Tax news

Tax

Creating a Stress-Free Busy Season

by Sandra L. Wiley, COO, Boomer Consulting, Inc.You can thrive, not just survive, during this upcoming busy season. You just need to do five things:- Keep your expectations rational. - Take care of yourself. - Take control of your time and limit your commitments. - Create a positive work environment. - Embrace your family and friends.These tips will help you reduce stress, relax, and breeze through the busy season feeling rested, grounded, and in control.Keep Your Expectations Rational
Technology

Amnesty Program Leads to Online Sales Tax Collection

Pressure by cash strapped states with increased state tax collecting authority has resulted in an amnesty program for some major retailers turning a new chapter in the development of the Internet. On February 3, 2003, some online retailers began voluntarily charging sales tax for online purchases, regardless of the state of residence of the customer. Retailers that are part of the new plan are apparently being given an amnesty of sorts from previous taxes that might have been levied on past sales.
Tax

Sprint CEO Fears Losing Everything in IRS Audit

William T. Esrey, who recently resigned as CEO of Sprint Corporation, fears for his financial future as he places his fate in the hands of the Internal Revenue Service. Although the former executive expects Sprint to pay him $1 million per year for the next three years, that sum won't go far if he is charged a projected $63 million in taxes as well as interest and penalties.The IRS is investigating participants in a tax shelter sold by Big Four firm Ernst & Young.
Tax

Firms Face More Lawsuits Over Tax Shelters

Big Four firms Ernst & Young and KPMG are being sued by clients for selling tax shelters that have been found by the Internal Revenue Service to be illegal tax evasion strategies.In December we reported that four Indiana residents along with 45 other clients of E&Y sued the Big Four firm for $1 billion, alleging that the firm induced them into entering into what were known to be illegal tax shelters.
Tax

Earned Income Tax Credit Available For Certain Workers

Workers earned it. Don’t forget to claim it, says the Internal Revenue Service. The Earned Income Tax Credit lowered federal tax liabilities for 19 million lower-income workers last year.Some taxpayers may be eligible to claim the EITC for the first time, especially if there were changes in the family such as a new child, divorce or decrease in earnings during the past year.To qualify for the EITC, taxpayers must have earned income during the year. Married taxpayers who file a joint return may qualify if at least one spouse has earned income.
Tax

IRS Officials And Tax Lawyers to Discuss The Voluntary Compliance Initiative

The Internal Revenue Service is making an offer to those involved in offshore payment card and offshore financial arrangement schemes: come clean now and you can avoid criminal prosecution. But this is your last chance."Tax Schemes and Scams—Save your Client the Trouble" is the title for this month’s Tax Talk Today® webcast, with the panel discussion focusing on the recently launched Offshore Voluntary Compliance Initiative.
Tax

April 15 is Last Chance For Your Share of $2.5 Billion

Nearly 2 million people have yet to file their 1999 federal income tax returns and their time is running out. Taxpayers owed a refund of 1999 income taxes have until midnight April 15, 2003 to file their 1999 tax returns or else they forfeit the tax refund.The Internal Revenue Service believes that more than $2.5 billion for 1999 tax returns has gone unclaimed. Any unclaimed tax refund money will belong to the U.S. government as of April 16, 2003.About half of the taxpayers owed refunds are entitled to receive more than $500.
Tax

Child And Dependent Care Credit

If you paid someone to care for a child or a dependent so you could work, you may be able to reduce your tax by claiming the credit for child and dependent care expenses on your federal income tax return, according to the IRS. This credit is available to people who, in order to work or to look for work, have to pay for child care services for dependents under age 13.
Tax

Reminder: New IRS Tax Filing Address in 16 States

As taxpayers begin to prepare their tax returns, the Internal Revenue Service reminds them that they may be sending their returns to a different service center than last year. However, those who received a tax instruction booklet from the IRS in the mail and use the labels included with the booklet can be assured that their tax returns will go to the correct address.However, taxpayers who did not receive an instruction booklet in the mail, are mailing a paper tax return and live in one of the following 16 states should be aware of the change.
Tax

Offshore Tax Return Processing Continues to Gain Favor

Recognizing a growing trend, last month, CCH announced a new product, Prosystem fx Outsource, which utilizes trained tax preparers to help U.S. CPA firms by utilizing offshore, lower cost professionals to prepare tax returns.
Tax

