Our Blog: Fast Cash Chat

Looking for a great business opportunity in a tough economy? There are a lot of business opportunities out there for hungry entrepreneurs, but business startups are more at risk than ever.  If you’re looking for a low-risk business opportunity during tough times, tax industry franchising may be your best bet.  

The franchising model combines the best aspects of individual ownership (being your own boss, making your own hours!) with a proven business model and recognized brand name. It can be best described as something of a hybrid that fills the gap between working for yourself and having the power of a large company behind you. Today, about 3,000 different franchise brands operate in more than 200 different lines of business.

So, what’s the best franchising opportunity for you in a tough economy? Believe it or not, one of the fastest growing and most stable segments of franchising is the tax preparation business. Why? A couple of reasons. First, it’s a recession resistant industry. This means that no matter what the economy is doing, there will always be a need for tax preparation services. It’s like Benjamin Franklin once said – the only thing certain in life is death and taxes.

Second, franchising in the tax industry provides entrepreneurs with the ability to work just 17 weeks a year! This seasonal schedule and flexibility allow tax industry franchisees to enjoy the rest of the year pursuing other interests. As a tax industry franchisee, you can spend more time with your family, take that trip around the world you always wanted, build another business… Owning a business in this proven industry can help you take control of your financial future.  You’ve got the freedom and the flexibility to succeed.

If you’re ready to go into business for yourself, why not invest in a business with a proven, growing demand? Even during tough times! According to the IRS, more than 140 million individual income tax returns were filed last year, resulting in over $246 billion in tax refunds.  In addition, more than 60% of U.S. tax returns are prepared each year with the assistance of an income tax franchise office or other paid tax preparation services or a preparer.

Other benefits to consider when investing in a tax industry franchise are the expert training, advice and resources available to you as a franchisee. Financing options are usually available to those who qualify. At Instant Tax Service, we even provide you with comprehensive local and national marketing campaigns to get your new office noticed.

If you’re interested in owning your own business, working an average of just 17 weeks a year, and want to join Entrepreneur magazine’s Top New Franchise, #1 Low Cost Franchise and one of the Top 10 Fastest Growing Franchises of 2009, click here.

Ok, so you’ve decided to skip the pencil and paper this year and let a professional prepare your tax return. But who are you going to choose – Uncle Albert, your neighbor, a local CPA or a tax preparation firm?

Any of these answers could be right depending on your situation. It all comes down to the complexity of your return and the qualifications of the person who is doing the work. But preparing your taxes can be tricky business. Are you sure you’re getting the maximum refund entitled to you by law? Using a tax preparation firm may be your best bet to avoid costly mistakes and ensuing penalties from the IRS.

So where should you look? Your best bet is to start with your friends and family and ask them for referrals. Find somebody who is happy with their preparer’s work and start there. Don’t forget to use the Internet to your advantage and research the tax offices near you. Another good idea is to keep an eye out for local advertising or even drive around the neighborhood and check out the local storefronts to choose the best fit.

Next thing you should do is ask questions. Experience counts, and you want a firm that is up-to-date on the latest tax code changes. Also make sure they have extensive knowledge about the way you want to file your return and how quickly you need the amount of your refund. Whether it’s a refund anticipation loan, an electronic tax refund check, or an IRS direct check, make sure the tax office has the tax refund options you’re looking for.

Additional things you may want to consider as you choose the best tax preparer include: 

• Choose a preparer you will be able to contact and one who will be responsive to your needs.
• Although a preparer is required to sign your return by law, you are responsible for the accuracy of every item on your return, so make sure they give you copies and walk you through every detail.
• Does your preparer offer any guarantees? What happens if your tax preparer makes a mistake that costs you penalties or interest? Some companies, like Instant Tax Service, even offer service guarantees.
• Make certain you and your tax preparer are a good fit philosophically and check references to see how responsive a potential preparer will be.

Just remember that there is a right answer. And if you shop around and ask questions, you stand a good chance of hiring someone who will find the right answer for you. To find a local income tax preparer near you, click here.

