DaKine Taxes http://www.dakinetaxes.com Hawaii Income Tax News ~ Federal And State Tax News Wed, 13 Jan 2010 22:24:20 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 EIC Changes For 2009 http://www.dakinetaxes.com/2010/eic-changes-for-2009/ http://www.dakinetaxes.com/2010/eic-changes-for-2009/#comments Wed, 13 Jan 2010 22:23:34 +0000 Admin http://www.dakinetaxes.com/?p=432 New for tax year 2009, is the additional EITC and income thresholds for a Third Qualifying Child and Changes to the Uniform Definition of a Child The change in the Uniform Definition of a Child adds two new rules to the definition of a “qualifying child.” The child must:

  • Be younger than the person claiming the child
  • Not have filed a joint return other than to claim a refund

For more information on whether a child qualifies you for the EITC, see Publication 596, Chapter 2, Rules If You Have a Qualifying Child.

Earned Income and adjusted gross income (AGI) must each be less than:

  • $43,279 (48,279 married filing jointly) with three or more qualifying children
  • $40,295 ($45,295 married filing jointly) with two qualifying children
  • $35,463 ($40,463 married filing jointly) with one qualifying child
  • $13,440 ($18,440 married filing jointly) with no qualifying children

Tax Year 2009 maximum credit:

  • $5,657 with three or more qualifying children
  • $5,028 with two qualifying children
  • $3,043 with one qualifying child
  • $457 with no qualifying children

Investment income must be $3,100 or less for the year.

The maximum of Advance EITC workers can receive from their employers is $1,826.

Earned income credit (EIC)

The EIC has increased for people with three or more children and for some married couples filing jointly.

The maximum AGI you can have and still get the credit also has increased. You may be able to take the credit if your AGI is less than the amount in the above list that applies to you.

Divorced or separated parents

A noncustodial parent claiming an exemption for a child can no longer attach certain pages from a divorce decree or separation agreement instead of Form 8332 if the decree or agreement went into effect after 2008. The noncustodial parent must attach Form 8332 or a similar statement signed by the custodial parent and whose only purpose is to release a claim to exemption.

Definition of custodial parent

Beginning in 2009, new rules apply to determine who is the custodial parent for tax purposes. See Custodial parent and noncustodial parent. Page 31 in Publication 17

Publication 17 – IRS Tax Guide
2009 Publication 596 – Earned Income Credit The EIC chart starts on page 46.

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]]> http://www.dakinetaxes.com/2010/eic-changes-for-2009/feed/ 0 Hawaii State Tax Refund Delay http://www.dakinetaxes.com/2009/hawaii-state-tax-refund-delay/ http://www.dakinetaxes.com/2009/hawaii-state-tax-refund-delay/#comments Fri, 25 Dec 2009 09:17:42 +0000 Admin http://www.dakinetaxes.com/?p=423 Gov. Lingle’s tax refund delay is her way of trying to fix a shortfall in the states budget. By holding state tax refunds until July which starts the 2011 fiscal year.

“The government has made it very clear they are gonna use your money for the first six months of the year to balance the budget,” explained Lowell Kalapa of the tax Foundation Hawaii.

This has many taxpayers very upset because they need that money with the state the economy is in.

While your Federal Income Tax Refund will be deliverd on time, it is just the state refund that will be delayed. Most state refunds are a lot less than the fed refunds, but it is still money people possibly counted on when spending the christmas.

Lowell Kalapa of the tax Foundation Hawaii offers this suggestion (if it is not too late already and you already received your final paycheck of 2009):

“So what people might want to consider is asking their payroll clerks for this last payroll, is to not withhold maybe any state taxes, right?” said Kalapa.

Just make sure you have met the witholding requirments for your income first so you don’t end up owing the state money.

“Not breaking any rules, just like her, she’s not breaking any rules, because they had 90 days to pay back the refund, you are not breaking any rules because you are just under-withholding this last payroll,” explained Kalapa. “It is juggling the books, if you will, to make it come out in favor of the taxpayer.”

California is also delaying tax refunds and several other states have or are talking about following suit.

Even though e-file doesn’t open until January 15th, if you have your final numbers for your income and witholdings then you can file your taxes now and the tax preparation service you choose will automatically e-file your tax return on Jan 15th when the IRS opens up e-file. The tax services offered on the right of this article (or below) are accepting early tax returns now with auto e-file and are open now ready for you.

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]]> http://www.dakinetaxes.com/2009/hawaii-state-tax-refund-delay/feed/ 0 Gambling Winnings Are Always Taxable Income http://www.dakinetaxes.com/2009/gambling-winnings-are-always-taxable-income/ http://www.dakinetaxes.com/2009/gambling-winnings-are-always-taxable-income/#comments Wed, 16 Dec 2009 23:38:19 +0000 Admin http://www.dakinetaxes.com/?p=415 Gambling winnings are fully taxable and must be reported on your tax return. Gambling income includes, but is not limited to, winnings from lotteries, raffles, horse and dog races and casinos, as well as the fair market value of prizes such as cars, houses, trips or other noncash prizes.

Depending on the type and amount of your winnings, the payer might provide you with a Form W-2G and may have withheld federal income taxes from the payment.

Here are some general guidelines on gambling income and losses:

  • Reporting winnings: The full amount of your gambling winnings for the year must be reported on line 21, Form 1040. You may not use Form 1040A or 1040EZ. This rule applies regardless of the amount and regardless of whether you receive a Form W-2G or any other reporting form.
  • Deducting losses:  If you itemize deductions, you can deduct your gambling losses for the year on line 28, Schedule A (Form 1040). You cannot deduct gambling losses that are more than your winnings.

It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show the amount of both your winnings and losses.

For more information see IRS Publication 529, Miscellaneous Deductions, or Publication 525, Taxable and Nontaxable Income, both are available below, or by calling 800-TAX-FORM (800-829-3676).

