Category Archives: Personal Taxes

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You don’t always get what you pay for but often you do.

IRS Issues Tax Tip Video About Tax Scams

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‎”We’re not going to let the middle class carry the whole burden.”

The key word here is “whole”.   No way taxes are going up on the top 2% without dramatic increases on what is left of the middle class. And Biden’s use of “we” here is shameful. I am not a part of his “we”.   Here is the link to the article with his quote.  http://fb.me/13FioDKLZ

WASHINGTON - JANUARY 25:   U.S. Vice President...

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IRS Announces Higher Standard Mileage Rate 2nd Half of 2011

IRS has revised upwards the standard mileage rates due to the higher gas prices   Beginning this July 1st, the standard mileage rates will be 55.5 cents per mile for business travel and  23.5 cents per mile for medical travel.  Charitable mileage rate always remains at 14 cents under statute.  The rates for the first half of 2011 are 51 cents and 19 cents respectively.   Keep in mind these rates are optional and the actual out-of-pocket costs can be used in lieu of the standard rates.

Announcement 2011-40 advises the public that the Internal Revenue Service is revising the optional standard mileage rates for computing the deductible costs of operating an automobile for business, medical, or moving expense purposes and for determining the reimbursed amount of these expenses that is deemed substantiated.  This modification results from recent increases in the price of fuel.  The revised standard mileage rates are 55.5 cents per mile for business use of an automobile and 23.5 cents for use of an automobile as a medical or moving expense. The mileage rate for use of an automobile as a charitable contribution is fixed by statute and remains 14 cents.  The revised standard mileage rates apply to deductible transportation expenses paid or incurred for business, medical, or moving expense purposes on or after July 1, 2011, and to mileage allowances that are paid both (1) to an employee on or after July 1, 2011, and (2) for transportation expenses an employee pays or incurs on or after July 1, 2011.

IRS-Announcement_2011-40

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Ho Hum. Business as usual.

Seal of the United States bankruptcy court. Ch...

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Ho Hum. Business as usual. All they need is big lenders who are willing to risk going to the Federal government to get bailed out if their loans go bad.

Jackson Hewitt Tax Service Inc, the second largest U.S. tax preparer, petitioned for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware on May 24. The Company submitted a pre-packaged plan along with its bankruptcy filing that contains the necessary approvals from its secured lenders, and has asked the Court to approve the plan on an expedited basis.

A prepackaged arrangement permits companies to move through the court process more rapidly. Jackson Hewitt announced that it expects to emerge from bankruptcy in 45-60 days and sees no disruption in its day-to-day operations.

Jackson Hewitt earns most of its revenue through its franchises and tax preparation agreement with Wal-Mart Stores.

This is just a paper shuffle that injures the small shareholders and enriches the big lenders, that is if they ever actually get repaid.  And if not, there is always the Fed bailout.

http://fb.me/WEbUx0Wi

There is a Lot of Misinformation About Taxes

There is a lot of misinformation about taxes. One of those misconceptions is the recently bantered about fact that 51% of Americans pay no Federal income taxes. Unfortunately life is complicated and so is tax policy. This article explains the “why” of this 51% figure and how it should not be used to raise taxes on middle and lower income taxpayers.. http://fb.me/Hwbfe7p7

Beware of “Too Good to Be True” Tax Claims

The Internal Revenue Service issued this bulletin today about tax scams:

Beware of Tax Scams

The IRS wants taxpayers to be aware of tax scams. These scams are illegal and can lead to problems for taxpayers including significant penalties, interest and possible criminal prosecution. The schemes take several shapes, ranging from promises of large tax refunds to illegal ways of “untaxing” yourself.

Here are three important guidelines to keep in mind:

  • You are responsible and liable for the content of your tax return.
  • Anyone who promises you a bigger refund without knowing your tax situation could be misleading you, and
  • Never sign a tax return without looking it over to make sure it is accurate.

Beware of these common schemes:

Return Preparer Fraud:

Dishonest tax return preparers can cause many headaches for taxpayers who fall victim to their ploys. Such preparers derive financial gain by skimming a portion of their clients’ refunds and charging inflated fees for return preparation services. They attract new clients by promising large refunds. Choose carefully when hiring a tax preparer. As the saying goes, if it sounds too good to be true, it probably is. No matter who prepares your tax return you are ultimately responsible for its accuracy and for any tax bill that may arise due to a questionable claim.

To increase confidence in the tax system and improve compliance with the tax law, the IRS is implementing a requirement that all paid tax return preparers register with the IRS and obtain a preparer tax identification number (PTIN). Later this year, registered preparers will have to pass a competency exam and take continuing education courses.

Identity Theft:

It pays to be choosy when it comes to disclosing personal information. Identity thieves have used stolen personal data to access financial accounts, run up charges on credit cards and apply for new loans. The IRS is aware of several identity theft scams involving taxes or scammers posing as the IRS itself. The IRS does not use e-mail to contact taxpayers about issues related to their accounts. If you have any doubt whether a contact from the IRS is authentic, call 800-829-1040 to confirm it.

Frivolous Arguments:

Promoters have been known to make outlandish claims such as that the Sixteenth Amendment concerning congressional power to establish and collect income taxes was never ratified; that wages are not income; that filing a return and paying taxes are merely voluntary; and that being required to file Form 1040 violates the Fifth Amendment right against self-incrimination or the Fourth Amendment right to privacy. Don’t believe these or other similar claims. Such arguments are false and have been thrown out of court. Taxpayers have the right to contest their tax liabilities in court, but no one has the right to disobey the law.

For more information about these and other tax scams visit the IRS Web site at http://www.irs.gov. Remember that for the genuine IRS Web site be sure to use .gov. Don’t be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is http://www.irs.gov.

Also be very wary of radio or TV ads that promise to eliminate or greatly reduce your tax obligations.  There are legitimate ways to reduce your tax obligations, but very often the ones you see making outlandish claims in ads are really just in the business of taking your money and giving you nothing but disappointment in return.  Like those ads that say you can buy a house for $125 a month, you do not want to pay someone based on their promise to eliminate your tax obligations only to find out later they were just scamming you.

Last year the IRS instituted a new tax preparer program that requires all professionals to obtain a preparer ID number with the Service and pay an annual fee.  This has come about because of the proliferation of these scammers.  The IRS is cracking down and is stepping up their efforts to shut down these “smooth operators”.

But it is still “buyer beware”.  Legitimate tax professionals do NOT make “too good to be true” claims.

Happy Valentine’s Day

People filing tax forms in 1920

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Not very romantic I know:

NEW YORK (CNNMoney) — On Monday, the Internal Revenue Service will begin accepting itemized tax returns, after having pushed back the process due to Congress’ delay finalizing the tax code this year.

That delay — during which the IRS reprogrammed its processing systems — meant that if you itemize deductions on Form 1040 Schedule A, you weren’t able to file your taxes earlier than Feb. 14.