Tax news

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.
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.

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