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Income tax

Tax

Bush signs AMT fix - millions saved from tax increase

On Wednesday, President Bush signed the House legislation that provides a one-year patch for the Alternative Minimum Tax, keeping an estimated 23 million taxpayers from an unexpected tax increase of approximately $2,000.
Tax

IRS releases newly designed Form 990 for 2008

The IRS has issued an updated version of Form 990, the return that charities and other tax-exempt organizations are required to file annually, and has provided transition relief so that small exempt organizations will have time to adjust to the new form. "When we released the redesigned draft form this past June, we said we needed a Form 990 that reflects the way this growing sector operates in the 21st century," said Steven T. Miller, commissioner of the IRS' Tax Exempt and Government Entities division.
Tax

IRS gets busy with AMT patch

The Internal Revenue Service has announced it will immediately begin the final reprogramming steps for its income tax processing systems to prepare for the upcoming tax season following final passage of the Alternative Minimum Tax patch Wednesday by the House of Representatives."Our people will do everything they can to quickly update our systems for this major change and make this filing season as smooth as possible for everyone," said Linda Stiff, IRS Acting Commissioner.
Tax

Senate won't yield on AMT legislation - bill goes back to the House

The clock continues to tick on the Alternative Minimum Tax patch as this year comes to a close and weary legislators are anxious to get home to their families. In a late night session on Tuesday, December 18, the Senate voted 48-46 in favor of a House bill that would halt the spread of the AMT to the middle class and increase taxes elsewhere to pay for the amount the Democrats are claiming the government will lose if the AMT is restricted.
Tax

IRS expands Fast Track Settlement program

The Internal Revenue Service has announced it is expanding the number of test areas for the Fast Track Settlement program for taxpayers under examination by the Small Business/Self-Employed Division.The settlement program is now available for small businesses and self-employed taxpayers until Sept. 5, 2008, in five new areas, including Philadelphia, central New Jersey, San Diego, Laguna Nigel, CA, and Riverside, CA.The Fast Track program is continuing in the three original test cities of Chicago, Houston, and St.
Tax

House AMT relief bill passes - political wrangling continues

This week, House Ways and Means Committee Chairman Charles B. Rangel (D-NY) introduced the AMT Relief Act of 2007, new legislation that would provide a one-year fix to the alternative minimum tax (AMT) currently poised to affect an estimated 23 million taxpayers. Congressman Rangel's bill, H.R.4351, passed in the House at 6:45 p.m.
Technology

AICPA tax veep to participate in live small business tax Web chat

AICPA Vice President of Taxation Thomas P. Ochsenschlager will answer questions Thursday, December 20, from 1:00 p.m.
Tax

Lawmakers vow to pass AMT fix before year-end

Late last week the Senate passed legislation to halt the impending increase in the Alternative Minimum Tax, currently poised to affect more than 23 million Americans on their 2007 income tax returns.The Senate legislation is in direct contrast to legislation passed earlier in the House, the large difference between the two factions being the reaction to the philosophical intent of the AMT.
Technology

What to look for in small-end tax prep software for 2007

The best selling tax preparation software packages, Intuit's TurboTax, H&R Block's TaxCut and 2nd Story Software's TaxACT are now available for 2007 both online and in CDs or downloads.
Tax

Ways and Means AMT fix expected to die in Senate

Last week, the House Ways and Means Committee authored legislation that would protect millions of taxpayers from paying the Alternative Minimum Tax for 2007. The bill is to be funded by raising taxes in other areas so that the net effect of the legislation will be revenue neutral.
Tax

Ways and Means passes AMT fix, Treasury not pleased

By a vote of 22-13, the House Ways and Means Committee passed legislation that would provide a patch to the Alternative Minimum Tax for the 2007 tax year. The Temporary Tax Relief Act of 2007 provides an offset to the funds that would be generated by the AMT by raising revenue in a number of areas.The TTRA would set AMT exemption amounts at $42,350 for single and head of household taxpayers, down from $42,500 in 2006, and $66,250 for married taxpayers filing jointly and surviving widow(er)s (and half that amount for married taxpayers filing separately), up from $62,550 in 2006.
Tax

New taxes, deduction limitations to replace AMT revenue

The House Ways and Means Committee estimates that the cost of permanent repeal of the Alternative Minimum Tax (AMT) will be $795 billion over ten years, and while there is widespread agreement that the AMT should be repealed, few in Congress believe that it will be possible to make up for the lost revenue through cuts in spending.
Tax

IRS offers tax relief to California wildfire victims

The Internal Revenue Service has extended relief to California wildfire victims by extending tax return filing and payment deadlines.Taxpayers in the Presidential Disaster Area – consisting of Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara, and Ventura counties – will have until Jan. 31, 2008, to file returns, pay taxes, and perform other time-sensitive acts that have a deadline that falls between October 21, 2007 and January 31, 2008. This includes the federal withholding tax return, Form 941, normally due Oct.
Tax

Rangel proposes business tax changes, LIFO repeal

Business tax changes in the legislation introduced on October 24th by House Ways Committee Chairman Charles Rangel (D-NY) are designed to be revenue neutral as required by House rules, and the provision to reduce the top corporate income tax rate from 35 to 30.5 percent is offset in the bill by the repeal of the last-in, first-out (LIFO) method of accounting for inventory and changes in or the elimination of other tax breaks.Although the Senate attempted unsuccessfully to repeal the use of LIFO by oil companies in 2005 in an effort to respond to critics of the government's treatment of the
Tax

No repeal of AMT this year - one-year fix proposed

Tax legislation introduced by House Ways and Means Chairman Charles Rangel on Thursday provides a one-year extension of current Alternative Minimum Tax (AMT) relief for 2007, with a permanent repeal beyond that, but passage of the complete bill in either 2007 or 2008 is considered unlikely. Failure to enact a temporary fix will cause 21 million more taxpayers to "fall into" the AMT, Treasury Secretary Henry Paulson told Congress in a letter earlier in the week.
Tax

IRS announces 2008 inflation adjustments

By law, the dollar amounts for a variety of tax provisions must be revised each year to keep pace with inflation. As a result, more than three dozen tax benefits, affecting virtually every taxpayer, are being adjusted for 2008.
Tax

2008 Pension plan limitations announced

The Internal Revenue Service has announced cost of living adjustments applicable to dollar limitations for pension plans and other items for Tax Year 2008.Section 415 of the Internal Revenue Code provides for dollar limitations on benefits and contributions under qualified retirement plans. It also requires that the Commissioner annually adjust these limits for cost of living increases.Many of the pension plan limitations will change for 2008 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment.
Tax

7 ways you can help your clients hit the tax jackpot

Year-end tax planning for individuals is more about skill than luck. Need proof? Here are seven ways clients can slash their personal tax bills in 2007.1. Dodge the 'big, bad' AMTOriginally, the alternative minimum tax (AMT) was intended to hit only the wealthiest taxpayers.
Tax

IRS warns taxpayers about certain trust arrangements

The Internal Revenue Service and the Treasury Department have cautioned taxpayers about participating in certain trust arrangements being sold to professional corporations and other small businesses as welfare benefit funds. They have identified some of the arrangements as listed transactions.There are many legitimate welfare benefit funds that provide benefits, such as health insurance and life insurance, to employees and retirees.
Tax

IRS authorizes alternative signature methods for EROs

The IRS has issued Notice 2007-79 which sets forth rules that allow Electronic Return Originators (EROs) to sign forms by rubber stamp, mechanical device (such as signature pen), or computer software program. Forms included in this directive include: Form 8453, U.S.

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