The average rate for top earners has plummeted from 26% to 17% since 1992, while the average rate for all has fallen from 9.9% to 9.3%. Congress is talking about cutting tax breaks, but which ones?
This article is by Stephen Ohlemacher of The Associated Press.
Stung by the income taxes you had to pay this month? You'll probably take little consolation in hearing that the superrich pay a lot less in taxes than they did a couple of decades ago. And nearly half of U.S. households pay no income taxes at all.
The Internal Revenue Service tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17%, down from 26% in 1992.
Over the same period, the average federal income tax rate for all taxpayers declined to 9.3% from 9.9%.
Inspector general faults IRS for paying out $513 million in questionable claims for homebuyer tax credit. Agency says it caught many bogus claims.
This story is by Stephen Ohlemacher of The Associated Press.
The Internal Revenue Service has paid out more than a half-billion dollars in homebuyer tax credits to people who probably didn't qualify, a government investigator said Friday.
Most of the $513 million -- about $326 million -- went to more than 47,000 taxpayers who didn't qualify as first-time homebuyers, said the report by J. Russell George, the Treasury inspector general for tax administration. Other credits went to prison inmates, taxpayers younger than 18 and people who did not actually buy homes.
"The IRS has taken positive steps to strengthen controls and help prevent the issuance of inappropriate homebuyer credits," George said. "However, many of the actions occurred after hundreds of thousands of homebuyer credits had already been issued, including fraudulent and erroneous credits totaling millions of dollars."
The popular credit provided up to $8,000 to first-time homebuyers and up to $6,500 to qualified current owners who bought another home during parts of 2009 and 2010.
It's not too late to contribute to an IRA or HSA, plus other advice to get you to the finish line on time.
If you haven’t finished your taxes -- and fear waiting in line at the post office -- you’re not alone.
In fact, this year tax season may be moving a bit slower than usual because the last-minute, year-end tax agreement delayed the usual timetable for the Internal Revenue Service to get its forms and systems ready.
"We are probably a week behind last year," says Bill Fleming, managing director in the personal financial services division of PricewaterhouseCoopers. "Everything has been pushed back a week or so."
The mad dash to the finish could cause extra problems this year because of the feds’ push for electronic filing. E-filing is now mandatory for accounting firms that do at least 100 returns a year, and there’s no precedent for how the government’s e-filing system will do under pressure.
If you’re among those who are just now struggling through your taxes, here’s a quick guide to the things you need to know now:
Financial institutions and online services provide some nifty aids for wrestling your information into submission before the April 18 deadline.
You let your taxes go until the last minute. And now you need some help.
Taxes are due April 18, come heck or high water, so if you've procrastinated, here is your one-stop shop for fast and easy tools for getting your business finances organized for the taxman.
None of these are particularly pretty, mind you, but they will get your finances in IRS-ready shape -- and fast.
Most Americans have earned enough this year to pay federal, state and local taxes. Some states celebrated early, but residents of others will be working for taxes until next month.
You might still be working on your 2010 tax return, but your earnings so far this year have been going to pay your 2011 tax bill.
So put down your Form 1040 instruction book and take a minute to celebrate. Today is America's Tax Freedom Day.
That means, according to the Tax Foundation, that U.S. taxpayers on average will have earned enough by today to pay off their 2011 federal, state and local taxes.
The Washington, D.C.-based nonpartisan research and policy group has been tracking Tax Freedom Day for 40 years.
This year's Tax Freedom Day is three days later than last year, largely because of income changes rather than statutory tax law changes, said Kail Padgitt, the Tax Foundation's staff economist.
The tax deadline this year is April 18. But if you find that you owe and can't pay, don't bury your head in the sand. File your return on time, then check out these options for dealing with the debt.
More than 140 million individual income tax returns are filed every year -- and every year, a quarter of Americans wait until the last minute, according to the IRS.
Some people are just procrastinators. But others might be reluctant to file due to fear of owing money they don’t have. If you’re in the latter group, there’s a little good news: The filing deadline is not April 15 this year -- it’s April 18, thanks to a D.C. holiday.
Don't try to write off your wedding as a charitable contribution, and those porn magazines probably are not business expenses.
Did you hear about the human sperm deduction? The cop who wrote off his flattop haircut? The interstate cheeseburger incident?
Behold Bankrate's sixth installment of the year's craziest, laughably outrageous, utterly true tax deduction tales, culled from the seasonally imbalanced minds of certified (if not certifiable) public accountants from across the land, some of whom requested anonymity.
Our past forays into tax return weirdness turned up some very naughty behavior indeed as desperate taxpayers sought to slip past the taxman everything from breast implants to barking security systems and an expensive "time monitoring system" made by Rolex.
Follow the rules, take advantage of free help, organize your records and know when you need a pro.
We all want to save money on taxes, but the government insists we pay our fair share. Still, big corporations aren't the only ones entitled to tax breaks.
Just following the rules can save you money, as can using the right tools. When we think of saving money on taxes, we think about little-known deductions, but for most of us the real savings are in the basics.
Here are five tips to save money on taxes:
- File on time. Even if you can't pay all your taxes, you should file a return or an extension to avoid the penalty for not filing on time. Death, by the way, is not an excuse for missing the deadline. As executor of an estate, I filed two years of tax returns for a deceased relative. Because I filed those returns after the deadline, the deceased (actually her estate) was assessed a penalty.
- Take advantage of free online filing options. Yes, you can buy tax software, and if you have a complicated return, you may need it. But if you made less than $58,000 last year, you can use Free File, a partnership between the IRS and vendors of tax software. Each company has slightly different rules. If you made more, you can use free IRS online forms.
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