If you add in local levies, the highest sales taxes are on Indian reservations. Arizona is home to 9 of the 25 localities with the highest sales tax rates.
President Obama's proposed budget calls for tax increases mainly on the well-to-do and rich. But many states are already raising the one big tax that falls disproportionately upon the poor.
In 2010 the average combined sales tax bite rose by a full percentage point, reaching 9.64% at the year end, according to an annual report from Vertex, which calculates sales taxes for Internet sellers. That's the highest rate since the Berwyn, Pa., firm started calculating the number in 1982 and the second year in a row that it has set a record.
The year-to-year change is noteworthy and real. But Vertex's stated average is a bit artificial and likely higher than what Americans pay on average. Vertex calculated separately the average sales tax levied by states, by counties, by municipalities and by special districts such as business improvement zones and Indian tribes, and added them together. Five states (Alaska, Delaware, Montana, New Hampshire and Oregon) have no sales tax. Nor do a huge number of counties and cities. Most people aren't on a tribal reservation, either.
Still, there's no disputing that last year was a big one for sales tax hikes. Vertex tallied 542 new sales taxes or sales tax rate increases, compared with just 52 decreases. Since there is no federal sales tax, this clearly reflects mounting budget woes at the lower levels of government -- in states, counties and municipalities.
President wants to give agency more money for service, but don't expect that to be easy in this political climate.
President Obama released his fiscal year 2012 budget earlier this month.
For every president, the annual budget is like a kid's long Christmas wish list. It's what an Administration would like for Congress to OK.
And just like how Mom and Dad Santa picks and chooses which goodies actually show up under the tree, Congress has its say on every Commander in Chief's myriad budget requests.
One Representative immediately denounced any money to hire more IRS "goons."
But the annual fiscal exercise is how the system works (or doesn't, depending on your point of view). And it provides insight on what a president believes is important.
These credits and deductions may make organizing and filing your taxes less painful.
Filing taxes isn’t a lot of fun, but maybe if you find out that you’ve got some good deductions coming, it will be easier to start.
Let’s start with this news story I recently shot that will provide some of the most important breaks you’ll get this year. Then meet me on the other side for a condensed version of the nitty-gritty.
The agency began processing returns with Schedule A on Feb. 14, but is having trouble keeping up with the flood of electronic returns sent this week.
As planned, the IRS on Monday, Feb. 14, began accepting tax returns that had been delayed while the agency got its computer system up to speed with tax law changes enacted in December.
Now, however, the IRS is asking for one more favor from e-filers. Slow down!
The Council for Electronic Revenue Communication Advancement (CERCA), the association founded 15 years ago at IRS request to deal with the electronic filing of tax returns, says that although the IRS is now processing delayed returns -- primarily ones that include Schedule A itemized deductions -- there will be some continued delays in return and refund processing.
To help alleviate these continuing processing issues, the IRS would really, really appreciate it if "private sector transmitters of e-filed returns" (in plain English, that's tax preparers who've been holding onto the returns in anticipation of IRS filing acceptance) would stagger their submission of returns over the course of this week.
There's nothing wrong with charging a fair amount for a valuable service. But for years, some tax-preparation companies have been squeezing extra fees from people least able to afford them.
It should be enough to perform a service and charge a fair fee. But for some tax preparation services, doing people’s taxes in exchange for money apparently isn’t enough. Because some feel the need to squeeze as much as possible out of the unsuspecting for services that either aren’t necessary at all or are of dubious value.
Let’s take a look at three examples.
It's your name on the bottom line, so make sure you find someone who is ethical and competent.
You've decided to hire someone to file your taxes this year. You've looked at your tax pro options and decided which kind of paid preparer fits your needs.
Now the next step: Thoroughly vetting the tax professional.
Remember, regardless of who fills out your 1040 and sends it on to the IRS, when you sign your tax return, you are legally responsible for everything on it. So it's crucial to hire a tax pro who's not only knowledgeable, but also ethical.
GOP opposes plan that would raise taxes on businesses and the wealthy while cutting taxes for the working poor and the middle class.
This article is by Stephen Ohlemacher of The Associated Press.
President Barack Obama's budget proposal resurrects a series of tax increases on certain corporations and the wealthy that were largely ignored by Congress when Democrats controlled both chambers. Republicans, who now control the House, are signaling they will be even less receptive.
The plan unveiled Monday includes tax increases for oil, gas and coal producers, investment managers and U.S.-based multinational corporations. The plan would allow Bush-era tax cuts to expire at the end of 2012 for individuals making more than $200,000 and married couples making more than $250,000. Wealthy taxpayers would have their itemized deductions limited, including deductions for mortgage interest, charitable contributions and state and local taxes.
"What we've done here is make a down payment, but there's going to be more work that needs to be done, and it's going to require Democrats and Republicans coming together to make it happen," Obama said.
Obama's proposal would extend tax credits for college expenses and expand them for child care. A more generous Earned Income Tax Credit for families with three or more children would be made permanent.
The plan would enhance and make permanent a popular business tax credit for research and development, and would provide tax breaks for investing in manufacturing and for making commercial buildings more energy efficient.
In all, the budget proposal would impose about $730 billion in new taxes on businesses and wealthy individuals over the next decade, while cutting about $400 billion in taxes on middle-income families, the working poor and other businesses, for a net tax increase of about $330 billion.
Agency changes rule and declares that breast pumps are deductible and can be purchased with FSA funds.
Anyone with a mom knows that they usually get their way. The IRS now has learned that lesson, too.
Last fall, the IRS issued rules on what is and isn't deductible as a medical expense.
That compilation also set the rules on what expenses can be reimbursed by medical flexible spending account, or FSA, money.
That oversight riled up moms nationwide, especially since the new health care reform law specifically requires workplaces to provide accommodations for breast-feeding employees.
Then last month, another government official, Surgeon General Regina M. Benjamin, issued a Call to Action to Support Breast-Feeding, which lists ways to lower barriers for mothers who want to breast-feed.
So it's no big surprise that the IRS to changed its mind. The agency made it official this week with the issuance of Announcement 2011-14, which says that expenses for breast pumps and supplies that assist lactation may be deducted as medical expenses or reimbursed under a flexible spending arrangement or similar plan.
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