Tax News

This up-to-date Tax News section will help you stay current with any new or pending tax legislation, as well as how it affects your current and future tax situation.

Year-end tax planning moves forward with or without Congress

The fate of many of the tax incentives taxpayers have grown accustomed to over recent years will likely remain up in the air until Congress and the Administration finally face off weeks before year-end 2012. While the results of Election Day will have bearing on the outcome, no crystal ball can predict how the ultimate short-term compromise will unfold. As a result, some year-end tax planning must be deferred and executed ”at the eleventh hour” only after Congress passes and the President signs what will likely result in a stopgap, temporary compromise for 2013.    More on this story.

Last Minute Tax Tips to Save You Time and Money

The clock is ticking down toward April 17--the 2012 federal income tax filing deadline. There is no time like the present to overcome your anxieties and frustrations, gather your records, sit down with a cup of coffee, your computer, and your tax forms and instructions, and get busy! To help you along the way, here are some tips to save you time, heartache and (hopefully) money.    More on this story.

Installment Payment Rules Expanded to Aid More Taxpayers

The IRS has a variety of programs designed to help taxpayers who can not pay their tax bills in full by the due date, The easiest of these is the streamlined installment agreement. To enable more taxpayers to take advantage of this program, the IRS has raised the streamlined installment agreement threshold from $25,000 to $50,000.    More on this story.

Failure-to-File Penalty Relief Available

The IRS has expanded its Fresh Start program, which seeks to provide relief for taxpayers who are struggling to meet their tax obligations. New relief enables certain unemployed or self-employed taxpayers to avoid failure-to-pay penalties if they can't pay their tax liability by the April 17, 2012, deadline.    More on this story.

Child's Unearned Income Can Trigger 'Kiddie Tax'

Parents may not realize how tax rules can affect the taxation of their child's investment income. If your son or daughter has more than $1,900 of investment (not earned) income, that income might be taxed at your tax rate, rather than your child's tax rate as a result of the "kiddie tax" rules.    More on this story.

Employees May Be Able to Deduct Business Expenses

If you work for someone else, you may be distressed to know that there are some significant limitations placed on your ability to deduct business-related expenses.    More on this story.

Beware of Scams Involving Education Credits

Promoters of a new tax fraud are targeting senior citizens, church members and people who have little or no income by making bogus claims of free money tied to claiming the American Opportunity Tax Credit.    More on this story.

Watch Out for These 'Dirty Dozen' Tax Scams

Although it's perfectly legal--and commendable--to use every legal means possible to lower your tax bill, some actions you take could result in serious trouble.    More on this story.

Does It Make Sense to Itemize?

Most taxpayers can choose whether to claim the standard deduction or to itemize their deductions. There is no doubt that claiming the standard deduction is the easiest choice. However, the simplest choice is not always the most sensible. Ultimately, you will want to make the choice that will save you the most money on your tax bill.    More on this story.

Lower Taxes by Improving Energy Efficiency

Under a little-known Internal Revenue Code provision, if you make qualified improvements to the energy-efficiency of your commercial building, you may be able to deduct up to $1.80 per square foot in your building.    More on this story.

Payroll Tax Reduction Extended through Year-End

The president signed the Middle Class Tax Relief and Job Creation Act of 2012 on February 22, 2012, which extends the 2-percent payroll tax holiday for an additional 10 months, through the end of 2012. This new law follows on the heels of a temporary two-month extension of the payroll tax holiday through the end of February 2012.    More on this story.

IRS Experiencing Processing Delays

According to a memo from the IRS, they are experiencing delays in processing federal refund checks.    More on this story.

New Year's Resolutions to Help Get Ready for Tax Season

The IRS has issued their top tips for getting your tax paperwork in order. Now is the time to make sure that you have documentation for all your expenses in order to claim the largest allowable deductions or credits.    More on this story.

Tax ID Theft Victims Should Get Identity Protection PIN

Victims of identity theft know it is a frightening and frustrating situation. Many times the theft will mean that someone else now has your Social Security number, putting much of your private information--including tax information--at risk.    More on this story.

Time to Sing Auld Lang Syne for Numerous Tax Breaks

At the moment the New Year arrived, a wide range of credits, deductions and tax incentives ceased to exist--or continued to exist in a far more anemic fashion.    More on this story.

Payroll Tax Cut Extended Through February 2012

After much back and forth between the Senate and the House, on December 23, 2011, Congress agreed to disagree and extend the payroll tax cut due to expire on December 31, 2011, for two months.    More on this story.

IRS Targeting Returns with Schedules A, C, or E

It's no secret the federal government is short on money. So the nation's tax collector is trying to fix this situation.    More on this story.

Know the Rules for Charitable Giving

'Tis the season to be charitable. Although every charity will tell you the need is year-round, the holiday season usually prompts an increase in charitable giving. While lowering your tax bill might not be the primary reason for your generosity, most people know that charitable contributions made to qualified organizations may help you save taxes. However, as with every area of tax law, if you want to get the maximum benefit, you must carefully follow the rules.    More on this story.

Do You Know Where Your 2010 Refund Is?

As surprising as it may sound to the average taxpayer, each year the IRS ends up with millions of dollars in unclaimed refund checks that could not be delivered because of mailing errors. This year the total amounts to $153.3 million: Almost 100,000 taxpayers have left an average of $1,547 "on deposit" with the IRS.    More on this story.

