*
Have you taken advantage of my “October Half Price Sale” yet?
*
Tax professionals should check out my posts “There MUST be Grandfathering!” and
“A Potential Disaster” at THE TAX PROFESSIONAL.
*
I join Kay Bell of DON’T MESS WITH TAXDS in saying a sad farewell to George McGovern.
1972
was the first Presidential election I voted in (having actively campaigned
locally for reducing the voting age to 18 when I was in high school) – and my
vote was for McGovern.
The
same is true for fellow tax blogger Peter J Reilly, a couple of years my
senior, who reminisces in “George McGovern Passes On - Where Were You In 1972?”
at FORBES.COM.
Where
was I in 1972? In February through April
of 1972, a college freshman, I was working my very first season as an
apprentice tax preparer for James P Gill and Co just off Journal Square in
Jersey City.
*
Kay also addresses the same subject as my “A Potential Disaster” post
referenced above in “Income Tax Tables and Much, Much More Missing from Annual IRS Inflation Update”.
As
her “tweet” promoting the post says –
“Congressional inaction (again) leads to IRS --
and ultimately taxpayer – troubles.”
She
joins me in suggesting –
“Remember all this undone tax work as you
head out in a couple of weeks to vote for who stays or goes in Washington, D.C.”
*
Bruce McFarland hosts a guest post by Alisa Martin titled “Things That You Can Do To Get Ready For Tax Season” at the MISSOURI TAXGUY.
While
the post is just a basic plug for using a tax professional, I do like her
description of tax preparation -
“Preparing Taxes Is Part Art Part Science.”
My
tax returns (prepared for clients) have often been referred to as a “work of
art” by the IRS and other tax pros.
*
Did you know that Bruce also has a blog for Quickbooks users? Click here.
*
CCH reports that “Amended Return Will Not Automatically Trigger Audit, IRS Manager Says” – putting to rest an “urban tax myth”.
Many
taxpayers are afraid to file an amended return for a legitimate reason because
they think it will result in an audit.
This fear is unfounded.
In
my 40+ years of preparing 1040s I have never seen an audit of a Form 1040X I,
or anyone else, has prepared, or an audit of the original 1040 that was amended
as a result of filing an amended return.
*
A new report by the Treasury Inspector General for Tax Administration tells us
“Expanded Controls Over Refundable Credits Could Reduce Lost Dollars”.
“Millions of dollars in refundable credits
that were determined to be erroneous after taxpayers received them may never be
recovered by the Internal Revenue Service (IRS), according to a new report
released publicly today by the Treasury Inspector General for Tax
Administration (TIGTA).
Refundable tax
credits, which not only have the potential to reduce a taxpayer’s liability to
zero but can provide cash payments to taxpayers, are highly vulnerable to fraud.
TIGTA initiated its audit to determine the effectiveness of efforts by the IRS
to recover refundable credits disallowed during post-refund examinations and to
consider options the IRS could implement to decrease the issuance of erroneous
refundable credits. Examples of refundable credits include the Earned Income
Tax Credit (EITC), Additional Child Tax Credit (ACTC), First-Time Homebuyer
Credit, and American Opportunity Tax Credit.”
I
have a much better solution to the problem – NO REFUNDABLE CREDITS!
*
No surprise here – “N.J.'s Local Tax Bills Keep Spiraling Upward” from
PHILLY.COM.
Why?
“The Christie administration, which took
office in 2010, blames the increases on ‘unrestrained spending, overgenerous
benefits, and the expansion of government at the local and state level’, said
spokesman Michael Drewniak.”
*
Trish McIntire gets on The Soapbox with some good advice for 1040 clients in
her post “Tax Backup” at DON’T MESS WITH TAXES.
“Using a tax pro for your tax returns doesn’t
get you out of taking some responsibility for your tax situation. All taxpayers
need to keep a copy of their tax return and all supporting documents for at
least 3 (I suggest 5) years. You may never need those documents. But if you get
audited or even need a copy of your return for a bank loan you’ll be glad you
kept them.”
To
go a step further – I tell my 1040 clients to make and keep a copy of their
W-2s when sending me their “stuff” at tax time.
This way they won’t waste my time having to make and send them copies
which they end up needing for a variety of reasons.
*
A good tax tip “tweet” from Kathy Bylkas
(aka @URTaxlady) –
“Don't let penalties for underpaid taxes
increase your tax bill next April. Check the total tax you've paid in for 2012
through withholding and/or quarterly estimated payments. If you've underpaid,
consider adjusting your withholding for the final pay periods of 2012.
Withheld taxes are
considered paid in equal amounts during the year regardless of when the tax is
withheld. Therefore, a year-end adjustment to your withholding could help you
avoid a penalty.”
*
Oops! Did I forget to mention the “IRA Contribution Limits for 2013” in my recent post on inflation adjustments?
Bill
Perez tells us –
“Individuals can save up to $5,500 through an
individual retirement account (IRA) for 2013, according to new limits announced
by the IRS (IR-2012-77). This new $5,500 limit is the first change in IRA
contribution limits since 2008. For the years 2008 through 2012, IRA
contributions were capped at $5,000.
The $5,500 IRA
contribution limit for 2013 applies to traditional IRAs and Roth IRAs
collectively. Taxpayers can choose to contribute either to a traditional IRA or
to a Roth IRA or to both in any combination, as long as total contributions
don't exceed the annual limit.”
While
I could not find it in the IRS Information Release, I expect that the IRA
“catch-up” for taxpayers age 50 or older at the end of the year remains at
$1,000.
So,
if I am so inclined, I can contribute $6,500 to a traditional or ROTH IRA for
2013. And, if I wanted the
biggest potential bang for my buck, I would make the contribution on January 2,
2013.
TTFN
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