Why paying taxes with credit card is a bad idea
Chances are, anybody who hasn’t filed their taxes yet probably is not expecting a refund. Since the IRS has partnered with several credit card providers, paying by plastic seems the most convenient way to go. But is it? Most of the time, tax experts say no.
Two reason it’s a bad idea
The two main reasons why it is almost always a poor idea to pay a tax debt with a credit card are convenience fees and interest charges. Most of the time, these will cost you more than the IRS charges in penalties and interest, even if you are unable to [...]
File even if you are unable to afford tax bill
Tax day is only a few days off. So what happens if you find, in this time of financial hardship, that you can’t afford to pay your tax debt? Experts say don’t put off filing.
Higher penalties for late filing
The reason for this is that the Internal Revenue Service penalizes those who don’t file at a higher rate than it penalizes those who don’t pay immediately. The penalty for not filing is 5 percent per month for the first 25 months. For not paying right away, however, the tax bureau charges only 0.5 percent a month.
In either instance, tardy taxpayers will [...]
Factors that influence a refinanced mortgage rate
When considering mortgage refinancing, it is important to know what factors can affect the refinance rate. Each factor can have as much as a full percentage point’s difference in the new mortgage rate, according to various mortgage experts. Armed with knowledge, you can approach your own mortgage refinancing with greater confidence.
Advertisements typically reflect points
As anyone who has looked into refinancing a mortgage knows, banks compete for business by advertising low mortgage refinancing rates. However, what many people don’t know is the fine print in this scenario. According to Pat Cunningham of Home Savings and Trust Mortgage of Fairfax, Va., those [...]
Traffic deaths increase on Tax Day
Benjamin Franklin famously said, “The only things certain in life are death and taxes.” A study released this week combines the two in a far more tangible way than Franklin ever could have guessed. The study shows a spike in traffic deaths on each of the last 30 tax days.
Spike in each of the last 30 years
According to an article published Tuesday in the Journal of the American Medical Association, for each of the last 30 years, traffic death numbers rose by an average of 6 percent on tax filing day. For a control, the tax day numbers were compared [...]
Strange state taxes for tax day fun
State tax codes don’t make for a riveting read, but there are hidden chestnuts that are sure to please. Here are a few strange state taxes, presented for taxpayers who can use a bit of a laugh. See if your state’s tax laws are opportunistic or hopelessly arcane!
Bagels and dogs, salt and arrows
The dizzying array of items that are taxed in various states is both amusing and bewildering. It could involve labor (such as the tax on sliced bagels in New York), controlled substances, pets or tattoos. Even everyday substances like salt can be a sticking point for state tax [...]
Lottery winner tax evasion thwarted by IRS
Taxes and the lottery have both been prominent in the financial news recently. A recent story touched on both. A man was indicted Wednesday for trying to hide lottery winnings from the IRS, proving, once again, that tax evasion is a risky proposition at best, and a bad idea for sure.
Man failed to report lottery income
Sherman W. Friend, a 69-year-old man from McClellandtown, Pa., was indicted before a grand jury April 4 for hiding about $481,000 in lottery winnings from the IRS.
The IRS estimates he evaded paying about $132,000 in income taxes between 2009 and 2010. According to the indictment, [...]
States cracking down on tax zapper programs
Many states are starting to crack down on businesses that use so-called “tax zapper” programs to keep two sets of books by simply inserting a flash drive into the cash register. States say the programs cost them billions in unreported taxes.
Illegal in five states now
Florida, Georgia, Maine, Utah and West Virginia have all enacted legislation to make it illegal to use the tax-cheating programs. New York, Tennessee, Michigan, Indiana and Oklahoma all have bills pending targeting tax zappers. Lawmakers in Massachusetts, Connecticut and Alabama, meanwhile, are discussing drafting similar measures.
Maine’s legislation was signed into law in March. There, business owners [...]
Hiring blacklists and how to get off them
According to Wall Street Journal, a large number of human resource departments and job recruiters keep unofficial blacklists, sometimes called “do not hire” lists, that record the names of individuals considered to be undesirable employees. These dark spots can be very difficult to remove from a job history.
Can stick with a job-seeker for years
These lists can follow a job hunter for years, excluding them from getting jobs. Since the lists are “unofficial” and often denied, it is often very difficult to determine where and why the blacklisting began. This situation can also make it very difficult to remove a name, [...]
Million Mustache March: fighting for a tax break?
Sunday, thousands of mustachioed men and their supporters marched on Washington in solidarity for a tax break for mustache-grooming supplies. But was the “million mustache march” a real event or a hoax? Should clean-shaven male taxpayers ‘stache up now to reduce their taxes in the current year? Should some female taxpayers forgo electrolysis?
