A quick clarification on my post of yesterday about the availability of human help from tax software companies. A TurboTax rep dropped me a note to say "you don’t have to be a TurboTax customer in order to use the Free Tax Question. It is open to anyone and everyone, no purchase required." Just wanted to share in case you use another computer tax prep package and want to get a second opinion!

You’ve probably already seen them, the TaxCut TV ads touting the software’s "people." As it did last year, the computer tax program is emphasizing its H&R Block connection that allows clients to get human help with filing questions. Now TurboTax is doing the same, at least for the month of January. For the last several years, TaxCut has offered its customers the chance to talk with an H&R Block tax staff via phone or e-mail. One free session is included with all TaxCut Premium online programs and TaxCut Premium + State + E-file software. Details at Ask a Tax Advisor.…

Most of us nowadays file our taxes electronically, but there still are some paper holdouts. Those folks soon will be getting their tax packets, or most of them, in their snail mail boxes. The IRS says it’s sending 16.5 million 1040 packages to taxpayers who have filed paper tax returns in the past. But, notes the IRS, the tax packages don’t contain any tax credit or other forms that are related to the end-of-year alternative minimum tax (AMT) law changes. As noted earlier (in this blog item), since the 2007 tax year AMT adjustments didn’t become law until Dec. 26,…

The IRS announced today that it is considering new rules on the marketing of refund anticipation loans (RALs) and "certain other products" in connection with 1040 preparation. The IRS can’t ban such products, but it can tighten its rules, and penalties for violating them, in connection with the high-fee/high-interest loans. In that regard, the agency is considering prohibiting tax return preparers from "obtain[ing] a taxpayer’s consent to disclose or use tax return information for the purpose of soliciting taxpayers to purchase such products." This is the latest in the IRS’ tougher stance toward such tax-related loans. Last year, tax software…

Hallelujah! The 2008 tax-filing season will be as usual for the vast majority of us. This is a good thing, really! Especially for folks with simple returns and who are expecting refunds. Acting IRS Commissioner Linda Stiff announced today that the upcoming tax season is expected to start on time for everyone except certain taxpayers potentially affected by late enactment of the alternative minimum tax "patch." That means that the IRS will begin processing returns for the vast majority of taxpayers in mid-January as it does every year. However, up to 13.5 million taxpayers who plan to file five AMT-related…

The 2008 filing season is shaping up to be a very costly tax season for all taxpayers. All you folks expecting a refund on your 2007 return already know that you’re going to have to wait a little longer for your tax cash, thanks to Congressional maneuvering over the AMT (the sad, sorry details are blogged about here and here). Now there’s equally disconcerting news for taxpayers who owe. It’s bad enough when you have to hand over money to Uncle Sam. Well, now he wants your cash even more quickly. Big surprise … Not! The IRS reportedly is reducing…

If 2008 is the year you want to pay your taxes via an electronic transfer from your bank account to the IRS, then you need to set up your Electronic Federal Tax Payment System (EFTPS) account soon. As much as we want to ignore it, tax season — and required tax payments — are bearing down on us.  For folks who file estimated taxes, the 2007 fourth quarter deadline is Jan. 15. Sure, that’s 5½ weeks away, and right now you’re thinking you’ve got plenty of time to deal with it. But as you also cope with all sorts of…

The 2008 filing season is six weeks away. Maybe. The IRS is considering not processing all early returns if Congress doesn’t resolved the alternative minimum tax (AMT) issue soon. That would mean that early filers, all those folks who want to get their 1040s in ASAP because they are due refunds, would end up waiting a few extra weeks for their tax cash. That’s word from Richard Spires, the deputy IRS commissioner for operations support, in an interview with the Associated Press. "We are worried that if we allow certain filers to file that it does not cause a lot…

We have a saying here in Texas: Dance with who brung ya. H&R Block is now taking that advice to heart. The tax-preparation giant has stumbled a bit in recent years, in part by two-stepping with some partners that weren’t very light on their feet. The company got into the subprime mortgage lending business (and we all know how that turned out for a lot of folks), as well as detoured into banking, accounting and brokerage services. And we can’t gloss over the refund anticipation loan issue, which produced customer lawsuits, fraud charges from the New York attorney general, special…

I’ve been searching for responses from the tax software companies named in the class action lawsuit filed against Free File Alliance corporate partners (more on the legal action in this earlier blog post). Not surprisingly, there’s nothing official on any of the major company Web sites. It’s a cliche, but I’m sure the truth, that the companies’ lawyers are all poring over the documents and have mostly muzzled spokespeople. However, I did find a few reply reports and, in the interest of fairness, wanted to share them. Tim Hugo, executive director of the Free File Alliance (this link takes you…

A group of taxpayers who didn’t meet Free File income requirements have decided to recoup their e-filing fees by taking the software companies to court. Two Philadelphia law firms have filed a class-action suit in federal court against the companies that make up the Free File Alliance. They estimate that damages could be billions of dollars. The complaint, filed by Feldman, Shepherd, Wohlgelernter, Tanner & Weinstock and Cooley & Handy, alleges that while the agreement the IRS made with the Alliance companies was supposed to provide free e-filing for up to 70 percent of Americans, only 3.8 million taxpayers filed…

When did Bill Murray get elected to Congress? Sorry. The laid-back comic isn’t in D.C. It just seems that way, since Congress apparently is a big fan of Groundhog Day. Every year, regardless of which party’s in control — and I use that word advisedly — on Capitol Hill, lawmakers do the same dang thing. They pontificate for 11 months, pushing actual legislative action on critical (i.e., usually tax) measures until the very end of the session. That’s all fine and good for Representatives and Senators. They have a few late nights, vote and head home for the holidays. But…

