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Taking Action Tax Tips for 2014

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Taxes can be a daunting task.  But these days, the Internal Revenue Service is doing everything possible to keep it easy and manageable. And much of the work can be done from the comfort of your own home.

Last year, nearly 120 million taxpayers opted for the safest, fastest and easiest way to submit their individual tax returns.  It’s called IRS e-file and you can easily head over to the IRS website to find 14 reputable commercial tax software companies.

One thing to keep in mind, contacting the IRS over the phone isn’t always the fastest fix.  The IRS commissioner is giving consumer a heads up this year, hoping you consider browsing their website for your answers to your questions.

Here’s some web services you should expect to find quickly online:

  • File your tax return
  • Check your refund status
  • Use the Interactive Tax Assistant
  • Request an Electronic Filing PIN
  • Get Transcript of Your Tax Records
  • Apply for an EIN Online

The Affordable Care Act will also play a role this year in paying your taxes.  However it primarily applies to higher income earners who make more than $200,000 per year.

Here’s 2 new taxes to look out for:

Net Investment Income Tax:

A new Net Investment Income Tax went into effect on Jan. 1, 2013. The 3.8 percent Net Investment Income Tax applies to individuals, estates and trusts that have certain investment income above certain threshold amounts. On Nov. 26, 2013, the IRS and the Treasury Department issued final regulations which provide guidance on the general application of the Net Investment Income Tax and the computation of Net Investment Income.

Additional Medicare Tax:

A new Additional Medicare Tax went into effect on Jan. 1, 2013. The 0.9 percent Additional Medicare Tax applies to an individual’s wages, Railroad Retirement Tax Act compensation and self-employment income that exceeds a threshold amount based on the individual’s filing status. The threshold amounts are $250,000 for married taxpayers who file jointly, $125,000 for married taxpayers who file separately and $200,000 for all other taxpayers. An employer is responsible for withholding the Additional Medicare Tax from wages or compensation it pays to an employee in excess of $200,000 in a calendar year.

And don’t forget about the Earned Income Tax Credit. It’s a tax credit to help you keep more of what you earned. To qualify, you must meet certain requirements and file a tax return, even if you do not owe any tax or are not required to file.  Don’t miss out if you made, less than $51,567.

And finally, we have a warning for tax payers.  Scam artists are out there in 2014 ready to take your money. It starts with a phone call, often from a phone number that looks like it’s coming from the IRS. This tax scam has been the biggest issue for the IRS in 2014.

Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are then threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting.

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