Personal Finance

Tax

Senior Marriage Penalty

“It’s galling that they have a marriage penalty for seniors, when they’ve addressed it for everyone else,” Lonell Spencer, a 77-year-old retiree from Arcadia, Connecticut, told the Hartford Courant.The penalty he’s referring to is the tax on Social Security income, which applies to every dollar of income over $32,000 for married couples, compared to $25,000 for a single taxpayer.
Tax

IRS Taking New Steps to Improve Questionable Refund Program

The Internal Revenue Service (IRS) announced today that new steps, including the notification of taxpayers when refunds are frozen and the more timely release of frozen refunds not warranting further review, have been undertaken to improve the Questionable Refund Program (QRP) and reduce the number of taxpayers subject to frozen refunds.Advertisement
Community News

Helping Clients Keep Their Financial Resolutions

It’s a new year and many clients start it off right by organizing financial files and “cleaning house.” The benefits of this are twofold: 1) They will gain a clearer idea of their current financial situation, and 2) They can form financial goals for their future.
Technology

GoDirect Campaign Aimed at Baby Boomers

A nationwide telephone survey of 1,400 adults sponsored by The U.S. Department of the Treasury and the Federal Reserve Banks, part of their join GoDirect initiative, revealed that, contrary to widely held perceptions, baby boomers are less inclined to use direct deposit than today’s seniors, a U.S. Treasury press release reports.
Tax

Taxing Vehicles: Business and Personal

The ads are everywhere. “Walk in with your W-2, drive out with a new car,” or some variation on that theme. But before walking in, a little thought is in order.“We find a number of people who get in trouble when they expect a certain amount and they don’t get that amount,” Mike Cherry of the Consumer Credit Counseling Services told KOLR 10.
Technology

In Personal Finance Software, Style Rules

In the world of personal finance software: two rivals, Microsoft Money and Intuit's Quicken, dominate.Both can help organize tax information and all personal accounts, pay bills online, create budgets, handle investments and make financial forecasts. Both are connected to their websites. Features are similar in both programs, so style and personal preferences could be the determining factor as to which one to use.
Tax

Rules for 'Head of Household' Get Stricter

Claiming a dependent child on a federal income tax form may sound like a straightforward matter, but some taxpayers have been bumping up against confusing definitions for years.Congress, last year, brought together the five different definitions of the term “dependent child,” tightening the
Tax

Tax Tip: Gift Taxes

Taxpayers who have given gifts exceeding $11,000 in value to a single individual must report the total gift amount to the Internal Revenue Service (IRS). The giver may owe taxes on the gifts.
Practice

Year-End Bonuses: $1 Million or $800 or Nothing?

End-of-year bonuses on Wall Street amounted to a total of $21.5 billion, a 16 percent increase and an all-time high.New York State Comptroller Alan Hevesi predicted in Time magazine that the extra income would bring $1.5 billion in tax revenue to the state. Bankers and traders got the biggest bonuses, of $1 million and up. The average Wall Street bonus is $125,500. Most people expect far less, if anything. American workers who responded to a Salary.com 2005 Holiday Spending Survey said they expected to receive a bonus of about $800 and would use some of it to buy gifts.
Tax

Keeping Personal & Business Tax Records

This is an important task for everyone. The Ventura County Star describes the organization of tax records like exercise. You might not always have fun, but it is necessary.A good recordkeeping structure is a solid start. The Ventura County Star recommends you make a list of your important assets and then organize your files in the same order. This provides for easy document retrieval. Ensuring that all your records are filed will help you at tax time.
Community News

H&R Block Mailed Free Software with Recipient’s Social Security Number on Label

H&R Block acknowledged last week that it had mailed unsolicited packages, containing their TaxCut software, to former customers early in December and that some of these packages had the former client’s social security number (SSN) embedded in the source code on the mailing label, CIO-today.com news reports. This kind of software mailing is a common marketing practice in many industries, according to WTVQ.com in Lexington, Kentucky.

