Tax news

Tax

Tax Tip: 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 2000, it applies if the child's total investment income for the year was more than $1,400.
Tax

Tax Talk Today: Filing Those Returns-200 Million Submissions

As the first wave of 200 million tax returns begin to stream into IRS centers, the February 27, 2001 broadcast of Tax Talk Today takes a timely look at the current filing season. The broadcast, from 2:00 - 3:00 p.m. EST, will engage tax professionals and IRS guests in wide-ranging discussion of tax preparation topics - service center processing, the new checkbox option, and tips and trends in electronic filing. There will be a special segment on how the IRS is thwarting tax evasion schemes.
Tax

IRS Initiates Steps to Protect Victims of Domestic Violence

The following article is provided courtesy of CCH, Inc.The IRS has announced that it has initiated a series of steps to protect victims of domestic violence who apply for innocent spouse relief. Taxpayers who are victims of domestic violence and fear that filing a claim for innocent spouse relief would result in retaliation should write the term "Potential Domestic Abuse Case" on the top of their Form 8857, Request for Innocent Spouse Relief.
Tax

Tax Tip: Child and Dependent Care Credit

If you paid someone to care for a child or a dependent so you could work, you may be able to reduce your tax by claiming the credit for child and dependent care expenses on your tax return, according to the IRS. This credit is available to people who, in order to work or to look for work, have to pay for child care services for dependents under age 13.
Tax

Tax Tip: Deductible Taxes

Did you know that you may be able to deduct certain taxes on your federal income tax return? You can if you file IRS Form 1040 and itemize deductions on Schedule A. There are three types of deductible non-business taxes:State, local and foreign income taxes; Real estate taxes; and Personal property taxes.You can deduct any estimated taxes paid to state or local governments and any prior year's state or local income tax as long as they were paid during the tax year.
Technology

New Study Shows Number of E-Filers Up 300%

A revealing study by Forrester Research shows that an estimated 6 million households will file tax returns online this spring. The number represents a 4 million or 300 percent increase over last year.The increase in online filers is attributed to the increase in readily available online tax filing services, the ease of tax software programs, and a growing comfort level toward electronic filing.
Tax

2001 Tax Hints Available On-Line

For many years, several of the IRS Service Centers produced guides for tax professionals in their area. This year, 2001 Tax Hints: Practitioner's Guide To The Filing Season has been expanded into a National Filing Season reference guide for the tax professional community.
Tax

Tax Tip: What To Do If You Can't Pay Your Taxes

If this year's tax filing deadline will be a pay day for you and you cannot pay the full amount that you owe, you should still file your return by the due date and pay as much as you can. The IRS may allow you to pay any remaining balance over time in monthly installments through an Installment Agreement or possibly even settle for less than the full amount owed through its Offer in Compromise program.If you find that you cannot pay the full amount by the filing deadline, you should file your return and pay as much as you can by the due date.
Tax

Take a Peek at New IRS Web Site

The new IRS Web site is not yet up and running, but the prototype is available for observation and comment.The Digital Daily will be replaced with a new, more austere design.
Tax

Tax Tip: Education IRAs Can Make College Costs Less Taxing

The Education IRA is an incentive to help parents and students save for higher education. Up to $500 may be contributed to a child's Education IRA each year. Earnings on contributions will be distributed tax free provided that they are used to pay the beneficiary's postsecondary education expenses. Any individual who meets adjusted gross income (AGI) requirements can make a non-deductible contribution on behalf of a child under the age of 18. The AGI requirements are $95,000 for single taxpayers and $150,000 for married taxpayers.
Tax

Beware: 'Tis the Season for Tax Scams!

Millions of Americans who are preparing their tax returns this spring have one desire in common - how can we reduce our taxes? Bankrate.com writer, Kay Bell, has compiled a summary of some of the more popular tax scams that attract the attention of taxpayers hoping to save money.
Tax

Pavarotti Could Be Jailed for Tax Evasion

Six months after appearing to settle a tax dispute, opera star Luciana Pavarotti has been ordered to stand trial for alleged tax evasion, according to London's Sunday Times.In July, the opera singer agreed to pay £8m in back taxes after a meeting with Italy's finance minister, Ottaviano del Turco.
Tax

IRS Audits Decline as Agency Deals with Cutbacks

IRS Commissioner Charles O. Rossotti announced Thursday that the number of tax returns selected for audit during 2000 decreased by nearly 50% over the prior year. The chances of a tax return being audited during 2000 was 1 in 200, compared to 1 in 112 in 1999. Mr.
Tax

Democrats Respond to Proposed Bush Tax Cut

Congressional Democrats came forward Thursday with their own set of principles that they believe should be applied to any tax cut measures that proceed through Congress.Senate Minority Leader Tom Daschle (D-SD), announced the Democratic plan which contains three basic ideals:The American people deserve a major tax cut.
Tax

Baptist Temple Seized for Tax Evasion

Federal marshals took possession of the Indianapolis Baptist Temple early Tuesday morning in a peaceful exchange. Six supporters of the church, including the church's former pastor, were carried off the property by the 85 deputy marshals who were acting on the authority of the U.S. Supreme Court.The church had been in the news for the past year as a result of a dispute over $6 million in taxes owed to the IRS.
Tax

Tax Tip: Taxpayer Rights a Priority for IRS

The law that required the IRS to reorganize also required the tax agency to include the protection of taxpayer rights as one of its most important values. In its day-to-day operations, the IRS and its employees make taxpayer rights a top priority. This includes explaining those rights to taxpayers, keeping taxpayer information private and confidential and being professional and courteous. Besides what is expected of IRS employees, taxpayers have many other rights. They have the right to have someone represent them before the IRS and to accompany them to any meeting with IRS employees.
Tax

Tax Tip: How To Prepare Your Tax Return For Mailing

Your tax return is complete and ready to be mailed. Before sealing that envelope, take a few minutes to make certain that all information is complete and accurate. Avoid mistakes that may delay your refund or result in correspondence with the IRS.Here are just a few items to complete prior to mailing your tax return: Sign your return. Your federal tax return is not considered a valid return unless it is signed. If you are filing a joint return, your spouse must also sign. Provide a daytime phone number.
Tax

Nonprofits Beware: The IRS is Watching You On-Line

The IRS has announced its intention to consider revoking the tax exempt status of nonprofit organizations that link to political campaigns or lobbyist groups on their Web sites. There are currently no guidelines as to how tax exempt organizations should conduct themselves on the Internet. The IRS is trying to determine if new rules are necessary, or if existing rules can be applied to organizations with an Internet presence.Some nonprofit organizations will probably benefit from a little guidance in this area.
Tax

Tax Tip: Gift Giving

If you give any one person gifts valued at more than $10,000 in a year, 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.
Tax

Tax Tip: Tax Assistance for Individuals with Disabilities

If you are unable to complete your income tax return because of a physical disability or hearing impairment, you may get help from the IRS through its Volunteer Income Tax Assistance/Tax Counseling for the Elderly (VITA/TCE) programs, or through a special TDD phone number that is available in both English and Spanish.The Volunteer Income Tax Assistance (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.

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