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8/22/2017

A Return on Your Investment: Education Tax Credits & Deductions

For most, summer vacations have come to an end and school is now back in session. Whether you’ve sent your child off to school for the first time or bid them farewell as they enter into their senior year of college, some of the expenses you’ve gathered preparing them can be written off from your taxes.

Here are a few rules and credits from the IRS that you could take advantage around tax season.

Qualifying Educational Institutions


Schools that typically offer education beyond high school levels are eligible for tax deductions - these include your common vocational or post-secondary schools and accredited colleges or universities. You can confirm your school’s eligibility by asking the administration staff or searching through the U.S. Department of Education database of accreditation.

One Credit Per Student

The IRS imposes a limit of credits you can claim for each college student within your household, and each family can have a different situation. For example, if you’re claiming two or more students, you can’t write-off the same type of credit for both students - each one must be different for each student.

Deductible Expenses

Like many other tax deductions, the more you spend towards education, the more it subtracts from your owed tax amounts - these expenses are typically tuition, fees, and other related costs for qualifying students. Please check with the IRS for eligible expenses before racking up a tab - you might be surprised by which educational costs aren’t tax deductible.

Tuition and Fees Deduction

Deductions can be made during tax filing season for qualified tuition expenses and other related expenses that are paid for your education or the education of a spouse or dependent. No itemization is required for this deduction. Simply claim the deduction as an adjustment to your income when filing IRS Form 1040.
Other education benefits for education expenses include:
If your expenses qualify for both a business expense deduction as well as the tuition and fees deduction, you can only claim one deduction and not both.

Student Loan Interest Deduction

Student loan payments are never fun. But there is some good news if you do have one! Those that are required to make student loan payments can easily make a deduction for these costs each year. The first step is verifying if your loan qualifies for the deduction. A qualified student loan is one that was taken out solely to pay the expenses to attend a qualified institution of higher education. Student Loan Interest is considered to be any interest paid during the year on a qualified student loan, including required and voluntarily prepaid interest payments. Deductions for these loans can either be $2,500 or less or the amount of interest actually paid during the year can be claimed as an adjustment to your income, so no itemization of the deduction is needed.

Filing Extension

Be sure to take advantage of these credit and deductions and don’t forget to visit ExpressExtension.com to e-file a personal tax extension and get six months of extra time to file your income taxes. Download our FREE Express 4868 App for your iOS or Android device - e-file and get approved in minutes without even leaving your study session. Contact us with any questions at 803.514.5155, Monday through Friday from 9 a.m. to 6 p.m. EST or email us at your convenience with support@ExpressExtension.com.
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8/15/2017

Beneficial Tax Information for New Business Ventures

In the world that we live in today, entrepreneurship and starting your own business is a positive trend that has impacted society as a whole. Individuals all over the country have found ways to provide creative products and materials to consumers through a unique and new business. Although starting a business has its various challenges, the hopeful success achieved once it has started and taken off is the ultimate reward.

To help lay a form foundation for your business to build on, we’ve provided some important tax related areas that will help your business significantly in the long run.

Defining the Structure of Your Business

When starting a business, you must first determine what form of a business entity that you would like to establish, which will also determine which income tax return form you will have to file annually. There are five forms of businesses; the most common of these are the sole proprietorship, partnership, corporation, and S corporation. A Limited Liability Company (LLC), which is a business structure that is allowed by state statute, is another business structure that can be selected.  

Business Taxes

The four general types of business taxes are income tax, self-employment tax, employment tax and excise tax. The type of business you create normally executes what type of tax the business will have to pay. An extension for filing your business taxes can be granted by filing with ExpressExtension.

Employer Identification Number (EIN)

This ten digit number, also known as a Federal Tax Identification Number,  is extremely important for when it’s time to file your annual taxes and take care of anything that has a federal tax purpose attached to it.

Accounting Method

In order for a business to succeed, its finances must be consistent and in order. The accounting method for a business is a set of rules that is used to determine when to report income and expenses. The two most common accounting methods are the cash and accrual methods.

    • Cash Method - Reporting Income and Deducted Expenses for the year in which the taxpayer received or paid them.

    • Accrual Method - Taxpayers generally will report income and deduct expenses in the year that they earn or incur them. This method is still followed even if they receive the income or pay the expense in a later year.


So as you begin to lay the foundation for your new business, don’t forget to focus in on the little things that matter most and be sure to file your taxes each year to avoid issues with the IRS. ExpressExtension is always here to be of assistance and provide you with extension Form 7004 which grants you up to 6 months of additional time to file your taxes within minutes. For filing assistance or more information on the forms that we offer, feel free to give us a call at 803.514.5155 or email us at support@expressextension.com for any assistance you may need.

