The American Cancer Society’s Relay for Life

Thanks to you, we have so far raised more than $8,500. Many members of our Poughkeepsie and Millbrook staffs attended and walked the track as part of the relay.

You can still contribute and join us in our effort to raise money and awareness helping the American Cancer Society create a world with less cancer and more birthdays. Click here to visit our team page and learn more about how you can help.

4 percent for overpayments [3 percent in the case of a corporation];

4 percent for underpayments;

6 percent for large corporate underpayments; and

1.5 percent for the portion of a corporate overpayment exceeding $10,000.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis.  For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.  Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points.  The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points.

The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

The interest rates are computed from the federal short-term rate during April 2011 to take effect May 1, 2011, based on daily compounding.

The Relay for Life

The Relay for Life is the national signature activity of the American Cancer Society. During the event, one team member is required to be on the track at all times. The Relay inspires, entertains and touches the hearts of all who participate. Team D’Arcangelo walks in honor of the millions of Americans who have survived cancer and most importantly to support the continued fight against the disease.

We are asking once again for your support. Log on to our website here and click on the Relay for Life button to donate by using your credit card. Every dollar you donate makes a real difference to people whose lives are touched by cancer. Team D’Arcangelo is committed as a team to take a leadership role in the fight against cancer.

Thank you in advance for your generosity. 

The Partners and Staff of D’Arcangelo & Co., LLP

Refund Information

You can go online to check the status of your 2010 refund 72 hours after IRS acknowledges receipt of your e-filed return, or 3-4 weeks after you mail a paper return. Be sure to have a copy of your 2010 tax return available because you will need to know your filing status, the first Social Security number shown on the return, and the exact whole-dollar amount of the refund. You have several options for checking on your refund:

 Click on “Where’s My Refund” at IRS.com.

Call 1-800-829-4477~24 hours a day, seven days a week, for automated refund information.

Call 1-800-829-1954 during the hours shown in your tax form instructions

Use IRS2Go. If you have an Apple iPhone or iTouch or an Android device you can download an application to check the status of your refund.

What Records Should I Keep?

Normally, tax records should be kept for three years, but some documents — such as records relating to a home purchase or sale, stock transactions, IRAs and business or rental property — should be kept longer.

You should keep copies of tax returns you have filed and the tax forms package as part of your records. They may be helpful in amending already filed returns or preparing future returns. See IRS Publication 552, Recordkeeping for Individuals.

Change of Address

If you move after you filed your return, send Form 8822, Change of Address, to the Internal Revenue Service. If you are expecting a paper refund check, you should also file a change of address with the U.S. Postal Service.

What If I Made a Mistake?

Errors may delay your refund or result in notices being sent to you. If you discover an error on your return, you can correct your return by filing an amended return using Form 1040X, Amended U.S. Individual Income Tax Return.

The 2011 tax year is nearly one-third complete. Let us know at D’Arcangelo & Co., LLP if we can help you take better command of your finances.

To help you better understand these new requirements, non-profit Board Members, Executive Directors, CFOs and Controllers are invited to attend one of the upcoming free morning seminars presented by D’Arcangelo & Co., LLP and Rider, Weiner & Frankel, P.C.

Dates and times:

In Orange County, Monday, May 9, at the Orange County Chamber of Commerce building, 30 Scott’s Corner Drive in Montgomery. Registration is 7:30 a.m. The seminar will run from 8-10 a.m.

In Dutchess County, Tuesday, May 10 at the Poughkeepsie Grand Hotel, 40 Civic Center Plaza in Poughkeepsie. Registration is 7:30 a.m. and the seminar runs from 8-10 a.m.

These are free seminars, but please let us know you are planning to attend one of them. To RSVP, or for more information, call Rich at 845-473-7774, or email here.

An extension gives you an additional six months to file your tax return. But keep in mind that an extension of time to file is not an extension of time to pay. All outstanding balances are due this Monday, April 18, 2011.

The IRS expects to receive approximately 10 million extension requests in 2011, which is about the same as last year.

In order to get an extension, you need to file Form 4868 with the IRS.

