Many of our clients have reported that persons representing themselves as the IRS call on the phone and ask for money. In many cases they seem to know a great deal about you when they call.
In response to new SEC pricing rules for shares in certain money market funds (MMFs), the IRS on Wednesday issued guidance that allows a simplified method for calculating gain or loss on shares in MMFs subject to the new rules and exempts redemptions of shares in these MMFs from the wash sale rules.
For those paying their income tax through quarterly estimates the 2nd estimate is due June 15th. Usually during the rush of tax season you had to decide what to base your 2014 estimates on. You would have considered the safe harbors and chosen the one that best fits your circumstances at the time.
The U.S. federal government could lose almost $3 billion in revenue during the current fiscal year because budget cuts are forcing the tax-collecting Internal Revenue Service to audit fewer people, the agency’s chief said on Wednesday.
Testifying before a congressional panel, IRS Commissioner John Koskinen said the IRS will audit 100,000 fewer individuals this year as part of congressionally mandated cuts to the tax agency’s budget. Audits of high-wealth individuals, businesses and partnerships will also decline, he said.
“This fiscal year, the IRS’s key enforcement programs will operate well below historical levels,” said Koskinen, who was speaking before a House of Representatives subcommittee about the tax season that ended on April 15.
The tax deadline and filing your return might be behind you, but your tax responsibility isn’t really over until you begin to organize your documents for next year. Staying organized even after your taxes have been filed will make your life a lot easier in the future – especially when life events like buying a home or refinancing your mortgage require you to show past tax returns, W-2s and other tax-related documents. Preparing your documents now will also save you time and money when it’s time to file next year.
Most mistakes in tax returns occur during the last two weeks of tax season before the deadline.
This is due to many people wanting returns and not enough time to both prepare the returns and allow for the taxpayers to review them prior to filing.
We recommend that, where possible, you have your tax professional file an extension for you and then finish the returns late April or early May – that way you will get their best service.
Also, remember that an extension is an extension of time to file, not an extension of time to pay – IRS charges ½ of 1% per month penalty plus interest on any unpaid balance after April 15th. California is the same except the first month the penalty is 5%.
Going through the back door can pay off for high-income retirement savers.
We’re talking about the backdoor route into popular Roth individual retirement accounts, which offer tax-free income in later life.
The front door into Roths is shut for many investors. Married couples earning $191,000 or more and singles earning $129,000 or more in 2014 are barred from contributing directly to Roth IRAs.
But there’s a simple detour that works for many of them. They can put money into a traditional IRA—and then roll that into a Roth IRA, getting all the benefits.
For most of us, tax day comes just once a year—on or around April 15. But for people who owe estimated taxes, Uncle Sam expects a check four times a year. Unfortunately, one of those poor quarterly taxpayers may be you if any of the following applies to your situation.
We are now solidly into 2014, so it’s time to start thinking about your 2013 tax bill. One big question to be answered is whether you will owe the dreaded alternative minimum tax with your 2013 Form 1040. Congress originally cooked up the alternative minimum tax (AMT) to make sure high-income types who take advantage of multiple tax breaks would still owe something to Uncle Sam each year. These days, however, upper-middle-income folks are the most likely AMT victims. Here’s what you need to know.
Think of the AMT as a separate tax system with a family resemblance to the more-familiar “regular” federal income tax system. The difference is the AMT system taxescertain types of income that are tax-free under the regular tax system and disallows some regular tax deductions. Also, the maximum AMT rate is “only” 28%
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As Americans across the country rang in the new year, many were unaware that, at midnight, more than 50 different tax breaks expired. According to the Tax Foundation, among them were credits for everything from building motorsports facilities, producing biofuels, conducting business research and development, and even training a mine rescue team.
Clearly, the U.S. tax system can be very complex. Understanding the basics, especially the different types of taxes you may face, can be a valuable tool in financial planning.
Not all taxes are paid at the same time. Some, for example, are deducted from your paycheck. “Generally, three types of taxes will show up on a worker’s pay stub: federal income taxes, payroll taxes (Social Security and Medicare), and state income taxes,” Andrew Lundeen, manager of federal projects at the Tax Foundation, told 24/7 Wall St.