The ‘STACHE Act
Late last month the American Mustache Institute announced the Million Mustache March for April 1, designed to pressure Congress to give its support to the Stimulus To Allow Critical Hair Expenses, or the “‘STACHE Act.”
Under the act — authored by John Yeutter, a professor of tax [...]
IRS audits millionaires twice as much in 2011
According to a report from the Internal Revenue Service last week, nearly twice as many millionaires were targeted for tax audits in 2011 as in 2010. That’s right the IRS audits millionaires often
Number of all audits about the same
The overall audit rate in 2011 remained nearly unchanged at 1.1 percent of all taxpayers. Not so, however, for taxpayers who earned between $1 million and $5 million over the year. Twelve percent of taxpayers in those brackets were audited, a five percent leap from 2010.
Higher the income, greater the increase
According to the IRS data, the audit rate increase rose with annual [...]
Sometimes Rover and Tabby can be tax deductions
From time to time, taxpayers attempt to use their pets as dependents in order to reduce taxes. No matter how close you are to your pet or how much you consider him or her a part of the family, this is a big no-no and it will likely get you audited. However, there are some situations in which you can take tax deductions for animals.
IRS recognizes service and business animals
Tax-planning professor Rhea Friedman recently spoke to CNN on the matter. She said taxpayers need to guided by two general principles when considering these deductions:
1) Food, vet bills and other pet-related [...]
Everyday charitable donations for your taxes
Giving gifts to charity is a great way to assist those in need and give yourself a nice break in the form of tax deductions. There are many everyday ways to make your charitable donations count, from goods to cash. Here are a few ideas you can use for next year’s tax return.
Sponsor yourself or a friend in a charity event
Each year, there are countless runs, walks and rides that benefit charities. By sponsoring a participant, whether it is yourself, a friend or a complete stranger, you can show support for a worthy cause and give yourself another tax deduction. [...]
Spotlight on celebrity tax deadbeats
Tax season is approaching with all its usual fanfare, grumbling and deadbeats. Many of those tax-dodgers will no doubt say the economy is to blame for their tax shortcomings. But what about the celebrities listed below? Surely they can afford to pay up. The red carpet is filling up with celebrity tax-cheats. Paparazzi take notice as we spotlight five.
Nicholas Cage
The Academy Award-winning star of “Leaving Las Vegas” has been in hot water with the IRS since 2002. Nicholas Cage blames his former manager Samuel Levine, whom he sued for $20 million for investments that, in Cage’s words, sent him “down [...]
Can divorce affect your credit score?
The finances of divorce, like everything else associated with the unhappy institution, can be tricky, complex and heart-breaking. Untangling joint accounts and obligations is essential in order to move on and become independent again. But what kind of impact, if any, does divorce have on your credit score?
A mortgage by any other name
A consumer recently asked financial expert Lynnette Khalfani-Cox if her credit score would be affected by her impending divorce. She owns a house jointly with her spouse, and it’s currently in foreclosure. She asked if she could skirt that ding on her credit report by reverting to her [...]
Why you should hire a tax professional
Tax season is here, and with it comes the yearly question of whether you should hire a tax professional to prepare and file the forms for you. Even if your tax preparation is a relatively simple affair, consider employing a qualified tax preparer. Not only does such commerce stimulate the economy, there are at least three key reasons why hiring a tax professional is a capital idea.
Focus on saving money now
While it may seem as though working with a tax professional such as a certified public accountant will take the taxpayer as much time as if they’d simply prepared and [...]
How to survive a tax audit
You don’t want to attract the attention of the Internal Revenue Service, unless you’re an IRS employee seeking a promotion. Most taxpayers find the IRS’s special brand of attention – the tax audit – to be very unpleasant. In order to avoid such unpleasantness, it’s worth knowing what trips the IRS trigger.
Even policy changes won’t save you
In 1998, the IRS Restructuring and Reform Act prompted the agency to focus more on taxpayer rights and less on being a collection machine. While this decreased the number of annual tax audits, it didn’t eliminated them entirely. The kinder, gentler IRS is looking [...]
Tax deductions for the unemployed
Job hunters who have been out of work for months and are watching their nest egg fly out the window may actually be able to catch a break in April. Out of-work job hunters can take a whole slew of tax deductions unavailable to the steadily employed.
Most job hunt expenses deductible
Unemployed job-seekers can deduct most of the expenses associated with looking for work that exceed 2 percent of their adjusted gross income. That includes printing, phone calls, career counseling and hiring job agents — even travel expenses if they help get you to an interview. And for those whose lack [...]
Recent Conversations