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April 2012

I love it when my profession, journalism, coincides with my passion, taxes. The latest occurrence is the 2012 Pulitzer Prize in Journalism just awarded New York Times reporter David Kocieniewski for his tax series "But Nobody Pays That." The award was in the explanatory reporting category for work that "illuminates a significant and complex subject, demonstrating mastery of the subject, lucid writing and clear presentation, using any available journalistic tool." The Pulitzer committee commended Kocieniewski for authoring a "lucid series that penetrated a legal thicket to explain how the nation's wealthiest citizens and corporations often exploited loopholes and avoided taxes."... Read more →

Everybody recovered from their Tax Day hangovers? Good! How about some post-filing fun? Check out the chart below from the Center on Budget and Policy Priorities detailing where the money we pay Uncle Sam goes: That's just one of the Center's top 10 tax-related charts that the nonprofit put together for Tax Day 2012. "Together, [the 10 charts] provide useful context for the coming debates about how to reduce soaring budget deficits and reform the tax code," says Chuck Marr, director of Federal Tax Policy at the CBPP. But the graphic fun doesn't stop there. Derek Thompson, senior editor at... Read more →

While most Americans were finishing up their returns this past weekend, some folks in the middle of the country were trying to salvage what was left of their lives. More than 100 tornadoes were reported in Iowa, Kansas, Nebraska and Oklahoma on April 14 and 15. Some, like the EF3 twister that his Woodward, Okla., touched down with deadly force. Other places escaped direct hits, but were slammed by high winds, large hail and some flooding. Many of those who endured the weekend weather onslaught probably didn't bother with meeting the April 17 tax filing deadline. Not even the IRS... Read more →

Ah, politicians and their loose lips. We recently listened to Obama's open mike "second term" remarks to his Russian counterpart. Now we have his likely Republican challenger talking a bit too loudly about tax breaks at a private, but outdoor, event. Mitt Romney, the almost official Republican nominee for the White House, has offered a broad outline of his tax plan. He would keep the Bush tax cuts in place permanently, eliminate the estate tax, repeal the alternative minimum tax (AMT), ax the taxes created by the health care reform act, do away with investment income taxes for most folks,... Read more →

Yes, there is such a thing. And while it's not quite 5 o'clock anywhere in the United States yet, just the fact that it's Tax Day in America makes it worth celebrating. The Income Tax Cocktail is basically a Bronx cocktail (gin, sweet vermouth, dry vermouth and orange juice) with an added dash of aromatic bitters, says home mixologist Nora Maynard. You can find the full recipe in theKitchn. If you're still working on your tax return, I totally understand how the process, especially with the midnight deadline approaching, might indeed be driving you to drink. But I suggest you... Read more →

Happy Tax Day, this time for real. This filing season is shaping up like most. A whole lot of us have put off tax filing until the last minute. In 2011, the Internal Revenue Service received more than 145 million individual returns. At this time last year, the federal tax office had in hand only around 97 million returns. Taxpayers are on a bit faster pace this year, with almost 99 million having sent in their forms. But that still leaves more than 46 million of us who have been working on our taxes these last few days. And if... Read more →

Did you put off filing your tax return until the last minute because you knew you'd owe Uncle Sam? You, my friend, are not alone. Although the vast majority of taxpayers get refunds, there are those of us for whom Tax Day is pay-up day. But if we're short of the cash on April 15 -- or this year, April 17 -- the Internal Revenue Service does offer us, as today's penultimate filing season 2012 Daily Tax Tip notes, some tax payment options. Short-term installment agreement: While it's true that on Tax Day both your tax return and any tax... Read more →

Happy Tax Day! Sorry. I didn't mean to give you a heart attack. But I'm pretty sure that by now every taxpayer knows that this year the tax-filing deadline is Tuesday, April 17. When April 15 falls on a Saturday, Sunday or federal holiday, we get until the next business day to file our returns. So instead of scrambling to get our 1040s filed by midnight today, Sunday, April 15, our federal tax returns normally would be due tomorrow, Monday, April 16. But that's Emancipation Day, a holiday in the District of Columbia. And as we learned when this holiday... Read more →

Most taxpayers have multiple taxes to worry about this time of year. At the federal level, in addition to the 2011 tax year returns, some of us also must pay 2012's first quarter estimated taxes. And as today's Daily Tax Tip notes, most folks also have to file state tax returns. This year that's Tuesday, April 17. Click the map above, from a calendar bought years ago at the Marfa Book Company, for a larger view of Texans' skewed view of the United States. Here in Texas, as well as in Alaska, Florida, Nevada, South Dakota, Washington and Wyoming there's... Read more →

Tax Day is almost here, so that meant extra posting last week at my other tax blog. Obama hit the road last week to rally support for the Buffett Rule. The prez wants to include in any tax reform effort a rule that would impose a minimum 30 percent tax rate on individuals who make $1 million or more. While most taxpayers are probably not happy with what they're paying Uncle Sam, right now they're not worrying about overall tax reform. They just want to finish their 2011 returns and get them on the way to the IRS. But taxpayers... Read more →