Face it: tax season is stressful, and the tax deadline is fast approaching. Don’t file late (or incorrectly!) and risk getting hit by IRS penalties. It’s time to get serious and set some time aside to analyze what you need to do to get your taxes done… with as little stress as possible!

To help you have a stress free tax season, Instant Tax Service has put together these important tips to help you get your tax return out the door:

Get Started

Sometimes the hardest part of any project is just putting your boots on the ground and getting to work. Same thing goes for your taxes. There’s no better time than the present to put pen to paper, flip on a computer, organize your receipts, pull your W-2s together and set your tax plan in motion.

Get the Facts

Most of us don’t follow changes in the tax code like we do box scores for our local baseball team. So while you may know how well Derek Jeter hits with men on bases, chances are you probably don’t follow U.S. tax laws with the same enthusiasm. So what’s a tax filer to do? A good place to start is by logging on to the Internet and checking out the IRS’ Publication 17, a free manual on everything you need to know about your 2008 tax return and how to plan for 2009. It’s also a good idea to poke around the Internet and read relevant tax sites and blogs to get a sense for what people are talking about.

Get a Tax Professional

Tax codes are complicated. There is no way around it. For some it comes easier than others, but for most of us, getting professional tax help will ensure that our tax returns are filed correctly and that we’re getting the maximum refund we’re entitled to by law.  To find a local income tax preparer near you, click here.

Get the Right Deductions

There are certain deductions you’re allowed whether you itemize your return or not. Such deductions include IRA and qualified pension contributions, student loan interest, moving expenses, alimony, medical savings account deductions and, for the self-employed, the health insurance deduction and deduction for half the self-employment taxes paid.

Get Filed

It may sound simple, but sometimes it’s the hardest step in the whole process. None of these tips really matter unless you file your return. If you owe money, there are going to be penalties and interest for not filing on time. If you are owed money, then what are you waiting for? You’ve done all the hard work! Now it’s time to get that tax return off your desk and put some cash back into your pocket.

Are you stressed out over this year’s tax forms? Take some time out for tax season trivia!

Tax Firsts

According to the University of Illinois at Chicago:

• Beard Tax – Tsar Peter I in the early 1700’s tried to transform and regulate the appearance of his subjects to pay for his reign and westernize Russia.
• Bachelor Tax - The state of Missouri enacted a $1 bachelor tax in 1820 on unmarried men between the ages of 21-50.
• First Income Tax - 1404 in England. It was so hated that parliament burned all records of it.
• First U.S. Income Tax – 1862 as the government was trying to raise money for the Civil War.
• World’s First Tax Shelter – in the 4^th Century B.C., the Romans built a tax-free port at Delos.
• First Documented Imprisonment for Tax Evasion – enacted by Emperor Constantine of the Roman Empire in 306 A.D.

Did You Know

According to the IRS:

• Ancient Egyptians revered tax collectors as some of the noblest people in society.
• According to the IRS, they received a total of 235,438,000 individual income tax returns in 2007 and 87,000,000 of those were filed electronically.
• Over 114 million individual tax returns the IRS examined in 2007 resulted in tax refunds to taxpayers totaling $350,000,000,000.
• Aztecs used cocoa beans for money. Owners were taxed four cocoa beans for one rabbit.
• The IRS deals directly with more individual Americans than any other institution, public or private.
• Last year, it cost 42 cents for the IRS to collect each $100 in taxes – lowest cost/collection ratio since 1954 because of electronic filing.
• $50 million was given to the Presidential Election Campaign Fund from 2007 tax returns.
• In 1913 the average U.S. income was $800 and tax rates ranged from one to seven percent on incomes above $3,000.
• The average error rate for a paper tax return is 21%, while e-filing hovers around .5%.
• The telephone was first taxed in the U.S. in 1898 to raise money to support the Spanish American War and continues to be taxed today.

