2012 IRS Tax Season Fun Facts

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By Stacey Gorowitz, CPA, MBA It’s tax time again, so why not get to know the IRS on a personal basis? Well…maybe that’s too big a step, but we might as well learn a little more about this fixture in our lives, because it’s not going away. On March 25, the IRS announced the release of its 2012 Internal Revenue Service Data Book which includes information about returns filed, taxes collected, enforcement actions, taxpayer assistance and more, from October 1, 2011 to September 30, 2012. Highlights of this treasure trove of data include: Out of the 146 million individual income tax returns filed, almost 81 percent were e-filed. E-filing is so popular because not only does it remove the need to deal with stamps and minimize the risk of your return being lost, it gets your refund into your bank account within just a few days. More than 120 million individual income tax return filers received a tax refund, which totaled almost $322.7 billion. Of course, this is money that already … [Read more...]

Happy 100th Birthday, Form 1040!

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By Stacey Gorowitz, CPA, MBA  In March 1913, Form 1040 as we know it today was first issued for income tax reporting. Here’s a basic 1040 income tax return history from the Library of Congress: “The origin of the income tax on individuals is generally cited as the passage of the 16th Amendment, passed by Congress on July 2, 1909, and ratified February 3, 1913… March 1st was the [filing deadline] specified by Congress in 1913, after the passage of the 16th amendment. In 1918 Congress pushed the date forward to March 15th, where it remained until the tax overhaul of 1954, when the date was again moved ahead to April 15th.” Included in this post is an image of the first page of the original form from 1913, as supplied via OurDocuments.gov through the National Archives & Records Administration. Additionally, here is a link to a recreated pdf of a complete 1913 1040 form that is, get this, a whopping four pages long including the form and all instructions. Today’s form and … [Read more...]

5 Tax Myths That Won’t Go Away

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  I get a lot of questions this time of year. They come from clients, from friends, from the cleaning crew at the office, and from my mechanic. I don’t mind; I actually enjoy what I do and consider educating the taxpaying public part of my job. I get excited when I get to talk about tax law over dinner with friends. However, it still amazes me to see the tax myths that just won’t die. If I could create a public service announcement, I would tell people that: 1)    Most taxpayers will get synergy and tax savings by having one appropriately qualified CPA prepare both their individual and business returns. Many people are under the impression that to spread risk and save costs they should have different preparers handle personal and businesses tax returns. This can’t be further from the truth. The proper professional will help you with tax planning for your entire financial picture – not just pieces of it. Most small businesses are flow-through entities, which means that … [Read more...]

How Does Sequestration Affect You?

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  For many, the word “sequestration” is just another overly-hyped term being thrown about the halls of D.C. that doesn’t actually have any real effect on the average American citizen. However, if you know anything about how economics works, then you understand that no matter where large cuts like this take place, they ultimately affect all of us. Call it the trickle down effect or whatever you want: cuts in the government means cuts for small businesses and individuals, both directly and indirectly. For example, the IRS announced that portions of the Affordable Care Act that offer some health care incentives for small businesses will have cutbacks. This means that health care benefits are now a little more expensive for employers. This could result in  lowered benefits or benefits that are eliminated in full. Another direct impact is on individual and small business contractors who work with the government. With such large cutbacks, many of these contractors will have … [Read more...]