Tax Credit - WalletPop

Getty Images

What is a tax credit? Unlike a deduction that only reduces the amount of your taxable income, a tax credit reduces the amount of tax you owe.

Top earners lose around $50k if Bush tax cuts expire

Sarah Coffey Sep 13th 2010 @ 6:00AM EST Filed Under: Tax, In the News

Wealthy Americans could pay around $50,000 more in taxes if Congress decides to let Bush tax cuts expire this year.

For example, a married New Yorker earning about $1 million in income, with an additional $50,000 in capital gains and $5,000 in dividends may pay about an extra $45,300 in federal income taxes, $2,500 in capital gains and $1,230 on dividends if Congress doesn't extend the 2001 and 2003 tax reductions scheduled to end Dec. 31, estimates Bloomberg News.

Around 315,000 U.S. taxpayers earn more than $1 million, according to the Joint Committee on Taxation. In 2011, federal income tax rates for the highest earners will go to 39.6 percent, up from 35 percent, and capital-gains rates will increase to 20 percent from 15 percent, unless Congress decides differently. Dividends, currently taxed at 15 percent, would be taxed as ordinary income with rates as high as 39.6 percent.

President Barack Obama wants to end the tax cuts enacted by President George W. Bush for families making more than $250,000, and raising capital-gains and dividend rates to 20 percent. Congress is scheduled to return to Washington next week.

Nevada's DiSimone proposes allowing speeding for a price

Tom Barlow Sep 7th 2010 @ 12:00PM EST Filed Under: Tax, Transportation, Recession

Many highways in Nevada are plumb-bob straight, flat, and very lightly traveled, highways where driving 75 mph makes you feel like an ant crawling across a Walmart parking lot toward the sugar aisle. Now gubernatorial candidate Eugene "Gino" DiSimone has proposed a plan to help solve the dire financial straits of the state and this driver's dilemma by allowing some drivers to pay for the privilege to drive much faster than the current speed limits.

The "Free Limit Plan" from DiSimone, a non-partisan, Tea Party candidate for the state's highest office, would work this way: A driver would first have his car inspected for safety. If it passed, he/she would then buy a special transponder, similar to the ones used on toll roads across the country. After setting up an account with the state, the driver could call in via the transponder to buy a day's worth of speeding rights, up to 90 mph, for $25.

Continue reading Nevada's DiSimone proposes allowing speeding for a price

Report: U.S. taxes overly confusing

Ira Teinowitz Aug 27th 2010 @ 4:00PM EST Filed Under: Tax, Tax - Deduction, In the News

There may be no surprise that the federal income tax is confusing but a new report done at President Obama's request is detailing just how confusing and contradictory it is.

Unveiled at the White House today and produced by the President's Economic Recovery Advisory Board, an independent group not tied to the Obama administration headed by former Federal Reserve Chairman Paul A. Volcker, the 118-page report outlines area after area where it seems the tax code is as confused as the people who try to follow it.

"What the report makes clear is the enormous complexity of the tax law for the typical taxpayer," said Harvard economist Martin Feldman, who headed the panel of the board that produced the study.

The report said seemingly simple definitions in the tax code go one way in one part of the code and another way in another part, resulting, "in errors and mistakes." The report, while offering no recommendations for detailed fixes, suggested there is a need to simplify the tax code, improve compliance and deal with some problems in corporate taxes.

Among problem areas the report cites:

Continue reading Report: U.S. taxes overly confusing

Wesley Snipes avoids jail a little longer

Kelly Phillips Erb Aug 26th 2010 @ 5:00PM EST Filed Under: Tax, Celebs & Money

Just weeks after a federal appeals court upheld Wesley Snipes' 2008 three-year sentence on misdemeanor counts of failing to file tax returns, Snipes is again trying to avoid prison. The "Blade" actor has filed another motion in court, this time alleging judicial misconduct.

Snipes' initial appeal focused on what he considered to be an "unreasonable" sentence. He believed that he should serve, at most, time on probation. A panel of federal court judges disagreed, paving the way for Snipes to serve time in prison as originally ordered.

The most recent legal action has given Snipes a bit more time to enjoy his freedom. He now doesn't have to report to the Bureau of Prisons on September 2, which was the date allegedly given to Snipes by a U.S. marshal.

Procedurally, what's happening isn't so much a continuation of the legal process as a new direction. Snipes' lawyers have filed motion for a new trial, citing evidence that he has been denied his Fifth and Sixth Amendment rights. In case those amendments don't roll off your tongue quite so easily, here's the text of the Fifth Amendment:

Continue reading Wesley Snipes avoids jail a little longer

Crocodile Dundee star detained in Australia for multimillion-dollar tax bill

Kelly Phillips Erb Aug 26th 2010 @ 2:15PM EST Filed Under: Tax, Celebs & Money, In the News

Actor Paul Hogan, known in the U.S. for his 1980s role as "Crocodile Dundee" in the movies, has been slapped with a multimillion-dollar tax bill. The actor, who turns 70 later this year, has been under investigation both in his native Australia and in the U.S. amid claims that Hogan was shifting money offshore in an effort to avoid taxation.