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8/10/2017

How To Handle Gambling Winnings and Losses


What happens in Vegas may not necessarily stay in Vegas, especially if taxes have anything to do with it. Did you know that it is required of taxpayers to report all gambling winnings as income? Yes, it is true, taxpayers must be able to itemize deductions to claim gambling losses on their tax return.


Gambling income is considered to be any money gained from winnings from the lottery, horse racing, and casinos. It also includes cash and non-cash prizes. The fair market value of these non-cash prizes such as cars or trips, must be reported to the IRS. Also, the payer of these winnings may issue a Form W-2G, Certain Gambling Winnings, to winning taxpayers based on the type of gambling as well as the amount they have won. The payer also sends a copy of the form to the IRS, so it is extremely important that you report these earnings as the IRS will already have them on file. Additionally, taxpayers should get a Form W-2G if the payer withholds income tax from their winnings.


One may ask, “Well how would I even report my winnings when I file?” The answer to that question is pretty easy. You would simply report all gambling winnings as income and list it in the “Other Income” section of your tax return. This will still need to be done even if the taxpayer doesn’t provide a Form W-2G.


Taxpayers are also able to deduct gambling losses on Schedule A (Itemized Deductions), but should keep in mind that you cannot deduct gambling losses that exceed your winnings. As always, it is beneficial to keep records of gambling wins and losses. Gambling receipts, statements and tickets should be kept or written in a gambling log or diary.


So whether you’re in Las Vegas having the time of your life or enjoying good times with family and friends at a local casino, or even “lucked up” with your recent lottery ticket purchase, be sure to take advantage of this info to avoid any problems with the IRS when it’s time to file your taxes. As always, ExpressExtension is here to assist you with any tax extensions that you may need. Whether it is personal, business or for an organization, we provide you with extra time to file your taxes correctly to stay in good standing with the IRS. Be sure to visit our website at www.expressextension.com to find out more about how great of a resource we can be to you!


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8/08/2017

Avoid Identity Theft With These Helpful Tips



Identity theft is considered to be the fraudulent acquisition and use of a person's private identifying information, usually for financial gain. In a tax-related identity theft situation, someone uses another person’s stolen Social Security number or Employer Identification Number to file a tax return to receive a fraudulent refund.  Most taxpayers don’t realize they have been a victim of identity theft until they file their tax returns and are then notified that someone has already used their social security number to file.

Although various government agencies, along with the IRS, have taken strategic measures to prevent and detect identity theft, there is still a large possibility that as a taxpayer someone could still take your identity prior to filing for your next tax return. Here are some ways to protect yourself against identity theft:

  1. Protect Your Personal & Financial Records - It is recommended that taxpayers not carry their Social Security card in their wallet or purse, but to only provide the number when necessary. Also utilize anti-spam or anti-virus software to protect personal information stored on computers and store personal documents in a small safe. Routinely change the passwords of your online accounts as well.

  1. Don’t Get Caught Up in Scams - Banks, credit card companies and IRS representatives are often impersonated by scammers attempting to steal personal information. Try your best to discern and avoid any fake communications. Remember, an IRS representative will not contact you threatening a lawsuit, arrest or demand any type of immediate payment.

  1. Report Tax-Related Identity Theft - If you find yourself being a victim of identity theft and unable to e-file your return due to your social security number already being used, this is what you should do:
    1. File your return by paper and pay any taxes owed. Also file a IRS Form 14039 (Identity Theft Affidavit).
    2. File a report with the Federal Trade Commission
    3. Contact the Social Security Administration at www.ssa.gov and search “Identity Theft” in the search box for more info.
    4. Contact financial institutions to report the alleged identity theft.
    5. Contact a credit bureau to have a fraud alert or credit freeze occur on the affected account.
  2. Letters from the IRS - Taxpayers may receive a letter from the IRS if the IRS identifies a suspicious tax return that was filed with the taxpayer’s stolen social security number. This letter will ask them to verify their identity by calling a special numbers or visiting an IRS Taxpayer Assistance Center.
  3. IP Pin - Taxpayers that are confirmed ID theft victims may have an “IP Pin” issued to them by the IRS. This pin is a unique six-digit number that the taxpayer will use to e-file their return. A new pin will be issued to the taxpayer each year to file with.

