Tax news

Tax

Treasury Targets Tax Shelters

The Treasury plans on strengthening the ethics rules for both lawyers and accountants after calling tax shelters one of the nation's worst tax abuses. These proposed regulations would reinforce the existing standards, known as Circular 230, regarding factual due diligence and legal analysis.
Tax

Tax Tip: Education Credits Can Help At Tax Time

Are you footing the costs of higher education for yourself or your family? Education tax credits can help offset those costs. The Hope Credit and the Lifetime Learning Credit are education credits which you can subtract in full from your federal income tax, not just deduct from your taxable income. The Hope Credit applies only for the first two years of post-secondary education - such as college or vocational school - and it can be worth up to $1,500 per student, per year. It does not apply to graduate and professional-level programs.
Tax

Tax Tip: Taxability Of Social Security Benefits

Whether your Social Security benefits are taxable depends on your total income and marital status. Form SSA-1099, which Social Security recipients receive by January 31, shows your total benefits, but determining your taxable benefits requires putting pencil to paper. Generally, if Social Security benefits were your only income, your benefits are not taxable and you probably do not need to file a federal income tax return.
Tax

Tax Tip: 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. 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

Tax Tip: Don't Overlook Home Mortgage Points

Did you buy or build a new home in 2000? Many new homeowners don't know they can deduct points paid on home mortgage loans. The IRS reminds homeowners this can really pay off because some home mortgage points are fully deductible in the year they are paid.To fully deduct mortgage points in the year paid, the following requirements must be met: Your main home secures your loan. Paying points is an established business practice in your area.The points paid were not more than the amount generally charged in that area.You use the cash method of accounting.
Tax

Tax Tip: Publication 17 -- One Stop For Tax Help

Facing a lot of different tax questions this year? IRS experts have pulled together an overview of common tax issues in one convenient place - Publication 17. "Your Federal Income Tax," available at the IRS Web site in the Forms and Pubs section, contains a vast array of helpful information in one guide. From stock sales to student loans, people can get many of their questions answered in this 276-page publication. A sampling of the items covered in 38 chapters:Need help deciphering the mysteries of the Roth IRA?
Tax

California Tax Camp no Picnic for Participants

Just like the U.S. Army, instructors at this week's tax boot camp in southern California help students "be all they can be."Such is the motto at this five-day, intense learning experience sponsored by the San Diego Chapter of the California Society of CPAs.
Tax

Tax Tip: Thousands of Refund Checks Remain Unclaimed

WASHINGTON - Tens of thousands of taxpayers still haven't received tax refund checks from 1999 tax returns. The outstanding refunds are worth millions of dollars. The IRS wants to get these refund checks back to where they belong.An annual review by the IRS last fall showed more than 90,000 taxpayers had not received tax refund checks worth $67.4 million. The average per-check amount was $734.If you think the IRS may still have your refund check, call the toll-free assistance line at 1-800-829-1040. There are many reasons why refund checks might not reach taxpayers.
Technology

IRS Web Site is Quick Source for Forms, Publications

The IRS Web site, www.irs.gov, performed up to five times faster during the 2000 tax filing season than it did in the previous year.
Tax

E-Filing Growing in Popularity

The latest American Customer Satisfaction Index survey shows that the overall taxpayer satisfaction score for the Internal Revenue Service's e-filing service increased to 75 (on a scale of 0 - 100) in 2000, from 74 in 1999. This compares with a score of just 51 for the filing of paper tax returns. It is also well above the average score of 68.6 for government services. Additionally, 81 percent of the respondents say they intend to file again electronically. The survey findings support the IRS's own theory about electronic filing - that taxpayers who try it really like it.
Tax

Tax Tip: 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 Social Security. 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," takes her husband's surname but doesn't let Social Security know about the name change.
Tax

IRS Gearing Up for Busy E-Filing Season

From a new paperless e-filing option to expanded customer service features, taxpayers will find more and easier ways to get help from the Internal Revenue Service during this year's tax filing season, and preparers have something to celebrate as well. The new 2000 tax forms include an easy checkbox for taxpayers to indicate their agreement to let the IRS speak to paid tax preparers about the tax return.This week marks the beginning of 2001 filing season.
Tax

Tax Tip: Where To Find Out About Taxpayer Rights

The Internal Revenue Service has created a special Web section for taxpayers seeking information about their rights when dealing with the nation's tax agency. The "Taxpayer Rights Corner" can be found at www.irs.gov under the "Tax Info for You" section.The section brings a variety of issues involving taxpayer rights issues into one convenient place. The Taxpayer Rights Corner includes topics ranging from basic taxpayer information to detailed steps on how to get help from the IRS.
Tax

Tax Tip: Avoid Headaches, Prepare Taxes Early

Earlier is better when it comes to working on your taxes. The IRS encourages people to get a head start on tax preparation. Not only do you avoid the last-minute rush, early filers also get a faster refund.Here are seven easy ways to get a good jump on your taxes long before the April 16 deadline rolls around: Gather your records in advance. Make sure you have all the records you need, including W-2s and 1099s.
Tax

IRS Raises Income Exclusion for Parking Benefits

The Internal Revenue Service recently announced that employers may exclude parking benefits from employee wages up to a maximum of $180 per month for 2001, a $5 increase from the 2000 ceiling.The announcement came in IRS Revenue Procedure 2001-13.No increase is forecast for the existing exclusion amount of $65 per month for combined transit pass and vanpooling expenses.The Employee Benefits Institute of America, a publishing group that provides guidance on various benefits plans, commented that the $65 ceiling on excludable transit pass and vanpooling expense is scheduled to increase
Tax

Index of Tax Tips

Welcome to AccountingWEB's Tax Tips area. Each day between now and April 15 we will be adding a tax preparer tip, courtesy of the IRS.
Tax

Final Regulations for Research Credit

The following article is provided courtesy of CCH, Inc.Newly finalized Treasury regulations relate to the computation of the Code Sec. 41 credit for increasing research activities and to the definition of "qualified research" for purposes of the credit.
Tax

Record Capital Gains Payouts! Experts Predict!

If the Nasdaq's 40 percent drop didn't hurt enough, wait until you see your tax bill. Experts say that investors could be hit twice as hard this year due to a bad stock market and a larger tax bite. They are predicting that mutual funds will pay out a record amount of capital gains this year. Investors are learning this week what their distributions are, and indications are that the distributions could top last year's record of more than $200 billion. With federal capital gains taxes running 20 percent or more, bigger gains mean a windfall for the federal treasury.
Tax

Tax Garnishment Cause of Shooting Spree

In apparent response to the discovery that the IRS had ordered his company to garnish his wages for back taxes, a Massachusetts software tester came to work bearing a semiautomatic assault rifle, a 12-gauge shotgun, and a pistol, and killed seven members of the company accounting department.Michael McDermott, 42, had recently learned of the garnishment, which would have extracted "a couple thousand dollars" from his wages for back taxes and related penalties and interest. His employer at Edgewater Technology, Inc.

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