Jul 3, 2012 – Kevin Brady, a Texas Republican, warns that the IRS will hire up to 16,500 new enforcers in the coming months to go after citizens who do not …
Jul 7, 2012 – In 2010, House Ways and Means Committee Republicans issued a report saying the IRS may need as many as 16500 additional auditors, …
Mar 22, 2010 – Top IRS officials have been working with Democrats on Capitol Hill to determine how the agency will enforce President Obama’s new health …
“Many lower-income parents could see their tax bills jump by thousands of dollars next year if nothing is done to stop a series of tax breaks from expiring January 1.
Unless Congress takes action before the end of the year, four important credits for families — The Child Tax Credit, Earned Income Tax Credit, Child and Dependent Care Credit and the American Opportunity Credit — will revert back to previous levels.
If this happens, many families will be worse off by hundreds — or even thousands…” story
ps, you might want to go to college asap
You already saw on the news last night the head of the International Monetary Fund note that the US is at the edge of a “Fiscal Cliff” and pulling down the world economy. You also heard that the average American w/ earnings of about $40k will pay $2000 MORE in taxes for 2013. All this will bring … according the the IMF speaker, a new wave of great recession: “2%+ and 2%- = 0%, the math speaks”
This may be a good year to get out and vote folks.
— significantly more than first estimated— ( surprise )
..”These licensing requirements impose a substantial burden on small tax preparation businesses and independent tax return preparers, many of whom prepare taxes on a part-time or seasonal basis,” IJ’s attorneys argued in a statement. “Many of these independent preparers and small businesses will have to either stop preparing taxes or raise their prices……
1. Income drops.
2. Overlook a 1099.
3. Work for yourself.
5. Home office (or car) expenses.
IRS estimates that 17 percent of taxes owed were not paid, leaving $450 billion underpayment more
( i.e. …. hold on to your wallets and document everything ! )
INCOME TAX CHANGES FOR INDIVIDUALS AND TRUSTS EFFECTIVE TAX YEAR 2012 (FOR RETURNS FILED IN 2013)
New legislation does not apply to returns thru April 2012, but returns that are due in April 2013.
Be aware of the following:
- Tax rates
- The rate remains at 4.35 % for tax year 2012.
- For 2013 and each tax year thereafter the rate is 4.25%.
- Personal exemption set at $3,700 (same as under current law) and will be indexed to inflation beginning in 2013.
- Repeals special exemptions for seniors. & unemployment compensation greater than 50% of adjusted gross income (AGI).
- Special exemption for disabled and exemption for disabled veterans – unchanged.
- Phases out certain pension and retirement income subtractions based on date of birth.
- certain miscellaneous deductions (political donations; prizes won in state-regulated bingo, raffle, or charity games; charitable gifts from retirement plans).
- the $600 deduction for children 18 and under.
- Non-refundable Credits: for city income taxes, public contributions, credit for contributions to homeless shelters, food banks, and community foundations, automobile donations, college tuition and fees, reduces the Earned Income Tax Credit from 20% to 6%, excess adoption expense credit, stillbirth credit.
- Changes the homestead property tax credit as follows:
- Household income is replaced by total household resources which excludes losses from business, rentals and royalties and also excludes net operating losses.
- Available only for homes with taxable value of less than $135,000.
- For senior claimants: Full credit of 100% if total household resources are $21,000 or less and reduced by 4% for each additional $1,000 in total household resources until $30,000 is reached. For total household resources of $30,000 to $41,000 senior claimants receive 60% of the credit.
- All other claimants are eligible for 60% of the tax credit. Credit phase out begins at $41,000 of total household resources and is reduced by 10% for each $1,000 increase. Complete phase-out at $50,000.
- Alternative credit for eligible service person/veteran is still available.
Many folks work from their homes.
If the office is qualified, you may deduct up to $24,000 for the cost of computers as well as a share of heating, cooling, and maintenance expenses of the home. To qualify, the home office must be an area used exclusively for business activity, and it must be the principal location used to conduct business or meet with customers.
The IRS is very strict in granting the home office deduction and has disallowed the deduction when it determined that a taxpayer kept personal correspondence in the same area used for the business.
If you are furnished another office you are not allowed to take home-office deductions. Review IRS Publication 587.
