It's your name on the bottom line, so make sure you find someone who is ethical and competent.
You've decided to hire someone to file your taxes this year. You've looked at your tax pro options and decided which kind of paid preparer fits your needs.
Now the next step: Thoroughly vetting the tax professional.
Remember, regardless of who fills out your 1040 and sends it on to the IRS, when you sign your tax return, you are legally responsible for everything on it. So it's crucial to hire a tax pro who's not only knowledgeable, but also ethical.
GOP opposes plan that would raise taxes on businesses and the wealthy while cutting taxes for the working poor and the middle class.
This article is by Stephen Ohlemacher of The Associated Press.
President Barack Obama's budget proposal resurrects a series of tax increases on certain corporations and the wealthy that were largely ignored by Congress when Democrats controlled both chambers. Republicans, who now control the House, are signaling they will be even less receptive.
The plan unveiled Monday includes tax increases for oil, gas and coal producers, investment managers and U.S.-based multinational corporations. The plan would allow Bush-era tax cuts to expire at the end of 2012 for individuals making more than $200,000 and married couples making more than $250,000. Wealthy taxpayers would have their itemized deductions limited, including deductions for mortgage interest, charitable contributions and state and local taxes.
"What we've done here is make a down payment, but there's going to be more work that needs to be done, and it's going to require Democrats and Republicans coming together to make it happen," Obama said.
Obama's proposal would extend tax credits for college expenses and expand them for child care. A more generous Earned Income Tax Credit for families with three or more children would be made permanent.
The plan would enhance and make permanent a popular business tax credit for research and development, and would provide tax breaks for investing in manufacturing and for making commercial buildings more energy efficient.
In all, the budget proposal would impose about $730 billion in new taxes on businesses and wealthy individuals over the next decade, while cutting about $400 billion in taxes on middle-income families, the working poor and other businesses, for a net tax increase of about $330 billion.
Agency changes rule and declares that breast pumps are deductible and can be purchased with FSA funds.
Anyone with a mom knows that they usually get their way. The IRS now has learned that lesson, too.
Last fall, the IRS issued rules on what is and isn't deductible as a medical expense.
That compilation also set the rules on what expenses can be reimbursed by medical flexible spending account, or FSA, money.
That oversight riled up moms nationwide, especially since the new health care reform law specifically requires workplaces to provide accommodations for breast-feeding employees.
Then last month, another government official, Surgeon General Regina M. Benjamin, issued a Call to Action to Support Breast-Feeding, which lists ways to lower barriers for mothers who want to breast-feed.
So it's no big surprise that the IRS to changed its mind. The agency made it official this week with the issuance of Announcement 2011-14, which says that expenses for breast pumps and supplies that assist lactation may be deducted as medical expenses or reimbursed under a flexible spending arrangement or similar plan.
Virtually everyone in the United States is eligible for some sort of free tax preparation help, from free in-person preparation and electronic filing to filing free forms online.
Every year Americans spend millions of dollars paying professionals to do their tax returns when they could be getting the same help free.
Don’t be one of those Americans.
If you made less than $49,000 last year, you can have your taxes prepared and electronically filed by a trained volunteer for nothing. If you made up to $58,000, you can find free online preparation and electronic filing. And no matter how much you made, if you’re willing to fill in the forms online, you can also file electronically for free.
Military widows can't collect both survivor benefits and benefits from an annuity bought by the dead veteran -- unless they remarry after they're 57.
This article is by Kimberly Hefling of The Associated Press.
Tens of thousands of the nation's war widows find it perplexing and downright disrespectful to their late military husbands: In order to fully collect on insurance their husbands bought for them when alive, they must marry another man.
And to qualify, the widows must remarry when they are 57 or older. Those who remarry earlier miss out, as do widows who never remarry.
At the heart of the issue is a government policy known as the "widows' tax." It says a military spouse whose loved one dies from a service-related cause can't collect both survivor's benefits and the full annuity benefits from insurance the couple bought from the Defense Department at retirement. Instead, the amount of the annuity payment is reduced by the amount of the monthly survivor benefit.
You can order your tax transcripts and copies of returns online. Transcripts are free, but those copies will cost you.
Everyone's hoping that the housing market will at least begin to recover in 2011. And it looks like that might just happen. Sales of existing homes in December 2010 grew at their fastest pace since May 2010.
Where home prices are still dropping, Housing Predictor says its data show the values are deflating at a slower rate for the second year in a row. And now there are indications that as many as 17 states, primarily in the Midwest and Northern-most parts of the country, will see home prices rise in 2011, demonstrating, says Housing Predictor, that housing markets are recovering.
If that indeed does come to pass and you're in the market for a new place to live, you'll need your tax information when you apply for a loan.
Lenders used to want several years of tax returns to show that you had a solid earnings history. That practice was eased in the crazy "everyone must buy a home" era that led to the housing bubble that burst and tanked our whole economy.
Now, I hope, they're being more diligent before doling out mortgages.
The IRS is making it easier for you to get the tax data that your lender wants with an online tool for ordering tax transcripts and tax return copies.
Americans are paying less in federal taxes than they did under Bush, and taxes are taking the smallest share of GDP since Truman was president.
This article is by Stephen Ohlemacher of The Associated Press.
Taxes too high?
Actually, as a share of the nation's economy, Uncle Sam's take this year will be the lowest since 1950, when the Korean War was just getting under way.
And for the third straight year, American families and businesses will pay less in federal taxes than they did under former President George W. Bush, thanks to a weak economy and a growing number of tax breaks for the wealthy and poor alike.
Income tax payments this year will be nearly 13% lower than they were in 2008, the last full year of the Bush presidency. Corporate taxes will be lower by a third, according to projections by the nonpartisan Congressional Budget Office.
A professor argues that raising the tax on beer would reduce both consumption and crime. But powerful lobbies make that move unlikely.
Would raising the tax on beer reduce the number of young folks who get caught up in crime and the high budget and social costs of locking up so many people?
In a provocative article, "The Economist’s Guide to Crime Busting," in the new issue of The Wilson Quarterly, Duke University’s Philip J. Cook and the University of Chicago’s Jens Ludwig suggest that it would. (The article is here, but isn’t free.)
The profs argue that crime policy (from an economist’s point of view) should focus "both on making criminal opportunities less tempting and the law-abiding life more rewarding" and offer three strategies which they say have been shown to do just that: raising the mandatory age through which kids must attend school; creating business improvement districts with private security guards (a tactic Los Angeles has used with great success); and yes, raising taxes on alcohol.
"It’s obvious," they write "that in considering criminal opportunities, such as whether to break a beer bottle over the head of the obnoxious Yankees fan on the next bar stool, people often make foolish, impulsive choices. There are many reasons for that -- hormones, immaturity, stress -- but surely one of the most important is intoxication."
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