Tax news

Tax

Which Form - 1040, 1040A, or 1040EZ?

If you are filing a federal income tax return on paper, use the simplest form you can, the IRS advises. The simpler the form, the less chance of an error that may cost you money or delay the processing of your return. The simplest is Form 1040EZ. Form 1040A covers several additional items not addressed by the EZ. Form 1040 should be used when itemizing deductions and reporting more complex investments and other income.
Technology

2nd Story Offers Free Tax Software

As tax preparers around the country begin gearing up for another busy tax season, software publisher 2nd Story is taking a different approach - giving away free copies of its TaxAct 2002 Standard Edition software for taxpayers to prepare their own taxes.Why are they doing this? 2nd Story is looking to open up a new market for tax preparation software.The theory that 2nd Story is banking on is that there are 30 million people preparing taxes the "old fashioned way," and many of them may be intimidated by software to help them with the process.
A&A

Summary of 2002 Tax Law Changes For Businesses

There are some changes to the tax laws effective for 2002 income tax returns that work to the benefit of business taxpayers. Tax accountants will want to make sure their clients are aware of these changes that will save their clients tax dollars on their 2002 tax returns and in years to come.The deduction for self-employed health insurance as an adjustment to income increases to 70% for 2002. The remaining 30% qualifies as an itemized deduction. For 2003 the above-the-line adjustment for self-employed health insurance increases to 100%.
Tax

What is Your Filing Status?

Your filing status on your federal tax return is a category that identifies you based on your marital and family situation, according to the IRS. It is an important factor in determining whether you must file a return, the amount of your standard deduction and your correct amount of tax. If more than one filing status applies to you, you may choose the one that gives you the lowest tax obligation.There are five possible filing statuses: Single, Married Filing Jointly, Married Filing Separately, Head of Household and Qualifying Widow(er) with Dependent Child.
Tax

Who Must File a Tax Return?

There are some instances when you may not be required to file a federal income tax return. But keep this in mind — more than 70 percent of those who file are due a refund, so it may be to your advantage to file even if you are not required to.The law does require you to file a tax return if your income is above a certain level. Check the instructions for Form 1040, 1040A or 1040EZ (under "filing requirements") for specific details that may affect your need to file a tax return with IRS this year.Here are some general guidelines for anyone under age 65.
Tax

Taxpayer Advocate Group Lists Top Complaints About The IRS

The National Taxpayer Advocate Service (TAS) has filed its annual report with Congress setting out the most serious problems encountered by taxpayers in dealing with the Internal Revenue Service, the most litigated tax issues, and the TAS's recommendations for legislation.According to the report, the function of the TAS is to provide taxpayers with timely service, correct responses, and efficient advocacy.
Tax

2003 Filing Season Begins With New IRS Resources

The IRS wants to make sure that you have all the information you need to file your taxes, so they have added a few resources to assist the process.New IRS ResourcesCheck the status of your refund.
Tax

H&R Block Employee Accused of Identity Theft

A former H&R Block office manager and three accomplices have been charged with mail fraud and other crimes in a case of identity theft involving 27 tax preparation customers at H&R Block in White Plains, New York.The Block employee, Ivy Johnson, has been accused of taking customer names, Social Security numbers, and dates of birth. Ms.
Tax

IRS Won't Let Taxpayers Hide Behind Preparers' Coattails

The U.S. Treasury Department has released proposed rules that limit the likelihood of a "My Accountant Told Me I Could Do This" defense for tax return deductions.
Tax

IRS Issues Regulations Regarding Education Credits

The Internal Revenue Service has issued final regulations regarding the use of the Hope Scholarship Credit and the Lifetime Learning Credit. The regulations clarify some areas of discrepancy surrounding the two credits.The Hope Scholarship Credit applies to higher education costs of students in their first two years of college and has an annual limitation of 100% of the first $1,000 paid for such expenses and 50% of the second $1,000 paid, or $1,500.
Tax