Taxpayers will be classified into one of three categories :
- Born before 1946- same treatment of retirement and Social Security income as in prior law.
- Born 1946 – 1952 may take an exemption of $20,000 for a single return and $40,000 for a joint return against retirement income until age 67 when they may take that same exemption amount against all types of income.
- Born after 1952 – no exemption for retirement income until age 67, except for the Social Security. At 67,
(1) the taxpayer has a choice between the $20,000/40,000 exemption against all types of income, with no personal exemptions and with no additional exemption for Social Security
(2) continuing the exemption for Social Security, along with the personal exemptions for which they are eligible.
The $20,000/$40,000 exemption is not available when total household resources exceed $75,000 single $150,000 MFJ.
…set a household income cap of $50,000 for claiming the credit, down from $82,650 currently and $70,000 under the original plan Gov. Rick Snyder presented Feb. 17…
Those with household incomes of $20,000 or less will be eligible for 100 percent tax credits, compared with 60 percent currently and 80 percent under Snyder’s February proposal, which was revenue-neutral.
“What we’re trying to do is beef up the support to moderate- and low-income families,” said Lt. Gov. Brian Calley, Snyder’s point man on tax issues.
Dave Maluchnik, a spokesman for the Michigan Catholic Conference, which advocates for the poor, called the shift “a step in the right direction.”
Additional related links:
The new proposal would exempt those aged 67 and older from the pension tax, Snyder said. For people 60 to 66 years old, the first $20,000 would be exempt for an individual and the first $40,000 for a couple. Pensions would be taxed at the full rate for retirees aged 59 and younger.
But once any Michigan resident turns 67, income exemptions of $20,000 for individuals and $40,000 for couples would apply, Snyder said.
The revised budget plan also makes further cuts to the Homestead Property Tax Credit, though the credit would be strengthened for those with incomes of $20,000 or less. …….. more
In general, people who are employees and have side businesses are often in the best position to maximize the tax code’s benefits, say experts. Mr. Stives calls this “the best of all worlds.”
…Tax rules allow him to work for only three days of a 11-day trip and write off the airfare and a majority of other costs, he says. “To deduct the airfare, you have to spend more than half your working days on business, but travel days don’t count, and neither do weekend days you wouldn’t work anyway,” says Mr. Stives. “So I can leave on a Friday, teach for three days midweek, and return the following Monday.”
….”The most important lesson I teach my students,” he says, “is that just because something is deductible, that doesn’t make it free.” more
You’re now almost four times as likely to conduct your tax audit by mail, as you are to sit down with the tax man.
Of the more than 1.6 million Americans who were slapped with audits last year, 78% dealt with correspondence audits, while only 22% were asked to come in for an in-person examination.
That is a 13% rise in audits-by-mail from 2009, and a 93% jump compared to 2003. In 2000, the chances of getting a correspondence audit were less than 2 to 1. more
Top 10 Tax Time Articles – but there are many more tips and ideas:
- How to Reduce Your Taxes As a Contractor
- How to Know When to Issue a 1099-MISC
- How to Access a W-2 Online
- How to Prepare a 1096
- How to File Taxes as Head of Household
- How to Look Up Your W-2 Information Online
- How to Calculate Self-Employment Tax
- How to File Federal Income Taxes
- How to Fill Out IRS Form 1099-INT
- How to Request Duplicate W2
©John R. Coughlin/CNNMoney
|CNNMoney personal finance editor Amy Haimerl.|
About 1.6 million people found themselves in this situation last year, according to the IRS. That means 1.1% of all filers drew the short end of the stick — and about 300,000 of them were selected because of deductions related to a business venture
The Detroit News
Gov. Rick Snyder visited with The Detroit News early today for a discussion of his proposed 2012 state budget. Here’s a transcript of the interview.
Rebates for ENERGY STAR® Appliances
You may be eligible to receive rebates from your state or territory for the purchase of new ENERGY STAR qualified appliances. These rebates are being funded with $300 million from the American Recovery and Reinvestment Act of 2009. Under this program, eligible consumers can receive rebates to purchase new energy-efficient appliances when they replace used appliances. more more yet
Taxpayers who stand out tend to draw the attention of Internal Revenue Service auditors. Claim too much in interest, health expenses or charitable deductions, and it’s like waving that proverbial red flag in front of the tax man. more