IRS Form Links:

  • Form W-2G, Certain Gambling Winnings (PDF 134K)
  • Publication 529, Miscellaneous Deductions (PDF 169K)
  • Publication 525, Taxable and Nontaxable Income (PDF 266K)
  • Tax Topic 419, Gambling Income and Expenses

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]]> http://www.dakinetaxes.com/2009/gambling-winnings-are-always-taxable-income/feed/ 0 Hawaii Tax Forms http://www.dakinetaxes.com/2009/hawaii-tax-forms/ http://www.dakinetaxes.com/2009/hawaii-tax-forms/#comments Mon, 14 Dec 2009 12:36:37 +0000 Admin http://www.dakinetaxes.com/?p=368

Hawaii Individual Income Tax Forms- Resident and Nonresident

Form Title/Description
L-15 Substitute for Form HW-2 or W-2, Wage and Tax Statement (Rev. 2004)
L-72 Request for Copies of Income Tax Return (Rev. 2006)
L-80 Tracer Request for Net Income Tax Refund (Rev. 2007)
N-1 Declaration of Estimated Tax for Individuals (Rev. 2008) for Tax Year 2009
N-1 NEW Declaration of Estimated Tax for Individuals (Rev. 2008 – Hand writable) for Tax Year 2009
N-2 Individual Housing Account (Rev. 2004)
N-11 Individual Resident Income Tax Return (Rev. 2008)
N-11 Individual Resident Income Tax Return (Rev. 2008 – Hand writable)
N-11 Ins Instructions for Preparing Form N-11 (Rev. 2008)
N-12 (OBSOLETE for tax years after December 31, 2006) Individual Income Tax Return for Residents
N-11/N-12 Ins (OBSOLETE for tax years after December 31, 2006) Instructions for Preparing Forms N-11/N-12
N-13 Individual Income Tax Return – Resident Short Form (Rev. 2008)
N-13 NEW Individual Income Tax Return – Resident Short Form (Rev. 2008 – Hand writable)
N-13 Ins Instructions for Preparing Form N-13 (Rev. 2008)
N-15 Individual Income Tax Return for Nonresidents and Part-Year Residents (Rev. 2008)
N-15 Individual Income Tax Return for Nonresidents and Part-Year Residents (Rev. 2008 – Hand writable)
N-15 Ins Instructions for Preparing Form N-15 (Rev. 2008)
Sch. CR Schedule of Tax Credits (Rev. 2008)
Sch. CR Schedule of Tax Credits (Rev. 2008 – Hand writable)
Sch. D1 Sales of Business Property (Rev. 2008)
Sch. D1 Ins Instructions for Filing Schedule D-1 (Rev. 2008)
Sch. J Supplemental Annuities Schedule (N-11, N-15, and N-40) (Rev. 2008)
Sch. X Tax Credits for Hawaii Residents (Rev. 2008)
HW-16 Dependent Care
Provider’s Identification and Certification (Rev. 2006)
N-101A Application for Automatic Extension of Time to File Individual Income Tax Return (Rev. 2008)
N-101A NEW Application for Automatic Extension of Time to File Individual Income Tax Return (Rev. 2008 – Hand writable)
N-103 Sale of Your Home (Rev. 2008)
N-103 Ins Instructions for filing N-103 (Rev. 2008)
N-109 Application for Tentative Refund from Carryback of Net Operating Loss (Rev. 2008)
N-110 Statement of Person Claiming Refund Due to a Deceased Taxpayer (Rev. 2007)
N-139 Moving Expense Rev. 2008)
N-152 Tax on Lump Sum Distributions (Rev. 2008)
N-152 Ins Instructions for Form N-152 (Rev. 2008)
N-157 Carryover Credit for Energy Conservation (Rev. 2008)
N-158 Investment Interest Expense Deduction (Rev. 2008)
N-163 Fuel Tax Credit for Commercial Fishers – Individual (Rev. 2008)
N-168 Income Averaging for Farmers and Fisherman (Rev. 2008)
N-168 Ins Instructions for Preparing Form N-168 (Rev. 2008)
N-172 Claim for Tax Exemption by Person with Impaired Sight or Hearing or by Totally Disabled Person and Physician’s Certification (Rev. 2007)
N-172 Ins Instructions for Preparing Form N-172 (Rev. 2008)
N-188X Amended Individual Income Tax Return (Rev. 2008)
N-188X Ins Instructions for Preparing Form N-188X (Rev. 2008)
N-196 Annual Summary and Transmittal of Hawaii Annual Information Returns (Rev. 2008)
N-200V Individual Income Tax Payment Voucher (Rev. 2008)
N-200V NEW Individual Income Tax Payment Voucher (Rev. 2008 – Hand writable)
N-210 Underpayment of Estimated Tax by Individuals, Estates and Trusts, and Fiduciaries (Rev. 2008)
N-210 Ins Instructions for Preparing Form N-210 (Rev. 2008)
N-289 Certification for Exemption from the Withholding Tax on the Disposition of Hawaii Real Property Interests (Rev. 2008)
N-312 Capital Goods Excise Tax Credit (rev. 2008)
N-312 Ins Instructions for Filing Forms N-312 (Rev. 2008)
N-314 Carryover of the Hotel Construction and Remodeling Tax Credit (Rev. 2008)
N-317 OBSOLETE – Statement by a Qualified High Technology Business (Rev. 2006) for Tax Year 2006. Superceded by online N-317 – ELF login (Act 206, SLH 2007).
N-318 High Technology Business Investment Tax Credit (Rev. 2008)
N-318A Certified Statement of Investment in a Qualified High Technology Business (Rev. 2008)
N-318A Ins Instructions for Form N-318A (Rev. 2008)
N-319 Tax Credit for Research Activities (Rev. 2008)
N-319A Certified Statement of Research and Development Costs (Rev. 2008)
N-319A Ins Instructions for Form N-319A (Rev. 2008)
N-320 Carryover of the Individual Development Account Tax Contribution Tax Credit (Rev. 2008)
N-324 Ethanol Facility Tax Credit (Rev. 2008)
N-326 Technology Infrastructure Renovation Tax Credit (Rev. 2008)
N-330 School Repair and Maintenance Tax Credit (Rev. 2008)
N-330 Ins Instructions for N-330 (Rev. 2008)
N-332 Carryover of the Residential Construction and Remodeling Tax Credit (Rev. 2008)
N-334 Renewable Energy Technologies Income Tax Credit (Rev. 2008)
N-334A Information Statement Concerning Renewable Energy Technologies Income Tax Credit (Rev. 2008)
N-334 Ins Instructions for Form N-334 (Rev. 2007)
N-335 Statement of Ko Olina Resort and Marina Attractions and Educational Facilities Tax Credit (Rev. 2006)
N-335 Ins Instructions for Form N-335 (Rev. 2006)
N-336 Ko Olina Resort and Marina Attractions and Educational Facilities Tax Credit (Rev. 2008)
N-337 Schedule of Certified Ko Olina Tax Credits (Rev. 2006)
N-338 Recapture of the Tax Credit for Flood Victims (Rev. 2008)
N-340 Motion Picture, Digital Media, and Film Production Tax Credit (Rev. 2008)
N-340 Ins Instructions for Form N-340 (Rev. 2008)
N-379 Request for Innocent Spouse Relief (Rev. 2007)
N-379 Ins Instructions for Preparing Form N-379 (Rev. 2007)
N-586 Tax Credit for Low-Income Housing (Rev. 2008)
N-615 Computation of Tax for Children Under Age 14 Who Have Investment Income of More than $1,000 (Rev. 2008)
N-615 Ins Instructions for Preparing Form N-615 (Rev. 2008)
N-756 Enterprise Zone Tax Credit (Rev. 2008)
N-814 Parent’s Election to Report Child’s Interest and Dividends (Rev. 2008)
N-848 Power of Attorney (Rev. 2004)
N-848 Ins Instructions for Form N-848 (Rev. 2004)
N-884 Credit for Employment of Vocational Rehabilitation Referrals (Rev. 2008)