Famous Tax Quotes

• Our Constitution is in actual operation; everything appears to promise that it will last; but nothing in this world is certain but death and taxes. – Benjamin Franklin
• The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin. – Mark Twain
• Alexander Hamilton started the U.S. Treasury with nothing and that was the closest our country has ever been to being even. – Will Rogers
• The hardest thing in the world to understand is the income tax. – Albert Einstein
• The taxpayer: that’s someone who works for the federal government, but doesn’t have to take a civil service examination. – President Ronald Regan

Why do you need a tax preparer? As Albert Einstein once said about filing a tax return: “This is too difficult for a mathematician, it takes a philosopher.” This tax season, finding a tax “philosopher” in your area could save you hundreds or thousands of dollars in income tax overpayments.

The problem – even for one of the greatest minds in modern history – is that doing your taxes can be a complicated business. Are you sure you’re getting the maximum refund you’re entitled to? Are you taking the right deductions? Should you file separate or married? What about the kids? Do you qualify for a first time home buyer credit?

With all of these concerns looming over your head and the tax deadline quickly approaching, maybe it’s time to consider getting some professional tax advice.

A good tax pro will be able to apply all of the correct deductions to your tax return and give you advice about recent and upcoming tax code changes.  If you qualify, they may be able to show you how to deduct as much as $500 ($1,000 on a joint return) in real estate taxes paid on your home even if you take the standard deduction.  

Did you know that a single mother may qualify for the head-of-household filing status, which offers a greater income tax deduction than filing as single? Sometimes, even a married person with a dependent child can qualify for head-of-household status, which may give you a greater tax credit than married filing separate. What about Refund Anticipation Loans versus Electronic Tax Refund Checks? A good tax professional can advise you about the best option for you.  

At the end of the day, not everyone needs the help of a tax preparer, but if you have questions or need assistance, hiring a professional can be money well spent – especially as tax rules become more complex.

Using a pro may also a save you from paying more taxes than you should… and it’s a lot less costly than paying fees and penalties to the IRS for late or incorrectly filed tax returns!

To find a local income tax preparer near you, click here.

This tax season, the Recovery Rebate Credit (RRC) has been causing a lot of confusion for taxpayers interested in filing early. According to a statement, the IRS has received a number of errors on tax returns relating to the RRC credit.

In response, the IRS urges both tax preparers and taxpayers to determine the recipient’s correct eligibility before filing this year’s federal tax return.

This year, about 15% of tax return errors are related to the RRC. “Some tax returns erroneously claim the credit, do not claim the proper amount of the recovery rebate credit or mistakenly enter the amount of the stimulus payment they received on the recovery rebate credit line,” says the IRS.

The amount of your stimulus payment should NOT be entered directly onto your tax return (it will go on a separate worksheet, which will help you determine what amount to put on the recovery rebate credit line on your tax form). However, whether filing on paper or electronically, you WILL need to know the amount of your stimulus payment. If you don’t know or don’t remember receiving your stimulus check, go to the IRS’s How Much Was My Stimulus Payment? tool to find out. It’s a quick and easy way to calculate your payment.

You can also call the IRS at 866.234.2942 to get your payment amount. All you’ll need to know is your filing status, Social Security Number, and number of exemptions.

Once you know the correct stimulus number, you can enter the credit into the appropriate worksheet on your paper return or in your tax software. If you use a tax preparer like Instant Tax Service, your recovery rebate credit amount should automatically be entered correctly.

Note that most taxpayers will have a recovery refund amount of zero, which means you’ve already received your credit. However, some factors that may change the amount of your credit include:

• Financial situation changed from 2007 to 2008
• Did not file a 2007 tax return
• Family gained an additional qualifying dependent child in 2008
• Someone else claimed you as a dependent on their 2007 return but you can’t be claimed as a dependent in 2008

If you have any questions about the RRC credit, visit IRS.gov or contact your local tax preparer.

So, you’re expecting a big refund on your federal income tax return this year…  and you need your money fast.  In this economy, there are a lot of people in your situation. This year’s tax refunds aren’t going toward big vacations or flat screen TVs. They’re going toward paying for basic things like rent, groceries, and electricity.

It’s your money, and Uncle Sam’s been holding it for you all year interest free.   It’s time to get it back.

