Tax Archives - Page 15 of 36 - Professional Tax Resolution

Category Archives: Tax

The Wealthy are Still Spending after Tax Increase

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Wealthy Still Spending After Tax Increase

 

The fiscal cliff was the big story in the news recently. One of the major debates was that the wealthy were to be taxed more. Prior to January 1, 2013 it had been proposed that if the wealthy were heavily taxed that this would stop the economy from moving forward. A recent poll shows that this may not be the case.

A new poll is showing that most of the Americans that make $500,000 or more a year (this is the group that is paying the higher income tax rate) have said that the tax increase has not affected their spending. It seems this group is still spending the same amount on charitable contributions, investment plans, and overall spending.

The poll was reported by the Shullman Luxury and Affluence Monthly Pulse, which is a division of a research center that studies the spending habits of the wealthy. The report discovered that 55 percent of taxpayers that made over $500,000 or more said that the tax increase had not affected their spending plans. Meanwhile the poll also showed that 61 percent of people that make $250,000 or more also stated that the tax hike had not affected their spending either.

The poll also showed that in regards to investing, 59 percent of those making $500,000 said the tax rate increase had not affected their investment strategies. Meanwhile 64% of the people that make $250,000 or more a year also had not changed their investment spending. Lastly, the poll also proved the wealthy are still donating the same amount to charities as well. The study shows that 55% of those making $500,000 or more are still donating the same amount to charity, meanwhile 62% making $250,000 or more are also still donating the same amount as well.

There are still however some wealthy that have changed their spending due to the tax increase, but they are in the minority. The study also indicates that the wealthy have mixed opinions on the condition of the economy. About a third of the people are optimistic about the future of economy, meanwhile a third of these wealthy individuals seem to be pessimistic on the economy. Overall, the study shows that business owners seem to be more optimistic than non-business owners.

The research center is also showing that wealthy women seem to be more pessimistic on the economy. The poll discovered only 21 percent of women were confident of the economy, meanwhile 46percent of the men were encouraged by the state of the economy.

It is a positive sign for the economy that the higher income individuals spending habits remain the untouched due to the tax increase.  The majority of the rich are able to pay more in taxes, spend the same on investments, charitable contributions, and overall spending patterns remained untouched.

 

If you have tax any questions or tax debt you are unable to pay, our tax settlement professionals are happy to discuss your tax resolution options free of charge. For more information about our services, visit us today at www.professionaltaxresolution.com. With over 16 years in the business of resolving tax debt, we have a thorough understanding of tax law together with the experience to know which settlement option will be the best fit for your specific set of circumstances.

For more information about our tax debt resolution services, visit us at www.professionaltaxresolution.com. Contact us by phone at 877.889.6527 to receive a free, no obligation consultation

 

 

 

 

4 Tax Surprises and How to Handle Them!

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4 Surprise Taxes and How To Handle Them!

One thing is certain besides taxes….you probably will want to stay on IRS’s good side! Here are some common items you may come upon this tax season. These are a few terrible tax surprises and how to handle them!

 Alimony Collected

Now that you made it through the divorce you will also have to accept the fact that the IRS is going to take some of your alimony.

It is important to know that alimony is completely taxable. Alimony and other similar payments of the type from your former spouse are taxable the year that you receive them. Child support money on the other hand is not taxable.

It is important to make your IRS payments on alimony and other untaxed income via estimated filings so that you will not have a large tax bill in April.

One positive for the person that is writing the alimony check, the check amounts are deductible.

Unemployment Benefits

Unemployment benefits are considered wage income; therefore, the IRS does receive a portion of these benefits.

So that you do not have to pay a big tax bill in April, it is important, that when you apply for unemployment benefits, you select the option to have your federal income taxes withheld. Similar to payroll withholding, you fill out a form called the federal W-4Voluntary Withholding Request, or a like IRS-acceptable form. This way 10% of your benefit amount will be taken out of each unemployment check.

Excused Debt

The IRS still collects from the total amount of debt owed, even if some debt is excused.  For example, if you are able to modify your credit card bill from $10,000 to $5,000 you can expect the credit card holder to send you a form called the Form 1099-C or a similar statement. The rest of money owed from the debt will be labeled miscellaneous income and you will be expected to pay it.

