Agency won't send flowers or chocolate, but it will be ready to process your return Feb. 14.
If you itemize deductions and have been wondering when the Internal Revenue Service will get to your tax return, put a big red circle around Feb. 14 on your calendar.
Yep, the tax man has a Valentine's Day gift for those folks whose returns are on processing hold because of December 2010 changes to tax laws.
Those late-year tax law tweaks meant the IRS had to update its computer systems. Affected returns mostly claim itemized deductions on Schedule A, as well as income adjustments (often referred to as above-the-line deductions) found directly on Form 1040 or 1040A for higher education tuition and fees (which also requires Form 8917) and educator expenses.
Making the tax code less complex would mean creating new groups of winners and losers. Does Congress have the guts?
This article is by Stephen Ohlemacher of The Associated Press.
Nine in 10 Americans will find the maze of credits, deductions and exemptions on their tax forms so confusing and difficult that they'll hire someone or turn to special computer software to fill out their returns. Even the commissioner of the Internal Revenue Service says he pays someone to do his taxes.
President Barack Obama and key lawmakers from both political parties say it's time for a serious national discussion about making the tax code simpler and fairer. It's going to be a long talk, one that could last years. Why? Because every deduction, exemption and credit, every layer of complexity, is important to somebody, in some cases millions of somebodies.
"That's what the tax code is now, it's a whole set of winners and losers," said Howard Gleckman, a fellow at the Urban Institute and editor of TaxVox, a blog on tax issues. "If you reform it, you're going to create new winners and new losers, and the losers always scream much louder than the winners cheer."
There is a lot of political support on Capitol Hill for simplifying the tax code. But in the new era of divided government, it is unclear whether Obama has the ability, or the political will, to steer such a massive piece of legislation through a Republican-controlled House and a deeply divided Senate.
TurboTax's mobile tax program works with iPhone or Android if you use form 1040EZ.
If you can buy coffee with your phone, why can't you file your taxes?
You can, if your financial life is simple.
TurboTax has rolled out the first tax-filing app for smart phones, SnapTax, which can be used by anyone filing a 1040EZ return. About 2,000 Californians used the program to file their state returns last year.
If your income is $58,000 or less, you can file free with tax software or at the IRS site.
If your adjusted gross income for 2010 is $58,000 or less, you can prepare and file your taxes at no cost at Free File.
This partnership between the IRS and tax software manufacturers who are members of the Free File Alliance kicked off its ninth year last week.
During the formal announcement of Free File 2011, IRS senior executive David Williams, had some advice for all e-filers:
Submit your tax returns as soon as you can.
Despite the tax processing problems caused by the end-of-year passage of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Williams said it's better not to wait. Just e-file your 1040 when you're ready and let your software worry about when the IRS can deal with the return.
Low-income workers may actually pay higher taxes this year, with the loss of the Making Work pay credit.
I'm hearing a lot of grumbling about how the highly touted 2 percent payroll tax cut is not working.
Some companies may not have yet instituted the new payroll tax tables to take the
reduction from 6.2% to 4.2% in employees' withholding. This is the portion that goes toward Social Security and will apply to up to $106,800 of income made by all workers.
But the unfortunate fact of the matter is that folks who make well less than the six-digit wage base cutoff aren't likely to get anything from the payroll tax cut. In fact, some will see less, not more, in their paychecks this year.
Many states are facing huge budget problems. Expect lots of wrangling over how to cut budgets and whether to raise taxes.
With President Obama and Congressional Republicans having sealed a deal in December to extend the Bush tax cuts through 2011 and 2012, the tax debate has taken a short Washington hiatus and hit the road.
On Wednesday, Illinois kicked off this national tour with high drama. In a lame duck session vote just hours before a new, less heavily Democratic legislature was to be sworn in, the state’s Senate gave final legislative approval to raising the state's personal income tax by two-thirds, from 3% to 5%, and its corporate income tax rate by 45%, from 4.8% to 7%. The tax package, designed to close half the state’s $13 billion 2011 deficit, also brings back the state’s estate tax with an exemption of just $2 million per person, compared to the new $5 million per person exemption from the federal estate tax. (For other states’ 2011 estate taxes, click here.)
"Our state was careening towards bankruptcy and fiscal insolvency,"’ Gov. Pat Quinn said at a news conference confirming he will sign the stunning increases. "Our fiscal house was burning,’" he added.
Not surprisingly, state business leaders warn the tax hikes used to put out the fiscal fire could douse Illinois’ growth prospects, too. The Washington-based Tax Foundation has already recalculated Illinois’ ranking on it s 2011 State Business Tax Climate Index, downgrading it from 23rd to 36th. The Tax Foundation says that when an additional 2.5% property replacement tax imposed on Illinois corporate income is figured in, the state will have a 9.5% corporate income tax rate -- the third highest in the nation.
The agency prefers direct deposit, but it will offer debit cards to taxpayers without bank accounts.
This article is from The Associated Press.
The Treasury Department is offering to put tax refunds on prepaid debit cards for low-income taxpayers who don't have bank accounts.
The department announced Thursday that it will send letters to 600,000 households next week, offering to put their tax refunds on the debit cards, which can be used to get money from ATM machines or to buy goods and services from retailers.
Committee chair wants to looks at changes to tax code for corporations and individuals simultaneously.
Rep. Dave Camp, chairman of the House Ways and Means Committee, said he wants to begin discussions on rewriting individual and corporate taxes at the same time.
Obama-administration officials have focused their discussions in recent weeks primarily on tax changes that would affect corporations.
Camp, R-Mich., said that tackling the corporate-tax code alone wouldn't help the growing number of small businesses that are organized as partnerships, sole proprietorships or s-corporations.
"Tax reform is about getting the economy moving again," he said in a brief interview recently outside the House floor. "I'd like to begin discussions on both" individual- and corporate-tax changes, Camp said.
Businesses organized as so-called pass-throughs aren't subject to the corporate-tax regime and pay taxes at individual rates.
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