More Hawaii Tax Forms can be found out Hawaii’s official Tax site

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]]> http://www.dakinetaxes.com/2009/hawaii-tax-forms/feed/ 0 2010 IRS e-file Refund Cycle Chart http://www.dakinetaxes.com/2009/2010-irs-e-file-refund-cycle-chart/ http://www.dakinetaxes.com/2009/2010-irs-e-file-refund-cycle-chart/#comments Fri, 11 Dec 2009 09:08:17 +0000 Admin http://www.dakinetaxes.com/?p=405 2010 Tax Refund Cycle Chart for your 2010 tax refunds.

(2009 earnings)

* The IRS does not guarantee a specific date that a refund will be deposited into a taxpayer’s financial institution account or when it will be mailed.

Transmitted and accepted (by 11:00 am) between… Direct Deposit Sent* Paper Check Mailed*
Jan 15 and Jan 21, 2010 Jan 29, 2010 Feb 5, 2010
Jan 21 and Jan 28, 2010 Feb 5, 2010 Feb 12, 2010
Jan 28 and Feb 4, 2010 Feb 12, 2010 Feb 19, 2010
Feb 4 and Feb 11, 2010 Feb 19, 2010 Feb 26, 2010
Feb 11 and Feb 18, 2010 Feb 26, 2010 Mar 5, 2010
Feb 18 and Feb 25, 2010 Mar 5, 2010 Mar 12, 2010
Feb 25 and Mar 4, 2010 Mar 12, 2010 Mar 19, 2010
Mar 4 and Mar 11, 2010 Mar 19, 2010 Mar 26, 2010
Mar 11 and Mar 18, 2010 Mar 26, 2010 Apr 2, 2010
Mar 18 and Mar 25, 2010 Apr 2, 2010 Apr 9, 2010
Mar 25 and Apr 1, 2010 Apr 9, 2010 Apr 16, 2010
Apr 1 and Apr 8, 2010 Apr 16, 2010 Apr 23, 2010
Apr 8 and Apr 15, 2010 Apr 23, 2010 Apr 30, 2010
Apr 15 and Apr 22, 2010 Apr 30, 2010 May 7, 2010
Apr 22 and Apr 29, 2010 May 7, 2010 May 14, 2010
Apr 29 and May 6, 2010 May 14, 2010 May 21, 2010
May 6 and May 13, 2010 May 21, 2010 May 28, 2010
May 13 and May 20, 2010 May 28, 2010 May 28, 2010
May 20 and May 27, 2010 Jun 4, 2010 Jun 11, 2010
May 27 and Jun 3, 2010 Jun 11, 2010 Jun 18, 2010
Transmitted and accepted (by 11:00 am)between… Direct Deposit Sent* Paper Check Mailed*
Jun 3 and Jun 10, 2010 Jun 18, 2010 Jun 25, 2010
Jun 10 and Jun 17, 2010 Jun 25, 2010 Jul 2, 2010
Jun 17 and Jun 24, 2010 Jul 2, 2010 Jul 9, 2010
Jun 24 and Jul 1, 2010 Jul 9, 2010 Jul 16, 2010
Jul 1 and Jul 8, 2010 Jul 16, 2010 Jul 23, 2010
Jul 8 and Jul 15, 2010 Jul 23, 2010 Jul 30, 2010
Jul 15 and Jul 22, 2010 Jul 30, 2010 Aug 6, 2010
Jul 22 and Jul 29, 2010 Aug 6, 2010 Aug 13, 2010
Jul 29 and Aug 5, 2010 Aug 13, 2010 Aug 20, 2010
Aug 5 and Aug 12, 2010 Aug 20, 2010 Aug 27, 2010
Aug 12 and Aug 19, 2010 Aug 27, 2010 Sep 3, 2010
Aug 19 and Aug 26, 2010 Sep 3, 2010 Sep 10, 2010
Aug 26 and Sep 2, 2010 Sep 10, 2010 Sep 17, 2010
Sep 2 and Sep 9, 2010 Sep 17, 2010 Sep 24, 2010
Sep 9 and Sep 16, 2010 Sep 24, 2010 Oct 1, 2010
Sep 16 and Sep 23, 2010 Oct 1, 2010 Oct 8, 2010
Sep 23 and Sep 30, 2010 Oct 8, 2010 Oct 15, 2010
Sep 30 and Oct 7, 2010 Oct 15, 2010 Oct 22, 2010
Oct 7 and Oct 14, 2010 Oct 22, 2010 Oct 29, 2010
Oct 14 and Oct 21, 2010 Oct 29, 2010 Nov 5, 2010

Refund Inquiries

Taxpayers who e-filed their 2010 Taxes can get refund information 72 hours after the electronic return data is acknowledged as accepted by the IRS. To check the status of a refund click on Where’s my refund? Taxpayers without internet access can get refund information by calling 1-800-829-1954 or 1-800-829-4477.

