All Articles Tagged "taxes"
It’s about time! Tax season is coming to an end and Uncle Sam can finally get off our backs — unless you’re Terrell Owens and you’ve been slapped with a $244,000 tax lien, but I digress.
April 15th has arrived and I think it’s about time we delve into this year’s tax season — by the numbers, shall we?
Americans are pretty irritated by the amount they must pay in federal income taxes, according to a Gallup poll. Fifty-two percent say that it’s just “too high” — that’s a six-point increase from 2012′s 46 percent. Breaking it down by income levels, 49 percent of Americans who earned less than $30,000 also believe it’s too high; 60 percent of Americans raking in more than $75,000 say the same.
Now the upper-income Americans, specifically, felt the pinch this tax season — federal income taxes have indeed increased for them this year.
“The top 1 percent of earners will pay an average tax bill of $525,231, up more than $36,000 from last year, according to the nonpartisan Tax Policy Center. It will surge to $670,000 for 2014 taxes,” CNBC wrote. The tax rate for nation’s elite has jumped from 35 percent in 2012 to the current 39.6 percent.
The Obamas, whose tax rate was at 20.4 percent, were actually exempt from the higher tax rates because their taxable income is lower than $450,000, according to Bloomberg. Both Michelle and Barack reported adjusted gross income of $481,098 in 2013. POTUS and FLOTUS both paid $98,169 in taxes — this includes $2,310 for Obamacare.
Now let’s talk about the fun part — refunds, baby! About three quarters of Americans get refunds, which is why, in many ways, the April 15 deadline isn’t so huge. Penalties only apply to those who owe.
As of March 28, the IRS has an issued an average of $2,381 in refunds, CNN Money reports; this is a 1.5 percent increase compared to last year. According to Hipmunk Survey (via Mashable), 45 percent of Americans will save their refund. When asked what they wish they could do with the money, 54 percent said they would go on vacation.
“While saving money may be more responsible, it isn’t very fun. This explains the discrepancy between what people want to do and what they feel obliged to do,” Mashable adds.
For those who do want to splurge, about 25 percent of Americans will blow their refund on a new car, according to GOBankingRates. “The average tax refund is equivalent to a 20 percent down payment on a $15,000 auto loan; combined with today’s very low interest rates, it is a great time to buy a car,” said GOBankingRates Managing Editor Casey Bond, Cars.com reports.
Groups that are most likely to purchase a car are taxpayers under the age of 35 (29 percent), parents (26 percent), and residents of the South (22 percent).
Surprisingly enough, the IRS still has $760 million sitting in the treasury for 918,600 people who failed to file their 2010 tax return. If no one steps up to claim this money by midnight of April 15th, the cash will become property of the federal government. Retired taxpayers and low-income earners make a large percentage of those owed money — many do not know they’re eligible for Earned Income Tax Credit.
“The Earned Income Tax Credit could be worth as much as $5,000 to a taxpayer, depending on their situation,” Fox News reports. Students who worked jobs, but didn’t meet the income level required to file, are also a population that might not have claimed part of that $760 million — they had taxes withheld and could get that money back.
California has the highest number of people owed money — 85,000 residents. New York and Texas follow with 80,600 and 57,400 respectively.
Meanwhile, as many Americans who are truly deserving of a tax refund have no idea that they’re missing out on a large chunk of cash, scam artists cashed in on $4 billion in fraudulent tax returns last year — this a 66 percent jump from the year prior. Criminals have been using other people’s personal information to file, USA Today reports.
“Thieves steal Social Security numbers in any number of ways, including from publicly available sources or workplaces. Victims include school children, prisoners, Medicaid beneficiaries and the deceased. Criminals use the information to file false returns and then pocket the refund checks, often before the legitimate taxpayers have had a chance to submit their own returns,” the paper adds.
On a lighter note, there is one thing that will ease your stress through tax season — Tax Day! This means free dinner, free cookies, and even free massages at the Hard Rock Cafe, European American Bakery Café, and Hydromassage locations, respectively. There’s plenty more where that came from! Check out News-Press’ list of generous locations and see to it that you get your much needed R&R this Tax Day Tuesday.
