Agency offering carrots and sticks to force taxpayers and preparers to file electronically. Plus, tax benefits to remember this year.
Tax season is in full swing. But something is missing: the forms the Internal Revenue Service sends out in the mail every year.
It isn't a mistake. As part of a push to have more taxpayers file electronically, this year the IRS ended its decades-long practice of mailing paper packages to taxpayers.
In 2009 it cost the IRS only 19 cents to process an e-filed return, compared with $3.29 for one on paper.
There are other important tax-code changes to be aware of as well, many of them a result of December's sweeping tax legislation. They affect health insurance for the self-employed, charitable IRA rollovers, sales taxes and other items.
Yet the "e-filing" push will be the biggest and most jarring change for many. Although e-filing has caught on over the past decade -- nearly 70% of 142 million individual returns were e-filed last year, up from 23% a decade ago -- it has been least popular among wealthier taxpayers. To promote e-filing, the IRS this year stopped mailing forms to people's homes automatically and mandated that preparers of more than 100 returns e-file them. Next year, that figure drops to 11.
Anonymous tipster alerted the feds to $600 million tax-evasion scheme. Yes, the bounty is taxable.
A whistleblower who exposed a tax fraud scheme by Enron and Wall Street firms has been awarded a $1.1 million reward by the Internal Revenue Service.
The payout came from the new IRS Whistleblower Office, but was made under prior, less generous guidelines. Those older rules, which still apply in some instances, call for a reward of up to 15% of the money that the IRS recovers based on the information.
The whistleblower office was revamped in 2006. Now when whistleblower information about alleged tax cheating leads to IRS collection of unpaid taxes and the subsequent recovery amount exceeds $2 million, the whistleblower can pocket up to 30% of the recovered money.
Retirees up in arms over governor's proposal to tax pensions in order to cut taxes on business.
This article is by Kathy Barks Hoffman of The Associated Press.
Republican Gov. Rick Snyder is drawing recall threats and angry protests over his attempt to do what no Michigan governor has tried in more than 40 years: Tax the pension and 401(k) incomes of millions of retirees.
The move has brought demonstrators to the Capitol and has thousands of seniors reminding the new governor that they could make re-election difficult for him and lawmakers who go along. Democrats oppose the move, and even some GOP lawmakers are casting about for an alternative to avoid raising taxes on a powerful interest group.
Snyder remains undeterred. The multimillionaire former Gateway computer executive says Michigan -- which has some of the nation's most generous senior tax breaks -- can't afford the $900 million it loses because of them, and that retirees need to pay their share rather than pushing the burden onto younger residents.
Arnold Eick, a 73-year-old former General Motors manager, says he needs those tax breaks to stay afloat. Like many retirees, he's incensed that he and the working poor who would lose a tax credit are being asked to pay more so Snyder can reduce business taxes.
The IRS assigns the numbers sequentially, but keeps some numbers on ice in case related forms are created later. No, form 1 is no longer in use.
You may know that a 1040 is the form you need to send the Internal Revenue Service every year, but have you ever wondered where its name came from?
MainStreet, which has spent the better part of the past two months reminding you about your W-2s, 1098s, 1099s and the aforementioned 1040, contacted the IRS to find out if there was a method to the numerical madness.
"We pick them sequentially," a spokesperson from the IRS said, explaining that the Forms and Publications division, which is primarily responsible for the naming, will start at a certain number based on what its latest paperwork is designed to do and pick the next numeral available.
Agency pays companies that owe the government millions. Bill seeks to fire federal employees who haven't paid taxes.
Everybody is looking for more tax money to cover ginormous budget gaps. At the federal level, it looks like the search for additional revenue should start at home.
The Treasury Inspector General for Tax Administration, or TIGTA, says existing practices within the IRS let tax agency contractors get paid even though they owed back taxes.
Eleven IRS contractors received more than $356 million in payments from Uncle Sam in 2009 despite owing a combined $3.8 million in back taxes, according to the new TIGTA report bluntly titled Existing Practices Allowed IRS Contractors to Receive Payments While Owing Delinquent Taxes.
Other states also are moving to tax web-based businesses, which is strongly opposed by Amazon.
The law, known as the Mainstreet Fairness Bill, is intended to force online retailers to abide by the same tax standards as brick and mortar businesses. Until now, retailers in Illinois, and in the majority of states, only had to collect sales taxes if they had a physical location in the state, effectively granting e-commerce sites a significant tax loophole.
According to the Illinois Department of Revenue, this law could help the state earn as much as $170 million in previously uncollected sales tax revenue, which should help deal with some of the state’s projected $4.9 billion budget shortfall for the 2012 fiscal year.
Software error leads Ohio to notify 9,700 residents told they'd be getting big refunds. The problem has been fixed.
This article is by The Associated Press.
Ohio's tax department says a promise that it would send a woman a $200 million refund check was a mistake due to a software glitch.
The Sandusky Register reports that Denise Bossetti was among 9,700 taxpayers statewide who received Ohio Department of Taxation notices about mega-refunds. It's not clear if the other amounts were as big as what Bossetti was told to expect.
The woman from Huron, Ohio, was sent a letter dated Jan. 24 saying her $200 million refund could not be paid by direct deposit so she'd be sent a check.
March 15 is the final deadline to use the funds in your flexible spending account. Most over-the-counter items won't qualify.
When 2010 ended, did you leave some money unspent in your medical flexible spending account, usually referred to as an FSA?
Well, you might have a second chance at using that pretax cash. If your company allows you the IRS-approved two and a half month FSA grace period, then you still have time to use up last year's money.
But not much time.
VIDEO ON MSN MONEY
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.