Taxes

You know the saying, nothing is certain but death and taxes. Well, we can't help you with the first one, but here you'll find all the latest tax planning news, advice and calculators you need to help you with the second.

Learn how to maximize the money you keep in your pocket without setting off red flags to the IRS.

Stay on top of today's top tax news and take advantage of expert advice.

Phony tax e-mail pretends to be from IRS as extension filing day arrives

Linda Doell Oct 15th 2010 @ 10:00AM EST Filed Under: Tax, Fraud, Identity Theft, Consumer Ally

As Friday's tax deadline approaches for those who applied for extensions in April, don't be fooled if you get an e-mail that appears to be from the U.S. Internal Revenue Service -- it's a scam to trick you into giving up personal information to potential ID thieves.

The Better Business Bureau, Greater Maryland issued an alert to be on the lookout for an e-mail with the subject line: "Your Tax Payment ID: 010377149 has been rejected. Urgent Report information," following reports from consumers and businesses who received the message.

Continue reading Phony tax e-mail pretends to be from IRS as extension filing day arrives

FTC: American Tax Relief ran $60 million scam as owners drove Ferraris

Jorgen Wouters Oct 6th 2010 @ 4:30PM EST Filed Under: Tax, Consumer Ally

The Federal Trade Commission put the brakes on a massive tax relief scam it says cheated struggling consumers nationwide out of more than $60 million while its owners lived lavishly and collected luxury cars, including Ferraris, Bentleys and Rolls-Royces.

The FTC, which is seeking compensation from American Tax Relief for its victims, asked a Chicago federal judge to halt the company's operations and freeze its owners' assets. The FTC lawsuit names names American Tax Relief LLC of Beverly Hills, Calif. and its two co-owners, Alexander Seung Hahn and Joo Hyun Park. Park's parents, Young Soon Park and Il Kon Park, are also named for allegedly holding funds obtained from customers.

"We've made it a top priority to go after scammers who try to exploit the financial hardship of others," said David C. Vladeck, Director of the FTC's Bureau of Consumer Protection, in a statement. "For people having a tough time paying their taxes, the last thing they need is to lose more money to a fraud."

Continue reading FTC: American Tax Relief ran $60 million scam as owners drove Ferraris

Making Work Pay Credit not likely to be extended

Kelly Phillips Erb Sep 27th 2010 @ 2:00PM EST Filed Under: Tax, Recession, Tax - Credit

Congress' effort to stimulate the economy included pushing through a series of tax breaks in 2009. The centerpiece of the legislation was the Making Work Pay Credit, which was intended to provide tax relief for working and middle class families. It may not last beyond this year.

The idea was to allow more taxpayers to have cash in their pocket during the year, as opposed to at tax time, by adjusting the amount of earned income withholding.

Continue reading Making Work Pay Credit not likely to be extended

Study links booze, taxes to public health

Kelly Phillips Erb Sep 27th 2010 @ 11:00AM EST Filed Under: Tax, Health

A study out of the University of Florida has concluded that raising taxes on alcohol leads to lower rates of alcohol-related disease, injury, death and crime. The study was released online this week by the American Journal of Public Health in advance of the print edition.

The study found that increasing the average state tax on alcohol (you can see the individual state tax rates on beer, wine and hard liquor here) by a factor of two yielded significant changes in behavior. How significant? It's estimated that it would result in, among other things, a 35% reduction in alcohol-related deaths, a 6% reduction in sexually transmitted diseases and a 1.4% reduction in crime.

Continue reading Study links booze, taxes to public health

New York, Hawaii top earners face highest tax under Obama plan

Sarah Coffey Sep 23rd 2010 @ 6:00AM EST Filed Under: Tax, In the News

High-income residents of New York City and Hawaii would have the highest marginal tax rates in the U.S. if Congress adopts the president's proposal to increase taxes for top earners, according to a study by the Tax Foundation.

