What is the American Recovery and Reinvestment Act (ARRA) of 2009?
Should I notify the IRS of my change of address?
I am unable to pay my delinquent taxes. Will the IRS accept an Offer in Compromise?
What kind of interest and penalties will I be charged for filing and paying my taxes late?
I am 18 years old, have a job, and my parents are claiming me on their federal tax return. I paid some income tax when I filed, so do I qualify for the stimulus rebate?
I lost my refund check. How do I get a new one?
What is a split refund?
I received an incorrect W-2 form. I can't get my former employer to issue a corrected W-2? What should I do?
As a full-time student, am I exempt from federal taxes?
Is there an age limit on claiming my child as a dependent?
May an employer provide me my Form W-2 electronically?
I am a caregiver for my aging parent, who lives in my home. May I claim my parent as a dependent on my tax return?
I am a caregiver for my aging parent, who lives in my home. may I file as head of household?
May I claim a medical expense for amounts I paid for modifications made to my home to accommodate my parent’s medical condition?
My parents occasionally give me money to offset some of the cost of their support. Is this money taxable to me?
I pay for some of my parent’s expenses medical expenses. May I deduct these expenses on my return?
As a condition of acceptance into this assisted-living community, my parents relinquished all ownership rights in their home to the community. Does this arrangement have any tax consequences?
My parent is suffering from dementia. As a result, I must cash his/her monthly social security check and use the proceeds for his/her care. What are the resulting tax consequences?
My parent signed his/her home over to me. Does this transaction have to be reported to the IRS?
I received a death benefit from my parent’s life insurance policy? Are these insurance proceeds taxable to me.

What is the American Recovery and Reinvestment Act (ARRA) of 2009?

The American Recovery and Reinvestment Act (ARRA) of 2009 was signed into law by President Obama on February 17, 2009. The bill is intended to provide a stimulus to the U.S. economy in the wake of the economic downturn. The bill includes federal tax cuts, expansion of unemployment benefits and other social provisions, including domestic spending in education, health care, and infrastructure, including the energy sector.

Should I notify the IRS of my change of address?

Yes, if you move, you need to notify the IRS of your new address. We can change our records so that any tax refunds due to you or any other IRS communications will reach you in a timely manner. If you filed a joint return, you should provide the same information and signatures for both spouses. If you filed a joint return and you and/or your spouse have since established separate residences, you both should notify the IRS of your new addresses.

There are several ways to notify the IRS of an address change.

• Mail a signed written statement to an appropriate Service address informing the Service that you wish that the address of record changed to a new address. In addition to the new address, this notification must contain the taxpayer’s full name and old address as well as the taxpayer’s social security number, individual taxpayer identification number, or employer identification number.
• Submit Form 8822, Change of Address, to request an address change.
• Provide an oral notification in person or directly via telephone to a Service employee who has access to the Service Master File informing the Service employee of the address change. In addition to the new address, you must provide the taxpayer's full name and old address as well as the taxpayer’s social security number, individual

Caution If you are a representative signing on behalf of the taxpayer, you must attach to the written statement or Form 8822 a copy of your power of attorney. To do this, you can use Form 2848. The Internal Revenue Service will not complete an address change from an "unauthorized" third party.

I am unable to pay my delinquent taxes. Will the IRS accept an Offer in Compromise?

You may qualify for an Offer in Compromise if you are unable to pay your taxes in full or if you are facing economic hardship or other special circumstances.

Note:
Offer in Compromise Application Fee - Your offer must include the $150 application fee. If you are requesting a low-income exception of the fee, your offer must include a completed Form 656-A, Income Certification for Offer in Compromise Application Fee and Payment.

Offers received without the $150 fee or a complete Form 656-A will not be accepted for processing. Please see Step Four on Page 12 of Form 656-B, Offer in Compromise Booklet, for more information on the application fee and to determine if you qualify for the exception.

• If you aren’t granted an Offer-in-Compromise and you are still unable to pay your delinquent taxes, you still may be eligible for an installment agreement. File Form 433-D and pay a $105 user fee, which we have authority to deduct from your first payment(s) ($52 for Direct Debit).
• if you default on your installment agreement, you must pay a $45 reinstatement fee if we reinstate the agreement
• Refer to Tax Topic 204, Offers in Compromise, for additional information.

What kind of interest and penalties will I be charged for filing and paying my taxes late?

Interest is compounded daily and charged on any unpaid tax from the due date of the return until the date of payment.

• The interest rate is the federal short-term rate plus 3 percent. That rate is determined every three months.
• For current interest rates, go to News Releases and Fact Sheets and find the most recent Internal Revenue release entitled Quarterly Interest Rates.

In addition, if you filed on time but didn't pay on time, you'll generally have to pay a late payment penalty.

• The late payment penalty is one-half of one percent of the tax (0.5%) owed for each month, or part of a month, that the tax remains unpaid after the due date, not exceeding 25 percent.
• You will not have to pay the penalty if you can show reasonable cause for the failure.
• The one-half of one percent rate increases to one percent if the tax remains unpaid after several bills have been sent to you and the IRS issues a notice of intent to levy.
• Currently, if you filed a timely return and are paying your tax via an installment agreement, the penalty is one-quarter of one percent for each month, or part of a month, that the installment agreement is in effect.