Additional Relief Provided for Ponzi Scheme Victims

In 2009, following a number of high-profile Ponzi schemes and other investment scams, the IRS issued rules that determined when the victim could claim a casualty loss deduction for the year in which the lead figure was charged with embezzlement, fraud or a similar crime under either federal or state law. Now the IRS has expanded the relief to include certain civil actions filed when the lead figure has died.    More on this story.

Use the Tuition Fees Deduction Before It Expires

Federal tax law provides a number of incentives to encourage Americans to obtain an education. These incentives range from tuition reimbursement under an employer-provided plan to a deduction for tuition and fees. Because the rules and requirements vary, it can be difficult to determine how to maximize your benefits.    More on this story.

2012 Will Bring Increases to Many Retirement Plan Limits

Many retirement plan contribution and benefit limits will increase in 2012, as a result of statutorily required cost of living adjustments to the base amounts.    More on this story.

Foreign Travel Expense Limits Don't Apply to North America

Business conventions can serve a number of valuable purposes, from keeping current with developments in your line of work to uncovering business opportunities and partners. The value of attending conferences is often enhanced by the fact that such expenses may be deductible business expenses.    More on this story.

Now May Be the Time to Buy Capital Assets

Bonus depreciation and the enhanced expensing election offer outstanding opportunities to acquire needed assets and greatly minimize your tax liability. However, if you hesitate you will lose out on substantial tax savings because both provisions will be substantially reduced in 2012.    More on this story.

Many Tax Amounts Inflation-Adjusted Upward for 2012

The amounts specified in dozens of federal tax provisions will be higher in 2012 due to legally required inflation adjustments, the IRS has announced. These new dollar amounts apply to returns filed for the 2012 tax year, which will be filed by most taxpayers in early 2013.    More on this story.

Don't Overlook Tax Savings When Preparing for Winter

Going green may enable you to save some green by reducing your income tax bill for 2011. There are two tax credits available to help offset the cost of making your home more energy-efficient: the Residential Energy Efficient Property tax credit and a limited Non-Business Energy Property tax credit.    More on this story.

IRS Makes Voluntary Reclassification of Workers Less Costly

The IRS takes a very dim view of the misclassification of employees as independent contractors. In fact, tracking down employers who misclassify workers is a high priority for the IRS, as the recent collaboration with the Department of Labor indicates.    More on this story.

Protect Yourself When Mailing Tax Officials

No one wants to be in a game of "he said, she said," especially if involves the delivery of important tax returns or Tax Court documents. Using the proper mailing procedures provides prima facie evidence the documents were delivered. Simply put, this means that it's up to the IRS or the Tax Court to prove they weren't delivered.    More on this story.

Use of Employer-Provided Mobile Phones Is Non-taxable Fringe Benefit

If you provide your employees with a cell phone for business use, both their business and personal use of the cell phone is a non-taxable fringe benefit. More importantly, the IRS will not require recordkeeping of business use in order to receive this tax-free treatment: If your cell phone policies meet the requirements for exclusion from income, then the employee's expenses are considered to be substantiated.    More on this story.

Outsourcing Payroll Relieves Workload, But Not Tax Responsibilities

As an employer, you have many obligations to the federal and state taxing authorities. Among these are requirements that you withhold and pay over Social Security, Medicare and income taxes. The administrative complexities of payroll taxes can cut into the time that you need to run and grow your business, prompting many small employers to outsource the process.    More on this story.

Employers Protected from Lawsuits When Honoring IRS Levies

As an employer, you may find yourself in the unpleasant position of having to withhold and turn over money from an employee's wages in response to a garnishment or levy. In some cases, the employee may challenge your right to do so. However, as a recent Texas district court case reaffirms, you can not be successfully sued by an employee for complying with an IRS levy, even if the levy was wrongfully issued.    More on this story.

Airlines, Not Flyers, Reap Windfall from Expired Taxes

It seems logical that if a business is collecting a tax by adding it to the cost of the item purchased, and the tax expired, the amount the purchaser would have to pay would drop. Sadly, the actions by the airline industry are motivated not by logic, but by a desire to turn a tax lapse into a revenue windfall.    More on this story.

IRS Broadens Equitable Relief for Innocent Spouse

The IRS has eliminated the two-year time limit that now applies to equitable relief requests in order to permit more innocent spouses to avoid tax liability caused by the misdeeds of the other spouse (or former spouse.)    More on this story.

Are You Missing Your Refund?

Each year the IRS becomes the custodian of millions of dollars of other people's money because of undeliverable refund checks or unfiled claims for refund of withheld taxes. If you have moved within the past year or if you (or your children) had money withheld but did not file a tax return, then some of those millions may belong to you. If so, you'll want to take action to get your money.    More on this story.

Amended Income Tax Returns Enable You to Correct Errors

Although most people strive to be one-hundred percent accurate when filing income tax returns, there are times when the original return needed to be corrected or changed. If your filing status, your dependents, your total income or your deductions or credits were reported incorrectly, then it is wise to make the correction as soon as you discover the error.    More on this story.

Take a Moment to Fine-tune Your Withholding

As summer winds down, this is an excellent time to make sure you are on track to have the correct amount withheld from your wages this year. This is especially true if you got married or divorced, added or lost a dependent, purchased a home, changed jobs or retired.    More on this story.

IRS Tackles Deductibility of Booster Club Contributions

Dues paid to amateur sports booster clubs may be tax deductible if you can establish that you paid was more than the experience was worth because you wanted to support the goals of a non-profit organization.    More on this story.

Tax News Archive

For more news stories and features on federal, state and payroll tax issues and how they may affect you, view a listing of articles.