Posts Tagged ‘Tax’
Amazon and eBay are squaring off in the fight over internet sales tax. The Marketplace Fairness Act will nationally require internet sellers to collect sales tax, where before it had fallen to consumers to fork over the sales tax on their state tax returns. In a not-too-hard-to-believe circumstance, few people later pay the sales tax on their internet purchases. The bill itself is moving through Congress quickly and with bipartisan support unexpected for a tax issue. It seems more than likely that paying sales tax on internet purchases will become a reality.
Ambiguity and complexity within the tax code continues to be a major problem for small businesses. A new report from the National Small Business Association (NSBA) finds that one-in-four small businesses spent at least 100 hours or more annually on tax preparation. When businesses were asked to rate the most challenging aspect of the federal tax code, the majority selected the administration of taxes.
For more on this study: Small Business Tax Woes
The IRS claims that they can read your emails if they have been “opened or are older than 180 days.” This goes against the court case of U.S. v. Warshak, which stated that governmental agencies need a warrant to access emails and private messages. The IRS claims that this case only applies to the Sixth Circuit, and that they are allowed to read emails because of the Electronic Communications Privacy Act (ECPA). Activist Groups are challenging this action, and law makers are currently looking at updating the ECPA to preclude this action.
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While most individuals are rushing to have their individual income tax returns prepared by April 15, many will overlook another important form that is due that day. Form 709 covers taxable, or potentially taxable, gifts that were made during the previous year. Estimates are that twice as many Americans will need to file From 709 this year because of the increase in gifts that were made because of the fiscal cliff uncertainty at the end of 2012.
While the exemption from estate tax was $5.12 million in 2012, many expected it to decrease down to $1 million for 2013, with the tax rate rising from 35% to as much as 55%. To avoid the potentiality of a lower exemption and higher tax rates, taxpayers had lawyers and tax advisers working hard at the end of 2012 to make last minute gifts in order to decrease the size of their estates. In the end, Congress chose to actually raise the exemption slightly to $5.25 million and only marginally increase the tax rate to 40%. However, the gifts had already been made at the end of 2012, and taxpayers now have to file Form 709 even if they don’t owe tax so the IRS will know how much of each taxpayer’s exemption has been used so far.
An incentive for taxpayers to file their Form 709 on time is that the IRS is likely to be overworked with the increase in gifts from this past year. Therefore, filing on time decreases the likelihood a taxpayer will be audited.
To read more about the approaching April 15 deadline for Form 709
81% of Income Tax Filers file their taxes online. However, the process by which the IRS processes the returns has not been able to keep up with the times. Because the IRS issues refunds on a type of “honor system” before actually reviewing the return, cyber thieves have been able to file fraudulent returns at an alarming rate. This provides a big problem for both the government and the individual. Fox Business News provides tips on how to protect yourself from the cyber thieves.
Click here to read more from Fox Business News.
The United States Senate passed its first budget in four years Saturday by a vote of 50-49. This budget proposes to increase tax revenue by $1 Trillion. However, it does little to reduce the overall federal deficit. This plan will reduce the deficit by $1.85 Trillion over the next 10 years, compared to Congressman Paul Ryan’s plan to reduce the deficit by $4.6 Trillion in the same period. Neither of these budget proposals are likely to pass the opposing house, but this may pave the “pathway to compromise.”
To read more, see Fox Business News