  1. Report Any Suspicious Activity - If you suspect or know of anyone that is committing tax fraud you can report them by clicking here.
Safety as a taxpayer is of utmost importance to us at ExpressExtension. To avoid scammers or even filing your annual return late, simply file a quick and easy extension with ExpressExtension and receive extra time to get those taxes filed. We’re always here to help so feel free to give us a call at 803.514.5155 or email us at support@expressextension.com for any assistance you may need.

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8/03/2017

Avoid IRS Scammers: 3 Ways the IRS Contacts Taxpayers

As technology continues to grow and become even more modernized, the threat of scammers still exists. Tax scammers contact taxpayers in an attempt to collect funds that they claim are owed to the IRS.  If you are unaware of the ways that IRS contacts taxpayers, you may be taken advantage of and become a victim of a sneaky tax scammer.

Luckily, we’ve done some research and found that there are only three ways of contact that the Internal Revenue Service uses. These methods of contact include:

  1. Mail - In most cases, the first point of contact from the IRS is normally by letter, which will be delivered by the U.S. Postal Service. It is very unlikely that the IRS will contact you via email, by text message, or even through social media channels.

  1. Phone Call - Based upon the severity of the situation at hand, IRS employees also known as IRS revenue officers, may contact you by phone. These officers work directly with taxpayers to educate them about options to resolve any delinquencies they may have as well as attempting to collect past due taxes and tax returns, while protecting the rights of the taxpayer. Other representatives from the IRS that may contact you are:
    1. IRS Revenue Agents or Tax Compliance Officers - these agents or officers may contact you to confirm an appointment or discuss items for a scheduled audit, in which you were notified about through a mailed notice.
    2. Private Debt Collectors - These collectors can call taxpayers for the collection of certain outstanding inactive tax liabilities after a taxpayer and their representative have received written notice.

  1. Physical Visits - Revenue Officers can make unannounced visits routinely to a taxpayer’s home or place of business to discuss delinquent tax returns, owed taxes, a business that has fallen behind on payroll tax deposits. Payment requests of taxes owed by the taxpayer will be made, but payment will never be requested to be paid to a source other than the US Treasury.  Other necessary visits may include:
    1. Audit - IRS Revenue Agents will usually visit a taxpayer or tax professional to conduct an audit after a notice has been mailed and/or a specific date and time has been designated to meet and discuss tax matters.
    2. Investigation - Criminal investigators, who are federal law enforcement agents may visit to conduct a necessary investigation but will demand any type of payment.

Whether it is a phone call or a physical visit, ALWAYS ask for credentials. Representatives of the IRS should be able to provide two official forms of credentials: 1) Pocket Commission [describes the specific authority & responsibilities of the authorized holder] and 2) Personal Identity Verification Credential [government-wide standard for secure and reliable forms of identification for federal employees and contractors].

All payments should be made to the U.S. Treasury and should never be paid with a preloaded debit card or wire transfer. Specific guidelines for tax payments can be found at https://www.irs.gov/payments. Also, IRS employees and contracts will never be hostile, demand payment without allowing taxpayers the opportunity to ask questions or appeal the amount, require a specific payment method, threaten with lawsuits, arrest, or deportation, or ask for credit/debit card numbers over the phone.

To avoid scammers or filing late, simply file a quick and easy extension with ExpressExtension and receive extra time to get those taxes filed. We’re always here to help so feel free to give us a call at 803.514.5155 or email us at support@expressextension.com for any assistance you may need.
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8/01/2017

Rack Up on Savings During This Year's Tax Free Weekend

Several states have their annual Tax Free Weekend holiday coming up soon. It’s during this time of year that many parents and guardians rack up on an abundance of school supplies to last their kids for the school year, or even other household items that you or your family can utilize.


We’ve gathered some tips for shoppers across the country that may find themselves searching for great deals and savings this weekend or a soon to come tax free weekend.


