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Unfortunately, taxpayers in Illinois are not even making a small dent in the amount of money that the state owes to vendors. The payments owed to the state by taxpayers will first go to interest owed on the nearly $6 billion owed by the state. During the past 10 years, Illinois taxpayers have paid over $300 million in interest on overdue bills owed by the state. Increasing the date that interest accrues on unpaid bills by 30 days has helped but is not enough to stop the state from going … [Read more...]

Dealing with government agencies and the “red tape” involved is frustrating for business owners and individuals alike. The amount of paperwork required to accomplish anything with the government is staggering. However, the Internal Revenue Services tops all government agencies for paperwork. The IRS alone accounts for 75% of government paperwork or 6.7 billion annual hours to complete that paperwork. For more about how the IRS should reduce the paperwork read, “Go Simple.” … [Read more...]

The President and the First Lady reported a gross adjusted income of $608,611 for 2012. Based on that amount, they paid a total of $112,214 in federal income taxes. This translates into an 18.4% tax rate for the President and the First Lady. Obama has proposed the Buffet rule for anyone earning more than $1 million per year in income. The Obama’s adjusted gross income fell during 2012 from what was reported on their 2011 tax returns. For more details about the President’s 2012 tax return … [Read more...]

In order to determine if your tax return should be audited, the IRS uses a scoring system to identify which tax returns may generate more tax revenue if they were audited. The DIF (Discriminant Inventory Function) is a score assigned to returns based on certain criteria that the IRS has determined increase the possibility that the taxpayer “cheated” on their income tax returns. A study by the National Taxpayer Advocate has revealed several geographical areas where it is more likely that … [Read more...]

Nanny taxes are a sore subject among many parents who feel that it is unfair to pay taxes on the salary for a full-time nanny when other parents never dream of paying payroll taxes for casual or part-time babysitting services. The fact remains that it is the law that parents who employ a full-time nanny should be withholding and paying payroll taxes based on the nanny’s salary. However, this is probably one of the most common types of “tax fraud” committed each week in the United States. … [Read more...]

If you have waited until the last minute to file your tax returns, you are not alone. It may be better for you to request an extension to file your tax returns if you do not have all of your documentation or you are unsure which tax laws apply to your situation. Rather than miss the deadline or file an incomplete return, you should request an extension to file your return. If you file the return and must amend it later, you increase your risk of being audited. For more read, “Not Ready to … [Read more...]

If you have waited until the last minute to file your 2012 tax returns, you are not alone. Millions of Americans will be burning the midnight oil to make the April 15 filing deadline. After you finish the last schedule and hit the submit button to send your tax returns to the IRS, relax and enjoy one of the Tax Day Freebies or Specials that many businesses are offering for tax day. Some offer freebies while others offer special discounts to celebrate the first major deadline of tax … [Read more...]

Many tax advisers tout after-year-end IRA contributions as good ways to reduce your 2012 income tax responsibility. However, there is another after-year-end contribution that you can use to reduce your 2012 tax bill - - your health savings account. HSAs have three great tax benefits – contributions are pre-tax, interest is tax-free and authorized use for medical reasons is tax-free. Now they have a fourth tax benefit if you use them to contribute after the end of the year to reduce your tax … [Read more...]

For those who have procrastinated, the deadline to file 2012 tax returns is looming very close. If you have completed your 2012 tax returns and you owe money to the IRS, you may be able to lower your tax liability by taking advantage of a retroactive IRA contribution. This allows taxpayers to make a contribution to their Individual Retirement Account after December 31 but still include this on their 2012 federal tax return. However, is this amazing piece of tax advice really as good as it … [Read more...]