Tax Carnival Ecstasy – May 9, 2013

Online Investing?
Online Investing? (Photo credit: Monkey Mash Button)

Welcome to the May 9, 2013 edition of Tax Carnival Ecstasy. We begin with a post from James Powell on credit and benefit changes for 2013 that is quite interesting. Bill Smith looks at how TurboTax has changed in the current year. And finally John Schmoll has a number of online brokers that he likes to use. Hope you enjoy all the articles, bookmark, share on your social sites, and come back real soon for more tax topics.

credits

James Powell presents Tax Credits and Benefits Changes 2013 – How They Will Affect You : Tax Credits posted at Tax Credits, saying, “This post will look at how the changes in tax credits will affect you in 2013.”

filing

Bill Smith presents Innovations For Turbo Tax 2013 posted at 2013 Taxes, saying, “Professional accounting can help business owners save time and resources, and the Turbo Tax 2013 CPA Select edition by Intuit may be the ideal solution for tax filing season.”

retirement

Jebelle presents LIFE is what you make it: HEALTH is WEALTH posted at LIFE is what you make it, saying, “earn even retired”

John Schmoll presents Online Brokerages I Use: OptionsHouse Review posted at Frugal Rules, saying, “There are many online brokerages to use as you look to invest in the stock market. The good ones are there to meet your needs and help make sure you’re doing what you can to be investing for things like retirement.”

tax law

Bill Smith presents Senate Bill On Internet Taxes Passes First Hurdle posted at FastSwings, saying, “Recently, the United States Senate passed a bill concerning Internet tax collection.”

taxes

Bill Smith presents Estimate Your Tax Refund With The Free TurboTax Taxcaster posted at 2013 Taxes, saying, “Tax time is drawing near and like most other Americans, you need to file and prepare your taxes to avoid penalties and late fees from the Internal Revenue Service.”

tips

Bill Smith presents The Benefits Of TurboTax 2013 posted at 2013 Taxes, saying, “When you are planning to file your income tax return, you want simplicity, accuracy, and options. You will have these benefits and more with TurboTax 2013.”

That concludes this edition. Submit your blog article to the next edition of tax carnival ecstasy using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

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Tax Return Forms And Filing IRS Taxes

Tax Return Forms And Filing IRS Taxes

Tax time can be an incredibly hectic time for every individual of taxing age in the United States and other countries. There are forms aplenty for every type of deduction, job, withholding, and pay out and understanding some of the basics is the best way to get your taxes off to the right start. Using a system like TurboTax 2013 can be helpful, but a working knowledge of what tax return forms to fill out is still necessary to get the maximum refund.

Paying taxes is required for both citizens and...
Paying taxes is required for both citizens and non-citizens. (Photo credit: Wikipedia)

The first and most common forms are the 1040 and the 1040 EZ. The 1040 is the basic form that most tax payers use to complete their income taxes. These forms cover anything from income, taxes withheld, charitable donations, scholarships and grants, life insurance, gambling proceeds, child support, and more. This form was designed to be the blanket form for most tax payers to help speed up and simplify the process. This is the form that most are going to be working from when filing taxes and as such it is important to be well versed in the 1040. The 1040 EZ is a simplified version of the 1040 that is often used by workers that are either under the age of 18 or that do not have any dependents or households to claim. This form has basic information like income, taxes withheld, and any untaxed income that workers may have gotten over the course of the year.

A 1040 Schedule A is an individual tax return that has a list for itemized deductions. These deductions can be any range of things from medical bills, to work expenses, to charitable donations, and many more. If filers are at all unsure of what deductions they can count it is important that they check with a tax professional. Schedule B is a form that covers the interest on bank accounts and ordinary dividends. This form is generally only needed for those that have investments. Schedule C is profit or loss from businesses that are personally owned and will likely not be needed for all of those individuals filing. Schedule D is capital gains and losses in any investing or financial ventures that filers have partaken in over the course of the year. This form is again not necessary for every individual filing. The Last Schedule is Schedule E, this is for supplemental income or loss that was incurred through the course of the year. Most tax services will include Schedules A through E in the typical filing.

Form 1099 is for income from an employer that was not taxed at the time of payment, a 2848 is for those that are using their power of attorney to file for another individual, form 2553 is for those that are filing for a small business or corporation, and form 1065 is for married or partnered couples that are filing a joint return. A complete list of forms is available on the IRS website with brief descriptions of the function of each. If at any time it becomes difficult to complete your tax return or to understand what is being filled out, it may be necessary to talk to a tax professional.

Learn About The Buffett Rule

Learn About The Buffett Rule

Watch out for debate misdirection when it comes to taxes. Dr. Cornwall wants everyone to know that there will never be a tax increase on the extremely wealthy population (The Buffett Rule) that will put the tiniest dent in the tax shortfall of the United States.

So why is everyone so focused on the debate about making those who bring home over $250,000 a year pay more in taxes?

The answer is the Buffet Rule by President Obama. This Buffett Rule raises the taxes on a group of extremely wealthy people, but we hear that many of them would be glad to pay more in taxes.

We are also hearing that this group is about two percent of the population of taxpayers. In all honesty, they are about 1.8% of the population that pays taxes. They are over two and a half million people according to data provided by the IRS.

The deficit right now is $1.1 trillion. That is $440,000 for each wealthy household a year. There will not be any type of increase in taxes that can resolve this tax situation.

If you are wondering whom the two and half million super wealthy people are, according to surveys from the Spectrem Group up to twenty five percent of them are entrepreneurs. These professionals are the people we need to be expanding their businesses so that our economy can get better.