Taxpayers can electronically file Form 4868 through IRS Free File or Free File Fillable Forms. Using Free File to prepare and electronically submit Form 4868 is free to everyone, regardless of income.

Paid preparers can also electronically file Form 4868 as can tax software that you run on your computer.

The IRS will only provide an acknowledgement of your extension request if you e-file or Free File the request.

When you request an extension, you need to estimate your tax liability and pay any balance due by the April 18 deadline. If you are unable to pay the total balance due, you should pay as much as possible and apply for an installment agreement.

As of March 25, the IRS had received more than 82 million individual income tax returns, which is 58 percent of the 141 million returns expected this year. The IRS has received about the same number of returns so far this year as it did at this time last year, while processing of returns is up 3 percent from the same time last year.

Numerous economic recovery tax credits are also still available. The IRS reminded taxpayers that for some credits, such as the Making Work Pay Credit, individuals must claim the $400 ($800 for married couples) in order to receive it. (Use Schedule M to calculate your Making Work Pay credit.)

Usually, 20 to 25 percent of all taxpayers file in the final two weeks of the tax season. And, usually, about 7 percent of taxpayers seek a six-month extension to file.

Taxpayers have an extra weekend to file this year because of a District of Columbia holiday. The deadline for 2011 is Monday April 18, instead of April 15.

The IRS offered these filing tips as the final countdown begins:

Start now to gather information and prepare your return to avoid hasty and possibly costly errors;

Many tax credits from the American Recovery and Reinvestment Act (ARRA) are available. There’s an expanded American Opportunity Credit of up to $2,500 for tuition, books and fees; a larger energy credit of up to $1,500 and an expanded Earned Income Tax Credit for larger families of up to $5,666. The $8,000 first-time homebuyer credit is still available for people who entered into a binding contract by April 30, 2010, and went to settlement by September 30, 2010;

Consider using IRS Free File, which is brand-name software or online fillable forms, to prepare and e-file your returns – at no charge. Software is available to the 70 percent of taxpayers – those who earn $58,000 or less. And, fillable forms have no income limitations. Get started at IRS Free File;

File electronically to get a faster refund, have secure, encrypted transmission and a more accurate tax return. You can e-file through your tax preparer, through commercial software or through IRS Free File;

If you cannot meet the April 18 deadline, file an extension, Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. All taxpayers can use Free File to submit a Form 4868 for an automatic six-month extension. And, Free File will be available through the October 17 extension deadline for late filers.

The six-month extension is to file a return only; it is not an extension to pay taxes due. If you are unable to pay your taxes, file a tax return anyway to lessen the penalties and pay all that you can. Then work with the IRS to set up a payment plan or you can go to IRS.gov and use the Online Payment Agreement Application.

“This marks another important step in our evolving relationship with corporate taxpayers,” said IRS Commissioner Doug Shulman. “Through greater cooperation and transparency, CAP taxpayers and the IRS both benefit.”

Under CAP, participating taxpayers work collaboratively with an IRS team to identify and resolve potential tax issues before the tax return is filed each year. With the major potential tax issues largely settled before filing, taxpayers are generally subject to shorter and narrower post-filing examinations.

With the CAP program growing in popularity, it is being expanded to include two additional components. A new pre-CAP program will provide interested taxpayers with a clear roadmap of the steps required for gaining entry into CAP. A new CAP maintenance program is intended for taxpayers who have been in CAP, have fewer complex issues, and have established a track record of working cooperatively and transparently with the IRS.

“CAP is a program where the tax system is at its best — when the taxpayer and the IRS are transparent and issues are resolved before a return is filed,” Shulman said.

Details of the permanent program, including the new pre-CAP program and CAP maintenance program, are included in a revision to the Internal Revenue Manual, a revised application and memorandums of understanding (MOU) that corporations are required to submit to participate in pre-CAP and CAP.

The CAP pilot began in 2005 with 17 taxpayers and in FY 2011 there are 140 taxpayers participating. Only taxpayers with assets of $10 million or more are eligible to participate.

For more information on the Compliance Assurance Process (CAP), visit the CAP page on IRS.gov.

