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Show Feb. 17, 1994 Make Wise Choice For Preparer a rare haw Earn Tax Working Parents At tax time, many tax professionals "sell" their business by claiming to be the best at what they do. To help you feel confident in selecting a tax preparer, the Internal Revenue Service (IRS) has some suggestions: Select an individual, or a firm, who will be available if you have quesLiuus auuui inc preparation or your tax return months, or even years, after it has been filed. ' Avoid any tax practitioner who claims that he or she can get you a larger tax refund than other practition- 0 i i : ) 1 ' ' I - ; : t SB'S For many, the costs of day care are a necessary part of working, but there is a way to ease the burden a bit. Working parents who pay someone to care for their children so they can work may get a tax break. : their federal income tax return. Generally, to qualify for the credit, the parent, and spouse if married, must work or be looking for work. There are exceptions for students and disabled spouses. The child must be under age 13 or disabled when the care was provided. For those who file Form 1040, the credit is figured on Form 2441. Form contents.' !The IRS cannot recommend specif ic tax preparers. 2441 is attached to the tax return. Form 1040A filers use Schedule 2. To claim the credit, parents must list the name, address and" taxpayer identification number of the care provider. If Don't shortchange your family! Take the EIC they cannot get the identification number, the parents should list the efforts made to get the number. Generally, married taxpayers must file a joint return to get the credit. e working parents who have newborns should note that there is an additional earned income credit (EIC) for a child bom in 1993. If they qualify for the EIC, parents should figure out how much they would get for the additional EIC for a child bom in 1993. They Lower-incom- The credit for child and dependent care can be as much as $720 for the care of one qualifying child or $1,440 for two or more children. Qualifying parents can subtract the credit from the tax owed on ff May Need Tax Return Copies 1 represent their clients before the IRS. Take the tax package you receive in the mail to your practitioner so he or she can use your forms. He or she should also use your peel-oidentity labels and the envelope from your tax package to speed processing of your return. Make sure thaf your preparer signs your return. You should receive a copy of the completed return. Never sign a blank tax return form. Be sure you are satisfied with the prepared return. Regardless of who did the preparation, it is still your tax return and you are responsible for its should compare this with the amount they could get for the child care credit. The parents should then claim the credit that gives the greater benefit. Qualifying parents can claim either the additional EIC or the child care credit, but not both. For more information on these credits, get Publications 503, Child and Dependent Care Expenses, and 596, Earned Income Credit. You can order The more college tuition costs increase, the more students may need to depend on financial assistance from their college or university. To determine eligibility for aid, schools need to review a student's, and sometimes their parents', tax situation. They require information from students' andor parents' tax returns or even complete copies of the returns. If your copy of any federal tax return you have filed is misplaced, the Internal Revenue Service can help you. If you need a copy of a return, it will take at least 45 days. There is a charge of $4.25 per return, which may be requested on Form 4506, "Request for Copy of Tax Form." Send the completed Form 4506 with payment to the Internal Revenue Service Center where you filed your original return. Some schools may instead accept tax account information, such as marital status, number of exemptions claimed, adjusted gross income, taxable income and income tax shown on your return. If the school will accept it, you can call, write or visit your local IRS office listed in your local phone directory to get tax account information. You should allow at least six weeks processing time after a return is filed before requesting a copy or other information. To get tax information, call To order a Form 4506, call free tax forms and publications from the Internal Revenue Service by calling Parents Can Add On Kid's Income Under certain conditions, parents can include their children's income on their 1993 federal income tax returns and not file separate returns for the children. A child's income may be included on the parent's tax return if the child: (1) is under age 14 on January f, 1994, (2) had income only from interest and dividends (including Alaska Permanent Fund dividends), (3) such gross income was more than $500 but less than $5,000, AND (4) had no Federal income tax withheld from his or her income (backup withholding) and did not make estimated tax payments for their federal income tax returns. In addition, the parents must meet certain requirements. For instance, if you and the child's other parent are not filing a joint return, special rules apply to determine which parent may make the election. IRS Publication advises that although this type of filing is available, parents may want to figure their tax separately from the child's and use the method most beneficial in tax savings for both. The above mentioned form and publication can be sent to you by calling the IRS at 1993. 929, Tax Rules for Children and Dependents, provides more information. Parents can make the election to claim a child's interest and dividend income on their returns by completing Form 8814, "Parents' Election To Report Child's Interest with no payment by April 15 penalty or interest. Electronic filers expecting refunds should get their through TeleFile? The IRS offers these alternatives to the traditional filing of tax forms. They are designed to make it easier for people to file tax returns. These a returns will also be more accurate er for direct deposits into bank about phoning in your tax return million people used one of the alternatives. Electronic filing, first tested in 1986, has been an operational part of the IRS processing system since 1988. preparers and transmissend their clients' tax services sion their computers to the from filing data IRS-accept- ed IRS. Being the most widely used alternative, 12.3 million returns were received by the end of last year's filing season. Taxpayers who owe can file when they're ready, then send the The Internal Revenue Service and Dividends," and attaching the form to Revenue Service?... Why not print out a 1040PC answer sheet with your home computer and mail it?... Or how benefit for both taxpayers and the IRS. At tax time last year, over 12 your tax return to the Internal j c hensive test that entitles them to Want to have an electronic filer zap iBl'lrtlilf'ililitiii'l Break centrates on taxes, a tax lawyer or an enrolled agent to prepare your return. Enrolled agents are either former IRS employees whose experience with the IRS has qualified them for enrollment or those who have passed a compre- 17 "N Students ers, or whose fees are based on a ' percentage of your refund. If your tax situation is complex, consider hiring a certified public accountant (CPA) whose work con- Fast Filing Alternatives U. thsssa Hilltop Times money within three weeks; even soon- savings or checking accounts. For more details on electronic filing, call the IRS's recorded information teleand listen to phone line, Tele-Tatopic 252. tax filing has a Computer-assiste- d new twist - print out a tax return answer sheet from your personal computer and mail it to the IRS. Unlike traditional forms, which may have many blank lines, the 1040PC program generates only the lines which have entries. The result is a three column list that fits on one or two pages. Individuals and paid tax preparers can use standard computers, printers and one of many tax preparation software programs sold in computer stores to x, produce thel040PC formats. The form is not available from the IRS. For details, call Tele-Taand listen to topic 251. TeleFile, filing by phone, is being used by certain single residents of nine U.S. cities who receive short x, form (Form 1040EZ) packages. TeleFilers call a toll-fre- e number using a touch-ton- e phone and enter total wages, interest and tax withheld. The IRS figures the adjusted gross income, the tax and any refund or tax due while the taxpayer is on the phone. For southern Ohio residents, a voice signature is recorded and stored on laser disk. Others sign the Form I040-TE- L and mail it to the IRS along with their Form W-"Wage and Tax Statement." Refunds are sent in about three weeks and any tax due can be paid by the usual April 15 deadline. Taxpayers who receive the TeleFile tax package should carefully read the instructions included. 2, |