Smart TaxesSmart Taxes

No one wants to be audited, but following some simple guidelines can make the process less painful -- and maybe less expensive.

By MSN Money Partner Apr 28, 2011 12:36PM

This article is by Andrea Coombes of MarketWatch.

 

Talking with the IRS is no one’s idea of a picnic, but there are plenty of ways to make it more like a walk in the park than a slog through a murky, dangerous swamp.

 

Whether the IRS is auditing you, or you’re trying to work out a payment plan on a big tax bill, meeting an agent face-to-face -- and all the fear and resentment that situation may bring  -- can lead taxpayers to make serious missteps, experts say.


The good news is audits are relatively rare: Just 1.1% of individual returns filed in 2009 were audited in fiscal year 2010, and 78% of those audits were by mail, not in person, according to the IRS. Still, that’s a not-insignificant 1.6 million returns. Taxpayers with heftier earnings should be more worried: 8.4% of returns with income above $1 million were audited.

 

Meanwhile, if it’s a big tax bill you’re struggling with, remember that if you owe $25,000 or less, you’re likely eligible for an installment plan. You can request one online. See more on this IRS page.

 

If the IRS does contact you, avoid some common taxpayer mistakes to make sure you keep your tax pain to a minimum.

 

Obama reiterates call for repeal after GOP leader says he was willing to 'take a look at' the multibillion-dollar subsidies.

By MSN Money Partner Apr 26, 2011 7:21PM

This article is by Jim Kunhenn of The Associated Press.

 

Amid rising gasoline prices at the pump, President Barack Obama urged congressional leaders Tuesday to take steps to repeal oil industry tax breaks, reiterating a call he made in his 2012 budget proposal earlier this year. The White House conceded his plan would do nothing in the short term to lower gas prices.

 

The president wrote a letter to the bipartisan congressional leadership on Tuesday, a day after Republican House Speaker John Boehner said he was willing to "take a look at" repealing the multibillion-dollar tax subsidies enjoyed by the major oil companies.

 

Rising gas prices have become a political weight for the White House, with polls showing that as the cost rises at the pump, the president's approval ratings have slipped. Obama has increasingly sought to display action on oil, even as he acknowledges that there is no immediate answer to stem costs

 

"High oil and gasoline prices are weighing on the minds and pocketbooks of every American family," Obama wrote. But he also added that "there is no silver bullet to address rising gas prices in the short term."

 

Obama's proposal, spelled out in his past two budget plans, would eliminate a number of tax breaks for oil companies that would generate an estimated $4 billion a year in additional revenue.

 

Congress may be ready to talk tax reform, but are Americans ready to talk about ending tax breaks that save them money?

By Kay Bell Apr 25, 2011 6:36PM

Most of America's taxpayers finished up their federal tax returns April 18.

 

But a Washington, D.C., tax think tank says that for tax year 2010 almost half of us don't owe the federal government any income taxes.

 

Around 45% of U.S. households, or about 69 million, will end up in this envious tax position, say Tax Policy Center researchers. Some of those folks will even get money back from Uncle Sam.

 

Percentage points-wise, that's slightly fewer folks who don't owe the IRS than in 2009. That year, the Tax Policy Center estimated that around 47% didn't owe income taxes.

 

While most of us pay at least something to Uncle Sam every year, some groups are exempt from federal taxes.

By MSN Money Partner Apr 22, 2011 4:09PM

This post is by Mark P. Cussen of Investopedia.com.

 

Every year, millions of Americans patiently wait for weeks to receive all of their necessary tax data in the mail, dutifully gather them together and prepare their returns, and wistfully contemplate what they could have done with the dollars that went to Uncle Sam and their state governments.

 

But not everyone is subject to this process; there are some groups of people in America who have been exempted from this process under our tax code.

 

If you're wondering when taxes were started, read The History Of Taxes In The U.S.)

 

There are five main categories of taxpayers that are lucky enough to escape the tax man.

 

While Obama had the highest tax rate and gave the most to charity, his income his first year in office was millions more than Bush or Clinton.

By MSN Money Partner Apr 21, 2011 4:56PM

Presidential tax returns
Image: Washington, D.C. (© Bilderbuch/Design Pics/Corbis)By Jim Wang, Bargaineering

 

I always look forward to the annual ritual of the White House releasing the president’s tax return because it feeds one of my guilty pleasures -- financial voyeurism. This year is no different as pundits pick apart the 2010 tax return and look to draw conclusions about the president’s financial life. 

 

In this article, however, I intend to do something slightly different. I'm going to compare President Obama’s return with the returns of former Presidents George W. Bush and Bill Clinton, using their first year in office. For my analysis, I leaned on the archives at Tax Analysts, which saved the releases as they were made available.

 

Experts say refunds are a bad deal, but taxpayers, particularly the young, like receiving an annual windfall. Last year's average refund was $3,003.

By MSN Money Partner Apr 21, 2011 1:10PM

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

 

Wall Street Journal on MSN Money
Three-quarters of all filers will get refunds this year, about the same as usual -- but the amount of those refunds has surged over the past decade.

 

While the practice of overpaying Uncle Sam throughout the year in order to collect a big refund the next was once sacrilege to personal-finance experts, the rationale is getting more compelling.

 

Last year's average refund reached a new high of $3,003, and this year's average is tracking last year's, says Internal Revenue Service spokesman Eric Smith. That is almost twice the $1,698 average of 1999. The growth far outstrips inflation.

 

A close look at tax data shows the growth in refunds hasn't been confined to taxpayers at any one income level, says economist Roberton Williams of the Tax Policy Center in Washington. Some people who suffered job or investment losses in the 2001 or 2007-09 recessions did overpay inadvertently, and received bigger refunds, but these increases don't explain the total rise.

 

A new study finds that for first time since the Great Depression, tax receipts from households total less than the government paid out in unemployment, Social Security and other programs.

By Amey Stone Apr 20, 2011 2:47PM

taxes: (© Peter Gridley/Photographer)The Fiscal Times on MSN MoneyBy James Cooper, The Fiscal Times

 

With President Obama’s deficit-reduction plan now on the table, the political left, right and center are ready to rumble over how to assure long-term fiscal stability. The big questions are where to slash and by how much. But over the next year or two, the most important question for the economy might well be how quickly the cutting should begin. Households have become unusually dependent on the government for income support and removing that prop too fast could put the recovery at risk. 

 

White House provides online calculator that breaks down your tax payment the way it is allocated by the fedral government -- at least most of it.

By Kay Bell Apr 20, 2011 11:16AM

I hope all y'all came through Tax Day relatively unscathed.

 

Even though most people get refunds when they file their returns, it's still no fun to fill out the forms detailing how much of our money goes to Uncle Sam.

 

Exactly how that money is and will be spent is the prime topic nowadays on Capitol Hill. Congress finally agreed last week on a budget to keep federal offices open through Sept. 30.

 

Discussions on the next fiscal year budget, however, are likely to be more difficult.

 

A lot of the debate centers on which programs get how much money. Several organizations have created graphics depicting the expenditures

 

But the most popular populist budget tool right now is the taxpayer receipt. Advocacy groups have devised programs to break down our taxes to a more personal level.

 

Now the White House is getting in on the act.

 

The Obama Administration has released its version of an online federal taxpayer receipt calculator. 

 

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