Tax news

Tax

Deductible Taxes

Did you know that you may be able to deduct certain taxes on your federal income tax return? The IRS says you can if you file Form 1040 and itemize deductions on Schedule A. There are three types of deductible non-business taxes:State, local and foreign income taxes; Real estate taxes; and Personal property taxes. You can deduct any estimated taxes paid to state or local governments and any prior year's state or local income tax as long as they were paid during the tax year.
Tax

Early Distributions From Retirement Plans

An early distribution from an Individual Retirement Arrangement (IRA) or a qualified retirement plan need not be a “taxing” experience, according to the IRS.Any payment that you receive from your IRA or qualified retirement plan before you reach age 59½ is normally called an “early” or “premature” distribution. As such, these funds are subject to an additional 10 percent tax. But there are a number of exceptions to the age 59½ rule that you should investigate if you make such a withdrawal.
Tax

IRS Audits on The Rise

A new report analyzing the performance of the Internal Revenue Service when it comes to auditing taxpayers and collecting unpaid taxes shows the agency is improving and streamlining its audit and collection process.For fiscal year 2002 the IRS increased its audits of taxpayers earning more $100,000 by 22%.
Tax

Estate Beneficiaries Sue E&Y For Faulty Tax Advice

Big Four firm Ernst & Young faces a court battle in the Circuit Court of Jackson County, Missouri, where beneficiaries and trustees of an estate claim the firm cost them millions due to a miscalculation of potential estate tax.At issue in the estate of the late Kansas City banker John J. Sullivan Jr. is the valuation of bank stock owned by the decedent. The estate was valued at approximately $23 million at the time of Mr. Sullivan's death in 1999.
Tax

Do You Have a Deductible Home Office?

Whether you are self-employed or an employee, if you use a portion of your home for business purposes, you may be able to take a home office deduction, according to the IRS.You can deduct certain expenses if your home office is the principal place where your trade or business is conducted or where you meet and deal with clients or patients in the course of your business.
Tax

More Ingenious Tax Strategies: Kansas Taxes Drug Dealers

The following is a part of a continued AccountingWEB series of articles examining unique and ingenious ways that states are finding to generate tax revenue.When state governments face budget woes, legislators devise creative ways to raise revenue. One of the most unusual is the taxing of illegal drug transactions. A growing number of states now require drug dealers to purchase a drug tax stamp and affix it to the controlled substance.
A&A

Sales Tax Loss in Online Sales May Not be All It's Cracked up to be

A new analysis by the Direct Marketing Association (DMA) points out flaws in the theory that states are losing billions of dollars each year due to the loss of sales tax on Internet sales. The analysis, based on data provided by the U.S.
A&A

Streamlined State Sales Tax Project at Core of Corporate Concerns

Tax executives met recently in Washington D.C. at the fourth annual Tax Council Policy Institute Symposium for the purpose of examining jurisdiction-to-tax issues in today's economy. Not surprisingly, a majority of symposium participants expect the Streamlined Sales Tax Project and similar tax issues to have a major influence on their companies' ability to compete in the next five years.The Streamlined Sales Tax Project is a plan to organize the nation's 7,600 taxing jurisdictions into a workable arrangement for collecting sales tax on Internet sales.
Tax

Voices of Reform: Get Out of Tax, Get Out of Audit, Shape up!

These are confusing times for accountants. As the accounting profession jockeys to identify and secure its proper place in the financial universe, conflicting messages continue to emanate from the leaders of the profession.Paul Volcker Calls For an End to High End Tax WorkIn an interview this week with the Financial Times, former Fed Chairman Paul Volcker called upon the Public Company Accounting Oversight Board to ban audit firms from performing tax work for audit clients.
Tax

Alternative Minimum Tax

Before mailing your federal income tax return, check to make sure you aren’t subject to the alternative minimum tax (AMT). The IRS says that in recent years, more and more people have found themselves subject to the AMT.The tax law gives preferential treatment to some kinds of income and allows special deductions and credits for some kinds of expenses. Taxpayers who benefit from these provisions of the law may have to pay an additional tax called the alternative minimum tax.
Technology