Get ready, taxpayers. An IRS official says by summer 2008 we might be able to access our own personal tax data through the agency’s official Web site. At the annual Council for Electronic Revenue Communication Advancement conference, David R. Williams said the IRS is working on a Web program that will allow taxpayers to view three years of prior tax information. "Wouldn’t it be nice if your W-2 was there as well?" asked Williams, the director of the IRS Office of Electronic Tax Administration. "How about changing your address or updating your information?" According to a report in Tax Notes…

Ho-hum. Same old, same old. Another tax-filing season, another IRS statistical record falls. Nearly 80 million of us filed out taxes electronically this year, breaking the record set last year. As the table below shows, that’s pretty much been the pattern since the IRS began accepting and then encouraging taxpayers to e-file. The IRS reports (IR-2007-185) that the exact number of e-filers for the 2007 tax season, which officially closed out on the Oct. 15 extension deadline, was 79.98 million. That’s about 9 percent more than filed electronically the previous year. This year, more than 22.6 million returns were e-filed…

Whew! Tax season 2007 is now officially over. You can bet the IRS is as glad about that as you and I are, although the agency now has to deal with the millions of returns filed at the very last moment on Monday. But if this year’s processing of previously filed returns is any indication, working through this last batch should go smoothly. In a report issued just before the Oct. 15 final filing deadline, the Treasury Inspector General for Tax Administration (TIGTA) said "the 2007 tax filing season was generally successful, and most returns were timely and accurately processed."…

October 15. The final deadline for folks who got an extension to file their 2006 tax returns. October 15. The inaugural Blog Action Day, when bloggers unite to discuss environmental issues. Coincidence? I think not. Over the past few years, the U.S. tax code has become more environmentally friendly. So on this day when millions of procrastinators are finally filing their 1040s, it’s only fitting to look at some ecologically connected tax breaks. Before you send in your return today, check it over to make sure you don’t miss out on these savings. And even if you filed months ago,…

That’s right, all you master procrastinators. You better get your act together this weekend. The final filing deadline for most 2006 Form 1040s is Monday. Don’t get in such a hurry, though, that you overlook some tax breaks. Areas that the IRS says filers are ignoring at their own expense include: Telephone excise tax refundThis is a one-time refund of long-distance excise taxes (details on how it came about are in this earlier blog item). The refund applies to phone charges billed between March 1, 2003, and July 31, 2006. If you have those bills on hand, you can figure…

I saw that bad IRS television want-ad again. Yes, I was up watching late-night cable programming; how else am I going to get my X-Files fix? Anyway, you remember the ad. I blogged about it back in the fall. It’s the IRS’ pitch for seasonal employees. It’s reappearance can only mean one thing. It’s tax-filing season again. Back in April, almost 10 million taxpayers requested an extension to file their 2006 returns. A good number of those folks will no doubt put off their final filing duties until the ultimate last moment, which is Oct. 15. So Uncle Sam is…

I’m a wife, so I know how to nag. The hubby’s just glad this time, it’s not him I’m "reminding." No, my target today is all my fellow taxpayers who have to make estimated tax payments. As mentioned last week, payment #3 is due Monday, Sept. 17. If you mail in the 1040ES voucher and a paper check, you can get it in the mail so that it’s postmarked on that date. If, however, you were able to set up an e-payment account via EFTPS, then you probably want to sign on to your account today and get things in…

I cannot believe it’s September! At the first of each month, which for me is today since I took most of the Labor Day long weekend off, I look at the financial tasks I have to complete within the next 30 days. It’s usually pay the bills, balance the bank account, contribute to the IRA. All pretty routine. September, however, is an added-duty month. On the 17th, our estimated tax payments are due. If you file a 1040ES, too, I wanted to be sure to remind you that you can do so electronically . Now in the spirit of full…

That could be the new advertising campaign for Wal*Mart this coming tax season. The Associated Press reports that tax-filing giant H&R Block has signed a kiosk license agreement with the world’s largest retailer to provide tax preparation services in certain Wal*Mart locations. In a filing with the Securities and Exchange Commission late Wednesday, H&R Block said the deal with the discount store leader expires on May 30, 2009. Either party, however, may terminate the agreement between April 16 and May 1 of each year. If not terminated, the agreement will automatically renew for one year after the initial term ends.…

Uncle Sam is still trying to give away money. Specifically, the IRS has put out a call to taxpayers who haven’t yet claimed the telephone excise tax refund. It’s a one-time, money back offer that could get taxpayers, depending on their filing status, from $30 to $60. Most phone customers, including most cell-phone users, qualify for the refund. So far this year, the only filing season the tax refund will be available, 92.1 million taxpayers have requested the phone tax cash. That, according to the IRS, represents 71.6 percent of all individual tax return filers and accounts for a total…

Fed up with scammers using Web sites that look and sound official, the IRS has established a new e-filing rule. By next Thursday, Aug. 9, all authorized IRS e-file providers that obtain taxpayer information via the Internet, either directly or through third parties, must submit to the IRS the following information via an encrypted Excel spreadsheet: The provider's Electronic Filer Identification Number (EFIN); The name of a Principal or Responsible Official shown on the e-file application for the EFIN; and The Uniform Resource Locators (URLs) of all web sites that are used to e-file federal returns; that are portals or…

Thousands of superstitious couples will walk down the aisle today, Saturday, July 7, 2007, hoping that the triple seven date will bring them some added marital luck. And although he wasn’t invited to any of these 7/7/07 ceremonies, Uncle Sam has a vested interest in your marriage. Bob D. Scharin, RIA Senior Tax Analyst from Thomson Tax & Accounting, advises newlyweds to make sure they are aware of how their new married status can affect many tax and financial decisions. "This will help guide you to smart choices that will have the best possible effect on your bottom line next…

You use tax software, in part, because you want to make sure your returns are done correctly, right? Well, it seems that, at least in the case of some folks who use the IRS’ free tax filing program, that’s not happening. A June 28 report from the Treasury Inspector General for Tax Administration (TIGTA) has the alarming news that Free File Alliance software does not always compute taxes correctly. Oh, the software does fine in calculating the entries on the return. But whether those entries should be there in the first place is TIGTA’s concern. Basically, some of the software…

