Taxes

H&R Block has been hitting the airwaves this filing season touting the ability of its offices to get taxpayers money back that they overpaid in earlier tax years.

 

Dubbed the Second Look Review, the Kansas City, Mo.-based tax preparation giant says that its analyses of previously filed tax returns find mistakes in the majority of those old 1040s.

 

Now I've watched these H&R Block ads, mainly because I'm fascinated by the poor woman who runs a small business and apparently overpaid the IRS by more than $5,000.

 

Sure she points out the obvious, that numbers are not her thing. But really? Five grand? She couldn't have gotten some tax software and saved herself at least some of that tax bill? 

 

As I recall, this woman doesn't say who did her prior return. In fact, I got the impression that she screwed it up all on her own. Again, lady, software!

 

In fact, I don't recall hearing any other company specifically named in the TV spots.

 

But then, I might have just missed the finger-pointing. Apparently, Jackson Hewitt Tax Services didn't.

 

The country's number two tax preparation company says the H&R Block ads are "false, misleading and highly disparaging" and Jackson Hewitt executives want them off the air.

 

The Parsippany, N.J., tax prep firm has filed a lawsuit in U.S. District Court for the Southern District of New York to force the commercials' immediate removal.

 

I ordered a bedskirt online a couple of weeks ago. Or I tried to. The company's order process didn't provide me with a confirmation page. So I called customer service and placed the order by phone.

 

On Friday I got the bedskirt. On Saturday, I got another bedskirt. Apparently, even though the company's website didn't tell me it got my order just fine, it did. I'll be sending one bedskirt back, after I make sure the company will pay the return shipping.

 

You might be thinking that, given this experience, I'm done with online ordering. I am, but only with that company.

 

In most everything else, I'm a big fan of electronic communications (hey, you're reading this blog post, right!?) and commerce.

 

And that applies to my taxes, too.

 

So that's why Today's Tax Tip is to take your taxes electronic.

 

Most of you are like me, wired in our daily lives, so it only makes sense to go electronic at tax time, too.

 

This article is by Deborah L. Jacobs for Forbes.

 

Miami lawyer Nelson C. Keshen and Talma, his wife of 45 years, have always had simple "I love you" wills leaving all their assets to each other directly. That's remarkable, considering he has spent decades drafting more complicated estate plans for other affluent couples -- plans designed to minimize estate taxes by putting some assets of the first spouse to die into a "bypass" trust for the kids. But regardless of tax costs, Keshen says, he didn't want his own widow (should he die first) to have "to account to my children or grandchildren."

 

The estate tax overhaul President Obama signed in December liberates many other well-off couples to follow the Keshens' lead and dispense with costly, cumbersome trusts -- assuming they are in stable first marriages and trust each other to manage their joint wealth. Here's what married folks need to know and do now.

 

This article is by David Wessel of The Wall Street Journal.

 

In his State of the Union address, President Barack Obama called on Congress to embark on a major revamp of corporate taxes: "[S]implify the system. Get rid of the loopholes. And use the savings to lower the corporate tax rate for the first time in 25 years -- without adding to our deficit."

 

On Wednesday, Treasury Secretary Timothy Geithner talked to The Wall Street Journal's David Wessel about the initiative. Geithner emphasized the administration's insistence on offsetting the corporate rate, now 35%, by eliminating deductions, credits and incentives.

 

Raising more revenue from businesses in light of global competition "isn't realistic," he said. But, given the deficit, "We can't raise taxes on individuals to lower business taxes."

 

This article is by Juliet Williams of The Associated Press.

 

A majority of California voters agree with Gov. Jerry Brown's approach to closing the state's $25.4 billion budget deficit over the next year and a half, including his plan to hold a special election to extend temporary sales, vehicle and income taxes, according to a poll released Wednesday.

 

Six in 10 likely voters told the Public Policy Institute of California they are willing to pay higher taxes to support schools, and a majority also would pay more for universities. But voters overwhelmingly oppose paying more for California's overcrowded prison system, which they incorrectly think accounts for the largest share of state spending.

 

This article is by Stephen Ohlemacher of The Associated Press.

 

President Barack Obama's call to lower corporate tax rates is popular among business leaders and lawmakers from both parties. That support, however, won't be easy to maintain if the president ever gets specific about how to pay for the lower taxes.

• How much should you invest?

Obama said in his State of the Union address that he wants to close corporate tax loopholes and use the additional revenue to lower corporate tax rates for the first time in 25 years -- without adding to the budget deficit. The top corporate tax rate is 35%, among the highest in the industrialized world. However, federal tax laws are filled with so many credits, deductions and exemptions that few companies pay the top rate.

 

"Over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries," Obama said in his speech Tuesday night. "Those with accountants or lawyers to work the system can end up paying no taxes at all. But all the rest are hit with one of the highest corporate tax rates in the world. It makes no sense. It has to change."

 

Meanwhile, key congressional Republicans said Wednesday that tax reform shouldn't be limited to corporate taxes -- individual income taxes should also be revamped.

 

This post is by Laura Saunders of The Wall Street Journal.

 

There's a saying: Pigs get fed and hogs get slaughtered. The Internal Revenue Service surely hopes that includes tax hogs.

 

That is the message of a recent U.S. district court case won by the IRS against David Watson, a CPA in West Des Moines, Iowa. At issue: a common tax-cutting maneuver available to the owners of millions of closely held businesses.

 

The case, David E. Watson P.C. v. U.S., revolved around Watson's low pay as the sole owner and shareholder of a so-called S Corporation. Such companies, often called "Sub-Ss" after the subchapter of the tax code governing them, is a popular choice of entity for private firms. Unlike C corporations, Sub-Ss have no more than 100 shareholders, and they pass profits to owners without an extra layer of tax. There are nearly 4 million Sub-Ss in the U.S. today.

 

You've found the perfect pair of shoes but aren't sure you can afford them. You're waiting for your tax refund to show up in your account before you use your debit card.

 

No worries! Whip out your smartphone, click on the new IRS2Go app to find out the exact status of your refund.

 

Yep, the IRS is the hot, happening, technology embracing federal agency.

Really!

 

IRS Commissioner Douglas Shulman announced today that the agency has its own smartphone app, free in both iPhone and Android iterations.