The IRS has $760 Million in Unclaimed Refunds

The Internal Revenue Service is holding onto nearly $760 million in unclaimed tax refunds that could soon become property of the United States government if taxpayers do not claim it! This money belongs to roughly 918,600 taxpayers who have yet to file their 2010 tax returns. If you have not filed your 2010 tax return, you must file it by April 15^th if you wish to claim your fund. Otherwise, the IRS will keep the funds. The IRS estimates that half of these unclaimed refunds total more than $571. For more information, click the link below:

http://myfox8.com/2014/03/19/irs-has-760-million-in-unclaimed-refunds/

518 Arbor Hill Rd.

Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

 

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

 

 

What You Need to Know about 529 Plans

The 529 plan is the one of the most popular college savings vehicles. 529 plans offer federal and in some cases, state tax advantages, as well as providing tax-deferred growth options for savings. These plans offer great benefits, but are complex. Listed below are some things you need to know before opening a 529:

1.      Some plans are pricier than others. There are prepaid plans that allow families to buy “units” of tuition at rates similar to today’s pricing, and also savings plans that allow families to invest in preselected investment portfolios that follow the pricing of the markets. It is important to consult a professional to determine which type of plan is best for your family.

2.      These plans do have a risk factor. Many of the 529 college savings plans contain mutual funds that are tied with stock and bond markets, which means that families could potentially lose money if their investments take a hit.

3.      Your state might not offer the best deal on 529 plans. All 529 plans offer federal tax advantages, but only certain states also offer state income tax deductions or credits. Consult with a professional to discuss the pros and cons of opening a 529 plan in your state.

4.      529s impact financial aid. Money invested in a 529 plan will impact your federal financial package, but not as much as funds stored in other types of accounts. Take this fact into consideration when opening your 529 plan.

If you have any questions about 529 plans, please contact us!

518 Arbor Hill Rd.

Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

 

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

 

 

Is Your Income Taxable or Nontaxable?

In general, all income is taxable unless the law specifically excludes it. Taxable income includes money you receive, such as wages and tips, and also includes noncash income from property or services. For example, in a barter exchange, the fair market value of the good or service must be included as income on both parties’ tax returns. Certain types of income that are usually not taxable are as follows:

·         Gifts and inheritances

·         Child support payments

·         Welfare benefits

·         Damage awards for physical injury or sickness

·         Cash rebates from a dealer or manufacturer for an item you buy

·         Reimbursements for qualified adoption expenses

Some types of income are not taxable, except under certain conditions:

·         Life insurance proceeds are usually not taxable, but if you redeem a life insurance policy for cash, any amount that is more than the cost of the policy is taxable.

·         Income from a qualified scholarship is usually not taxable when the funds are used for tuition and required books, but funds used for room and board are taxable.

·         State or local income tax refunds may be taxable. With a state or local income tax refund, you should receive a 1099-G; if you have not received a 1099-G, contact the department to obtain the form.

If you have any questions, please contact us!

518 Arbor Hill Rd.

Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

 

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

 

Common Income Tax Myths

During this time of year, many questions may come up about tax returns and what exactly needs to be listed or reported. Listed below are common income tax misconceptions, followed by the real answers.

1.      Myth #1: If you are a student and only work part-time, you do not have to file a tax return.

The Truth: Student status does not affect whether or not you need to file a tax return. Age, filing status, dependency status, amount of income, and whether it is earned or unearned affect filing requirements, but student status does not.

2.      Myth #2: You do not have to pay taxes on Social Security Benefits.

The Truth: Social Security benefits may be required to be included as income. The maximum amount of Social Security benefits that may be included in income is 85 percent.

3.      Myth #3: Your broker sold some stock this year and reinvested the money in another stock. Since you didn’t receive money, it’s not taxable.

The Truth: Stock sales (outside of retirement accounts) are required to be reported on your tax return. This includes the sale of mutual funds.

4.      Myth #4: You and your spouse separated last year and lived apart for most of the year, so you can file as Single.

The Truth: Couples that are not legally divorced or separated as of the end of the year are precluded from filing Single.

518 Arbor Hill Rd.

Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

 

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

 

9 Ways to Raise Your Credit Score

Your credit score is one of the most valuable aspects of your finances. If your score is not good, follow the tips below to raise your credit score:

1.      Keep credit card balances low: FICO scores, the most common scoring method used by lenders, weigh 30% of your credit score on existing amounts owed on credit accounts.

2.      Avoid impulsive retail decisions: Steer away from running up your credit on random items that catch your eye. Many retailers offer small discounts when you use a credit card, but the savings won’t be worth it if your credit score is lowered.

3.      Look for errors on your report: Analyze your annual credit report, and report any discrepancies to the credit-reporting companies as soon as possible.

4.      Make timely payments: 35% of your FICO score is determined by your payment history, so it is important to not miss payment deadlines. Scheduling automatic payments before the creditor’s deadline can be helpful to ensure the payment is made.

5.      Know ALL of your credit scores: Most creditors use your FICO score to determine credit worthiness, but the three credit-reporting bureaus (TransUnion, Equifax, and Experian) created VantageScore to grade credit worthiness as well. Be aware of both of your scores.

6.      Avoid going on an application spree: new credit impacts your FICO score by 10%. If you don’t need the additional credit card, don’t apply for one.

7.      Use credit to get good credit: During the process of rebuilding your credit, it can be helpful to apply for a secured credit card, which is a card that is secured with a deposit made by the cardholder.

8.      Diversify your credit types: A good credit score depends on installment credit lines (car loans, student loans, or mortgage) and revolving credit lines (credit card or home equity line of credit). The balance of credit types accounts for 10% of your FICO score, which is significant enough to take note of.

9.      Enlist the help of a professional: Credit repair professionals can assist in cleaning up your credit and challenge questionable items presented to you by creditors and credit bureaus.

If you have any questions about improving your credit score, let us know!

518 Arbor Hill Rd.

Kernersville, NC 27284

 Ph: 336-996-3338

 www.cpamcdaniel.com

 

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).