What Taxpayers Don't Know Could Hurt Them
SACRAMENTO, Calif., Jan. 30, 2014 /PRNewswire-USNewswire/ -- With the official start of the federal tax filing season on Friday, January 31, many taxpayers are wondering how the new tax laws may affect them and whether they qualify for any tax credits. For example:
Did you work and earn less than $51,567 last year? You could receive Earned Income Tax Credit (EITC) as a tax refund if you qualify.
Do you have at least one child that qualifies for the Child Tax Credit? If you don't get the full credit amount, you may qualify for the Additional Child Tax Credit.
Are you a student or do you support a student? If so, you may be eligible for this credit. Students in their first four years of higher education may qualify for as much as $2,500. Even those who owe no tax may get up to $1,000 of the credit refunded per eligible student.
Do you know if you are subject to the new Additional Medicare Tax? Or that the highest tax rate is 39.6 percent? Or that you can deduct only the part of your medical and dental expenses that is more than 10 percent of your adjusted gross income (or 7.5 percent if either you or your spouse is age 65 or older)?
"There is a lot of confusion surrounding how to best file your taxes for 2013, especially this year in light of so many changing tax rules," said Patricia Kappen, EA, President of the California Society of Enrolled Agents (CSEA). "With all the tax changes taking place in Congress and the state Legislature, it is more critical than ever to have a qualified tax specialist on your side when preparing your tax and financial strategy."
According to the National Taxpayer Advocate's 2013 Annual Report to Congress, absence of tax return preparer regulation is one of the most serious problems facing taxpayers. "We recently have seen many misconduct cases in which the return preparers have altered return information without their clients' knowledge or consent in an attempt to obtain improperly inflated refunds or divert refunds for their personal benefit." What does this mean for taxpayers? Make sure to choose a tax professional who has the required experience, skills, education and ethical training to do the job.
One good way to get a better understanding of the various tax professionals is from the IRS. According to the IRS website, "Enrolled Agent status is the highest credential the IRS awards. Individuals who obtain this elite status must adhere to ethical standards and complete 72 hours of continuing education courses every three years." So, when choosing a tax professional this year, be sure to choose carefully. There's a lot at stake.
CSEA, an association of more than 3,500 federally licensed tax professionals, is offering Californians guidance in choosing a tax professional to assist them with tax planning, preparation and representation. Member Enrolled Agents can help taxpayers to best navigate the new tax law changes. If you have tax questions, your Enrolled Agent can assist you in ensuring that you do not pay too much, and help you minimize your risk of an audit. Visit www.CSEA.org or call (800) 777-2732 to find an Enrolled Agent near you.
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SOURCE California Society of Enrolled Agents