Tax credit, that is. Last year’s stimulus bill included provisions expanding and renaming the Hope Credit, making it possible for more people to save on taxes when paying college expenses. (more…)
Archive for the ‘News’ Category
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Friday, August 27th, 2010Friday Wrapup
Friday, August 20th, 2010As expected in mid-August, there’s little tax news to report this week. Heads-up, though: soon we’ll be reporting on major legislative initiatives as Congress grapples with extension of the Bush tax cuts and reinstatement of the estate tax, among other issues.
Our Friday Wrapup is also published as a free email newsletter. Click here to sign up. (more…)
FTD Goes Paperless
Friday, August 20th, 2010No, we aren’t talking about floral arrangements. The federal tax deposit system, or FTD, is used to collect various taxes including employment taxes and corporate income tax. (It isn’t used by individual taxpayers filing their income tax returns, so they aren’t affected by this announcement.) The system has long accepted and encouraged electronic payments, and fewer than 10% of the payments are still made with old-fashioned paper coupons. Apart from being less efficient, the paper coupons account for a disproportionately large number of errors and penalties. Beginning next year paper coupons will be eliminated and all these deposits will have to be made electronically.
Return Preparers to Pay $64.25
Thursday, August 19th, 2010Last month we reported on proposed regulations that would impose an annual user fee on paid return preparers in connection with an application for and renewal of a preparer tax identification number (PTIN). At that time we knew the IRS would receive $50 and applicants would pay an additional amount to cover the cost of a third-party vendor to operate the online system and provide customer support. The IRS has announced that the system will go live in mid-September, and the total fee for 2011 will be $64.25. This fee may change in future years as costs are re-evaluated.
This is an annual fee and will apply to all compensated return preparers, including registered tax return preparers, enrolled agents, CPAs and attorneys, even if they already have a PTIN.
Friday Wrapup
Friday, August 13th, 2010It’s August, it’s hot, and the tax news is not. Still, we have a few items you may want to note. (more…)
California Asks for IRS Guidance on Same-Sex Couples
Thursday, August 12th, 2010From time to time, bar associations, tax practitioners and others plead with the IRS to issue guidance dealing with some aspect of the tax law. In an unusual move, the legislature of the State of California has done the same, adopting a resolution calling on the IRS to issue a revenue ruling on the income tax treatment of same-sex couples. (more…)
Does the IRS Owe You?
Wednesday, August 11th, 2010The IRS owes lots of money to lots of people. Some failed to file returns even though they had a refund. Others filed a return but the IRS wasn’t able to find them when trying to pay the refund. Are you one of those people? (more…)
Do You Owe the IRS?
Wednesday, August 11th, 2010If you owe money to the IRS, there are a few things they’d like you to know about how to resolve the problem. (more…)
Advance EIC Repealed
Wednesday, August 11th, 2010Beginning 2011 the advance payment option for the earned income credit will no longer be available. This option allowed individuals who were eligible for the credit to receive it as part of their paychecks instead of waiting to file their tax return and receive it as a refund. Few taxpayers took advantage of the option, and Congress decided to eliminate it as part of the legislation providing assistance to cash-strapped state and local governments.
The legislation contains other tax provisions, but these are mainly of interest to multinational corporations that will see new restrictions on their ability to claim the foreign tax credit.
Congress to Debate 1099 Reporting
Tuesday, August 10th, 2010Under current law, a business paying more than $600 for services provided by an individual other than an employee must report that payment to the IRS on Form 1099. One of the revenue provisions in the Patient Protection Act expands the Form 1099 reporting requirements to include payments to corporations (other than exempt organizations), and payments for property and other “gross proceeds.” The provision, which applies to payments after 2011, is aimed at preventing tax avoidance by individuals and companies receiving those payments. It has the virtue of raising government revenue without imposing a tax increase, yet it’s controversial because of the paperwork burden it imposes on companies making the payments. Senate debate of the small business tax bill early next month will include consideration of amendments to repeal or amend this requirement before it goes into effect. (more…)
