Tax news

Tax

Busy Season Stress Busters Part Two

In Stress Busters Part One, we offered some ideas on ways to reduce the stresses of tax season. Here are some more great ideas from the readers of AccountingWEB.com – Part Two On nice weekend days, teens can come to the office parking lot and wash all the cars.  
Tax

Taxability of Social Security Benefits

The IRS says that whether your Social Security benefits are taxable depends on your total income and marital status. Form SSA-1099, which Social Security recipients receive by January 31, shows your total benefits, but determining your taxable benefits requires putting pencil to paper.Generally, if Social Security benefits were your only income, your benefits are not taxable and you probably do not need to file a federal income tax return.
Tax

IRS Reduces Burden For Family Day Care Providers

The Internal Revenue Service has announced that family day care providers may now choose to use a standardized rate to claim the deduction for meals provided to children in their care instead of keeping detailed records and receipts of food purchased for use in their business. Use of the standardized rate will significantly reduce the recordkeeping burden of family day care providers.The change means day care providers could save an estimated 10 million hours by using the standard meal rate.
Tax

CCH’s Annual Picks For The Most Quirky Tax Court Cases

The nation’s tax code hardly reads like a novel, yet interesting stories come out of it every year, according to CCH INCORPORATED (CCH), a leading provider of tax law information and software.
Tax

Changing Your Address? Notify The IRS

Have you changed your home or business address? If so, you may want to notify the IRS to ensure that you receive any refunds or correspondence. The IRS is now using the Postal Service’s change of address files to update taxpayer addresses, but you may want to notify the IRS directly.There are several ways to do this. You may correct the address legibly on the mailing label that comes with your tax package or write the new address in the appropriate boxes on your tax return when you file. When your return is processed, the IRS will update your address in its records.
Tax

Intuit Addresses TurboTax Controversy

AccountingWEB recently reported on the controversy surrounding TurboTax 2002 and the alleged "Spyware" software that it was using in the installation process. Upon release of the product, comments in user groups, shopping sites and chat rooms quickly fueled concerns over adverse affects caused by methods the popular tax preparation software was using to combat illegal copying.
Tax

Charitable Contributions

The Internal Revenue Services advises that, when preparing to file your 2002 federal tax return, don’t forget your contributions to charitable organizations. Your donations can add up to a nice tax deduction if you itemize on IRS Form 1040, Schedule A.Here are a few tips to help make sure your contributions pay off on your tax return.To be deductible, contributions must be made to qualified organizations. Organizations can tell you if they are qualified and if donations to them are deductible.
Tax

IRS Updates List of 'Dirty Dozen' Scams For 2003

In an update of an annual consumer alert, the Internal Revenue Service urged taxpayers to avoid falling victim to one of the "Dirty Dozen" tax scams. In the new 2003 ranking, several new scams have reached the top of the consumer watch list, including offshore banking and identity theft schemes."With the tax season in full swing, we’re seeing the traditional upswing in tax trickery," said IRS Acting Commissioner Bob Wenzel. "Year after year, con artists across the nation try pulling a fast one on honest taxpayers with different types of miracle tax solutions.
Tax

Free Filing in 2003

You may be one of millions of taxpayers who will be able to prepare and file their 2002 federal tax returns electronically this year — for free.The IRS and the Free File Alliance, LLC, a private-sector consortium of tax software companies, have formed a partnership to help taxpayers electronically prepare and file their federal tax returns for free. Each Free File Alliance member sets taxpayer eligibility requirements for its program, and the requirements will differ from company to company.
Tax

Refinancing Your Home

Taxpayers who refinanced their homes may be eligible to deduct some costs associated with their loans, according to the IRS.Generally, for taxpayers who itemize, the “points” paid to obtain a home mortgage may be deductible as mortgage interest. Points paid to obtain an original home mortgage can be, depending on circumstances, fully deductible in the year paid.
Tax

IRS Official Explains New Role in Dealing With Tax Shelter Issues

The IRS has elaborated on how the new Senior Executive position in the Office of Chief Counsel, which was created to focus on potentially abusive tax-avoidance transactions, will operate in coordination with other IRS personnel already devoted to that mission.The original announcement reported that Nicholas J. DeNovio, a Washington D.C. attorney, had been selected to fill the new post and that he would supervise a staff of attorneys and lead task force initiatives to expedite the published guidance process to address questionable transactions.
Tax

Beware: IRS Does Not Approve IRA Investments!

Some investment promoters are trying a new tack this spring, touting their Individual Retirement Accounts (IRAs) as being approved by the Internal Revenue Service. Apparently some people are getting sucked in by the ads, or at least the government is afraid people won't know the ads are hype. On Wednesday the Federal Trade Commission (FTC) issued a consumer alert warning the public that there's no such thing as an "IRS-Approved" IRA.Technically, every IRA is IRS-approved, in that to be an IRA, an investment account has to meet certain standards promulgated by the IRS.
Tax

Selling Your Home

If you sold your main home, you may be able to exclude up to $250,000 of gain ($500,000 for married taxpayers filing jointly) from your federal tax return, according to the IRS. This exclusion is allowed each time that you sell your main home, but generally no more frequently than once every two years.To be eligible for this exclusion, your home must have been owned by you and used as your main home for a period of at least two out of the five years prior to its sale.
Tax

Enron Report - Tax Schemes Even the IRS Doesn't Understand

Last Thursday, the U.S. Senate's Joint Committee on Taxation published a three-volume, 2,700 page report describing what the committee had learned of the tax shelters used by Enron Corporation to reduce and in some cases avoid paying U.S. corporate income tax. The year-long investigation into Enron's shenanigans produced a high level of awe from Senators who knew big corporations use tax shelters to lower their tax bills but didn't know quite how much of an industry the practice is.
Tax

Credit For The Elderly or Disabled

You may be able to take the Credit for the Elderly or the Disabled if you are age 65 or older, or if you are retired on permanent and total disability, according to the IRS. Like any other tax credit, it’s a dollar-for-dollar reduction of your tax bill.
Tax

Capital Gains And Losses

Almost everything you own and use for personal purposes, pleasure or investment is a capital asset. The IRS says that when you sell a capital asset, such as stocks, the difference between the amount you sell it for and your basis, which is usually what you paid for it, is a capital gain or a capital loss. While you must report all capital gains, you may deduct only your capital losses on investment property, not personal property.A “paper loss” – a drop in an investment’s value below its purchase price – does not qualify for the deduction.
Tax

Paid Tax Preparers May Need Licenses

In this year's annual report to Congress by the Taxpayer Advocate Service, an independent organization that operates within the Internal Revenue Service and serves as a watchdog to make sure the IRS is handling taxpayer problems efficiently and effectively, one of the more progressive themes is the concept that there should be a push to license paid tax preparers.Currently it is estimated that at least half of the nation's taxpayers pay to have their tax returns prepared by someone else.
Tax

Roth IRAs

Confused about whether you can contribute to a Roth IRA? The IRS suggests checking these simple rules:Income:To contribute to a Roth IRA, you must have compensation (e.g., wages, salary, tips, professional fees, bonuses).
Tax

IRS Gets a New Soldier in War Against Tax Shelters

Nicholas J. DeNovio, a former PwC partner from the National Tax Office in Washington, D.C., has joined the IRS staff to help sniff out and eradicate abusive tax shelters.Part of Mr. DeNovio's role will be to coordinate the anti-tax shelter efforts of many departments of the IRS. His investigatory responsibilities will include gathering data from audits, taxpayer disclosures, and tax shelter documents to quickly identify shelters that the agency may challenge.
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.

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