State, local and federal levies would result in a top 50.8 percent rate on high-income New York City residents, the study says. Wealthy Hawaiians would pay 49.7 percent. And residents of California, Vermont, Maryland and New York would face top federal- state rates of 49.4 percent, 48.8 percent, 48.6 percent and 48.4 percent, respectively.

Lower tax rates on income and investments enacted in 2001 and 2003 expire Dec. 31. President Barak Obama and most Democrats want to retain those that target individuals earning less than $200,000 and married couples earning under $250,000 and allow policies that benefited those with higher incomes to expire. Republicans generally back extending all of the tax cuts.

Obama's proposal would allow the top marginal tax rates of 33 percent and 35 percent to revert to 36 percent and 39.6 percent next year. Phase-outs for deductions and exemptions would also be reinstated, pushing the rate higher. Tax rates on dividends and capital gains would increase to 20 percent from 15 percent.

Under current law, the top federal tax rate applies only to taxable income that exceeds about $375,000; amounts below that are taxed at lower rates.

The marginal tax rate rankings of states would be little changed if all tax cuts are extended, the study found. In that case, the top marginal rate in New York City would be 45.3 percent; Hawaii, 44.3 percent; California, 44.1 percent; Vermont, 43.3 percent; Maryland, 43.1 percent; New Jersey and New York, 43 percent.

Click here to calculate your predicted 2011 tax rate.

Which states enjoy bargain prices on the things that count?

Tom Barlow Sep 21st 2010 @ 5:00PM EST Filed Under: Home, Tax, Transportation, Insurance - Car Insurance

Are you livid about the cost of utilities? Do you want to beat high taxes on goods, services, even your home? Then perhaps you should consider moving, because many of life's necessities and niceties cost less depending on where you live. Here are ten examples of the current "geography pricing gap" in the U.S.:

Continue reading Which states enjoy bargain prices on the things that count?

Paychecks could shrink if U.S. tax vote doesn't happen

Sarah Coffey Sep 20th 2010 @ 6:00AM EST Filed Under: Tax, Wealth, In the News

Your paycheck may shrink next year, at least temporarily, even if Congress decides not to raise taxes.

Why? Because the Internal Revenue Service needs time to prepare and distribute the tables used to calculate withholding taxes, and your employer needs time to put the new rates in place. So even though the tax cuts enacted under President George W. Bush don't expire until Dec. 31, the paperwork needs to be in place well before.

So, unless Congress votes by November to extend the Bush-era tax cuts, the IRS will advise employers to increase deductions from paychecks beginning Jan. 1.

President Barack Obama and most Democrats want the tax cuts extended for middle-income earners and to expire for the 2 percent of Americans earning more than $250,000 annually. Republicans want the cuts extended for everyone, saying raising taxes for any income bracket doesn't make sense during a recession.

When the current law expires, income tax rates will revert to their June 2001 levels. Rates are currently at 10 percent, 15 percent, 25 percent, 28 percent, 33 percent and 35 percent. If Congress doesn't act, they will revert back to 15 percent, 28 percent, 31 percent, 36 percent and 39.6 percent.

Rich people save tax cuts instead of spending

Sarah Coffey Sep 16th 2010 @ 6:00AM EST Filed Under: Tax, Wealth, In the News

New data from Moody's suggests wealthy Americans will save any money they get from tax cuts rather than spending it.

History suggests as much: tax cuts in 2001 and 2003 under President George W. Bush were followed by increases in the saving rate among the rich, according to Moody's data. When President Bill Clinton raised taxes, the savings rate fell.

President Barack Obama wants to extend the cuts for individuals earning less than $200,000 and couples earning less than $250,000 while ending them for those who earn more.

"High unemployment has cast a shadow on Americans' collective psyche that will only darken with higher taxes, raising the already-uncomfortable odds that the economy will suffer a double-dip recession," says the new analysis by Mark Zandi of Moody's Economy.com. By contrast, "allowing the tax cuts for high-income households to expire over, say, a three-year period would not harm the economy," the analysis says.

The Moody's research on couples who earn more than $210,000 found that spending by the wealthy is more likely to be influenced by how well the stock market is doing and not changes in income-tax rates.

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.

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