Your June estimated tax payment, that is. Form 1040-ES, payment voucher 2, is due today. If you’re still mailing the paper form, a postmark is OK. This blog item from a couple of days ago has more details. I just checked my bank account and Uncle Sam has already taken out our payment, so I’m calling it a day. My cousin Kathy is in town. Regular readers remember her and our grand adventure in the wilds of West Texas last September. Today we’re going to do some Austin exploring — the Texas State History Museum, the Blanton, probably a margarita…

For those of us who must pay estimated taxes, it’s that time again. The second payment is due June 15. As with your regular 1040, if you mail it, this filing of your 1040-ES just has to be "timely." That is, it doesn’t have to be in the IRS account by Friday, just postmarked by then. Although the payments are referred to as quarterly, this second installment covers income you earned, but that didn’t have payroll taxes collected from, in April and May.  The estimated tax system obviously was devised by the same folks who came up with payroll taxes.…

Did you use the Free File Alliance this year to send in your 1040? Me neither. In fact, not too many of us took advantage of the public-private consortium that enabled taxpayers with adjusted gross income of $52,000 or less to electronically prepare and e-file their taxes for free. A recent Government Accountability Office examination of the 2007 tax-filing season found that the program continues to lose users. According to the GAO data collected through March 17, there were 5.2 percent fewer Free File users this year compared to that time frame in the prior filing season. That number might…

I thought I was so cool back in April, paying our 2006 tax bill electronically. Getting with the cyberprogram. Saving the service charge connected with credit card payments. Then in yesterday’s mail was a notice from the IRS telling the hubby and me that we were tax delinquents. Yep, Uncle Sam said we’d best pony up the amount due shown on our 1040, which he got on time, along with some extra dollars in penalties and interest. Of course I reacted as any taxpayer would. I was ticked off! I paid our tax bill on April 16, a whole day…

The 2007 tax-filing season wound down a little over a month ago, once again setting records. This year, e-filing continued to climb, hitting a new high of 76 million electronically submitted returns. While e-filing has always been popular among early filers who typically are expecting refunds and like the way the cyber system gets them their money faster, this year’s tax season saw another e-surge in April. The number of electronically-filed returns sent by last-minute filers, a group that until this year has tended to send in paper 1040s, jumped 35 percent during the final weeks of this filing season…

Back in January, the all-news radio station in Washington, D.C., reported on (and we blogged about) all the tax deadbeats who work or once worked in the federal government. All told, nearly half a million current and former U.S. federal employees have not filed tax returns. Their unpaid taxes come to almost $3 billion. I guess members of Congress don’t listen to WTOP as they drive to their Capitol Hill offices, because lawmakers are just now getting around to reacting to the tax scofflaws currently or previously on Uncle Sam’s payroll. In a letter sent this week to Dubya, the…

Actually, Uncle Sam is in the money, thanks to our recent tax filings. The Treasury Department announced today that on April 24, the government set a one-day record for collections of personal income tax. $48.7 billion in tax receipts from individuals was recorded yesterday. The amount reflects taxes that weren’t withheld from individuals over the course of the year, but were paid to the government before this year’s April 17 filing deadline. Much of the record cash collection, say tax experts, came from money owed on income from investments or profits from sales of those holdings. That’s what happened to…

On Tuesday, the IRS learned to be careful what it asks for. The agency has been pleading with us for years to e-file. And on April 17, so many TurboTax users e-filed that the company's servers were unable to handle the tax crush. That meant that the returns of hundreds of thousands of taxpayers technically didn't make the deadline, putting them into a penalty and interest paying situation. But don't panic if you were one of the unintentionally past-due filers. The IRS says that taxpayers who weren't able to e-file Tuesday using Intuit software products (TurboTax, its Free File version…

If you don’t already know what your 2006 tax liability is, you will by the end of the day. You’ll either precisely figure it so you can file your 1040 by midnight. Or you’ll have a close approximation of your tax bill to send in with your Form 4868 extension request. Wouldn’t it be cool to know what you would have owed back in 1913 when the first income tax form was created? Now you can. The folks at Political Calculations have created a calculator you can use to see what kind of tax bill your current income would produce…

If you’re planning to e-file for free today, make sure you go to the Free File Alliance page on IRS.gov. That’s the only legitimate access point to the no-cost electronic service. The IRS says some sites are posing as members of the public-private tax filing consortium to illegally make off with individuals’ tax refunds. The con artists take the filing data from individuals, then go one of the 19 legitimate Free File Alliance partners and use the taxpayers’ information to claim the refunds, which then are deposited into the scammers’ bank accounts rather than the taxpayers’ accounts. The IRS did…

Two government agencies that regularly catch a lot of flack find that they are good partners each April. I’m talking, of course, about the Services of Internal Revenue and U.S. Postal. True, electronic filing has been gaining in popularity over the years. In fact, the most recent filing season stats from the IRS (numbers there in the upper right hand corner of the page) show that more taxpayers are using e-file as the deadline approaches than in past years. But millions still file the old-fashioned way and many of them will opt on April 17 for a trip to the…

A quick reminder for all you folks who are three years late with your 2003 returns. If you didn’t file back in April 2004 and you were due a refund, the U.S. Treasury will get to keep your tax cash if you don’t get that old 1040 in by April 17. Click here for a 2003 Form 1040. You can download other 2003 forms and instructions you might need to complete that old filing here. This story has details on the unclaimed money; this one shows the amounts left in Uncle Sam’s account by residents of each state. And if…

Just a quick reminder: If you pay quarterly estimated taxes, your first 2007 payment also is due April 17. (Ignore the date on the voucher insert below; it was printed before the IRS discovered that this year we all get an extra day to get our taxes done, both the annual filings and estimated payments.) The IRS would prefer you figure the total amount of estimated taxes you’ll need to pay to ensure you don’t face any underpayment issues and then divide it by four and send in four equal payments. You can find the instruction booklet, worksheet and payment…