]]> http://www.dakinetaxes.com/2009/2010-irs-e-file-refund-cycle-chart/feed/ 0 2010 eFile Start Date http://www.dakinetaxes.com/2009/2009-efile-start-date/ http://www.dakinetaxes.com/2009/2009-efile-start-date/#comments Thu, 10 Dec 2009 20:27:08 +0000 Admin http://www.dakinetaxes.com/?p=227 The 2009 e-File start date is January 15, 2010 for the filing of your 2009 Income Taxes.

The IRS will start accepting tax returns by e-file on that date. If there are any changes or delays we will keep you informed.

Check out the 2010 e-File Refund Cycle Chart for when you can expect your tax refunds.

Subscribe to keep up with any changes or delays.

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]]> http://www.dakinetaxes.com/2009/2009-efile-start-date/feed/ 0 Hawaii Dept of Taxation 2009 Year End Workshops http://www.dakinetaxes.com/2009/hawaii-dept-of-taxation-2009-year-end-workshops/ http://www.dakinetaxes.com/2009/hawaii-dept-of-taxation-2009-year-end-workshops/#comments Fri, 06 Nov 2009 10:05:06 +0000 Admin http://www.dakinetaxes.com/?p=382 The Hawaii Department of Taxation will hold a series of year-end workshops around the state to provide tax professionals and the public with updates on tax legislation, changes to tax forms and current department initiatives to improve and streamline tax collections and overall department operations.

The first workshop will be held on Kaua`i on Monday, November 23. Workshops on Maui and O`ahu, and in Kona and Hilo, will be held within the following weeks (see schedule on the following page). All workshops begin at 8:30 a.m. and end at 12:30p.m.

The cost for the workshop is $80 for those who register at least two weeks in advance; there is a $5 fee for later registrations. The cost includes continental breakfast and all workshop materials. The course provides four hours of Continuing Professional Education credit. The workshop materials may be purchased separately for $25 each.

Registration forms are available at www.hawaii.gov/tax. For more information, contact the Director’s Office at 808-587-1540, or by email at Tax.Directors.Office@hawaii.gov.

YEAR-END WORKSHOP SCHEDULE

KAUA‘I: Monday, November 23, 8:00 a.m. registration; KCC OCET
Multipurpose Room 3-1901 Kaumuali`i Highway, Lihu`e
Contact Kaua`i Community college, 808-245-8318

MAUI: Monday, November 30, 8:00 a.m. registration; Maui Beach Hotel,
Elleair Rainbow Room, 170 Ka`ahumanu Avenue, Kahului
Contact Maui Community College, 808-984-3231

O‘AHU: Tuesday, December 1, 8:00 a.m. registration; Ala Moana Hotel, Hibiscus
Ballroom, 410 Atkinson Drive, Honolulu
Contact Kapi`olani Community College, 808-734-9211

KONA: Monday, December 7, 8:00 a.m. registration; Royal Kona Resort,
Discovery Room, 75-5852 Ali`i Drive, Kailua-Kona
Contact Hawai`i Community College, 808-974-7531

HILO: Tuesday, December 8, 8:00 a.m. registration; Hilo Hawaiian Hotel –
Moku’ola 1, 71 Banyan Drive, Hilo
Contact Hawai`i Community College, 808-974-7531

For more information, contact:
Director’s Office
Department of Taxation
State of Hawai`i
Phone: (808) 587-1540
Email: tax.directors.office@hawaii.gov

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]]> http://www.dakinetaxes.com/2009/hawaii-dept-of-taxation-2009-year-end-workshops/feed/ 0 Taxpayers Have Until Oct. 15 to File Extended 2008 Tax Returns http://www.dakinetaxes.com/2009/taxpayers-have-until-oct-15-to-file-extended-2008-tax-returns/ http://www.dakinetaxes.com/2009/taxpayers-have-until-oct-15-to-file-extended-2008-tax-returns/#comments Thu, 01 Oct 2009 23:42:12 +0000 Admin http://www.dakinetaxes.com/?p=361 The Oct. 15 deadline is fast approaching for millions of taxpayers who requested a six-month extension to file their 2008 tax returns.

It’s also the deadline for special voluntary disclosures by taxpayers with assets in previously undisclosed offshore financial accounts.

In most cases, Oct. 15, 2009, is the last day taxpayers may timely file their 2008 federal tax returns. The IRS expects to receive as many as 10 million tax returns from taxpayers who used Form 4868 to request a six-month extension to file their returns. Some taxpayers, for example, may have requested a filing extension to claim the first-time homebuyer credit for a home purchase that closed after the April 15 deadline.

Some taxpayers can wait until after Oct. 15 to file. This includes those serving in Iraq, Afghanistan or other combat zone localities and people affected by recent natural disasters.

Oct. 15 is also the last day to take advantage of e-file.

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]]> http://www.dakinetaxes.com/2009/taxpayers-have-until-oct-15-to-file-extended-2008-tax-returns/feed/ 0 Deadline nears for Special Offshore Voluntary Disclosures http://www.dakinetaxes.com/2009/deadline-nears-for-special-offshore-voluntary-disclosures/ http://www.dakinetaxes.com/2009/deadline-nears-for-special-offshore-voluntary-disclosures/#comments Thu, 01 Oct 2009 22:58:36 +0000 Admin http://www.dakinetaxes.com/?p=364 Oct. 15 is the deadline for special voluntary disclosures by taxpayers with assets in previously undisclosed offshore financial accounts.

Under the special provisions issued in March, taxpayers with these accounts originally had until Sept. 23, 2009, to come forward. Those taxpayers who do not voluntarily disclose their accounts by Oct. 15 face harsh civil penalties, where applicable, and possible criminal prosecution.

Tax professionals or individuals who want to initiate a voluntary disclosure should call their local IRS Criminal Investigation office. Individuals or their representatives may either contact the nearest Special Agent in Charge, IRS Criminal Investigation, stating their wish to make a voluntary disclosure, or provide a letter outlining information needed to assist the IRS in determining their acceptance into the voluntary disclosure program.

