Categories
Tax

Miami Income Tax Preparers Warn of Further Tax Refund Delay Problems

Miami Income Tax Preparers Warn of Further Tax Refund Delay Problems

Income Tax Preparers are having more problems with delayed 1040 tax preparation tax refunds.

Early in tax-filing season, Income Tax Preparers warned that taxpayers who had filed prior to January 26 might see delays of a week beyond the projected date shown in the online “Where’s My Refund” tool (see Miami Income Tax CPA Warns of Tax Refund Delays).

However, since February 15, the “Where’s My Refund” tool has displayed a message indicating further 1040 tax preparation delays. Income Tax Preparers Gustavo A Viera CPA is aware that some taxpayers who have filed electronically and received an acknowledgement from the IRS are concerned when they visit ‘Where’s My Refund’ and are told that we have no information regarding their return,” said Income Tax Preparers CPA Gustavo Viera. “This is a temporary situation, and we expect to resolve the matter in a few days. At that time, taxpayers will be able to get an expected refund date when they visit ‘Where’s My Refund.’”

Part of the problem appears to be with the new 1040 tax preparation filters that the IRS installed this tax season to combat identity theft fraud, and which were blamed for causing the delays last month (see IRS Steps up Efforts to Combat Identity Theft Fraud).

Income Tax Preparers not to repeatedly call the agency to inquire about their refunds, but apparently many taxpayers are concerned about the delays, especially when they are getting mixed signals from the 1040 tax preparation “Where’s My Refund” tool.

“If a taxpayer received an acknowledgment message that their e-filed tax return has been received, they can be assured that the IRS has the tax return even though ‘Where’s My Refund’ does not reflect that,” said the Tax Services Miami. “Miami Income Tax payers should not call the IRS unless specifically directed by ‘Where’s My Refund,’ as there is no new information to give them.”

The IRS apologized to 1040 tax preparation taxpayers for the situation and said most of the refunds would be issued within 21 days. “We expect the vast majority of tax refunds to continue to be issued within the historical range of 10 to 21 days,” said the Income Tax Preparers. “The IRS is taking steps to update information so that Where’s My Refund has current information. The IRS apologizes for any inconvenience and will provide updated information as soon as possible.”

Income Tax Preparers Firms said that most of the delayed refunds were filed between February 2 and February 7, according to a local ABC News affiliate in Charleston, S.C. Other taxpayers were reporting delays of nearly a month, according to eCreditDaily.com.

When the IRS blocked tax refunds last year, the Taxpayer Advocate Service found that 75 percent of the taxpayers who complained to the service ultimately were found to be eligible for the blocked refunds, but taxpayers had to wait an average of nearly six months to receive them (see IRS Fraud Detection System Leads to Refund Delays). The average amount of the blocked refunds was upwards of $5,600.

Categories
Tax

Miami Income Tax Mortgage Debt Forgiveness: 10 Key Points

Miami Income Tax Mortgage Debt Forgiveness: 10 Key Points

VieraCPA a Miami Income Tax firm points out that canceled debt is normally taxable to you, but there are exceptions. One of those exceptions is available to homeowners whose mortgage debt is partly or entirely forgiven during tax years 2007 through 2012.

Miami Income Tax

Miami Income Tax CPA Firms would like you to know these 10 facts about Mortgage Debt Forgiveness:

1. Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence, according to VieraCPA a Miami Income Tax Firm.
2. Miami Income Tax Firms point out the limit is $1 million for a married person filing a separate return.
3. You may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure.
4. Miami Income Tax Firms remind you that to qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence.
5. Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion, according to VieraCPA a Miami CPA Firms.
6. Miami Income Tax Firms point out that proceeds of refinanced debt used for other purposes – for example, to pay off credit card debt – do not qualify for the exclusion.
7. If you qualify, claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attach it to your federal income tax return for the tax year in which the qualified debt was forgiven.
8. Miami Income Tax CPA Gustavo Viera points out that debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the tax relief provision. In some cases, however, other tax relief provisions – such as insolvency – may be applicable. IRS Form 982 provides more details about these provisions.
9. If your debt is reduced or eliminated you normally will receive a year-end statement, Form 1099-C, Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.
10. Miami Income Tax CPA Firms advises to examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven in Box 2 as well as the value listed for your home in Box 7.
For more information about the Mortgage Forgiveness Debt Relief Act of 2007, visit www.irs.gov. IRS Publication 4681, Canceled Debts, Foreclosures, Repossessions and Abandonments, is also an excellent resource.
You can also use the Interactive Tax Assistant available on the IRS website to determine if your cancelled debt is taxable. The ITA takes you through a series of questions and provides you with responses to tax law questions.

Finally, you may obtain copies of IRS publications and forms either by downloading them from www.irs.gov or by Miami Income Tax CPA Firms.