Author: Leon Clinton

Tax

Filing Requirements for Dependents

Whether a dependent has to file a return generally depends on the amount of the dependent’s earned and unearned income and whether the dependent is married, is age 65 or older, or is blind.

Note: A dependent may have to file a return even if his or her income is less than the amount that would normally require a return.

Even if you are not legally required to file, you should file a federal tax return to get money back if any of the following apply:

      • You had income tax withheld from your pay.
      • You qualify for the earned income credit.
      • You qualify for the additional child tax credit.

Contact us for further information. We’ll advise you about your particular situation.

Tax

Receive a Faster Refund with Direct Deposit

The New Year has arrived, which means . . . it’s tax time!

This year, do you want your refund faster? Have it deposited directly into your bank account. More taxpayers are choosing direct deposit as the way to receive their federal tax refunds. More than 78.4 million people had their tax refunds deposited directly into their bank accounts last year. It’s the secure and convenient way to get money in your wallet faster.

      • Security. The payment is secure – there is no check to get lost. Each year thousands of refund checks are returned by the US Post Office to the IRS as undeliverable mail. Direct deposit eliminates undeliverable mail and is also the best way to guard against having a tax refund stolen.
      • Convenience. There’s no special trip to the bank to deposit a check!

You can also electronically direct your refund to multiple accounts. With the new “split refund” option, taxpayers can divide their refunds among as many as three checking or savings accounts and three different U.S. financial institutions. The split refund option, using Form 8888, is also available for paper returns.

Caution: Some financial institutions do not allow a joint refund to be deposited into an individual account. Check with your bank or other financial institution to make sure your direct deposit will be accepted. Also, make sure you have the correct nine-digit routing number and your account number when selecting direct deposit.

To request direct deposit, just ask us. We are happy to assist you.

Tax

IRS Announces 2012 Standard Mileage Rates

Beginning January 1, 2012, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) became:

      • 55.5 cents per mile for business miles driven
      • 23 cents per mile driven for medical or moving purposes
      • 14 cents per mile driven in service of charitable organizations

The rate for business miles driven is unchanged from the mid-year adjustment that became effective on July 1, 2011. The medical and moving rate has been reduced by 0.5 cents per mile.

The standard mileage rate are based on an annual study of the fixed and variable costs of operating an automobile.

Let us know if you have questions about which driving activities you should monitor as tax year 2012 begins.

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