All Articles Tagged "tax return"
I remember about eight years ago when I first started working my first professional job and was actually looking forward to tax season. Up until then from what I had witnessed with my parents and other relatives, tax season to adults was like what Christmas is to a toddler. That was the “real” most wonderful time of the year. I didn’t understand much about taxes, but quickly learned that because I didn’t have kids, was no longer in school, not paying student loans, barely had any deductions and was a tax bracket above broke that I qualified for a little something in return but definitely would not be doing the dougie to “This Is How We Do It” like the dude in the Jackson Hewitt commercial.
I drove home in tears crying to my friend on the phone, “What am I doing wrong?” But once I started to understand a little more about taxes, I learned I wasn’t really doing anything wrong. When I figured out tax season wasn’t meant for the single working woman, I was a lot less emotional during tax time. Now admittedly I’m a still a little bitter, but I am better prepared and I realize that without many deductibles I’ll end up owing every tax season because of my writing hustle, and that’s OK now that I know what to expect. But for all of you who are lucky enough to come into a little extra sometime soon, I need to you to spend responsibly for all of us who have to actually budget for big items and can’t lose our mind for 3 months out the year. Here are 12 ways I’m sure some people will waste their tax returns this year:
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.
Why Are You Waiting For The New Year To Act Right? 10 Ratchet Behaviors We Should Leave Behind in 2012…Starting Now
A part of me is so happy to see 2012 leave, as long as it’s taking the “ChriannaRueche” love triangle, Joseline Hernandez, the Romney family and the Twilight series franchise with it. But seriously, something about 2012 made me completely disgusted with how African-American women are portrayed and more importantly what we prioritize. This was the year of the booty shot fails, the stripper/sideline chick/baby mama, and the ratchet. Sadly, it makes me wonder when we stopped wanting more for ourselves. It’s like I looked up and one of the best things we had going for us was the cast and crew behind Scandal. Is that all we’ve got? So not just for 2013, but starting right now, I propose our resolution be to stop engaging in the following ratchet behaviors:
1. Knowing more about Basketball Wives than Obamacare.
If you can recite the names of all the characters on Basketball Wives, but can’t tell me any of the changes the Affordable Care Act made to U.S. health insurance, I’m going to need you to turn to CNN for at least five minutes a day. When you become of age to vote, it’s definitely time to know how the economy, politics and world issues directly affect you. You don’t have to break down the details of the fiscal cliff, but your knowledge of current events and economy should go beyond what you can write off come tax season.
Today same-sex couples are now recognized in over 12 states. For the first time, most Americans are in favor of gay marriage. Even as acceptance grows, disparities show up in tax returns. A new study shows that same-sex couples may pay as much as an additional 6,000 a year in taxes.
Why? Although some state governments have legalized gay marriage, the federal government doesn’t recognize them, a CNNMoney analysis observes. The federal government is restrained by the 1996 Defense of Marriage Act. This act forces same sex couples to file separately with federal tax returns sent to the IRS.
As they cannot file their federal returns jointly, same sex couples are not able to benefit from tax benefits given to heterosexual couples. In some states, same-sex couples are also obligated to fill out up to four separate returns including a mock federal return.
CNN used H&R block to give an example: say a family consists of two adults and two children. One parent earns $100,000 while the other stays home to take care of the kids. The working parent then files as “head of household” while the stay-at-home parent is the “qualifying relative.” With no other income or deductions, the family is forced to pay $15,199 to the federal government. This amount is $4,543 higher than if the couple were heterosexual. This is because the “head of household” classification doesn’t provide the same tax deductions as “married filing jointly.”
The child tax credit is $1000 for each child for a heterosexual couple, but families using the “head of household,” tag are not able to receive this full amount. Altogether in this situation, the same-sex couple stands to lose $6,043 more to the federal government.
There is one exception. Same-sex spouses in the higher tax brackets with no children can file tax returns with a “single” status. This makes their liability lower than heterosexual couples.
(Forbes) — Journalist Lee Sheppard once remarked that a tax return is signed under penalties of perjury, and is not an opening offer! That’s true, but there are still plenty of times when you either made a mistake or discover something after filing that cries out for correction. You might receive a Form K-1 (or an amended K-1) from a partnership, LLC or S corporation after you filed your return. You might discover you omitted income, incorrectly reported your filing status, forgot to deduct all your business expenses or didn’t take advantage of a credit for your new hybrid car.