See the Voluntary Disclosure page on IRS.gov for more details.

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]]> http://www.dakinetaxes.com/2009/deadline-nears-for-special-offshore-voluntary-disclosures/feed/ 0 Hawaii’s Tax Fresh Start Program http://www.dakinetaxes.com/2009/hawaiis-tax-fresh-start-program/ http://www.dakinetaxes.com/2009/hawaiis-tax-fresh-start-program/#comments Wed, 27 May 2009 22:34:34 +0000 Admin http://www.dakinetaxes.com/?p=356 DEPARTMENT OF TAXATION ANNOUNCES – TAX FRESH START PROGRAM
HONOLULU – The State of Hawaii Department of Taxation (“DOTAX”) announced that it is offering a “Tax Fresh Start Program”, running from May 27, 2009 through June 26, 2009. The program provides an opportunity for eligible taxpayers to pay their back taxes to the state while avoiding penalties and potentially avoiding referral for criminal prosecution. It also offers a 50% reduction in interest from the statutory rate of 8% per annum to 4% per annum. The program is available to all eligible taxpayers owing eligible Hawaii tax(es) for any taxable period ending on or before December 31, 2007, either because the taxpayer:

  • failed to file a return for the taxable period, or
  • previously filed a return for the taxable period but under reported the amount of Hawaii tax due.

Taxpayers who have undisclosed or unreported Hawaii income are encouraged to make a voluntary disclosure to become compliant, avoid substantial civil penalties and generally eliminate the risk of referral for criminal prosecution. Making a voluntary disclosure also provides the opportunity to calculate with a reasonable degree of certainty the total cost of resolving their Hawaii tax liabilities.

DOTAX is currently aggressively pursuing non-filers and under-reporters and, when appropriate, will refer such taxpayers for criminal prosecution. Hawaii law contains no civil statute of limitations on auditing or assessing non-filers. There is also no civil statute of limitations on auditing or assessing under-reporters where tax fraud is involved. In addition, the legislature has recently passed legislation which greatly enhances the power of DOTAX to audit and assess non-filers or under-reporters, including the adoption of stiffer penalties and a longer civil statute of limitations for cases involving substantial underreporting of income.

The program covers all taxes that are administered by DOTAX, including the general excise tax, use tax, income tax, and transient accommodations tax, among others. The program may not be used for tax liabilities that are already known to DOTAX. Taxpayers already in a payment plan with DOTAX or who have received a tax bill from DOTAX cannot participate in this program for the tax liability that is the subject of that bill. The taxpayer may, however, report additional liability for that tax period as an under-reporter under the Tax Fresh Start Program.

A taxpayer is ineligible for participation in the program if any of following applies:

  • The taxpayer is currently under audit by DOTAX;
  • The taxpayer is currently under criminal investigation;
  • The taxpayer is a party to any civil or criminal litigation that is pending on May 27, 2009 with DOTAX;
  • The taxpayer is currently in DOTAX’s collection program;
  • The taxpayer has been contacted by DOTAX concerning a return for any reason, including a return that has not been filed or an apparent understatement of income;
  • The taxpayer is under audit by the federal government or has been
    notified of such an examination; or
  • The taxpayer has been criminally prosecuted by the criminal investigations unit, or who is currently under court jurisdiction.

If a taxpayer is not eligible for the Tax Fresh Start Program for a particular Hawaii tax or for a particular taxable period, the taxpayer may still be eligible to apply for participation in the program for a different Hawaii tax or for a different taxable period.

If you have a question about eligible taxes, visit the website www.hawaii.gov/tax for a comprehensive list.

All participants must file the required tax return(s) for the applicable periods using the appropriate tax form for the period involved in order to participate in the Tax Fresh Start Program. Full payment including interest must also be made at the time the tax returns are filed under this program. Each tax type must be accompanied by a separate check. If payment in full including interest is not submitted with the return on or before June 26, 2009, or if your payment is dishonored for any reason through no fault of DOTAX, your participation in the Tax Fresh Start Program will be denied. If you are denied participation in the Tax Fresh Start Program, all applicable penalties and interest at the statutory rate of 8% per annum will be assessed against you. Interest will continue to accrue at the full statutory rate until payment is received. Payment plans are not available under this program. The notation “Tax Fresh Start Program” must be noted boldly at the top of all pages of the tax return and submitted to:

Tax Fresh Start Program Administrator
PO Box 259
Honolulu, HI 96809-0259

Taxpayers should be aware that payment under this Tax Fresh Start Program constitutes an express and absolute relinquishment of any and all administrative and judicial rights of appeal. If you need more information about the Tax Fresh Start Program, visit www.hawaii.gov/tax, or call the office nearest to you
between the hours of 7:45 a.m. through 4:30 p.m. Monday through Friday, excluding State holidays:

Oahu (808) 587-9200
Maui (808) 984-8511
Hilo (808) 974-6321
Kona (808) 323-4597
Kauai (808) 274-3456

Hearing impaired users only may transmit inquiries calling (808) 587-1418 (Oahu only) or 1-800-887-8974 (Outer islands).

For more information, contact:
Kurt Kawafuchi, Director
State of Hawaii Department of Taxation
Phone: (808) 587-1510

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]]> http://www.dakinetaxes.com/2009/hawaiis-tax-fresh-start-program/feed/ 0 Ten Last Minute Tax Filing Tips http://www.dakinetaxes.com/2009/ten-last-minute-tax-filing-tips/ http://www.dakinetaxes.com/2009/ten-last-minute-tax-filing-tips/#comments Tue, 07 Apr 2009 16:49:02 +0000 Admin http://www.dakinetaxes.com/?p=351 With the tax filing deadline close at hand, the IRS offers ten tips for those still working on their tax returns:

