All Articles Tagged "income taxes"
(Network Journal) — The tax filing deadline will be here before you know it. Don’t forget it’s April 18th this year. To ensure you’re not scrambling at the last minute, be sure your W-2 wage and tax statement is in hand. Your employer should have mailed it out by Jan. 31. But if you haven’t yet received it, here are four steps the Internal Revenue Service suggests taking:
1. Contact Your Employer. First, make sure the form isn’t sitting in that pile of unopened mail on your coffee table. After that, ask your employer when the form was mailed. If it was already sent and you suspect it got lost, check that your employer has the right address on file and request that the form be resent.
(The Network Journal) — If you were among the millions out of work at any point in 2010, your tax return may look quite different this year. Many people fail to realize that they must pay taxes on unemployment benefits. For 2010 all unemployment benefits received will be considered taxable income. That is a big change from 2009 when a temporary exemption was granted for the first $2,400 received. Some states withhold part of the unemployment benefit so recipients don’t get socked with a big tax bill, but that’s not a requirement, said Melissa Labant of the American Institute of CPA’s tax team. That means you might be on the hook for taxes on the full amount of your benefits. Fortunately, there’s a host of deductions and tax credits that can help offset any tax you owe, or increase your refund.
Job search: Certain expenses can be deducted if you’re looking for a job in your most recent occupation. That means similar job titles in different industries, like administrative assistant or customer service manager, would qualify. Costs for a search that enabled you to switch from being an elementary school gym teacher to a restaurant chef wouldn’t make the cut. Fees for resume preparation, job counseling and employment agencies may be claimed. And, if you kept a log of telephone calls, you may be able to claim a portion of your phone bill.
(Slate) — Americans will pay less in total taxes, as a proportion of the nation’s economy, this year than in any year since 1950. This is due in part to a growing list of personal and business deductions. How long have deductions been around? Since we’ve had an income tax. The first federal income tax form—for income earned in 1913, the year of the 16th Amendment’sratification—listed six general deductions. (It was called the “Form 1040″ back then, too.) Broadly speaking, they allowed federal taxpayers to write off business expenses; business and personal interest; state and local taxes; catastrophic losses (those “arising from fires, storms, or shipwreck”) not covered by insurance; bad debts; and depreciation of business assets. Each category of deductions survives in some fashion in the current tax code, though we’ve been tweaking the specifics. Business interest is still deductible, for instance, but the Tax Reform Act of 1986 junked the deductions for nearly all personal interest, such as credit card debt and car loans. One exception is interest on home mortgages, spared from the 1986 cuts: Today, the mortgage-interest write-off is among the most valuable deductions, accounting for an estimated $573 billion in foregone tax revenues between 2009 and 2013. Deductions for depreciation—write-offs based on property or assets losing value with wear-and-tear or general obsolescence—today are nearly identical in principle to those in 1913, though the method of calculating the deductions has become much more complicated.
(Wall Street Journal) — Roll out the red carpet. The 2010 tax season will probably introduce a star-studded cast of tax evaders, many of whom are already on the IRS’s blacklist. These celeb tax dodgers help contribute (at least in a small way) to what the IRS estimates to be a $290 billion tax gap—the difference between what’s reported and what’s owed, according to latest data. Check out who among the elite of the silver screen, television screen and radio waves is hiding from Uncle Sam in the limelight…Nas: The IRS hopes the latest $6.46 million lien against the hip-hop star will put a wrap on his deadbeat filing habits. Beyond the bad blood he’s established with the IRS, the rapper is widely known for his years-long feud with rival hip-hop artist Jay-Z. Nas’s hefty bill adds three separate liens filed since 2009, the oldest of which is filed against a Georgia home. Even the rapper’s Queens condominium association has smacked the artist with a $3,860 lien for failing to pay his $420 monthly assessment since last January.
(Inc.) — Turbotax Taxcaster: This well-designed Intuit app provides a rough estimate of your tax bill or rebate after you tap in details such as marital status, age, income, and deductions. The app, which is available for the iPhone, Android, and Windows Phone 7 platforms, also has a robust Help section. Cost: Free.
Capturengo: After you snap a photo of a receipt with your phone and hit Submit, Capturengo, available for iPhones and BlackBerrys, creates an IRS-approved digital receipt that you can access through an online account. You can organize receipts online and export data into Excel. Cost: Free for up to 50 receipts a month, then $99 a year.
(Wall Street Journal) — It’s that time again: tax-filing season. Most employers have to send workers their W-2 wage reports by the end of January, and, with luck, banks and brokers won’t be far behind with 1099 forms detailing interest and investment income. This year’s season has several notable wrinkles. Because Congress waited till the last minute to make important changes to 2010 taxes, the Internal Revenue Service is telling some taxpayers to delay filing while it updates its computers. Who’s affected? The biggest group includes all taxpayers who itemize deductions on Schedule A instead of taking the standard deduction, which for 2010 is $11,400 for married couples and $5,700 for single filers. Itemizers give the IRS a detailed list of their deductions for such items as mortgage interest, charitable donations, and state and local taxes, in order to qualify for greater tax benefits from these write-offs.
(AJC) — The state Revenue Department issued $12 million in tax refunds beginning last week to more than 30,000 Georgians and then took the money back, leaving many people overdrawn and wondering where their money went. Revenue Commissioner Douglas J. MacGinnitie, who was appointed Jan. 18, apologized to taxpayers Wednesday and said a series of errors led to the problems. The mistakes left Jenny and James Richards of Macon in an embarrassing situation. Their account contained $700 Tuesday morning, Jenny said, and she invited her husband to lunch at Applebee’s. By lunchtime, however, the state had taken back the Richards’ tax refund.
(Wall Street Journal) — Report all of your income. The IRS uses information returns, such as W-2s and 1099s, to cross-check income reporting. Under its document-matching program, the IRS’ computers compare information on the forms with the income reported by taxpayers on their returns. If the information doesn’t match, this leads to an automatic audit. But don’t panic; it’s merely a correspondence asking about the discrepancy. It can be easily cleared up by submitting an explanation by mail if you think you are correct, or paying the tax owed if the omission was your oversight and the IRS is correct.
(Network Journal) — Original conclusions in “State of the Dream 2011″ seemingly point toward beneficiaries of the top-end tax cuts included in the December tax deal. In fact, the report states that Whites are three times more likely than Blacks and 4.6 times more likely than Latinos to have incomes of $250,000 or more, and thus receive a disproportionate benefit from the extension of the Bush tax cuts for top-tier earners. Capital gains income shows similar disparities as documented in the report. Further, the official unemployment rate is 15.8 percent among Blacks and 13 percent among Latinos; Blacks earn only 57 cents for each dollar of White family income, Latinos earn 59 cents; and Blacks have only 10 cents of net wealth while Latinos have 12 cents to every dollar of net wealth that Whites have.
(Businessweek) — The 2011 tax season is under way and the airwaves are full of a deal that sounds too good to be true: For another month, Americans can visit their local H&R Block (HRB) office and file their taxes for no charge. How and why would the nation’s largest tax filer give its service away for free? In a nutshell: 1) H&R Block is being forced to scramble harder this tax season to compete with other filing services. 2) It’s unable to offer a service that brought in customers in years past. 3) The “free taxes” offer isn’t for everyone.