Like the majority of taxpayers, the Prez and Veep were late-season return filers this year. The return for W and Laura was signed on April 5 (not by them, but a representative of the trust company that manges their money). Dick and Lynne autographed their 1040 on April 12. On Friday the 13th, some of the filing details of D.C.’s most powerful couples were made public. The Bushes reported gross income of $765,801. Exemptions and deductions whittled that down to taxable income of $642,905. The damage: a tax bill of $186,378. But thanks to withholding, estimated tax payments and the…

I regularly hear three words from the hubby during tax season. No, not those three, although I know he’s crazy about me beyond words. He continually tells me as I sort through our tax filing material to deduct, deduct, deduct. Message received, honey. I’m working on it. We’re in the filing minority. We itemize. IRS statistics show, year after year, that most taxpayers claim the standard deduction. Part of the reason is that it’s easy. Just look on your tax form and it’ll tell you the amount to enter. No receipts to save, no addition or subtraction or percentage multiplication…

If you ever had any doubt about what a revenue generator tax filing is, the ever increasing competition between the major tax preparation chains will remove it. As we head into the final week of tax season 2007, we have H&R Block’s pizza play vs. Jackson Hewitt’s lunch box brigade. The Kansas City, Mo.-based Block has teamed up with Papa John’s to reward tax "pro-crust-inators." So sorry … and, even sorrier, more is on the way. Taxpayers who file using H&R Block’s TaxCut Online software program will get a $10.40 (warned you!) gift card redeemable for online pizza orders. The…

There’s nothing like taxes to showcase our fallibility. Sometimes we make big mistakes, like miscalculating how much tax we owe. On rare occasions, the IRS sends us money we didn’t properly claim. I’ve been on both sides of this tax equation, and while getting is definitely better than giving, the best move is to get it right the first time. Other times the mistakes seem small, like forgetting to come back and plug in your kids’ Social Security numbers. But without those, the IRS won’t give you any child-related tax breaks you might be trying to claim. This year, trying…

Is the IRS contributing to identity theft? Possibly. Over the last few years, the tax agency has lost or had stolen nearly 500 laptop computers that contained taxpayer data. To be fair, the IRS isn't alone when it comes to lax laptop security, as noted in this previous post. But when it's the IRS you're talking about, some seriously personal financial data is floating around. That's exactly what a recent investigation by the Treasury Inspector General for Tax Administration (TIGTA) discovered. In a report issued March 23, TIGTA says at least 490 IRS laptop computers and other computer devices were…

Most taxpayers claim the standard deduction. But every tax-filing season, these folks tend to get overlooked as tax tips are tossed about on how to cut tax bills. The focus is on itemizing. And yes, there’s a lot to be covered for those Schedule A filers. But even taxpayers who take the standard deduction have a chance to lower their tax bills by claiming what are popularly known as above-the-line deductions. These technically are adjustments to income. They’re found in the section titled Adjusted Gross Income at the bottom of the first page of Form 1040. A few also show…

Everybody needs help now and then. That’s especially true at tax time, when millions of us turn to professionals we expect to guide us safely through the tax code. But once in a while, a tax pro becomes more hindrance than help. Most recent case in point: The IRS yesterday shut down 125 Jackson Hewitt branch offices in Detroit, Atlanta, Chicago and Raleigh, N.C. The tax agency alleges that preparers at these sites, cited as locations "in which fraudulent tax return preparation is encouraged and flourishes," filed fake returns to obtain inflated refunds that cheated the federal government out of…

We’ve only got two weekends left before the April 17 filing deadline. So that you don’t have to spend all this Saturday and Sunday tracking down ways to trim a few dollars off your tax bill, below are a dozen tax credits that could be beneficial. Remember, credits are better than deductions. True, deductions reduce your taxable income. But in determining your actual tax bill, a deduction is worth, at best, only 10 to 35 cents per dollar, depending on your tax bracket. Credits, on the other hand, reduce your tax bill dollar for dollar. If you owe $1,000 and…

I was chatting with the Web’s Tax Mama, Eva Rosenberg, this afternoon and one of our topics was questionable tax tactics. Then I opened up my e-mail box and there was a release from the IRS on a $76 million penalty settlement agreement the IRS has reached with a Texas-based law firm for, quoting the IRS here, its "promotion of abusive and fraudulent tax shelters and violation of the tax law concerning tax shelter registration and maintenance." As Eva had just noted not half an hour earlier, "You don’t ever want an IRS press release with your name on it."…

Three weeks. 21 days. That’s how much time we have until our tax returns must at least be on their way to the IRS. A recent H&R Block survey found that 80 percent of the people the company asked didn’t know this year’s due date is Tuesday, April 17. The tax preparation giant referred to it as "surprising taxpayer confusion." Isn’t that redundant? Thanks to Congressional tinkering, the tax code is continually changing (check out what happened last year alone here) so who’s not confused? Maybe that’s why so many of us — the IRS expects 47 million taxpayers to…

Everybody else lets, even encourages, us to pay for things over time. So it’s no surprise that the IRS will accept the tax you owe via installment plans. This is not a new development, but over the years, the IRS has tweaked its payment agreements in ways that are good and not so good for taxpayers. One of the positive changes is that, in keeping with the agency’s increasing migration to electronic tax activity, many taxpayers now can apply for a payment agreement online. The IRS estimates that over 75 percent of filers who are eligible for an installment agreement…

$49,000 in deductions for donated designer clothing is disallowed. No, that extravagant (and errant) tax claim wasn’t on Paris Hilton’s tax return. It was on the 1040, actually the Schedule A accompanying the 1040, of a New York investment banker. There wasn’t any question as to whether the haute couture was donated. The problem was with the dollar assessment of the expensive designer duds. In a written opinion, the special trial judge called the valuation "overly optimistic." True, the items did indeed cost a pretty penny when purchased. But as one consignment shop owner told the Washington Post, everything depreciates,…