Quick filing makes the most sense for people with relatively straightforward returns who are taking standard deductions. If your return is complex, you’ll still be able to take advantage of a quick filing options like electronic filing, but you’ll want to review your return very carefully before submitting it.

If you want a faster refund, electronic filing is the way to go. The people who generally have to wait the longest to receive their tax refunds are those who mail in their returns.      

Either way, the best approach to ensure that you get the maximum refund you’re entitled to by law is to hire a tax professional. Some companies, like Instant Tax Service, even offer service guarantees. Most tax offices also offer additional ways to get you the amount of your anticipated tax refund in as little as 12-48 hours. Most tax companies don’t even require you to pay any money up front for tax preparation fees, either. If you choose, the amount can be deducted from your tax refund.

To get started, gather all of your paperwork, including all W-2’s (you’ll need your W-2 to file). Once you have everything together, sit down and decide how fast you want the amount of your refund. Here are some options you might be presented with at your local tax preparation office:

Refund Anticipation Loan: If you need money right away for any reason, you can file what’s called a Refund Anticipation Loan, or RAL. This can provide you with a check in the amount of your anticipated tax refund, less any applicable fees, in as little as 12 to 48 hours.

Electronic Tax Refund Check:  If your financial needs are not as immediate, you may want to consider an Electronic Tax Refund Check. This provides all of the benefits of electronic filing and also saves you money when compared with a RAL.  The Electronic Tax Refund Check is available 10 to 16 days after the IRS acceptance date and tax preparation and other fees are deducted from the tax refund amount.

IRS Direct Check: If you’re not in a rush, then you can choose to receive your refund directly from the IRS either. The IRS can either direct deposit your refund into your personal bank account in 11 to 17 days or you can have it mailed to your home in 18 to 21 days, if you file electronically. Tax preparation fees are paid at the time of service.

Contact your local Instant Tax Service office for more information about tax preparation, electronic filing, and refund anticipation loans.

Every year, we frantically rush to get our taxes done before April 15^th. While shuffling papers, gathering receipts, filling out forms or calculating your tax refund, have you ever wondered whose idea it was to pay income taxes in the first place? 

From the ancient Egyptians to the British monarchy, taxes have always been integral to the functioning of the state.  In fact, you could say that taxation was one of the core issues that led to the American Revolution.  ”No taxation without representation” was the battle cry of American colonists outraged by the high tariffs imposed by the British on imported goods.  When the British refused to repeal the taxes, the colonists revolted.  

Our love/hate relationship with taxes is as old as our country. So when we’re not paying taxes or working out how to get our refunds, we’re talking about taxes or coming up with new ones.  While taxes on goods and services have been implemented throughout history, the levying of income tax didn’t catch on until the 1800s.  Prior to widespread use of the printing press and other modern accounting tools, keeping track of individual income records would have been a logistical nightmare.

The first income tax levied in the U.S. was during the war of 1812. Short on money, the government needed a fast way to raise cash for its war coffers.  The tax was so unpopular (and judged by many to be unconstitutional) that it was abolished right after the war. The tax later resurfaced in 1862 during the Civil War, and citizens paid income tax until the law was fully repealed in 1872.

By the 1890’s, the government was looking at new ways to fairly distribute the tax burden across its population. In a rapidly industrializing nation, the rich were getting richer and the poor were getting poorer. Rich industrialists and poor farmers were paying the same amount of taxes for goods and services.  That meant the burden of taxation was being felt primarily by the poor.

The solution? Bring back the income tax!

In 1913, the 16^th Amendment to the Constitution was ratified, which allowed Congress to constitutionally levy and collect income tax.  Later that year, the first income tax law was enacted and the first 1040 form was created.  Today, the IRS collects more than $2 trillion in revenue and processes more than 225 million tax returns!

Income tax laws have been created, adjusted, and abolished many times in our country’s history. Keeping up with all those adjustments and changes can be a headache.  That means that taxation with representation isn’t much fun either… but tax preparers can help make our income tax burden as painless as possible. To find a local income tax preparer near you, click here.