Show I iiyitrTri C£L iiyi p Wednesday February 23 1994 -- Do Retirees Have To File? Although you may have retired this may not mean the end of your tax as well Your income may be at or above the amount needed responsibilities to file a federal income tax return Use the chart below to see if you must file a federal income tax return To use this chart find your filing status at the end of 1993 in the first column then read across for your age at the end of 1993 You must file a return if your gross income was at least as much as the amount shown in the last column Cross income means all income you received Li the form of money goods property and services that is not exempt from tax including any gain on the sale of your "home (even if you may exclude or postpone part or all of the gain) See your tax forms package to find out what types of income to include Do not use this chart if someone else can claim you as a dependent on his or her return Students 1 Because you are a student you don’t have to have tax taken out of your pay (a) True (b) False You QUIK QUIZ- can learn a lot about taxes by taking this little quiz! 2 If you are a candidate for a college degree you may generally exclude from income that part of a scholarship or fellowship grant you received and used for (a) Tuition and fees required for enrollment or attendance (b) Fees books supplies and equipment required for your course (c) Room and board or personal items 5 You worked two jobs last year but got a W-- 2 form from only one employer You don’t have to report the income from the missing W-(a) True (b) False cannot be claimed as a dependent by your parents if your gross income is $2350 or more and if you are a student who 3 You turned 24 (a) True 1993 in because (a) They can refer to for future tax planning False (b) 4 Students should make and keep a copy of their tax return forms and Copy C of all Forms W-and any information filed with the return them (b) They may need a copy when applying for financial aid (c) They may get a question from IRS on what was reported on their return 6 We pay taxes to help our government raise income (called “revenue”) to meet its expenses (a) True (b) False (b) False students are not automatically exempt from withholding They must meet certain tests listed on Form W-- 4 (See employer for copy) 2 (a) and (b) different rules apply for grants received before August 1 7 986 3 (a) True however at that point a student may claim his or her own exemption oh his or her own tax return 4 (a) (b) and (c) these records should be kept for three years from the date the return was due or the date filed or two years from the date the tax was paid whichever is later 5 (b) False you must report all income from wages Obtain a duplicate Form W-- 2 from the employer or contact the IRS 6 (a) T rue the revenue raised by taxes is used to provide a wide variety of services such as our national defense conservation of our natural resources and public education Part of the taxes also goes into the old age survivor and disability fund and Medicare insurance to provide benefits when you become eligible for them Get IRS Publication 4 Student’s Guide to Federal Income Tax for more information on federal income tax laws of particular interest to high school and college students Call the IRS at to order it Answers: If you were age 63 end of 1993 on January 1 1994 you are considered to be age 63 at the Even if you do not have to file a return you should file one to get a refund of any federal income tax withheld (for instance if federal tax was withheld from your pension or bank interest) For specific derails on whether or not you must file or should file and jvhich filing status you qualify for refer to your tax package or see IRS publication 301 Exemptions Standard Deduction and Filing Information to order a free copy of the publication vCall Farm Tax Facts —If you receive more than $10000 in one or more related transactions in your farming business you must report the transaction to IRS File IRS Form 8300 “Report of Cash Payments Over $10000 Received in a Trade or Business" within 15 days of receipt of the payment orpayments that total over Three Tax Deadlines? Farm & Ranch Disaster Loss mr Jr Farmers who receive insurance proceeds for crop damage due to floods 'or otter natural disasters or the taxability to plant crops because of these may qualify to report this J°tacome in the year after receipt Since farmers often report the income from crpp sales in the year after V the crops were harvested this provi-‘- i sion allows fanners whose crops are i damaged or destroyed to avoid porting two years’ income in the same year To qualify farmers must use the method of accounting and must rcash that the proceeds from the t p sals of the destroyed crops would £ have bom reported in a year follow-- l tag the damage g More information on disaster Jj losses can be found in IRS free Pub-- f lication 225 Fanner’s Tax Guide Call to order the l publication ! i Most taxpayers have already filed their 1993 federal income tax returns But millions of others opted for automatic extensions of tjme to file by a second deadline — August IS August 13 is the due date for these taxpayers to file their tax returns for last year A taxpayer who filed the extension request Form 4868 by the first tax deadline — April 15 — must file his or her completed tax return by Relief August 15 to avoid penalties is available however for people who cannot file or pay their tax due with special circumTaxpayers that prestances such as hardship vent them from preparing and filing their tax forms may request an addiextension that usutional 5 to ally will give them until October file To request the additional time to file taxpayers must send Form 2688 to the IRS The extension should be requested early so that if refused the return can still be filed on time The IRS will advise in writing if their Those requests are granted or not who are not granted the additional time must file within tea days of the denial letter When the additional extension is not requested a tax return should be filed by August 15 even if die amount owed cannot be paid Filing the tax return will avoid a late filing penalty tax balances However outstanding are subject to interest charges Those who file but cannot pay may fSiauty & 1 SaftfUq SaltM request a monthly payment plan by attaching Form 9465 “Installment Agreement Request” to the front of their tixetumsrOr Attach a handwritten requestTor a monthly payment plan The request needs to include the taxpayer’s name and so A Off Rcdkcn 74 Products! Come visit us Today! 