Advocates Target Predatory Lending Practices

Consider these two adages: Owning your own home is the American Dream, and if it sounds too good to be true, it usually IS too good to be true.Advocates worry that low-income taxpayers are paying too much attention to the first and not enough to the second, as predatory lending practices promise to make them homeowners, but instead put them in far worse financial shape than they were before.Bad lenders aggressively target low-income neighborhoods, offering loans based on inflated appraisals with high annual interest rates and payments the borrower cannot afford.
Tax

Introducing the AMT Assistant

A new tool, developed to help taxpayers and tax preparers determine whether the taxpayer is potentially subject to the alternative minimum tax (AMT), debuted last week on the Internal Revenue Service (IRS) website. The AMT Assistant automates the AMT Worksheet, called “Worksheet to See if You should Fill Out Form 6251”, of the 1040 Instructions. The IRS estimates it will talk 5 to 10 minutes to get an answer from the new application.“The alternative minimum tax causes a lot of hair pulling for millions of taxpayers each year.
Tax

Requesting Your Tax Return Information

When requesting tax return information from the Internal Revenue Service (IRS), there are several ways for you to receive your information. You can request tax return transcripts and tax account transcripts. You can also receive a copy of your original return, generally if it has been less than seven years since filing. This information can be obtained by phone or by mail, according to the IRS. The usual fees for transcripts or return copies requested by taxpayers residing in the Presidential Disaster Areas have been waived by the IRS.
A&A

Tax Season Opens with Extended Deadlines & E-Filing Hopes

The Internal Revenue Service (IRS) has kicked off the 2006 tax filing season by announcing some extended filing deadlines, reducing the reporting workload for small businesses, and maintaining its high hopes for continued expansion of electronic filing.The agency has changed this year’s filing deadline to April 17 because the traditional April 15 date falls on a weekend.

Minimum Payments to Go Up for Many Credit Card Users

When Americans open their credit card bills this month they will see a warning about how long it will take to pay off their bills if they only make minimum payments, a requirement of the Bankruptcy Reform Law. In addition, they may find that their minimum payment has been doubled.Federal banking regulators have issued guidelines to credit card issuers requiring that minimum payments cover at least one percent of the balance, including finance fees, the Seattle Times reports. The result can be a minimum payment of three percent.
Tax

IRS Announces Uniform Definition of Qualifying Child

Beginning in 2005, the Internal Revenue Service (IRS) defines a qualifying child as someone who meets the same four tests: the relationship test, the residency test, the age test and the support test.
Practice Management

Accountants’ Confidence Slides in December

Accounting and finance workers confidence fell nearly five points in December, according to the Hudson Employment Index. Despite reporting the lowest figure of the year for job satisfaction, at 68 percent, and declining confidence in hiring expectations and job security, they still remained more positive than other workers.
A&A

2005 Tax Changes Affecting Electric & Clean-Fuel Vehicles

Taxpayers who put a qualified electric or clean-fuel vehicle into service during 2005 can claim the maximum electric vehicle credit and/or the maximum clean-fuel vehicle deduction, according to the Internal Revenue Service (IRS). Other clean-fuel property placed into service this year may also be eligible to take the maximum deductions. Popular gas/electric hybrid vehicles, such as Toyota’s Prius and Honda’s Insight, not powered primarily by an electric motor, are NOT qualified electric vehicles.
A&A

CCH Issues Small Business Retirement Plan Guidance

During the last week of December, CCH, a Wolters Kluwer company and leading provider of tax, pension and human resource information and software, introduced Retirement Plans for Individuals and Small Business. This new resource was developed to help professionals advise their clients on choosing the right retirement vehicle, setting up and maintaining the plan and complying with relevant laws and regulations.“Retirement Plans for Individuals and Small Business is useful for both the novice and seasoned professional to help cut through the numerous options and related complex

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