  1. File Electronically – Consider filing electronically instead of using paper tax forms. If you efile and choose direct deposit, you can receive your tax refund in as few as 10 days.
  2. Check the Identification Numbers – When filing a paper tax return carefully check the identification numbers — usually Social Security numbers — for each person listed. This includes you, your spouse, dependents and persons listed in relation to claims for the Child and Dependent Care Credit or Earned Income Tax Credit. Missing, incorrect or illegible Social Security Numbers can delay or reduce a tax refund.
  3. Double-Check Your Figures – If you are filing a paper return, you should double-check that you have correctly figured the refund or balance due.
  4. Check the Tax Tables – If you are filing using the Free File Fillable Forms or a paper return you should double-check that you have used the right figure from the tax table.
  5. Sign your form – Taxpayers must sign and date their returns. Both spouses must sign a joint return, even if only one had income. Anyone paid to prepare a return must also sign it.
  6. Mailing Your Return – Use the coded envelope included with your tax package to mail your return. If you did not receive an envelope, check the section called “Where Do You File?” in the tax instruction booklet.
  7. Mailing a Payment – People sending a payment should make the check out to “United States Treasury” and should enclose it with, but not attach it to the tax return or the Form 1040-V, Payment Voucher, if used. The check should include the taxpayer’s Social Security number, daytime phone number, the tax year and the type of form filed.
  8. Electronic Payments – Electronic payment options are convenient, safe and secure methods for paying taxes. You can authorize an electronic funds withdrawal, or use a credit card or a debit card. For more information on electronic payment options, visit IRS.gov.
  9. Extension to File – By the April due date, taxpayers should either file a return or request an extension of time to file. Remember, the extension of time to file is not an extension of time to pay.
  10. IRS.gov – Forms and publications and helpful information on a variety of tax subjects are available around the clock on the IRS Web site at IRS.gov.

Links:

  • Form 4868, Application for Extension of Time to File U.S. Individual Income Tax Return
  • Form 9465, Installment Agreement Request

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]]> http://www.dakinetaxes.com/2009/ten-last-minute-tax-filing-tips/feed/ 0 Top Seven Facts About the Tuition and Fees Deduction http://www.dakinetaxes.com/2009/top-ten-facts-about-the-tuition-and-fees-deduction/ http://www.dakinetaxes.com/2009/top-ten-facts-about-the-tuition-and-fees-deduction/#comments Wed, 25 Mar 2009 23:56:42 +0000 Admin http://www.dakinetaxes.com/?p=349 The Tuition and Fees deduction of up to $4,000 is available to help parents and students pay for post-secondary education. Below are ten important facts about this deduction every student and parent should know.

  1. You do not have to itemize to take the Tuition and Fees deduction. You claim a tuition and fees deduction by completing Form 8917 and submitting it with your Form 1040 or Form 1040A.
  2. You may be able to claim qualified tuition and fees expenses as either an adjustment to income, a Hope or Lifetime Learning credit, or – if applicable – as a business expense.
  3. You cannot take the tuition and fees deduction on your income tax return if your filing status is married filing separately.
  4. You cannot take the deduction if you are claimed, or can be claimed, as a dependent on someone else’s return.
  5. The deduction is reduced or eliminated if your modified adjusted gross income exceeds certain limits, based on your filing status.
    You cannot claim the tuition and fees deduction if you or anyone else claims the Hope or Lifetime Learning credit for the same student in the same year.
  6. If the educational expenses are also allowable as a business expense, the tuition and fees deduction may be claimed in conjunction with a business expense deduction, but the same expenses cannot be deducted twice.
  7. You cannot claim a deduction or credit based on expenses paid with tax-free scholarship, fellowship, grant, or education savings account funds such as a Coverdell education savings account, tax-free savings bond interest or employer-provided education assistance.
    The same rule applies to expenses you pay with a tax-exempt distribution from a qualified tuition plan, except that you can deduct qualified expenses you pay only with that part of the distribution that is a return of your contribution to the plan.

    8. IRS Publication 970, Tax Benefits for Education, can help eligible parents and students understand the special rules that apply and decide which tax break to claim. The publication is available below or by calling 800-TAX-FORM (800-829-3676).

    Links:

    Form 8863, Education Credits
    Publication 970, Tax Benefits for Education
    Form 8917,Tuition and Fees Deduction
    Tax Topic 605

    ]]> http://www.dakinetaxes.com/2009/top-ten-facts-about-the-tuition-and-fees-deduction/feed/ 0 Are Your Social Security Benefits Taxable? http://www.dakinetaxes.com/2009/are-your-social-security-benefits-taxable/ http://www.dakinetaxes.com/2009/are-your-social-security-benefits-taxable/#comments Fri, 27 Feb 2009 11:39:25 +0000 Admin http://www.dakinetaxes.com/?p=346 How much, if any, of your social security benefits are taxable depends on your total income and marital status. Generally, if social security benefits were your only income for 2008, your benefits are not taxable and you probably do not need to file a federal income tax return.

    If you received income from other sources, your benefits will not be taxed unless your modified adjusted gross income is more than the base amount for your filing status. Your taxable benefits and modified adjusted gross income are figured in a worksheet in the Form 1040A or Form 1040 Instruction booklet.

    Before you go to the instruction book, do the following quick computation to determine whether some of your benefits may be taxable:

    • First, add one–half of the total social security you received to all your other income, including any tax exempt interest and other exclusions from income.
    • Then, compare this total to the base amount for your filing status. If the total is more than your base amount, some of your benefits may be taxable.

    The 2008 base amounts are:

    • $32,000 for married couples filing jointly
    • $25,000 for single, head of household, qualifying widow/widower with a dependent child, or married individuals filing separately who did not live with their spouses at any time during the year
    • $0 for married persons filing separately who lived together during the year

    For additional information on the taxability of social security benefits, see IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits. Publication 915 is available below or by calling 800-TAX-FORM (800-829-3676).

    Links:
    Publication 915, Social Security and Equivalent Railroad Retirement Benefits

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    ]]>     http://www.dakinetaxes.com/2009/are-your-social-security-benefits-taxable/feed/ 0     Expanded Tax Break Available for 2009 First-Time Homebuyers http://www.dakinetaxes.com/2009/expanded-tax-break-available-for-2009-first-time-homebuyers/ http://www.dakinetaxes.com/2009/expanded-tax-break-available-for-2009-first-time-homebuyers/#comments Thu, 26 Feb 2009 23:29:02 +0000 Admin http://www.dakinetaxes.com/?p=344 WASHINGTON — The Internal Revenue Service announced today that taxpayers who qualify for the first-time homebuyer credit and purchase a home this year before Dec. 1 have a special option available for claiming the tax credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year.

