Smart TaxesSmart Taxes

Studies show breaks designed to attract moviemakers produce few economic benefits.

By MSN Money producer Jan 22, 2014 3:38PM

By Howard Gleckman, Forbes.comForbes.com


Each of the nine movies nominated for this year's Oscar for best film may already have taken home a pile of tax subsidies. Seven brought back state goodies from the U.S. and two got cash for their work in the United Kingdrom. 


Leonardo DiCaprio in 'The Wolf of Wall Street' © Paramount Pictures
And, according to data collected by the Manhattan Institute, the winner is ... "Wolf of Wall Street." The $100 million black comedy about (irony alert) over-the-top greed among sleazy stockbrokers got a 30 percent tax credit for making the movie in New York state.


The Empire State isn't even the most generous when it comes to doling out tax incentives to filmmakers. In Louisiana, moviemakers not only get a 30 percent credit against overall in-state production costs but also an additional 5 percent payroll credit. Even better, filmmakers with no state tax liability can monetize the credits by selling them to firms that do owe Louisiana tax or even selling them back to the state at 85 percent of their value. 


Though the Louisiana subsidies are more generous than New York's, the Oscar-nominated films made in that state – "12 Years a Slave" and "Dallas Buyer's Club" --  were much less costly than Wolf. So, at least by the Manhattan's Institute's calculations, the big-budget picture takes home the prize for fattest tax break. 

 

While fewer than 1 percent of all tax returns are audited, there's no guarantee you won't appear on the IRS' radar. But there are ways to reduce the risk.

By MSN Money Partner Jan 22, 2014 2:14PM

By Allison Martin, Money Talks NewsMoney Talks News


Wouldn't it be nice if the IRS released its secret formula for how it selects individual tax returns for audit? That way, we'd do everything we could to stay under the radar and not be selected for further review.


Fewer than 1 percent of tax returns are audited, which is good news for all. But there's no way to guarantee you’ll be exempt from the IRS' prying eyes, so all you can do is take the proper precautions and hope for the best.

 

Need help filing your return? Make sure you get an expert who's perfect for your situation.

By MSN Money producer Jan 21, 2014 4:39PM

By Kay Bell, Bankrate.comBankrate.com


Individual taxpayers find tax return preparation so confusing that many pay a professional to do it for them. But which tax preparer should you choose? 


Different types of tax preparation professionals have varying degrees of training and experience. A few states regulate tax preparers. The Internal Revenue Service also has begun a system to track and, in some cases, test tax preparers. 


But it is the responsibility of taxpayers to determine which tax pro is best for their personal tax situations.

 

Budget cuts mean taxpayers who need help will spend more time waiting on the phone.

By MSN Money producer Jan 20, 2014 3:17PM

By Allison Linn, CNBC CNBC.com


If you have a question about your taxes, here's a tip: Be prepared to be very patient. 


The Internal Revenue Service answered a smaller share of taxpayer calls and kept taxpayers on hold longer last year than in other recent years, a new report finds. What's more, budget cuts could make it hard for taxpayers to get help this year as well.


Angry man © Imagesource/CorbisThe IRS could answer only 61 percent of the calls it received from taxpayers during the 2013 fiscal year, National Taxpayer Advocate Nina E. Olson said in a report released to Congress on Jan. 9. 


That means that the rest of the calls -- about 20 million -- just didn't get through, the independent taxpayer advocate said. 


Taxpayers who got help had to wait a long time for it. The taxpayer advocate said callers who got through were on hold for an average of nearly 18 minutes before talking to a customer service representative during the 2013 fiscal year, which ended Sept. 30. 

 

Reduced funding harms ordinary taxpayers and makes the agency less effective.

By MSN Money producer Jan 17, 2014 3:54PM

By Bruce Bartlett, The Fiscal Times The Fiscal Times


There is an old trick in both government and business to get rid of an operation you don't like through stealth -- you simply cut its budget gradually, thus causing its effectiveness to suffer, and then cut it some more because it is ineffective.

The exterior of the Internal Revenue Service building in Washington, D.C. (Susan Walsh/AP)

Repeat until the operation is so weak and can be abolished altogether.


Republicans have been playing this trick with the Internal Revenue Service for years. The agency has become the all-purpose whipping boy to excite Tea Party members and divert attention from the performance problems resulting directly from Congress's failure to fund it properly.


The Obama administration has stood by passively, doing nothing whatsoever to counter Republican attacks.


The problems at the IRS will only get worse; the new budget gives it $526 million less than it got in 2013, which was cut from what it got in 2012, which was cut from what it got in 2011. And these are dollar cuts; in inflation-adjusted terms the budget reduction is even greater.


The IRS Oversight Board has repeatedly criticized Congress for failing to provide the IRS with adequate resources to do its job.

 

Despite the death of a 2009 bill to make pet expenses tax deductible, there are instances when owners can save money on their tax bills.

By MSN Money producer Jan 16, 2014 8:22PM

By Paul Sisolak, GoBankingRates.comGoBankingRates.com


Pets play an important role in our lives. We feed them, clean them, play with them and spend some of the best times of our lives with them. We provide them with all the same medical care and comforts afforded to any one of our family members. After all, our dogs, cats and other diminutive friends are no different than people, really; they're our family, so shouldn't it seem obvious that Fido and Rex get the same tax return breaks as their human brethren?


Dog in purse © CorbisAnimal lovers have long lobbied for a formalized, nationwide pet tax deduction policy -- something to compensate for what we spend annually at the groomer, the veterinarian or the pet store.

 

Thousands or millions of dollars? Think again. According to The Huffington Post, Americans spend some $45 billion a year on pet care.

 

In 2009, a Michigan senator introduced a bill that would give pet owners up to $3,500 a year in tax refunds for "qualified pet care" costs. It was an ambitious, heavily inclusive piece of lawmaking that would've saved pet owners a chunk of money. Unfortunately, the HAPPY Act (short for Humanity and Pets Partnered Through the Years) didn't pass muster on Capitol Hill, despite a decent showing of public support.

 

In spite of the HAPPY Act's demise, there are some examples of tax-deductible pet care for our four-legged friends. 

 

The identity theft rate in Florida -- with Miami as the epicenter -- is at more than 360 complaints for every 100,000 residents.

By MSN Money producer Jan 16, 2014 3:18PM

By Curt Anderson, The Associated Press


Florida has the nation's highest rate of identity theft, led by the fraud-wracked Miami area, and thieves are increasingly using the ill-gotten personal information to rip off the government through fraudulent tax refunds, said a top federal prosecutor.


The identity theft rate in Florida in 2012 was more than 361 complaints for every 100,000 residents, according to the most recent Federal Trade Commission data. Georgia was next at 194 complaints per 100,000 residents, followed by California and Michigan at about 122 complaints each and New York at 110. The 2012 figures are the most recent.

 

It pays to listen to the tax pros if you want a smooth and painless filing.

By MSN Money producer Jan 15, 2014 5:25PM

Accountant © NULL, Blend Images, Getty ImagesBy Geoff Williams, U.S. News & World Report

 

Between now and April 15, as you start preparing your taxes, the best thing you can do for your wallet is think about how you can make life easier for your tax preparer.

 

Another way to put it: You can present your preparer with a pile of unorganized receipts and get through the process painfully, or you can do some preparation and make everyone happy. Here are some thoughts, suggestions and requests from tax preparers on what they wish taxpayers would do when putting together their tax paperwork. It's also good advice to follow if you're doing your own taxes.

 

VIDEO ON MSN MONEY

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.