The renewal of 55 federal extenders that expired last year is on Congress' to-do list for 2014.
As the next Senate Finance Committee Chairman Sen. Ron Wyden (D-Ore.) takes the gavel, his first priority will likely be to renew the more than 55 tax breaks or extenders that expired at the end of the year.
These provisions are essentially a grab bag of goodies for business and industry, as well as some for individuals. Last year, they cost taxpayers a whopping $74 billion --$63 billion of which solely benefited businesses, according to the Joint Committee on Taxation.
One of the most popular -- and most expensive -- extenders is the research and development tax credit, which subsidized business expenses at a cost of more than $6 billion in 2013, according to the Tax Foundation. Some other popular provisions include bonus depreciation, the mortgage deduction and incentives for the renewable energy industry, as well as an $11 billion break for U.S. multinational corporations that allows them to defer U.S. taxes on overseas income. These measures are separate from popular tax breaks like the mortgage deduction, the earned income tax credit and exclusions for employer health insurance.
If you've sketched out your tax situation and it makes you want to try and forget it until April, we have some better options.
This post comes from Christine DiGangi at partner site Credit.com.
As much as we'd all like a refund this tax season, not everyone gets money back from the IRS. If you're not prepared for it, owing money on your taxes can seriously stress your budgets and, potentially, your credit.
If you're not sure whether you'll owe or be owed, there's no better time than now to get started on your taxes. There are advantages to filing early, but if you get started and realize you're going to have to spend a little extra come April, at least you have some time to come up with a game plan.
Figure out what you owe
Perhaps you've been getting a little bit more mail lately — start sorting through any tax forms you may have received from employers, financial institutions or healthcare providers in the past few weeks, follow up with anyone who should be sending you one and look into any deductions you need to prepare to claim.
Every year millions of Americans get money back, then blow it. Here are four ways to put it to better use.
This post comes from Stacy Johnson at partner site Money Talks News.
According to the IRS, the average American tax refund for tax year 2013 is about $2,600. But whatever you're expecting this year, there are smart things you can do with it, as well as things that aren't so smart.
Here are some of each, along with some advice on how to check on the progress of your refund if you've yet to receive it.
Should man or machine be your accountant? The old adage that you get what you pay for applies when hiring tax preparers as much as it does when buying tax preparation software.
The old adage that you get what you pay for applies when hiring tax preparers as much as it does when buying tax preparation software.
"There is no absolute answer as to whether using basic tax software is better than hiring a qualified and experienced tax preparer, but typically certified public accountants (CPA) have the latest and highest quality of tax preparation software on the market," said Jordan Niefeld, a CPA with Gerstle Rosen & Goldenberg.
Yet and still the idea of doing it yourself holds a special appeal for many.
"It is advantageous to prepare your own return when you have the time, ability and desire to do so," said Rebecca Pavese, a CPA with the Palisades Hudson Financial Group in Atlanta.
Taxpayers will see some of the biggest changes in the federal tax code in more than a decade.
It could have been worse, but 2013 ushered in the most significant changes in the tax code for more than a decade.
For most American taxpayers, the resolution of the fiscal-cliff drama early last year was good news. The Bush-era tax cuts were made permanent for people in all but the top income-tax bracket; ditto for the low 15 percent tax rates on qualified dividends and capital gains. The deal even included a fix -- of sorts -- for the dreaded alternative minimum tax (AMT) that has annually threatened millions of taxpayers for years.
For wealthier taxpayers, however, the American Taxpayer Relief Act (ATRA) didn't live up to its name. They now face higher marginal tax rates, new investment income taxes to finance the president's health-care plan, and limitations on the itemized deductions they can claim. The combination of those policy changes will account for the bulk of the $600 billion in new tax revenue the government is expected to take in over the next 10 years as a result of ATRA.
There are lots of different kinds of cons happening during tax time. Some are happening to taxpayers, and some are being perpetrated by them.
This post comes from Stacy Johnson at partner site Money Talks News.
Nothing is certain except death, taxes, and people scared to death of taxes.
That's part of what makes tax season ripe for con artists. They prey on fear and lurk anywhere they catch a whiff of quick money. Some even find ways to defraud taxpayers out of millions -- while in prison!
While some taxpayers might have to pay more to the IRS this year, most won't see big changes until they file their 2014 returns.
The dozens of tax policy changes associated with the implementation of Obamacare are complex, but what most people really want to know is: How will it affect my taxes?
On 2013 returns
For most people preparing their 2013 returns right now, Obamacare won't have any impact at all. The taxpayers who may see higher bills this year include high earners and those with steep medical expenses.
The first tax hit on high earners is a 0.9 percent higher Medicare tax for married couples earning $250,000 or individuals at $200,000. The second is a new Net Investment Income Tax of 3.8 percent on "individuals, estates and trusts," also triggered at the $250,000 or $200,000 level.
Lawmakers' efforts to correct economic and social problems have over the years transformed the nation's tax code into a multi-headed monstrosity.
If you are dreading doing your taxes this season, don't blame the Internal Revenue Service for making it so hard.
After all, it's the nation's elected officials who have passed all those tax laws over the years -- for better or for worse.
"We have come to use the tax system as if it is a cure for every social and economic problem the country faces," said Michael Graetz, a professor of tax law at Columbia Law School and a proponent of major tax reform.
That's not necessarily what the federal tax system was intended for when it was introduced about 100 years ago.
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