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Answers To Frequently Asked Questions:

Q: What should I do if I am unable to file my return by the due date?
A: You must file Form 4868, Application for Automatic Extension of time to File U.S. Individual Tax Return, by the due date of the return had it been filed timely. If you anticipate owing taxes then that amount should be paid at the time the extension is filed.

Q: How much can I contribute to a traditional IRA?
A: For 2009, the maximum that can be contributed is based on the smaller of: - $5,000 ($6,000 if you are age 50 or older), or - Your taxable compensation for the year.

Q: When is the deadline for contributing to a traditional IRA?
A: You have until the due date of the return, not including any extension of time to file?

Q: How much additional income can I earn before all or a portion of my social security is taxable?
A: The taxability of your social security benefit is based on the total of one-half of your social security benefit plus any taxable pensions, wages, interest, dividends and other taxable income. Also included is tax-exempt interest. This total is subject to certain limitations based on your filing status.
$25,000 - Single, Head of Household, Qualified Widower, Married filing separately
$32,000 - Married filing joint
$0 - Married filing separately and lived with your spouse anytime during 2009

Q: Do I have to pay taxes on freelance income?
A: All income you get, no matter from what source, must be reported to the IRS. However, your expenses for earning this income may be deductible.

Q: Am I eligible for the Earned Income Tax Credit? (EIC)?
A: The Earned Income Credit is available based on your earned income and the number of dependents. Please check on the news page on this website and read our Internal Revenue Tax changes for tax year 2009 for more information.

Q: Can I claim a deduction for giving to charity at the grocery store?
A: Yes. But the IRS requires that you have receipts for all charitable deductions you claim. You may not be able to support your claim for the dollars and pennies you drop in the jars on the store counter.

Q: Do I have any deduction from the amount I received when I sold my house?
A: If you sell your personal residence and you are single, you may be entitled to deduct up to $250,000 from the gain on that sale. If you are married and are filing together, you may be able to deduct $500,000 from that gain.

Q: Who is a dependent for tax purposes?
A: A dependent is anyone living with you and for whose care you have paid more than half for the year.. There are certain exceptions. It is best to consult a tax advisor.

Q: How do I handle my taxes when I rent rooms to tenants in the house where I live?
A: All the rent you collect must be reported as income. All the expenses you spend for the upkeep of those rooms are deductible. These include allocated expenses such as depreciation and insurance. It is best that you consult a tax advisor.

Q: How will the AMT affect me?
A: Congress raised the Alternative Minimum Tax exemption to $70,950 for a married couple filing jointly; to $46,700 for singles and heads of households. IRS Form 6251 and the AMT calculator provide more information. This is a complex area of the tax code. It is best to consult your advisor.

Q: Should I pay a fee to get my refund earlier than from the IRS?
A: The fee you pay in this instance is for a Refund Anticipation Loan (RAL). We suggest you file your return electronically. You should receive your refund within ten (10) days. The fee you pay is far higher than the highest interest rate you pay on any credit card. It has been estimated that you sometimes pay at a rate of more than 300 per cent interest per annum. In our view, it is, therefore, not worth it.

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.