Want to end up in a federal jail cell? The IRS has just issued a list of 40 tax claims that'll help you get your wish. The official Internal Revenue Service name for these tax, or rather nontax positions, is "frivolous." That's a nice euphemism. I call them, the arguments and their adherents, crazy. Crazy for thinking these wacky schemes would work. Crazy for thinking you won't get your wrist, or worse, slapped if you use them to avoid paying your tax bill. I know that tax protesters for many years pointed to the lack of prosecution of some of…

An interesting message from the IRS showed up in my e-mail box this morning, a tip on taking the home office deduction. The e-mail itself wasn’t so unusual. I get tons of cyber communication every day — newsletters I’ve signed up for, newsletters I don’t remember signing up for, blog alerts, FYIs from friends and colleagues about tax and financial topics. Heck, even the occasional "V!agggra" message still slips through the filtering system. And this particular one from the IRS didn’t offer anything shocking or new. It was simply the standard tax-time reminder to home-based workers about what to do…

As a tax enthusiast and Internet aficionado, you probably already know this, but here’s some supporting data from a company that tracks Web trends: We like e-filing. Compete.com recently asked members of its panel how they filed their returns last year and what they plan to do this year. In 2006, 23 percent said they used PC software and e-filed. This filing season, 24 percent plan to take that route, as shown in the company’s colorful pie chart below. Another 22 percent plan to use the Web and e-file, again a 1 percent bump over last year’s choice of online…

Harry Willner, an IRS agent since 1974, has been charged with tax fraud. Federal prosecutors in Manhattan allege that Willner was part of a group that evaded taxes by manufacturing false business deductions for a company Willner operated out of his home. The Fair Lawn, N.J., resident was arrested Monday and subsequently released on his own recognizance. The amount of the alleged fraud: $758,000 claimed as a "bad debt" from 1998 through 2001. The resulting tax evasion on his personal return, prosecutors say, was almost $21,000 over four years. The potential time in jail for Willner: 18 years. Details on…

You roll into work. Drop your briefcase and/or purse at your desk. Head to the coffee room and fill up your mug. Chat with a few coworkers. Then back to your desk to work on your taxes. Huh? That’s what more than a third of the people who responded to a recent survey said they do. St. Bernard Software heard from 525 workers on how their tax and work tasks coincide. Twenty percent said they plan to file their returns electronically using their office PC. Ah yes, one of the few cube farm perks: High-speed Internet connection. Just ask any…

Feeling rushed because you lost an hour while you slept? Worried that the time shift will slow down your tax-filing efforts? If you have to file a state return in addition to a federal 1040, here’s a time saver: Most states accept electronically filed returns. You have a couple of options here. You’ll probably be able to combine your state and federal filings, thanks to the federal/state e-file program. According to the IRS, the electronic filing software places your federal and state return data in separate "packets" that are transmitted to the IRS in one taxpayer "envelope." (Don’t you just…

Do you know someone who doesn’t have to file a tax return? Yes, it does happen. These folks usually are lower income. Sometimes they are older and their income, perhaps primarily Social Security benefits, is not taxed. Whatever the reason for escaping 1040 duty, these individuals still might be eligible for the telephone tax refund. They can get the standard refund amount, which ranges from $30 to $60 depending on the number of exemptions they claim, by simply sending in Form 1040EZ-T. This half-page document requires only the individual’s name (or names for joint filers), Social Security number (or numbers…

We’ve all done it. Typed in the wrong URL. Or taken the lazy way and just hit enter after typing in what we thought was the site name to have our browser automatically add the extension. The only problem with that shortcut method is that the automatic extension is dot-com. And that might not be what you’re looking for. Case in point: Not so long ago, anyone wanting to see what the President of the United States was up to and who typed dot-com instead of dot-gov after White House got an entirely different, and decidedly adult, Web page. Whoa…

What’s up with you Californians? I know you’ve got the beaches in the south and wine country up north to keep you occupied, but can’t you find some time to file your tax returns? I’m talking specifically about your 2003 tax returns. Seems that about 200,000 of you Golden Staters didn’t get around to turning in that paperwork three years ago. And by ignoring your tax tasks back then, you left more than $236 million in Uncle Sam’s hands. But those left coast residents aren’t alone. They’re just part of (albeit the largest part of) 1.75 million taxpayers who missed…

Apparently after you finish reading the ol’ blog, many of you head right to your tax software program and file your returns. The latest weekly roundup of numbers from the IRS shows that taxpayers are submitting returns electronically from home computers at a record pace. That group is up almost 7 percent from the same period last year, specifically the weeks ending Feb. 24/23, 2006/07. These do-it-myselfers account for 30 percent of the season’s e-filed returns so far. Overall, electronic filing this tax season has increased by nearly 4 percent over last year’s numbers, 78 percent in 2007 vs. 76…

Still looking for some tax breaks to knock down your IRS bill a bit more? Each filing season, some folks do this by getting what they call "creative" with their returns. Others call it cheating. Po-tay-to, po-tah-to. Let’s call the whole thing off (if only). Or you could join me in, as one reader suggested after I denounced tax cheats elsewhere, "getting bent." Ah, yes, taxes. They do bring out the best in folks, don’t they? That reader, who insisted that tax cheating is a valid form of nonviolent protest, is not alone. And don’t pretend that you’ve never thought…

Elizabeth Taylor celebrated her 75th birthday yesterday with a bash in Las Vegas. Sorry I missed it, Liz. The card is in the mail. I know, though, that she’s not offended by my belated best wishes. Liz is much too gracious and giving, as evidenced by her gift to the New Orleans medical community to help its continuing post-Katrina rebuilding efforts, to worry about something as silly as a missed birthday. Liz’s generosity has an obvious tax tie. I could go on about donating now to your favorite charity and how that will get you a tax write-off next year;…

Some taxpayers apparently believe it’s better to give than to receive. How else to explain the more than 10 million filers who didn’t claim the federal telephone excise tax refund. It doesn’t take a math degree to figure out the cost to filers and for the U.S. Treasury. Multiply those 10 million returns by $30, the smallest available standard phone refund amount, and you get $300 million. And that’s a conservative estimate. It’s a safe bet that some of those returns that ignored the phone refund were eligible for the other allowable amounts — $40, $50 or $60 — that…

You probably know by now that you can use the IRS online tracker "Where’s My Refund?" to find out just where in the system your tax return is. Well, here’s its companion: A nifty little table the tax agency put together telling you when you can expect a refund if you e-filed. Now you know exactly what date to start bugging Uncle Sam about your tax cash!

