The IRS ain’t so evil, they sponsor free tax prep help program to give you assistance with your taxes. [IRS]
Last Thursday we polled our readers for what they plan on doing with their money when they get their tax rebate checks. The result is that Consumerist readers mainly plan on using their money in precisely the opposite way that the politicians want them to, paying off debt (46.3%) and saving it in the bank (30%). All the other options combined, which would have a supposedly more directly stimulating effect on the economy, add up to only 23.8%. Food came in at 1.5%, depreciating assets 8.2%, discretionary spending 4.5% and stimulating the critical beer and cigarette industries 9.6%. It seems our readers are more concerned about their personal finances than the national economy. Good. Maybe if more people were like them we wouldn’t be in this mess in the first place.
Smarting from its continued failure to check the expansive growth of the unitary executive, the Senate has decided to assert itself by derailing an agreed upon economic stimulus plan. Senate leaders are now insisting that the stimulus plan contain an extra $25 billion to fund road work, tax cuts, and extend unemployment insurance.
The first tax rebate checks will be sent out in May and just about everyone should have them by July. [AP]
Accord was reached and the economic stimulus plan has passed. Here’s a brass tacks breakdown:
The Administration and Congress have negotiated the outline of how the proposed economic stimulus plan will play out. Here’s how much in rebates you could be getting back, depending on your situation:
If you’re uncertain about something on your taxes, you can get free tax advice over the phone until Jan. 31, thanks to a special TurboTax promotion at FreeTaxQuestion.com. Just enter your question and name, phone, email, and best time to reach you, and an IRS enrolled tax pro will call you and help you out. If you’re worried that this is just a lead generation ploy, use a disposable email address and disposable phone number. The FiLife blog tried it and had to submit their question twice, but they got it answered and answered good. They said that TurboTax was casually mentioned among the array of options one could use to finish filing, but there was otherwise no overt product pushing.
The first question that must be asked about any home office in order for it’s expenses to be deductible is, is the workspace used exclusively and regularly for business? The answer to both of these questions must be yes before any deduction can be taken. If the workspace is used for both business and personal use, then it is not deductible. Furthermore, the space must be used on a regular basis for business purposes; a space that is used only a few times a year will not be considered a home office by the IRS, even if the space is not used for anything else. These criteria will effectively disqualify many filers who try to claim this deduction but are unable to substantiate regular and exclusive home office use. It should be noted that it is not necessary to partition off the workspace in order to deduct it (although this may be helpful in the event you are audited.) A simple desk in the corner of a room can qualify as a workspace, provided you count only a reasonable amount of space around the desk when computing square footage.
As of January 11th, you can now start e-filing your taxes. Let the fun begin! [Bankrate]
Being self-employed can be a source of personal satisfaction, but also headache, especially when it comes to doing one’s taxes. Fortunately, there’s an extremely lucid step-by-step guide posted over at E-How. They’ll walk you through everything you need to do, from determining your status, to your expenses and deductions. The guide points out important things to remember, like the extreme importance of using exact numbers when claiming deductions. Rounded numbers might be easier to add, but they’re also a red flag to IRS auditors (if you learn nothing else from Girls Gone Wild, let it be this).
More audits for all, says the IRS! Especially the rich. 1 out of every 11 millionaires was audited in 2007. The rest of us earning less than $100,000 had only a 1 in 100 chance of receiving the Torquemada treatment. [Mercury News]
Are you totally clueless about your taxes? Don’t worry, the government is here to help! The IRS puts out a 300-page document called Publication 17. It can serve as a getting started guide for doing your taxes and answer questions like what to do when you have a baby, retire, or sell stock. Pub 17 also covers some of the new changes in store for 2008, like the expiring capital gains tax, IRA deduction increases, changes to child’s investment income, and ever so much more. No, you don’t have to read the whole darn thing. It’s a PDF so you can search for specific keywords and phrases. If you’re doing your taxes yourself and have some basic questions you need answering, Pub 17 is a good place to start.
It looks like Bush’s economic stimulus package is going to take the form of instant cash bonuses: $800 for individuals and $1600 for married couples. That’s dumb, everyone should get Costco coupons! All kidding aside, the NYT says the ~$500 rebates granted after the 2001 recessions proved “surprisingly effective…people spent most of the money rather than salting it away in savings or using it to pay down credit card debt. A 2004 study by economists at the Department of Labor, Princeton University, and the University of Pennsylvania found that households spent between 20 and 40 percent of the rebate within three months and another third in the following three months.” Will this “wealth surge” be just what the countries needs to beat back the forces of recession holed up in our economy, terrorizing our financial well-being? Bring on Operation Cash Dump.
I saw a big billboard for Jackson Hewitt showing a broadly smiling woman of indeterminate ethnicity holding a fistful of money that she just got by getting a refund anticipation loan, and it reminded me of how we need to do our annual telling of people to once again stay away from said refund anticipation loans.
If you’re looking to invest in mutual funds and avoid capital gains tax, Vanguard Tax Managed International Fund (VTMGX) and Third Avenue Value Fund (TAVFX) are recommended as funds to look into, along with index funds and ETFs (exchange traded funds) in general. [WSJ]
Kevin sent in this ad for H&R Block trying to market to college kids by giving them $10 in “pizza cash” if you file through H&R Block. This sounds tasty, except that due to their low income, most college kids won’t have to pay any taxes and it’s pretty easy to do with FreeFile through the IRS.gov website, for free, natch. But file through H&R Block and you’ll probably be paying at least $60. So, you could buy yourself $10 of pizza, or pay $50+ for H&R Block pizza. They still teach math in college, right?
Today represents your final opportunity to donate money to charity for tax year 2007! CharityNavigator has some tips for holiday giving, and of course, you’ll want to brush up on the tax implications of your generosity.
The IRS is celebrating the results of an AP poll that ranks the TSA as the most hated arm of the federal government. More than anything, Americans apparently hate being inconvenienced by seemingly pointless and arbitrary security checks.
The AP poll, conducted Monday through Wednesday, found that the more people travel, the less they like TSA.