TaxWorks Blog

ArkWorks Intergrates with TaxWorks

ArkWorks was originally created to work hand-in-hand with TaxWorks Professional Tax Software. The linking between the two applications makes it easy to move from a paper-based office to a paperless office. Using TaxWorks’ Advanced Form defaults, you can print the client’s signature copy, email a PDF copy, and save a copy of the tax return into ArkWorks. You can then scan supporting documents and save a copy in the clients’ drawer for future reference. Use ArkWorks’ Burn to CD feature to create a CD with an electronic copy of all of tax documents.

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2008 Heroes Act

The 2008 Heroes Act passed unanimously in the House on May 20, 2008, and in the Senate on May 22, 2008. President Bush signed this act into law on June 17, 2008.

Military reservists who are called to active duty are taken into special consideration in the 2008 Heroes Act. This act helps reservists in the following five ways: 1) Effective on the date of enactment of the 2008 Heroes Act, active duty reservists can withdraw any unused amounts held in a flexible health spending account; 2) The Act makes it permanent that active duty reservists can make penalty-free withdrawals from retirement plans; 3) Retirement plans can allow reservists who are called to active duty and then killed or disabled in the line of duty to be treated as though they were rehired  on the day before death or disability, making the employee eligible for all benefit accruals throughout the period of active duty (for deaths occurring after 2006); 4) Effective on the date of enactment, small employers can take a twenty-percent tax credit for differential wages paid to employees who are called to active military duty; and 5) Differential wages paid to an employee called to active duty may be included in the calculation of wages for retirement plan, IRA, and federal income tax withholding purposes, effective for amounts paid after 2008.

The 2008 Heroes Act states that those serving actively in the military and filing a joint tax return are eligible for a rebate check under the Economic Stimulus Act of 2008 even if one spouse does not have a Social Security Number. The 2008 Heroes Act also makes it permanent that combat pay can be included as earned income for purposes of the earned income tax credit (EITC).

There are several other provisions included in the 2008 Heroes Act. Thorough research of the legislation is recommended before any tax decisions are made. TaxWorks will be fully updated to handle any new legislation for 2008.

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Additional Info from IRS on Stimulus Payments

The IRS has provided additional information regarding payments received under the Economic Stimulus Act of 2008.

In a release on the IRS website regarding the Stimulus Act, if a taxpayer’s tax refund was deposited (as directed by their tax return) into a direct deposit account, the stimulus payment would follow the same process. 

Such deposits could have been made into a checking or savings account, or an account that is given favorable tax treatment under the code, such as an IRA, health savings account, an Archer MSA, a Coverdell education savings account, or a qualified tuition program account. Distributions to these accounts are subject to rules and restrictions of the IRS Code.

Taxpayers who had their 2007 refunds deposited into more than one account will receive a paper check for their stimulus payment.

Individuals may withdraw an amount equal to the stimulus payment from a tax-favored account, but are subject to restrictions of IRS code.  The amount withdrawn is treated as neither contributed to, nor distributed from the account, and will not be subject to regular federal income tax.  Please see the irs.gov website for additional guidelines regarding stimulus payments.

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The results for Tax Hero Challenge round 1 (Elvis the Sheetrocker)

Some have asked about the winning returns for round 1 of the the Tax Hero Challenge. Elvis the Sheetrocker had to pay taxes, so the preparers who calculated the lowest tax due won. The iPod-winning returns are as follows:

Jack - $6589

John - $6878

Harvey - $7660

Peter - $7660

Irwin - $7660

We wish everyone good luck in the next round.  

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A note to tax preparers….

The IRS reported, “Third party designees, indicated by checking the box on Form 1040, now have the same authority extended to them on an amended return filed for the year in question. For details, see IRM 11.3.3.1 on IRS.gov.”

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Victims of Midwest Natural Disasters Have Longer to File Returns

The earthquake in California reminds us of others who have faced natural disasters. The IRS is extending the deadline, until August 29, for victims of natural disasters in the Midwest to file certain returns, make tax payments and perform time-sensitive acts. This announcement affects counties in Indiana, Iowa, Illinois, Nebraska, West Virginia, and Wisconsin.

Click here for IRS disaster news on each state affected.

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Print From Any Software Application

Some paperless office applications do not lend themselves to saving electronic copies of their files outside of their system. However, most should allow you to print their output to a Windows-based printer. For this reason, ArkWorks includes a printer driver that will take the data and convert it to a readable PDF document. When you print to the ArkWorks print driver, the ArkWorks Save Document window will appear. This allows you to save the document to the appropriate cabinet, drawer, and folder.

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Uncle Sam Had a Farm…

2008 Farm Act

The 2008 Farm Act became law on May 22, 2008, and includes many provisions that are very specific to farmers. For example, a new business tax credit allows manufacturers and retailers of certain chemicals and pesticides a credit for 30% of the costs of protecting those chemicals. This credit is effective for expenses incurred after May 22, 2008, and before January 1, 2013. The 2008 Farm Act also provides a one-year cut in the tax rate on a corporation’s qualified timber gain to 15% for years ending after May 22, 2008, and beginning on or before May 22, 2009.

Other items listed in the 2008 Farm Act explain that: 1) Conservation reserve payments made after 2007 and received by those who are on Social Security retirement or disability are not subject to self-employment tax; 2) There is a limit on farming losses that a taxpayer can use to reduce other non-farming business income. Beginning after 2009, for entities other than C Corporations, the annual farming loss is limited to the greater of $300,000 ($150,000 for married filing separate), or the taxpayer’s total net farm income for the five previous years; and 3) There is a new credit for the development of biofuels produced from agricultural waste, wood chips, and switch grass for fuel produced after 2008 and through 2012.

The 2008 Farm Act has several other farming and non-farm related provisions. Our tax software will be fully updated to handle these new laws.

(For more information visit irs.gov.)

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Five tax heroes found, 15 more to go

Tax preparers nationwide have accepted the Tax Hero Challenge and we found the first five tax heroes. Jack of Pennsylvania, John of Wisconsin, Harvey of Texas, Peter of Pennsylvania, and Irwin of Illinois each received an iPod® touch for calculating the biggest refund legally possible during the first round. Congratulations to our winners and thanks to all of the participants. Now, gear up for round two! 

Round two began on July 1st and will run through August. You all start afresh with an equal opportunity to prove you are America’s #1 tax preparer.

For July and August, the client profile is for Phyllis the Landlord. Phyllis inherited three duplex apartment buildings and is managing them full time. As a side note, Phyllis is single and loves cats (she also prides herself on her sense of style). For more information and to download the client profile, visit taxherochallenge.com

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Importing Files

In a paperless office environment you may have several documents that are already in an electronic format. In ArkWorks these documents can be converted to PDF or stored in their native format. Alternatively, you can drag and drop documents from the Windows desktop, Windows Explorer, or attachments to emails in Microsoft Outlook. Drag and drop multiple files into ArkWorks and save each file individually. Document storage has never been so easy.

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