All Articles Tagged "IRS"
The IRS is lending a hand to taxpayers affected by the Boston Marathon explosions. The agency announced that Bostonians will get a three-month tax filing extension due to the tragic event.
“Our hearts go out to the people affected by this tragic event,” said acting IRS Commissioner Steven Miller in a press statement (via USA Today). “We want victims and others affected by this terrible tragedy to have the time they need to finish their individual tax returns.”
All individual taxpayers residing in Massachusetts’ Suffolk County, including the city of Boston, will automically receive the extension. This applies to the bombing victims and their families, first responders, and others affected even if they live outside Suffolk County. According to the newspaper, “Eligible taxpayers who live elsewhere may claim the relief by contacting the IRS at 866-562-5227 beginning Tuesday, April 23, and identifying themselves before filing a return or making a payment.”
The extension also applies to those whose tax preparers were affected by the bombing, which took place on the annual April 15 federal tax-filing deadline.
There will be no filing or payment penalties due as long as federal returns are filed and tax payments made by the new deadline of July 15, 2013. “But, by law, interest at the annual rate of 3%, compounded daily, will still apply to any payments made after the April 15 deadline, the IRS said,” reports USA Today.
This is not the first time the IRS has made extensions available following a tragic event. It did the same following Hurricane Katrina in 2006.
Today is April 15th Tax Day. This is an important financial day for most people. But now that you have filed your taxes, what should you do next?
1.) Understand what happened. If you ended up owing taxes, understand why. You obviously did not have enough taxes withheld throughout the year. Plan so that this does not happen again next year. Talk with your tax preparer about this and set up a plan to make sure more taxes are withheld. Also, if you received a big tax refund this year, you should plan better for next year too.
For more on this and other tips for staying organized and keeping your information safe, click through to Black Enterprise.
Today is tax day everyone! We can hear you groaning through the Internet, but honestly, we really need to bring this annoying portion of the year to an end. (Actually, a Pew survey says that about one-third of people actually like doing their taxes. Who are you?!)
To make today a little bit easier, some companies are offering up some sweet deals. TIME rounds up some of the specials that companies are offering today, including free small popcorn at AMC Theaters (in case you need to sit in a dark room and reflect on your taxes for a bit), free Cinnabon bites, and free copies of your taxes at Office Depot. If you really need to take the edge off, Trojan has a special deal for Californians today as well. Wow.
Over the past few weeks, we’ve offered up a number of tips to help you make it through the tax season. Here’s a quick roundup. Good luck out there.
Tax season is a time of joy and pain. For some, Uncle Sam is a kind friend who drops a check in the mail just in time for spring. For others he’s a cruel collector, shaking money out of your pocket for the government to spend. But, some taxpayers are destined to meet a worse fate. One where a representative of the IRS looks through every receipt in their possession and decides how much they really owe your government. Getting audited is a real and present danger.
Should you be afraid? According to Michael Rozbruch, founder and CEO of Tax Resolution Services, only about 1.1 percent of people who file a 1040, the most common tax return, are audited. That rate increases to 12.5 percent for people earning $1 million or more. Most audits are triggered by the kind and amount of deductions taken. If you fit one of these profiles, watch yourself. Uncle Sam may turn his attention to you.
One would think that, of all the groups out there, the Internal Revenue Service would be among the most fiscally responsible. After all, if we don’t keep proper tabs on our finances, they’ll be the first ones to drag us into their offices for a little talking to. But it looks like the people counting our money can use a little help handling theirs.
The Today show reported this morning on a Star Trek spoof video that the IRS produced as an educational tools but is ostensibly a big fat waste of taxpayer money. According to the report, the IRS spent about $60,000 on two videos. A Congressional oversight committee asked to take a look at them to see what was going on. One of them, this spoof, which was supposed to be for a 2010 conference, was deemed by one Congressman to lack in “meaningful training content.” Others are calling it “expensive silliness.”
The IRS admits that the video isn’t the best use of resources, and says, a video like this “wouldn’t be made today.”
The other video was a spoof of Gilligan’s Island, and, apparently, the committee found some value in that one.
We’ve got the video after the jump, but warning: It is truly dumb.
Many people assume that because they are unemployed and have no or very little earned income, there is no need to file a tax return. In some cases that may be correct, but in others you may actually have taxes due or be missing out on a tax refund by not filing.
With just a few weeks left until tax forms need to reach the IRS, here are some of the questions you should be asking yourself if you’re unemployed.
Who Has to File?
If you have been working odd jobs to make ends meet, the income you brought in for 2012 will be taxable only if you are under the age of 65, filing single, and made over $9,500, or married, filing jointly, and reporting over $19,500.
Income from a job is not the only source of taxable income. If you have been receiving unemployment benefits or monies from severance pay, both income streams add to your overall taxable income and should be reported for 2012.
If, from your combined income from jobs, unemployment insurance and severance pay you made below the amounts listed above, you are not required to file a tax return. Although you are not required, there may be credits you qualify for that could warrant a tax return. You don’t want to miss out by not filing!
Why You Should File a Tax Return?
There are several reasons to file a tax return this season even if you did not meet the minimum amount of taxable income.
- Taxes were withheld from your pay. If you made less than the minimum taxable income of $9,500 filing single or $19,500 filing jointly and taxes were withheld from your paycheck, you may be entitled to a tax refund.
- Student credits could apply. If you are a college student there are credits like the American Opportunity Credit that will give you up to a $2,500 for the first four years of post-secondary school.
- Other credits may work in your favor. There are other credits for those who did not earn a lot of money for 2012 like the Earned Income Tax Credit, Making Work Pay credit and the Additional Child Tax credit, which all could result in a refund for the 2012 tax season.