So maybe the criminals weren’t hardcore Capone clones, but they were breaking the tax law and they now will have to pay. The IRS announced this morning that it had executed search warrants at tax preparation businesses in five states, closing business and seizing computers and documents that federal agents believe will prove the filing of illegal inflated telephone tax refund claims. Earlier, the IRS had reported widespread problems with the new, this-year-only tax break, which is the result of the agency’s decision to stop collecting a 108-year-old long-distance excise tax. Some of the incorrect filings were simply mistakes by…

The new option this filing season to directly deposit a tax refund into up to three accounts is benefiting more than just taxpayers. Banks and Uncle Sam are suddenly new best friends forever, as financial institutions tout the benefits of multiple refund deposits. OK, I’ll suspend my cynicism about corporate types long enough to allow that yes, this is a good move for most taxpayers. By circumventing the actual filer and putting the money directly into an account, there’s less chance that the tax cash will be wasted on frivolous consumer desires. Now, I know that we all deserve a…

One of the drawbacks of being your own boss is you also have to be your own HR person (and hassle with getting your own health care coverage) and your own bookkeeper. Thank goodness I have the hubby as my intern! Part of my ad hoc office accountant job is making sure that my records agree with those of my various clients. This is critical in tax season, since most of what I report to the IRS can be verified by those numerous 1099 forms from assorted companies. I’ve been working on my own full-time for two years now, and…

Whether you just dropped a couple of bucks into the office Super Bowl pool, are in Vegas watching the game line (and your bank account) change all day, handed money over to a bookie or are bouncing between this blog and your online gambling account, the big money you make today when Da Bears beat the odds and win is taxable. The problem for the IRS, as detailed in this story, is that many people don’t realize that Uncle Sam counts gambling winnings as taxable income. And even if they do, they tend to ignore the law. Obviously, it’s a hard…

The third time’s a charm. At least that’s what the IRS hopes. This year it’s giving filers three ways to directly deposit refunds. New for 2006 returns, you can split your IRS cash back three ways and have it sent to three different accounts. Send some of your refund straight to your checking account. Tell the IRS to put another chunk directly into your savings. And direct a third amount to your IRA. All it takes is filling out the new, half-page Form 8888. But be careful. If you enter a wrong numeral for any of those accounts, you could…

The IRS has gone computer calculator crazy! First, tax programmers came up with the withholding calculator to help you determine how many allowances to claim on your W-4. This is probably a good one to play with this time of year. When you get your annual W-2, run some preliminary tax return numbers to see if you’ll owe a lot or get back a lot more. Owing the IRS or getting a refund means you’re having too little or too much, respectively, taken out of your paycheck, and a large amount either direction is not the wisest way to manage…

As I’ve mentioned before, I get letters from readers. I love ’em, readers and their questions. However, as I’ve also mentioned before, I can’t answer every question that shows up in my e-mail. Some are technical beyond my knowledge (remember, I’m not an accountant). Others I know I could answer, but they would take time and unfortunately, just like y’all, I tend to run very short of that commodity, especially during tax season when I have a regular writing gig. Others queries, though, where I know the answer off the top of my head or know just where to find…

While you’re working on your return — and you are working on your 1040 this weekend, right? — here’s an interesting noncompliance tidbit. Nearly half a million current and former U.S. federal employees have not filed tax returns. Collectively, they owe almost $3 billion. Britannica Blog (and thanks to Tom Panelas for pointing out the item) elaborates: "Although I cannot confirm this, I have noticed that PEN (Postal Employee Network) has given the report credence at its website, quoting that ‘The federal agency with the highest number of delinquent taxpayers is the United States Postal Service, where 56,652 employees owe…

New this filing season, and for 2006 returns only, is the credit for previously-paid federal excise taxes on long-distance telephone service. Several readers have dropped me notes about how the claim process is going for them. Apparently, not too well. As noted in this story, you get the choice of claiming a standard amount ranging from $30 to $60 depending on your number of exemptions. Or you can submit Form 8913 with the details of your federal phone taxes from March 1, 2003, through July, 31, 2006. The experiences of Brian in Maryland are pretty typical. He reports that he…

No kidding. We all get one more day to work on our 1040s. And the IRS is just as surprised as the rest of us, although probably not as happy about the change as we taxpayers are. This filing season, a perfect calendar storm has produced the convergence of the already-delayed filing deadline, an official District of Columbia holiday and an obscure federal law. The result: More tax time. Most of us were looking at Monday, April 16, as the due date for our 1040s, since the 15th this year fell on a Sunday. But 4/16 is the Emancipation Day…

One of the hardest things about filing your taxes is trying to decipher the forms. You practically have to learn a new, tax- specific language. And the IRS-speak makes that dang VCR manual (yes, a few of us still use those antiquated devices!) seem almost coherent! To help out, Don’t Mess With Taxes is gathering some common tax terms and phrases and their plain English meanings in this post. This is an ongoing list, so don’t be discouraged if the word that’s stumping you isn’t here yet. It soon will be. In fact, just go ahead and e-mail it to…

