Tax news

Technology

Most Taxpayers Avoid Computer When Preparing Tax Returns

A recent survey commissioned by Iomega Corporation and performed by Harris Interactive disclosed surprising results about the use of tax software. While the number of home computer users continues to increase, a significant majority of taxpayers do not use their computers to prepare and file income tax returns.
Tax

IRS Chief Nominee: Curbing Tax Evasion is Priority One

Despite former IRS Chairman Rossotti's report of the agency's failure to go after taxpayers who fail to file a return - or perhaps because of it - Mark Everson, the nominee to head the IRS, has vowed to make curbing tax evasion his top priority."Attorneys and accountants should be pillars of our system of taxation, not the architects of its circumvention," Everson told the Senate Finance Committee on March 18. A vote is expected next week on Mr. Everson's nomination for a five-year term as commissioner of the IRS.If confirmed, Mr.
Tax

Tax Changes For Business Owners

At tax time, many business owners want to make sure they are aware of the latest changes that could affect their taxes. If you are one of these owners, a good source of information is IRS Publication 334, Tax Guide for Small Business. Publication 334 includes a listing of some tax changes for 2002 returns, plus explanations of the changes. It also includes some of the changes for 2003.
Tax

Class Action Filed Against Intuit Over Product Activation

Customers who purchased Intuit's TurboTax tax preparation software this year were surprised to find a new feature, the product activation feature, that prevents users from installing the software on more than one computer. Now those who purchased the software may be able to recover damages in a lawsuit filed against Intuit.Intuit added the product activation feature this year to cut down on piracy of the program.
Tax

Tax on Child’s Investment Income

Part or all of a child's investment income may be taxed at the parent's rate rather than the child's rate, according to the IRS. Because a parent's taxable income is usually higher than a child's income, the parent's top tax rate will often be higher as well. This special method of figuring the federal income tax only applies to children who are under the age of 14. For 2002, it applies if the child's total investment income for the year was more than $1,500.
Tax

Strong Growth in Computer Returns And Federal/State E-File

The Internal Revenue Service continues to receive more tax returns electronically, with especially big increases in taxpayers e-filing from their own computers – almost 7 million, up nearly 30 percent over this time last year – and for those e-filing federal and state returns together – more than 14.4 million, up 14 percent."Our Free File program is driving a strong growth in e-filing among taxpayers using their home computers," said Terry Lutes, IRS Director for Electronic Tax Administration.
Tax

Don't be Taken in by Tax Scams

The IRS reminds taxpayers not to fall victim to a variety of tax scams. These schemes take several shapes, ranging from promises of special tax refunds to illegal ways of “untaxing” yourself. If people think something may be unscrupulous, they can report suspected tax fraud to the IRS at 1-800-829-0433.The IRS urges people to avoid these common schemes:Offshore Transactions. Some people use offshore transactions to avoid paying United States income tax.
Community News

Busy Season Stress Busters Part Four!

Here are some more great ideas from the members of AccountingWEB.com – Part Four An AccountingWEB mentioned a Jellybean counting contest. We're doing it, and everyone loves it!! We also did tax season survival kits and attached them to an invitation to our after tax season cookout. We also have had "Nickname Day" - give your co-workers a nickname Survival Kits: Coffee singles, no-doz pills, Rolaids, Excedrin, "Nerds" candies!  
Tax

Taxable or Non-Taxable?