    Qualifying taxpayers who buy a home this year before Dec. 1 can get up to $8,000, or $4,000 for married filing separately.

    “For first-time homebuyers this year, this special feature can put money in their pockets right now rather than waiting another year to claim the tax credit,” said IRS Commissioner Doug Shulman. “This important change gives qualifying homebuyers cash they do not have to pay back.”

    The IRS has posted a revised version of Form 5405, First-Time Homebuyer Credit, on IRS.gov. The revised form incorporates provisions from the American Recovery and Reinvestment Act of 2009. The instructions to the revised Form 5405 provide additional information on who can and cannot claim the credit, income limitations and repayment of the credit.

    This year, qualifying taxpayers who buy a home before Dec. 1, 2009, can claim the credit on either their 2008 or 2009 tax returns. They do not have to repay the credit, provided the home remains their main home for 36 months after the purchase date. They can claim 10 percent of the purchase price up to $8,000, or $4,000 for married individuals filing separately.

    The amount of the credit begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for joint filers.

    For purposes of the credit, you are considered to be a first-time homebuyer if you, and your spouse if you are married, did not own any other main home during the three-year period ending on the date of purchase.

    The IRS also alerted taxpayers that the new law does not affect people who purchased a home after April 8, 2008, and on or before Dec. 31, 2008. For these taxpayers who are claiming the credit on their 2008 tax returns, the maximum credit remains 10 percent of the purchase price, up to $7,500, or $3,750 for married individuals filing separately. In addition, the credit for these 2008 purchases must be repaid in 15 equal installments over 15 years, beginning with the 2010 tax year.

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    ]]>     http://www.dakinetaxes.com/2009/expanded-tax-break-available-for-2009-first-time-homebuyers/feed/ 0     Hawaii Easier General Excise Tax Form http://www.dakinetaxes.com/2009/hawaii-easier-general-excise-tax-form/ http://www.dakinetaxes.com/2009/hawaii-easier-general-excise-tax-form/#comments Thu, 01 Jan 2009 23:04:22 +0000 Admin http://www.dakinetaxes.com/?p=331 HONOLULU- The State Department of Taxation announced that starting January 5,
    2009, taxpayers will find it easier to complete the General Excise (GE) periodic tax return
    Form G-45 electronically or to use the web-fillable version of this form. Both new versions
    will perform math calculations for the taxpayer. Taxpayers only need to fill in the
    necessary information and the program will automatically perform the calculations. This
    new feature eliminates more than 90 percent of the errors made by taxpayers, is simple,
    and is free.

    To file the Form G-45 electronically, go to www.hawaii.gov/tax and click on
    “E-Services.” Unless already registered, users will need to register by clicking on
    “Register to E-file”. Some additional benefits gained from filing electronically
    include: the G-45 is filed immediately; immediate confirmation that the tax return
    was filed; the ability to view filing history; calculation of late penalty and interest
    for late filings; 24/7 tax return filing, with live assistance from 7:45 a.m. to 4:15
    p.m. Monday thru Friday (excluding State holidays); and the site is secure.
    o Taxpayers may also pay their GE taxes using an electronic check at no
    cost. Taxpayers using a credit/debit card will be assessed a credit/debit
    card processing fee.

    To complete the web-fillable Form G-45, go to www.hawaii.gov/tax and click on
    “Forms.” Next click on “Alphabetical List.” Next click on “G.” Scroll down to the
    Form G-45 entry and click on “General Excise / Use Tax Return (Rev. 2008 –
    Calculated).” For instructions on how to use this fillable form, click on the green
    “Help” button in the upper right corner of the form. After printing, mail the
    completed forms to the State Department of Taxation, P. O. Box 1425, Honolulu,
    HI 96806-1425.

    Reminder: taxpayers will no longer receive their GE tax booklets in the mail
    automatically as in previous years and are encouraged to use the Tax Department’s online
    services. However, for those taxpayers who do not have computers or prefer not to
    use on-line services, GE tax booklets may still be ordered by calling 808-587-4242 or
    toll free at 1-800-222-3229.

    ####

    For more information contact:
    Sandi Yahiro
    Deputy Director of Taxation
    Phone: (808) 587-1540

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    ]]>     http://www.dakinetaxes.com/2009/hawaii-easier-general-excise-tax-form/feed/ 0     Education Savings Bond Exclusion http://www.dakinetaxes.com/2008/education-savings-bond-exclusion/ http://www.dakinetaxes.com/2008/education-savings-bond-exclusion/#comments Tue, 23 Dec 2008 21:32:44 +0000 Admin http://www.dakinetaxes.com/?p=286 For 2008, the amount of your interest exclusion is phased out (gradually reduced) if your filing status is married filing jointly or qualifying widow(er) and your modified adjusted gross income (MAGI) is between $100,650 and $130,650. You cannot take the deduction if your MAGI is $130,650 or more.

    For all other filing statuses, your interest exclusion is phased out if your MAGI is between $67,100 and $82,100. You cannot take a deduction if your MAGI is $82,100 or more.

    ]]>     http://www.dakinetaxes.com/2008/education-savings-bond-exclusion/feed/ 0     Hope and Lifetime Learning Credits http://www.dakinetaxes.com/2008/hope-and-lifetime-learning-credits/ http://www.dakinetaxes.com/2008/hope-and-lifetime-learning-credits/#comments Tue, 23 Dec 2008 20:56:39 +0000 Admin http://www.dakinetaxes.com/?p=282 Beginning in 2008, the following changes apply to the Hope and lifetime learning (education) credits.

    Income limits for credit reduction increased. For 2008, the amount of your Hope or lifetime learning credit is phased out (gradually reduced) if your modified adjusted gross income (MAGI) is between $48,000 and $58,000 ($96,000 and $116,000 if you file a joint return). You cannot claim an education credit if your MAGI is $58,000 or more ($116,000 or more if you file a joint return).

