We have organized this information in a pdf chart that you can download and print. Access the chart here: http://www.taxworks.com/cmsdocuments/2011_tax_chart.pdf

1. Who needs to repay the credit? If you bought a home in 2008 and claimed the First-Time Homebuyer Credit, the credit is similar to a no-interest loan and must be repaid in 15 equal annual installments that began with your 2010 return. Also, anyone who sold their home, or stopped using it as their main home, may have to repay the entire credit whether their home was purchased in 2008, 2009 or 2010.

2. Information needed to access the tool The First-Time Homebuyer Credit Tool will provide critical account information to help you report your repayment obligation on your tax return. To access the tool you will need: your Social Security number, date of birth and complete address. If you file a joint return, you’ll only be able to access your portion of the First-Time Homebuyer Credit account information.

3. What the tool provides The tool will show the original amount of the credit, annual repayment amounts, total amount paid and the total balance left to be paid. You will be able to print your account page to share with your tax preparer and keep for your records.

4. How to repay the credit To repay the First-Time Homebuyer Credit, add the amount you have to repay to any other tax you owe on your federal tax return. This could result in an additional tax owed or a reduced refund. To repay the credit, you report the repayment on line 59b on Form 1040, U.S. Individual Income Tax Return. If you make an installment payment, you do not need to attach Form 5405, First-Time Homebuyer Credit and Repayment of the Credit, to your tax return. However, if you are repaying the credit because the home stopped being your main home, you must attach Form 5405.

You can access the First-Time Homebuyer Credit Lookup Tool, 24 hours a day, seven days a week, visit the IRS.gov website.

Links:
• First Time Homebuyer Credit Account Look-up
• Form 5405, First-Time Homebuyer Credit and Repayment of the Credit and instructions

With the new IRS e-file mandate of 11 or more prepared returns, e-file volume is expected to increase significantly. The IRS has also placed constraints on the number of Legacy returns that can be filed, in an effort to ensure they receive a majority of the returns through the new Modernized e-filing (MeF) platform.

RedGear has also released the 1065 and 1120 federal systems, and some states, for e-file. The IRS is still finalizing instructions for the 1120S system and expect to have this available soon.

The websites have numerous videos to help you use the program to its fullest potential. Learn about the new program enhancements, navigation tips and tricks, the E-File Center and much more.

Access the TaxWorks videos here, or the 1040Works videos here. Select from a number of different topics and view the videos as it fits into your schedule!

Find more information about the Registered Tax Return Preparer at the links below.

Registered Tax Return Preparer

IRS PTIN Renewal

All of the Federal 1040 and Individual State programs are ready for e-file.  RedGear is pleased to be leading the way!

The IRS also announced a number of improvements to help make this tax season easy for taxpayers. This includes new navigation features and helpful information on IRS.gov and a new pilot to allow taxpayers to use interactive video to get help with tax issues.

“At the IRS, we’re working hard to make the process of filing your taxes as quick and easy as possible,” said IRS Commissioner Doug Shulman. “Providing quality service is one of our top priorities. It not only reduces the burden on taxpayers, but also helps in filing an accurate return right from the start.”

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 2011 tax returns.

The IRS expects to receive more than 144 million individual tax returns this year, with most of those being filed by the April 17 deadline.

The IRS will begin accepting e-file and Free File returns on Jan. 17, 2012. Additional details about e-file and Free File will be announced later this month. IRS Free File provides options for free brand-name tax software or online fillable forms plus free electronic filing. Everyone can use Free File to prepare a federal tax return. Taxpayers who make $57,000 or less can choose from approximately 20 commercial software providers. There’s no income limit for Free File Fillable Forms, the electronic version of IRS paper forms, which also includes free e-filing.

The IRS also reminds paid tax return preparers they must have and include a Preparer Tax Identification Number (PTIN) on all returns they prepare. All PTINs must be renewed for 2012. Tax return preparers can obtain or renew PTINs online.

http://www.irs.gov/newsroom/article/0,,id=251825,00.html

(Article courtesy of IRS.gov)

As a result of the Housing Assistance Tax Act of 2008 (IRC section 6050W), there are new requirements for reporting credit card and other card payments, as well as transactions through third-party settlement networks. Payments made between January 2011 and December 2011 by credit card or third-party merchants for goods and services will be reported to the IRS and payees on Form 1099-K, Merchant Card and Third Party Network Payments.