So why are political figures trying to soak the rich?

President Barack Obama and Warren Buffett in t...
President Barack Obama and Warren Buffett in the Oval Office, July 14, 2010. (Photo credit: Wikipedia)

I am a believer that this is just a set up for what we can expect in our future. This is just a way to get started on the real tax increase so that the masses will be more open to it.

There have been many talks about using a value added tax system for our tax burdens right now so that we can fund our federal government. It is surprising how little attention the press is paying to the VAT tax. What we are mostly hearing about is in regards to taxing the very wealthy.

The VAT tax has not been a favorite choice for Democrats because of it being such a flat tax. This European method is going to need to be covered if they decide to add it America’s tax system.

In the next few months, this is what I see happening…

There will be an agreement that the top marginal rates will have to be increased to at least where they were before the Bush tax cuts. This will be the Democratic cover.

After that, the VAT tax will be implemented. Republicans will be able to say that even if they did not want to raise our taxes, we should be happy that they did so by implementing a flatter tax system instead of huge increases in income tax rates.

When this happens, America will be facing an expanding government that has a new tax program for politicians to use however they see fit.

File Your Taxes Quickly

2011 taxes are already in the books for most people. It is possible you simply forgot about taxes, were busy, or perhaps did not have the money to pay what you owed. If you have not filed yet, do not panic. If you have the capability, you want to go ahead and do your 2011 taxes as soon as possible.

If you are still not ready, contact the IRS and request an extension for taxes 2011. Depending on your circumstances, the IRS may not penalize you. If you are getting a refund, you should not be penalized at all for your late filing.

The best way to make the filing process go smoothly is to have all your tax information on hand. This can includes receipts, your total income, possible business expenses, and your taxes from last year.

2011 taxes can seem pretty daunting. If you are having trouble figuring out everything yourself, it can often be beneficial to use a program like Turbotax. This can help guide you step by step and show you the math and some of the deductions for taxes 2011 that you should make. Filing sooner means you will get your refund faster, or prevent late fees and interest piling up on money you owe.

Should You Take Care of Your Own Taxes?

One of the major downsides of being self-employed is the dreaded tax return and the question of whether you should do it yourself or pay an accountant to do them for you.

Your initial thoughts may be to file your own taxes to save paying someone to do them for you, but you should never underestimate the time and effort it takes to complete your tax returns and the consequences if you get it wrong.

To make matters worse the goalposts sometimes move and the rules can change depending on new tax laws or even if there is a change in your personal circumstances.

Who should complete and file a tax return?

Most taxpayers that are in full time employment do not have to complete a tax return as this is taken care of as part of the Pay As You Earn (PAYE) system on your wages or occupational pension.

This means that you will not be issued with a tax return.

However, you will be issued with a tax return if you are

Self employed

  • A company director (though not if for a not-for-profit company)
  • Have income from rent or properties (there is a lower amount that can fall under PAYE)
  • Have another income that is not taxed by PAYE.

If you are unsure whether or not you fall into any of these categories then you should contact the revenue service at www.hmrc.gov.uk.

Tax return deadlines and fines

The filing dates for tax returns are different depending upon whether you return them using paper forms or online.

The deadline for the paper tax returns is October 31 of the following year.
The deadline for online tax returns is January 31 of the following year.

And the bad news is, if you miss these deadlines then there are some strict penalties:

  • £100 penalty – tax return is one day late
  • £10 per day, up to maximum of £900 – three months late
  • The greater of 5% of the tax due or £300 – six months late
  • The greater of a further 5% of the tax due or £300 – 12 months late

And the worst news is that you could be liable for these fines if you don’t owe any tax or even if you are owed money – so make sure you file your tax returns!

Keeping records

The law dictates that you must keep all of the records necessary to fill in and correctly complete a tax return. Incomplete returns are subject to penalty fees and interest charges. To find out about what records you should keep visit www.direct.gov.uk

Estimates and errors

If you are waiting for information you need to fill in your tax return then you may use provisional figures or estimates so that your return isn’t filed late. Use the ‘any other information’ box or white space on an online return to draw attentions to this.

If you make an error on your tax return then this can be put right by calling HMRC on 0845 60 55 999.

Should you take care of your own taxes?

If you fall into one of the groups that need to fill in a tax return then you need to consider whether you can trust yourself to get it right and if it is worth the time and potential stress. If not, then it may be best to employ an accountant to do it for you.

Rob E is an avid financial blogger and freelance writer for www.click4personalfinance.com and loves to share his knowledge on personal financial.

Use Turbo Tax To Help With Taxes

For many people out there tax time may seem a confusing mess. There are many people who just need a little help with taxes. One of the options out there to help is turbo tax to help get your taxes done right.

If you are unfamiliar with turbo tax you may wonder what it is. Well it is basically software set up to help you file your taxes. With the help of this software you may actually find deductions you failed to notice before and even increase your final refund. By doing you taxes online as well there is no delay of waiting for the mail. Everything will go directly to the IRS and your refund will get processed more promptly. You can have your refund direct deposited to your bank in the least possible time.

Incorrectly filed taxes can also be a hassle. Not only could you be missing out on money you deserve there is also the issue of fees and fines. A well meaning tax payer may think that everything is under control only to be shocked when a letter arrives from the IRS looking for a bill. Doing your taxes correctly the first time will save time and grief. Taxes do not need to be complicated so if you need some help make sure you go to the right place.

So taking a look at using turbo tax for help with your taxes may be for you. There are different options for individuals and business owners as well as those people with investments. Taxes can be tricky but the need not be with a little help.