Generally, most income you receive is taxable, according to the IRS. But there are some areas where certain types of income are partially taxed or not taxed at all.
Tax

Audits of Some Taxpayers Increase, Computers Partially Responsible

While the number of IRS agents conducting face-to-face audits has decreased significantly in the past 10 years, the actual quantity of returns being audited is slowly increasing.President Bush's proposed budget includes an extra $133 million for the IRS earmarked for "high-income non-compliance" including investigations into questionable tax shelters like those marketed by Big Four firms Ernst & Young and KPMG and like the one owned by former Sp
Tax

Gift Giving

If you gave any one person gifts valued at more than $11,000 in 2002, it is necessary to report the total gift to the Internal Revenue Service. You may even have to pay tax on the gift.The person who receives your gift does not have to report the gift to the IRS or pay gift or income tax on its value.You make a gift when you give property, including money, or the use or income from property, without expecting to receive something of equal value in return.
Technology

Techies Warn Self-Filing Taxpayers of Possible Identity Theft Threat

Leading tax preparation software companies Intuit (TurboTax) and H&R Block (TaxCut) may be producing software that puts customer tax data at risk, according to some data security experts. Both TurboTax and TaxCut leave taxpayer data files unencrypted and thus unprotected from hackers, and some people are concerned about the possibility of identity theft.Security Firm PivX Solutions has issued a warning about the hacker potential.
Tax

Tax Assistance For Individuals With Disabilities And Hearing-Impaired

Are you unable to complete your federal income tax return because of a physical disability or hearing impairment? Get help from the IRS through its Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) programs, or through a special TDD phone number available in both English and Spanish.The VITA program has IRS-trained volunteers who provide free tax assistance at neighborhood locations such as churches, schools, libraries and community centers. VITA is aimed at those who may find it difficult to pay for tax assistance.
Tax

Massachusetts Takes Aim at Rapid Refund Loans

The State of Massachusetts has ordered tax preparation giant H&R Block as well as other tax preparers to file for a license that will prevent the tax companies from collecting exorbitant interest rates on the popular tax refund anticipation loans. The Massachusetts law would limit tax preparers and banks to an annual interest rate of 23% on the rapid refunds. Rapid refund loans enable taxpayers to get their tax refund money as soon as they file their tax returns, or within 2-3 days, as opposed to waiting 10 days or more for the IRS to produce the money.
Practice

Tax Professionals Can Now E-File Employment Tax Forms

Tax professionals are able to file employment taxes for business clients for the first time as part of a new Employment Tax e-filing System offered by the Internal Revenue Service.The IRS expects the e-file upgrades will continue to reduce the paperwork burden on small businesses.
Tax

Check Your Refund Status

If you have already filed your federal tax return and are due a refund, you have several options for checking on the status of your refund, says the IRS.A new option this year is Where’s My Refund?, an Internet-based service available on the IRS Web site.
Tax

Schedules B and 1

You may be one of about 15 million taxpayers who no longer have to file Form 1040’s Schedule B or Form 1040A’s Schedule 1, according to the IRS.
Tax

E-File Now, Pay Later, Despite Alabama Warning

Alabama taxpayers who thought they were doing the right thing by filing tax returns electronically, even though they owe money on those returns, got a bit of a surprise last week.While the Alabama taxpayers saved paper and the time of state employees who would have had to process written tax returns manually, their reward for such efforts was a collection letter from the Alabama state government telling them they'd better pay their taxes within 10 days.The recent trend has been to encourage taxpayers to file early and electronically with the incentive of receiving their refunds more quic
Tax

Sierra Club Pushes IRS For SUV Audits

As one of the country’s leading conservation organizations, the Sierra Club often asks the Environmental Protection Agency to enforce federal laws to protect the environment. Now, the club wants the Internal Revenue Service (IRS) to step up its auditing efforts on certain SUV owners and to help the environment in the process.In a press release last month, the San Francisco-based Sierra Club explained its directive to the IRS.
Tax

Reservists, New Enlistees May Get Deferral For Back Taxes

The IRS reminds reservists called to active duty and new enlistees in the armed forces that they might qualify for a deferral of taxes owed if they can show that their ability to pay taxes was impaired because of their military service. The Soldiers and Sailors Civil Relief Act provides this benefit.The Act covers active duty members of the military services — Army, Navy, Air Force, Marine Corps and Coast Guard. Reservists must be placed on active duty to qualify.

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