It is important to keep in mind that there are certain debts that can be forgiven. The Mortgage Debt Relief of 2007 states that certain homeowners that qualify will be forgiven and will not have to pay taxes on that amount.

Money and Other Prizes Won

Are you lucky? Did you win a $1,000 raffle? Money won as a “prize” is listed on the lengthy list of taxes that needs to be paid.

Regardless of whether you win a monetary amount or any type of non-monetary gift you are expected to pay taxes on it. You must pay taxes on the fair market value of any property that you win. In most cases the company you won from will send you a 1099 form in which you will declare how much you have won.

It is important that you are careful when you report the amount of a non cash property. If you under report you could be subjected to an audit.

If you have tax any questions or tax debt you are unable to pay our tax settlement professionals are happy to discuss your tax resolution options free of charge. For more information about our services, visit us today at www.professionaltaxresolution.com. With over 16 years, in the business of resolving tax debt, we have a thorough understanding of tax law together with the experience to know which settlement option will be the best fit for your specific set of circumstances.

For more information about our tax debt resolution services, visit us at www.professionaltaxresolution.com. Contact us by phone at 877.889.6527 to receive a free, no obligation consultation

 

 

Don’t Lose Your Refund to an Identity Theft Scam

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Identity Theft

Identity Theft

 

In 2012 the IRS uncovered a mounting problem involving the thefts of innocent taxpayers’ refunds. According to the IRS, investigators found 898 identification theft cases in 2012. This is a number that has tripled in comparison to the previous years. The IRS has issued numerous media alerts and has hired an additional 3,000 employees to be on high alert for such thefts.

Here is how it works: Somehow the criminal gets access to a person’s social security number and then they file a fraudulent claim and receive the refund check. One couple found out when they went to file their tax return electronically and they were told by the IRS a claim had already been filed.

Certified public accounts across the country are on high alert for such cases. One CPA said in the last 10 to 15 years she has never had a case, but since electronic filing was introduced, she has witnessed a surge of these types of thefts. She has had a dozen or so cases in the last year alone.

The IRS is stepping up to the plate and is strengthening its screening process. The agency is said to have halted $20 billion fraudulent returns alone last year. The IRS urges people to always protect their social security number. Also, it is important to remember that the IRS will never contact anyone by social media or email.

If you feel that you have had an identity theft problem call the at IRS 1-800-908-4490 or go to https://www.irs.gov/uac/Indications-your-identity-may-have-been-stolen-and-how-to-report-it-to-us.

If you have tax debt you are unable to pay or any other questions our tax settlement professionals are happy to discuss your tax resolutions free of charge. For more information about our services, visit us today at www.ProfessionalTaxResolution.com . With over 16 years in the business of resolving tax debt, we have a thorough understanding of tax law together with the experience to know which settlement option will be the best fit for your specific set of circumstances.

For more information about our tax debt resolution services visit us at 877-889-6527 or at www.ProfessionalTaxResolution.com.

 

 

 

The Real Numbers In A Hot Topic Issue

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 This years’ election debate hot topic issue was one that plagued this country since income tax was born 100 years ago. Should the wealthy pay more in taxes?

Just to give some background information from the recent election President Barack Obama believed that the rich need to pay more taxes to aid the budget deficit and to provide the government with the help it needs. Meanwhile, his opponent, Mitt Romney counterd that deficit can be lowered without raising taxes on the wealthy. He thought this to be unfair and unwise to this bracket of people.

“Who is right Obama or Romney? Both.. Or neither,” says Joseph Thorndike, a tax historian. This is a debate that has gone on in our country for over a hundred years.

The best measurement is the top marginal income-tax rate. It has gone from 7% in 1913 to 92% in the 1950’s, back to 28% with the Tax Reform Act of 1986, to 39.6% during the Clinton era and now today it is 35%. Mr. Obama plans on raising the rate meanwhile Romney wanted to lower it

For the past thirty years many Americans, mostly the wealthy, have paid less of their incomes to Washington. The rich have received more of the income and paid more of the taxes; an increasing percentage at the bottom have paid less or even nothing.

