This is "Travel Tuesday", but travel around the IRS site, if you haven't already done it.
Looking for the IRS Site? It's Not IRS.com"If you're starting to think about your taxes and searching online for the official site of the U.S. Internal Revenue Service, make sure you don't click on IRS.com by mistake.
The IRS, like many U.S. government sites, uses the ".gov" top-level domain name, and can be found at IRS.gov. But IRS.com isn't affiliated with the government at all, despite the misleading "IRS Tax Center" title in the browser bar and tab. The banner headline on the homepage also suggests an official association: "US Tax Center – Tax Information You Can Trust.""
Seven Common Audit Triggers and Ways to Avoid Them"The IRS has made no secret of the fact that it is ramping up audits in order to close the "tax gap." The "tax gap" is the difference between what the IRS expects to collect and what it actually does collect. In 2005, the IRS estimated this gross tax gap, before collections efforts, to be approximately $345 billion.
The good news is that the IRS doesn't expect to shrink the tax gap with random audits. While it's true that some returns are randomly selected for examination, most of the time the IRS has a reason for plucking a form 1040 out of the pile. In other words, audits are generally triggered by a specific item or pattern of behavior on your tax return (or tax returns). Following is a brief checklist of items or behaviors that might trigger an audit:
1. Failing to Include a Form 1099 or Other Income
2. Inflating Home Office Deductions
3. Citing Too Many Losses on a Schedule C
4. Claiming Disproportionately High Charitable Deductions
5. Using Too Many Round Numbers
6. Reporting Rental Real Estate Losses When you Don't Materially Participate
7. Citing Too Many Business-Related Deductions"
More at: http://www.walletpop.com/2011/03/03/seven-common-audit-triggers-and-ways-to-avoid-them/?icid=main%7Chtmlws-main-n%7Cdl5%7Csec1_lnk3%7C205812
Is It Deductible? We Evaluate 12 Common Expenses
Read the article: http://www.walletpop.com/2011/02/25/is-it-deductible-we-evaluate-12-common-expenses/?icid=main%7Chtmlws-main-n%7Cdl5%7Csec3_lnk2%7C205812
Five Tax Season Secrets From a Tax Pro, by Kelly Phillips Erb."Around this time of year, there are a lot of assumptions about taxes. Since I work with taxes for a living, many folks assume that I have a huge advantage over other taxpayers. Don't be fooled -- we're all in the same boat.
I do, however, have the benefit of experience working with a number of other taxpayers and watching what they've done right (and wrong). Over the years, I've figured out a few things. Here are a few of my secrets to help you through tax season:" Read the article at: http://www.walletpop.com/2011/03/11/five-tax-season-secrets-from-a-tax-pro/
More Tax Tips From the Pros, by Kelly Phillips Erb."I also emphasized that there's no one-size-fits-all approach to taxes. To give you a wide range of advice, I asked a number of tax professionals from all over the globe for their best tax tips for tax season. Here's what they had to say:" Read the article at:
11 Outrageous TaxesIf you needed any more proof that our state, local and federal budget spending is out of control, here it is. In an effort to get out from under record deficits and support their spending habits, politicians from Seattle to New York and everywhere in between have cooked up some outrageous taxes.
Some of these taxes are already on the books, some are just up for debate, but all show you just how far politicians will go to put a little moreta of your money in their pockets.
Let's start with so-called "sin taxes," which have always been popular with politicians. Taxing items seen as vices--such as smoking, drinking and gambling -- is seen as an easy way to raise tax revenue. But the definition of "sin" seems to be expanding...
Here's proof that some politicians are a few cards short of a full deck. Anyone who purchases a deck of cards in the state of Alabama must pay a "card tax" of 10 cents. However, the law claims that the tax must be levied on the purchase of any deck containing "no more than 54 cards" so if you are lucky enough to find a deck with 55 cards, you're home free! Really, how much money can this possibly raise?!
In Utah, any businesses where "nude or partially nude individuals perform any service" have to pay a 10% sales and use tax. This tax is applied to all revenue from admission fees as well as merchandise, food, drink and "services" sales.
As part of the controversial Patient Protections and Affordable Care Act of 2010 (better known as healthcare reform), there is now a 10% excise tax on using a tanning salon. This tax is expected to raise a surprising $2.7 billion dollars over 10 years.
Be careful what you eat in Kentucky or it can cost you. There is now a sales tax on any food classified as candy. But the definition of candy is controverisal -- under Kentucky's definition, a Reese's Peanut Butter Cup is candy, but a Milky Way is not. Huh?
