This tax season, you may want to do what millions of people do and hire a tax preparer to help you file your income tax return.

To choose the best professional to help you with your specific tax needs, there are several criteria that you should consider. When making this important decision, be sure to take the following factors into account:

Tax Preparation Experience

To ensure that you receive the proper assistance, never enlist a non-accountant friend to help. You need a qualified tax professional to help you avoid any costly mistakes on your return. The professional that you choose should have a Preparer Tax Identification Number. This is the federal requirement for professional tax return preparers.
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Because taxes can significantly impact the economy by changing the cash flow available to both individuals and businesses, a presidential candidate’s view on taxes has become an increasingly hot topic during the past several election seasons.

Each presidential candidate’s view on tax policy is different. Some candidates weigh heavily on the standpoint that tax money should be used to stimulate the economy, while others believe that taxes should be severely cut in order to stimulate the economy. Taking a look at the history of how the candidates voted on taxes – as well as the stances that they have taken – can give us a good idea as to how they’ll handle taxes if elected into office.
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Mitt Romney released his tax returns on January 24th, 2012. His 2010 earnings showed $21.7 million in income with an effective tax rate of just 14%. Newt Gingrich shared his tax return last week and his tax rate came in around 31%.

Why is Romney’s Tax Rate so low? Unlike Newt, Romney’s income mostly comes from dividends that are not taxed at the same rate as ordinary income; dividends are typically taxed at 15%. Romney’s tax rate was dropped more from charitable donations and other itemized deductions that he was able to claim. Many people take this lower tax rate out of context because they don’t understand that the capital gains income he’s receiving has already been taxed by the government before he received the income.
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Newt Gingrich shared his 2010 tax returns on his website on January 19th, 2012. Newt and his wife, Callista, filed a joint tax return with an adjusted gross income of $3.14 million. They paid a total of $994,708 in income taxes.

According to the tax returns, Callista was paid $191,827 in W-2 wages in 2010 and Newt received $2.5 million in K-1 profit from an S corp and an additional $250K in W-2 wages.
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The 2011 fiscal year tax season will mark more than two decades of the extremely popular and highly successful IRS e-file program. This year, there are more options than ever for the average American to settle up with the IRS in a fast, free, safe and secure manner by using IRS e-file. Since e-filing means filing a paperless tax return, it’s also better for the environment than filing the old fashioned way.

The IRS website provides a great deal of information about the four major ways to electronically file taxes. You can e-file your taxes using any of these options:
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As if Lindsay Lohan hasn’t had enough negative publicity lately, she has now been hit with an IRS tax lien. According to official documents filed in Los Angeles County, the actress failed to pay $93,701.57 in federal income taxes back in 2009.

Sources for Lohan told TMZ that the 25-year-old had no knowledge of her outstanding tax bill, as she assumed that her finances were being handled by her accountants.

Those sources also explained that the unpaid taxes may have been a result of the Mean Girls star’s recent overhaul of her business team, and made assurances that the issue would be resolved immediately.

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Record producer, songwriter and rapper Jermaine Dupri (also known as “JD”) has finally paid off his back taxes from 2007 – but at a cost nearly twice the amount of the initial tax lien filed against him, according to TMZ.

JD’s original tax bill totaled $254,782.64. However, Georgia records show that late fees, penalties and interest – including $91,721.75 in associated interest, $64,969.57 in penalties, a $82,294.79 collection fee, and $50 in miscellaneous fees – were added to the principle amount owed, creating a new grand total of $493,818.75.
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If you are a small business owner who pays independent contractors, service providers and other individuals for freelance or contract work, you are required to issue IRS Form 1099. These forms are sent to any individuals who you’ve made payments to in order to be used in their own tax filing.

The information on Form 1099 is also reported to the IRS so that the information can be matched to the individual’s tax return and ensure that the income is being reported properly. If you don’t issue 1099s, you will pay noncompliance penalties to the IRS.

Who Needs a 1099-MISC Form?

While there is more than one type of 1099 form – since it is used for a wide variety of transaction reporting – small business owners generally use the 1099-MISC form to report payments made to non-employees doing work for them.

The guidelines for who must receive a 1099-MISC form are as follows:

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The tax deadline to file your 2011 tax return is April 17, 2012. If you are unable to file your return by the due date, in most cases you will want to file for an automatic tax extension.

Here is a look at all that you need to know about filing for a tax extension, along with any special filing circumstances that you may qualify for:

What is a Tax Extension?

A tax extension buys you extra time to prepare and file your tax return. When you file for an extension, it is typical for the the IRS to automatically grant you an additional six months to file your return. If you file for a tax extension for the 2011 tax year, your new due date will be October 15, 2012.
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There is generally some confusion as to how bonus income is taxed, and many people mistakenly believe that the bonus they receive from their employer during the holiday season is either taxed at a higher rate than regular income or it could bump them into a higher tax bracket, resulting in their being subject to a higher tax rate on their total income for the year.

Bonus Income is the Same as Regular Income

As far as the IRS is concerned, bonus income is the same as your regular income. Any bonus income that you receive is added to your W-2 income, and is calculated in the total income you report to the IRS on your federal tax return forms. Employers often treat bonus income differently in terms of how they withhold taxes from the payment – which is why some people have the mistaken believe that a bonus will increase their taxes.

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