Most of us don’t think about that, but those taxes may tap into our wallets nonetheless. Here are just a few.

1.  Sales Tax - Unless you live in a state that has no sales tax, you pay this one every day on most of the things you buy. Even goods purchased online are increasingly subject to sales tax.

2.  Sin Tax – Oh wow, there’s a tax on sinners? Well, sort of. The two major taxes dubbed “sin taxes” are alcohol tax and cigarette tax. Every time you take a drink or light up, you are paying a tax that is hidden in the cost of the cigarettes and alcohol you buy. The tax is meant to deter people from indulging in these habits and to help the government pay for the cost of illnesses caused by smoking and alcoholism.

3.  Social Security Tax and Medicare Tax - If you are employed, these taxes are taken out of each of your paycheck, so most people don’t really notice them. If you’re self-employed, these taxes show up on your tax return as self-employment tax.

4.  Telephone Tax -  Did you ever have to pay a luxury tax when you played Monopoly ? The telephone tax is one of those taxes, though telephones have now become a necessity, not a luxury. Originally imposed on landline telephones, it now applies to cell phones as well. And if you have cable television, you’ll find special taxes on your cable bill as well.

5.  Gas Tax - As if gasoline prices weren’t high enough on their own, the state and federal government build in an average of 49 cents per gallon into the price of each gallon. Next time you are filling up, check out the sticker on the pump that lists what makes up the cost of each gallon – you’ll be amazed.

6.  Utility Tax - Check your utility bills for various taxes imposed on gas, water and electricity. That will make you remember to turn out the lights each time you leave the room.

Knowing about these taxes may help you take control of your spending habits and cut down some of your expenses to reduce some of these unknown taxes.

The IRS announced that it will provide penalty relief to taxpayers impacted by the storms who were not able to file or pay taxes due until after the April 15th tax deadline.

If you were impacted by the storms, you may qualify for relief of the late-filing penalty of 5% per month and the late-payment penalty of 0.5 percent per month as long as there is reasonable cause and you file your tax return or pay the taxes due within a reasonable time after the power outages and transportation problems are resolved.

If you receive a penalty notice from the IRS and you were impacted by the storms, the IRS will remove the late-filing and late-payment penalty.

Don’t forget, if you suffer a casualty loss from a federally declared disaster, you may be able to deduct the casualty loss on your tax return for the previous tax year or amended tax return for the preceding year.

In the wake of the tragic bombings that occurred in Boston on Monday, April 15, the IRS announced today a three-month tax filing and payment extension to provide relief to Boston-area taxpayers and others affected by Monday’s explosions.

The relief will give eligible taxpayers until July 15, 2013 to file their 2012 tax returns and pay taxes that were due on April 15th without incurring filing and payment penalties.  Interest penalties, however, will still apply to any payments made after the April 15 tax deadline.

Who is Eligible for Relief?

The relief applies to individual taxpayers who live in Suffolk County, Massachusetts, including the city of Boston.  In addition, victims, their families, first responders, taxpayers whose tax preparers were affected, and individuals living outside Suffolk County who were impacted will be eligible for relief.

How Do You Get an Extension?

If you live in Suffolk County, the IRS will automatically provide you an extension and no further action is necessary.  If you live outside Suffolk County, you can call the IRS beginning Tuesday, April 23 at 1-866-562-5227 to claim relief.

If eligible, you may also receive an additional extension, to October 15, as long as you file extension Form 4868 by July 15, 2013.

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The IRS began accepting the last group of forms impacted by late tax legislation today, Monday, March 4.

This includes:

• Residential Energy Credit(Form 5695) – This tax credit may save you up to $500 if you purchased energy efficient windows, doors, roofs, and insulation.
• Mortgage Interest Credit (Form 8396) –  Lower income individuals may receive an additional tax credit for part of their home mortgage interest paid.

Most of the other forms are related to business tax credits or tax credits and deductions that impact more complex tax returns.  For a complete list of forms please see the IRS list of forms.

Have any of the forms mentioned?  If you do, don’t worry.  TurboTax is up to date with all tax law changes, so you can file today and feel confident that you will get every tax deduction and credit you deserve.

The IRS began accepting tax returns for the vast majority of taxpayers on January 30. As of today, March 4, the IRS began accepting and processing all 2012 tax returns..