Is this fair? Here are some strong facts to aid this debate. Let’s take a look at some concrete numbers behind this hot topic debate:

The wealthiest 5%, 1% and 0.1%of Americans have been receiving more income and paying an increasing share of federal taxes.

For example in the 1990’s the wealthiest 5% averaged 25.3% of income and paid 28.5% of taxes.

During the 2000’s the wealthiest 5% averaged 28.4% of income and paid 40.3% of taxes.

The taxes paid by the lower 40% of the Americans have been decreasing along with their portion of income.

An increasing number of Americans are not paying any income tax. These people are living on social security, may be getting tax breaks for lower wage workers or simply do not make enough.

For example, in 2007 the lower 40% received 14.9% of the income and paid 5.9% of federal taxes.

The standard tax rates have lowered for everyone. The rich do pay a bit more, except for those whose overall income is from dividends and capital gains.

From the earning scale, Americans range of income that went to taxes was lowered in the 1980’s, increased in the 90’s and then fell in the 2000’s.

Overall most Americans have seen the part of their income that goes to taxes has steadily decreased.

The tax system structure strengthens the divide between economic winners and losers, but not enough to keep the divide from increasing.

Due to the fact that the tax act takes more from the top percentage then from the bottom percentage it greatly lowers inequality.

Mr. Thorndike believes, “Fairness cannot be solved scientifically, but by a show of hands.”

If you have tax debt you are unable to pay or any other questions our tax settlement professionals are happy to discuss your tax resolutions free of charge. For more information about our services, visit us today at www.professionaltaxresolution.com. With over 16 years in the business of resolving tax debt, we have a thorough understanding of tax law together with the experience to know which settlement option will be the best fit for your specific set of circumstances.

For more information about our tax debt resolution services visit us at 877-889-6527 or at www.professionaltaxresolution.com. Contact us by phone at  to receive a free, no obligation consultation.

 

 

 

 

 

 

 

Tax Refunds Likely to be Delayed

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It seems that some taxpayers that are looking for a “quick” refund make have to wait a bit longer than normal these days as the Internal Revenue Service tries to halt criminals that file fraudulent returns and who attempt to steal others identities.

The IRS began accepting 2012 returns on January 30th. It has been making its automated system more receptive to signs of possible fraud. This means that certain returns will be looked at more closely. Just last year alone the IRS stopped $20 billion fraudulent refunds being issued, up from $14 billion the previous year.”

IRS Fraud and Identity Theft

IRS Fraud and Identity Theft

“It’s a difficult responsibility for the IRS,” said Benson Goldstein, a senior technical manager at the American Institute of CPAs in Washington. “They’re there to get prompt refunds, but at the same time protect the U.S. Treasury.”

Some valid taxpayers will have their refunds delayed. The IRS has been attempting to decrease processing times to speed up refunds, partly to stimulate electronic filing and in part to break the taxpayer’s reliance on short term loans. The rush of refunds presented an opportunity for fraud.

The IRS hopes to meet its goal of processing 90 percent of refunds within twenty one days. Meanwhile taxpayers who are victims of identity theft could wait months. The IRS has long delayed refunds to prevent fraud. Some experts believe that this year’s undertaking, combined with the normal flood of returns because of the late congressional action that delayed the start of filing, may delay refunds for about a week.

The IRS stated that it had more than 3,000 employees focused on identity theft in late 2012. If any taxpayers fear that they are identity theft victims they can contact the IRS at 1.800.908.4490 extension 245.

In the upcoming months ProfessionalTaxResolution.com will give you helpful tips to prepare for tax season. If you have any tax questions or tax debt you are unable to pay, our tax settlement professionals are happy to discuss your tax resolution options free of charge. For more information about our services, visit us today at www.professionaltaxresolution.com. With over 16 years in the business of resolving tax debt, we have a thorough understanding of tax law together with the experience to know which settlement option will be the best fit for your specific set of circumstances.

For more information about our tax debt resolution services visit us at www.professionaltaxresolution.com. Contact us by phone at 877.889.6527 to receive a free, no obligation consultation