I meant to mention this in my earlier post about Free File, but … So here it is now. Seems the IRS Web page that lists this year’s participants (click here then "start now" at the bottom) is making sure each gets its day in the spotlight, or at least at the top of the list. Every time I’ve gone back to the page, either to make sure the link works if I’m including it in a story or posting or to count and see if other preparers have come on board (not yet; still holding at 17), the list…

The Free File Alliance, the private-public partnership between the IRS and tax software/preparation firms, kicked off its fifth season on Tuesday with a few changes. The income eligibility limit was bumped up a bit, from $50,000 to $52,000. If your adjusted gross income is that or less, you probably can find one of the participants that’ll let you do your taxes and e-mail them at no cost. More notable, refund anticipation loans (RALs) and what the IRS calls "ancillary" products are no longer advertised. I got a call from one of the Free File companies after my story about this…

I recently had my first "Duh" moment of the 2007 filing season. I was at the IRS’ online payment portal, the Electronic Federal Tax Payment System or EFTPS, to make our final 2006 estimated payment that’s due today. If you haven’t yet filed your 1040ES, don’t panic. You can finish it up today the old-fashioned way and get it en route to the IRS with today’s postmark. Or you can file your full 2006 return and pay any tax you owe by Jan. 31 and skip this final quarterly filing. It was the third time I’ve used EFTPS. My first…

NOTE, Jan. 19, 2018: Although this was one of my earlier posts here at the ol' blog, the advice is still as solid today in 2018 as it was 11 years ago. I have, though, fixed a couple of dead links and added some new ones. So just buzz past the old filing stats and deadlines — here are the due dates for the 2018 tax filing season — and head to the first highlighted heading, "How complicated are your taxes?"  As noted yesterday, the IRS is now accepting e-filed returns, with more e-filing options opening up for eligible taxpayers on…

And you thought April 15 (actually the 16th this year since the regular deadline falls on a Sunday) was the only tax day you had to think about.If only. Today, Jan. 12, is a biggie, since the IRS starts accepting e-filed returns. If you’ve got all your paperwork and are ready to go, hit "enter" now. Here’s a story I did for Bankrate on your e-filing options. And here’s the IRS official announcement about the process. Then next Tuesday, Jan. 16, the Free File Alliance is open for business.  If you make $52,000 or less, you should be able to…

Some of you might have already filed your 2006 tax returns. Many more are just waiting for Friday, Jan. 12, to get here so you can hit "enter" on your keyboards. That's when the IRS starts accepting e-filings. And a good number of you will send in your forms, snail or e-mail, as soon as you have in hand your last tax puzzle piece, a W-2. It's a good bet that the common motivator for all you eager filers is a tax refund. The sooner you get your return in, the sooner you'll get your tax cash back, right? Maybe.…

Dick Solomon, that is. As the lovably pompous patriarch of the extraterrestrial family trying to live as normally as possible on our 3rd Rock from the Sun, Dick thinks he has U.S. taxes under complete control. He is, after all, a self-proclaimed superior being. Really, how hard can tax filing be since we simple carbon-based life forms deal with it every year? "This is what humans do," Dick declares. "It’s like their national pastime." I don’t know if I’d go that far, but I suspect a lot of us can definitely relate to this first tax-filing experience of Dick, Harry,…

Around 170,000 Wisconsin taxpayers will soon open their mailboxes to find their annual state tax packets. While that’s never a welcome mailing, a major mistake makes it even more troubling this year. The Wisconsin Department of Revenue sent out the tax material with the individuals’ Social Security numbers printed on the labels. Hello, Cheeseheads! Your state officials have just made it easier for someone to assume your identity. Any nefarious character between the revenue office and your mail receptacle is welcome to jot down your nine crucial identifying digits, along with your address. The errant labels were blamed on a…

The IRS this afternoon announced how it plans to handle the tax legislation — the Tax Relief and Health Care Act of 2006 aka extender tax breaks — that was signed into law just a couple of days ago. The first thing to know is that the 2007 filing season will begin on time. You can still file your return next month as soon as you get all your necessary documentation. But, and it's a big but, the IRS warns that the recent law changes mean it won't be able to process a "small percentage" of individual tax returns until…

The IRS has decided it’s time to make a few extra bucks using our personal data. The tax agency has announced that tax year 2002 and 2004 filing statistics, sorted by Zip Codes, are now for sale. You can pay $25 for a single state or $500 for info on taxpayers across the entire country.  You’ll be able to see, among other things, how many total returns, by income range, were filed where you live, how much in taxes was collected from you and your neighbors, how much was from self-employment income reported on Schedule C, how many of your…

After reading over yesterday’s blog entry about the expected confusion because some tax breaks were passed too late to make it onto 2006 forms, the hubby had some follow-up questions. Haven’t I trained him well? He not only reads the blog, he wants to know more about taxes! But back to hubby’s inquiries, specifically: Why didn’t the IRS just wait for Congress to act before sending the forms to the printer? Wouldn’t it have made more sense to hold off since so many people are affected by these tax breaks? What’s the harm in waiting until final passage and pushing…

I’m back home, still digging through the e-mail accumulation (literally thousands from my various accounts), catching up on year-end work for clients (payment is paramount) and trying to take care of some personal things (home repair crises seem to come in groups and at the most inconvenient times). But I did want to get something up on the ol’ blog today, primarily because my mother just chastised me for slacking off. Don’t believe me? Here’s the transcript of the phone call I just had: Me: Hi, Mum. I’m home and we got your Christmas gift today. Thanks so much. We love…

Wow! It’s Tuesday night already?! Time sure flies when you’re having tax fun! It’s been two very full days here in Washington at my inaugural Taxpayer Advocacy Panel. In addition to general administrative and orientation sessions, we’ve had a couple of special guest speakers: IRS Commissioner Mark Everson and Taxpayer Advocate Nina Olson. In response to a question about the alternative minimum tax, that costly and confusing parallel tax system that affects more taxpayers every year, Everson acknowledged that the situation needs to be addressed: "Both sides of the aisle have spoken. Something needs to be done. The problem is…