Most Taxpayers Avoid Computer When Preparing Tax Returns

A recent survey commissioned by Iomega Corporation and performed by Harris Interactive disclosed surprising results about the use of tax software. While the number of home computer users continues to increase, a significant majority of taxpayers do not use their computers to prepare and file income tax returns.
Tax

IRS Chief Nominee: Curbing Tax Evasion is Priority One

Despite former IRS Chairman Rossotti's report of the agency's failure to go after taxpayers who fail to file a return - or perhaps because of it - Mark Everson, the nominee to head the IRS, has vowed to make curbing tax evasion his top priority."Attorneys and accountants should be pillars of our system of taxation, not the architects of its circumvention," Everson told the Senate Finance Committee on March 18. A vote is expected next week on Mr. Everson's nomination for a five-year term as commissioner of the IRS.If confirmed, Mr.
Tax

Tax Changes For Business Owners

At tax time, many business owners want to make sure they are aware of the latest changes that could affect their taxes. If you are one of these owners, a good source of information is IRS Publication 334, Tax Guide for Small Business. Publication 334 includes a listing of some tax changes for 2002 returns, plus explanations of the changes. It also includes some of the changes for 2003.
Tax

Class Action Filed Against Intuit Over Product Activation

Customers who purchased Intuit's TurboTax tax preparation software this year were surprised to find a new feature, the product activation feature, that prevents users from installing the software on more than one computer. Now those who purchased the software may be able to recover damages in a lawsuit filed against Intuit.Intuit added the product activation feature this year to cut down on piracy of the program.
Tax

Tax on Child’s Investment Income

Part or all of a child's investment income may be taxed at the parent's rate rather than the child's rate, according to the IRS. Because a parent's taxable income is usually higher than a child's income, the parent's top tax rate will often be higher as well. This special method of figuring the federal income tax only applies to children who are under the age of 14. For 2002, it applies if the child's total investment income for the year was more than $1,500.
Tax

Strong Growth in Computer Returns And Federal/State E-File

The Internal Revenue Service continues to receive more tax returns electronically, with especially big increases in taxpayers e-filing from their own computers – almost 7 million, up nearly 30 percent over this time last year – and for those e-filing federal and state returns together – more than 14.4 million, up 14 percent."Our Free File program is driving a strong growth in e-filing among taxpayers using their home computers," said Terry Lutes, IRS Director for Electronic Tax Administration.
Tax

Don't be Taken in by Tax Scams

The IRS reminds taxpayers not to fall victim to a variety of tax scams. These schemes take several shapes, ranging from promises of special tax refunds to illegal ways of “untaxing” yourself. If people think something may be unscrupulous, they can report suspected tax fraud to the IRS at 1-800-829-0433.The IRS urges people to avoid these common schemes:Offshore Transactions. Some people use offshore transactions to avoid paying United States income tax.
Community News

Busy Season Stress Busters Part Four!

Here are some more great ideas from the members of AccountingWEB.com – Part Four An AccountingWEB mentioned a Jellybean counting contest. We're doing it, and everyone loves it!! We also did tax season survival kits and attached them to an invitation to our after tax season cookout. We also have had "Nickname Day" - give your co-workers a nickname Survival Kits: Coffee singles, no-doz pills, Rolaids, Excedrin, "Nerds" candies!  
Tax

Taxable or Non-Taxable?

Generally, most income you receive is taxable, according to the IRS. But there are some areas where certain types of income are partially taxed or not taxed at all.
Tax

Audits of Some Taxpayers Increase, Computers Partially Responsible

While the number of IRS agents conducting face-to-face audits has decreased significantly in the past 10 years, the actual quantity of returns being audited is slowly increasing.President Bush's proposed budget includes an extra $133 million for the IRS earmarked for "high-income non-compliance" including investigations into questionable tax shelters like those marketed by Big Four firms Ernst & Young and KPMG and like the one owned by former Sp

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