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Show PD J Salina Sun and Gunnison Valley News March 19 , 1997 Page 9 Self-employ- must take care not to ed write off Social Security protection - By Bob Frisbey Social Security Manager, St. George Writing off your business expenses may make you smile when you file your income tax, but it could make you frown if you become disabled and unable to work. Although its legal to deduct most business expenses, even to the point that you may not owe income taxes, persons sometimes lose their Social Security disability protection when they don't pay taxes trucker whose injuries in an autoThis is what happened to a mobile accident disabled him for nearly three years. Because of the seriousness of the injuries, the trucker met Social Securitys definition of disability. Unfortunately, he couldnt receive disability benefits because he had not paid TSsu Taxes Made Easier Preparing your federal income tax returns can be made easier, just make sure you keep track of all your records throughout the year. You should start with a copy of this years return. Add to that any canceled checks, receipts and records that will help when you file your next tax return. By keeping your income and expense records in good order, you can save hours of searching at the end of the year and make tax filing a lot easier. No Refund? Expecting a refund, but havent paid certain bills? Federal law allows your income tax refund to be taken to pay off all or part of your past-du- e child and spousal support, delinquent student loans, income tax or other federal debts. If your refund was used to pay back what you owe, the IRS will notify you. At Moving Time Moving? Tell the IRS. If the IRS does not have your current address, your tax refund or any letters about past returns may not reach you. Send Form 8822 as soon as you move. Dont let your refund get lost or returned to the IRS. Taxes in Spanish Where can you get tax help in Spanish? Publication 579SP, C6mo Preparar la Declaration de Impuesto Federal, has information in Spanish about which form to file, which filing status to choose, taxable and nontax-abl- e income and some of the more common tax credits. Call to order. Name Changed? Change Number If you change your name for any reason, such as marriage or divorce, notify the Social Security Administration (SSA). Your name and Social Security number on your tax return must match those SSA has on record, or there can be a delay in getting your federal income tax refund. Label and Envelope A Good Idea M label and envelope When filing a federal tax return, use the peel-othat comes inside the tax booklet. Using them shortens the returns processing time and lessens the chance of misrouting mail or refunds because ff of hard-to-rea- handwriting. d Age Has Its Tax Benefits There are benefits to getting older, at least when it comes to taxes. Some tax benefits become available starting at age 55. tax break is A available to people age 55 or older. Those who are selling their personal residence may qualify for the exclusion of up to $125,000 of gain on the home sale. Certain use and ownership restrictions apply, and there are special rules for persons with disabilities and for widows or widowers. People age 60 or older can get help with their tax returns from Tax Counseling for the Elderly (TCE). Through TCE, volunteers from many organizations provide free tax information and guidance. Local IRS offices have information on TCE locations. Seniors age 65 or older may not have to file a tax return if their income is less than a certain amount. For 996, that amount for single seniors is $7,550. The limit for a married couple filing a joint return is $12,600 if only 1 complete adenough postage Always check mail to the IRS could get mail the and IRS. address Otherwise, the both return dresses lost or delayed, and that could cost penalties, interest and frustration. W-- 2 Missing W-- 2 by January 31. Those who Employees should get their Form havent received their s shortly after that should ask their employer for call the IRS for help at one. If by February 15 there is still no W-W-2- 2, Buying? Selling? Somewhere in between? Home ownership and ones tax return go hand in hand. Whether a person is just now buyin a home for some time, or in the process of selling one, home ownership can have significant effects on income tax returns. Buying a Home Some of the settlement fees or closing costs paid at closing can be deducted in the tax year the house is bought. These costs include certain real estate taxes, mortgage interest and points that meet certain requirements. Other costs may be included in the basis of the property. Basis, IRS Is On-lin- e The IRS has tax forms, publications and other information available Access through the Internet via theWorld Wide Web (http: Telnet www.irs.ustreas.gov); file transfer protocol (ftp.irs.ustreas.gov); or (703)321-802dial access To modem, by (iris.irs.ustreas.gov). on-lin- e. 0. Babies Need SSNs To claim an exemption for any dependent bom before December 1996, number (SSN) on your tax you must list the dependents Social Security Administration ofSocial nearest the Security return. To get one, contact Card. Always Social a for SS-Security fice for Form Application double-chec- k each SSN on all tax forms and schedules. If the dependent is not eligible for an SSN, you must list an individual taxpayer identification number. Use Form W-- 7 to get one. 5, Dependents Claimed Only Once should make sure a People who share custody or support of dependent the dependent. claims the to entitled is who exemption that only the person diNo one may be claimed on more than one tax return. For example, each determine must child vorced parents who have joint custody of their the dependent. Call year which parent qualifies to claim Standard Deduction, and Filing for Publication 501, Exemptions, Dependent may have to file Dependents must follow