After a report from RadarOnline that Lauryn Hill was hit with seven tax liens spread like wildfire last week, the singer’s publicist, Kathryn Frazier of Biz3 Publicity, put out a statement to Pitchfork denying the news, saying:
“Contrary to media gossip (fact checking seems to be a dying art-form) there are no changes in Ms. Hill’s legal status. Ms. Hill has finished her sentence, has been fulfilling her agreement with the IRS, and is taking care of all outstanding matters in regards to this situation. She is not in jeopardy of any further charges. The press is reporting on paperwork that had recently been filed, and has now become public record.”
It looks like Lauryn Hill may be in the hot seat with Uncle Sam again. According to Radar Online, the IRS has filed seven additional tax liens against the 90s singer.
The documents, which accuse Lauryn of bailing on her taxes between the years of 2005 and 2011, were filed on Jan. 14 and collectively sum up to a whopping $866,868.05. According to the six-year breakdown, the mother of six owes $422,008.26. For 2006, she owes $19,838.75; 2007, $61,158.50; 2008, $58,405.71; 2009, $30370.91; 2010, $13,247.73; and 2011, $261,838.19.
This of course, is major news since Lauryn was convicted last May of failing to pay nearly $1 million in taxes. She actually just completed a three-month prison sentence in relation to the previously filed tax evasion charges last fall.
“To me, it is obvious that the accumulation of generational trauma and abuse have created the very behaviors the system tries to punish, by providing no sufficient outlets for the victims of institutional terror,” she wrote in a Tumblr post following her 2013 conviction. “Clearly, the institution tries to hide its own criminal history at the expense and wholeness of the abused, who ‘acting out’ from years of abuse and mistreatment, reflect the very aggression that they were exposed to.”
At this point it’s unclear what Lauryn plans to do about her tax woes or if she has already been actively working to get these issues resolved, but we’re hoping that she can get a handle on the situation and pay off her debt.
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:
Tried calling the IRS lately? I have. If you want a live agent, you’ll be on hold for 30 minutes and upward. Or you could get caught in a maze of automated requests.
In fact, 39 percent of people who called the IRS last year gave up before their call was answered, according to a revealing report by the IRS Taxpayer Advocate. And don’t look for the IRS to fix this anytime soon. “Given our very limited resources, phone lines will be very busy, and there will frequently be extensive wait times,” IRS Commissioner John Koskinen said on the IRS’s YouTube video about the 2013 tax year.
IRS inefficiency is hurting taxpayers. Since they can’t get answers they need from the agency to do their own taxes, more people are paying outside sources to prepare them. And for those who go it on their own, basic mistakes in filing may become fines, penalties, or liens.
The agency’s inability to meet customer demands for the past three years are due to Congressional cuts to the budget. President Obama requested $340 million due to the Affordable Care Act, but Congress has failed to come through.
The IRS Taxpayer Advocate says the agency allotted $172 million for customer service training in 2012, but now only has $22 million to train those same people. The IRS also lost 8,000 employees between 2010 and 2012, according to Edward Jenkins, tax director at accounting firm CBIZ MHM. And in the government’s fiscal year 2017, a whopping 70 percent of IRS executives and half of non-executives will be set to retire, he says.
“The online system is better than it used to be,” Koskinen says. “But you’re still going to end up with 15 to 20 million calls unanswered this year.”
The IRS is even backlogged in dealing with notices they have sent out to taxpayers. “The IRS sends you a notice about an issue on your tax return, you respond, and they send a letter saying they will respond in 45 days,” Jeffrey Porter, chairman of the American Institute of Certified Public Accountants’ tax executive committee, tells USA Today.
Jenkins says the agency needs to update its systems so its 22 departments can communicate. Some parts of the IRS still use the antiquated DOS system.
And the agency just isn’t making money. It collects $255 for every $1 it gets in its budget. Voluntary compliance rate is around 83 percent; 17 percent of tax revenue is uncollected. In 2006, this equaled $450 billion.
With a complicated tax code that changes every year, what’s a confused taxpayer to do?