- You may be eligible for job search deductions. You may be able to deduct expenses related to your job search, which will decrease your tax liability and could increase your refund.
Where Do I Get Tax Help?
This is in no way a comprehensive list of taxable situations or benefits for filing taxes, so make sure you consult with a tax professional to ensure you’re on the right track with your taxes. Here are some resources to help you get tax advice:
IRS Fresh Start: Helps struggling tax payers to avoid penalties and make installment agreements more available.
Volunteer Income tax Assistance: Provides free tax preparation to those who earn less than $51,000 and need assistance preparing tax returns.
IRS2GO Mobile app: With this smart phone app users can access video, gen news and updates, request tax account transcripts and check their tax refund status.
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When you work for yourself, you must take extra care when preparing the taxes. And, there are more and more freelance workers in today’s workforce. In fact, according to the advocacy group Freelancers’ Union, one-third of the workforce can be considered independent–self-employed, contractors, consultants, temps and sole proprietors. Preparing taxes for freelancers can a bit more complicated.
Here are nine tips on how to do federal taxes better for freelancers.
It’s tax season readers, and we’ve been offering up tons of advice (here, here, here, and here) to help you make it through. But even with all the advice in the world, there’s a chance you could be audited. Dun Dun Dunnnnnn!
We gathered a first-hand account of what it’s like to be audited, giving our brave author anonymity to spare her any further pain. Read on and take heed.
I was audited. It’s everyone’s tax-time nightmare and it can happen to the little guys. In fact, I was 27 years old when it happened, living in New York and making under $50,000 a year. When I got the letter in the mail, I didn’t know what to do. I imagined people yelling at me and demanding thousands more dollars, even though I had dutifully paid my taxes each year.
When the official letter arrived, it was very bare bones. It said I was being audited for the 2008 calendar year and said to come to the IRS office at a set date and time. It then listed several issues that I should be prepared to discuss, including “cash contributions,” “legal and professional services,” and “gross receipts or sales.” What does that mean? Also, the audit could run as long as four hours.
I immediately thought back to 2008 to figure what happened that year. I paid someone to do my taxes because I was freelancing. But that was the year I transitioned from freelancing back to a full-time position, so everything had been confusing.
I was terrified. I emailed my tax guy with a scanned copy of the letter from the IRS. He did nothing to comfort me, just saying audits happen and he would gladly be my representative for the IRS meeting for several hundred dollars. I declined.
Next, I called the examining officer who was assigned to my case, nearly in tears, and asked him if he could tell me more of what I should expect. I was planning to move into my own apartment that spring and didn’t want to spend all the money involved with that if I owed the government thousands of dollars. He, of course, told me there wasn’t much he could say over the phone, but I must have sounded so sad and scared that he eventually looked at my file and quickly calculated a worst-case scenario of owing like $800.
That chat slightly eased my concerns about the money, but I was still terrified of what exactly this audit would entail. A finance-focused friend from my church read over the letter and heard more about my situation, explaining what exactly everything meant and what I can do to prepare.
Everyone’s looking for the best possible refund from their taxes this season, and the best service to use to get the most money back. With an average of $3000 as the tax refund for most filers in 2012, Americans are looking for better and faster ways to maximize refunds in 2013, with many filers looking online for preparation resources.
If you are still looking for tax preparation resources, an e-filing service or a reliable tax calculator to help you out this season, do your research on these nine online tax preparation services.
The phrase “The only thing that’s certain is death and taxes” is very true. And with taxes on the rise many people are attempting to find ways to avoid coughing up cash to the federal government, the wealthy included. According to The New York Times, new legislation for 2013 has raised the marginal income tax rate from 39.6 percent from 35 percent for individuals with income over $400,000 and for couples with income over $450,000 and deductions can start to phase out on income of around $250,000.
Some rich people are on board with the tax increases like Warren Buffett and Russell Simmons, but others are struggling to pay their rapidly growing tax debt.
Other wealthy people are having issues paying their tax bill. We recently talked about how the Queen of R&B, Ms. Mary J, was hit with a $900,000 tax lien and now another entertainer has joined the list. This week Perez Hilton reported that rapper Snoop Dogg is not on good terms with the IRS owing $546,000 in back taxes from 2009 and 2011. This isn’t the first time the “Gin and Juice” rapper has been in trouble with the IRS. He had this same issue back in 2008.
The list of celebrities that have experienced tax problems in the past include Wesley Snipes, Nicholas Cage, Toni Braxton, Lindsey Lohan and the goes on and on. However, you don’t have to be rich to get into tax trouble. StatisticsBrain.com reports on a study conducted by Pew Research, showing that 44 percent of audited individuals make under $25,000 per year. So although the rich folks are what we read about in the papers, there are millions of ordinary people who get audited that don’t make the front page.
Filing your taxes late, substantial understatements, disregarding tax rules and regulations, and bounced checks are just some things that could get you into trouble with the tax man. In most cases if you are found to have dabbled in tax evasion you may just get hit with a fine. However in other cases you could face criminal imprisonment for up to five years.
Now when it comes to taxes it’s important to make sure you reduce your tax burden as much as possible through legal practices spelled out by the IRS. This is called “tax avoidance” and is encouraged by the federal government. This includes, for example, finding all of your deductions and getting any credits you qualify for.
However you don’t want to reduce your tax burden by lying or being deceitful, which is tax evasion. The biggest difference between tax avoidance and tax evasion: one is illegal.
With the tax deadline approaching it’s important to keep your morals at the forefront. If you don’t feel qualified to do your own taxes then hire a professional. At least in that case, if you have been truthful with providing information and things hit the fan, you have a preparer to help clean it up. Income taxes aren’t going anywhere. It just makes since to be truthful and pay your tax bill instead of wondering if the tax man will come knocking at your door.