Child Tax Credit

With the Child Tax Credit, you may be able to reduce the federal tax you owe by $600 for each qualifying child under the age of 17, according to the IRS. A qualifying child for this credit is someone who:Is claimed as your dependent, Was under age 17 at the end of 2002,Is your son, daughter, adopted child, grandchild, stepchild, or eligible foster child, andIs a U.S. citizen or resident.The credit is limited if your modified adjusted gross income is above a certain amount.
Tax

President Bush Proposes Replacing IRAs, 401(k)s

President Bush presented his fiscal year 2004 budget this week. Among other proposals, the President is calling on Congress to create two new types of retirement accounts which would simplify and streamline the current collection of retirement options, including IRAs, Roth IRAs, 401(k)s, 456s, SIMPLEs, and more.The President's plan calls for the establishment of Retirement Savings Accounts (RSAs) which would replace the current Individual Retirement Arrangements (IRAs). The plan also calls for the establishment of Lifetime Savings Accounts (LSAs).
Tax

Dependents

So your daughter is off to college and you're wondering if you can still claim her as a dependent? To be claimed as a dependent, a person must meet five tests, according to the IRS:Member of Household/Relationship Test—the person must be a relative or live in your household all year.Joint Return Test—the person can't file a joint tax return with someone else except to claim a refund of all tax withheld.Citizenship Test—the person must be:a U.S.
Tax

Treasury Releases Details of Proposed Changes to Retirement Accounts

Provided by CCHFollowing several days of speculation over new retirement plan proposals that had been circulated privately among top policymakers by Bush administration officials, the Treasury Department, on January 31, released details of President Bush's budget proposals to greatly expand retirement accounts. The first proposal would create two new savings accounts: Lifetime Savings Accounts (LSAs) and Retirement Savings Accounts (RSAs), which will allow all Americans to contribute, regardless of age or income.
Tax

Alimony Payments Have Tax Implications

When the end of matrimony leads to the start of alimony, how does it affect your taxes? Alimony payments you receive are taxable to you in the year received, according to the IRS.The amount is reported on line 11 of Form 1040. You cannot use Form 1040A or Form 1040EZ. The person making the payment may claim a deduction in the year paid on Form 1040. You must give the person who paid the alimony your Social Security number or you may have to pay a $50 penalty.If your decree or agreement calls for both alimony and child support and specifies amounts for each, only the alimony is taxable.
Tax

IRS Announces 'No Rule' Areas

The Internal Revenue Service has issued a packet of revenue procedures designed to clarify areas on which the service will not provide guidance to taxpayers in the form of letter rulings or determination letters.
Tax

Marriage or Divorce? Check Your Social Security Number

The IRS reminds newlyweds and the recently divorced to make sure names on their tax returns match those registered with the Social Security Agency (SSA). A mismatch between a name on the tax return and a Social Security number (SSN) could unexpectedly increase a tax bill and reduce the size of any refund.For newlyweds, the tax scenario can begin when the bride says "I do" and takes her husband's surname, but doesn't tell the SSA about the name change.
Tax

IRS Form 2848 Is A Must For Military Personnel Being Deployed

If you have clients or a loved one being sent overseas in the next few months, then make sure they have the IRS FORM 2848. The IRS Form 2848 "Power of Attorney and Declaration of Representative" enables a spouse to sign the couple's tax return, easing the way for trouble-free tax filing. When you complete the form "Power of Attorney and Declaration of Representative", you must show the type of tax, the tax form number, and the year or period(s) for which the power is granted.
Tax

EFTPS-Online: Pay Your Taxes Over The Internet

If you’re going to owe taxes when you file your federal tax return, consider paying over the Internet through the Electronic Federal Tax Payment System (EFTPS). EFTPS-OnLine is fast, easy, convenient, and secure. The government does not charge for this service.You can enroll in EFTPS-OnLine via an official government site on the Internet, using a user-friendly Web interface. After enrollment, you will receive a confirmation kit by mail with instructions for obtaining an Internet password. For added security, a unique Personal Identification Number (PIN) will be mailed to you.
Tax

Faster Refunds Through Direct Deposit

Want a faster refund? The IRS says that more taxpayers are choosing direct deposit as the way to get their federal tax refunds. The payment is more secure — there is no check to get lost. And, it’s more convenient — no special trip to the bank to deposit a check! Be sure to ask your tax preparer to request direct deposit, or follow the instructions for "Refund" on your tax return.Nearly 40 million people had their tax refunds deposited directly into their bank accounts during the 2002 filing season, a 17 percent increase from the year before.

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