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Archive for November, 2011

In an effort to help promote alternative energy and energy conservation, the federal government is offering some tax credits to people who buy certain products like insulated windows, energy-efficient heat pumps and hybrid cars.

Earned Income Credit

In August of 2005 the federal government passed the Energy Policy Act, and the resulting tax credits went into effect January 1 of 2006. Not only are energy-efficient products rewarded, but certain building techniques and materials are too.

So you save money on energy bills and pay less to Uncle Sam too. Sounds like a win-win.

“By reducing overall energy demand one family or business at a time,” said U.S. Energy Secretary Samuel Bodman, “we are also increasing America’s energy security.” The program has the additional bonus of being environmentally conscious.

So how exactly does the program work? It provides tax credits for your federal return. Say you bought a new hybrid car or had your windows replaced with insulated ones. When April 15 rolls around, you note the purchase on your taxes, take the credit and it reduces the amount of tax you pay.

Tax Mileage Rate Allowance

Remember that tax credits are different from tax deductions. A tax deduction is subtracted from your income before your tax is calculated. A tax credit is whacked off the tax you have been calculated to pay.

Credits usually account for better savings than deductions. Tax credits allow you to pay less taxes than the person with the same amount of taxable income who did not buy the car.

Claim Mileage Deduction

Tax credits are also available for energy-efficient home improvements like installing insulation, certain types of windows and roofing, and solar energy equipment. Needless to say, since it’s a government program they’re lots of rules and regulations. For a more detailed list, visit the program’s website at If you need even more information, details for saving money on taxes is available at Currently, these incentives are only available through the years 2006 and 2007 unless Congress extends them. Write to your Congressman today and tell him or her to vote to extend the act and then start taking advantage of it!

Garnishment law has been in force to improvise the mode of collection of payment for the money due towards the federal government or any other creditor. Garnishment law also states wage garnishment according to which the money is deducted directly from the person’s salary after assessing the monthly expenses vis-à-vis monthly income.

Earned Income Tax Credit Calculator

Garnishment law can be levied by any agency and is not limited to the IRS. Any private creditor, federal government department, or even an ex-spouse can claim garnishment of the money overdue. Garnishment law can also be enacted towards the child support expenses. But for all agencies apart from the government department a court order is required to enforce the garnishment law.

Garnishment is taken as a part of payroll process. If the person is unable to pay the amount due as credit then the correct order for collecting the money has been stipulated in the garnishment law. According the garnishment law, the garnishment due to towards the federal government is to be collected first. Thereafter the money due towards state tax or local tax garnishment and lastly garnishment for credit cards falls in order.

Earned Income Credit 

Garnishment law in some states like Pennsylvania, North Carolina, Texas, etc do not allow wage garnishment at all except those related to taxes, child support, court order fines, federally-guaranteed student loans, etc. some states allow all kinds of garnishments even those levied by the private creditors. In some states garnishment law states maximum 25% of the disposable earnings to be levied as amount due towards payment.

Garnishment law also states types of garnishment law called as attachment. According to attachment the garnishee needs to hand over all the money or property during the service of process of the court. This type of garnishment as stated in the garnishment law is required only against institutions like banks, or other companies that face liquidated obligations in the regular course of the business.

The money withheld from any individual’s paycheck is handed over to the creditor or the agency towards which the amounts is due. Therefore it is suggested that while filing returns one must include the amount garnished from the wages. The garnishment law authorizes the pay of active, retired or reserve personnel to be garnished towards child or spouse support. As per the garnishment law, the garnishment says in effect until the total amount due towards the federal government of the agency is paid up or until the IRS department releases the garnishment.

Do I Qualify For The Earned Income Tax Credit

According the wage garnishment law an individual’s salary, wages, or other income can be levied. It prevents the employee to be fired from the job in hand. If the employer fires the employee because of garnishment proceedings, then it is violation of garnishment law. Also the employer can be fined for the same. The Wage and Hour division of the Department of Labor determines the violation of the law. The IRS does not do this job.

Does your incorporated business pay alternative minimum tax [“AMT]? If so, there is a 93% chance you have been overpaying your taxes by an average of $11,000 a year according to the Treasury Inspector General.

Student Tax Credit Form

The Office of the Treasury Inspector General for Tax Administration was created in 1999 to oversee the IRS. One of the duties of the Treasury Inspector General is to study and report the efficiency of the tax payment system, particularly the accuracy of tax collection efforts. Many of the studies conducted by the office reveal starting results, particularly when it comes to businesses overpaying their taxes.

As part of this oversight, the Treasury Inspector General is reporting that many small business corporations are incorrectly paying AMT. The AMT was enacted in the late 1990s, but proved to be a huge burden on small businesses. The tax was confusing and the paperwork was incredibly complex. An amendment was subsequently added to give small business corporations relief from the AMT. Section 55(e) of the Internal Revenue Code now contains language exempting small business corporations from paying the AMT.

Small business corporations can claim an exemption from the AMT if gross revenues average $5 million or less for the initial three years of business. Thereafter, the business can continue to claim the exemption as long as revenues average $7.5 million or less of each subsequent three year period.

Tax Refund Schedule

According to the Inspector General, companies that fail to claim an exemption to the AMT are overpaying taxes by an average of $11,638 each year. 93% of small business corporations qualify for the exemption. Since the IRS has no duty to notify taxpayers of overpayments, many small business corporations have no idea they are overpaying taxes and are due refunds.

What Kentucky State Tax Form should I use

All taxpayers have the right to file amended tax returns for the past three calendar years. Contact us now to find out if you failed to claim the exemption to the AMT and are due a refund for 2001, 2002 and 2003. If you failed to claim the AMT exemption, you may be due a refund totaling over $33,000.