Tax Free Weekend Shopping Tips

  1. Do Your Research - Find out what items are tax free in your state so you won’t be disappointed at the register during checkout. 
  2. Get organized before shopping - Take an inventory of what you already have and what you would need to get. The ultimate goal is to save money; so making unnecessary purchases defeats the overall purpose. 
  3. Make sure your tax free savings outweigh savings from other types of coupons
  4. Think about items that you would normally purchase in the near future and buy them during tax free weekend to save extra money. For example, holiday items and costumes can be bought now instead of during that season when prices are slightly elevated due to the demand for the product.
  5. Look over your receipt(s) in detail to ensure that you are receiving the proper tax savings and that you did not pay sales tax on exempt items. 
  6. Take advantage of any memberships that you have with stores like Sams Club, Office Depot, Staples, etc. 
  7. Know your prices. Don’t just buy something because it is tax-free. Some places will raise prices during tax-free weekend to make extra money. Be sure the deal that you’re getting is really a deal. 
  8. Save your receipts just in case you need to return something or to see how much money you saved throughout the weekend. 
  9. Shop at both local and major stores. A lot of shoppers will be crowding major stores, outlet malls, and traditional malls, however, some of the best deals can be found at smaller, local shops. 
  10. The last tip is so important we had reiterate it again. Make a list and stick to the list. Impulse buying causes most shopper to bust their budget and throw away all of the savings they expected to get.
We hope that these shopping tips will help you save even more bucks while shopping. Feel free to share this blog with your friends and spread the “summer savings joy!” Also, be sure to keep your receipts as some purchases that you make can be deducted when filing your taxes. As always, ExpressExtension is here to assist you with any tax extensions that you may need. Whether it is personal, business or for an organization, we provide you with extra time to file your taxes correctly to stay in good standing with the IRS. Be sure to visit our website at www.expressextension.com to find out more about how great of a resource we can be to you!
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7/28/2017

Tax Deductions 101: Save on Tuition, Fees, and Student Loan Interest

Summer break is quickly passing us by and before you know it, it will be time to send the kids back to school or even return to school yourself to complete your higher education journey. Tuition and other expenses associated with obtaining a degree or diploma can become costly. Luckily, if you meet certain requirements, you can deduct some of these expenses when filing your taxes annually.

Tuition and Fees Deduction

Deductions can be made during tax filing season for qualified tuition expenses and other related expenses that are paid for your education or the education of a spouse or dependent. No itemization is required for this deduction. Simply claim the deduction as an adjustment to your income when filing IRS Form 1040.

Other education benefits for education expenses include:

If your expenses qualify for both a business expense deduction as well as the tuition and fees deduction, you can only claim one deduction and not both.

Tuition and Fees Deduction Requirements

The Tuition and Fees Deduction can NOT be taken if one of the following occurs:
    • Your filing status is married filing separately
    • You can be claimed as a dependent on someone else’s return
    • Your modified Adjusted Gross Income exceeds certain limits
    • You claim the American opportunity tax credit or Lifetime Learning Credit for the same student in the same tax year
    • You or your spouse were a nonresident alien for any part of the tax year.
    • Expenses were paid with tax-free scholarships, grants, or education savings account funds, tax-free savings bond interest, or employer-provided education assistance.

Student Loan Interest Deduction

Student loan payments are never fun. But there is some good news if you do have one! Those that are required to make student loan payments can easily make a deduction for these costs each year. The first step is verifying if your loan qualifies for the deduction. A qualified student loan is one that was taken out solely to pay the expenses to attend a qualified institution of higher education. Student Loan Interest is considered to be any interest paid during the year on a qualified student loan, including required and voluntarily prepaid interest payments. Deductions for these loans can either be $2,500 or less or the amount of interest actually paid during the year can be claimed as an adjustment to your income, so no itemization of the deduction is needed.

Student Loan Interest Deduction Requirements

In order for the deduction to be claimed, you must meet the following requirements:
  • Paid interest on a qualified student loan in the current tax year
  • Are legally obligated to pay interest on a qualified student loan
  • Filing status is not “married filing separately”
  • Modified Adjusted Gross Income is less than a specified amount that is set annually
  • You or your spouse, if filing jointly, can’t be claimed as dependents on someone else’s return.
  • Those that paid $600 or more of interest on a qualified student loan during the year will receive a Form 1098-E (Student Loan Interest Statement) from the entity to which the student loan interest was paid. Keep this form and use the information listed on it when filing.

As you prepare to continue furthering your education, be sure you take advantage of these great deductions when filing. As always, ExpressExtension is here to provide you with any automatic filing extensions that you may need when that hectic time of year comes around. Feel free to contact us if you have any questions or need assistance with filing. We are available Monday - Friday from 9AM to 6PM EST at 803.514.5155. Live chat and 24/7 email support is also available at support@expressextension.com. We look forward to assisting you!
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7/25/2017

Be Good Friends with “Uncle Sam” and Eliminate Tax Surprises


Benjamin Franklin once said “If you fail to plan, you are planning to fail.” This phrase can be applied to various aspects of life, especially when it comes to filing your taxes. Taxpayers who are employed must pay federal income taxes each year. If you don’t pay these taxes, you and “Uncle Sam” probably won’t be the best of friends!

