Tax news

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.
Tax

Treasury Releases Details of Proposed Changes to Retirement Accounts

Provided by CCHFollowing several days of speculation over new retirement plan proposals that had been circulated privately among top policymakers by Bush administration officials, the Treasury Department, on January 31, released details of President Bush's budget proposals to greatly expand retirement accounts. The first proposal would create two new savings accounts: Lifetime Savings Accounts (LSAs) and Retirement Savings Accounts (RSAs), which will allow all Americans to contribute, regardless of age or income.
Tax

Alimony Payments Have Tax Implications

When the end of matrimony leads to the start of alimony, how does it affect your taxes? Alimony payments you receive are taxable to you in the year received, according to the IRS.The amount is reported on line 11 of Form 1040. You cannot use Form 1040A or Form 1040EZ. The person making the payment may claim a deduction in the year paid on Form 1040. You must give the person who paid the alimony your Social Security number or you may have to pay a $50 penalty.If your decree or agreement calls for both alimony and child support and specifies amounts for each, only the alimony is taxable.
Tax

IRS Announces 'No Rule' Areas

The Internal Revenue Service has issued a packet of revenue procedures designed to clarify areas on which the service will not provide guidance to taxpayers in the form of letter rulings or determination letters.
Tax

Marriage or Divorce? Check Your Social Security Number

The IRS reminds newlyweds and the recently divorced to make sure names on their tax returns match those registered with the Social Security Agency (SSA). A mismatch between a name on the tax return and a Social Security number (SSN) could unexpectedly increase a tax bill and reduce the size of any refund.For newlyweds, the tax scenario can begin when the bride says "I do" and takes her husband's surname, but doesn't tell the SSA about the name change.
Tax

IRS Form 2848 Is A Must For Military Personnel Being Deployed

If you have clients or a loved one being sent overseas in the next few months, then make sure they have the IRS FORM 2848. The IRS Form 2848 "Power of Attorney and Declaration of Representative" enables a spouse to sign the couple's tax return, easing the way for trouble-free tax filing. When you complete the form "Power of Attorney and Declaration of Representative", you must show the type of tax, the tax form number, and the year or period(s) for which the power is granted.
Tax

EFTPS-Online: Pay Your Taxes Over The Internet

If you’re going to owe taxes when you file your federal tax return, consider paying over the Internet through the Electronic Federal Tax Payment System (EFTPS). EFTPS-OnLine is fast, easy, convenient, and secure. The government does not charge for this service.You can enroll in EFTPS-OnLine via an official government site on the Internet, using a user-friendly Web interface. After enrollment, you will receive a confirmation kit by mail with instructions for obtaining an Internet password. For added security, a unique Personal Identification Number (PIN) will be mailed to you.
Tax

Faster Refunds Through Direct Deposit

Want a faster refund? The IRS says that more taxpayers are choosing direct deposit as the way to get their federal tax refunds. The payment is more secure — there is no check to get lost. And, it’s more convenient — no special trip to the bank to deposit a check! Be sure to ask your tax preparer to request direct deposit, or follow the instructions for "Refund" on your tax return.Nearly 40 million people had their tax refunds deposited directly into their bank accounts during the 2002 filing season, a 17 percent increase from the year before.
Tax

DOL Issues Final Rules on 401(k) Blackout Periods

Starting this week, workers with 401(k) retirement plans received new federal protection with the Labor Department’s announcement of a law requiring plan administrators to provide 30 days’ notice of blackout periods.Congress enacted the blackout rules as part of the Sarbanes-Oxley Act of 2002.
Tax

Bush Addresses Tax Relief And The Economy

President Bush's State of the Union Address included strong references to tax cuts that the President believes will bolster the economy. The speech focused on four goals, the first of which addressed the tax and economy issue. "Our first goal is clear," said President Bush.
Tax

Forms and Publications

If you use a tax preparer, you usually won't need to worry about which forms to file or how to complete those forms - that's in part what the preparer is paid to know. However, there may be occasions where you want to review the contents of a form or read a publication so you can become better informed on taxes that you owe.The Internal Revenue Service has many forms and free publications on a wide variety of topics to help you understand and meet tax filing requirements.
Tax

Grant Thornton, Community Bankers, Suggest Tax Fixes

The Independent Community Bankers of America, in cooperation with Grant Thornton, has released a comprehensive study outlining a menu of federal tax relief and simplification measures to improve the country's economy.The 50-page study, "Community Bank Tax Relief and Simplification Options," was developed by the community banking sector to suggest policies that should be enacted to assist small businesses and individuals, and increase the viability of community banks to serve these customers.The Top Ten Tax Fix
Tax

Toll-Free Telephone Service

The IRS provides various services through its toll-free telephone numbers. You can order forms and publications, listen to prerecorded tax information, check on the status of your refund, or ask questions about your tax return.
Tax

IRS Announces New Features For Tax Professionals

The Internal Revenue Service has launched a new and expanded e-subscription service available through IRS.gov for taxpayers, tax professionals, small business owners and the news media.Subscribers to the e-service lists will get timely, specialized information sent via e-mail on topics such as state practitioner meetings, news releases, filing season tax tips and other programs.To subscribe to any of the services, visit "e-News Subscriptions" on the IRS Web site.Among the new features:E-Ne
Tax

Need a Copy of Your Tax Return Information? Call The IRS

There may be times when you need a copy of your prior year federal tax return, a transcript of a return or tax account information. If you had your taxes prepared by a tax professional, you should contact them for copies.
Tax

Tax Materials And Assistance in Spanish

If you need federal tax information in Spanish, you can find it in the form of recorded tax topics, free tax publications and toll-free telephone assistance from the Internal Revenue Service.TeleTax is a toll-free automated service, in English and Spanish, providing helpful tax topics and refund information. You can find a list of the 151 TeleTax topics in the instructions for Form 1040, 1040A or 1040EZ. TeleTax can also help you if it's been at least four weeks since you filed your return and you want to check on the status of your federal refund.
Practice Management

IRS Provides Inventory Valuation Method For Auto Remanufacturing

The Internal Revenue Service today issued guidance that provides an inventory valuation method for rebuildable motor vehicle cores. In the remanufacturing industry, worn or used parts (cores) are rebuilt when received from customers and other sources.The guidance was released as part of the Industry Issue Resolution (IIR) program. The IIR program, launched by the IRS in 2001, tackles issues submitted by taxpayers, associations and other groups representing businesses.
Tax

IRS Guilty of Fraud, Acted Deceptively

The 9th U.S. Circuit Court of Appeals has accused the IRS of committing fraud and acting deceptively with regard to the agency's favored treatment of two pilots who ratted out 1,300 other pilots, all of whom participated in a flaky investment scheme over 20 years ago.The IRS is accused of setting up secret agreements with the two pilots, John Thompson and John Cravens, in exchange for testimony against the other pilots. Mr.

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