As tax law is very complicated, this article is intended only for educational or illustrative purposes and should not be construed to communicate legal or professional advise.  You should contact us with any specific questions so we can properly interpret how the tax laws applies to your situation.   Killingbeck Tax Preparation, Kokomo, Indiana.  765-452-8000.

Here's Info. for After You Get You Tax Return Prepared

Below we have listed information on:  Signing you tax return, 3rd Party Designees, Mailing, and Amending,   Also we include info. on: putting your return together, getting a copy of a prior tax return, contacting the IRS by phone, and penalties. 

 

Third Party Designee

1. You can complete section on the bottom of the back of the 1040 to allow any third party the taxpayer wished to contact the IRS to resolve original processing problems.  
   1. Can enter our firms name and anyone from our office will be able to talk to IRS about return till end of filing season (10-15). 
   2. If the person designated is the paid preparer, write “Preparer” in  the space for the designated name and check the box “yes”.

 

Sign Your Tax Return

 Tax return must be signed to be an official  document.  If joint return, both must sign.

 Tax return must be signed to be an official 

1. Others sign for taxpayer   
   1.  One spouse can sign for the other for situations in A below by  signing spouses name & then writing by & then signing their own name.  They also must include  an attachment as listed in ii below. 
      1.  This can include illness or injury, spouse being in combat zone, and other good reasons
      2. Attachment must include type of return, tax year, the reason spouse couldn't sign & is with spouse’s consent.  
      3. For other situations, a spouse must have a power of attorney.  Can use IRS form 2848.
         
         
   2. If minor child, parent signs the child's name and then signs their own name and writes "by parent for minor child"
   3. Others who sign for taxpayer must attach power of attorney
      1. Tax preparer must create form  2848 in computer and send in power of attorney client has with electronic filing form. 
         
         
         
2. Deceased Taxpayer       
   1. Only enter date of death if taxpayer died during the tax year.  If they died after 12-31, wait till next year.
      
   2. Form 1310 is not needed for deceased spouses & court appointed executors.                                 
      1. Surviving Spouses if no executor write  in signature area  "Filing as Surviving Spouse”.   No  need to sign for spouse
         1. If spouse is executor, spouse should sign twice.  Second signature should be as executor.  Attach court authorization.
         2.  If they are not the executor, they must file a joint return and have executor sign for spouse.
         3. Executors can revoke a jointly filed return filed by the surviving spouse to file a separate return for the deceased.
            
            
   3. Executors should attach a copy of court authorization  They write in signature area “Filing as Personal  Representative” and must sign their own name.
   4. Other filers must file form 1310.(can also use 1310 for state.)
   5. Use form 4810 when both spouses are deceased as IRS can only make further assessments to estate for 18 months.
   6. A Deceased Taxpayer is only taxed on income & can only claim deductions made up till the date of death.
      1. An exception is made for medical bills.  Can claim any medical  bills paid for deceased within 12 months after death on final return.
      2. After date of death the beneficiary or the estate is required to report income over $600.  Should be on a 1099.
      3. May have to do a nominee distribution on 1099's to properly split the income.
         
         

Putting Return together 

 

1. Forms go in alphabetical order, then numerical order.
2. Attach copy B of W-2's & 1099's with withholding.
   
   

Mailing 

1.  Where return is sent depends on whether you owe or are getting refund. See reference section  of this book.
2. Military personnel should file their return in service center where they reside as civilians or plan to reside
3.  Do not use the same envelope for different returns or for estimated tax.
4. The IRS will cash any check they receive no matter who the check is made out to.
   
    

 

Copy of the Tax Return or Transcript

1. To get a copy of a past years tax return use form 4506
2. The cost is at least $57.00. 
3. Can get the last 7 years of tax returns filed
4. Can get a transcript of tax return at no cost.  Transcript have some details but not all
5. Can call 1-800-908-9946 to get transcript.
   
   

AMENDING: Form 1040X

1. Should wait for original refund before sending in  1040X  as a 1040X will freeze the original refund.
2.  May amend a return up to 3 years from due date of return or two years of when tax was paid.
   1. This means until April 15 you can amend the current year, plus the 3 prior years.
   2. After April 15 you can only amend current plus last 2 year
   3. Can amend up to 7 years on worthless stock
   4. If original return was not filed, taxpayer has 3 years from when it was due plus extension. 
3. Send amended return to service center where it was originally filed. Send to new address if service center moves.
   
4. Watch that you attach necessary forms to 1040x.
   
5. Be sure to give explanation as to reason for amending on 1040-
6. The State doesn’t touch amended returns until all current returns are processed after 4/15.
7. On State Amendments, be sure to send 1^st 2 pages of 1040.
   
   

Contact IRS by Phone

1.  Can contact IRS by phone to speed certain paperwork
2. To abate a penalty,
3. To respond to a notice where tax has been paid
4. To respond to a missing form, or
5. To correct a withholding mistake.
6. May be able to fax item.  Read notice IRS sends.

 

Taxpayer Penalties:

 YOU ASK IRS TO WAIVE PENALTY  

 Generally, penalties are not imposed if taxpayer can show that the failure was due to reasonable cause.  Reasonable cause can include death or serious illness, unavoidable absence of taxpayer on filing date, or destruction of taxpayers home or business.

 But if taxpayer has good reason why, explain to IRS and ask them to waive penalty.  Often works.

 Hardship waiver request form is 8944

1. Failure to file:  The IRS can go back 6 years for people who haven’t filed a  tax return.
   1. A failure to file penalty of lesser of 100% of tax or 5% per  month of amount due is charged up to 25%. Unless you attach a reasonable explanation of why you are late.
      
      
   2. If return is not filed within 60 days of the due date, penalty is the smaller of $135 or the amount of tax due will be imposed
   3. FRAUD: If fraudulent, a 15% penalty per month up to a 75% penalty.  There is no time limit on when tax may be assessed where a fraudulent return is filed.
      
      
2. Failure to pay: 
   1. This penalty is 1/2% per month up to a 25% maximum.  (1% if repeated requests to pay)
   2. Can call IRS & they will figure penalty
   3. Also applies to failure to pay tax deficiency within 21 days of  the date of notice. 
      
      
3. Substantial Understatement of Liability of over $5000 or 10% of tax,  a 20% penalty applies.  Penalty is 40% from undisclosed foreign transaction or noneconomic substance transaction. 
   1. If from overvaluation of property for a charitable contribution, it is a 20% penalty if over 150% OF Value, 40% if over 200%. 
   2. If you fail to report an item of gross income which is more than 25% of gross income, the IRS has 6 years to assess additional tax.
      
      
4. Overvaluation:  20-40% penalty
   
   
5. Frivolous Tax Return:  $5000 penalty 

 

Give us a call if you have questions or we can be of help, 765-452-8000.  Killingbeck Insurance & Tax Preparation, Kokomo, Indiana.