The Tax Preparation Blog

Archive for the ‘Free Tax Services’ Category

Question: how can i file my taxes online for free?

I need to find a good, easy way to file my CANADIAN taxes online…im already past the deadline so help please!

Answer: irs.gov….free efile

Tip of the Day: Tax Survival Guide

Advice on surviving tax season from ‘Good Morning America.’

Question: How do I file a tax return for past years?

I haven’t filed a tax return for the past 5 years and I was wondering how to file them and would penalties be involved, also I was a minor for 4 of those years, and in 4 of those years I earned less than the tax free threshold and just was wanting to get tax back that was paid, also can you lodge past year tax returns online? If not where can you get the forms for a past year tax return?

Answer: If the irs owes you, there wont be penalties. You can only go back three years tho. Last time I did it, I simply downloaded the forms for the years I didnt file and sent them in. You can find the form on the irs website. Dunno what it is but easy to find by typing irs in search box

Online Tax Preparer Launches Software, Earns Top Ranking and Projects Exponential Growth

OnePriceTaxes.com recently launched a new software product and was ranked the No. 4 best tax preparation program by TopTenReviews.com. The Online Tax Preparation company is expecting to generate 500 percent growth in its business this year over last year.

Bankruptcy Questions : Can I File for Bankruptcy for Free?

Question: Advice on a retired person converting from a traditional IRA to a Roth?

I have a traditional IRA (about 40K) that I am thinking of converting to a Roth IRA. I am retired and about 3 years away from mandatory IRA withdrawals. Knowing full well that I will take a tax hit if I do this, is it a good idea to do this and just let the money grow tax free or should I just steel myself to mandatory yearly withdrawals at age 70 1/2, I can afford the tax hit and my taxable income in 2007 was approx 37K. Thx

Answer: If you have the money in non-tax deferred accounts to pay the taxes on the Roth conversion, then go ahead and make the conversion to the Roth. Don’t convert more than what would put you into the 28% bracket.

According to the Motley Fool:

You can find Roth IRA conversion “calculators” all over the Web to help you with your decision (test several or read reviews first to make sure the calculator you use matches your personal situation best — not all calculators are created equal). We have IRA calculators to help you chose between a regular IRA and a Roth IRA and decide whether to convert an IRA into a Roth IRA:

http://www.fool.com/calcs/calculators.htm#roth

Click on “Should I convert my IRA to a Roth IRA?”

Make tax season easy, organize your forms

As tax season approaches, many may be scrambling to get all their deductions and receipts organized. Master Tax Adviser Velma Bjorgum at H&R Block, Wahpeton, suggests having all Social Security numbers, dates of birth, children’s full names, 1099 and W2 forms at your tax appointment.

Tips & Advice for Income Tax Deductions : Tips for Sale’s Income Tax Deductions

The Federal Government introduced the tax free savings account in their last budget. Basically any Canadian citizen over the age of 18 can open an account and is allowed to deposit $5,000 per year. Any unused portion of the $5,000 in a given year can be carried forward. The account has no impact on RRSP yearly contribution eligibility. All income earned by the funds in the account are tax free and can be taken from the account at any time.

RRSPs have been the most widely used form of saving for retirement. People like you and I blindly scramble towards the end of February each year to purchase RRSPs from our bank or financial planner so that we can get a small tax break. The majority of people investing this way do not have any idea what their RRSPs are actually being invested in. In many cases when the funds actually do show a return, that return sits idly in the RRSP account and is not put back to work earning more dollars for the investor. Many people are in for a shock when they retire as taxes can reduce the face value of the RRSP account by as much as 39%. Imagine planning to have a million dollars to carry you through your retirement years only to find out that after taxes you actually have $610,000. The other consideration that one must look at is the fact that the RRSPs are usually purchased with after tax dollars and those same dollars are taxed again when the account is liquidated.

Bankers are programmed to sell RRSPs and are generally quite good at it. They however, have failed miserably in selling the tax free savings account product. The returns offered on tax free savings accounts by the banks are nominal at best and in many cases just cover the bank fees on the account. A number of investment companies offer products with higher yields and should be considered as a legitimate alternative.

The best way to compare RRSPs to the tax free savings account is by way of an example:

The client has decided to invest $5,000 per year for the next 5 years at which point the investment will be cashed in. The rate of return for both products is 7.0%. The example assumes that the client will reinvest yearly earnings. The tax rate used is 39%.

RRSP TFSA
Year 1 $5,350 $5,350
Year 2 $11,075 $11,075
Year 3 $17,200 $17,200
Year 4 $23,754 $23,754
Year 5 $30,767 $30,767

Taxes on the RRSP balance will be $11,999 leaving the client with $18,760 for his 5 year investment of $25,000. As there is no tax on the tax free savings account the ivnestor will have $30,767 from his $25,000 investment. One might argue that the tax deduction created by purchasing an RRSP should be part of this equation. However, then one would have to calculate the initial income tax paid to earn the investment funds. These numbers basically cancel each other out.

The bottom line is that the federal government has provided Canadians with a way to accumulate tax free dollars. In order to take full advantage of this product the general public will have to consider alternative investments offered by private investment companies.

Homeowners braced for unhappy new year

Despite signs of a recovery in 2009, many experts are predicting that house prices will stagnate – or even fall – in 2010 It’s been a funny old year for homeowners. House prices have defied expectations when, after falling as predicted in the first few months of the year, they seem to have been climbing in many places since. So what of the year ahead? Homeowners face a new year of stagnant …

Health Care Stakeholder Discussion with Nancy-Ann DeParle

Before you purchase an insurance policy for your car, you should first learn about Nashville car insurance, lowering rates, and different types of coverage. Having the right information is the first step to getting the best car insurance policy. If you do not know what to do, you will end up with an insurance plan that does not address your needs. Here are some things that you should know about auto insurance.

* Applying for an auto insurance policy is something that you are required to do. This is mandated by the state. There is a minimum insurance coverage that the state requires all motorists to have. These are coverage of damage and injury liabilities. You can get other coverage that is not required by the law but can be beneficial for you depending on your lifestyle and driving needs.

* You can apply for an Nashville auto insurance online, through an insurance agent, or personally. Online application is more convenient and faster. You can do it at home at any time of the day. Hiring an agent might be more expensive but at least you can rely on the help of an expert. Applying personally, meanwhile, gives you a chance to clarify things and questions with the company’s representatives or staffs. It is better to ask questions directly than through an intermediary or through the internet.

* You should also get Nashville auto insurance quotes form different car insurance companies to compare the advantages and disadvantages of one over the others. This will give you a clearer and better view, which can lead to an intelligent decision.

* If you want to lower your rates, you can do several things. For one, you can decrease your daily mileage. Also, you should not be involved in any car accidents or violations of traffic rules. Having multiple cars in one policy can also save you money. You can also consolidate other insurance policies like your home insurance plan in one company. And finally, you should have a good credit rating to get lower premiums.

By knowing these things about auto insurance, you can be sure that you will get the best policy that is appropriate for your needs.