Saturday, April 20, 2013
WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’
* Did you see the last of my post-tax season Tax Tips at MAINSTREET.COM? Check out “Tax Tip: Amend Your Return”.
* William Perez reported that “April 18 is Tax Freedom Day for 2013” at ABOUT.COM.TAX PLANNING:US.
As William explains, each year -
“The Tax Foundation calculates a Tax Freedom Day based on the federal budget and projections for state and local taxes, and data from the Census and the Bureau of Economic Analysis.”
There are various components of the Tax Day calculation -
“On average, Americans will spend about 32 days earning enough income sufficient to pay their federal income tax and another 24 days to earn enough income to pay for Social Security and Medicare taxes.”
Tax Day 2013 is 5 days later than Tax Day 2012. Why?
“The Tax Foundation notes that federal income taxes and payroll taxes have increased for 2013, resulting in 2013's Tax Freedom Day being later than it was for the year 2012. The increased taxes for 2013 includes the new 39.6% tax bracket, the new Medicare surtax on investment and wage incomes, and the new 20% tax rate on long-term gains.”
* Jason Dinesen, of DINESEN TAX TIMES, wants to know “Are Other Tax Pros Screening EIC Clients?” in light of the ridiculous new “due diligence” requirements.
He does make a point. There are many honest taxpayers who legitimately qualify for the Earned Income Credit. The EIC should not be in the Tax Code – but it is. And those who truly qualify should be able to take full advantage of this tax benefit.
I do feel that the IRS should not make tax preparers Social Workers. If enough tax professionals took a stand and publicly announced that they would not be accepting Earned Income Credit clients solely because of the excessive IRS requirements – would the IRS back down and remove these requirements? To be honest, I doubt it.
The additional requirements means tax pros must waste more valuable tax season time verifying that the taxpayer qualifies for federal welfare – and time is money. This ends up in a much higher fee for EIC clients. Unfortunately, if one truly qualifies for the EIC he/she does not have a lot of money, and may not be able to afford the additional fee. The IRS ain’t going to compensate the tax pros for their wasted time.
It is truly, as Jason says, a conundrum.
* Just as the BUZZ is back, so is Joe Kristan’s daily “Tax Round-Up” at the ROTH AND COMPANY TAX UPDATE BLOG.
* The headline of this ROCHESTER BUSINESS JOURNAL article reads “N.Y. Tax Systems Ranks Among Nation's Worst”, and the lead paragraph tells us –
“New York has the seventh-worst tax system for starting and growing small businesses, an advocacy group reported this week.”
But the real news (nothing surprising here) in the item for my clients and readers is the fact that, according to the Small Business & Entrepreneurial Council, my former home state of New Jersey is #49 on the list – or has the second-worst tax system in the US. Only Hawaii (a surprise) has a worse tax system.
* TAXGIRL Kelly Phillips Erb tells us “IRS To Mail Out Furlough Notices Next Week, Announcing Agency-Wide Shutdowns”.
Thanks to sequestration (and, of course, the idiots in Congress the IRS will shut down for 5 days -
“As of today, those five identified furlough days are: May 24, June 14, July 5, July 22, and August 30. On those days, IRS will shut down completely and taxpayers and practitioners will not have access to IRS resources. That means unanswered calls and closed offices.”