Hogan, who claims that he has paid at least $100 million in taxes to Australia and the Australian Taxation Office (ATO), refuses to pay more. That presents a problem, since the ATO claims he still owes millions on undeclared income. As a result, he's now considered a flight risk and has been barred from leaving Australia until he pays up.

Continue reading Crocodile Dundee star detained in Australia for multimillion-dollar tax bill

Tax Lady Roni Deutch accused of duping consumers

Stella M. Chavez Aug 23rd 2010 @ 5:00PM EST Filed Under: Debt, Tax, Consumer Ally, In the News

California Attorney General Edmund Brown is suing TV's Tax Lady Roni Deutch for $34 million, claiming she duped thousands of consumers who sought her tax advice.

"Tax Lady Roni Deutch is engaged in a heartless scheme that swindled people with tax problems," Brown said in a statement. "She promises to significantly reduce their IRS tax debts, but instead preys on their vulnerability, taking large up-front payments but providing little or no help in lowering their tax bills."

Deutch is a licensed attorney who runs a tax resolution law firm in California. Her claims to fame are her frequent appearances on late-night cable TV, NBC's Today Show, CNN and CNBC.

Continue reading Tax Lady Roni Deutch accused of duping consumers

22 Cities like Utica, N.Y., prime for a double-dip recession

Jennie L. Phipps Aug 18th 2010 @ 2:45PM EST Filed Under: Tax, Recession, School

Roller coaster to illustrate double-dip recession

At least 22 U.S. cities are at risk of slipping back into recession, Moody's Economy.com said in a report this week.

"With chances of a national double-dip recession now estimated at about one in four, several metro areas will probably experience their own downturns in the first half of 2011," said economist Andrew Gledhill, who wrote the report.

Gledhill identified the 22 markets listed below as having the biggest chance of a double-dip recession because their economies are linked to manufacturing or they've lost whatever industry it was that created the city to begin with.

I've lived in a couple of these cities, and I was the editor of the daily newspaper, the Observer-Dispatch in Utica-Rome, N.Y., for several years. During that time -- about 15 years ago -- I got to know the region's problems well. I suspect that they are no different today than they were then, and that they are probably similar to those facing the other 21 cities on this list.

Continue reading 22 Cities like Utica, N.Y., prime for a double-dip recession

Cost of Government Day 2010: How much of your taxes go to run the country?

Kelly Phillips Erb Aug 18th 2010 @ 2:00PM EST Filed Under: Tax, In the News

Thurs., Aug. 19 marks this year's "Cost of Government Day." The date, calculated by the Americans for Tax Reform, signals when the average American finishes paying off his or her respective share of federal, state and local taxes, and the cost of implementing government regulations. This year, that means a whopping 231 days -- or almost 2/3 of the year -- are spent paying to keep the country going.

Feel like you've gotten our money's worth yet?

For 2010, the date arrives a full week later than in 2009, when Cost of Government Day fell on Aug. 12. That gives it the dubious honor of a new record, since the 2009 date was almost a full month later than in previous years. According to the Americans for Tax Reform, the date had never fallen later than July 20th over the period from 1977 to 2008.

About half of the total burden is attributable to the federal government. Keeping the government going these days takes a lot of money. But where does it all go?

Continue reading Cost of Government Day 2010: How much of your taxes go to run the country?

Miccosukee tribe, IRS wrangle over taxation of casino revenue

Kelly Phillips Erb Aug 16th 2010 @ 2:52PM EST Filed Under: Tax

The relationship between the U.S. federal government and Native Americans has never been a particularly easy one. It is, however, about to get a lot more complicated.

The Miccosukee tribe has advised the IRS that members of the tribe do not owe any taxes received from the tribe's multimillion-dollar gaming and casino operations in Florida. The IRS, as you can imagine, takes a very different position.

Under existing law, tribes with gaming facilities do not pay federal income tax on revenue collected at casinos and other halls. This is in deference to the idea of tribal sovereignty and is key to the Indian Gaming Regulatory Act (IGRA), signed into law by President Reagan in 1988. However, tribes are required to report all distributions to members and to advise members that they may owe federal income taxes on those distributions. The idea was to respect the idea of tribal sovereignty to create gaming halls and casinos which might otherwise not be allowed under state law but give the federal government the power to regulate gaming.

Continue reading Miccosukee tribe, IRS wrangle over taxation of casino revenue

Skip nav