IRS Extends Hurricane Sandy Claim Deadline

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The IRS announced they are extending the deadline for victims of Hurricane Sandy to claim their loss on a 2011 return through October 15, 2013. This is extremely helpful for taxpayers whose homes and records were completely destroyed. The additional six months allows taxpayers the time to ensure they are claiming the casualty loss in the year that will benefit them the most. 

Taxpayers who suffer a loss due to a disaster, such as Sandy, are offered the option to claim their loss on the tax return for the year prior to the year of the loss or the year of loss. This allows them the option to claim the largest allowable loss. For many taxpayers in the Sandy disaster area, claiming the loss on their 2011 tax return may allow them to claim a larger refund.

Reach out to your nearest Tax Pro for questions regarding disaster losses. 
 

Tax Tip - Deducting the Cost of Lottery Tickets

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If you were lucky enough to win money in a lottery, you can deduct the cost of your losing tickets for the year as an itemized deduction. The amount of the deduction is limited to your lottery winnings. You can also deduct losses from other types of gambling against your lottery winnings. If a husband and wife file a joint return, they can use their qualified combined losses to offset their combined winnings.

Ask Your Tax Questions on Twitter

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Taxes are complicated, especially this year.  So if you have a question or two, who better to answer them than our Chief Tax Officer Mark Steber? To help you get some of your tax questions answered, Jackson Hewitt Tax Service is making its top tax code expert available to consumers around the country through Twitter. On Wednesday, February 27, Mark Steber will host the company’s first-ever Tax Tip Tweet-Up. Starting at 6 p.m. Eastern and running for one hour, you can submit your questions – in 140 characters or less – to @JacksonHewitt, using the #TaxTalk hashtag. Steber will respond to as many inquiries as possible during this time, using his own handle, @MarkSteber.

“Social media gives us the unique opportunity to help taxpayers across the country – in real-time –with questions they may have surrounding tax filing,” said Steber. “We are inviting everyone, including our clients, those who have filed with someone else or on their own and those who have yet to file, to stop by and ask whatever question they may have.”

Stay on top of the latest tax news by following @JacksonHewitt and @MarkSteber on Twitter.
 




Chief Tax Officer Mark Steber Talks Sequestration

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As if the late start to the season and the changing tax laws weren’t enough to confuse taxpayers this year, there’s a new potential issue on the horizon – sequestration. What does this mean for you? If you still haven’t filed your 2012 taxes, you’re likely to see delays if you file after March 1. Let’s look at why.

“Sequester, or sequestration, is the term for the general cut in government spending coming soon,” said Mark. “Due to the Budget Control Act of 2011, Congress has to complete and approve a budget by January 1, 2013 (this has since been extended to February 28, 2013), or the government will immediately cut spending and put staff on a leave of absence, or personnel layoffs, across all areas of the federal government. The spending cuts and personnel layoffs will affect programs in the IRS, such as the taxpayer call center, taxpayer outreach programs and the IRS’s ability to rapidly respond to issues in the current tax season. The cuts won’t affect normal e-file return processing. So if you prepare your own return and need help (a common occurrence for self-prepared returns) or if the IRS reviews your return, you will see delays after March 1.”

It’s always a best practice to file your return as soon as you have all of your documentation to avoid troubles like identity theft, but now, more than ever, you will want to file sooner than later. Plus, with the tax law changes this year, you’ll want to work with a professional tax preparer, especially if you file after March 1, to help avoid common errors and further delays to your return if you’re due one.

Additional Forms Now Being Accepted by IRS

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Following the passage of the American Taxpayer Relief Act of 2012, the IRS delayed accepting all 2012 tax returns until January 30 for more than 120 million taxpayers, but for millions more, the date was pushed even further. But the good news is that the following forms, which affect the largest number of people out of the remaining taxpayers, are now being accepted.  By adding these to the accepted forms, most taxpayers can now file.

Form 8863, Education Credits. Form 8863 is used to claim two higher education credits -- the American Opportunity Tax Credit and the Lifetime Learning Credit.

Form 4562, Depreciation and Amortization. Most of the people using the depreciation form tend to file later in the tax season or obtain a six-month extension. 

Tax Tip - Child Support

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Do you pay child support? Are you wondering if the child be claimed as a dependent on your tax return? Child support is neither income to the recipient, nor a deduction for the payer and the custodial parent is generally entitled to claim the child as a dependent. The custodial parent is the parent the child lives with for more than half the year.  In order to claim a dependency exemption a signed Form 8332, Release of Claim to Exemption for Child of Divorced or Separated Parents, must be included in the noncustodial parent’s tax return.

Tax Tip - Computers and Cellular Phones

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Wondering if you can claim your computer and cell phone on your taxes? If you purchased a computer or cell phone and use it for business, you may be able to claim a depreciation deduction. Your employer must require you to have the phone or computer as a condition of employment, and you must use them for the convenience of your employer. Be sure to keep a record of the personal and business use of the computer or phone to determine the percentage of business use.

Tax Tip - Child Tax Credit

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You may qualify for a credit of up to $1,000 for each qualifying child under age 17 at the end of the year. A qualifying child is your child, stepchild, adopted child, eligible foster child or descendent of such, or your sibling, stepsibling or descendent of such. The individual must have lived with you, or the custodial parent, for more than half of the year, must not have provided more than half of their own support, and must be claimed as a dependent by you. Generally, the child must be a U.S. citizen or a U.S. national or resident for some part of the year.