7 Main Salina 529-710- fjom UJOIFF Tanning Qcd Thursdays $200 uccupon wrt m mm tw mm tm dm:-Grat- e r mm mm w "" nrn m little short Preparation At the Audit You may go to the exam interview or ask an auomey accoun number 1994 which make them ei must use ter monthly or semiweekly the new deposit rules depositors — You e credit or refund as may be able to claim a car van or light truck You can purchaser of a vehicle for either business or personal use Examing the Audit The law guarantees that you be treated fairly promptly professionally and courteously in any dealings with the IRS and especially in the You have the right to audit process know why you are being audited and what you will need to bring with you here’s where good (Helpful hint: recordkeeping really comes in handy) Your IRS examiner must also tell you exactly how any information you give will be used All taxpayer informaYou have tion js strictly confidential the right to make an audio recording And of course of the examination you have the right to appeal any decision made as a result of the examination citizen can work in this country complete certify that a “ Employment and Naturalization Service (INS) Form Immigration Eligibility Verification” Obtain and return the form to INS security mntmmsma Just because your return is sein lected for an audit (examination IRS language) doesn’t mean the IRS thinks you’re trying to get away with Returns are chosen for something examination in several ways A computer program based on common mistakes made by taxpayers over the years screens every return for possible errors Some returns are selected at random under the Taxpayer Measurement Program Compliance (TCMP) The IRS selects returns for audit by checking them against the information forms that you submit or with your return like your 1099 forms —To —EffectiveJanuary A6k your employer about the Advance Earned Income Credit or call the IRS at Being Selected be included in a made in cash have to file an excise alcohol tobacco firearms or employment tax return you should have an employer identification number and use that number on Schedule F for your farming business Otherwise use your social days? Your pulse may quicken at the thought of an audit but understanding the process can alleviate your Here’s how it works anxiety $10000 — Payments to farmers from the government should usually fanner’s income regardless of whether the payment is materials services or commodity certificates —If you between pay- In 10 cial security number the amount of tax outstanding and the number and amount of monthly payments the taxpayer will pay' Taxpayers can get forms 4868 and 2688 from the IRS by calling tant or enrolled agent to represent or accompany you If someone goes in your place he or she needs your writThe IRS provides ten authorization Form 2848 “Power of Attorney and Declaration of Representative’’ but any properly written authorization will do Finishing Up ' After going over your return and records with you your examinermust explain any changes to your return Ask questions if you don’t understand If you agree with the proposed changes that’s it You’re done Sign an agreement form to pay additional tax you may owe and interest on that tax and the audit is over You may even find you are due a refund and possibly interest If You Disagree There is an appeals process within the IRS if you don’t agree with your examiner’s changes You may then take your case to court if you can’t resolve it within the IRS system However be aware that the penalty for filing a frivolous suit or unreasonably failing to pursue a resolution through the IRS appeals process is the original purchase the — Beginning in 1994 certain vendors that sell undyed diesel fuel to farmers are allowed to apply for credits or refunds of the tax on diesel fuel sold for use on a farm for farming purposes Fanners will no longer be able to apply for this credit or refund — You may be able to claim a new general business credit Indian Employment Credit on qualified wages and employee health insurance costs you paid to an Indian after December 31 1993 — Qualified contributions to a community development may be claimed as a general business credit corporation (CDC) More tax information for those in the agricultural industry can be found ta IRS Publication 225 Farmer’s Tax Guide The latest tax changes are in Publication 553 Highlights to the 1993 Tax Changes Call to order them explained An auto insurance tune-u- p could giveyour money more mileage $25000 Available References Find out more about the audit process by calling the IRS at and ordering free Publication 556 Examination of Returns Appeal Rights and Claims for Refund Or cal your local IRS T axpayer Education Coordinator at and ask for a copy of the informational vidcocassette “Hey We're Being yourself ww Audited" I might l£t me check out die coverage you have on your car be able to save you some money Stop by soon SS1UYou’re in good hands Insurance Agency Worthlngton-Leavl- 86 S CIWJ Ubuk' libtinrKT Gifuny Main Noohlmuk Ephraim Wtaue UT 84527 Inc |