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January 2012

Two popular topics each filing season are how to get our taxes to the IRS and the tax rates that produce our tax bills. Both of those topics were the focus of posts last week at my other tax blog. The IRS' Free File program began accepting tax customers on Jan. 17, and this year more people might find themselves eligible because the income threshold is lower. For this filing season, you can use Free File if you made $57,000 or less. Last year, the income cutoff was $58,000. The IRS probably didn't intend it, but this lower income threshold... Read more →


2011 and 2012 tax rates, tax brackets

One positive thing from the ongoing Republican presidential candidate campaign is the focus it's put on tax rates and income tax brackets. So that you don't have to wonder -- or search -- as today's Daily Tax Tip you'll find below tables detailing the 2011 and 2012 income tax rates and the amount of income in each bracket to which those rates are applied. The Internal Revenue Code currently has six tax rates. Recent attention has been on the top tax rate, but the lowest one -- 10 percent -- was created as part of George W's tax cuts. All... Read more →


Mitt Romney, still the leader for the Republican presidential nomination, says his tax rate is around 15 percent. That makes sense if you presume (rather than assume, since we all know what happens when we do that!) that most of Mitt's very large (again presuming) income is via investment earnings and/or his Bain Capital carried interest payments. Both of those types of income currently are taxed at a top 15 percent capital gains rate. One of those battling Mitt to be the GOP's eventual White House candidate, Newt Gingrich, released his tax 2010 tax return information. It shows he and... Read more →


For all you tax folk in Washington, D.C., mark your calendar for next Wednesday. At 9 a.m. local time that day the Internal Revenue Service is holding its second public meeting on how it can implement "real time" handling of our tax returns. The agency conducted its first public outreach on this topic last month, so this upcoming event earns today's Follow-up Friday honors. As you might recall, IRS Commissioner Douglas Shulman is a big fan of this change which would allow his employees to do upfront matching of tax returns when they are first filed. That would let the... Read more →


Mitt Romney's "around 15 percent" tax rate has emboldened not only his rivals for the Republican presidential nomination, but also the top Democrat on the tax-writing House Ways and Means Committee. It's a pretty safe assumption that much of Romney's estimated $250 million net worth is via investment earnings that receive favorable capital gains tax treatment. But thanks to a tax code loophole, that 15 percent rate probably also applied to some of Romney's compensation from the private equity group Bain Capital. When private equity executives and hedge fund managers are paid by taking a share of their firm's profits... Read more →


Mitt Romney is rich and he doesn't pay a lot of tax on his money. Big whoop. We already knew that the presumptive Republican presidential nominee has boatloads of money -- more than $250 million by one estimate -- is no surprise. Neither is it a big shock that Romney, like the also uber-rich Warren Buffett and dozens of big companies, pays little in federal taxes. C'mon. The guy has enough money to buy accounting and tax law firms to make sure the sends as little as possible to the U.S. Treasury each April. We all should be so lucky.... Read more →


Welcome to the first day busy tax day of filing season 2012. Today the Internal Revenue Service starts accepting electronically filed returns. If you've already filled out your 2011 return via tax software on your personal computer, you now can hit "Enter." Or if your 2011 adjusted gross income was $57,000 or less, you now can head to the IRS website and use its Free File program to complete and e-file your taxes. Fifteen companies are participating this year. You can peruse the list or use the program's Help Me Find a Free File Company interactive tool. Finally, don't forget... Read more →


For filers who do their taxes the old fashioned way, the tax filing season began a couple of weeks ago -- as long as they had all the necessary 2011 statements to fill out their paper forms. Taxpayers who prefer to to e-file can hit "enter" tomorrow, Jan. 17. That's when the IRS starts accepting electronically filed returns and also opens the door to Free File 2012. But regardless of how you submit your return, the tax laws and rules are the same. Tax Carnival #95: Tax Filing Season 2012 looks at some of the issues taxpayers might encounter. One... Read more →


The Martin Luther King Jr. holiday has come to mean more than just a break from work. Since the establishment in 1984 of the Martin Luther King Jr. Day of Service in conjunction with the federal MLK holiday, this January day is commemorated by many as a day of personal action in Dr. King's memory. The Corporation for National and Community Service characterizes MLK Day as a day on, not a day off. To that end, the Corporation, a federal agency that coordinates the volunteer efforts of more than five million Americans through Senior Corps, AmeriCorps, Learn and Serve America... Read more →


"Your Rights as a Taxpayer" has the honor of being Internal Revenue Service Publication 1. But just giving a topic that exalted number-one ranking is not enough says the woman in charge of making sure the IRS does the best possible job. National Taxpayer Advocate Nina E. Olson wants Congress to codify a Taxpayer Bill of Rights that would clearly list the major rights and responsibilities of taxpayers. "The U.S. tax system is based on a social contract between the government and its taxpayers," wrote Olson in her 2011 Annual Report to Congress. "Taxpayers agree to report and pay the... Read more →