specific rules to figure whether they have to file a tax return. The amount and type of income and whether they are married, age 65 or older, or blind are all taken into account. For details, get Publication 929, Tax Rules for Children and Dependents, in English only. Only 27 days until April 15! Income Tax filing deadline L COPY k d, toll-fre- you TeleFiled your Federal Return youll need help with your Utah Return Tele-File- '' er Home ownership can greatly affect your tax returns ing a first home, living Sending mailfor to the IRS? and Social Security taxes in recent years. Earlier in his life, the trucker had paid Social Security taxes for more than 10 years. But, in recent years, he had eliminated his tax liability because he had been replacing expensive business equipment frequently. When a person's net earnings are less than $400 in a year, he or she doesn't have to report them. Therefore, no taxes are due. But, in that case. Social Security disability if and is 3.400 a $ senior, tection may be reduced or even eliminated for the present. To have been spouse are seniors. rently insured and eligible for Social Security disability, the trucker would Those who dont itemize deduc- - iave had (0 pay Social Security taxes for five of the past 10 years ending w ith tions get a higher standard deduction the year in which he became disabled. than people under 65. And those who The trucker said that, because he had worked and paid Social Secuiitv are blind get an extra added amount. taxes for 10 years, he had assumed he was insured for Social Security and was Seniors or people with disabilities surprised to learn that he was not currently insured for disability, lie of eldthe for for the cicdit benefits. retirement insured for qualify' may course, there are some special considerations When a person is erly or the disabled. I his credit is based on age, income and filing staSocial and Security taxes. For example, there ai e paying concerning reporting tus, and can reduce the amount of taxes two income tax deductions that reduce your tax liability. For one, your net owed. Those under 65 could be eli- earnings from are reduced by an amount equal to half of y our and total with retire if pertax. And second, you can deduct half of your total they gible manent disability and have income tax on your tax form. from their employer because of that For more information about paying Social Security taxes as a e 3, and ask for a copy disability. number, person, call our The IRS considers persons to be of the factsheet Social Security: If Youre (Publication number age 65 on the day before their 65th Our lines are busiest early in the week and early in the month, so birthday. Soto the IRS, those who turn if your business can wait, its best to call at other times. 65 on January 1, 1997, are age 65 on If December 3 1, 1996. For more infoimation, get Publication 554, Tax Information for Older program to file Many Utahns who took advantage of the easy Americans, and Publication 910, their federal tax returns by telephones are having difficulty completing their Guide to Free Tax Services. Call Utah income tax returns, the State Tax Commission said. Thats because state income tax booklet instructions tell taxpayers to ti ans-finformation from certain lines on their federal forms to the state form. But those who TeleFile fill out worksheets rather than an actual return. The TeleF ile , worksheet lines do not correspond to the instructions for completing the and many people are understandably confused. The state has addressed this new filing difficulty with an explanation of to the state return. how to transfer information from the TeleFile The accompanying box explains which information to transfer to the Utah and lived in their home at least three Income Tax Return TC-4If you did not complete TeleFile lines II.I and J, e out of the past five years and have call the Tax Commission at (801)297-220or never used this exclusion for another Nonresidents who are required to attach a copy of their federal returns sale after July 26, 1978. may attach the Telefile worksheet instead. state-form- work-shee- ts 0. 0, toll-fre- More Information More infoimation on buying, owning or selling a home may be found in the following publications, available in English only. Call Publication 523, Selling Your Home; Publication 530, Tax Information for e Homeowners; Publication 936, Home Mortgage Interest First-Tim- in gen- eral, is the way to measure the investment in a home for tax purposes. Costs like abstract and recording fees, surveys and owners title insurance are included in the basis. Owning a Home For those who itemize deductions, interest on most mortgages secured by a persons first or second home is deductible. In addition, qualifying points on a loan used to improve their main home are usually deductible. Real estate taxes, imposed by state or local governments for the general public welfare, are usually deductible. Selling a Home Generally, no taxes are due on the call the sale of a persons home, regardless of the amount of profit made, if the seller buys and lives in a new home within two years of the date of sale. The new home must cost at least as much as the adjusted sales price of the old home. Persons 55 or older may get a exclusion from all or of income part of the gain gross when they sell their homes. In general, seniors may qualify if they have owned mm professionals at Peterson & Associates HI I 528-377- 9 Help is closer than you think. 1 A timely reminder that no one has more experienced preparers at more convenient 1 It u (So is April 15th.) it locations than H&R Block. work. So while tax time is Our rates are reasonable, we stand behind our news is, so are we. the the good corner, just around iS H&R BLOCK Mt. Pleasant 250 N. 300 W. 47 462-278- S. Peterson 896-535- 7 5 10 -- 5 Mon. -10 -- 2 Sat. Richfield 288 W. 200 Frl. 6 Weekdays 9-- 5 Saturday or by Appointment & Associates L- - |