Both domestic and foreign merchant acquiring entities and third-party settlement organizations are required to issue reporting forms to their participating payees. The IRS defines a merchant acquiring entity as “an ‘acquiring’ or ‘merchant’ bank…or other organization that has the contractual obligation to pay the participating merchant/payee in settlement of payment card transactions.” Additionally, “a third-party settlement organization is a central organization that has the contractual obligation to make payments to participating payees (generally, a merchant) in a third-party payment network…The most common example of a third-party settlement organization is an online auction-payment facilitator, which operates merely as an intermediary between buyer and seller by transferring funds between accounts in settlement of an auction/purchase.” (http://www.irs.gov/newsroom/article/0,,id=249029,00.html)

While there is no minimum exception to the requirements for merchant acquiring entities, third-party settlement organizations are only required to file Form 1099-K if a seller has made at least 200 transactions totaling a gross amount of $20,000 within the calendar year. Beginning in January 2011, the organizations responsible for reporting the payments were required to track the transactions on a monthly basis. Form 1099-K contains fields to report each month’s gross transaction amount. Reporting both annual and monthly amounts is essential to reconciling any discrepancies between the data reported to the IRS on fiscal-year tax returns with the data on information-only returns.

Some may be concerned about the possibility of dual reporting of this information, perhaps because of the Form 1099-Misc reporting requirements. For example, ABC Tax Services (ABC) receives payments from clients through a third-party provider and meets both the 200 and $20,000 thresholds. Additionally, ABC has provided more than $600 in services to several clients, resulting in a requirement by those clients to issue Forms 1099-Misc to ABC. If said clients pay ABC with credit cards, at first glance, one could see that revenue may be reported to the IRS twice – once from the credit card provider (1099-K) and again by the clients issuing Forms 1099-Misc. However, the IRS has indicated that if transactions qualify to be reported under Form 1099-Misc rules as well as under Form 1099-K rules, the information should be reported only under section Form 1099-K rules. This will eliminate the potential of double reporting.

For 2011, the reporting of Form 1099-K information has been delayed somewhat. There are lines for Form 1099-K proceeds on various forms and schedules (e.g., Schedules C, E, and F). However, for 2011, the form instructions and even form line descriptions indicate to enter zero and instead report all proceeds on another line. RedGear software has an input for Form 1099-K similar to other informational reporting forms like Forms 1099-R and 1099-Misc. Rest assured that information entered on this new input screen carries to the correct place on the designated form(s). As the rules on reporting Form 1099-K amounts change, we will make sure that the software is updated to accommodate accordingly.

For frequently asked questions relating to Form 1099-K, see http://www.irs.gov/newsroom/article/0,,id=249029,00.html.

MyTaxAuction is easy to use for both the tax payers and tax preparers.  The simple navigation and step-by-step process make it easy for the tax payer. A simple client overview enables quick client processing for tax preparers.

Today’s mobile devices help us connect with our social network, browse the Internet and shop online. They are quickly becoming an indispensable tool for commerce on the go. According to Experian’s 2011 Mobile Consumer Report, over 33 million Americans use their phone in a networked environment every day. The interactivity and linkage between mobile devices and websites has transformed the way consumers think about brands, and has caused a major shift in how consumers shop.

MyTaxAuction is intended to connect tax payers, transacting on line, with a Professional Tax Preparer. Tax Payers want a professional to help them know how the tax law affects their individual tax situation. At last count, 37 million tax filers used a do-it-yourself program to prepare their taxes. MyTaxAuction is designed to provide another avenue for tax payers to work with a professional to have their taxes prepared and electronically filed.

Tax Payers make all payments through PayPal. During tax preparer enrollment, a PayPal account is established, allowing funds to be directly deposited, thus maintaining the product’s simplicity.

For more information about this exciting new product and registration details, click here.