Filing Season Tax Tips for Individuals

While the tax filing deadline is still over a month away, it always seems to be here before you know it! Here are a few tax tips to make the tax filing process run smoother than ever this year.

1. Start gathering your records. Round up any documents or forms you'll need when filing your taxes: receipts, canceled checks and other documents that support an item of income or a deduction you're taking on your return.
2. Be sure you have all W-2s and 1099s for work you've done throughout the 2009 tax year.
3. Consider Direct Deposit. If you elect to have your refund directly deposited into your bank account, you'll receive it faster than waiting for a paper check. Be prepared to provide your preparer with your bank's routing number and account number.
4. Review! Review! Review! Don't rush through getting your documents organized. We all make mistakes when we rush. Having your information organized will help report all of your income and claim all the tax deductions you are entitled to.
5. Don't Panic! We are here to answer your questions and guide you through the process.

Here's some additional information for those of you with special circumstances.

If you were married or divorced recently, there are a couple of things you'll want to do to avoid problems with your tax return.

1. If you took your spouse's last name or if both spouses hyphenate their last names, you may run into complications if you don't notify the Social Security Administration (SSA). When newlyweds file a tax return using their new last names, IRS computers can't match the new name with the Social Security Number.
2. If you were recently divorced and changed back to your previous last name, you'll also need to notify the SSA of this name change.
3. Informing the SSA of a name change is a snap; you'll just need to file a Form SS-5, Application for a Social Security Card at your local SSA office.
4. For SS-5 is also available on the SSA's Web site at http://www.socialsecurity.gov/, by calling 800-772-1213 or at local offices. It usually takes about two weeks to have the change verified so you still have time!
5. If you adopted your spouse's children after getting married you'll want to make sure the children have a SSN. Taxpayers must provide a SSN for each dependent claimed on a tax return. For adopted children without SSNs, the parents can apply for an Adoption Taxpayer Identification Number -- or ATIN -- by filing Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions with the IRS. The ATIN is a temporary number used in place of a SSN on a tax return. We can help you file this form.

If you recently married, divorced, separated or widowed, we can discuss which filing status applies to you. It's important you choose your correct filing status as it determines your standard deduction, the amount of tax you owe and ultimately, any refund owed to you.

Here are 8 facts about the filing status options you should consider to determine the correct filing status for your situation.

1. Your marital status on the last day of the year determines your marital status for the entire year.
2. If more than one filing status applies to you, choose the one that gives you the lowest tax obligation.
3. Single filing status generally applies to anyone who is unmarried, divorced or legally separated according to state law.
4. A married couple may file a joint return together. The couple's filing status would be Married Filing Jointly.
5. If your spouse died during the year and you did not remarry during 2009, you may still file a joint return with that spouse for the year of death, provided the joint return election is not revoked by a personal representative for the deceased spouse.
6. A married couple may elect to file their returns separately. Each person's filing status would generally be Married Filing Separately. However, this generally results in a total higher tax liability unless one spouse has special circumstances, such as high medical expenses for the year. We can evaluate the alternatives.
7. Head of Household generally applies to taxpayers who are unmarried. You must also have paid more than half the cost of maintaining a home for you and a qualifying person to qualify for this status. We can advise on the definition of a qualifying person.
8. You may be able to choose Qualifying Widow(er) with Dependent Child as your filing status if your spouse died during 2007 or 2008, you have a dependent child and you meet certain other conditions.

In addition to your filing status, there are two things that factor into your tax situation: dependents and exemptions. Here are five important facts you need to know about dependents and exemptions before you file your 2009 tax return.

1. If someone else claims you as a dependent, you may still be required to file your own tax return. Whether or not you must file a return depends on several factors, including the amount of your unearned, earned or gross income, your marital status, any special taxes you owe and any advance Earned Income Tax Credit payments you received.
2. Exemptions reduce your taxable income. There are two types of exemptions: personal exemptions and exemptions for dependents. For each exemption you can deduct $3,650 on your 2009 tax return. Exemption amounts are reduced for taxpayers whose adjusted gross income (AGI) is above certain levels, depending on your filing status.
3. If you are a dependent, you may not claim an exemption. If someone else -- such as your parent -- claims you as a dependent, you may not claim your personal exemption on your own tax return.
4. Your spouse is never considered your dependent. On a joint return, you may claim one exemption for yourself and one for your spouse. If you're filing a separate return, you may claim the exemption for your spouse only if your spouse had no gross income, is not filing a joint return, and is not the dependent of another taxpayer.
5. Some people cannot be claimed as your dependent. Generally, you may not claim a married person as a dependent if they file a joint return with their spouse. Also, to claim someone as a dependent, that person must be a U.S. citizen, U.S. resident alien, U.S. national or resident of Canada or Mexico for some part of the year. There is an exception to this rule for certain adopted children.

Finally, consider filing electronically. Last year, 2 out of 3 tax returns were filed electronically. If your return was not one of them, here are three important reasons to e-file your return.

1. It's fast! Your tax return will get processed more quickly if you use e-file. If there is an error on your return, it will typically be identified and can be corrected right away. If you file electronically and choose to have your tax refund deposited into your bank account, you will have your money in as few as 10 days.
2. It's safe! When you file a tax return electronically, the IRS is fully committed to protecting your information on our tax processing systems.
3. It's time! Don't miss out on the benefits of e-file. Two out of three taxpayers, or 95 million Americans already file their returns electronically.

We can answer all your tax questions and would like to remind you to schedule your appointment as soon as possible.

We sincerely hope this posting has been useful. Stay tuned for more!

Dale