1. Incorrect or missing Social Security Numbers When entering SSNs for anyone listed on your tax return, be sure to enter them exactly as they appear on the Social Security cards.

2. Incorrect or misspelling of dependent’s last name When entering a dependent’s last name on your tax return, ensure they are entered exactly as they appear on their Social Security card.

3. Filing status errors Make sure you choose the correct filing status for your situation. There are five filing statuses: Single, Married Filing Jointly, Married Filing Separately, Head of Household, and Qualifying Widow(er) With Dependent Child. See Publication 501, Exemptions, Standard Deduction, and Filing Information to determine the filing status that best fits your needs.

4. Math errors When preparing paper returns, review all math for accuracy. Or file electronically; the software does the math for you!

5. Computation errors Take your time. Many taxpayers make mistakes when figuring their taxable income, withholding and estimated tax payments, Earned Income Tax Credit, Standard Deduction for age 65 or over or blind, the taxable amount of Social Security benefits, and the Child and Dependent Care Credit.

6. Incorrect bank account numbers for Direct Deposit If you are due a refund and requested direct deposit review the routing and account numbers for your financial institution.

7. Forgetting to sign and date the return An unsigned tax return is like an unsigned check – it is invalid. And, remember on joint returns both taxpayers must sign the return.

8. Incorrect Adjusted Gross Income information Taxpayers filing electronically must sign the return electronically using a Personal Identification Number. To verify their identity, taxpayers will be prompted to enter their AGI from their originally filed 2009 federal income tax return or their prior year PIN if they used one to file electronically last year. Taxpayers should not use an AGI amount from an amended return, Form 1040X, or a math error correction made by IRS.

9. Claiming the Making Work Pay Tax Credit Taxpayers who file Form 1040 or 1040A will use Schedule M to figure the Making Work Pay Tax Credit. Completing Schedule M will help taxpayers determine whether they have already received the full credit in their paycheck or are due more money as a result of the credit. Taxpayers who file Form 1040-EZ should use the worksheet for Line 8 on the back of the 1040-EZ to figure their Making Work Pay Credit.

For additional information and to view some other commons errors, click here.

1. If your goal is a legitimate tax deduction, then you must be giving to a qualified organization. Also, you cannot deduct contributions made to specific individuals, political organizations and candidates. See IRS Publication 526, Charitable Contributions, for rules on what constitutes a qualified organization.

2. To deduct a charitable contribution, you must file Form 1040 and itemize deductions on Schedule A.

3. If you receive a benefit because of your contribution such as merchandise, tickets to a ball game or other goods and services, then you can deduct only the amount that exceeds the fair market value of the benefit received.

4. Donations of stock or other non-cash property are usually valued at the fair market value of the property. Clothing and household items must generally be in good used condition or better to be deductible. Special rules apply to vehicle donations.

5. Fair market value is generally the price at which property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts.

6. Regardless of the amount, to deduct a contribution of cash, check, or other monetary gift, you must maintain a bank record, payroll deduction records or a written communication from the organization containing the name of the organization, the date of the contribution and amount of the contribution. For text message donations, a telephone bill will meet the record-keeping requirement if it shows the name of the receiving organization, the date of the contribution, and the amount given.

7. To claim a deduction for contributions of cash or property equaling $250 or more you must have a bank record, payroll deduction records or a written acknowledgment from the qualified organization showing the amount of the cash and a description of any property contributed, and whether the organization provided any goods or services in exchange for the gift. One document may satisfy both the written communication requirement for monetary gifts and the written acknowledgement requirement for all contributions of $250 or more. If your total deduction for all noncash contributions for the year is over $500, you must complete and attach IRS Form 8283, Noncash Charitable Contributions, to your return.

8. Taxpayers donating an item or a group of similar items valued at more than $5,000 must also complete Section B of Form 8283, which generally requires an appraisal by a qualified appraiser.

For more information on charitable contributions, refer to Form 8283 and its instructions, as well as Publication 526, Charitable Contributions. For information on determining value, refer to Publication 561, Determining the Value of Donated Property. These forms and publications are available at www.irs.gov or by calling 800-TAX-FORM (800-829-3676).