Deloitte Ranked World's Leading Tax Adviser

Deloitte's tax practice was ranked No. 1 in Euromoney's 2002 World's Leading Tax Adviser Survey. The firm took top honors in both the worldwide and U.S. national standings as determined from responses to 5,000 questionnaires sent to in-house tax experts and chief financial officers.Commenting on the U.S.
Tax

IRS Issues Home Sale Exclusion Rules

The Internal Revenue Service has issued guidance in the form of both final and temporary regulations related to excluding gain on the sale of a principal residence. A 1997 law substituted an exclusion of up to $250,000 ($500,000 for a married couple filing jointly) for the old “replacement residence” rules.
Tax

E&Y Slapped With $1 Billion Lawsuit

While the rest of the world hurried to prepare for the Christmas holidays, lawyers and public relations specialists at Big Four firm Ernst & Young kicked into overtime to respond to the filing of a $1 billion lawsuit filed against the firm late last week. Four Indiana residents who, along with 45 other clients, allege that the firm induced them to enter into illegal tax shelters in 1999 filed the suit. The shelter in question utilized currency option trades to create paper losses that offset real capital gains on which the clients would have had to pay taxes.
Community News

'Tis The Season For Charitable Donations – Web Site Resources

Here are some helpful resources on the Web to assist you and your staff in finding the right charity to support. JustGive is a nonprofit organization whose mission is to connect people with the charities and causes they care about and to increase overall giving. As the central gateway to giving, JustGive provides people with the resources, services, and tools they need to give -- whether it's their money, their time, or their goods.
Tax

New Changes to IRS Form W-7

Resident and non-resident aliens applying for an Individual Taxpayer Identification Number must soon use a newly revised Form W-7.The new application forms will request additional information. The applications are now available in both English and Spanish on www.irs.gov. The English language version, Form W-7 and the Spanish language version, Form W-7 (SP) is also available at IRS offices.Along with their application, applicants must also submit documents proving their alien status and their identity.
Tax

President Bush Pushing For Immediate Tax Cuts

In an attempt to spur the sagging economy, the Bush White House is considering recommending tax cuts that could go into effect as early as January 1, 2003. Top among the cuts under consideration are an immediate repeal of the marriage penalty, currently slated for repeal in 2009, and an increase in the Child Tax Credit to $1,000.
Tax

Grant Thornton Warns of Problems With Tax Shelter Regulations

Grant Thornton, currently the nation's fifth largest accounting firm, has responded to the Internal Revenue Service's request for comments on proposed tax shelter regulations and has raised issues that may be of concern to middle-market companies.The regulations, which are set to be come effective January 1, 2003, include two provisions that have sparked concern with the accountants at Grant Thornton. First, the revised regulations include a provision for contractual protection against the risk that tax benefits from tax shelters will be denied.
Tax

IRS Drops Interest Rates

Effective January 1, 2003, the Internal Revenue Service will drop interest rates by one percentage point. The following new rates will apply:5% interest on tax overpayments5% interest on tax underpayments7% interest on tax underpayments by large corporations2 1/2% interest on the portion of a corporate overpayment exceeding $10,000These rates will apply for the first quarter of 2003. These are the lowest rates since 1975.The interest rates are computed from the federal short-term rate based on daily compounding determined during October 2002.
Tax

'Tis the Season For Job Hunting - Prepare For Tax Season

By Robert G. Epstein, President and CEO of CareerBank.com The holiday season brings job opportunities as companies prepare for Tax Season. As winter begins, thoughts of holidays and shopping replace job hunting in the minds of most job seekers. This can be a mistake.The interval between Thanksgiving and Christmas is when many retailers earn most of their annual revenue. What many people don't realize is that, just like the retail industry, public accounting has a seasonal nature.
Tax

IRS Reminds Taxpayers to Make Donations

The Internal Revenue Service issued a news release this week geared toward reminding taxpayers that, as the tax year comes to a close, donations to public charities can still be made as late as December 31, and such donations will reduce 2002 taxes for taxpayers who itemize their deductions on Schedule A of their federal tax return.Taxpayers are reminded that individual gifts of $250 or more must be documented with a written acknowledgement from the charitable organization.

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