Tax news | AccountingWEB

Tax news


Publication 17 - One Stop For Tax Help

Facing a lot of different tax questions this year?

Avoid Headaches - Prepare Taxes Early

Earlier is better when it comes to working on your taxes. The IRS encourages everyone to get a head start on tax preparation. Not only do you avoid the last-minute rush, early filers also get a faster refund.There are several easy ways to get a good jump on your taxes long before the April 15 deadline rolls around:Gather your records in advance. Make sure you have all the records you need, including W-2s and 1099s. Don’t forget to save a copy for your files.Get the right forms.

Ready, Set, E-File!

The IRS on Thursday unveiled its new online tax service called Free File. The service provides information about e-filing and links to 17 companies, all of which have agreed to provide free tax preparation and filing services to certain taxpayers. Each participating company has set its own criteria as to who qualifies for the free services. Altogether the companies have agreed to make their services available at no charge to at least 60% of the U.S.

Concerns Mount Over Proposed Curbs on Tax Services

Concerns are mounting among both accounting firms and consumer groups over the rules proposed by the Securities and Exchange Commission to limit the tax services provided by auditors. SEC's proposed rules represent a cautious compromise, saying auditors can still provide tax services so long as the services are pre-approved by audit committees and don't involve the firm acting as an advocate for the client or auditing its own work. Apparently, this is a compromise that no one likes.

Explanation of The Dividend Exclusion in The Bush Tax Plan

provided by CCHPresident Bush announced an economic stimulus package on January 7 containing more than $670 billion in individual and business tax cuts over the next 10 years. The centerpiece of the package, and the proposal causing the most controversy, is the proposed exclusion from income of dividends paid by a corporation to shareholders.

Get Tax Information 24 Hours a Day

Need a tax form? Have a question about changes to tax law? Want to find the nearest IRS taxpayer assistance center? Now anyone with a personal computer and Internet access can point and click their way to access tax information at should consult your tax preparer for answers to your questions about your personal situation. But for quick reference, check out the IRS Web site.The IRS Web site at offers a wealth of resources for making tax time, well, a little less taxing.


You can avoid headaches at tax time by keeping track of your receipts and other records throughout the year, the IRS advises. Good recordkeeping will help you remember the various transactions you made during the year, which may help you out on your taxes.Records help you document the deductions you’ve claimed on your return. You’ll need this documentation should the IRS select your return for examination.

IRS Offers Amnesty For Taxpayers With Offshore Accounts

The Internal Revenue Service has announced a new program, the Offshore Voluntary Compliance Initiative, designed to round up promoters of and participants in offshore banking and credit card accounts.Taxpayers who approach the IRS by April 15, 2003 and declare ownership of offshore credit card or bank accounts in which they have protected funds from U.S. income taxation may be eligible to participate in the amnesty program.

Should I Itemize?

Whether to itemize deductions on your tax return depends on how much you spent on certain expenses last year. According to the IRS, money paid for medical care, mortgage interest, taxes, contributions, casualty losses, and miscellaneous deductions can reduce your taxes. If the total amount spent on those categories is more than the standard deduction, you can usually benefit by itemizing.The standard deduction amounts are based on your filing status and are subject to inflation adjustments each year.

Mark Everson Chosen to Head IRS

Mark W. Everson, currently the deputy director of the White House Office of Management and Budget (OMB), has been named to the position of commissioner of the Internal Revenue Service. Mr. Everson, if confirmed by the Senate, will replace former commissioner Charles O. Rossotti who completed his five-year term in November, 2002. Bob Wenzel, IRS deputy commissioner, has been serving as acting commissioner since Mr. Rossotti vacated the position.Mr.

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.

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.

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%.

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.

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.

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.

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.

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.

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.

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.


Premium content is currently locked