Most employers withhold taxes from the wages of their workers to stay in compliance with Federal Income Tax regulations, which operates on a “pay-as-you-go” system. Each pay period you should see a deduction from your paycheck that will cover these taxes. If not, you may have to pay a lump sum of money back when you file. There are also other sources of income that are usually taxed which include pensions, bonuses, commissions and gambling winnings.

For those that do not have taxes withheld, like self-employed individuals, they generally have to pay what is known as an “estimated tax, which can be paid off quarterly or in one lump sum during tax filing season.  Other income such as capital gains, dividends, interest, rent and royalties are usually required to make estimated tax payments as well.

Also, did you know that major life events could affect your taxes as well?
We’ll talk about how your taxes can be impacted significantly a little later.

Avoid Tax-Time Surprises

Here’s a “heads up” on ways to eliminate any last minute surprises when it’s time to file your taxes:

  • New Job: New employees must complete a Form W-4 (Employee's Withholding Allowance Certificate) when starting a new job. This form is used by employers to determine how much federal income to withhold from your regular pay, bonuses, commissions and vacation allowances. The IRS Withholding Calculator is a great tool for taxpayers to use to figure out how much tax to withhold.

  • Estimated Tax: If a taxpayer has income that is not subject to withholding or is expecting to owe $1,000 or more than taxes withheld from their wages may need to make estimated tax payments to avoid penalties.

  • Life Events: Major life events such as a change in marital status, the birth of a child or the purchase of a new home can alter the amount of taxes a taxpayer owes. The IRS actually provides detailed information for various major life events that you can gain more specific information from regarding your taxes.
  • See Managing Your Taxes After a Life Event.

By taking these precautionary measures you will be able to keep calm during tax season! If you need some extra time to gather everything you need to file, there’s no need to worry. ExpressExtension is here to provide you with an automatic filing extension of up to 7 months for your business, personal, or exempt organization extension within minutes.

Contact us if you have any questions or need assistance with filing. Our U.S. based customer support team is available Monday - Friday from 9 AM to 6 PM EST at 803.514.5155. We also offer live chat and 24/7 email support at support@expressextension.com.
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7/21/2017

What To Do When You Receive a Notice From the IRS

IRS Letter.jpgMillions of letters and notices from the IRS are mailed to taxpayers every year. While the initial reaction to opening your mailbox and seeing a letter from the IRS may be that of a shocking or nervous state, all letters from the IRS are not detrimental with many being able to resolve easily.


Here’s what you should do if you just so happen to receive that unexpected envelope in the mail:

The Next Steps 


  • BREATHE. Don’t panic when you see the letter; simply follow the instructions that are listed.


  • Read the letter thoroughly and determine why the IRS has contacted you. The notice that you receive usually will cover a specific issue about your tax return or account. Topics such as tax payments or notifying you of a change to your account can also be covered as well.  


  • Notices regarding a correction to your tax return should be reviewed carefully and most likely will need to be compared to the information that was entered on your tax return.
    • A reply to an IRS notice is usually not necessary if you agree with the correction. However, if payment is due, you need to respond.


    • If you are not in agreeance to a correction that the IRS has made, it is very important that you respond as soon as possible in writing. In your response, be sure to include any documentation and information that you would like for the IRS to take into consideration.
  • Correspond with the IRS properly
    • If you decide to respond to the IRS in writing there are a few things you should do while corresponding:
      • Attach the bottom tear-off portion of the IRS notice to your response
      • Mail the information to the IRS address provided in the lower left corner of the notice.
      • Allow at least one month (30 days) for the IRS to respond.
  • Be prepared and organized if you decide to call the IRS
    • The number to contact the IRS will be listed in the upper right corner of the notice that you received. To receive a direct answer to your question(s), review both the IRS notice and your tax return carefully prior to calling.
  • Keep copies of any and all correspondence that will coincide with your tax records.


Receiving a notice from the IRS can always be avoided if you file your return correctly before the annual tax deadline. At ExpressExtension we understand that tax filing can be a little time consuming and that you may need some time to gather all of your information to file properly. With ExpressExtension.com, you can e-file a business, personal, or exempt organization tax extension to get up to six months of additional filing time within minutes.

If you have questions or need assistance with filing please don’t hesitate to contact our US based support team. We’re available Monday - Friday from 9 AM to 6 PM EST at 803.514.5155. We also offer live chat and 24/7 email support at support@expressextension.com.

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