Taxes are all about collecting money. Sometimes it's the Internal Revenue Service that brings in extra cash via audits. Other times it's crooks using tax hooks to scam taxpayers out of their money. Both of those topics were the focus of posts last week at my other tax blog. First, the audit issue. The good news is that if you make less than $200,000 you probably don't have to worry about the IRS paying extra attention to your tax return. Last year, the bulk of audits were aimed at millionaires. You don't have to be rich to be a tax... Read more →


While individuals must wait until Tuesday, Jan. 17, to begin e-filing returns, the Internal Revenue Service has already opened the electronic door for small businesses. In an email to tax professionals last week, the IRS said it successfully completed its annual Modernized e-File, or MeF, system activities and is now accepting tax year 2011, 2010 and 2009 business-related tax returns. So the ol' blog is joining the IRS with a nod to business taxes in today's Daily Tax Tip. Mark your business tax calendar: To help business filers meet all their tax responsibilities and deadlines, the IRS produces an annual... Read more →


Happy Friday the 13th! What? You don't celebrate this day? As a sufferer of paraskevidekatriaphobia you think nothing good can happen on such a day. Well, I have some bad news for you. This is the first of three Fridays that fall on the 13th in 2012. Mark your calendars for April 13 and July 13 as days to stay in bed if you're superstitious. I'm not here to judge. We all have our fears. Heck, tax terror is common, thanks to our convoluted tax system and its plethora of numbers and dates. But remember, a number is just that:... Read more →


The first tax filing deadline of the new year is almost here. OK. Technically, it's the final filing deadline of last year. It's time to send in the fourth installment of your estimated taxes. That amount is due on the 15th of January except when, like this year, the date falls on a weekend or federal holiday. Since Jan. 15 is Sunday and Monday, Jan. 16, is Martin Luther King, Jr. Day, all of us estimated tax filers get two extra days to make this payment. Of course, if you plan to file your full 2011 tax return by Jan.... Read more →


Another online sales tax domino has fallen. Indiana Gov. Mitch Daniels announced on Monday that his state has reached an agreement with Amazon.com that will require the online retailer to start collecting sales tax on products sold to customers in the Hoosier State. But just like the previous Amazon state-by-state deals, the actual tax collection is delayed. In Indiana's case, the Seattle-based online giant will begin collecting the state's 7 percent sales tax on Internet transactions beginning Jan. 1, 2014, or 90 days from the enactment of federal legislation addressing the online sales tax issue. As in most of the... Read more →


Lindsay Lohan hit with $93,000+ IRS lien

Poor Lindsay Lohan. She just can't seem to get her life together. Actress Lindsay Lohan, pictured during a court hearing, rejected a plea agreement Thursday offered by prosecutors in a grand theft case that included a guaranteed return to jail. She told a Superior Court judge she agreed to delaying her case until a preliminary hearing when prosecutors will present evidence against her. Lohan is accused of taking a $2,500 necklace from a Venice jewelry store. UPI/David McKnew/Pool Her latest trouble is in the form of taxes. Specifically, the IRS says the actress owes $93,701.57 for failure to pay her... Read more →


Sixty-five percent of e-filed tax returns last year were sent in by paid professionals. So it's not surprising that one of the things to look for in selecting a tax pro is that the person you select to do your taxes has received an official Preparer Tax Identification Number, or PTIN. Under new IRS oversight rules, a PTIN is the first step in the agency's effort to make sure paid tax preparers are qualified. What the IRS doesn't specifically say is make sure that PTIN possessing preparer isn't in prison. But perhaps the agency should have included that recommendation. In... Read more →


Not to OD on Republican presidential race data, but it is primary day in New Hampshire. An on the heels of the National Dialog Monitor comes a look at what polling volatility reveals, in the overall campaign and in today's voting. Nate Silver, who crunches political numbers for his FiveThirtyEight blog at the New York Times, examines the GOP White House wannabes with the most volatile poll numbers. It's no surprise that the candidates, both those still running and those who've bowed out, with the biggest poll spikes are the guys and gal who do or say the most outrageous... Read more →


Yes, we still have official presidential campaigns. And yes, voters across the country still get to pick their party's candidate and eventually our U.S. president. But this is the era of American Idol and The Voice and X Factor. And that means that the political buzz is just as important, and sometimes more so, than the actual campaign and election processes. So the folks at Target Point Consulting, an Alexandria, Va.-based market research and knowledge management firm that works primarily with Republican candidates, have created a the National Dialogue Monitor. This research tool, known in the usual Washington, D.C., area... Read more →


Tax season 2012 is here. To make fulfilling your tax duty as painless as possible, you'll find a Daily Tax Tip over there in the ol' blog's right column. Each day, including weekends and federal holidays, you'll find ways to cut your 2011 tax bill, ease your filing tasks and/or make key 2012 tax year planning moves. And if you miss a day, don't worry. You can visit the complete list of 2012 tips. Read more →