Tax news

Tax

Tips And Taxes

Do you work at a hair salon, barber shop, casino, golf course, hotel or restaurant or drive a taxicab? The tip income you receive as an employee from those services is taxable income, advises the IRS.As taxable income, these tips are subject to federal income, Social Security and Medicare taxes, and may be subject to state income tax as well.You must keep a running daily log of all your tip income.
Technology

Controversy Over TurboTax 2002

The reviews of Intuit’s TurboTax 2002 are in and most users are giving the perennially popular income tax software two thumbs down. At issue is C-Dilla software, commonly known as spyware, which Intuit installed to stop illegal copying of TurboTax.Intuit’s move has caused many new and long-time users to post their concerns online.
Tax

New Tax Laws Favorable to Home Office Workers

In 1997 there were changes made to the tax law regarding the taxation of gains on the sale of a personal residence. Now, the Internal Revenue Service has issued regulations that clarify those 1997 changes. The tax rules now in effect are much more favorable for taxpayers who take the home office deduction on their tax returns.
Tax

What if You Can't Get a Social Security Number?

If you are not eligible to get a Social Security number but have to file a tax return, you will need to use Form W-7, "Application for IRS Individual Taxpayer Identification Number" to get this number, known as an ITIN.An ITIN is a 9-digit number issued by the IRS, beginning with the number "9." It may look a bit like a Social Security number, but an ITIN is used only for federal income tax purposes and has no effect on your work or immigration status in the U.S.Each person who files a federal tax return or is listed
Tax

What to do if You Haven't Received a Form 1099

If you received certain types of income, you may receive a Form 1099 for use with your federal tax return. You should receive these forms from the payer by early February, according to the IRS. Payers have until January 31, 2003, to mail these to you. If you have not received an expected 1099 by a few days after that, contact the payer. If you still do not get the form by February 15, call the IRS for help at 1-800-829-1040.In some cases, you may obtain the information that would be on the 1099 from other sources.
Tax

New Report Says State Tax Systems Need Revamping

A new report, "The Way We Tax: A 50-State Report," produced by the staff of Governing magazine, points out weaknesses in state tax systems across the country. "The vast majority of state tax systems are inadequate for the task of funding a 21st century government," the authors begin. "Many of those tax systems are also unfair."The report claims that tax policies among the states, which vary greatly from state to state, are based on decisions made during the depression era. While economic conditions have changed, taxes, for the most part, have not kept up with the change.
Tax

What to do if You Haven't Received a Form W-2

You should receive a Form W-2, "Wage and Tax Statement," from each employer you worked for to use in preparing your federal tax return. According to the IRS, employers must furnish this record of 2002 earnings and withheld taxes no later than January 31, 2003 (if mailed, allow a few days for delivery).If you do not receive your Form W-2, contact your employer to find out if and when the W-2 was mailed. If it was mailed, it may have been returned to your employer because of an incorrect or incomplete address, so be sure to verify your address.
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.

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