Have a question?  Only TurboTax lets you talk to CPAs, IRS enrolled agents, and tax attorneys while you prepare your taxes, free.

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The IRS announced today that on February 14, they will begin processing tax returns that contain form 8863 with Education Credits.  Form 8863 is used to claim two higher education credits — the American Opportunity Tax Credit and the Lifetime Learning Credit.

They also announced that on February 10, they will begin processing tax returns that contain Form 4562, Depreciation and Amortization.

The IRS will begin accepting all other tax forms that are not yet being accepted due to late tax law changes the first week in March.  We will update the blog with the exact date as soon as the IRS announces what date that will be. Not sure if your file one of these forms?  Here is the full list of the forms that will be accepted the first week of March.

TurboTax is up to date with all tax law changes, so you can file today and feel confident that your will get every deduction and credit you deserve.  And remember, if you have any questions, only TurboTax lets you talk to CPAs, enrolled agents and tax attorneys as often as you like while you prepare your return, free.

You can read the IRS full announcement here.

Updated February 8, 2013

The IRS opened its doors today, officially kicking off the tax season!

With 80 percent of taxpayers getting a tax refund and the average federal tax refund last year topping $2,700, there is no reason to wait to file.

But what if you have questions?  Just give us a call or chat with us – our experienced TurboTax tax professionals are here for you. Only TurboTax lets you talk to CPAs, enrolled agents and tax attorneys while you prepare your return, free. We’ll even help you get started and we’re there when you need it

To help you get started, our tax experts can answer some of your most commonly asked questions:

How does the fiscal cliff or recent tax law changes affect my taxes?

Don’t worry!  Recent changes to the tax law will not impact the vast majority of people’s tax refunds for 2012. This is because Congress extended all of the existing, family-friendly provisions.

You can still claim the Earned Income Tax Credit, Child Care Credit, Teachers Deduction and more!

IRS Update:  The IRS announced today that they are now able to process tax returns that contain form 8863 with Education Credits beginning February 14^th.  Form 8863 is used to claim two higher education credits — the American Opportunity Tax Credit and the Lifetime Learning Credit.

The IRS has also announced that on February 10^th, they will begin processing tax returns that contain Form 4562, Depreciation and Amortization

Please read the full IRS announcement here.

Will the new healthcare reform changes impact my 2012 taxes?

Good news!  The requirement to purchase health insurance does not impact your 2012 or 2013 tax returns. You should know that your 2012 tax return will help determine your eligibility for an insurance subsidy from the government, which will kick in for 2014.

Who can I claim as a dependent?

This is one of our most frequently asked questions. Taxpayers may be surprised to find out that their boyfriend, grandmother or adult child may qualify as a dependent.

Are there tax deductions available for students in college?

The U.S. government provides incentives, in the form of education tax credits and deductions, to help decrease the costs of pursuing a college education. If you paid eligible education expenses for you, your spouse, or your dependent, you may qualify for one of these tax benefits.  In fact, this could be as much as a $4,000 deduction!

Still have questions?  Don’t worry.  We’re here for you to help you get your maximum refund possible and so you can be confident you’re taxes are done right.

Good News for your Valentine’s day and your tax refund!  The IRS announced today that they are now able to process tax returns that contain form 8863 with Education Credits beginning February 14^th.  Form 8863 is used to claim two higher education credits — the American Opportunity Tax Credit and the Lifetime Learning Credit.

Read the full IRS update

The IRS announced today that they will not be able to process tax returns with Form 8863 until mid-February.  This is a delay that will impact all tax preparation methods.

What is Form 8863?

Form 8863 is the form that is used to claim the American Opportunity Credit and the Lifetime Learning Credit.

American Opportunity Credit:  The American Opportunity Tax Credit is offered to students who pay qualified tuition (and aren’t claimed as dependents elsewhere), as well as to parents who pay expenses for their dependent students or themselves.  This tax credit allows you to claim up to $2,500 per student. The full credit is available for individuals with a MAGI(Modified Adjusted Gross Income) of $80,000 or less, $160,000 for married filing jointly. It is 40% refundable, meaning that you can get up to $1,000 back even if you don’t owe taxes.

