Filing taxes from home more popular than ever according to IRS

This time of year, it’s hard not to notice the assortment of home PC tax software packages available on the market. Many taxpayers swear by these products, due to the ease of use for the average person and the ability to e-file tax returns to the IRS.

Recent information from the IRS shows e-filing of federal tax returns from home computers is on the rise. In fact, as of March 6, 2009, the IRS has received more than 18 million returns filed from home computers. This number is up more than 20 percent over the same time last year.

So far, a total of 52 million tax returns have been e-filed, up 6 percent over the same period last year. About 91 percent of tax returns filed to date for tax year 2008 have resulted in a refund, although this seemingly large number is easily explained. At the beginning of tax season, the number of returns receiving a refund is higher because taxpayers anticipating a refund are more likely to file early. Those taxpayers expecting to owe the IRS usually put off filing until closer to or on the April 15th deadline.

Here are some other interesting statistics the IRS released with this report:

For the week ending March 7, 2008 compared to week ending March 6, 2009:

	2008	2009
Visits to IRS.gov E-filing Receipts   Total E-filed Tax Professionals Self-prepared Total # Refunds Total of Refunds Avg. Refund	90,729,850 48,795,000 33,419,000 15,377,000 53,176,000 $136,976,000,000 $2,576	116,774,933 51,793,000 33,349,000 18,444,000 54,638,000 $153,579,000,000 $2,811

As a reminder, if you meet the income requirements of the IRS and you do not want to purchase your own tax software, the IRS partners with several companies to offer free online tax preparation and e-filing. Visit IRS.gov for more information.

Stimulus means extra money, just not all at once

Stimulus means extra money, just not all at once
It is truly amazing how one word can spark so much excitement in so many people. The word “stimulus” seems to have done that with the American public. Many Americans hear the word stimulus and immediately think check. The proof is in the number of times I have been asked if or when stimulus checks will be distributed this year.

The truth of the matter is, President Barack Obama’s “Stimulus package” does not include a stimulus check for taxpayers like former President George Bush’s package did. But don’t be discouraged. American taxpayers will still be getting money from the government, just not all at once.

Instead, the Making Work Pay provision of the American Recovery and Reinvestment Act is intended to provide a refundable tax credit of up to $400 for working individuals and $800 for married taxpayers filing jointly. This will likely put extra money in your paychecks as the tax credit will be calculated at a rate of 6.2 percent of earned income for those taxpayers with an adjusted gross income of $75,000 or less, or $150,000 for married couples filing jointly.

And the beauty of this is the average American taxpayer need not do anything special to receive the credit. The credit will automatically start showing up in their paychecks this spring. It’s all up to employers and their payroll departments to start using the new withholding tables established by the IRS.

So there is no need to complete a new W-4, unless you have multiple jobs or the combined income of you and your spouse will put you in a higher tax bracket. If that is the case, you may want to submit a revised W-4 to ensure you have enough withholding held out to cover the tax for the combined income.
But please don’t forget the amount of the credit must be reported on your 2009 income tax return. Until then, however, enjoy the extra take-home pay you should start receiving very soon.

For more information about the Making Work Pay credit, see Publication 919 available on the IRS website at http://www.irs.gov.

Tax representation can also mean tax preparation for JK Harris

Does anyone know what time it is?
It’s tax time of course. The time of year when everyone’s thoughts turn to taxes. Yes indeed, even those of us in the tax representation business think about taxes more now than ever.

One reason for this is because our clients have JK Harris prepare their tax returns. In order for taxpayers who owe the IRS to negotiate some sort of resolution, they must be up to date, or compliant as the IRS calls it, with the filing of their tax returns.

That is where our Tax Preparation Department comes in. When a non-compliant taxpayer comes to us, we can prepare their tax returns and then move directly to the resolution process. And many of these clients actually have JK Harris prepare their tax returns in future years as well.
While we don’t directly advertise our Tax Preparation services, it is a service we offer to our clients and to the general public. In fact, on average, we prepare between 32,000 and 33,000 tax returns each year. The IRS has received an average of 134,279,500 tax returns each year between 2002 and 2007.

This means that one out of approximately 4,000 tax returns submitted to the IRS nationally on a yearly basis is prepared by our JK Harris Tax Preparation Department.

These numbers, in and of themselves, are pretty impressive. But here’s something else I think is worth mentioning. The IRS, on average each year, receives 45,304,000 tax returns which are prepared by tax practitioners, meaning CPAs, Enrolled Agents, national tax preparation firms, etc.

This translates to one in every 1,400 tax returns prepared by tax practitioners are actually prepared by JK Harris.

To say I am quite pleased with these numbers would be an understatement. In fact, they are not just numbers to me. They represent a large population of people that JK Harris is proud to have assisted. And we look forward to continuing to assist our clients well into the future.

John Harris
www.JKHarris.com