If you did not file on time and owe tax, you may owe an additional penalty for failure to file unless you can show reasonable cause.

• The combined penalty is 5 percent (4.5% late filing, 0.5% late payment) for each month, or part of a month, that your return was late, up to 25%.
• The late filing penalty applies to the net amount due, which is the tax shown on your return and any additional tax found to be due, as reduced by any credits for withholding and estimated tax and any timely payments made with the return.
• After five months, if you still have not paid, the 0.5% failure-to-pay penalty continues to run, up to 25%, until the tax is paid.
• The total penalty for failure to file and pay can be 47.5% (22.5% late filing, 25% late payment) of the tax owed.
• If your return was over 60 days late, the minimum failure-to-file penalty is the smaller of $100 ($135 for returns required to be filled after December 31, 2008) or 100% of the tax required to be shown on the return.

Note: If you feel this as assessed in error you may refer to Publication 1, Your Right as a Taxpayer.

I am 18 years old, have a job, and my parents are claiming me on their federal tax return. I paid some income tax when I filed, so do I qualify for the stimulus rebate?

No, because you can be claimed as a dependent on someone else’s return you do not qualify for the stimulus rebate.

Note:

Although you may not qualify for the stimulus payment because you are claimed as a dependent on your parents' return, you are still able to claim your federal withholding listed in box 2 of Form W-2.

Whether or not you actually are claimed as a dependent on someone else's return, you do not qualify for the stimulus rebate. So long as someone can claim you as a dependent, you are not eligible.

I lost my refund check. How do I get a new one?

If you have lost your refund check, there are several options available to initiate a refund trace on your behalf.

• You can go to the “ Where’s my Refund” system available through www.irs.gov and request assistance.
• You can call the IRS toll-free at 800-829-1954 and either use the automated system or speak with an agent.
• If you filed a Married Filing Joint return, you cannot initiate a trace using automation, but the IRS will issue you a Form 3911 (PDF), Taxpayer Statement Regarding Refund, to get the process started.

If your refund check has not been cashed, we can normally provide a replacement within six to eight weeks. You may need to complete a Form 3911 (PDF), Taxpayer Statement Regarding Refund, to initiate a claim. If your refund check has been cashed, the Financial Management Service (FMS) will provide a claim package which includes a copy of the check. FMS will review the claim and the signature on the cancelled check before determining whether another refund can be issued. Be advised this process could take up to six weeks to complete.

What is a split refund?

A split refund lets you divide your refund, in any proportion you want, and direct deposit the funds in up to three different accounts with U.S. financial institutions.

I received an incorrect W-2 form. I can't get my former employer to issue a corrected W-2? What should I do?

If your attempts to have an incorrect Form W-2 (PDF) corrected by your employer are unsuccessful and it is after February 15th, contact the IRS toll-free at 800-829-1040 .

• An IRS representative can initiate a Form W-2 (PDF) complaint.
• A letter will be sent to the employer requesting that they furnish a corrected Form W-2 to you within ten days. The letter advises the employer of their responsibilities to provide a correct Form W-2 (PDF) and of the penalties for failure to do so.
• You will be sent a letter that provides instructions and Form 4852 (PDF), Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. The Form 4852 may be used in the event that the employer does not provide you with the corrected Form W-2 in time to file your tax return.

When you call the IRS or visit an IRS Taxpayer Assistance Center (TAC), please have the following information available:

• Your employer's name and complete address, including zip code, employer identification number (if known - see prior year's Form W-2 (PDF) if you worked for the same employer), and telephone number,
• Your name, address, including zip code, social security number, and telephone number; and
• An estimate of the wages you earned, the federal income tax withheld, and the period you worked for that employer. The estimate should be based on year-to-date information from your final pay stub or leave-and-earnings statement, if possible.

If you file your return and attach Form 4852 (PDF) to support the withholding amount claimed instead of a Form W-2 (PDF), your refund can be delayed while the information you gave us is verified.

If you receive a Form W-2 (PDF) after you file your return and it does not agree with the income or withheld tax you reported on your return, file an amended return on Form 1040X (PDF), Amended U.S. Individual Income Tax Return.

As a full-time student, am I exempt from federal taxes?

There is no exemption from tax for full-time students. Every U.S. citizen or resident must file a U.S. income tax return if certain income levels are reached. Factors that determine whether you have an income tax filing requirement include:

• The amount of your income (earned and unearned),
• Whether you are able to be claimed as a dependent,
• Your filing status, and
• Your age.

If your income is below the filing requirement for your age, filing status, and dependency status, you will not owe income tax on the income and will not have to file a tax return. You may choose to file if you have income tax withholding that you would like refunded to you. For more information on filing requirements refer to Publication 501, Exemption, Standard Deduction and Filing Information.

