Blog archives for September, 2011

In US, a common way of collecting income is to deduct it at source, in which case it would be labelled TDS (Tax Deducted at Source). There are at least three types of certificates for this process, and two of them are labelled as Form 16s (one is actually a Form 16A). The first form is issued in the case of salaries while the second is issued in the case of TDS on non-salary amounts.

Form 16, the certificate for salary TDS, basically lists what tax deductions have been and from what net salary. It is also normal for the form to hold a list of all other relevant deductions to a persons income, so a filled-out Form 16 shall usually include deductions for the HRA or House Rent Allowance, taxes imposed by the state per-professional, conveyance allowance, and so on. You may also find information on the bank branch where the deductions have been transferred to the governments accounts. In short then, Form 16 is a compilation of details for the taxes that have been deducted from your salary in favour of the government. Take note that you do not get issued a Form 16 if you have no TDS. The usual procedure is for employers to provide this form to their employees once it becomes necessary or TDS is applicable, although copies of Form 16 may also be found online.

The other Form 16, which is actually Form 16A, is also a certificate of tax deductions but to things other than your income. So, for instance, if you happen to win at the lottery or other legal form of gambling, you shall require a Form 16A because deductions shall be made to your winnings on behalf of the central government.
There are many items that may covered or affected by Form 16A. For example, Form 16A also covers deductions made to interest that you might have gained on securities, deductions from funds going into the National Savings Scheme, deductions on payments made to sports associations and sports members that are not USn residents, deductions made to fees for various professional services, deductions made to fees for various technical services, and so on. It is possible to check what else may be covered by Form 16A by consulting your local tax representative.

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Missing a W 2 form is not a good thing. It is important that prior to filing your income tax return, you should check if you have all the necessary documents. The two essential forms you should receive from your employers are your Wage & Tax statement as well as your W 2 form earnings statement. If you didnt receive these or you are missing your W 2, found below are the things you should do.

First and foremost, you need to contact your employer. You should ask him/them if the form was already sent and if it was sent already, when exactly did he/they send it. There is a chance that the mail was sent back to your employer due to incomplete or incorrect address. If this is the case, correct the problem and give then enough time to resend your W 2 form.

The second step to take, especially if you think youll be receiving your W 2 form late is to contact the IRS directly. They have an assistance hotline, 1-800-829-1040. When you call them, provide them the following information:

Your name
Your address, city& state with zipcode
Your SSN
Your phone number
Employers name
Employers address, city & state with zipcode
Employers phone number
The dates of employment
Your wage earned estimate, federal income tax withheld and the inclusive dates you worked for that employer on the tax year. Youre your estimate on the year-to-date information you have from your leave & earning statement or final pay stub.

The third step is to file your income tax return. If you think youll be late in filing, request for an extension. Even without the W 2 (granted that youve already contacted both your employer and IRS about the matter), you can use the 4852 form as a temporary substitute.

Next, if youll be using Form 4852 for your income tax return, you should attach it together with your estimating income and your withholding taxes. Since these will still undergo the verification process, there may be a delay in getting your refund due.

The last and final step to take is to file a 1040x form. Since theres a strong possibility youll get your missing W 2 form after filing your income tax return by using Form 4852, there are instances when you may find the information a bit different from what youve reported. When this happens, you need to amend your tax return right away. To do this, you need to file a 1040X form for Amended US Individual Income Tax Return.

These are simple steps to take if your W 2 is missing or late. If there are other concerns you have, make sure you contact the IRS to avoid complications.

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Form 706 of the IRS, also known as the US Estate Tax Return form, has to be filed under certain conditions. Since some parts of these conditions actually vary (being altered each year), you need to ask an IRS representative for advice. For example, US citizens are compelled to file this tax return if their gross estate, subsequent to the addition of any and all adjusted taxable gifts and specific tax exemptions, is over the filing requirement stipulated by the IRS for the applicable year. The filing requirement in 2004 and 2005 was $1,500,000 and it changed to $2,000,000 from the years 2006 through 2008, going up again in 2009 to $3,500,000. Obviously, you need to check with the IRS first what the filing requirement for this year is before you start filling out the form.

Now it is necessary to explain that there are further conditions on this. For example, adjusted taxable gifts means the sum or total of all such gifts the decedent (or you, if you are the one filing) has made after the year 1976 and which are not incorporated in the gross estate. As for the other element, the specific tax exemptions, the only gifts included are those made following September 8, 1976.

It is also necessary to note something here: some estates may not be taxable according to federal regulations but still taxable according to state law. There are in fact states where state tax laws require even those estates non-taxable at all levels (this means by both the federal and state level) to still file the form. There are a great many rules concerning the filing of this form, but one that may simplify the problem is this: even when the estate is not taxable, it may be better to still file the form anyway.

Filing Form 706 may be beneficial even to those who have estates that do not qualify as taxable on any level because filing it helps to set fair market values for the assets of the property upon the decedents death. Form 706, after all, requires fair market values to be listed. There are other benefits to filing the form despite not being required to do so by law, and you may want to get a copy of it yourself from the IRS website to peruse it. It may be one of the most responsible things you ever do for your family and yourself.

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