Smart TaxesSmart Taxes

Voters support higher taxes on the wealthy, but governors and legislatures are hesitant.

By MSN Money Partner Mar 30, 2011 6:01PM

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

 

Wall Street Journal on MSN Money
In the partisan fight over taxing the rich, state "millionaire's taxes" have emerged as the latest and most hotly contested battleground.

 

In New York, New Jersey, Maryland, Oregon and California, state governors are at war with legislatures over taxing their state's highest earners to plug revenue gaps.

 

Advocates of the taxes say that with the wealthy riding the recovery of stock markets and global growth, and with less fortunate Americans facing unemployment and a housing slump, the top earners can best afford to foot the government's bills. Opponents say the taxes amount to a redistribution of wealth and encourage runaway government spending.

 

Polls show that many voters support taxing the top 1% or 2% of earners in each state. A Marist Poll, for instance, found that 64% of New York voters support preserving New York's millionaire's tax, which hits residents of the state who earn $500,000 or more a year.

 

That email is NOT from the IRS. Also, be careful with your files, both paper and electronic, to avoid identity theft.

By MSN Money Partner Mar 29, 2011 5:50PM

This article is by Kimberly Lankford of Kiplinger's Personal Finance.

 

Kiplinger on MSN Money
While you’re spending time preparing your tax returns this spring, scam artists are hard at work figuring out ways to steal your money and your identity. ID thieves are particularly active during tax time because your return contains all the information they need -- your Social Security number, name, address, work information, investment accounts -- to open accounts in your name or steal your refund.

 

"Everything is there," says Robert Siciliano, an ID-theft expert. But there are some simple precautions you can take to stay a step ahead of the bad guys.

 

Federal tax of 10 cents a roll to upgrade sewer systems would be the ultimate user tax and ease the squeeze on city funds.

By Kay Bell Mar 28, 2011 4:12PM

If Washington, D.C., is going to demand that local governments upgrade their sewer systems, then Washington, D.C., should help pay for the improvements.

 

And what better way than a federal excise tax on toilet paper?

 

The extra 10 cents on every roll of toilet paper was one of the ideas from Omaha, Neb., Mayor Jim Suttle, who's looking for ways to help pay his city's $1.7 billion federally mandated sewer project cost.

 

Given the linking of taxes and bathroom humor, the toilet paper tax proposal pops up across the country now and then.

 

Suttle admits that he got the idea from an Oregon lawmaker who suggested a similar plan a couple of years ago as a way to help cities and the environment. But the

Midwest mayor thinks the time might actually be right for such a tax. 

 

Almost 100 offices nationwide will be open to answer questions and help with returns. We also have tips on other sources of free tax-return help.

By Teresa Mears Mar 25, 2011 11:13AM

Tax day is fast approaching. This year you get a few extra days, but you might want to start working on your tax return now to get it sent to the Internal Revenue Service by the April 18 deadline.

 

Remember, the IRS doesn't want to hear any lame excuses. If you can't pay your taxes, you still need to file by the deadline to avoid penalties.

 

If you need some help, the IRS will have offices open this Saturday throughout the country to provide free help to taxpayers. The offices will be open 9 a.m. to 2 p.m. local time Saturday, March 26.

 

"We are opening our doors on these Saturdays to help taxpayers who may not have a chance to seek assistance during the work week," IRS Commissioner Doug Shulman said in a news release. "If taxpayers need help preparing their tax returns or have an account question, we encourage them to visit one of our open houses." 

 

Start by filing on time and paying as much as you can. Ignoring the problem will just make it worse.

By MSN Money Partner Mar 24, 2011 7:09PM

This article is by Mary Beth Franklin of Kiplinger's Personal Finance.

March 6, 2011

 

Kiplinger on MSN Money
What if you owe money to the IRS but don’t have the cash to pay the bill?

 

Don’t panic, but don’t ignore the problem, either. File your 2010 tax return by the April 18 deadline, even if you can't pay the full amount you owe. The late-payment penalty is 0.5% per month of the unpaid amount, up to 25% of the balance. Still, that's a lot better than the failing-to-file penalty of 5% a month.

 

Pay as much of your tax bill as you can when you file your return, to reduce the penalties and interest that will continue to accrue until the balance is paid in full. Then wait for the IRS to send you a bill for the balance. That should take about 45 days and give you some time to come up with some or all of the cash.

 

The IRS is having problems processing the returns of those who got the 2008 homebuyer tax credit. It's a small but vocal group.

By Kay Bell Mar 23, 2011 6:31PM

This has not been a good filing season for the Internal Revenue Service.

 

First, Congress screwed around into December before passing tax laws that apply to 2010 returns. That forced the IRS to push back the start of the 2011 filing season for many taxpayers as it reprogrammed its computers.

 

Then, thanks to a glitch in those computers, the IRS erroneously demanded payments of folks whose direct tax debits are in the works.

 

Now there's a passel of first-time homebuyer credit claimants who are not happy about another IRS glitch that's placed their tax returns and, in some cases, their refunds  in limbo.

 

The problem is with filers who claimed the original $7,500 homebuyer credit for the 2008 tax year. It wasn't really a credit back then. Instead, it was a 15-year, no-interest loan that has to be paid back, starting with 2010 tax returns. 

 

The agency issues an 84-page report debunking common arguments people use to try to avoid taxes. The penalty for 'frivolous' filing is $5,000.

By MSN Money Partner Mar 22, 2011 9:03PM

This article is by Jeanine Skowronski of MainStreet.

 

Americans have tried just about everything to get out of paying their taxes, the Internal Revenue Service says, but very few excuses are likely to work.

 

The IRS recently released its annual The Truth About Frivolous Tax Arguments report, which outlines not only the most popular arguments people have presented over the years to avoid paying their taxes but also the policy statements and inevitable tax court decisions the government has used to debunk them.

 

"Anyone who contemplates arguing on legal grounds against paying their fair share of taxes should first read the 84-page document," the IRS said.

 

Agency offering carrots and sticks to force taxpayers and preparers to file electronically. Plus, tax benefits to remember this year.

By MSN Money Partner Mar 21, 2011 6:39PM

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

 

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.

 

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