You may have given your employer a Form W-4 (PDF), Employee's Withholding Allowance Certificate, claiming exemption from withholding. To claim exemption from withholding, you generally would have to have had no tax liability the previous year and expect none in the current year. An exemption certificate is good for the calendar year.

For related topics see Tax Information for Students.

Is there an age limit on claiming my child as a dependent?

Age is a factor in the qualifying child test, but a qualifying relative can be any age.

As long as the following tests are met, you may claim a dependency exemption for your child:

• Qualifying child or qualifying relative test
• Dependent taxpayer test
• Citizenship or resident test Joint return test

May an employer provide me my Form W-2 electronically?

Yes, an employer may furnish your Form W-2 (PDF) electronically provided certain criteria are met.

• You must agree to receive the Form W-2 (PDF) in an electronic format.
• Prior to, or at the time of, your consent, your employer must provide you a disclosure statement containing specific disclosures.
• Additionally, the electronic version of the Form W-2 (PDF) must contain all required information and comply with applicable revenue procedures relating to substitute statements to recipients.
• If the statement is furnished on a Web site, then your employer must notify you, via mail, electronic mail, or in person, that the statement is posted on a Web site and provide instructions on accessing and printing the statement.

I am a caregiver for my aging parent, who lives in my home. May I claim my parent as a dependent on my tax return?

You may claim your parent as a dependent if the following tests are met:

• You are not a dependent of another taxpayer.
• Your parent does not file a joint return.
• Your parent is a U.S. citizen, U.S. national, U.S. resident, or a resident of Canada or Mexico.
• You paid more than half of your parent's support for the calendar year.
• Your parent's gross income for the calendar year was less than the exemption amount.

See Publication 17, Your Federal Income Tax, and Table 3-1 on page 27, "Overview of teh Rules for Claiming an exemption for a Dependent," for additional information about claiming a dependent, see also, Publication 501, Exemptions, Standard Deduction, and Filing Information.

I am a caregiver for my aging parent, who lives in my home. may I file as head of household?

You may file as head of household if you meet the following requirements.

• 1. You are unmarried or “considered unmarried” on the last day of the year.
• 2. You may claim a dependency exemption for your parent.
• 3. You paid more than half the cost of keeping up a home for your parent for the tax year.

Your dependent parent does not have to live with you. See Special rule for parent , in Publication 17, under Qualifying Person.
See Table 3-1 in publication 17 on page 27, “Overview of the Rules for Claiming an Exemption for a Dependent,” for additional requirements. See Table 2-1 on page 25, “Who Is a Qualifying Person Qualifying You to File as Head of Household?” See also Publication 501, Exemptions, Standard Deduction, and Filing Information.

May I claim a medical expense for amounts I paid for modifications made to my home to accommodate my parent’s medical condition?

Yes, but only if your parent was your dependent at the time the medical services were provided or at the time you paid the expense. Also, the amount of the allowable medical expense is the cost of the modification decreased by any resulting increase to the value of your home.

My parents occasionally give me money to offset some of the cost of their support. Is this money taxable to me?

An amount of money that your parents give you to offset their expenses is not taxable to you, however, you should take this amount into account in determining whether your parents are your dependents.

I pay for some of my parent’s expenses medical expenses. May I deduct these expenses on my return?

If you can claim your parent as a dependent, you also may be able to claim a deduction for a portion of your parent’s medical or dental expenses that you paid.

As a condition of acceptance into this assisted-living community, my parents relinquished all ownership rights in their home to the community. Does this arrangement have any tax consequences?

Yes, this transaction will be considered a sale of their home. The property was transferred for services.
See Publication 523 “Selling your Home” for additional information.

My parent is suffering from dementia. As a result, I must cash his/her monthly social security check and use the proceeds for his/her care. What are the resulting tax consequences?

Your parent’s social security benefits are not taxable to you. However, in determining whether your parent is your dependent, you should consider the benefits used for your parent’s support as support provided by your parent.

My parent signed his/her home over to me. Does this transaction have to be reported to the IRS?

Yes. If certain conditions apply, this transaction would be considered a taxable gift from your parent to you. Generally, your parent must file a gift tax return ( Form 709) if any of the following apply:

• Your parent gave gifts to at least one person (other than his/her spouse) that are more than the annual exclusion for the year. For 2010, the annual exclusion is $13,000.
• Your parent and his/her spouse are splitting a gift.
• Your parent gave someone (other than his/her spouse) a gift of a future interest that he or she cannot actually possess, enjoy, or receive income from until some time in the future.
• Your parent gave his/her spouse an interest in property that will be ended by some future event

NOTE: If any of the above conditions apply, your parent is required to file a Form 709, even if a gift tax is not payable.
See Publication 950 for additional information on gifts.

I received a death benefit from my parent’s life insurance policy? Are these insurance proceeds taxable to me.

Life insurance proceeds paid to you because of the death of the insured person are not taxable unless the policy was turned over to you for a price. This is true even if the proceeds were paid under an accident or health insurance policy or an endowment contract. However, interest income received as a result of life insurance proceeds may be taxable.

Source from: http://www.irs.gov