Lifetime Learning Credit:  The Lifetime Learning Credit a perk available to you if you paid qualified college expenses.  Rather than limiting your ability to get tax credits for education expenses for the first four years of college, it’s possible to use the Lifetime Learning Credit to offset your expenses even in graduate or professional school. As long as the educational institution is qualified, undergraduate or beyond, you can qualify for up to $2,000 in tax credits for your expenses. It’s figured on 20% of your tuition and fees, up to the first $10,000. There is a phase out as you reach certain income levels. Parents can claim this for dependent students.

Can I still File?

Yes!!!  TurboTax is up to date with all the latest tax law changes, including changes to the American Opportunity Credit and Lifetime Learning Credit, so you can be confident that you are getting every deduction and credit you deserve on your tax return.  We recommend that you file now with TurboTax, so you will be at the front of the line for your refund when the IRS begins to process these returns. Returns will be submitted on a first in, first out basis.  For the fastest refund possible, make sure you e-file and select direct deposit.

Last year, the IRS issued  9 out of 10 refunds in 21 days or less  and expects the same results this year.  Once your return is accepted by the IRS, you can track the status of your return you can login in to your MyTurboTax account at anytime.

The IRS anticipates that it will be able to process tax returns for about 120 million taxpayers, including those affected by AMT, the educator expense deduction, the higher education tuition and fees deduction and the state and local sales tax deduction.

Even though the IRS does not anticipate any tax refund delays due to the week slip in accepting refunds, there are some simple steps you can take to make sure you get your tax refund back as quickly as possible:

1.  File Now!  Don’t wait!

•      TurboTax is up-to-date with all recent tax law changes and has been accepting e-filed tax returns since January.

•    TurboTax will hold and securely submit your tax return to the IRS on a first-in, first-out basis. So filing now puts you first in line for your tax refund.

2.  E-file and Use Direct Deposit

•   E-file and direct deposit are the fastest way to get your tax refund.

•  The IRS does not anticipate any associated tax refund delays once processing begins on January 30. The IRS expects to issue 9 out of 10 tax refunds in 21 days or less.

• The IRS will not process paper returns before January 30.

3.  Get Expert Answers to Your Tax Questions

•     Taxpayers wondering how recent tax law changes may impact their taxes can contact TurboTax tax experts, who are available year round to answer taxpayer questions, free.

•   Only TurboTax lets taxpayers talk to certified public accountants, Internal Revenue Service enrolled agents or tax attorneys as often as they like while they’re preparing their tax return, free.

According to IRS, taxpayers claiming the residential energy credit and businesses claiming depreciation and amortization and general business credit will be able to file tax returns in late February or early March due to additional forms and processing requirements.

There’s no need to wait to file your tax return. Get started now to get a jump on your tax refund.

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The act includes a permanent patch of the Alternative Minimum Tax (AMT), the permanent reduction of tax rates, and reinstating various tax deductions such as the Educator Expense Deduction, the Tuition and Fees Deduction, state sales taxes in lieu of state income taxes, among others.

Now, are you asking yourself, “What does this mean for me?”  You are certainly not alone.  Here is a quick snapshot of what this could financially mean to you and your family in 2013.

The Alternative Minimum Tax (AMT): The AMT patch was permanently extended, which means 34 million middle-income families can celebrate the New Year with an average of $3,700 back in their pockets.  Under current law, the AMT typically hits taxpayers who have a household income of over $75K and are married with more than two kids.

The Tax Extenders: The “Tax Extenders” refer to a broad set of temporary tax laws.  Here are just a few of the tax deductions and credits that were included in this “Tax Extenders” package:

•    The Educator Expense Deduction– If you are a teacher, you can claim up to $250 of classroom expenses for supplies, materials, books and software.

•    Tuition and Fees Deduction – College students or parents can once again deduct education expenses related to schooling, including tuition, books and other supplies, up to $4,000.

•    Mortgage Debt Relief – Previously, taxpayers who have mortgage debt canceled or forgiven after 2012 may be required to pay taxes on that amount.  Under the new law, up to $2 million of forgiven debt is eligible to be excluded from income in 2013.

•   Energy Tax Breaks – Homeowners who made energy efficient improvements to their homes in 2012 will still be able to claim the Residential Energy Property Credit. This credit could mean as much as $500.