    Hope credit. Beginning in 2008, the amount of the Hope credit (per eligible student) is the sum of:

        100% of the first $1,200 ($2400 if a Midwestern disaster area student). of qualified education expenses you paid for the eligible student, and
        50% of the next $1,200 ($2400 if a Midwestern disaster area student). of qualified education expenses you paid for that student.

    The maximum amount of Hope credit you can claim in 2008 is $1,800 ($3600 if a Midwestern disaster area student) per student

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    ]]>     http://www.dakinetaxes.com/2008/hope-and-lifetime-learning-credits/feed/ 0     Student Loan Interest Deduction http://www.dakinetaxes.com/2008/student-loan-interest-deduction/ http://www.dakinetaxes.com/2008/student-loan-interest-deduction/#comments Tue, 23 Dec 2008 20:24:07 +0000 Admin http://www.dakinetaxes.com/?p=279 For 2008, the amount of the student loan interest deduction is phased out (gradually reduced) if your filing status is married filing jointly and your modified adjusted gross income (MAGI) is between $115,000 and $145,000. You cannot take the deduction if your MAGI is $145,000 or more.

    For all other filing statuses, your student loan interest deduction is phased out if MAGI is between $55,000 and $70,000. You cannot take a deduction if your MAGI is $70,000 or more.

    For more information, see chapter 4 in Publication 970, Tax Benefits for Education

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    ]]>     http://www.dakinetaxes.com/2008/student-loan-interest-deduction/feed/ 0     Tuition and Fees Deduction – New Form 8917 http://www.dakinetaxes.com/2008/tuition-and-fees-deduction-new-form-8917/ http://www.dakinetaxes.com/2008/tuition-and-fees-deduction-new-form-8917/#comments Tue, 23 Dec 2008 19:44:23 +0000 Admin http://www.dakinetaxes.com/?p=277 Beginning in 2007, in order to claim the tuition and fees deduction, you must complete Form 8917, Tuition and Fees Deduction, and file it with Form 1040 or Form 1040A. Previously, a worksheet was provided to help taxpayers figure the amount of the deduction.

    See Form 8917 and chapter 6 of Publication 970, Tax Benefits for Education, for more information about the tuition and fees deduction.

    Form 8917 – Tuition and Fees Deduction

    Publication 970 – Tax Benefits for Education

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    ]]>     http://www.dakinetaxes.com/2008/tuition-and-fees-deduction-new-form-8917/feed/ 0     Hawaii State Tax Dept to Assist Residents and Businesses Affected by Storms http://www.dakinetaxes.com/2008/hawaii-state-tax-dept-to-assist-residents-and-businesses-affected-by-storms/ http://www.dakinetaxes.com/2008/hawaii-state-tax-dept-to-assist-residents-and-businesses-affected-by-storms/#comments Tue, 23 Dec 2008 01:47:19 +0000 Admin http://www.dakinetaxes.com/?p=294 Hawaii State Tax Department To Assist Residents and
    Businesses Affected By Storms
    Filing extensions, penalty waivers to be considered on case-by-case basis

    In light of the heavy winds, rain and flooding this past week that have caused substantial damage to homes and businesses in the counties of Kaua‘i, Maui and the City and County of Honolulu, the state Department of Taxation is taking steps to assist taxpayers – both individuals and businesses – who may have difficulty meeting their state tax obligation as a result of the storm.

    The department will consider requests for extensions to file and pay taxes as well as for waivers of penalties and interest on a case-by-case basis for affected taxpayers. In addition, the department will also follow federal casualty loss provisions in the event of a Presidential declaration of a natural disaster.

    Taxpayers seeking an extension or waiver of penalties and interest should mark their return with “2008 O‘ahu/Kaua‘i/Maui Heavy Rains & Flood Relief” on the top center of the return.

    Taxpayers and tax practitioners seeking an extension or waiver whose addresses (on file with the department) are not within the areas directly affected, should also include a brief statement as to how the disaster adversely affected their ability to meet their tax obligations.

    Taxpayers whose Hawai‘i employer’s withholding tax returns are due December 15, 2008, and who, as a result of the rains and flooding cannot meet this due date, may file their returns and pay the tax due by January 15, 2009, without incurring any penalties or interest. No late filing penalty will be imposed for returns that are postmarked on or before January 15, 2009. This also applies to those who are required to file monthly and remit payments on a semi-weekly schedule (tax payments may be made when the return is filed).

    Employers who have employees at several locations in the state, including locations affected by the heavy winds, heavy rains and flooding, must file their returns on time, including payments for taxes due. However, if complete information from locations affected by the winds, rains and flooding is not available by the due date of the return, an amended return should be filed when the information becomes available.

    The department will also consider requests for extensions to file and pay other taxes and waivers of penalties and interest on a case-by-case basis. Each request should include a statement as to how the 2008 O‘ahu, Kaua‘i, or Maui heavy winds, rains and flooding adversely impacted the taxpayer.

    For purposes of the Hawai‘i Income Tax Law, a taxpayer may claim all of the casualty loss deductions as allowed by the Internal Revenue Code. Casualty losses on business property are deductible in full. The first $100 of the eligible unreimbursed casualty losses on non-business property is not deductible. The remaining loss is deductible to the extent it exceeds 10 percent of the taxpayer’s Hawai‘i adjusted gross income. Information on options available to taxpayers is posted on the department’s website (www.hawaii.gov/tax, Announcement No 2008-10).

    On Dec. 12, Governor Lingle signed a State Disaster Proclamation for the City and County of Honolulu and counties of Kaua‘i and Maui. Therefore, taxpayers may be eligible for a general excise tax exemption if they receive amounts under property and casualty insurance policies for damage or loss of inventory used in a trade or business located within the City & County of Honolulu or the affected portions of Kaua‘i or Maui.

    Tax forms and information are available on the department’s website at www.hawaii.gov/tax (Announcement No. 2008-10). Please call the Department’s Forms Request Line at 808-587-7572, or toll-free from the neighbor islands and continental U.S. at 1-800-222-7572 to request appropriate forms. Additional information is available by calling the Taxpayer Services Branch during business hours at 587-4242, or toll-free at 1-800-222-3229, or by e-mailing them at Taxpayer.Services@hawaii.gov.

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