployment insurance tax rates by state.

On November 15, 2011, in Colorado, Gary Neuger was sentenced to 24-months imprisonment, followed by one year of supervised release. Neuger was ordered to pay restitution in the amount of $393,791, as well as a special assessment fee of $200. Additionally, Neuger must complete a mental health treatment program for filing a false tax return and impeding internal revenue administration.

According to court documents, Neuger admitted that he willfully filed false tax returns and took various steps to impede collections by the Internal Revenue Service (IRS). In 1997, Neuger stopped paying his Federal income taxes. The IRS then initiated several attempts to collect his outstanding taxes. It was at this time that Neuger began protesting the Federal tax system and seeking to harass and impede the IRS’s collection efforts.

From May, 2000 until November 2008, Neuger sent over one dozen threatening letters to the IRS. Throughout this time period, he filed several lawsuits against IRS employees both in Federal and State court and threatened employees with arrest. He also sought summonses against IRS employees protesting the levying of Federal taxes.

In 2003, Neuger filed a fabricated default judgment. In it, he falsely claimed that he had won a lawsuit against the IRS in Federal court and demanded damages. In furtherance of his cause, Neuger filed lawsuits against any business that complied with the IRS levies and sought to have the business owners arrested.

Once a tax protester who publicly bragged on extremely shady tax “liberty” sites about his capability to retain large tax “refunds” of more than $40,000, Gary Neuger has been sentenced to 2 years in a federal prison and ordered to pay almost ten times what he would have originally owed in income tax.

“Taxpayers thinking about participating in fraudulent tax schemes, including failing to report all forms of income, should stop in their tracks and look at the consequences of taking the next step,” said Sean P. Sowards, Special Agent in Charge, Internal Revenue Service – Criminal Investigation, Denver Field Office. “Those consequences include going to prison, being branded a convicted felon for the rest of their lives, and paying back all the taxes owed plus steep penalties and interest.”

The moral of the story here is that TAX PROTESTING DOES NOT WORK. Do not fall for schemes that claim to save you tens of thousands of dollars by disobeying tax code. Remember: if it sounds too good to be true, it probably is. Hire a professional to help you negotiate the complexities of the IRS and state taxing agencies, not a snake oil salesman.

The mileage rates for calendar year 2012 are:

• 55.5 cents per mile for business miles driven
• 23 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organizations

The medical and moving rate has been reduced by 0.5 cents per mile from the most recent revision, which happened in July 2011.

“Tax Girl” Kelly Phillips Erb has a pretty good rundown of how the standard mileage rates work, including a tidbit about reimbursement that paid tax preparers frequently overlook:

Under the current rules, you can generally use the standard mileage rate whether or not you are reimbursed and whether or not any reimbursement is more or less than the amount figured using the standard mileage rate. I know that seems odd but it’s a quirky little provision that might save you a few tax dollars.

Tax law requires that taxpayers keep good records of their deductible mileage in order to be able to claim these deductions on their tax returns. This can be done in any way, as long as the records are accessible, accurate, and clearly readable. If you have a smartphone, there’s a number of cool mileage apps to help you track your travels throughout 2012.

If you need help figuring out how vehicle expenses can be deducted on your tax return for any year, contact IRS Problems Resolved to speak with one of our highly qualified and experienced tax preparers.

Although the Internal Revenue Service (IRS) has been following procedures for processing streamlined installment agreements (SIAs), those procedures have allowed for the inconsistent processing and treatment of taxpayers, according to a report publicly released yesterday by the Treasury Inspector General for Tax Administration (TIGTA).

TIGTA reviewed whether the IRS consistently applied streamlined installment agreement requirements to all taxpayers. According to the report, the streamlined installment agreement program has brought in large amounts of revenue with minimal IRS processing while decreasing taxpayer burden by reducing the amount of documentation required. Approximately 3.1 million taxpayers entered into streamlined installment agreements in Fiscal Year 2010, resulting in approximately $5.9 billion in collections.

However, due to inconsistencies, some agreements will not be paid off when expected, according to the report. In addition, auditors found that the IRS has not consistently communicated to taxpayers the options about how to avoid user fees associated with these agreements. Taxpayers paid more than $1 million in user fees that could have been avoided, and thousands of taxpayers may have been surprised to learn they still owed taxes after they completed the terms of their streamlined installment agreements, according to the report.

“The inconsistent processing and treatment of taxpayers may contribute to the inefficient use of IRS resources and jeopardize the IRS’s ability to collect tax liabilities,” said J. Russell George, Treasury Inspector General for Tax Administration. “Inconsistencies can also create an economic hardship for taxpayers and may lead to future tax liabilities,” he added.

TIGTA auditors estimated that at least 90,000 taxpayers using a streamlined installment agreement to pay back taxes may still owe the Internal Revenue Service (IRS) after they complete the terms of their agreement. Streamlined installment agreements allow taxpayers owing tax liabilities equal to $25,000 or less to make payments over a 60- month period or by the collection statute expiration date. However, because the IRS does not consider current and future accruals of penalties and interest when computing streamlined installment agreement payments, many accounts will not be fully paid within the 60-month period.

TIGTA recommended that the IRS revise its streamlined installment agreement procedures. The IRS agreed with TIGTA’s recommendations and plans to take steps to address TIGTA’s concerns.

Read the TIGTA report on SIA inconsistencies here (PDF).