There is a saying in the Bible: “For the love of money is the root of all kinds of evil.” (1 Timothy 6:10)
You may have heard your mom, dad, or grandma reprimand or educate you with it from time to time, but did you ever think to apply the quote to advance your business sense and financial wealth? Financial pundit Sean Hyman has, for example, taking what he has deemed as the Biblical Money Code revealed in the Bible’s scriptures as a foundation for his investment success and education. Hyman is one of many who are enlightening others about how we can get out of debt and build wealth by way of the Word.
Read on for nine ways that we can all learn to invest and spend more wisely through the Bible, whether you are religious or not.
The year is almost over, and after some wise (and perhaps some very unwise) personal financial decisions throughout the course of 2013, you may be ready to close the books on another year. Don’t miss a beat before this year is out. There are many financial decisions you should make before the end of year, such as starting a retirement fund or making room for a little extra cash with a side hustle.
Before the year is over, challenge yourself and accomplish these financial resolutions before the New Year.
Looking to make a little extra cash with a secondary part-time source of income? A second job may only benefit you financially. When deciding whether or not to take on a part-time job or side hustle, you should consider not only the toll it’ll take on your finances, but your emotional health, your mental health, your daily schedule and your free time.
Have you considered these downfalls of juggling multiple jobs at one time? Is a little extra cash worth it? Here’s a few reasons why two (or more jobs) can do you more harm than good.
As we approach the month of November, you’re going to spend your days soon thinking about holiday shopping, decorations, and dinner table place cards. But, don’t forget about your taxes. In fact, it would be best to go ahead and not only start thinking about them, but to begin organizing your paperwork now for early filing.
Because of this year’s government shutdown, the IRS will not begin to process tax returns until one to two weeks after the originally planned January 21st date. If you’e expecting a return and need that money ASAP, you should act in advance. Just because the government is behind schedule does not mean that you should be. Tax season officially starts in December and you will still be able to send your tax returns at any time. Keep ahead of the game and continue to prepare on time — or early — so you’re not pulling your hair out when we’re talking about how close we are to April.
“Because, you know, paying taxes is supposed to pay for the government, which in turn is not working. So if they’re not working, I shouldn’t have to pay taxes,” he jokingly told Vh1. “Being in the upper echelon of the tax bracket, [I] feel the the money I could be saving over these next couple of days could be very vital to my survival.”
While he’s being silly (clip below) there are those who agree with him.
“Republican or Democrat, it seems hard to argue with this logic,” says Forbes. “But high or low, everyone is a little tired of theatrics, of no service at the IRS and elsewhere. And yet taxes and filings are coming due like a freight train.”
The article also notes some past Nelly tax shenanigans, saying in 2006 he tried to deduct his “jewel-encrusted teeth” after he made the song “Grillz.”
Nelly’s latest album “M.O.” was released last week and, so far, sales have stalled. It debuted at number 14 on the Billboard 200.
If you haven’t paid your taxes lately in New York, don’t expect to get behind the wheel of a car anytime soon. Some 16,000 New Yorkers could lose their driver’s licenses because of unpaid taxes.
“The state has officially rolled out a new program that will yank delinquent taxpayers’ driver’s licenses if they are more than $10,000 behind on payments, according to a memorandum issued by the Dept. of Taxes and Finance,” reports Business Insider.
Gov. Cuomo called tax delinquents “scofflaws,” and said the new policy sends a clear message.
“These worst offenders are putting an unfair burden on the overwhelming majority of New Yorkers who are hardworking, law-abiding taxpayers,” he said. “By enacting these additional consequences, we’re providing additional incentives for the state to receive the money it is owed and we’re keeping scofflaws off the very roads they refuse to pay their fair share to maintain.”
Notices sent by the Tax Department have already gone out to 16,000 delinquent taxpayers, who’ll have 60 days to set up a payment plan or the D.M.V. will send another warning, this time giving them 15 days to respond. If they have not taken action by then, their license will be suspended.
Commercially licensed drivers and taxpayers who are makings child or spousal support payments will be exempt. And those who do lose their license will be able to apply for a restricted license, which will allow them to drive only to work.
The Department of Taxes expects the program to generate $6 million in tax revenue each year.
There are three other states who have similar license suspension programs. Many people in New York City don’t own cars, so this is a measure that will clearly impact people who live across the state more heavily than those living in the five boroughs.