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When knowledge and experience count.

Hints&Tips

The 2001 tax cut package, signed into law by President Bush on June 7, 2001, turns out to be the biggest tax cut in 20 years, with many pluses for clergy.

Tax rate reductions under the act will phase in over six years. For 2002, the top four brackets drop another half percent: the 28% tax bracket drops to 27%, the 31% bracket to 30%, and the 36% to 35%.  

Greatest immediate benefit for many taxpayers is the new 10% tax bracket for the first $12,000 of taxable income for married couples, which takes effect this year.  That's down from 15%, an immediate savings of $600/year ($300 for singles).

Other cuts involve SUBSTANTIAL retirement savings for clergy and school and charitable workers. Contact a CTFS retirement planner for ways you can benefits the most.  You'll enjoy a free and relaxed consultation:

 

The definitive reference on opting-out of social security. (Currently out-of-print for update.)

 

Tax Tips:

Need proof? Get a free tax return transcript

IRS may reduce refund if social security names/numbers don't match

Moved? Refund checks mailed to old address get returned to the IRS

Make sure IRS credits you for paying

 

Personal Finance Tips:

Why you should consider an annuity

Compare long-distance rates

Is it really a better rate? 
Thinking of refinancing your home loan to lock in lower interest rates?  If you have a variable- rate loan, you need to first compare your current index to the new loan's index. 

  Chart shows 11th District Cost of Funds follows Fed Discount Rate

Example:  Many loans are based on Federal District Cost of Funds.  The bank adds its margin to that index rate to get your interest total.  Say the loan is based on the 11th District cost of funds and the margin is 2.25%.  If the 11th District cost of funds was 5.5%, the interest rate charged for that month was 2.25% + 5.5% = 7.75%.  A new loan with a 6.75% rate would appear smart.  

The blue line in the chart shows the Federal Discount Rate, now down to 4%.  The pink line is the 11th District Cost of Funds, which moves with the Discount Rate, but behind it.  Within a few months, the 11th District Cost of Funds should also fall to around 4%, so interest on the current loan will fall to 6.75%--and you won't have to pay the bank thousands of dollars in fees or points to get that rate.  

"I've alway filed my own returns.  Before seminary I took accounting classes, so I felt confident in doing so.  But three years ago I ran into some sticky tax questions, and had CTFS file my return.  I was shocked.  I'd been paying more than I really owed for years.  I've stuck with CTFS ever since, and saved A LOT of time.  They really SOLVE clergy tax problems.

Rev. C. G.
Los Angeles, CA

 

 

 

 

 

Tax Tips:

Need proof? Get a free tax return transcript

Need copies of your tax return for loan or scholarship applications?  Ask the IRS for a Tax Return Transcript. 

A Tax Return Transcript is available only for returns in the 1040 series, such as, Form 1040, 1040A, 1040EZ, and so forth. It is not a photocopy of your 1040 but it will show line items from your original return. In most cases a transcript will meet the requirement for lending institutions for purposes of student loans, etc. You will receive it in about 10 working days after the IRS receives your request.

If you need an exact copy of a previously filed and processed return you also file Form 4506, Request for Copy or Transcript of Tax Form, but you need to include $23.00 for each tax period requested. (There is no charge for transcripts or W-2's.)

 Beginning in 2000, there is a $37.00 fee for all non-program copies of W2's. Non-program copies include Civil Court Cases, Proof of Residency, and State Tax Returns. It can take up to 60 calendar days to get a copy of a tax return or W-2. Form 4506 can also be used to obtain proof from the IRS that you did not file a return (check box 8B). Forms can be [downloaded] or ordered by calling 1-800-829-3676.

 

IRS may reduce refund if social security names/numbers don't match

Names and Social Security numbers of everyone claimed on your return, taxpayer, spouse and dependents must match.  In the past, the IRS has reduced tax benefits claimed on the return for mismatches in taxpayer and dependent names and SSNs.  Starting in 2001, the IRS will do the same for both spouse in a joint return.

  • Make sure your SSN is correct and legible
  • If you change or name (get married, for example) get a new Social Security card by filling out Form SS-5.  

 

Moved? Refund checks mailed to old address get returned to the IRS

You may correct the address legibly on the mailing label that came with your tax package or write the new address on your return when you file. When your return is processed the IRS will automatically update your records.

If you moved after you filed your last return, download Form 8822 Change of Address.

Make sure IRS credits you for paying

Make sure the IRS gives you credit for your payments—and avoid a lot of problems.  Here’s what you need to put on your check or money order:

  • Social Security Number (or EIN if a church or business)

  • Tax period, i.e., “2001” for returns covering 2001

  • Tax form associated with the payment, i.e. “FORM 1040”

  • Correct name of tax account, i.e., the name on your tax return

  • Current mailing address

Make check payable to “United States Treasury” (not "IRS").