Reduction in Individual Income Tax Rates:  98% of Americans will continue to see lower tax rates as a result of the permanently extended Bush Tax Cuts, keeping more money in their pocket.  Tax rates will remain at 10%, 25%, 28%, and 33% on incomes below $400,000 if single ($450,000 married filing jointly). The top rate goes from 35% to 39.6% only for the highest earners. Dividends and capital gains top tax rate goes to 20% from 15% for those with income above $400,000 ($450,000 if filing jointly).

Tax Relief for Families and Children

•       Child Tax Credit:  You will continue to be able to qualify for a $1,000 tax credit for each dependent child you are able to claim under the age of 17.

•      Earned Income Tax Credit (EITC):  If you have three children and are married you can still receive a maximum tax credit worth over $5,700.

•      Dependent Care Credit:  Increased dependent care credits remain in place that allow you to claim up to $2,100 of your eligible dependent care cost for two or more children.

•      Commuter Transit Tax Provision: Average hardworking families can continue to save money on their daily commutes through higher allowable pre-tax payroll deductions if employers offer commuter transit plans.  In 2013 taxpayers will see a federal tax savings up to about $570 per year in their paychecks.

We know your money is important to you and that’s why we’ve planned ahead for these changes.  TurboTax will automatically update to reflect all recent changes, and will be ready for you to start your taxes on January 3^rd.

Plus, remember, at TurboTax, we’re here for you. If you still have questions about the tax law changes, only TurboTax software lets you talk to CPAs, EAs or tax attorneys as often as you like to answer your questions while you’re preparing your taxes. And you can ask as many questions as you want, as often as you like – all for free. We’ll help you get your biggest refund – guaranteed and help make sure your taxes are done right.  We guarantee all our calculations are 100% accurate – so you can be sure you get every penny you deserve.

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Do you have any tips for saving this holiday season?  We’d love to hear yours.

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Fiscal Cliff

Let’s start with the facts.

Every year, a small portion of the IRS tax code expires, requiring Congress to pass laws to extend them.   This year is no exception. There are a handful of tax laws that will expire if they are not extended by December 31.

So what’s on the table?

Alternative Minimum Tax (AMT) Patch

The AMT was originally created as a special tax for the wealthiest taxpayers.  Today the AMT usually hits taxpayers who have a household income over $75K and are married with more than two kids.

This is where a lot of the hubbub is coming from because unless the AMT is patched by Congress by the end of the year, an estimated 26 million households will, for the first time, face the AMT, which threatens to add an average of $3,700 onto taxpayers’ bills for the current tax year.

But the reality is that, historically, Congress has patched the AMT every year, since 1969, without fail.

Tax Extenders

The “Tax Extenders” refer to a broad set of temporary tax laws.  Here is a short list of the higher-impact tax deductions and credits that are included in the “Tax Extenders” package currently on the table:

Tuition and Fees Deduction:  This tax deduction allowed some college students or parents to deduct education expenses related to schooling, including tuition, books and other supplies.   TurboTax data shows that about only 2% of our taxpayers claim this tax deduction.

Residential Energy Property Credit:  This tax credit increased the energy tax credit for homeowners who made certain energy efficient improvements to their existing homes.  TurboTax data reveals that only an estimated 4% of our taxpayers claim this tax credit.

Educator Expense Deduction:  This is a $250 tax deduction available to teachers K-12, who purchase classroom supplies.  TurboTax data shows that only about 3% of our taxpayers claim the Educator Expense Deduction.

While only a small percentage of TurboTax customers claim these tax deductions and credits, be assured that no matter what is decided, TurboTax will be fully up to date with the latest tax laws shortly after decisions are made.

Bush-era Tax Cuts

As the name implies, the “Bush Tax Cuts” were tax cuts first passed in 2001 under George W. Bush and then extended in December 2010 by President Obama

The tax deductions and credits included in the Bush Tax Cuts do not impact your 2012 taxes.  They won’t come into play for another year, when you file your 2013 taxes. What you could see next year is changes to your paycheck, starting in Jan. 2013, due to changes in 2013 tax brackets.

So when will we know for sure? No one knows. But it’s not uncommon for tax laws like these to not be extended until midnight on Dec. 31.

That’s why, at TurboTax, we plan ahead so we’re prepared for any outcome. TurboTax will be up to date and ready for taxpayers within a matter of days of changes to the tax code.

And if you have questions, TurboTax CPAs are here for you year-round to answer your tax questions, helping you understand what these changes may mean to you and your family.