April 15 Deadline to Receive Refund for 2006 Late Filers

An important deadline is coming up on April 15, 2010. This applies to people who have not yet filed their 2006 tax returns, and who might be eligible for a refund from the IRS. As per IRS regulations, any refund owed by the IRS for tax year 2006 must be claimed by filing a 2006 tax return on or before April 15 2010, failing which the refund amount is deposited into IRS coffers, and cannot be claimed at any time in the future.

Millions of people routinely fail to file taxes on time. This could be due to a variety of reasons, ranging from lack of knowledge about tax filing regulations to intentionally not filing taxes because of an apprehension that the IRS will then not know about certain financial aspects of the person. Whatever the reason maybe, it should be clearly understood that not filing taxes can put one in serious trouble, and the IRS has powerful recourse to make someone pay their due.

IRS regulations allow one to file taxes for prior years. Many late filers owe taxes to the IRS, but what is not so well known is that there are many people who are eligible to get a refund from the IRS, even when filing late. When it comes to owing the IRS money, there is no escape. The IRS will track a person down who owes taxes and they have powerful provisions granted to them by law which they can use to reclaim these owed taxes. These collection mechanisms can include garnishment of wages (where an employer can withhold part of the salary), putting a lien on your home, or taking over your bank accounts. When it comes to a refund, one has to file in a timely fashion in order to obtain the refund. As per law, the IRS gives a filer 3 years from when the taxes for a particular year should have been correctly filed, in order to file late and claim a refund. Thus, the tax filing deadline for tax year 2006 was April 15, 2007. If you have not filed your 2006 taxes yet, and if you are owed a refund, then you must file on or before April 15, 2010, in order to be able to collect the refund. If you do not file by April 15, 2010, and the IRS owes you money, then this can never again be reclaimed.

When it comes to filing taxes, it is never too late. It is always possible to file taxes for a prior year, but one should understand that the consequences of not filing in a timely fashion can be severe. To start with, if you don’t file taxes and owe the IRS, then penalties and interest start to accrue the day after the filing deadline. The IRS may file a “substitute return” for their records. But this return will be based only on information that the IRS has, such as wages, for example. It will not include any exemptions that you might be eligible for, or any expenses that you might be able to deduct. In case this happens, it still is possible for you to file a late return, and the IRS is typically known to adjust your account to indicate the correct figures. Finally, as has been hinted above, the IRS can start a collection process which can impact your life considerably.

At RapidTax we are experienced tax professionals who understand the intricacies of tax law. We have dedicated our website completely to helping clients who have not filed prior year taxes. One thing to keep in mind is that prior year taxes cannot be filed electronically. Based on the information that you input into our easy to understand and state of the art questionnaire, we prepare the necessary forms. Our algorithm goes deeply into tax law and figures out the maximum possible deduction based on circumstances that were in effect in the prior year of your choice. We do a preliminary error check and email you the filled out forms within an hour of your submitting your information on our site. You need to take a print out of the forms, sign them, and put it in the mail so that it is post-marked on or before April 15. For tax year 2006, we once again remind our clients that in case you are owed money from the IRS, you need to post-mark your return on or before April 15, 2010, failing which your money cannot be reclaimed in the future.

2008 Tax Return Conundrum: With Funding Dropping, How Will Feds Pick up the Slack?

2008 tax return numbers just aren’t looking good for the government. Year over year revenue has dropped catastrophically, even as spending is up. So how are they making up the shortfall? There’s been some tentative talk of cost-cutting and income tax hikes, but there are some unusual plans that are also in the works:
Continue reading “2008 Tax Return Conundrum: With Funding Dropping, How Will Feds Pick up the Slack?”

2008 Economic Stimulus Payment

What is the Stimulus Rebate?

The 2008 Tax Rebate is an economic stimulus payment that more than 130 million households will receive starting May 2nd, 2008. The rebate will not be taxable nor will it affect your tax liability or refund. To qualify for the stimulus rebate, simply file your 2007 Individual Income Tax return and nothing more. In order to receive a stimulus payment, a return must be filed by April 15, 2008 or October 15, 2008 (with extension) . This payment is automatic and eligibility is determined based on the information provided on your 2007 tax return.

Who is eligible to receive this rebate?

Taxpayers are required to meet the following conditions to be qualify for the stimulus rebate: • must have a valid Social Security Number • cannot be claimed as a dependent on a tax return • have qualifying income of at least $3,000. If you are filing a ‘Married Filing Joint’ return, BOTH people listed on the return must have a valid Social Security Number in order to qualify for the payment. Eligibility for the stimulus payment is subject to maximum income limits. The payment, including the basic amount and the amount for qualifying children, will be reduced by 5 percent of the amount of income in excess of $75,000 for individuals and $150,000 for those with a Married Filing Jointly filing status.

What is Qualifying Income?

For the purpose of the Stimulus Payment, qualifying income consists of earned income such as wages and net self-employment income, Social Security, certain Railroad Retirement benefits, veterans’ disability compensation, and pension or survivors’ benefits received from the Department of Veterans Affairs. Supplemental Security Income is not qualifying income for the stimulus payment.

How much money will I receive?

The IRS will determine your payment based on the information provided on your 2007 tax return.

Click here to calculate your 2008 rebate.

If you are an eligible individual you may receive anywhere from $300 and $600. Taxpayers who have filed a joint return, may receive anywhere between $600 and $1,200. An additional $300 payment will be made for each qualifying child listed on your return that is younger than 17 and is eligible for the Child Tax Credit with a valid social security number.

When will I receive the Stimulus Payment?

Stimulus Payments will be sent out in the order of the last two digits of the primary Social Security Number used on the tax return. Whether you chose direct deposit or a paper check will also determine how soon you will receive your payment. Payments will be directly deposited into your account beginning May 2. Paper checks will be mailed starting May 16.

Taxpayers who file a return after April 15 will receive their Stimulus Payment about two weeks later than the normal schedule.