The president and vice president released their 2011 tax returns and yes, the Commander in Chief's 20.5 percent tax rate is lower than what his secretary pays. But while he's in the same situation as the man for whom the Buffett Rule is named, it wouldn't affect Obama, at least not this year, because his income is under $1 million. Barack and Michelle Obama's income last year dropped substantially, from $1.7 million in 2010 to $789,674 in adjusted gross income for 2011. Since itemized deductions are no longer phased out, they got the full value of the $278,498 from their... Read more →

If last year was the first one in which you worked for yourself, either as your full-time job or by doing some freelance work on the side to supplement your wages, you are likely to encounter a big tax surprise when you file: self-employment tax. Self-employed individuals generally must pay self-employment tax, or SE tax, in addition to the usual federal income tax. Today's Daily Tax Tip looks at SE tax considerations. The SE tax goes toward Social Security and Medicare, similar to those tax amounts that employees see withheld from their working-for-the-man paychecks. In both SE and withholding situations,... Read more →

Ways to e-pay your tax bill

You put off filing your taxes because you knew you were going to have to pay the IRS. At least Uncle Sam makes it relatively easy, and in a couple of cases fee-free, to pay him electronically. These tax e-payment options are today's Daily Tax Tip. First, here's a look at the e-pay ways that'll cost you: credit or debit card transactions. Service Provider Website and Telephone Convenience Fees on Credit Card Payments Convenience Fees on Debit Card Payments WorldPay US, Inc. 1-888-9-PAY-TAX (1-888-972-9829) 1.89% $3.49 WorldPay US, Inc. 1-855-9-PAY-TAX (1-855-972-9829) 2.29% $3.49 Official Payments Corp. 1-888-UPAY-TAX... Read more →

If you got a refund from the Internal Revenue Service, you probably filed your 1040 many weeks or months ago. The same is true for folks in the 43 states and the District of Columbia that collect some sort of income tax (mostly on wages, but on some investment income in Tennessee and New Hampshire). But the way that state tax offices deal with refunds is starting to look decidedly different from the federal process. This year, refund recipients in at least five states are getting their state tax cash back in the form of a debit card. That's right.... Read more →

Did a crook file your taxes?

It's tax filing crunch time and I know you have enough to worry about now if you haven't yet completed your return. Really. I've yet to file my own tax return. Waiting to file isn't necessarily a bad idea. Giving yourself extra time means that you can double check things, make sure you have all the tax documents you need and that you don't miss any tax deductions or credits. But there's one delayed tax filing worry that might not have crossed your mind. An identity thief might have filed under your name. Federal Trade Commission data show that tax-related... Read more →

If you still file a paper tax return by mailing it to the Internal Revenue Service, know where you're going on Tax Day. It could save your life. A recent analysis of driving habits on April 15 (or whatever day tax returns must be filed; it's April 17 this year) found that auto fatalities spike on Tax Day. So that your tax-filing trip is a bit safer, use the U.S. Postal Service's online post office locator. You can find the post office closest to you, check out its hours of operation and map a route there. And here are some... Read more →

Bush tax cuts: Would a tax break by any other name be less contentious?

Recent tax policy debate has focused on two proposals: Let the Bush tax cuts, or at least the top two rates, expire as scheduled (again) on Dec. 31 and Implement the Buffett Rule to make millionaires pay a tax rate of at least 30 percent. Although these two tax proposals are about different areas of taxation, they share one interesting component. Both are named for a person. Obama was on the road Tuesday (April 10) touting the Buffett Rule, which gets its moniker from financier Warren Buffett. The uber rich Oracle of Omaha ratcheted up the debate over how the... Read more →

Buffett Rule gets support from Reagan

President Obama is in Florida today, launching his full-fledged campaign for including the Buffett Rule in any tax reform. And yes, it also is a key part of the prez's campaign to keep working in the Oval Office. The Buffett Rule proposal would institute a 30 percent minimum tax rate on individuals who make $1 million or more a year. The proposed tax law's name, as everyone knows by now, comes from the Oracle of Omaha Warren Buffett, who started the wealthy tax rate debate last August when he pointed out that under the current tax system he pays a... Read more →

With the individual tax return filing deadline next week, federal taxes are taking center stage in the presidential and Congressional campaigns. On Tax Day 2012 Eve, the Senate will vote on the Paying a Fair Share Act of 2012. This bill, introduced by Sen. Sheldon Whitehouse (D-R.I.) and also known as the Buffett Rule act, would raise taxes on those earning more than $1 million and impose a minimum tax rate for these filers of 30 percent. Whitehouse's proposal probably won't get the 60 votes it needs to advance in the divided Senate, but that's not the main reason, right... Read more →

Happy Easter! I hope your kids had successful Easter egg hunts. After you finish making egg salad of the colorfully shelled collection, check out Today's Tax Tip special holiday edition: A dozen egg-cellent tax filing tidbits. Photo courtesy Nestlé/Juicy Juice 1. You counted the payments you made to your regular day care provider toward the child and dependent care credit. But did you add in the costs of the day camp the kiddos attended last summer? It can be used toward this popular tax credit, too. 2. If you took advantage of low home loan rates to refinance your mortgage,... Read more →