The tax is also snaring some seemingly healthy foods. If a breakfast bar contains natural or artificial sweeteners along with fruits, nuts or other healthy ingredients, but has no flour and doesn't need refrigeration, it's considered candy and is subject to sales tax. But breakfast cereals with exactly the same ingredients are not considered candy and are not taxed.
After 20 years of living, working and raising a family in New York City, nothing surprises us. But the city certainly has cooked up some outrageous new taxes. We doubt any of these will do much to help them dig out of their massive budget deficit, but let's take a look...
In January, the New York City Fire Department proposed a new "crash tax." The proposal, which stirred up a very heated debate, calls for a $500 fine for anyone in an accident requiring emergency response vehicles at the scene.
Haunted House Tax
Here's a new tax that would scare any reasonable person. If a haunted house includes music and the admission charge is more than 10 cents, then sales tax applies. Yet New York, the home of one of the greatest theater arts communities in the world, doesn't tax musical comedies, operas or chamber music shows. Go figure.
New York is cracking down on enforcing the tax on prepared food. One of their targets: the beloved bagel. If you buy a whole bagel and take it home with you, it's tax free. But, if you purchase a bagel to eat at the bagel shop, you'll have to pay sales tax.
A New Kind of Death Tax
As of January 1, 2011 it costs money to die in Seattle. King County, which includes Seattle, has instituted a $50 fee for reporting a death to the Medical Examiner's Office. If you don't pay, you don't get the permission and paperwork needed in order to be buried.
There is now an annual tax on brand name pharmaceutical companies. This is a tax on corporations, not individual taxpayers, that's expected to generate $2.5 billion in 2011. But you better believe the cost of this new tax will be passed on to consumers in the form of higher prices for the brand name drugs we buy.
New FSA Tax
If you use a Flexible Spending Account (FSA) that lets you pay for medical expenses with pre-tax money, brace yourself for new restrictions. New Flexible Spending Account (FSA) rules will limit the amount you can set aside tax-free to just $2,500 starting in 2013. That amounts to a tax increase on anyone who currently uses an FSA to pay for healthcare costs over that $2,500 cap.
With budget deficits reaching a crisis point, we think you'll see plenty of new and outrageous taxes coming your way. We should all pay our fair share, but make sure you're not paying one penny more! Take every tax deduction you're entitled to and make those tax deductions airtight! "
The IRS wants to give you money!
WASHINGTON, Feb. 28, 2011 — "Refunds totaling more than $1.1 billion may be waiting for nearly 1.1 million people who did not file a federal income tax return for 2007 according to the IRS. However, to collect the money, a return for 2007 must be filed with the IRS no later than Monday, April 18, 2011.
The IRS estimates that half of these potential 2007 refunds are $640 or more.
Some people may not have filed because they had too little income to require filing a tax return even though they had taxes withheld from their wages or made quarterly estimated payments. In cases where a return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund.
If no return is filed to claim a refund within three years, the money becomes property of the U.S. Treasury."
Savings Experiment: Make Filing Your Taxes Less Painful - and Less Costly"For many Americans, filing tax returns is one of the year's most arduous chores, right up there with, say, having a root canal. And while procrastinators have an extra three days to file their taxes this year -- Tax Day has been pushed back to April 18 -- that isn't going to make the task any easier."
Here are some tips:
It used to be only death and taxes were inevitable.
Now, of course, there's shipping and handling, too!
Jay and I had to alter the base to the cargo trailer's closet so that the front of the AC could be accessed, as the filter slides out from the side. We had to go back to my original plan. Jay hadn't wanted to cut that piece out yesterday, and today, I showed him why it had to be done. So we had to remove the metal pan that goes under the AC, and the board under it, so that we could get to that piece of the cabinet.
I have what I call "the blade that goes ahead of itself" for my jigsaw, and we cut it out with that. Jay measured, and cut, the stiles and rails for the closet, which is next to the countertop. The closet couldn't be finished until the Formica-ed countertop backsplash is in place. Jay cut the boards, and the Formica for the backsplash, then he installed the wooden backsplash.
Ray arrived, and painted the cabinets, then he "buttered" the Formica and the wooden backsplash with contact cement, while I took Jay home. When I got back the contact cement was dry, so we stuck it all together. The closet should go up quickly now.
Slowly, but surely, that is another job jobbed today.