" 2012 Education Credits Overview "

IRS allows three Education Credits - American Opportunity Credit, Lifetime Learning Credit, and Tuition & Feed Deduction.  Student should choose the credit that provides the maximum tax benefit. Only one credit can be claimed i.e. no double dipping. Any of the three credits are available to a student that is:
1.  Enrolled at least half year.
2. The Education Institution has to be accredited.
3. Typically student receives 1098-T from the University.
A)  American Opportunity Credit - If a taxpayer pays over $4000 per year in Qualified Expenses this $2500 credit is available for a four year post secondary education.  Tution & Books expenses qualify.
B) Tution and Fees Deduction-  Varies depending upon the Adjusted Gross Income(AGI). If AGI is less than 130K$ for Married filing Jointly, $4000 Credit is available.
C) Life Time Learning Credit:  Limited to 20% of the Education expenses with a maximum of $2000. Many educational requirements are reduced and many taxpayers generally qualify for it.

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Kash, @ Yajnik & Mehta Associates (925) 963 4891
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" Want a Piece of the 917M$ Tax Refund Pie? " - IRS

Estimated to be 984,000 Taxpayers, who have not claimed their Refund for the Tax Year 2009 Returns. Date date to claim this refund by filing a tax return is April 15, 2013.  If the refund is not claimed, IRS will be happy to keep taxpayer's refund check. The average potential refund check is estimated to be around $500. 

IRS reminds taxpayers that the 2009 refund checks will be withheld if the 2010 & 2011 Tax returns aren't filed. Also, the refund may be used to Offset any unpaid, State Agency, Unpaid Child Support, or Past due Federal debt such as Student Loan. In addition, many low income families also stand to loose Credits such as Earned Income, Child & Defendant Care, Child Tax Care, and Education.

For Q & A Contact :
Kash, @ Yajnik & Mehta Associates (925) 963 4891
Linked-In :   kyajnik@yajnikandmehta.com
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Twitter :       Kash_Yajnik@kash_yajnik

" Do you Barter? " IRS - Know 4 Things..

Businesses Barter Products or Services they Need.  Bartering is trading one product or services for another.
Usually there is no Cash Exchange. IRS requires that Tax payers Report Fair Market Value (FMV) of the Product or Service received as Taxable Income. Also, Both Parties must report this Income. Some facts about Bartering :
1. Barter Exchanges -  Organized market place for bartering Products and services. They are required to issue Form 1099-B for all Broker & Barter Exchange for transactions.
2. Barter Income - Barter Trade Dollars are same as cash dollars for tax reporting purposes. Report FMV all of the services received.
3. Tax Implications -  Barter Income is Taxable in the year of transactions. Barterers may owe Income or Self Employment Tax.
4.  Report Bartering Trade or Businesses Income on 1040 Schedule C after deducting Barter costs.

For Q & A Contact :
Kash, @ Yajnik & Mehta Associates (925) 963 4891
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Twitter :       Kash_Yajnik@kash_yajnik

" If You Changed Name..." IRS Suggests...

Because of Marriage, Divorce, or Voluntary Name Change, IRS suggests following Taxpayer Actions:
1.  Notify SSA about the Name Change.  This way IRS Computers can match your New Name with the Social Security Number.
2. After divorce if you are using your prior last name, notify SSA about name change.
3.To Inform SSA about the name change, File Form SS-5, which is Application For a Social Security Card, at your local SSA office or by mail with a proof of your legal name change - (800) 772 1213
4.Go to SSA website www.ssa.gov for on line From SS-5.Your new card will have the same SS# but with New Name.
5. If you have adopted Spouse's children, you would like to update their Names as well. For adopted children without SSNs, parents can apply for Adoption Taxpayer Identification Number by filing out Form W-7A
For Q & A Contact :
Kash, @ Yajnik & Mehta Associates (925) 963 4891
Linked-In :   kyajnik@yajnikandmehta.com
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Twitter :       Kash_Yajnik@kash_yajnik

Did You Receive IRS eMail ?

Beware Of Phishing Web Sites that send IRS look alike Logos in Emails for following reasons:
1. To Steal Tax payer Identity
2. To Obtain Personal Information about Tax Payer
3. To gain Financial Info. about Tax payers
4. End Result is that the Security Of the Tax payer's Bank and Credit/Debit Card Account is compromised 

IRS advises Tax payers to do the following:
o Don't Reply the Message.
o Don't Open Attachments
o Don't Click on any links in the eMail.
o Report Suspicious eMails to phishing@irs.gov

Note: IRS doesn't communicate with Tax payers using eMails or Social Media to request Financial or Personal Information.  IRS Only Communicates through then US mail.

For Q & A Contact :
Kash, @ Yajnik & Mehta Associates (925) 963 4891
Linked-In :   kyajnik@yajnikandmehta.com
Facebook :  kash@yajnikandmehta.com  
Twitter :       Kash_Yajnik@kash_yajnik

IRS 2012 Tax Program Update...

The New Tax law was passed on Jan 2, 2013 and since then following events have occurred:

1. IRS started accepting eFile returns by Jan 30, 2013 rather than customary Jan 15, of the current year.
2. Certain returns with Education credits, and Depreciation are beginning to be processed by  Feb15, 2013.
3. Estimated Tax Payments forms 1040-ES will be processed beginning Feb 20, 2013.  

Other Tax Programs are being constantly updated as IRS begins to process current year returns. and the industry reacts to all the changes in the new tax law.

For Q & A Contact :
Kash, @ Yajnik & Mehta Associates (925) 963 4891
Linked-In :   kyajnik@yajnikandmehta.com
Facebook :  kash@yajnikandmehta.com  
Twitter :       Kash_Yajnik@kash_yajnik

Dirty Dozen Scams : #10, #11, & #12

2011 Dirty Dozen Tax Scams According to IRS, will be listed and explained to the informed Tax Payer.

# 10 Zero Wages  - Typically Form 4852 (Substitute For W-2) or Corrected "1099" is used to Improperly reduce taxable Income to Zero. Taxpayer might submit statement rebutting wages and taxes reported by payer to IRS. Fraudulent tax payers explain on Form 4852 that company has issued erroneous W-2 and refuse to correct it for fear of IRS retaliation. Taxpayers should not participate in such schemes.  Such Filings may result in $5000 penalty.

#11 Trust Misuse - Unscrupulous Promoters have for years asked taxpayers to transfer assets in to trusts to shelter or evade income tax. While many such transfers are legitimate, some highly questionable transactions promise reduction of Income subject to taxes, less deductions, and reduced gift or estate taxes.  Such trusts rarely promise what they deliver and avoid income tax or shelter income illegitimately. Recently IRS has stepped up activities to monitor Annuity and Foreign trusts to shift Income & deduct personal expenses.  Seek a trusted Professional before entering such trust arrangements.

#12 Fuel Tax Credit Scams - IRS receives claims for excessive Fuel Tax Credits.While some farmers who use fuel for off-highway business purposes, are eligible for fuel tax credit, other Individuals claim tax credit for nontaxable uses of fuel when their occupations & income levels make such claims unreasonable. Fraud involving Fuel Tax Credit is frivolous tax claim and can result in $5000 penalty.

For Q & A Contact :
Kash, @ Yajnik & Mehta Associates (925) 963 4891
Linked-In :   kyajnik@yajnikandmehta.com
Facebook :  kash@yajnikandmehta.com  
Twitter :       Kash_Yajnik@kash_yajnik