How much do you plan to spend on Black Friday, the traditional big shopping day following Thanksgiving? If it’s around $900 and you’re one of 95,746 select taxpayers across the nation, then you might just be in luck when it comes to paying for those presents. That’s how many folks the IRS is trying to give money to. Actually, the money is theirs to begin with. The tax collector wants to hand over their refund checks that bounced back as undeliverable. The total unclaimed money sitting in the government’s bank account: $92.2 million. The average refund comes to $963. Amazingly,…

Twice this year, a tax court has thrown out attempts by filers to blame tax return mistakes — which, of course, produced nice tax results for the filers — on computer software. In the latest ruling, filed last week, the court made it clear that the taxpayer is the one ultimately responsible for submitting a return and making sure such filing is timely and correct. Here are the facts, per the court ruling. Henry Broderick, owner of a small business in New Jersey, filed a corporate return for his company in 2002 showing earnings of just under $3,000 and business…

The results are in. No, not the midterm election; we’re still waiting and will continue to do so for official word on a handful of races. I’m talking about our "we want it back" tax deduction poll. This query got the most response of any previous Don’t Mess With Taxes survey. We’ve run 10 others in the past year, and only the question of how you file (computer vs. paper vs. accountant) sparked as much interest. As you can see from the results there in the left column, an overwhelming 72 percent of respondents want the sales tax deduction back.…

Admit it. You spent at least part of your Saturday and Sunday surfing the Web for tax data. You didn’t? Wow, please drop me a note on how to get a life! Really, though, some folks are already thinking about their taxes. In fact, William Perez over at About Taxes reports that his readers have been seeking tax guidance in some specific areas: 2006 tax rates, Form W-4, the Pension Protection Act, tax deductible mileage rates and the tax implications of selling a home. Click here to read William’s comments on each of these areas, along with links to stories…

If you’ve stiffed the IRS, you picked a good year to do so. An election year, in fact, might give you a bit of cover. That seems to be the message from the IRS. A story in today’s New York Times says that earlier this month, IRS Commissioner Mark Everson (at right) ordered his agency to postpone collection of back taxes from Hurricane Katrina victims until after the Nov. 7 elections and the holiday season. The reason: To avoid negative publicity. Good luck with that, Mr. E. Everson told Times’ reporter David Cay Johnson that putting off collections until after…

Doing your taxes. OK, it’s not that fun, but lots of people will be spending this Saturday and/or Sunday and possibly much of Monday doing just that. They got a filing reprieve in April by requesting an extension via Form 4868. That added time, however, is up on Oct. 16. Actually, the 16th is itself a bonus. The final filing deadline is usually Oct. 15, but since that fell on Sunday this year, tax procrastinators got one more day. The good news for these folks: The extra time this year was for six months by filing just the one extension…

A Brooklyn tax preparer has been getting big federal refunds for his clients by declaring that New York State is a separate country. Under the preparer’s logic (OK, we’ll use that word, advisedly, for now), wages earned in the state are “foreign” income, qualifying NY filers for the foreign earned income tax exclusion. No surprise that federal officials respectfully disagree with the tax pro, Garry P. Webb-Bey, and have hauled him into court. According the U.S. Justice Department lawsuit, Webb-Bey has frivolously claimed $335,000 in refunds and his clients have received actual IRS checks totaling more than $97,000. You can…

Sorry to interrupt your vacation that started when the kids finally went back to school (love that Staples "most wonderful time of the year" commercial), but your tax professor, Uncle Sam, has an assignment for you. Your third installment payment of 2006 estimated taxes is due tomorrow, Sept. 15. Actually, you just have to get it in the mail so that the envelope’s postmark shows that date, the same "timely return" standard (Section 7502 of the Internal Revenue Code) accepted for your annual 1040. I toyed with mailing our third quarter 1040ES voucher tomorrow. That would give the hubby and…

Taxpayers who made long-distance calls in the last 3½ years can expect a refund of between $30 and $60 next filing season by simply submitting a return. The cash back is courtesy of the IRS decision in May to discontinue the 3% federal excise tax that had been tacked onto phone bills for most of the years after its origination in 1898. You can find details on the tax and the IRS’ change of collection heart in this earlier blog. Unfortunately, despite the phone tax’s long history, only the fees paid on long-distance service after Feb 28, 2003, and before…

If you deduct your donations to charitable organizations, you’ll soon have to do a bit more bookkeeping. Tucked into the pension bill, now awaiting the president’s signature to become law, are a couple of provisions governing charitable gifts that many of us might encounter. (You can read about some of the pension bill’s actual retirement account tax-law changes in this earlier post.) Let’s start with the new substantiation rule. Previously, you had to get a receipt or other acknowledgement from a charity if you gave $250 or more. Now, for a monetary gift of any amount, you’ve got to have…

The truth on immigration policy is out there, but which truth? The X-Files might have been about extraterrestrial aliens, but a series of nationwide Congressional hearings on the "illegal aliens" issue should be characterized using one of the television show’s recurring themes: Trust no one. These hearings, which kicked off yesterday in Philadelphia and San Diego, are the ultimate in dog-and-pony shows. Expect whoever is leading the hearing to carefully direct the discussion to support a predetermined position. Depending on whether the hearing leader is for stricter border controls with no amnesty (the putative House position) or guest worker guidelines…

A key piece of business facing the Senate Finance Committee today is a proposal by its chairman to tax certain sex crimes. Yep, Sen. Charles Grassley (R-Iowa), wants the IRS to make it harder out there for pimps. Grassley says he’s using the tax collector’s most famous criminal take-down as a model: He wants the IRS to go after pimps and sex traffickers with the same fervor it employed in arresting gangster Al Capone for tax evasion. "The thugs who run these trafficking rings are exploiting society’s poorest girls and women for personal gain," Grassley told the Associated Press. "The…